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GEI Intern. Corp. v. St. Paul Fire and Marine Ins. Co.

February 16, 1996

GEI INTERNATIONAL CORPORATION, A NEW JERSEY CORPORATION (FORMERLY KNOWN AS ANDREW DENHOLM, INC.), PLAINTIFF-APPELLANT,
v.
ST. PAUL FIRE AND MARINE INSURANCE COMPANY, FEDERAL INSURANCE COMPANY, ATLANTIC MUTUAL INSURANCE COMPANY, NORTHWESTERN NATIONAL INSURANCE COMPANY, MIDLAND INSURANCE COMPANY, CHUBB GROUP OF INSURANCE COMPANIES, FIREMAN'S FUND INSURANCE COMPANY, INC., IDEAL MUTUAL INSURANCE COMPANY, INC., ORB HOLDING COMPANY, JOHN BLACK, ROBERT DEDERER, FRANK VANDERHOOF, METRA-MATIC CORPORATION, AND NEW JERSEY PROPERTY/LIABILITY GUARANTY ASSOCIATION, DEFENDANTS, AND HI-SPEED CHECKWEIGHER, INC., SUCCESSOR IN INTEREST TO METRAMATIC CORPORATION, AND AG FUR PRAZIONSINSTRUMENTE, DEFENDANTS-RESPONDENTS.



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

Approved for Publication February 16, 1996.

Before Judges Baime, Villanueva, and Kimmelman. The opinion of the court was delivered by Kimmelman, J.A.D. (temporarily assigned).

The opinion of the court was delivered by: Kimmelman

The opinion of the court was delivered by KIMMELMAN, J.A.D. (temporarily assigned).

In this toxic tort litigation, the issues of which have been bifurcated for trial, plaintiff seeks (1) contribution from certain named defendants for its cleanup costs (the liability trial) and (2) a declaratory judgment against the insurance company defendants to determine and enforce coverage under several policies (the coverage trial). The trial court struck plaintiff's demand for a jury trial on both of the bifurcated issues. Pursuant to R. 2:2-4, we granted plaintiff's application for leave to appeal from that interlocutory ruling.

Although defendants Hi-Speed Checkweigher, Inc. (Hi-Speed) and AG fur Prazionsinstrumente (AG) in their answer did demand a trial by jury, their demand was obviously withdrawn when said defendants Hi-Speed and AG successfully moved to strike plaintiff's demand for a trial by jury in the liability trial.

In addition to plaintiff's jury demand, the defendant insurance companies, in their answers, also demanded a trial by jury. The trial court additionally struck all such demands by said defendants for a trial by jury by ordering a separate bench trial on the insurance coverage issues. It was further ordered that the verdict to be rendered in the liability trial assigning liability amongst the various parties would be binding upon the insurance company defendants. The insurance company defendants have not appealed the trial court's ruling and have neither entered appearances nor responded with respect to this appeal.

Defendants Orb Holding Company, John Black, Robert Dederer, and Frank Vanderhoof (sometimes hereinafter referred to as Orb or the Orb defendants) also demanded a trial by jury in their answer, cross-claims, and third-party complaint seeking to compel coverage under policies of insurance issued to them. Their demand is regarded as having been likewise stricken by virtue of the foregoing orders. They, too, have not appealed the trial court's ruling and have neither entered appearances nor responded with respect to this appeal.

Factually, this action relates to the apportionment of environmental remediation costs incurred and to be incurred by plaintiff in connection with an industrial site located in Landing (Roxbury Township), New Jersey. Defendant Metramatic Corporation (Metramatic) operated a manufacturing facility on the site from 1969 to March 1983. Defendants Black, Dederer, and Vanderhoof owned Metramatic during this period. Defendant Orb, a general partnership composed of Black, Dederer, and Vanderhoof, owned the site itself. In March 1983, Orb transferred title to the real estate to Metramatic, and plaintiff purchased the capital stock of Metramatic.

Plaintiff continued with the operation of Metramatic at the site in question until July 1988 when plaintiff sold the stock of Metramatic to defendant AG. Metramatic was then merged into defendant Hi-Speed, a subsidiary of AG.

Plaintiff's sale of the Metramatic stock to AG triggered the Environmental Cleanup Responsibility Act (ECRA), N.J.S.A. 13:1K-6 to -14, which mandates the remediation of contaminated industrial property upon transfer of ownership of or cessation of the operations conducted thereon. By subsequent amendment, ECRA is now known as the Industrial Site Recovery Act (ISRA), N.J.S.A. 13:1K-6 to -14. Compliance with ECRA required plaintiff to conduct a full investigation to determine the possible existence of hazardous contamination and the necessity for environmental remediation of the site. N.J.S.A. 13:1K-9. The investigation revealed contamination. In order for the sale of Metramatic's stock to be consummated before the cleanup of the site could take place, it was necessary for plaintiff to enter into an administrative consent order (ACO) with the New Jersey Department of Environmental Protection. Plaintiff has undertaken the cleanup of the toxic contamination found on the site in compliance with the terms of the ACO and to date has incurred costs, we are informed, in excess of $2,000,000. The cleanup work continues.

Plaintiff has brought this action against Hi-Speed and AG, as successors to Metramatic, and the Orb defendants, the prior owners of the site, for the recovery of plaintiff's remediation costs from said defendants by way of contribution.

I

The liability trial to determine the relative responsibility of Hi-Speed, AG, and the Orb defendants for the cost of remediating the contamination at and around the site is principally based upon the contribution provisions of the Spill Compensation and Control Act (the Spill Act), N.J.S.A. 58:10-23.11 to -23.11z. The complaint also contains counts for common law contribution and indemnification and for strict liability in tort, which latter ...


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