Handy & Harman v. Borough of Park Ridge

• Decision Date: 27 June 1997
• Parties: HANDY & HARMAN and Handy & Harman Electronic Materials Corporation, Petitioners-Respondents, v. BOROUGH OF PARK RIDGE, Claimant-Appellant.
• Court: New Jersey Superior Court — Appellate Division

Page 558

302 N.J.Super. 558

695 A.2d 747

HANDY & HARMAN and Handy & Harman Electronic Materials

Corporation, Petitioners-Respondents, v. BOROUGH OF PARK RIDGE, Claimant-Appellant.

Superior Court of New Jersey,

Appellate Division.

Argued June 3, 1997.

Decided June 27, 1997.

Walter G. Reinhard, Somerville, for claimant-appellant (Norris, McLaughlin & Marcus, Somerville, attorneys; Mr. Reinhard, Somerville and John J D'Anton, Ridgefield, Borough Attorney for the Borough of Park Ridge, of counsel; Mr. Reinhard and Martha N. Donovan, Somerville, on the brief).

John M. Agnello, Roseland, for petitioners-respondents (Carella, Byrne, Bain, Gilfillan, Cecchi, Stewart & Olstein, attorneys; Mr. Agnello, of counsel; Mr. Agnello and David G. Gilfillan, on the brief).

Before Judges MICHELS, MUIR, Jr., and COBURN, JJ.

The opinion of the court was delivered by

MICHELS, P.J.A.D.

Claimant Borough of Park Ridge (Park Ridge) appeals from an Arbitration Decision of an Administrative Law Judge that denied its claim for reimbursement from the New Jersey Spill Compensation Fund (Spill Fund) established by N.J.S.A. 58:10-23.11i pursuant to the provisions of the New Jersey Spill Compensation and Control Act (Spill Act), N.J.S.A. 58:10-23.11 to -23.24.

Briefly, Park Ridge owns and operates a drinking water supply system, drawing from nineteen underground wells, which supplies Park Ridge and Woodcliff Lake residents. In 1983, Park Ridge learned that wells one, two, and seventeen were contaminated with volatile organic compounds including trichloroethylene (TCE) and perchloroethylene (PCE). As a result, in December 1985, Park Ridge filed a Spill Fund damage claim (No. H-86-24). No parties allegedly responsible for the contamination were named in the claim form. The Spill Fund administrator eventually settled the claim in about 1990 by paying Park Ridge $332,156.83.

In 1985, petitioners Handy & Harman and Handy & Harman Electronic Materials Corporation (hereinafter collectively referred to as Handy & Harman) bought property on which they and Plessey, Inc. had operated a metal stamping plant since 1966. This purchase triggered the Environmental Cleanup Responsibility Act (ECRA), N.J.S.A. 13:1K-6 to -13, now called the Industrial Site Recovery Act (ISRA), pursuant to which Handy & Harman was required to ensure that the property was environmentally sound. A survey of the area revealed groundwater pollution. On August 7, 1992, the Department of Environmental Protection (DEP) approved a groundwater cleanup plan submitted by Handy & Harman pursuant to ECRA. The record, however, does not reflect the current status of the ECRA/ISRA cleanup.

In December 1992, Park Ridge filed a Spill Act claim related to volatile organic compound contamination found in wells three through eight, ten, and thirteen. By this time, Park Ridge had installed equipment to purify the water on wells three through eight, ten, and thirteen. Handy & Harman was named a responsible party in the claim form. That same month and pursuant to a permit issued by the DEP, well nineteen was drilled and tested for contamination. The tests revealed volatile organic contamination in well nineteen. Park Ridge subsequently installed certain equipment to remove the contamination.

In March 1993, Park Ridge filed another claim, No. 92-0128-0002, seeking $253,000 for contamination in well nineteen, which claim is the subject of this appeal. The claim named Handy & Harman as a responsible party. Later, several other potentially responsible parties were discovered, including Plessey, Inc.; Plessey Materials Corp.; Cycle Chem., Inc. (formerly Perk Chemical); Park Ridge Hye Partners; Mid-Park Hye Corporation and Sarkis Gabrellian; and Buymar Corporation.

The Environmental Claims Administration of the DEP (ECA) subsequently sent a letter to Handy & Harman indicating that the well nineteen "claim is valid under the auspices of the [Spill Act]." Handy & Harman requested arbitration concerning both the amount and validity of the claim pursuant to N.J.S.A. 58:10-23.11n(a) and N.J.A.C. 7:1J-8.2. At the conclusion of the proceedings, the arbitrator, Administrative Law Judge Richard McGill, denied Park Ridge's claim with respect to well nineteen, holding that Park Ridge failed to prove that it had been damaged by a discharge which occurred after April 1, 1977, the effective date of the Spill Act. In reaching this conclusion, the arbitrator relied upon Atlantic City Municipal Utilities Authority v. Hunt, 210 N.J.Super. 76, 509 A.2d 225 (App.Div.1986), and Township of South Orange Village v. Hunt, 210 N.J.Super. 407, 510 A.2d 62 (App.Div.1986), and, in part, held:

Park Ridge emphasizes that in both Atlantic City and South Orange there was evidence of pre-Act discharges. While it is true that there is no clear evidence of a pre-Act discharge in this case, it would also be accurate to say that there is no reliable evidence that the discharge occurred after April 1, 1977.

