M&W Case Alert – NJ Supreme Court Rules On Spill Act
NEW JERSEY SUPREME COURT RULES THAT SPILL ACT CONTRIBUTION CLAIMS ARE NOT SUBJECT TO A STATUTE OF LIMITATIONS DEFENSE
In Morristown Associates v. Grant Oil Co. the New Jersey Supreme Court ruled that the six-year statute of limitations generally applicable to contract and property damage claims does not apply to a private claim for contribution under the New Jersey Spill Compensation and Control Act (Spill Act). The Court expressly limited the defenses to a Spill Act contribution claim to those set forth in the statute.
The plaintiff in Morristown Associates was a general partnership that owned a shopping center. A tenant in the shopping center utilized an underground storage tank (UST) to store fuel oil used to operate a steam boiler for its dry cleaning business. The fill and vent pipes for the dry cleaning UST leaked fuel oil for several years. The plaintiff was aware of the fuel contamination from the dry cleaner’s UST for many years before taking any steps to remediate. After commencing remediation, however, plaintiff filed a Complaint demanding common law and Spill Act contribution from a former tenant and fuel oil providers who delivered home heating oil to the dry cleaner’s UST.
The trial court dismissed the claims against the former tenant and fuel providers on the basis that they last had contact with the subject premises more than six years before the filing of the Complaint. The Appellate Division affirmed the dismissal, contradicting the earlier unreported decision of Mason v. Mobil Oil Corp., in which a different appellate panel had held that there was no statute of limitations for Spill Act contribution claims.
In reversing and reinstating the claims of the landlord, the Supreme Court noted the broad reach of the Spill Act, which provides that persons who clean up and remove environmental contamination possess a private right of contribution from “all other dischargers and persons in any way responsible for a discharged hazardous substance or other persons who are liable for the cost of the cleanup and removal.” By its own terms, the Spill Act limits defenses to “an act or omission caused solely by war, sabotage, or God, or a combination thereof.” Because the expressly identified defenses did not include a limitations defense, the Court held, a potentially responsible party may not invoke the statutory six year limitations period typically applicable to property damage claims.
Morristown Associates serves the broad remedial purpose of the Spill Act by affording unlimited time within which to pursue contribution towards often costly environmental remediation. While a lengthy delay in pursuing contribution could mitigate the exposure of potentially responsible parties, they are likely to face some exposure unless they can demonstrate that they had no connection to the contaminant in question or that the contamination resulted from “an act or omission caused solely by war, sabotage, or God, or a combination thereof.”