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Marsh v. New Jersey Spill Compensation Fund and Environmental Claims Admin.

January 25, 1996

MARIE MARSH, PETITIONER-APPELLANT,
v.
NEW JERSEY SPILL COMPENSATION FUND AND ENVIRONMENTAL CLAIMS ADMINISTRATION, NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION AND ENERGY, RESPONDENT-RESPONDENT.



On appeal from a Decision of the New Jersey Department of Environmental Protection.

Approved for Publication January 25, 1996.

Before Judges Long and Brochin. The opinion of the court was delivered by Brochin, J.A.D.

The opinion of the court was delivered by: Brochin

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

The New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 et seq., prohibits the "discharge" of "hazardous substances," including petroleum products, into the environment. N.J.S.A. 58:10-23.11b(h) and (k), -23.11c; Atlantic City Mun. Utilities Auth. v. Hunt, 210 N.J. Super. 76, 84, 509 A.2d 225 (App. Div. 1986). The Spill Act established the New Jersey Spill Compensation Fund, N.J.S.A. 58:10-23.11i, and has made the Spill Fund "strictly liable, without regard to fault, for all cleanup and removal costs and for all direct and indirect damages no matter by whom sustained" resulting from any prohibited "discharge." N.J.S.A. 58:10-23.11g(a). However, if the person who has incurred the cleanup or removal costs, or who has sustained the damages "has discharged a hazardous substance, or is in any way responsible for any hazardous substance," that person is "strictlyliable, jointly and severally, without regard to fault, for all cleanup and removal costs no matter by whom incurred," N.J.S.A. 58:10-23.11g(c)(1), and is not entitled to reimbursement from the Spill Fund for cleanup or removal costs or damages. N.J.A.C. 7:1J-2.7; Tree Realty, Inc. v. Department of Treasury, 205 N.J. Super. 346, 500 A.2d 1075 (App. Div. 1985) (stating that a "responsible" person is ineligible to receive compensation from the Spill Fund); State Dep't of Envtl. Protection v. Ventron Corp., 182 N.J. Super. 210, 228 (App. Div. 1981) (same), aff'd on other grounds, 94 N.J. 473 (1983). If the Spill Fund contests a claim for "cleanup and removal costs," the claim is to be determined by an arbitrator whose decision is appealable to this court. N.J.S.A. 58:10-23.11n. Cf. In re Thomas, 278 N.J. Super. 580, 651 A.2d 1063 (App. Div.), certif. denied, 141 N.J. 95 (1995).

The issues presented by the present appeal are whether or not the statutory arbitrator who decided this case was correct in his determination that the appellant, Marie Marsh, was a "person

Mrs. Marsh's parents, Vincent and Mary Bernardo, acquired the property in question on June 7, 1968. Sole title vested in Mrs. Bernardo when her husband died on December 18, 1979. Since 1930, the previous owners leased it to one gasoline company or another for use as a gasoline station, and Mr. and Mrs. Bernardo continued to lease the property for that purpose until 1974.

Mrs. Marsh acquired the property by a gift from her mother in February 1991. Before accepting the gift, Mrs. Marsh knew thather parents had leased the property for use as a gasoline station, but she did not know until after she had acquired the property that it contained underground gasoline tanks or that it was polluted by gasoline from those tanks. Those facts were disclosed by an investigation required by the municipality when Mrs. Marsh sought subdivision approval.

The arbitrator reached his decision by a procedure in the nature of summary judgment. He held that because Mrs. Marsh was an owner of the property, she was "responsible" within the meaning of N.J.S.A. 58:10-23.11g for any part of the pollution which occurred while she owned the property, that some part had occurred during her ownership, and that she could not sustain her burden of proving what part of the pollution had occurred before the property was deeded to her. Alternatively, he ruled that because Mrs. Marsh knew when she voluntarily accepted the property that her parents had previously leased it for use as a gasoline station, she was "responsible" for discharges of gasoline which occurred both before and after she acquired it. The arbitrator's decision also states that Mrs. Marsh was the owner of the underground gasoline tanks. Mrs. Marsh argues that that "finding may have been an additional basis for the arbitrator's ruling." However, because Mrs. Marsh's ownership of the tanks is immaterial to our decision, we will not attempt to decide whether the arbitrator's determination as to her ownership of the tanks was a basis for his decision.

On appeal, Mrs. Marsh argues that the arbitrator's determination that she is "responsible" within the meaning of N.J.S.A. 58:10-23.11g is legal error. She also contends his findings that she owned the tanks and that she could not demonstrate what portion of the discharge occurred prior to her ownership of the real property decide material issues of fact which should not have been decided by a summary procedure.

The New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 et seq., does not define "responsible" as the term is used in N.J.S.A. 58:10-23.11g(c)(1). After noting that omission, the Supreme Court in New Jersey Department of Environmental Protection v. Ventron Corp., 94 N.J. 473, 468 A.2d 150 (1983), stated:

The Legislature intended the Spill Act to be "liberally construed to effect its purposes." N.J.S.A. 58:10-23.11x. The subsequent acquisition of land on which hazardous substances have been dumped may be insufficient to hold the owner responsible. Ownership or control over the property at the time of the discharge, however, will suffice. See State Dep't of Envtl. Protection v. Exxon Corp., 151 N.J. Super. 464, 470-74 (Ch. Div. 1977).

[ Id. at 502].

The issue before the Court to which the quoted statement is directed was whether Velsicol, one of the three principal defendants in the Ventron case, was a "responsible" party under the Spill Act and thereby liable for the cost of removing mercury pollution which had been seeping into Berry's Creek from a forty-acre tract of land for a number of years. Id. at 499-503. The trial court and our court had held that Velsicol was a "responsible" party. We reached that result by piercing Velsicol's corporate veil, ruling that it and its mercury processing subsidiary should be treated as a single entity for the purpose of determining liability under the Spill Act. The Supreme Court disagreed with our piercing the corporate veil, but it affirmed our holding that Velsicol was a "responsible" party. The Supreme Court's holding was based on Velsicol's own conduct. The Ventron opinion's Discussion of ...


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