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Rutgers, State University of New Jersey v. Liberty Mut. Ins. Co.

Decided: December 8, 1994.

RUTGERS, THE STATE UNIVERSITY OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
LIBERTY MUTUAL INSURANCE CO., DEFENDANT-APPELLANT, V. CENTENNIAL INSURANCE COMPANY, DEFENDANT-RESPONDENT, AND PENNSYLVANIA MANUFACTURERS ASSOCIATION INSURANCE COMPANY, INC., AMERICAN INSURANCE COMPANY, TRANSAMERICA INSURANCE COMPANY, AETNA CASUALTY & SURETY CO., INSURANCE COMPANY OF NORTH AMERICA, HIGHLANDS INSURANCE CO., FEDERAL INSURANCE CO., AND NATIONAL FIRE INSURANCE CO., DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County.

Before Judges Michels, Stern and Keefe.

Keefe

The opinion of the court was delivered by

KEEFE, J.A.D.

We granted Liberty Mutual Insurance Co.'s (Liberty) motion for leave to appeal from the entry of an order for partial summary judgment requiring Liberty to indemnify Rutgers, The State University of New Jersey (Rutgers) for defense costs already incurred and to be incurred by Rutgers in connection with ongoing environmental litigation. We now reverse the judgment under review and remand the matter for further proceedings for the reasons that follow.

The current litigation stems from an environmental suit brought by Pugliese Realty, a limited partnership, (Pugliese) against Rutgers and others in Ocean County. Pugliese's third amended complaint alleged that it purchased eighty acres of land in Lacey Township, Ocean County, in 1986 with a view toward future residential development. In 1988, Pugliese received a report from a contractor hired by it to perform an environmental investigation of the property that the land and ground water were contaminated. The report revealed the presence of DDT and petroleum hydrocarbons, with the most severe contamination located in the area of a former airplane hanger.

According to the Pugliese complaint, from 1950 through approximately 1969, the Ocean County Mosquito Extermination Commission (OCMEC) leased the property from Pugliese's predecessor in title, and used it as an airfield to operate its mosquito control aerial spraying program. The aerial spraying was performed by Wilson Air Service, Inc. (Wilson) on OCMEC's behalf. Pugliese contended that OCMEC, Wilson, "and their agents and contractors

spilled, discharged or released DDT and petroleum or petroleum products on, in or to the property," causing the contamination.

Specific allegations against Rutgers were made in the second count of the complaint wherein it was alleged that Rutgers "used the property in question as an airfield to operate its mosquito control aerial spraying program." It was further alleged that Rutgers "funded OCMEC and provided guidance, direction and support for its activities[,]" and that "Rutgers and others spilled, discharged or released DDT and petroleum, or petroleum products on, in or to the Property, causing the property to become contaminated and unsaleable." Pugliese alleged that Rutgers "knew or should have known that DDT and petroleum products, if not properly handled and controlled, would contaminate the soils and ground water on the Property." Paragraph thirty-two of the second count alleged that Rutgers was "negligent" and that its conduct violated the Spill Compensation and Control Act, The Water Pollution Control Act, and The Solid Waste Act. The ad damnum clause sought compensatory damages as well as other relief specifically against Rutgers.

Rutgers is not again mentioned until the fourth count of the complaint in which it is alleged that Rutgers "knew or should have known of the hazardous and toxic nature of DDT to mosquitos, animals, human health and the environment." Pugliese alleged that the storage of DDT and its use were "inherently dangerous activities" for which Rutgers was "strictly liable in tort." Money damages and other relief were sought in that count.

In the fifth count of the complaint it was alleged that Rutgers committed "a trespass upon or inverse condemnation of plaintiff's property," resulting in damage to Pugliese.

The sixth count of the complaint alleged that Rutgers and the other defendants' conduct constituted a nuisance which proximately resulted in Pugliese's damages. Again, compensatory damages and other forms of relief are sought in that count.

Finally, in the tenth count of the complaint, Pugliese sought mandatory injunctive relief against all defendants, including Rutgers, under the Environmental Rights Act, N.J.S.A. 2A:35-1, requiring that all defendants ...


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