Articles Posted in Environmental Law

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Plaintiff Givaudan Fragrances Corporation (Fragrances) faced liability as a result of environmental contamination from a manufacturing site that a related corporate entity operated in a facility in Clifton. The issue this case presented for review involved Fragrances' effort to obtain insurance coverage for environmental claims brought by governmental entities in response to discharges of hazardous substances that occurred during the pertinent policy periods running through January 1, 1986. Fragrances claimed that the defendant insurance companies (defendants) wrote liability policies for Givaudan Corporation during those relevant years. Fragrances argued that it was entitled, either as an affiliate of Givaudan Corporation or by operation of an assignment of rights, to have the insurers provide it with coverage for that environmental liability. Defendants claimed that they insured Givaudan Corporation as their named insured, not Fragrances, and that any assignment to Fragrances was invalid because defendants did not consent to the assignment, as was required for a valid assignment according to the language of the insurance policies. Therefore, collectively, defendants refused to honor Fragrances' right to bring insurance contract claims against them. Fragrances filed its complaint in February 2009 seeking a declaratory judgment that it was entitled to coverage under the policies. In February 2010, while the declaratory judgment action was pending, Fragrances notified defendants that Givaudan Roure Flavors Corporation (corporate successor-in-interest to Givaudan Corporation) planned to assign its post-loss rights under the insurance policies to Fragrances. Defendants refused to consent to the assignment. Nevertheless, Flavors executed the assignment to Fragrances. Both sides moved for summary judgment. Because Fragrances was not acquired by Givaudan Corporation during the policy period, the trial court determined that it could not be an affiliated corporation covered under the policies. The court also determined that the assignment in this case was an assignment of policies, which could not be assigned. The court denied Fragrances' motion and granted defendants' cross-motion for summary judgment. The Appellate Division reversed and remanded, explaining that although the anti-assignment clauses in the occurrence policies at issue would prevent an insured from transferring a policy without the consent of the insurer, once a loss occurs, an insured s claim under a policy may be assigned without the insurer s consent.The Supreme Court affirmed, concluding that, once an insured loss has occurred, an anti-assignment clause in an occurrence policy may not provide a basis for an insurer s declination of coverage based on the insured's assignment of the right to invoke policy coverage for that loss. The assignment at issue in this case was a post-loss claim assignment and therefore the rule voiding application of anti-assignment clauses to such assignments applied. View "Givaudan Fragrances Corp. v. Aetna Casualty & Surety Co." on Justia Law

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Shortly after plaintiff John Ross signed a contract to sell his home, he learned of contamination on his property as a result of a leak that previously existed in an underground oil storage tank located on a neighboring property. The prospective purchaser then cancelled the contract, and plaintiffs commenced suit against the current and former owners of the neighboring property, and their respective insurers. After the insurers remediated the contamination on the property, the lawsuit proceeded on the claims for damages against all defendants on theories of negligence, strict liability, private nuisance and trespass, as well as violations of the Spill Compensation and Control Act. In this appeal, the issue presented for the Supreme Court's review centered on whether plaintiffs' claims were properly dismissed, and whether plaintiffs could maintain claims as third-party beneficiaries against the insurers which provided coverage to the former owner of the neighboring property where the underground storage tank was located. The Court found no basis for the claims of private nuisance or trespass against the homeowner defendants because there was no proof of negligence, recklessness, intentional conduct, or the conduct of an abnormally dangerous activity, by these parties. Additionally, the Court declined to expand these causes of action to impose strict liability upon defendants. Plaintiffs could not proceed with a direct claim against the defendant insurers for breach of the implied covenant of good faith and fair dealing contained in the insurance contracts because they did not hold an assignment of rights from the named insured, and there was no evidence that the named insured or her insurers agreed to recognize plaintiffs as third-party beneficiaries of the insurance contracts. View "Ross v. Lowitz" on Justia Law

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In 1979, plaintiff Morristown Associates purchased commercial property located in Morristown. The property contained a strip-mall-style shopping center known as Morristown Plaza. Among the tenants was Plaza Cleaners, a dry cleaning business owned at the time by Robert Herring. Herring and his wife had entered into a lease with the property's previous owner, Morris Center Associates, in 1976. Due to construction, Herring was unable to occupy and operate Plaza Cleaners until 1978. At some point before moving in, Herring installed a steam boiler in a room at the rear of the leased space and an underground storage tank (UST) for fuel to operate the boiler. In 1985, Herring sold Plaza Cleaners to defendants Edward and Amy Hsi. The Hsis owned the business until 1998 when it was sold to current owner and third-party defendant, Byung Lee. In August 2003, a monitoring of a well installed near Plaza Cleaner's UST revealed fuel oil contamination. A subsequent investigation revealed that although the UST was intact, the fill and vent pipes were severely deteriorated, with large holes along a significant portion of their lengths. Plaintiff's experts concluded that those holes had developed as early as 1988 and, since that time, oil had been leaking from the pipes each time the tank was filled. Each of the named oil company defendants in this case allegedly supplied fuel oil to Plaza Cleaners at various times between 1988 and 2003. The issue in this appeal was whether the general six-year statute of limitations contained in N.J.S.A. 2A:14-1 applied to private claims for contribution made pursuant to the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11f(a)(2)(a). Based on the plain language of the Spill Act, reinforced by its legislative history, the New Jersey Supreme Court held that N.J.S.A. 2A:14-1 s six-year statute of limitations was not applicable to Spill Act contribution claims. The Court therefore rejected the contrary determination of the Appellate Division and reversed and remanded this case to the Appellate Division for its consideration of other issues raised on appeal that were unaddressed. View "Morristown Associates v. Grant Oil Co." on Justia Law

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The issue before the Supreme Court in this case concerned the nature of the nexus that must be proven by the New Jersey Department of Environmental Protection (DEP) under the Spill Compensation and Control Act (Spill Act or Act) against Sue’s Clothes Hanger (Sue’s), the only direct defendant that remained in the case, for costs expended in the investigation and remediation of contaminated groundwater that tainted private wells in Bound Brook. The trial court dismissed the Spill Act claim, concluding that even if the building where Sue’s was located is a contamination source, the evidence was insufficient to establish that Sue’s discharged PCE that contaminated the groundwater. The court found: the groundwater and soil contamination preceded Sue’s dry cleaning operation; there was no evidence that the drip from Sue’s continued or the pavement below showed signs of contamination; the DEP took no other action regarding the drip, suggesting it was not considered to be significant; there is no evidence that PCE in the groundwater or soil came from Sue’s rather than from others who had conducted dry cleaning operations in the building; and because there are alternative sources of contamination from the building and Zaccardi’s, the DEP had not established by a preponderance of the evidence that Sue’s contributed to the groundwater contamination. Upon review of the matter, the Supreme Court affirmed the Appellate Division in holding that in order to obtain damages under the Spill Act, the DEP must demonstrate, by a preponderance of the evidence, a reasonable connection between the discharge, the discharger, and the contamination at the damaged site. The proofs failed to establish a sufficient nexus between the groundwater contamination and Sue’s discharge during its operation. View "New Jersey Dep't of Envtl. Prot. v. Dimant" on Justia Law