The opinion of the court was delivered by: Debevoise, Senior District Judge
This matter involves a dispute over the environmental contamination of an area of land in Montville, New Jersey, where a fruit orchard was operated in the mid-twentieth century and which was later developed into a residential neighborhood. The Bonnieview Homeowners Association, L.L.C. (―Bonnieview‖) and members of that association, the Individual Plaintiffs,*fn1 (collectively, ―the Plaintiffs‖) assert various causes of action arising out of that environmental contamination against Woodmont Builders, L.L.C. (―Woodmont Builders‖); Woodmont Court at Montville, L.L.C. (―Woodmont Court‖) (together, ―Woodmont Properties); Donald Witmondt (together with Woodmont Properties, ―Woodmont‖); Associated Sales, Inc. (―Associated Sales‖); David Mandelbaum, Karen A. Mandelbaum, Nathan Mandelbaum, Ronald G. Targan, Judith Targan, Leslie J. Koralek and Richard W. Koralek as Co-Trustees under the Anita S. Koralek Living Trust (together, the ―Individual Defendants‖); and Montville Township (―Montville‖).
Woodmont, Associated Sales and the Individual Defendants (together, the ―Woodmont Defendants‖) assert counterclaims against the Plaintiffs. The Woodmont Defendants also assert a cross-claim against Montville.
The original complaint in this case was filed on September 12, 2003. The Plaintiffs filed their First Amended Complaint (―FAC‖) on February 15, 2005. On August 19, 2009, after the parties had already filed their motions for summary judgment, the Plaintiffs filed their Second Amended Complaint (―SAC‖), which added Donald Witmondt, the managing member of Woodmont Builders and Woodmont Court and president of Associated Sales, as a defendant. Because Mr. Witmondt was not a party to the action at the time these motions were briefed and argued, the court will not grant judgment against Mr. Witmondt on any counts at this time, but will grant summary judgment dismissing counts against Mr. Witmondt if appropriate. Additionally, although the operative complaint in this matter when these motions for summary judgment were filed was the FAC, the court will address these motions as directed to the SAC, given that the SAC is now the operative complaint. The SAC is, in any case, substantially the same as the FAC except for the addition of Mr. Witmondt as a defendant.
The court is aware that, at one time, Woodmont Court and the Plaintiffs were engaged in arbitration. While the court is unaware of the status of that arbitration, both the Plaintiffs and Woodmont Defendants consented to the inclusion of Woodmont Court in these proceedings for summary judgment (see Pls.' Opp'n Br. 64) and the court will proceed accordingly.
The Woodmont Defendants and Montville now move for summary judgment to dismiss all counts of the SAC. The Plaintiffs move for partial summary judgment on some counts of the SAC and to dismiss the Woodmont Defendants' counterclaims and two of the defenses pled in their Answer. For the reasons set forth below, the Woodmont Defendants' motions will be granted in part and denied in part; Montville's motion will be granted; and the Plaintiffs' motions will be granted in part and denied in part.
The land that is the subject of this litigation was originally comprised of approximately 130 contiguous acres in the Township of Montville, Morris County, New Jersey (―the Property‖). Bonnie View Farms, which is not a party to this litigation, owned and operated the Property for agricultural purposes, including as a fruit orchard, from 1941 until it was abandoned some time prior to 1970. In 1970, the Individual Defendants obtained title to the Property. Mr. David Mandelbaum testified that when the Individual Defendants purchased the Property it was not being farmed, but that he knew it had been previously used as an apple orchard. He also testified that the land was not farmed from the time that the Individual Defendants purchased the Property until approximately 1988. Sometime after 1988, a portion of the Property was used for foresting.
A June 27, 1989 letter from William Roe, the consulting forester at the Property, reflects that he had been managing the property since 1975, at which time he completed an ―inventory and plan.‖ This document also reflects that there was a timber sale at the Property in 1977.
