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Smith v. Vitollo


August 6, 2008


On appeal from the Superior Court of New Jersey, Chancery Division, Monmouth County, Docket No. C-284-02.

Per curiam.


Argued March 4, 2008

Before Judges Parrillo, Gilroy and Baxter.

Defendant Diana Litwin, as Administratrix of the Estate of David W. Litwin, deceased,*fn1 appeals from the June 9, 2006 order of the Chancery Division, which among other matters, granted plaintiff Michael Smith summary judgment against David W. Litwin in the amount of $85,906.31, representing $85,431.25 in environmental remediation costs and $475.06 in costs of suit.*fn2

We reverse and remand the matter to the Chancery Division for further proceedings consistent with this opinion.

Although the underlying facts are simple and straightforward, the procedural history is lengthy and tortuous. Smith is the former owner of property located at 204 East Main Street, or Block 95, Lot 7.02, in Manasquan, New Jersey. Located on the property is a building used for commercial purposes. Defendant Rose Vitollo is the owner of property located at 202 East Main Street, or Block 95, Lot 7.01, on which there is located a building used for commercial purposes by defendants, William Sheehan's Engine Rebuilding, Atlas Bronze, and Smith Tool Company, Inc. Lot 7.01 adjoins the northerly property line of Lot 7.02, and an alleyway straddles the property line between the buildings located on each lot. Smith and Vitollo also owned as tenants in common a third lot known as 206 East Main Street, or Block 95, Lot 12, which was used for parking automobiles; the property also contained a 1,000 gallon gasoline underground storage tank (UST).*fn3

On October 25, 1992, Vitollo entered into an installment contract for the sale of her interests in the properties at 202 and 206 East Main Street to Litwin for $175,000, payable over fifteen years, with interest at 8% per annum. Because the properties were used for commercial purposes, the sale was subject to the New Jersey Environmental Cleanup Responsibility Act (ECRA), N.J.S.A. 13:1K-6 to -13.*fn4 Pursuant to the terms of the contract of sale, Litwin agreed to be responsible for any remediation necessary to satisfy ECRA and to hold Vitollo harmless from any damage claims arising therefrom.

In 2002, in anticipation of selling his property interests to a third-party purchaser, Smith engaged James Golden d/b/a Environmental Systems, to perform an environmental study of Lots 7.02 and 12. The investigation identified soil and groundwater contamination on Lot 12, the lot jointly owned by Smith and Vitollo, caused by leakage from the abandoned UST. In addition, soil and groundwater contamination was found in the alleyway separating the buildings on Lots 7.01 and 7.02. Smith requested Vitollo and Litwin's permission for his environmental consultant to enter onto Lot 7.01 to conduct further studies to locate the source of contamination; Vitollo and Litwin refused.

On September 17, 2002, Smith filed a complaint against Vitollo, alleging nuisance by refusing to allow Smith's environmental consultant access to Lot 7.01 to conduct environmental sampling and testing. In his complaint Smith sought: 1) an order "enjoining Defendant Rose Vitollo from continuing the nuisance caused by the pollutants emanating from her property onto the property of the plaintiff and compelling her to clean up the source of contamination"; and 2) compensatory damages. On October 17, 2002, Smith filed an amended complaint adding Litwin, William Sheehan's Engine Rebuilding, Atlas Bronze, and Smith Tool Company, Inc., as defendants.

On October 31, 2002, Vitollo filed her answer to the amended complaint, asserting a counterclaim against Smith for contaminating Lots 7.01 and 12. Vitollo also asserted a cross-claim against Litwin, contending that since the date of their installment contract, Litwin had assumed full possession and control over Lots 7.01 and 12, and was responsible for any necessary environmental remediation and cleanup of the two lots. In her cross-claim, Vitollo alleged: 1) a claim of equitable conversion of the properties by Litwin, seeking damages for the costs of environmental remediation; and 2) a claim for breach of contract, seeking an order compelling Litwin to perform under the contract by indemnifying and holding her harmless from any claims by Smith; and in the alternative, rescission of the contract.

