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Bahrle v. Exxon Corp.

Decided: January 9, 1995.

DAVID BAHRLE, IDA BAHRLE, MICHAEL BAHRLE, WILLIAM BAHRLE, STEVEN BAHRLE, PATRICIA BAHRLE, KYLE BAHRLE, KAREN BENHAM, MICHAEL BENHAM, CARLEY BENHAM, MICHAEL BENHAM, KENNETH BERGMANN, JASON BERGMANN, DONNA BERGMANN, MICHAEL BERGMANN, CAROLE BRILLY, KATHLEEN BRILLY, MAY BETH BRILLY, PATRICK BRILLY, PATRICIA BRILLY, RUTH CERVASIO, THOMAS CERVASIO, TAMMY CLAYTON, BRYAN CLAYTON, NICOLE CLAYTON, SEAN CLAYTON, BRYAN CLAYTON, HILLARY DONOHUE, ROBERT DONOHUE, DAWN DONOHUE, MERRILEE DONOHUE, TIFFANY DONOHUE, DOROTHY FORTUS, STEPHEN FORTUS, DEBRA FORTUS, SHERRY FRICK, THOMAS FRICK, ATRINA FRICK, DAVID GALLINA, ELLEN GALLINA, KAREN GALLINA, KRISTINE GALLINA, ANDREW GLATZ, BERTHA GLATZ, FREDERICK GLATZ, PAUL GLATZ, CHERYL HEDBERG, JOHN HEDBERG, MICHELE HEDBERG, NORA HENNESSEY, MARIE HOWELY, ELEN KLEIN, JOSEPH KLEIN, PATRICIA KLEIN, THERESA KLEIN, DALE KNOTT, DENISE KNOTT, IRENE KNOTT, GEORGE LEARY, III, JUDITH LEARY, SEAN LEARY, TARA SCANLON LEARY, JEAN LUZETSKY, JOHN LUZETSKY, ROBERT LUZETSKY, JANENE LUZETSKY, ELENOR MCCORRY, MICHAEL MANGAN, SR., ELAINE MANGAN, MICHAEL MANGAN, JR., TARYN MANGAN, WILLIAM MANGAN, JR., JUDITH MANGAN, CHRISTOPHER MANGAN, WILLIAM MANGAN, III, NOAH MANGAN, PATRICK MANGAN, WILLIAM MANGAN, SR., GRACE MANGAN, PETER MANGAN, ELLEN MARANO, SALVATORE MARANO, DORIS MEEHAN, JAMES MEEHAN, MICHAEL METELSKY, ANITA O'BRIEN, THOMAS O'BRIEN, SR., CHARLES OBRZUT, STELLA OBRZUT, LUCILLE PETERS, HELMUTH PETERS, CHRISTINE PETERSON, ROBERT PETERSON, CATHLEEN PETRIN, NICHOLAS PETRIN, STEFFANY PETRIN, TIMOTHY PETRIN, JOAN PONTICELLO, MATTHEW PONTICELLO, RENE PONTICELLO, TINA PONTICELLO, CATHRYN POPP, GENE SANTUCCI, JUDITH SANTUCCI, DIANE SANTUCCI, JOSEPH SANTUCCI, MICHAEL SANTUCCI, THERESA SANTUCCI, TIMOTHY SANTUCCI, EDWARD SCANLON, HEATHER SCANLON, CHAD SCANLON, DREW SCANLON, DIEDRE SCANLON, JAMES SMITH, MARGARET SMITH, MARIE SMITH, DONNA SMITH, RICHARD SPAFFORD, SUSAN SPAFFORD, RICHARD SPAFFORD, JR., RONALD SPAFFORD, WENDY SPAFFORD, PATRICIA VANDERKAM, CHRISTOPHER VANDERKAM, MARK VANDERKAM, EDWARD VANDERKAM, LYNN VANDERKAM, BENJAMIN WEDEKIND, FRANK WEDEKIND, KEVIN WADEKIND, MARY WADEKIND, KENT WEDEKIND, ELIZABETH BETZ, LAWRENCE BETZ, WILLIAM MAGYARITS, CAROL MCMAHON, PATRICK MCMAHON, HAZEL PETERSON, JOSEPH PINO, LINDA PINO, ANGELA PINO, JOSEPH PINO, ANGELA RIZZO, ANTHONY RIZZO, CHRISTINE RIZZO, JOAN RIZZO, PLAINTIFFS-APPELLANTS,
v.
EXXON CORPORATION, A CORPORATION OF THE STATE OF NEW JERSEY DOING BUSINESS AS EXXON CO., USA; TEXACO CORPORATION, A CORPORATION OF THE STATE OF DELAWARE; RICHARD E. RITCHIE AND SUSAN M. RITCHIE, TRADING AS LACEY EXXON; CHARLOTTE W. RULE AND THE ESTATE OF DONALD W. RULE, T/A RULE'S SERVICE STATION, DEFENDANTS-RESPONDENTS, AND KALSCH-FORTE OIL CO., INC., A/K/A K-FORTE OIL CO., A CORPORATION OF THE STATE OF NEW JERSEY; "JOHN DOE" DEFENDANTS B THROUGH Z; "JOHN DOE" DEFENDANTS 1 THROUGH 10; "JOHN ROE" DEFENDANT B THROUGH Z; "JOHN ROE" DEFENDANTS 1 THROUGH 10, DEFENDANTS.



