Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

Transtech Industries, Inc. v. Certain Underwriters at Lloyds London

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 21, 2009

TRANSTECH INDUSTRIES, INC., PLAINTIFF-APPELLANT, AND KIN-BUC, INC., AND FILCREST REALTY, INC., PLAINTIFFS,
v.
CERTAIN UNDERWRITERS AT LLOYDS LONDON, LONDON MARKET INSURANCE COMPANIES, FIRST STATE INSURANCE COMPANY, AND INTERNATIONAL INSURANCE COMPANY, DEFENDANTS, AND SCP CARLSTADT COOPERATING PRP GROUP, INTERVENOR-RESPONDENT.

On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-10827-95.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued December 16, 2008

Before Judges Winkelstein, Fuentes and Gilroy.

Plaintiff Transtech Industries, Inc. (Transtech), appeals from the December 21, 2007 order denying its motion seeking an accounting of a Qualified Settlement Fund (QSF). We affirm.

The combined statement of facts and procedural history is as follows. Transtech is the former owner/operator of a solvent and waste oil reclamation facility located at 216 Paterson Plank Road, or Block 124, Lots 1-5, Carlstadt. The property is now known as the SCP Carlstadt Superfund Site (the site). In 1985, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C.A. §§ 9601-9675, the United States Environmental Protection Agency (EPA) ordered Transtech and other potentially responsible parties (PRPs) to remediate the site.

Intervenor, SCP Carlstadt Cooperating PRP Group (SCP Carlstadt), is an assemblage of other PRPs that banded together to remediate the site. In 1988, SCP Carlstadt filed a contribution action in the United States District Court in the District of New Jersey seeking to recover monies it spent in investigating and remediating the site. AT&T Technologies, Inc. v. Transtech Indus., Inc., C.A. No. 88-4267 (D.N.J. filed 1988). During the pendency of that action, a court-appointed Special Master determined Transtech 60% and SCP Carlstadt 40% responsible for the remediation costs.

In March 1995, Transtech and SCP Carlstadt settled the federal action with Transtech paying SCP Carlstadt $4,220,000 from proceeds of Transtech's primary insurance policies and assigning Transtech's rights under certain excess insurance policies. Shortly after settlement, Transtech filed this declaratory judgment action against its excess insurers, seeking additional coverage for its liability associated with the site.

In 2001, Transtech and the excess insurers settled this declaratory judgment action. SCP Carlstadt intervened in the action to ensure that the settlement proceeds were deposited in a QSF for the benefit of SCP Carlstadt. On November 26, 2001, the trial court entered a consent order memorializing the parties' settlement. That order established the QSF for receipt of the insurance proceeds from the excess insurance carriers to be used solely for remediation of the site. Nothing in the settlement agreement indicates that Transtech was a beneficiary of the settlement proceeds or of the QSF. Under the terms of settlement, any monies that remain in the QSF after completion of remediation are to be allocated among, and paid only to, the members of SCP Carlstadt in accordance with a formula yet to be determined. Lastly, the consent order provided that "the court shall retain jurisdiction over the parties and the SCP Carlstadt PRP Group for purposes of enforcing and resolving any disputes" arising out of the settlement. In 2002, Transtech deposited $12,000,000 received from its excess insurers into the QSF; in 2005, Transtech transferred an additional $350,000 to SCP Carlstadt for deposit into the QSF.

In 2006, the site was again implicated by the EPA in connection with contamination of several nearby waterways. On March 9, 2006, the EPA notified Transtech of its potential liability under CERCLA for pollution at the Berry's Creek Study Area. Transtech is implicated as a PRP for the Berry's Creek remediation based on its status as owner/operator of the site, which is encompassed by the larger Berry's Creek Study Area.

The EPA's March 9 notification requested that Transtech perform a remedial investigation and feasibility study. The notification serves as the statutory predicate to a CERCLA enforcement action. 42 U.S.C.A. §§ 9606(a), 9607.

In October 2007, believing that SCP Carlstadt financed the remediation of the site almost entirely from Transtech's contribution under the settlement agreement, Transtech filed a motion seeking an order compelling SCP Carlstadt to provide an accounting of the QSF. On December 21, 2007, the trial court entered an order, supported by an oral decision, denying the motion. The court reasoned:

An accounting in equity cannot be demanded as a matter of further course. The exercise of the equitable jurisdiction in compelling account rests upon three grounds.

First, the existence of a fiduciary or a trust relation. Second, the complicated nature or character of the account and third the need of discovery. Citing [Kenilworth Borough v. Graceland Mem'l Park Ass'n, 124 N.J. Eq. 35 (Ch. Div. 1938).]