The Woodmont Defendants maintain that the Property was never used for agriculture other than foresting during the time that the Individual Defendants owned it and that the Individual Defendants were not aware of any environmental problems on the Property during the time they owned it. The Plaintiffs dispute this contention based on the fact that in 1989, David Mandelbaum submitted an Application for Farmland Assessment to the State of New Jersey which stated both that the entire Property was used for ―fruit crops‖ and that the entire Property was used for ―woodland products.‖ The Defendants argue that the listing of ―fruit crops‖ on the Farmland Assessment was in error and that the Property could not have been used for both fruit crops and woodland products at the same time.*fn2
In 1998, at the request of the Department of Planning & Development of the County of Morris (in which Montville Township is located), former defendant Post, Buckley, Schuh & Jernigan, Inc. (―PBS&J‖), an environmental consulting firm, performed an environmental assessment of the Property and issued a Phase I Environmental Assessment report, dated April 1998. The report included a review of aerial photographs of the site from various years between 1939 and 1991. The report stated that the Property ―was forested in all the photographs viewed‖ and that the eastern portion ―contained rows of trees, indicating that the area may have been a tree nursery, while the western portion was naturally occurring forest.‖ (Certification of Stephen Smithson, May 14, 2009 (hereafter, ―May 14 Smithson Cert.‖), Ex. G at 3.) The report revealed that the Property had assorted debris on it, such as tires, wood and metal debris, cement, household debris, abandoned vehicles, hot water heaters, refrigerators, and empty aboveground storage tanks and drums, but did not mention any of the hazardous substances at issue in this case or possible soil contamination. (Id. at 12-14.) The report concluded that ―none of the observed debris was considered hazardous, [but] additional material in lower layers could be classified as such.‖ (Id. at 21.) While no sampling was recommended at the time, the report stated that ―when the debris is removed, the lower layers should be carefully examined.‖ (Id.)
In 1999, Montville engaged former defendant Princeton Hydro, LLC (―Princeton‖), an environmental consulting firm, which provided a report dated May 10, 1999. That report did not mention any discharge of pesticide constituents or other contaminants onto the soil and did not recommend any action with respect to the alleged contaminants.
B. Sale of the Property and Construction of the Individual Plaintiffs' Homes
At some point prior to October 1997, Woodmont Builders entered into an agreement with David Mandelbaum, Nathan Mandelbaum, Ronald Targan and the Estate of Adolph Koralek whereby Woodmont would develop the Property for the construction of single family dwellings houses, the proceeds of the sale of which would be shared by the parties to the agreement. On or around September 24, 1998, the Montville Township Planning Board approved an application to construct a residential subdivision on a 30-acre portion of the Property. On February 10, 1999, Montville acquired an approximately 100-acre portion of the Property from the Individual Defendants for use as ―open space‖ (hereafter, the ―Open Space Parcel‖).*fn3 On June 18, 2000, Woodmont Court acquired the remaining 30-acre portion of the Property (hereafter, the ―Residential Lots‖) from the Individual Defendants and thereafter began construction of a residential subdivision. The Plaintiffs allege that Woodmont did not conduct any due diligence before acquiring the residential lots. Mr. Witmondt, however, testified that, in purchasing the Residential Lots, Woodmont Court relied upon the review by PBS&J and the fact that Montville's Board of Health reviewed the lots in connection with the proposed residential development. (Witmondt Aff., June 3, 2009, ¶ 4.) After Woodmont Court acquired the Residential Lots, Woodmont Builders developed the land and built single-family homes on the Residential Lots.
After removing surface debris - including tires, abandoned cars, farm trucks, hot water heaters and 50-gallon tanks - from the Residential Lots, to prepare each site on Bonnieview Lane for construction Woodmont Builders then removed the topsoil from the Residential Lots. Woodmont Builders combined and stockpiled the soils, and after the foundations for the homes were dug, and the houses erected, took the topsoil from the stockpile and returned it to the Residential Lots to become the lawns. Mr. Witmondt testified that the areas on the Residential Lots that were wooded or had wetlands were not disturbed and that, generally, only the areas that later became lawns or had landscaping were disturbed. During the excavation and regrading process, Woodmont Builders did not test for hazardous substances in the soil that it removed from and subsequently replaced on the Residential Lots.