On appeal from the Superior Court, Law Division, Ocean County.

Before Judges Petrella, Havey and Brochin.

Havey

The opinion of the court was delivered by HAVEY, J.A.D.

In this groundwater contamination case, plaintiffs, 143 residents of the Barnegat Pines Development area in Lacey Township, Ocean County, appeal from a judgment entered on a jury verdict dismissing all claims against defendants Texaco Corporation and Donald W. Rule. Prior to trial, plaintiffs' complaint was dismissed by summary judgment in favor of defendants Exxon Corporation and Richard E. and Susan M. Ritchie, t/a Lacey Exxon (hereinafter referred to collectively as Exxon/Ritchie). During trial, which was limited to liability issues, plaintiffs sought to prove that gasoline from Rule's service station, which had operated between 1959 and 1975 as a Texaco Station, had seeped into the groundwater and contaminated their wells. Plaintiffs advanced negligence and strict liability theories against Rule. They also claimed that Texaco was liable, first because it owned the underground tanks from which the gasoline allegedly leaked into the aquifer, and second because it was vicariously liable for Rule's conduct based on an apparent authority theory. The jury returned a verdict of no liability in favor of both defendants.

On appeal, plaintiffs argue that: (1) the trial Judge erred in permitting Texaco to submit proofs that the contamination in plaintiffs' wells was attributed to post-1975 gasoline discharges caused by Exxon/Ritchie, since Exxon/Ritchie had been dismissed from the suit by summary judgment; (2) the testimony of plaintiffs' experts was erroneously precluded; (3) the jury finding that Kalsch-Forte, rather than Texaco, owned Rule's underground tanks was against the weight of the evidence; (4) the trial Judge erred in failing to charge res ipsa loquitur, and in charging that strict liability applied only to underground tank leaks; and (5) the nuisance claims were wrongly dismissed. We affirm as to Texaco and reverse and remand for a new trial as to Rule.

The procedural history is significant. This action was originally instituted by 258 plaintiffs.*fn1 Pursuant to a Case Management Order, plaintiffs were divided geographically into three zones. The present litigation involves plaintiffs situate in the "western zone," whose claims were against Exxon, the Ritchies, Texaco and Rule.

By order dated January 5, 1990, summary judgment was granted in favor of Exxon and the Ritchies dismissing with prejudice the claims against them of nearly all of the plaintiffs. The related cross-claims of codefendants Texaco and Rule against Exxon/Ritchie, were likewise dismissed with prejudice. Thereafter, the Ritchies and Exxon settled with the remaining plaintiffs. Texaco's subsequent motion to reinstate its cross-claims against the Ritchies was denied.

During motions entertained at the commencement of trial, the trial Judge (not the same Judge who granted summary judgment) ruled that Texaco and Rule were not precluded by the summary judgment from submitting proof that any contamination found in plaintiffs' wells was due to Exxon/Ritchie's conduct. Plaintiffs' motion to reopen the summary judgment orders in favor of Exxon/Ritchie was denied.

Facts revealed during the jury trial that in 1959, Rule and his father (now deceased), built a gasoline station on Lacey Road in Lacey Township. They arranged with an independent gasoline distributor, Kalsch-Forte, to install the necessary underground tanks and to supply Texaco gasoline. Kalsch-Forte installed the underground tanks and leased them to Rule. During the ensuing years the size and number of tanks were upgraded to a capacity of approximately 17,000 gallons.

During Rule's tenure at the station, he sold gasoline and performed oil changes, greasing, and exhaust work. Originally the station contained a floor drain, but Rule filled it with concrete after about one year. Waste oil was drained into a fifteen-gallon drum on wheels, and any spilled oil was taken up by absorbent material and put in the trash. The second bay, used for tune-ups, had no drain. The third bay, used mostly for brake work, had a drain. Initially Rule hosed down the floor, but to save water he soon switched to swabbing it once a week and sweeping every day. Ritchie converted the station to an Exxon station and in October 1975 purchased the underground tanks from Kalsch-Forte.