On April 4, 2003, Smith filed a motion seeking to compel Vitollo and Litwin to provide complete and unfettered access to Lot 7.01 to Smith's environmental contractor to perform studies of the property; and to pay one-half of the remediation costs of Lot 12 and of the alleyway between Lots 7.01 and 7.02. The motion was supported by certifications of Smith and Golden, stating that Golden had removed the UST from Lot 12 and that the cost of remediation of that lot was $17,009.50. Attached to Golden's certification was a statement dated March 31, 2003, itemizing the costs associated with the removal of the UST.

Golden also opined in his certification that "the contamination located in the alleyway and boundary line areas of the properties emanated from [Vitollo and Litwin's] property. That is because the amount of contamination is greater on [Vitollo and Litwin's] side of the boundary and the particular contaminant found is consistent with the lubricants and the tooling and machine oil used at one of the businesses on [their] property." This opinion, however, was contrary to the opinion expressed by Golden in his report of February 21, 2003, attached to his certification in which he stated: "Soil samples obtained on both sides of the boundary line are inconclusive [as] [t]o where the source of the [alleyway] contamination [comes from]." Golden estimated the costs of cleanup of the alleyway would be from $18,000 to $22,000.

Litwin opposed the motion, claiming that he was not responsible for the cost of the UST removal and that his environmental specialist, Wilmer C. Bahr of Environmental Recovery Systems, Inc., d/b/a Petroleum Specialists, Inc., had opined that it was "not possible to conclude that the source of the contamination encountered in the alleyway, which is the area where plaintiff seeks payment for one-half of the remediation costs, is from the Vitollo/Litwin property." Vitollo cross-moved against Litwin, seeking indemnification of any monies due to Smith, pursuant to the terms of her installment contract with Litwin.

On July 8, 2003, the trial judge entered two orders. The first order granted Smith's motion: 1) directing that Vitollo and Litwin "provide access to real property located at 204/206 East Main Street . . . for environmental remediation and entering judgment against them for one-half of the cost of the environmental remediation"; 2) directing that Vitollo and Litwin "cooperate with the Plaintiff and his environmental consultant with regard to the granting of full and complete access to the real property for the conduct of all environmental remediation services which are still necessary to achieve a clean up of the property"; 3) determining that Vitollo and Litwin were "jointly and severally liable to the Plaintiff for one-half of the cost of removal of a leaking 1,000 gallon gasoline tank and remediation of the contamination caused by [the UST]. The total . . . costs . . . were $17,009.50 and this Order grants Plaintiff Final Judgment in the amount of $8,504.75 against [Vitollo and Litwin]"; and 4) directing that Vitollo and Litwin were "jointly and severally liable for payment of one-half of the cost of investigation and remediation of the cross boundary contamination. The total estimated cost . . . is $16,680.00, and this Order grants Plaintiff Final Judgment in the amount of $8,340 against [Vitollo and Litman]."*fn5 The second order granted Vitollo summary judgment against Litwin "as a matter of law because Defendant Litwin contractually assumed all environmental remediation obligations on Ms. Vitollo's behalf."

On September 26, 2003, on motion of Vitollo, the trial judge entered an order directing Litwin to "tender payment and/or assist Plaintiff in completing the remediation required under the Court's prior order of July 8, 2003." The order also directed Litwin to "implement a comprehensive remediation" of Lots 7.01 and 12, setting completion dates for each phase of the remediation plan "in order to complete the remediation of the subject property and obtain a No-Further Action [(NFA)] [l]etter no later than October 26, 2007." On June 11, 2004, another trial judge entered an order determining that Litwin had violated Vitollo's litigant's rights by failing to comply with the environmental remediation schedule contained in the order of September 26, 2003, and directing that if Litwin fails to comply with the former order, that the court would entertain an application to appoint a receiver for Litwin's properties.