Associated Sales, through its agents, facilitated the sale of the homes on the Residential Lots to the Individual Plaintiffs. Advertisements published on behalf of Woodmont Properties and Associated Sales represented that the homes were built on ―natural homesites‖ and were a ―great place to raise children.‖ Three Individual Plaintiffs testified that Edward Tomback, whom they believed to be an Associated Sales representative, told them that, during the building process, the topsoil at the Residential Lots was replaced with ―good soil‖ or ―fresh topsoil.‖ Mr. Tomback, a licensed real estate agent and broker, testified that he has been with the company he owns, AmeriFirst, Inc. since about 1988, and that he was never employed by Associated Sales but acted as the broker to sell the homes on the Residential Lots. He also testified that he knows nothing about the nature of topsoil or grading of soil in connection with building homes and would therefore never have discussed the quality of soil with any of the Individual Plaintiffs.
The Individual Plaintiffs purchased their homes on Bonnieview Lane Between January 2001 and October 2002. The following is a list of the addresses and dates of purchase of the Individual Plaintiffs' homes:
Renee K. Goodlow and Michael R. Berry purchased 5 Bonnieview Lane on January 8, 2001.
Rene N. and Stephen J. Hrop purchased 3 Bonnieview Lane on March 31, 2001.
Parhat and Sema Yasar purchased 17 Bonnieview Lane on August 31, 2001.
Yuangen Zhu and Qi Liu purchased 9 Bonnieview Lane on September 17, 2001.
Fazal and Sanyakhan Bari purchased 19 Bonnieview Lane on October 4, 2001. They resold 19 Bonnieview Lane on July 31, 2007.
San Chee and George T. Lee purchased 15 Bonnieview Lane on November 26, 2001.
G. Thomas and Sharon Perrone purchased 11 Bonnieview Lane on January 25, 2002.
Joseph and Bobbie Intile purchased 33 Bonnieview Lane on May 23, 2002.
Juan F. and Rafael Hernandez purchased 1 Bonnieview Lane on August 26, 2002.
Keith Hamilton purchased 6 Bonnieview Lane on August 28, 2002.
Yi Lu and Bruce Tang purchased 26 Bonnieview Lane on August 28, 2002.
James and Diane Sadowski purchased 25 Bonnieview Lane on October 16, 2002.
Daniel and Pauline Roh purchased 27 Bonnieview Lane on October 24, 2002.
Louise Ann and Bruce Dostal purchased 29 Bonnieview Lane on November 18, 2002. Prior to purchasing their homes, the Individual Plaintiffs had title searches performed by title insurance companies. The title reports did not mention any possibility of pesticide contamination on the Residential Lots. One Individual Plaintiff, Sharon Perrone, testified that it was ―widely known around town‖ that the Property had been an orchard, but that she did not know that orchards used pesticides in their operation. (Certification of Lee Henig-Elona, May 13, 2009 (hereafter, ―May 13 Henig-Elona Cert.‖), Ex. 14 at 16:22 -- 17: 17.)
On July 26, 2001, Montville entered into an agreement with the NJDEP to investigate and remediate the Property. In March 2002, Montville's environmental consultant, Maser Consulting P.A. (―Maser‖), conducted soil sampling on the Open Space Parcel. Maser prepared a report of its findings in August 2002; it identified three Areas of Concern (―AOCs‖). Sampling results indicated that the Open Space Parcel was contaminated with pesticides and other contaminants in excess of the applicable standards: the Residential Direct Contact Soil Cleanup Criteria (―RDCSCC‖) of the New Jersey Department of Environmental Protection (―NJDEP‖). Maser informed Montville of the pesticide contamination on the Open Space Parcel in a telephone conversation with Montville Township engineer Anthony Barile, and in a follow-up letter dated September 3, 2002.*fn4 That letter stated, in part:
All of the AOCs listed above were sampled and found to contain contaminants of concern. Based on the historical aerials, [Maser] believes the 25-lot residential subdivision under construction from which the open space was originally subdivided from [sic] may also have been part of the same orchard and may contain constituents elevated above the RDCSCC.
The majority of constituents elevated above the RDCSCC are metals and pesticides associated with historic orchard and land use. [Maser] would recommend applying and obtaining a Letter of No Further Action (NFA) from the NJDEP....
The Township's Board of Health involvement may be warranted at this time to advise the public regarding contaminated soils at the site and the adjacent subdivision. Until a NFA is issued for the site, a Public Notice advising of potential hazards at the site may also be warranted to limit public contact with the soils of the site.
