On appeal from the Superior Court of New Jersey, Law Division, Mercer County (A-0974-00T3 & A-1656-00T3) and Hudson County (A-5496-00T3), MER-L-1240-00; MER-L-1220-00; HUD-L-1238-01.
Before Judges King, Cuff and Winkelstein.
The opinion of the court was delivered by: Cuff, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
In these consolidated condemnation appeals, we review the use by the State of environmental reservation clauses, which preserve the State's right to recover from the former property owner the cost of cleanup and removal of hazardous substances on property acquired by the State through its eminent domain authority. Although the issue has been addressed by several trial judges in several vicinages with disparate results, the issue is one of first impression for this court. We hold that the use of the environmental reservation clauses in the final judgment is consistent with and furthers the immunity from cleanup and removal costs conferred on the State and other public entities by N.J.S.A. 58:10-23.11g-d(4).
On April 7 and April 12, 2000, plaintiff New Jersey Transit (NJT) commenced two condemnation actions against defendant Goldman, Popkin, Caputi, Hegedus and Carom Partnership (Goldman Popkin), which traded as Best-Spot Parking, and against Cat in the Hat, LLC (Cat in the Hat), which traded as Penn Central Parking, by filing verified complaints and declarations of taking. The properties are adjacent but separately owned parking lots proximate to the Trenton Train Station. NJT has acquired each property in preparation for construction of a Light Rail Line between Trenton and Camden.
Defendant Sandra Eisen is the owner of property in Hudson County acquired by the New Jersey Department of Transportation (NJDOT). We have no knowledge of the project for which Eisen's property was acquired because her brief was suppressed and she notified the court she would rely on the legal arguments submitted on behalf of defendants Goldman Popkin and Cat in the Hat.
Preliminary environmental assessments of the two properties alerted NJT of the need for actual soil and groundwater testing. NJT, in a letter dated January 31, 2000, informed Goldman Popkin that the Property Acquisition Environmental Cost Estimating (PAECE) Report dated November 4, 1998, detected soil contamination on the property. NJT, however, also wrote that the New Jersey Department of Environmental Protection (NJDEP) would most likely only require placement of a Deed Notice on the parcel, instead of soil remediation, because the samples showed contaminate concentrations below Non-Residential NJDEP Soil Cleanup Criteria. A similar letter was sent to Cat in the Hat on March 6, 2000. Each property owner was given the results of the environmental testing and the recommended remediation.
In both PAECE Reports, the environmental consultant stated that the easiest and least expensive way to remediate each site would be to maintain an impervious asphalt cap, i.e. the parking lot surface, to preclude human environmental exposure. The estimated cost of remediation by imposition of the Deed Notice was $5000, with an additional cost of $20,000 for testing and delineation on each site, for a total of $25,000 to be paid by each property owner.
Both verified complaints filed by NJT sought a final judgment which contained clauses by which it, as condemnor, reserved the right to recover any present or future costs of remediation, sanitary landfill closure, and/or removal of solid waste. The clauses read as follows:
7. Plaintiff hereby reserves any and all rights it had or may have to recovery in this action, in any subsequent or pending action or by any administrative means, all costs of remediation and/or cleanup of contamination and/or removal of solid waste and/or sanitary landfill closure that have been incurred or may be incurred in the future by reason of conditions which were in existence as of or prior to the date of vesting of title and possession pursuant to N.J.S.A. 20:3-19. Plaintiff further reserves the right to seek, at its sole discretion, any and all available legal, administrative and equitable remedies to compel defendants to remediate and/or clean up the property in accordance with applicable state and federal statutory and regulatory provisions or to remove solid waste or carry out closure of a sanitary landfill if located on the subject property. Pursuant to N.J.S.A. 58:10-23.11g(d)(4), plaintiff is not liable for cleanup and removal costs of any discharge which occurred or began prior to the New Jersey Transit Corporation's ownership.
8. ....Notwithstanding the results of the State's inspection and the State's determination to limit its cost recovery to the costs associated with the Deed Notice, plaintiff does not accept liability for any pre-existing contamination or solid waste, whether known now or subsequently discovered, on the subject property. ... Furthermore, plaintiff has valued the property as if it has been remediated.... Plaintiff further reserves its right to amend, at its discretion, the amount of the estimated cleanup or remediation costs, as well as the scope and breadth of the cleanup or remediation, if additional information becomes available.
On April 13, 2000, the Superior Court, Law Division (Mercer County) signed orders requiring Goldman Popkin and Cat in the Hat to show cause on June 2, 2000, why judgment should not be rendered appointing three disinterested commissioners to fix the value of defendants' properties, and why final judgment should not be entered declaring that NJT properly exercised its powers of eminent domain. Further, the orders to show cause sought judgment declaring the environmental reservations in paragraphs ...