In 1981, residents of the Barnegat Pines area noticed a foul smell in their well water and reported the condition to the municipal authorities. Tests revealed volatile organic contaminants (VOCs) in some well water, including benzene, ethylbenzene, toluene and xylene. In some wells, all of the contaminant levels exceeded Department of Environmental Protection (DEP) standards. A subsequent DEP examination of the area determined that the potential source of contamination flowed south in the Cohansey Aquifer from Lacey Road toward Deer Head Lake. Monitoring wells were installed in the area. Only one of the monitoring wells, that at the Exxon station, showed signs of contamination. Thus, the DEP identified the gasoline station as the most likely source of contamination.

The thrust of plaintiffs' proofs at trial was that the contamination of plaintiffs' wells was caused by discharge of gasoline and other petroleum products occurring between 1959 and 1975, when Rule operated his Texaco station. Plaintiffs' experts rejected post-1975 discharges (during the time Exxon/Ritchie operated the station) as a causative factor because Exxon discharges into the groundwater (the "Exxon plume") would not have had time to reach any more than eight of the plaintiffs' homes, which were within a one and one-and-one-half block radius of the station. These plaintiffs, after summary judgment was granted to Exxon/Ritchie, settled with Exxon.

Indeed, on Exxon/Ritchie's summary judgment motions, both Exxon's expert, Environmental Resources Management (ERM) and plaintiffs' expert, Donald Bello, had agreed that any discharge from the gasoline station during the Exxon/Ritchie era could not have reached the remaining plaintiffs' wells. This Conclusion was reached based on the maximum distance any contaminant could have travelled by applying groundwater velocity rates ranging between 114 and 91 feet per year. ERM identified three potential sources of contamination in the western zone: (1) the gasoline station; (2) septic system discharges; and (3) home automobile repairs. Because of the groundwater velocity rate, ERM concluded that the "Exxon plume" contamination was caused by a discrete event, a spill, occurring in 1986, and did not affect any of the plaintiffs' wells except those within the one and one-and-one-half block radius of the station.

At trial, Bello basically agreed with the groundwater flow rate range established by ERM, 91 to 114 feet per year, but favored the lower end of the range and noted that particular contaminants, like benzene, would flow even slower. He agreed with ERM that based on the flow rate the contamination attributable to the gasoline station between 1975 and 1985 was geographically limited to the Exxon plume.

However, Bellow believed that additional contamination was attributable to earlier discharges. Based on positive well tests, the nature of the contaminants found in the area, probable contaminant "pathways," years of residence and house location, he identified twenty-two families whose wells were probably contaminated by pre-1975 discharges from the gasoline station.

The trial Judge charged the jury that Rule could be found liable based on negligence or a strict liability theory. According to the Judge, strict liability was predicated on a private cause of action for damages under the Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 to -40, caused by leakage from underground gasoline tanks. The Judge also charged that Texaco could be found liable based on strict liability if it owned the underground tanks or, vicariously, if Rule was negligent and there was an apparent agency relationship between Rule and Texaco. In answers to special verdict interrogatories as to strict liability, the jury first found that Kalsch-Forte, and not Texaco, was the owner of the underground oil and gasoline tanks during the time Rule operated the Texaco station between 1959 and 1975. The jury also concluded that the tanks did not leak or cause gasoline or petroleum products to seep into the groundwater during that period. Finally, the jury found that Rule was not negligent in the manner by which he operated the gasoline station during the pertinent period.

I

Plaintiffs first argue that the trial Judge erred in allowing Texaco to present evidence that post-1975 discharges from the Exxon/Ritchie gas station contaminated the wells of plaintiffs outside of the Exxon plume. Plaintiffs assert that allowance of such testimony was in direct contradiction to the summary judgment in favor of Exxon/Ritchie dismissing plaintiffs' complaint and cross-claims, and prejudiced their case against Texaco and Rule.

In granting summary judgment to Exxon/Ritchie, the motion Judge concluded that, based on both plaintiffs' and Exxon's experts' reports, plaintiffs "could not possibly have suffered damage as a result of any . . . toxic contaminants from Exxon's Service Station." This finding was predicated on the undisputed groundwater velocity rate agreed upon by ERM and Bello. Texaco did not oppose the summary judgment motion, and therefore did not submit a report contradicting ERM and Bello. The motion Judge thereafter denied Texaco's motion to set aside the dismissal in favor of the Ritchies and also "precluded Texaco from challenging the flow rate and the hydrogeological situation accepted to this point in the case." It was the motion Judge's view that to allow new experts to "change what has been accepted as the facts in this matter, specifically the flow rate" would make a "mockery out of case management and court orders entered . . . ."