The constituents identified do not present an imminent health hazard to the public. The majority of the constituents are metals/pesticides... [that] do not easily migrate into surface and/or groundwater. The health issue that is present is related to long-term ingestion of contaminated soils or long-term inhalation of dust originating from the soils. Long-term exposure to such contaminants is considered to be carcinogenic. (May 14 Smithson Cert. Ex. T at 3.) The letter also noted that because the majority of the Open Space Parcel was forested, the soils were stable and exposure to contaminants was limited. It also stated that because Montville ―is now aware of the elevated constituents above the RDCSCC at the site, it may be liable for any future public contact with soils and potential health issues involved with such contact.‖ (Id.)
By letter dated April 29, 2003, Montville notified the homeowners on Bonnieview Lane that it had discovered arsenic and levels of insecticides on the 100 acre Open Space Parcel. By letter dated May 7, 2003, Montville requested permission to test the Individual Plaintiffs' properties for environmental contaminants, reasoning that ―to the extent the township's property and your residential property would have been part of the contiguous land formerly operated by Bonnieview Farms,‖ such testing was advised. By letter dated May 29, 2003, Montville advised the Individual Plaintiffs that the soil tests revealed the presence of arsenic, dieldrin, lead, or DDT, all hazardous substances under federal and New Jersey law, and that Montville had reported the results to the NJDEP as required by law. Mr. Witmondt testified that he did not know about the pesticide residues until after Montville notified the Individual Plaintiffs in May 2003. He did know that the Property had been previously used as an apple orchard, and the Plaintiffs argue that the Woodmont Defendants, as experienced developers, therefore should have known that residual pesticides were present on the Residential Lots. Mr. David Mandelbaum testified he had no knowledge of environmental problems at the Property until after the sale of the Property to Montville. (May 13 Henig-Elona Cert. Ex. 2, 44:4-9.)
C. Contamination of the Property
The original contamination of the Property by pesticides took place at some point prior to 1970, when the Property was used for agricultural purposes, including as a commercial apple and peach orchard. At the time when the Property was used as an orchard, the operations included storing fertilizer and insecticides for spraying and applying onto the trees in the orchard. The parties agree that chemicals and insecticides were stored in drums and other containers at the Property. There is no dispute that no sampling or testing of the soil on the Property was conducted prior to Maser's soil sampling in March 2002.
In connection with this litigation, Montville hired Robert L. Zelley, Professional Geologist and Principal at Maser, to provide his professional opinion on the source, remedial responses, and extent of contamination at the Property. In a letter dated November 14, 2008, Mr. Zelley opined that ―[t]he historical legal application of a variety of pesticides has resulted in concentrations of arsenic, lead and DDT and its metabolites, and dieldrin above their respective NJDEP human health and ecological standards in the surface soils throughout the area.‖ (May 13 Henig-Elona Cert. Ex. 7 at 3.) The Plaintiffs argue, however, that soil sampling indicates that pesticides were spilled or leaked on the Property during its use as an orchard. To support this contention, Plaintiffs cite to the deposition testimony of Dr. Jorge Berkowitz, who testified that the pesticide concentration in the soil was heterogeneous, not homogeneous, and that such a distribution indicated that ―in certain portions of the property something happened that did not happen in other portions of the property. How that happened, I don't know.‖ (May 14 Smithson Cert. Ex. HH at 85:14-24.) Dr. Berkowitz did not agree, however, that pesticides were spilled or leaked. Plaintiffs also cite to Table 2 in the May 27, 2003 letter from Maser to the NJDEP which provided a Remedial Investigation Workplan on behalf of Montville for the Property. (Id. Ex. E.) Again, Table 2 supports the contention that the concentration of soil contamination varied in different areas of the Property, but does not offer any evidence or opinion as to the reason for the heterogeneous distribution of contamination -- whether it was caused by spills, leaks, proper application of the pesticides, or some other reason.