On September 8, 2005, Vitollo filed an application for an Order to Show Cause (OTSC), seeking to hold Litwin in contempt for failure to comply with the remediation schedule of September 26, 2003, and for the appointment of a receiver of Litwin's properties. On November 2, 2005, prior to the return date of the OTSC, the New Jersey Department of Environmental Protection (DEP) issued a site investigation report that identified the source of the environmental contamination of the alleyway as a hidden and buried discharge pipe emanating from the building on Lot 7.01.

The pipe was [four inches] in diameter and was constructed out of tar paper-like substance. The pipe was found to be collapsed in certain areas due to loose fittings . . . . The pipe was traced to outside the rear wall of the alleyway adjacent to the railroad tracks. The pipe extended approximately two feet from the wall and approximately four feet in depth; where a stone bed was encountered. An old weathered fuel oil odor was detected in soils, and from the material in the pipe . . . .

Excavation was then conducted in the original excavation area to try to locate the pipe. The pipe was found extending from the adjacent Litwin/Vitollo building . . . . The Department would not hold Mr. Smith responsible for the remediation of the alleyway, and would issue a letter indicating that the contamination is a result of an off-site source.

On November 18, 2005, the trial judge conducted a hearing on Vitollo's application for the appointment of a receiver to undertake the environmental remediation as directed by the November 26, 2003 order. Recognizing that Litwin's delay in completing the environmental remediation of the property was caused in part by his illness, the second trial judge did not appoint a receiver, but fashioned a remedy, appointing a Special Fiscal Agent to take charge of and manage the remediation of Lot 7.01. In doing so, the judge directed the Agent to consult with and use the environmental studies already completed by Litwin's environmental consultants, so as not to incur duplicative costs. A confirming order was entered on November 29, 2005.

On January 26, 2006, the DEP issued Smith an NFA letter stating in part that "[t]he site investigation revealed the source of the contamination [of the alleyway] to be coming from the adjacent 202 Main Street property . . . ." On April 25, 2006, Smith filed a motion for summary judgment against Vitollo and Litwin, seeking to recover an additional $85,431.25 incurred in the environmental remediation of the alleyway, together with $41,692.60 in attorneys' fees, and $475.06 in costs of suit. Counsel for Litwin requested an adjournment, contending that he needed additional time to submit opposition to the motion because he had recently suffered renal failure requiring a kidney transplant. At the time of the motion, counsel had not returned to work on a regular basis because of ongoing health problems. Although Smith's counsel had consented to the adjournment, the request was denied.

On June 9, 2006, the return date of the motion, the trial judge permitted Litwin's counsel to argue against the motion. Litwin and Vitollo opposed the motion, contending that there were material questions of fact concerning whether all of the environmental cleanup costs and counsel fees sought by Smith pertained only to the remediation of the alleyway and not to unrelated portions of Smith's property. Additionally, Litwin's counsel argued that a question of fact existed concerning whether contamination of the alleyway was caused by contaminants emanating from the Litwin/Vitollo building, contending that plaintiff's expert in 2003 had stated that he was unable to determine where the contamination was emanating from. Although the trial judge initially indicated that he agreed that questions of fact existed and would deny the motion setting the matter down for a plenary hearing, he subsequently granted the motion in part, awarding Smith all of the remediation costs requested, as well as costs of suit, but not legal fees. Litwin moved for reconsideration, but later withdrew the motion because it was not timely filed. This appeal followed.

On appeal, Litwin argues: 1) the trial court's order of June 9, 2006, directing that he pay all of the remediation costs of the alleyway violates the principles of res judicata and of the law of the case; 2) plaintiff is judicially estopped from seeking to have him pay all of the remediation costs of the alleyway (not specifically raised below); 3) the trial court erroneously granted summary judgment based on incompetent evidence; and 4) the trial court erroneously denied his request for an adjournment of the summary judgment motion. Because we agree with Litwin's procedural argument that the trial judge should have granted his request for an adjournment of the motion, we reverse and remand to the trial court to reconsider the motion. Accordingly, we do not address either the merits of Smith's claim or the legal arguments raised on appeal by Litwin in opposition thereto.