At trial, the trial Judge entertained Texaco's and Rule's motion to submit the testimony of Lloyd LaBrie, a consulting engineer who stated that Exxon/Ritchie's post-1975 conduct contaminated some of plaintiffs' wells. The Judge reviewed the transcripts of the summary judgment motions and determined that the summary judgment orders, though ending Exxon's and the Ritchie's legal liability, did not preclude Texaco from arguing that the contamination was due to the conduct of third parties over whom it had no control, including Exxon and Rule. The Judge reasoned that Texaco could argue "in defense" that Exxon/Ritchie may have caused the contamination, so long as those proofs and arguments are predicated on the same groundwater flow rates that were contained in the experts' reports.

Based on the trial Judge's ruling, Texaco presented LaBrie who concluded that, even accepting the agreed-upon groundwater flow rate, station discharges after 1976 could have reached the well heads of various plaintiffs. On cross-examination, plaintiffs' counsel questioned LaBrie concerning his calculations of flow rates. The trial Judge thereupon permitted LaBrie, on redirect, to testify that a station discharge as late as 1980, the year the Ritchies showed a 5,000 gallon inventory shortfall, could have reached some of plaintiffs' well heads.

Entry of the summary judgments in Exxon/Ritchie's favor dismissing plaintiffs' complaint and the Texaco and Rule cross-claims was predicated on the absence of any factual dispute concerning Exxon/Ritchies' potential liability. R. 4:46-2. Dismissal was granted because all the submitted expert reports agreed that, based on groundwater velocity rates, any post-1975 spillage caused by Exxon/Ritchie was not a causative factor in the contamination of plaintiffs' wells. Texaco chose not to submit a competing hydrogeological report. The summary judgment orders, not opposed by Texaco and Rule, were entered with prejudice. A dismissal with prejudice constitutes an adjudication on the merits "'as fully and completely as if the order had been entered after trial.'" Velasquez v. Franz, 123 N.J. 498, 507, 589 A.2d 143 (1991) (quoting Gambocz v. Yelencsics, 468 F.2d 837, 840 (3rd Cir. 1972)). In short, there was an adjudication of fact: Exxon/Ritchie's post-1975 conduct was not a cause of the contamination of plaintiffs' wells.

Having decided Exxon/Ritchie's liability fully as a matter of law and fact, the summary judgment orders became the "law-of-the-case." Lanzet v. Greenberg, 126 N.J. 168, 192, 594 A.2d 1309 (1991). Under the law-of-the-case doctrine, "where there is an unreversed decision of a question of law or fact made during the course of litigation, such decision settles that question for all subsequent stages of the suit." Slowinski v. Valley Nat'l Bank, 264 N.J. Super. 172, 179, 624 A.2d 85 (App. Div. 1993), (quoting State v. Hale, 127 N.J. Super. 407, 410, 317 A.2d 731 (App. Div. 1974)).

Of course, the doctrine is "'discretionary and the court is never irrevocably bound by its prior interlocutory ruling . . . .'" Daniel v. State, Dep't of Transp., 239 N.J. Super. 563, 581, 571 A.2d 1329 (App. Div. 1990), certif. denied, 122 N.J. 325 (1990) (quoting Sisler v. Gannett Co., 222 N.J. Super. 153, 159, 536 A.2d 299 (App. Div. 1987), certif. denied, 110 N.J. 304 (1988)), and "should be applied flexibly to serve the interests of Justice." State v. Reldan, 100 N.J. 187, 205, 495 A.2d 76 (1985).

However, here the trial Judge did not exercise discretion to revise the summary judgment orders. Indeed, the Judge denied plaintiffs' motion to vacate the dismissals against Exxon and the Ritchies. Instead, the Judge held that Texaco could present proofs that spillage during the post-1975 Exxon/Ritchie era affected plaintiffs' wells in support of Texaco's affirmative defense that others were responsible for the contamination. The trial Judge erroneously interpreted the summary judgment orders as preserving Texaco's right to construct a new factual and scientific theory against Exxon and the Ritchies, despite the prior adjudicated finding that the Exxon/Ritchie spillage was not a causative factor. Allowance of LaBrie's testimony established the "empty chair" defense, permitting Texaco and Rule to point their fingers at Exxon and the Ritchies, no longer parties to the action, by claiming that their activities were the cause of the contamination. On the strength of LaBrie's expert testimony, Texaco's counsel argued during summation that: (1) "discharges at the . . . Exxon station [and local sources] are the problem in this case"; (2) in 1980, "Ritchie ...


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