It is undisputed that the Defendants did not add pesticides or other hazardous substances to the Residential Lots or Open Space Parcel, but the Plaintiffs claim that, by clearing the topsoil, stockpiling it, then spreading it over the Residential Lots, the Defendants caused the pesticide contamination to be spread ―ubiquitously across the Residential Lots‖ and into areas previously not contaminated, and to be extended from the surface into the subsurface soil. In the course of this litigation, Plaintiffs hired environmental consultant, Whitestone Associates, Inc. (―Whitestone‖), to provide expert opinions regarding the contamination in the Residential Lots. Thomas K. Uzzo, President of Whitestone, and Keith Tockman, Senior Professional Geologist at Whitestone, authored a report, dated September 25, 2008 (hereafter, the ―Whitestone Report‖), in which they concluded that, ―[t]o a reasonable degree of professional certainty, these soil movement and replacement actions spread and worsened the arsenic, lead and organic pesticide contamination by redistributing the contaminants over a greater area and at more expansive depths than typically would be experienced at the pre-development orchard property.‖ (May 14 Smithson Cert. Ex. D at 14.)
Defendants dispute the Plaintiffs' contention that the earthwork worsened the contamination of the Residential Lots and that it extended contamination from surface into subsurface soils. Defendants hired Langan Engineering and Environmental Services (―Langan‖) to respond to the Whitestone Report and to offer further opinions on the issues in this case. Dr. Jorge H. Berkowitz, Senior Associate at Langan, authored a report, dated January 2009, in which he opined that the soil re-working on the Residential Lots actually improved the condition of the soil because ―re-working soils will eliminate ‗hot spots' of contamination, lowering and homogenizing the concentration‖ of contaminants, which has ―beneficial human health consequences‖ because it lowers the ―potential dose of contaminants per aliquot of soil.‖ (May 13 Henig-Elona Cert. Ex. 3 at 15-16.)
Dr. Berkowitz compared the concentrations of pesticides in the ―blended‖ areas of the Residential Lots to the soil in the undisturbed orchard on the Open Space Parcel and in the wooded areas of the Individual Plaintiffs' properties. (Id. at 20.) Dr. Berkowitz made these comparisons, rather than compare the soil on the Residential Lots before and after the earthwork, because there was no sampling of the soil prior to the earthwork. (Id.) He reported that the mean value for arsenic and dieldrin for all of the samples taken in the lawn areas of the Residential Lots was 6.07 mg/kg (or parts per million, ―ppm‖) for arsenic and 0.028 ppm for dieldrin.*fn5 (Id.) For the samples taken from the former orchard on the Open Space Parcel, Dr. Berkowitz reported a mean value of 32.71 ppm for arsenic and a mean value of 0.225 ppm for dieldrin. (Id.) In comparing the mean concentrations found in the lawns of the Residential Lots with those in the former orchard on the Open Space Parcel, he calculated that the mean concentration of arsenic on the lawns of the Residential Lots was approximately 19% of that in the Open Space Parcel and the mean concentration of dieldrin on the lawns of the Residential Lots was approximately 12% of that in the Open Space Parcel. (Id. at 21.) For the samples taken from the undisturbed wooded areas of the Individual Plaintiffs' properties, Dr. Berkowitz reported a mean value of 14.53 ppm for arsenic and a mean value of 0.123 ppm for dieldrin. In comparing the mean concentrations found in the lawns of the Residential Lots with those in the undisturbed wooded areas, he reported that the mean concentration of arsenic in the lawns of the Residential Lots was 42% of that in the wooded areas and the mean concentration of dieldrin in the lawns of the Residential Lots was 23% of that found in the wooded areas. Plaintiffs note, however, that at his deposition, Dr. Berkowitz testified that the difference between the concentration of dieldrin in the lawn areas of the Residential Lots and in the woodlands was not statistically significant. (Certification of Stephen Smithson, June 4, 2009 (hereafter, ―June 4 Smithson Cert.‖), Ex. HHH at 205:10 -- 206:17.)
Dr. Berkowitz concluded that ―[i]t is intuitively obvious, and scientifically demonstrated, that excavation and combining of top soil, and other earth moving activities achieved positive results in reducing contamination concentrations per aliquot of soil, thereby reducing public health risk across the development site‖ and that it did not appear that Woodmont's earth moving activities ―in any way worsened site conditions.‖ (May 13 Henig-Elona Cert. Ex. 3 at 22.) Plaintiffs contend that Woodmont Builder's earthworks caused the contamination to be spread ubiquitously across the Residential Lots and extended the contamination from the surface into the subsurface soils, thus exacerbating the contamination.
