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Marolda Farms, Inc., Rigi Holdings, LLC, Sherry Marolda and Richard v. Maryland Casualty Insurance Co.

November 29, 2012

MAROLDA FARMS, INC., RIGI HOLDINGS, LLC, SHERRY MAROLDA AND RICHARD MAROLDA, SR., PLAINTIFFS-APPELLANTS,
v.
MARYLAND CASUALTY INSURANCE CO., INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, ZURICH AMERICAN INSURANCE CO., NORTH RIVER INSURANCE CO., CONTINENTAL INSURANCE CO., DEFENDANTS-RESPONDENTS.



On appeal from Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-0861-11.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 22, 2012

Before Judges Messano and Kennedy.

Plaintiffs appeal from a Law Division order entered October 26, 2011, dismissing without prejudice their complaint against several insurance companies. Invoking the "doctrine of stare decisis," the motion judge determined that because the action required him to rule on the fairness and scope of a "consent decree" entered years earlier in the United States District Court, plaintiffs were required to litigate their claim in that forum.

We discern the facts from the record provided by the parties.

I.

South Jersey Clothing Company (SJCC) is a New Jersey partnership that had been located for many years in Atlantic County. During the course of its operations, it allegedly released hazardous substances onto its property. Garden State Cleaners (GSC) is a New Jersey partnership that was situated adjacent to the SJCC property and it, too, allegedly released hazardous substances onto its property.*fn1

In the early 1980s, the State of New Jersey, Department of Environmental Protection (DEP), began administrative proceedings against both SJCC and GSC arising from their release of the hazardous substances. In 1988, the United States Environmental Protection Agency (EPA) notified SJCC and GSC that they were potentially liable for the release of proscribed hazardous substances.

In 1991, SJCC filed a complaint in the Law Division against Continental Insurance Company and "others"*fn2 seeking a declaration that SJCC had insurance coverage for the environmental claims asserted against it. Thereafter, in 1996, the EPA filed a complaint against SJCC in the United States District Court for the District of New Jersey seeking reimbursement of its costs incurred and to be incurred in responding to the release of hazardous substances. SJCC filed a third party complaint against GSC and its owners for contribution and indemnity.

In 1997, GSC and its owners filed a complaint in the Law Division against the "C.N.A. Insurance Companies" and others*fn3

for insurance coverage for the environmental claims. Then, in 2001, the DEP filed suit in the United States District Court for the District of New Jersey against SJCC and GSC to recover its past and future response costs.

It appears that SJCC and GSC subsequently obtained stays of the coverage suits so they could pursue mediation of the claims brought against them by the EPA and the DEP, as well as their claims against the insurance companies. These efforts were successful and on September 5, 2002, Jerome B. Simandle, U.S.D.J., executed a lengthy "Consent Decree" that had been signed by the EPA, the DEP, SJCC, GSC, Maryland Casualty Insurance Co. (Maryland), the Insurance Company of the State of Pennsylvania (ISOP), Zurich American Insurance Co. (as the successor to Zurich Insurance Co.) (Zurich), North River Insurance Co. (North River), and Continental Insurance Co. (Continental).

The insurance companies paid, in total, $4,150,440, with respect to the claims asserted by the EPA and the DEP. In turn, the insurance companies received covenants not to sue from both the United States and the State of New Jersey "with respect to known or unknown environmental claims, existing now or arising in the future, relating to the" properties. SJCC also released Maryland, ISOP, Zurich, and North River from "all obligations whatsoever arising under any and all [p]olicies with respect to Environmental Claims at or arising from the SJCC site, whether past, present or future, known or unknown, or asserted or unasserted[.]" The releases noted that the insurance companies disputed coverage and that the agreements represented "a compromise and settlement" achieved through "arms-length ...


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