On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-1776-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges A.A. Rodriguez, Grall and LeWinn.
The multi-party suit that gives rise to the appeal and cross-appeals was dismissed, improperly we conclude, on the ground that plaintiffs' claim for damages was not ripe. We therefore reverse and vacate that order. But because the trial court also granted several defendants summary judgment, we review those judgments and an order denying certain attorney defendants leave to file third-party complaints.
The litigation involves a dispute over responsibility for repair of a dam that has a foundation resting, in part, on two residential properties. Those properties were purchased, respectively, by plaintiffs Joseph and Susanne Nuzzo in 1988 and defendant Peter Lorenz in 1999. Deeds in their chains of title address responsibility for maintaining the dam. Although the dam retains a pond abutting both properties, neither plaintiffs nor Lorenz altered, repaired or maintained it after taking possession.
Responsibility for the dam became an issue in 2004, when the New Jersey Department of Environmental Protection (DEP) directed the owners, first plaintiffs and then Lorenz, to submit for its approval plans to remove or repair and maintain the dam.
Plaintiffs filed their complaint in this action on June 23, 2006. They asserted that until DEP contacted them, they did not know the dam was on their property or that they had any responsibility for it. Accordingly, plaintiffs sought damages, essentially indemnification for costs of compliance with DEP's directives, from all who provided services in connection with their purchase of the property. They alleged that their realtors, defendants Coldwell Banker Relocation Management Services, Inc. through its agent, Roslyn Zencker, made an affirmative misrepresentation in violation of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -20, and breached their contract. They also alleged negligence and breach of contract on the part of their lawyers, defendants Joseph J. Rosta, Jr., of Rosta & Kollar; their surveyor, defendant Robert M. Horvath; and their title insurers, defendants Title USA Insurance Corporation of New York and Nations Title Insurance of New York, Inc. The realtors, attorneys, surveyor and title insurers denied the allegations and filed cross-claims for contribution. Subsequent motions to file third-party complaints and join DEP were denied, but just prior to entry of the order dismissing the case, the court granted the attorneys leave to file a third-party complaint against James Kehoe of Equitable Title & Abstract Co.
In addition, plaintiffs sought to recover a share of the expense of the dam from Lorenz on a theory of unjust enrichment. Lorenz denied liability and counterclaimed for a declaratory judgment quieting title by resolving the question of ownership and responsibility for the dam based on the deeds. In addition, he sought damages for plaintiffs' alleged trespass and encroachment. Plaintiffs were granted leave to file an amended complaint for declaratory relief.
These are the facts pertinent to all issues raised on appeal other than those related to the title insurer and the attorneys, which are discussed in part III.
Plaintiffs first looked at the exterior of the property offered for sale by Willard E. and Carol Gourlay when they were given its listing by Zencker. The following day, Zencker accompanied them to an open house. According to plaintiffs, when Mr. Nuzzo asked about the dam, Zencker told them it was not on the property, and they believed her.
Plaintiffs entered into a contract to purchase for $285,000, and they retained Rosta to represent them in connection with that transaction. Rosta contacted James Kehoe of Equitable Title & Abstract Co., who subsequently obtained a commitment for title insurance from Title USA effective May 2, 1988 and a survey dated June 23, 1988 from Horvath. Horvath certified the survey's accuracy to plaintiffs, Title USA and Rosta. That survey does not show the dam.
Thereafter, a title commitment and a policy were issued. Although the commitment and the title insurance policy both excepted coverage for "conditions and restrictions" that the title insurer described by reference to three deed books where the "similarly worded" conditions and restrictions were set forth, Rosta did not alert plaintiffs to any potential liability with respect to the dam. In his view, the title commitment did not contain anything that gave him reason to suspect that his clients were responsible for the dam. In fact, the deeds found at the pages in the deed books referenced by the title insurer state that the dam shall be maintained by the owner of the property. Plaintiffs nonetheless proceeded to purchase the property for $285,000 and have owned it since.
DEP inspected the dam in 2004, ironically in response to a report from plaintiffs that the water level in the pond was low. By letter of June 28, 2004, DEP advised plaintiffs that the dam's low-level outlet was malfunctioning. The letter further "order[s]" plaintiffs to retain an engineer to inspect the dam "and submit plans and specifications for either the repair or removal of the structure." By July 2004, DEP had identified Lorenz as a second "owner" of the dam and "request[ed]" him to submit his deed and survey. DEP explained that it construes its regulations applying to the "owner" of a dam to include the owner of "any portion of the dam embankment." That interpretation results in each owner becoming a "joint owner." See N.J.A.C. 7:20-1.2 (defining "owner and/or operator" of a dam as whoever owns, operates or maintains it). In August 2004, DEP advised plaintiffs that it was now deeming them "part" owners of the dam.
In September 2004, plaintiffs requested a second survey from Horvath. That survey, dated September 29, 2004, shows the dam. After plaintiffs received that survey, DEP advised plaintiffs and Lorenz, by letter of January 6, 2005, that it would treat them as "joint owners" and that they should cooperate to submit the required inspection, specifications and plans.
Plaintiffs retained an expert who submitted an inspection report in June 2005 indicating that repairs were needed. By letter of October 7, 2005, DEP informed plaintiffs and Lorenz that "the necessary repairs identified in [that] inspection report should be implemented as soon as possible," but after filing an application for and obtaining a permit. It is not clear on this record whether plaintiffs obtained an estimate of the cost of repairs they were directed to make. But DEP also identified studies that plaintiffs had to have done and directed them to submit an operation and maintenance manual, a safety-compliance schedule and proposed plans for removing the dam or bringing it into compliance with DEP standards. As we understand it, removal and repair were options for a long-term solution that did not countermand the direction to do immediate repairs.
In response, plaintiffs submitted a series of reports and plans. By February 14, 2008, their expert presented a plan for removal at an estimated cost of $305,000; and three alternate plans for repair, with estimated costs of $285,000, $290,000 and $480,000. The expert set forth the assumptions underlying the estimates and broke down the expenses - specifying costs for components ranging from engineering studies, support services and permitting fees to bidding and construction. The expert also qualified the estimate with reference to factors that could influence cost, and he clearly indicated that his estimates included a fifteen-percent contingency. Some of the costs did not vary with the plan selected.
DEP has not yet directed plaintiffs to pursue a specific long-term plan. There is no evidence that plaintiffs have incurred any expense to date beyond what they paid their experts to respond to DEP's requests.
On the foregoing facts, the trial court's order dismissing the case must be vacated. As noted at the outset of this opinion, the trial court dismissed plaintiffs' complaint and Lorenz's counterclaim on the ground that they were not ripe for adjudication. The trial court reasoned that because DEP had not yet ...