Six of the Individual Plaintiffs have added pools, driveways or additions to their homes. The following properties on Bonnieview Lane were improved by their owners: 1, 3, and 19 Bonnieview Lane added pools; 6 Bonnieview Lane added a pool and driveway; 17 Bonnieview Lane added a driveway; and 5 Bonnieview Lane added a driveway and an addition to the home. Defendants allege that these improvements worsened contamination. Plaintiffs, relying upon figures from a draft Remedial Investigation Report Addendum/Remedial Action Workplan (―RIRA/RAW‖), dated July 2007, prepared by EWMA (June 4 Smithson Cert. Ex. GGG), argue that the Defendants' own consultants do not identify any contamination in the vicinity of the Plaintiffs' improvements except for at 19 Bonnieview Lane. Many of these figures do not even show where the improvements were constructed on the property, and it is therefore not possible to tell whether there is contamination in that area. Neither party has submitted evidence regarding what was done with any soil that was disturbed during the construction of these improvements.
D. Current Levels of Contaminants in the Residential Lots
The NJDEP residential soil cleanup criteria for arsenic is 20 ppm and 0.042 ppm for dieldrin. Dr. Berkowitz reported that the mean value for arsenic and dieldrin for all of the samples taken in the lawn areas of the Residential Lots was 6.07 ppm for arsenic and 0.028 ppm for dieldrin. (May 13 Henig-Elona Cert. Ex. 3 at 20.) The Defendants argue that these figures demonstrate that the mean levels in disturbed areas of the Residential Lots meet residential standards.
The Plaintiffs, however, contend that the Residential Lots are contaminated with arsenic and dieldrin in excess of the residential standards. The Plaintiffs rely on a June 4, 2003 summary report authored by Robert L. Zelley and Eric J. Paulistaitis of Maser. Mr. Zelley and Mr. Paulistaitis report that soil sampling was conducted on each of the Individual Plaintiffs' Residential Lots. Two samples from each of the Residential Lots were tested: a composite sample composed of several samples collected throughout that Residential Lot, and ―a discrete sample collected from an area judged to have the highest potential for human exposure or an area selected by the property owner.‖ (May 14 Smithson Cert. Ex. X at 1.) All samples were collected from the 0 -- 6 inch zone below the existing sod/lawn. (Id.) Mr. Zelley and Mr. Paulistaitis report that arsenic and dieldrin were present in the majority of samples at levels above the residential standards. (Id. at 2.) Arsenic in the discrete samples ranged from 3.7 to 45 ppm, with a mean of 23.03 ppm and a median of 24.50 ppm. In the composite samples, the arsenic ranged from 18 to 110 ppm with a mean of 33.38 ppm and a median of 28.00 ppm. (Id.) The RDCSCC for arsenic is 20 ppm. Dieldrin in the discrete samples ranged from 0.0095 ppm to 0.23 ppm, with a mean of 0.084 ppm and a median of 0.074 ppm. In the composite samples, the dieldrin ranged from 0.045 to 0.510 ppm, with a mean of 0.127 ppm and a median value of 0.095 ppm. (Id.) The RDCSCC for dieldrin is 0.042 ppm. Based on these results, Mr. Zelley and Mr. Paulistaitis conclude that ―[a]rsenic and dieldrin are present in the surface soils throughout‖ the Plaintiffs' neighborhood at levels above the NJDEP RDCSCC. (Id. at 3.)
