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

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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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 ...


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