The law will not make a better contract for a party than they themselves have seen fit to enter into or alter it for the benefit of one party and to the detriment of the other. ["]The judicial function of a court of law is to enforce the contract as it is written.["] [James v. Federal Ins. Co., 5 N.J. 21, 24 (1950) (quoting Kupfersmith v. Delaware Ins. Co., 84 N.J.L. 271, 275 (E.& A. 1912).]

A justiciable controversy exists when one party . . . definitively asserts legal rights and such rights are positively denied by the other party. It is a controversy in which a claim of right is asserted against one who has an interest in contesting it. It is a real controversy as opposed to one that is hypothetical or abstract. Citing O'Shea [v. N.J. Schools Constr. Corp., 388 N.J. Super. 312, 317 (App. Div. 2006).]

In the case at bar the movant, Transtech, seeks to leave to compel SCP Carlstadt PRP Group to provide an accounting of disbursements it made as a result of a settlement agreement between the parties.

Transtech asserts that a fiduciary relationship is a circumstance that often gives rise to a claim for an accounting, but it is by no means a prerequisite.

This [c]court disagrees with Transtech's assertion and finds that a fiduciary relationship is one of three necessary elements that give rise to a claim for an accounting as referred to earlier.

It is undisputed that the parties resolved the underlying matter by negotiating for and entering into a confidential settlement agreement in the year 2001.

Now in anticipation of engaging in settlement negotiations with the EPA, Transtech seeks to compel SCP Carlstadt PRP Group to provide an accounting essentially for the purpose of establishing Transtech's negotiating position.

By virtue of the previous settlement agreement the [c]court finds that there is no controversy between the parties[,] and the issue is not justiciable.

Additionally[,] the confidential settlement agreement does not provide a mechanism for an accounting and this [c]court will not now put Transtech in a better position that it -- that that which it previously negotiated and for those reasons the motion by Transtech Industries is denied.

It is from this order that Transtech appeals.*fn1

On appeal, Transtech argues the trial court erred in denying its motion for an accounting on the basis that it does not have a fiduciary relationship with SCP Carlstadt. Transtech contends that a fiduciary relationship is not a prerequisite to the court directing an accounting; but that an accounting is an available remedy whenever special circumstances exist, including a need of the information for discovery reasons or to prove fraud. Transtech asserts that it needs the information to negotiate a settlement with the EPA pertaining to remediation of Berry's Creek and to possibly assert a claim for fraud against SCP Carlstadt. Transtech believes that "SCP Carlstadt may have misrepresented its financial contributions to the Carlstadt remediation to induce Transtech to turn over the additional [$12,000,000]," causing Transtech to "have funded all, or virtually all, of the remediation costs" in contravention of the settlement agreement. Transtech further asserts that the court erred in determining that, because of the 2001 settlement, no justicable controversy presently exists between the parties.

Our standard of review of the issues presented is de novo. "A [motion judge's] interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

We have considered Transtech's arguments in light of the record and applicable law. We are satisfied that none of the arguments are of sufficient merit to warrant discussion in a written opinion. We affirm substantially for the reasons expressed by Judge Edward Ryan in his oral decision of December 21, 2007. R. 2:11-3(e)(1)(A) and (E). Nevertheless, we add the following comments.

Generally, accountings are ordered where there is a fiduciary relationship between the parties and a duty by one party to account to the other. Bellingham v. Palmer, 54 N.J. Eq. 136, 138 (Ch. 1895) (denying a request for an accounting when no fiduciary or trust relationship existed between the parties). Nevertheless, although accountings are not available as a right, they may be ordered when a complicated account is involved, or it is required for discovery. Onderdonk v. Presbyterian Homes of NJ, Inc., 85 N.J. 171, 181 n.4 (1981) (noting that the "three traditional grounds" on which the court can order an accounting are the "existence of a fiduciary or trust relation, complicated character of the account, or need of discovery"); see also Jacobs v. Charney, 138 N.J. Eq. 73, 75 (Ch. 1946), aff'd, 142 N.J.Eq. 725 (E. & A. 1948).

Here, Transtech has not established a legal right to an accounting from SCP Carlstadt of funds contributed to the QSF. A fiduciary relationship does not exist between Transtech and SCP Carlstadt. Transtech's fraud in the inducement argument is without merit because it is unsubstantiated and based on hearsay and innuendo. So too is Transtech's argument that it is entitled to an accounting to negotiate a settlement of EPA's Berry's Creek claim because the EPA has not asserted a claim against Transtech. Whether EPA will assert a claim in the future remains speculative.

Affirmed.


Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.