The Plaintiffs also argue that Woodmont's September 2007 RIRA/RAW shows that the levels of arsenic and dieldrin on the Residential Lots exceed the RDCSCC. (Id. Ex. Y.) In that report, Environmental Waste Management Associates (―EWMA‖) described sampling of soil in the Residential Lots and the results of testing that soil for arsenic and dieldrin. While a majority of the samples did not contain arsenic and dieldrin at levels above the RDCSCC, many of the samples did contain arsenic and dieldrin at levels above the RDCSCC. (Id.) Plaintiffs also point to the April 2009 Remedial Action Workplan Addendum (RAWA), submitted to the NJDEP by EWMA on behalf of Woodmont, which proposes the remedial action of blending -- specifically, blending the impacted soils with ―clean on-site soils from deeper depths and, if necessary, clean off-site soils from a virgin source in an effort to reduce contaminant concentrations to below the NJDEP RDCSCC.‖ (May 14 Smithson Cert. Ex. XX at 14.) Defendants argue that Woodmont Court has entered into a memorandum of agreement with the NJDEP to voluntarily investigate the Residential Lots and that the Defendants have no legal obligation to perform any investigation or remediation and that the lots ―now overwhelmingly meet‖ the RDCSCC.
There is no evidence that any of the Individual Plaintiffs have vacated their homes as a result of the pesticide contamination. The Plaintiffs argue that some Individual Plaintiffs have tried to sell their homes but have been unsuccessful due to the pesticide contamination, and that those who have sold their homes have done so at a loss due to the contamination, but they do not contest that the Individual Plaintiffs, or the people to whom they sold the homes, continue to live in their homes on Bonnieview Lane.
E. Costs Incurred by the Plaintiffs and Stigma Devaluation
Whitestone has performed a variety of consulting services for the Plaintiffs in connection with the pesticide contamination at the Residential Lots. Whitestone has analyzed sampling data from the Residential Lots, evaluated alternatives for remediation of the properties, and communicated with the NJDEP regarding the appropriate permanent remedy for the properties. The Plaintiffs claim that the costs of Whitestone's services are response costs, but the Defendants maintain that these costs are not ―response costs‖ as defined by CERCLA and note that the Plaintiffs have not remediated the contamination at their properties.
The Plaintiffs allege that the Individual Plaintiffs have experienced a devaluation of their homes as a result of the stigma attached to environmental contamination. In support of their contention, the Plaintiffs offer the report, dated September 26, 2008, of Mark Sussman and Joseph Cimiluca, both New Jersey State Certified General Real Estate Appraisers (hereafter, the ―Sussman Report‖). As stated in the cover letter to the report, the purpose of the assignment undertaken by Mr. Sussman and Mr. Cimiluca was ―to estimate the market value of each property in order to determine any diminution in value due to the discovery, in or about May 2003, of pesticide contamination on the soils surrounding [the Individual Plaintiffs'] homes.‖ (May 14 Smithson Cert. Ex. ZZ.) The report offers an opinion as to the valuation of the homes of the Individual Plaintiffs and the diminution of that value resulting from the soil contamination as of July 11, 2006. For each of the Individual Plaintiffs' homes except for two, Mr. Sussman and Mr. Cimiluca opined that the stigma damages equaled 10% of the market value if uncontaminated. For the other two homes they opined that the stigma damages equaled 20% of the market value if uncontaminated. (Id.)
The Woodmont Defendants dispute that the Plaintiffs have or will suffer any devaluation of their homes due to environmental contamination.*fn6 In support of their contention, the Defendants offer the report of Charles E. Blau, Esq., who is a State Licensed Real Estate Appraiser. As stated in the cover letter to the report, Mr. Blau inspected the Plaintiffs' properties in order to estimate the effect on the market value of the properties ―with a ‗No Further Action' letter from the New Jersey Department of Environmental Protection after an approved remediation of historic pesticides in the soil.‖ (Certification of Lee Henig-Elona, June 3, 2009, (hereafter, ―June 3 Henig-Elona Cert.) Ex. 26.) Mr. Blau concluded that there was no effect on the market value of the homes. (Id.)
On May 4, 2004, the Plaintiffs filed a claim with the Spill Compensation and Control Act Fund.
A. Standard of Review for Summary Judgment
Summary judgment is proper where ―there is no genuine issue as to any material fact and... the moving party is entitled to judgment as a matter of law.‖ Fed. R. Civ. P. 56(c). For an issue to be genuine, there must be ―a sufficient evidentiary basis on which a reasonable jury could find for the non-moving party.‖ Kaucher v. County of Bucks, 455 F.3d 418, 423 (3d Cir. 2006). For a fact to be material, it must have the ability to ―affect the outcome of the suit under governing law.‖ Id. Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment.