"'The granting of trial adjournments rests within the sound discretion of the trial court. Absent an abuse of discretion, denial of a request for an adjournment does not constitute reversible error.'" State v. D'Orsi, 113 N.J. Super. 527, 532 (App. Div.) (quoting State v. Smith, 87 N.J. Super. 98, 105 (App. Div. 1965)), certif. denied, 58 N.J. 335 (1971).

Here, at the time of Smith's motion, Smith had sold his property interests in Lots 7.02 and 12 to a third party, and as such, his claim was solely for damages for cost of remediation and counsel fees. The motion did not seek to compel further remediation of the alleyway. An adjournment of the motion to accommodate Litwin's counsel's request to submit late opposition papers would not have caused substantial prejudice to either Smith or Vitollo. Litwin's counsel had requested the adjournment based on his recent illnesses, and Smith did not object. Because the interest of justice requires that matters be disposed of on the merits and not on strict adherence to the time requirements of court rules solely to accommodate the disposition of cases, we conclude that the judge mistakenly exercised his discretion when he denied the adjournment request.

In concluding that the motion should have been adjourned, we are mindful of Litwin's prior failures to comply with the remediation schedule contained in the order of September 26, 2003, and late submissions of environmental study reports to the court and his adversaries. However, Litwin was sanctioned by the court for past violations of litigant's rights and his past transgressions should not have prejudiced his attorney's request for an adjournment of the motion because of his recent illness. If a trial court believes that a litigant is unjustifiably consuming judicial resources or causing delay in a proceeding, the court might look to Rule 1:1-2. Audubon Volunteer Fire Co. No. 1 v. Church Constr. Co., 206 N.J. Super. 405, 407 (App. Div. 1986).

In Audubon, in addressing a trial court's denial of a motion to vacate a default, we suggested that a "court may proceed, in the absence of [a] rule, in any manner compatible with purposes of securing a just determination, simplicity in procedure, fairness in administration and elimination of justifiable expense and delay." Ibid. (citing R. 1:1-2). See also Rabboh v. Lamattina, 312 N.J. Super. 487, 493 (App. Div. 1998), certif. denied, 160 N.J. 88 (1999). "Until courts have exhausted means of performing their shepherding function which do not terminate or deeply affect the outcome of a case, they ought not to bar a litigant's way to the courtroom." Audubon Volunteer Fire, supra, 206 N.J. Super. at 407. In reversing the denial of the motion to vacate the default, Judge Cohen stated:

We appreciate the desirability of the prompt disposal of cases. Courts should not forget, however, that they merely provide a disinterested forum for the just resolution of disputes. Ordinarily, the swift movement of cases serves the parties' interests, but the shepherding function we serve is abused by unnecessarily closing the courtroom doors to a litigant whose only sin is to retain a lawyer who delays filing an answer during settlement negotiations. Eagerness to move cases must defer to our paramount duty to administer justice in the individual case. [Id. at 406.]

We determine that the same principles are applicable to the present matter. Because, with certain exceptions not applicable here, "any rule may be relaxed or dispensed with by the court in which the action is pending if adherence to it would result in an injustice," R. 1:1-2, we are satisfied that the trial judge should have relaxed the time constraint for filing opposition to the summary judgment under Rule 4:46-1 and granted the adjournment.

We recognize that the trial judge attempted to accommodate Litwin by allowing his counsel to orally argue against the motion, but we conclude that oral argument did not substitute for submissions of a certification and a legal brief addressing not only the issue of damages claimed by Smith, but also the issues of collateral estoppel and law of the case based on the two orders of July 8, 2003. Although we do not express whether the arguments raised on appeal would have resulted in a different result on the motion, we only state that Litwin was entitled to have submitted opposition on the merits in the trial court.

Accordingly, we reverse the grant of summary judgment; and remand the matter to the trial court for further proceedings consistent with this opinion. We do not retain jurisdiction.

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