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Pitney Bowes, Inc. v. Baker Industries

Decided: November 30, 1994.

PITNEY BOWES, INC., PLAINTIFF,
v.
BAKER INDUSTRIES, INC., PYRO REALTY ASSOCIATES II, LTD., ABC CORPORATION AND/OR AB, DEFENDANTS, AND HANOVER PARK FOR INDUSTRY AND PYRO REALTY ASSOCIATES II, LTD., THIRD-PARTY PLAINTIFFS/APPELLANTS, V. ATMOS ENGINEERING COMPANY, INC. AND ATMOS SERVICE COMPANY, INC. AND ABC CORPORATION AND/OR ABC CORPORATIONS (NAME OR NAMES BEING FICTITIOUS), XYZ PARTNERSHIP AND/OR XYZ PARTNERSHIPS (NAME OR NAMES BEING FICTITIOUS), AND JOHN DOE AND/OR JOHN DOES (NAME OR NAMES BEING FICTITIOUS), THIRD-PARTY DEFENDANTS/RESPONDENTS.



On appeal from Superior Court, Law Division, Law Division, Morris County.

Before Judges Pressler, Landau and Conley.

Pressler

The opinion of the court was delivered by

PRESSLER, P.J.A.D.

This controversy arises out of the environmental cleanup of soil contamination and ground water pollution allegedly caused by the improper design and installation of underground heating oil tanks by third-party defendant Atmos Engineering Company, Inc. in 1979. The sole question raised by this appeal is whether the private contribution rights accorded by N.J.S.A. 58:10-23.11f to those who do the cleanup are subject to N.J.S.A. 2A:14-1.1, the ten-year statute of repose protecting those who make improvements to real property. We hold that the later enacted provisions of the Spill Compensation and Control Act, N.J.S.A. 58:10-23.11, take precedence and hence that parties otherwise entitled to the benefit of the ten-year repose may not rely thereon to defeat a Spill Act contribution claim.

Plaintiff Pitney Bowes, Inc. is the sublessee of premises in Hanover Township under a lease with defendant Pyro Realty Associates II, Ltd., which had, in turn, leased the premises from the ground lessee, defendant Baker Industries, Inc. In 1987, some seven years after commencement of its tenancy, plaintiff discovered contamination on the site caused by the seepage of heating oil from underground tanks installed by Atmos Engineering Company. Working with the Department of Environmental Protection (DEP), plaintiff excavated the oil tanks in 1988. It asserts that as a result of their improper installation, the tanks had suffered structural failure and leakage causing soil contamination and groundwater pollution. Plaintiff bore the full cost of investigation and consequent remediation and brought this action in May 1991 against Pyro and Baker seeking reimbursement under theories of breach of warranty, breach of contract, and unjust enrichment.

By L. 1991, c. 373, the Legislature enacted N.J.S.A. 58:10-23.11f, effective January 10, 1992, affording to those who pay for the remediation of a discharge of hazardous substances a private right of contribution against those who are also responsible for the discharge. N.J.S.A. 58:10-23.11f(a)(2). Plaintiff accordingly amended its complaint in April 1992 to add a count for contribution under the statute. It again amended its complaint in May 1992 to add as a defendant Hanover Park for Industry, the owner of the premises, against whom it also claimed a statutory right of contribution. Defendants Hanover and Pyro then filed a third-party complaint against third-party defendant Atmos Engineering Company, Inc., alleging that Atmos, as the designer and installer of the tanks, was the culpable party actually responsible for the hazardous discharge cleaned up by plaintiff. Accordingly, Hanover and Pyro sought contribution from Atmos.

Contending that it was immune front suit under N.J.S.A. 2A:14-1.1 because it had not been impleaded until more than ten years from the date of its completion of the work at the site, Atmos moved for summary judgment dismissing the third-party complaint.

The trial Judge concluded that the oil tanks were improvements to real estate subject to the statutory protection and rejected the argument of Hanover and Pyro that the Spill Act private right of contribution supersedes the statute of repose. Accordingly, he granted Atmos Engineering Company's motion, entering an order dismissing the third-party complaint. We granted the motion of Hanover and Pyro for leave to appeal and now reverse.

Consideration of both the text and the policy of the two apparently conflicting statutes persuades us that the legislative scheme and purpose in enacting the Spill Act's contribution provisions would be significantly and unjustifiably compromised if the statute of repose were read as exempting from liability a class of persons patently intended to be included by N.J.S.A. 58:10-23.11f. To begin with, it is clear that the Legislative purpose in enacting the contribution provisions was to encourage prompt and effective remediation by any responsible party who might otherwise be disinclined to do so because of the risk and burden of bearing the entire cost despite the responsibility of others for the creation and continuation of the problem. Thus, as explained by the Senate Environmental Quality Committee Statement:

Although the right of contribution may exist under federal and State common and statutory law, the ambiguities in and between the laws, and as to standards of proof and allowable defenses result in the reluctance on the part of many dischargers and other responsible parties to enter into cleanup agreements with the Department of Environmental Protection (DEP) for fear that they may not be able to recover ...


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