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Magic Petroleum Corporation v. Exxon Mobil Corporation

July 26, 2011

MAGIC PETROLEUM CORPORATION, PLAINTIFF-APPELLANT,
v.
EXXON MOBIL CORPORATION, MARIE TIRICO, DEFENDANTS-RESPONDENTS, AND TRENTON OIL COMPANY AND M.M. WERTHEIM CORPORATION, DEFENDANTS, AND EXXON MOBIL CORPORATION, DEFENDANT/THIRD-PARTY PLAINTIFF-RESPONDENT,
v.
LINKING RING PETROLEUM, THIRD-PARTY DEFENDANT.



On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-3685-03.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Telephonically Argued April 12, 2011

Before Judges Lihotz and J. N. Harris.

Plaintiff Magic Petroleum Corporation appeals from two Law Division orders. The first dismissed its complaint without prejudice and the second denied its request for reconsideration. Plaintiff's action against defendant ExxonMobil Corporation (Exxon) sought an allocation of liability for the cleanup of contamination, pursuant to the Spill Compensation and Control Act (Spill Act), N.J.S.A. 58:10-23.11 to -23.24. Plaintiff argues the trial court erred by relying on the doctrine of primary jurisdiction and improperly deferring disposition of its claims until the New Jersey Department of Environmental Protection (DEP) concluded its efforts to delineate the necessary remediation of the spill site. Plaintiff additionally asserts the trial court erred by improperly relying upon non-binding precedent to reach its conclusions. See R. 1:36-3.

After careful consideration of the parties' arguments and applicable law, we agree with the trial judge's conclusion that the court's adjudication of the parties' Spill Act claims must abide the DEP's enforcement actions. We affirm.

These facts are taken from the motion record. Plaintiff owns property (Lot 19.01) located on County Route 537 (Monmouth Road) in Clarksburg, which is the site of a gasoline service station. Exxon owned realty (Lot 11) across the street from plaintiff's, at the intersection of County Routes 526 and 537, which also has been used as a retail gasoline service station.*fn1

Defendant Marie Tirico leased Lot 11 from Exxon and operated a gasoline station on the property from the early 1980s until 1988, when she purchased the lot from Exxon. Defendant Trenton Oil Company (TOC) purchased Lot 11 from Tirico and then third-party defendant Linking Ring Petroleum (LRP), which is owned by plaintiff's principal, bought the property from TOC. Other than Tirico, the defendants have not participated in this appeal.

When plaintiff acquired Lot 19.01 in the early 1990s, it was aware the underground storage tank (UST) system was leaking petroleum hydrocarbons into the soil and groundwater. During this same period, Exxon's property also contained leaking USTs, releasing similar hazardous substances. A detailed history of the DEP's involvement with the site and the agency's interaction with plaintiff in pursuit of remediation of the environmental hazard on Lot 19.01 is found in the November 1, 2006, fifty-page written Initial Decision rendered by an administrative law judge (ALJ) in an agency enforcement action. We briefly highlight aspects of these reported events in order to provide context to the dispute now under review.

Beginning in 1995, the DEP contacted plaintiff after it identified strong petroleum odors and recorded elevated photo ionization detector readings on Lot 19.01, which constituted a "discharge," N.J.S.A. 58:10-23.11b. The DEP issued a Field Directive notifying plaintiff of the need to investigate and remediate the hazards discharged on Lot 19.01 and requiring specific investigative actions be performed, including the installation of groundwater monitoring wells, to remediate the contamination.

Plaintiff excavated several USTs that exhibited one-quarter inch holes believed to be a source of the hazardous discharge and removed 200 tons of contaminated soil from Lot 19.01. The DEP advised plaintiff its efforts were untimely and insufficient because it had not properly conducted the soil and groundwater delineation required in the prior notice. Consequently, plaintiff's proposed remedial action workplan, submitted pursuant to N.J.A.C. 7:26E, was deemed unacceptable.

Discussions continued regarding the nature and extent of the cleanup efforts. On November 24, 1999, plaintiff and the DEP entered into an Administrative Consent Order (ACO) wherein plaintiff agreed to remediate Lot 19.01, under the DEP's oversight. Plaintiff was to perform soil and water sampling, install monitoring wells and continue field remediation activities, and take all necessary steps designed to mitigate, contain, cleanup and remove the discharge. N.J.A.C. 7:1E-5.7(a). The ACO contemplated plaintiff would apply for funding from the New Jersey Economic Development Authority (EDA) to effectuate the remediation. Plaintiff did not comply as agreed. Over the ensuing years, the DEP continued to notify plaintiff of its obligations and the possible assessment of penalties for non-compliance.

Also in 1999, with full knowledge of the faulty UST system, LRP acquired Lot 11 for the operation of a gasoline service station. LRP is owned by Avinash Vashisht, who also owns and operates plaintiff.

Thereafter, plaintiff began asserting that notwithstanding the hazardous substance discharge and resultant soil and groundwater contamination from its USTs, it believed the bulk of the contamination on Lot 19.01 resulted from Exxon's discharged gasoline leaking from its UST on Lot 11, which gravitated from Lot 11 to Lot 19.01. Plaintiff believes Exxon is substantially responsible for the contamination investigation and cleanup costs for both ...


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