In a motion for summary judgment, the moving party has the burden of showing that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). When the moving party does not bear the burden of proof at trial, the moving party may discharge its burden by showing that there is an absence of evidence to support the non-moving party's case. Id. at 325. If the moving party can make such a showing, then the burden shifts to the non-moving party to present evidence that a genuine issue of fact exists and a trial is necessary. Id. at 324. In meeting its burden, the non-moving party must offer specific facts that establish a genuine issue of material fact, not just create ―some metaphysical doubt as to the material facts.‖ Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
In deciding whether an issue of material fact exists, the Court must consider all facts and their reasonable inferences in the light most favorable to the non-moving party. See Pa. Coal Ass'n v. Babbitt, 63 F.3d 231, 236 (3d Cir. 1995). The Court's function, however, is not to weigh the evidence and determine the truth of the matter, but, rather, to determine whether there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). If there are no issues that require a trial, then judgment as a matter of law is appropriate.
B. CERCLA (First, Second & Third Counts of SAC and All Counterclaims)
Congress enacted CERCLA in 1980 to address the ―serious environmental and health risks posed by pollution.‖ United States v. Bestfoods, 524 U.S. 51, 55 (1998). The two provisions of CERCLA at issue in this case, §§ 107 and 113, ―allow private parties to recover expenses associated with cleaning up contaminated sites.‖ United States v. Atl. Research Corp., 127 S.Ct. 2331, 2333 (2007). These two provisions provide two ―clearly distinct‖ remedies. Cooper Indus., Inc. v. Aviall Serv., Inc., 543 U.S. 157, 163 (2004). Section 107(a) provides for a right to cost recovery in certain circumstances, whereas § 113 provides for a separate right to contribution in other circumstances. Atl. Research, 127 S.Ct. at 2337. ―[A] private party that has itself incurred cleanup costs‖ may recover those costs under § 107. Id. at 2338. A potentially responsible party (defined below) ―with common liability stemming from an action instituted under § 106 or § 107(a)‖ is entitled to contribution under § 113. Id.
The Plaintiffs have asserted claims against Woodmont and the Individual Defendants under §§ 107 and 113 of CERCLA and the Woodmont Defendants have asserted counterclaims against the Plaintiffs under §§ 107 and 113 of CERCLA.
The Plaintiffs now move for summary judgment that Woodmont Builders is strictly liable for response costs under § 107(a) of CERCLA, and that the Plaintiffs are entitled to a declaratory judgment against Woodmont Builders for future response costs or damages pursuant to § 113(g) of CERCLA. The Woodmont Defendants move for summary judgment dismissing all of the Plaintiffs' claims under CERCLA. The Plaintiffs' claims under CERCLA are: (1) Woodmont and the Individual Defendants are liable under § 107 of CERCLA as owners/operators at the time of disposal of a hazardous substance or as arrangers (Count One); (2) Woodmont and the Individual Defendants are liable under § 113 of CERCLA for contribution for response costs (Count Two); (3) the Plaintiffs are entitled to a declaratory judgment that Woodmont and the Individual Defendants are liable for future response costs or damages incurred by the Plaintiffs Count Three).
i. Potentially Responsible Parties
CERCLA provides for the apportionment of the cost of cleanup of hazardous waste among entities generally referred to as potentially responsible parties (―PRPs‖). E.I. DuPont Nemours & Co. v. United States, 508 F.3d 126, 128 (3d Cir. 2007). Section 107 defines four categories of PRPs:
(1) the owner and operator of a vessel or a facility,
(2) any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of,
(3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances, and
(4) any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities, incineration vessels or sites selected by such person, from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance.
42 U.S.C. § 9607(a). Woodmont alleges that they are not PRPs and, thus, cannot be held liable under either § 107 or § 113.
The Plaintiffs allege that Woodmont Court and Woodmont Builders are liable under § 107(a)(2) as past owners and operators, respectively, of the Residential Lots during the time of disposal of hazardous substances. Woodmont argues that they are not PRPs under § 107(a)(2) because there was no ―disposal‖ during their ownership of the Residential Lots. It is undisputed that Woodmont did not add any additional pesticides to the soil, so the question is whether a ―disposal‖ occurred when they removed the contaminated soil from the ...