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Matter of Thomas

Decided: January 26, 1995.


On appeal from Office of Administrative Law.

Before Judges King, D'Annunzio and Eichen. The opinion of the court was delivered by D'annunzio, J.A.D.


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

The issue is whether appellants, claimants under the Spill Compensation and Control Act (the Act), N.J.S.A. 58:10-23.11 to .11Z, are entitled to counsel fees as an element of "all direct and indirect damages" for which the fund is liable. N.J.S.A. 58:10-23. 11g.a.

Prior to August 15, 1986, home heating oil leaked from a tank in the basement of a single-family home then owned by William and Alice Busch. The leaking oil contaminated the basement and soil beneath the residence. Mr. Busch used a substance known as "speedy dry" to soak up the oil. Eventually, he disposed of the oil-saturated speedy dry and the damaged oil tank, and scrubbed and deodorized his basement.

Mr. and Mrs. Busch sold the residence to Michael Milano, conveying title to him on August 15, 1986. Milano sold the property to appellants, Raymond and Theresa Thomas, on September 22, 1987. Thereafter, due to a continuous and pervasive odor of fuel oil, the Thomases hired a testing laboratory to take and analyze soil samples. The soil tests confirmed the presence of hydrocarbons and, eventually, the Thomases learned of the spill, which they then reported to the Department of Environmental Protection (DEP). DEP ordered removal of the contaminated soil.

Mr. and Mrs. Thomas retained counsel and sought relief in two forums. They filed an action in the Superior Court, Law Division, titled Thomas v. Milano, and also filed a claim for damages against the New Jersey Spill Compensation Fund (Fund) under the Act. Mr. and Mrs. Busch contested the claim against the Fund and it was referred to arbitration. Ultimately, the Busches withdrew their objection to all aspects of the claim except the Thomases' request for attorneys' fees to be paid by the Fund. The arbitrator rejected the claim for attorneys' tees, ruling that,

neither the Act nor the regulations promulgated pursuant thereto authorize payment for an attorney's time expended in gathering and marshalling information and evidence for a claim or arbitration. (Although, conceivably, the fund could pay for attorneys' fees necessary for contracting and obtaining permits, etc., necessary for restoring the subject property.)

Mr. and Mrs. Thomas appeal, and we affirm.

The Act prohibits the discharge of petroleum and other hazardous substances. N.J.S.A. 58:10-23.11c (§ 23.11c). The Act authorizes the DEP "to clean up and remove or arrange for the cleanup and removal" of the discharged substances. § 23.11f.a(1). Alternatively, the DEP may "direct the discharger to clean up and remove, or arrange for the cleanup and removal of, such discharge." Ibid. The Act grants a right of contribution to persons who remedy a discharge "against all other dischargers and persons . . . responsible for a discharged hazardous substance." § 23.11f.a(2)

The Act also creates the Fund, § 23.11i., crediting it "with all taxes and penalties related to this act." Ibid.; see § 23.11h. The Fund is strictly liable "for all cleanup and removal costs and for all direct and indirect damages no matter by whom sustained." § 23.11g.a. A claim against the Fund must be filed with the Fund's administrator "not later than one year after the date of discovery of damage." § 23.11k. The Act requires the administrator to "promote and arrange a settlement between the claimant and the person responsible for the discharge," § 23.111., and the administrator may settle any claim against the Fund. § 23.11m. A claim against the Fund may be contested by the administrator, by persons alleged to have caused the discharge and, if the source of the discharge is unknown, by any person. § 23.11n. Contested claims are determined by arbitration. Ibid. The Fund is subrogated to the right of any successful claimant to recover from the person responsible for the discharge. § 23.11q.

The Thomases contend that counsel fees incurred in preparing and presenting the claim to the Fund administrator, in litigating the claim in arbitration, and in litigating the claim in the Superior Court,*fn1 constitute "direct or indirect" damages which the Fund must pay under § 23.11g.a. In this opinion, we use the phrase "litigation fees" or the equivalent to refer to all those elements of the counsel fee request. The issue is one of legislative intent. "Sources of legislative intent are the language of a statute, the policy behind a statute, concepts of reasonableness and legislative history." Coletti v. Union County Freeholders, 217 N.J. Super. 31, 35, 524 A.2d 1270 (App. Div. 1987)(citing Shapiro v. Essex County Freeholder Board, 177 N.J. Super. 87, 424 A.2d 1203 (Law Div. 1980), aff'd, 183 N.J. Super. 24, 443 A.2d 219 (App. Div.), aff'd, 91 N.J. 430, 453 A.2d 158 (1982)).

We explore the Act's intent regarding counsel fees against the background of the "American rule" that "the prevailing litigant is ordinarily not entitled to collect a reasonable attorneys' fee from the loser." Van Horn v. City of Trenton, 80 N.J. 528, 538, 404 A.2d 615 (1979)(quoting Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247, 95 S. Ct. 1612, 1616, 44 L. Ed. 2d 141, 147 (1975)). Deeply imbedded in New Jersey jurisprudence is the principle that "legal expenses . . . are not recoverable absent express authorization by statute, court rule, or contract." State, Dept. of Envtl. Protection v. Ventron, 94 N.J. 473, 504, 468 A.2d 150 (1983)(hereinafter Ventron). See Right to Choose v. Byrne, 91 N.J. 287, 316, 450 A.2d 925 (1982); Van Horne v. City of Trenton, supra; Gerhardt v. Continental Ins. Co., 48 N.J. 291, 301, 225 A.2d 328 (1966). The principle is ...

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