Park Ridge cites test results which show contamination in its wells from 1983 to 1993. The facts in Atlantic City demonstrate that contamination of the well water is not a reliable indication that the discharge occurred at substantially the same time. Price's Landfill received hazardous chemicals from 1971 through 1976. An EPA study in 1979 found that the contamination would reach the municipal wells in twelve years. These dates imply that it could take from fifteen to twenty years for the discharged substances to reach the wells. While each case may be different, the facts in Atlantic City clearly imply that the date on which the contamination is detected is not a reliable indication that the discharge occurred at a time in close proximity thereto.

This case is very similar to South Orange in that it is impossible to tell on the basis of the evidence presented whether the contamination has been caused by the continuing migration of pre-Act discharges or by post-Act discharges. Park Ridge would assume based upon test results from 1983 to 1993 not only that there was a post-Act discharge but also that there was no pre-Act discharge. This approach, however, does not satisfy the requirement of South Orange to segregate and distinguish between damages caused by post-Act discharges and those caused by pre-Act discharges.

To summarize, the Spill Fund provides compensation only for post-Act discharges. Park Ridge as the claimant has the burden of proof as to all requirements for eligibility under the Spill Act and pertinent regulations. N.J.A.C. 7:1J-2.3. In this case, Park Ridge has not produced sufficient evidence to establish the extent to which the contamination of well no. 19 was the result of a post-Act discharge. Under the circumstances, I must CONCLUDE that Park Ridge has not established the validity of its claim with respect to well no. 19.

Park Ridge seeks a reversal of the Arbitration Decision and urges us to exercise our original jurisdiction and find that its Spill Fund claim was valid and that it was entitled to damages of $298,000. Park Ridge contends that (1) the Spill Fund Administrator's decision that its claim was valid was entitled to great deference by the arbitrator; (2) absent direct evidence of a discharge that pre-dated the Spill Act, it cannot be required to prove that its cleanup costs are the result of a post-Act discharge; (3) the Spill Act is retroactive; and (4) we should exercise our original jurisdiction to determine the proper amount of the claim. We disagree and affirm.

We are satisfied that the Arbitration Decision was not arbitrary, capricious, or unreasonable; was supported by sufficient credible evidence in the record; and did not violate the legislative policies expressed or fairly implied in the statutory scheme administered by the Spill Act. See Public Serv. Elec. & Gas Co. v. New Jersey Dep't of Envtl. Protection, 101 N.J. 95, 103, 501 A.2d 125 (1985); Henry v. Rahway State Prison, 81 N.J. 571, 579-80, 410 A.2d 686 (1980); Campbell v. Department of Civil Serv., 39 N.J. 556, 562, 189 A.2d 712 (1963); Valdes v. New Jersey State Bd. of Med. Examiners, 205 N.J.Super. 398, 404, 501 A.2d 166 (App.Div.1985); In re Doyle, 201 N.J.Super. 347, 349-50, 493 A.2d 54 (App.Div.1985); Dore v. Bedminster Tp. Bd. of Ed., 185 N.J.Super. 447, 453, 449 A.2d 547 (App.Div.1982); In re Boardwalk Regency Corp. for a Casino License, 180 N.J.Super. 324, 333-35, 434 A.2d 1111 (App.Div.1981), modified, 90 N.J. 361, 447 A.2d 1335 (1982), appeal dismissed sub nom. Perlman v. Attorney General of New Jersey, 459 U.S. 1081, 103 S.Ct. 562, 74 L.Ed.2d 927 (1982). See also R. 2:11-3(e)(1)(D). Moreover, all of the issues of law raised by Park Ridge are clearly without merit. R. 2:11-3(e)(1)(E).

Contrary to Park Ridge's contention, the DEP's initial acceptance of its claim as valid did not foreclose the arbitrator from concluding that the claim was in fact not valid and, therefore, from dismissing the claim. The Spill Fund is strictly liable for all cleanup and removal costs and all damages resulting from a discharge of hazardous substances. N.J.S.A. 58:10-23.11g(a). A claim for compensation from the Fund must be submitted to the chief executive of the Spill Fund within one year after the date of discovery of damages due to a discharge of hazardous substances, N.J.S.A. 58:10-23.11k; N.J.A.C. 7:1J-6.1, and the initial claim form is required to contain certain detailed information regarding the alleged damages, N.J.A.C. 7:1J-6.3. The DEP may settle the claim with the claimant unless a party contests the "amount or validity of the claim" and requests arbitration. N.J.A.C. 7:1J-8.3(a)(3). Here, Handy & Harman requested arbitration to contest both the amount and validity of the claim.

The ECA sent a letter to Handy & Harman indicating that the "claim is valid under the auspices of the [Spill Act]." Park Ridge argues that this statement amounts to a conclusive finding by the DEP that the claim was valid and that the...