Lacey Mun. Utilities Authority v. New Jersey Dept. of Environmental Protection

Citation312 N.J.Super. 298,711 A.2d 932
PartiesLACEY MUNICIPAL UTILITIES AUTHORITY, Petitioner-Appellant, v. NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, ENVIRONMENTAL CLAIMS ADMINISTRATION, SPILL COMPENSATION FUND, Respondent-Respondent.
Decision Date04 June 1998
CourtNew Jersey Superior Court – Appellate Division

Jerry J. Dasti, Forked River, for petitioner-appellant (Dasti, Murphy & Wellerson, P.C., attorneys; Mr. Dasti and Gregory P. McGuckin, on the brief).

Mark D. Oshinskie, Deputy Attorney General, for respondent-respondent (Peter Verniero, Attorney General of New Jersey, attorney; Mary C. Jacobson, Assistant Attorney General, of counsel; Mr. Oshinskie, on the brief).

Before Judges SHEBELL, D'ANNUNZIO and A.A. RODRIGUEZ.

The opinion of the court was delivered by

SHEBELL, P.J.A.D.

This is an appeal from the January 3, 1995 denial by the Administrator of the Spill Compensation Fund (Fund) of two Spill Fund claims brought by the Lacey Municipal Utilities Authority (Lacey) on the ground that they were filed "later than one year from the date of discovery of damage" contrary to N.J.S.A. 58:10-23.11k. We reverse as to both claims and remand to the Fund for consideration of the merits of the claims.

On November 18, 1986, and January 6, 1987, a residential potable well located at 331 Constitution Drive, Lacey Township, in the area designated as MUA Zone 12, was discovered to contain benzene, a hazardous substance, in excess of the level established as acceptable for drinking purposes. Subsequent potable well water sampling found a total of thirteen (13) residential potable wells within Zone 12 to be contaminated with excessive levels of benzene, toluene, xylene and mercury, all hazardous substances. On February 28, 1991, petitioner filed a Spill Fund claim, seeking "reimbursement of costs incurred" by having its water supply lines extended into Zone 12.

In July, 1990, a residential potable well located in the Lanoka Harbor section of Lacey Township, in the area designated as MUA Zone 10, was discovered to contain trichloroethylene (TCE), a hazardous substance, in excess of the level established as acceptable for drinking purposes. Subsequent potable well water sampling found a total of twenty-five (25) residential potable wells within Zone 10 to be contaminated with excessive levels of TCE, 1,1, dichloroethylene, 1,2, dichloroethylene, tetrachloroethylene and carbon tetrachloride, all hazardous substances. On June 22, 1992, petitioner filed a Spill Fund claim, seeking "reimbursement of costs incurred" by having its water supply lines extended into Zone 10.

On January 3, 1995, the administrator issued Notices of Intent to deny the claims citing N.J.S.A. 58:10-23.11k, which states that "Claims shall be filed with the administrator not later than one year after the date of discovery of damage." Lacey, in accordance with N.J.S.A. 58:10-23.11n, requested arbitration, and the matter was transferred to the Office of Administrative Law. A motion by the Administrator for summary decision was denied by the arbitrator and, on July 8 and 9, 1996, a hearing was conducted.

On December 18, 1996, the arbitrator issued his final decision. With respect to the primary issue in the case, namely, whether petitioner's claims were time-barred by N.J.S.A. 58:10-23.11k, the arbitrator noted that the "facts for purposes of that question were undisputed":

Petitioner sought reimbursement for two water projects within Lacey Township, known as zone 10, ... and zone 12.... In July 1990 hazardous substances in excess of safe drinking water standards were discovered in zone 10. Petitioner solicited bids for a water extension project into this area on January 2, 1991, a contract was awarded on January 23, 1991, and construction began on May 2, 1991. The zone 10 claim was filed on June 22, 1992, and sought $181,834. The first contaminated wells were discovered in zone 12 during the latter part of 1986 and into 1987. Petitioner solicited bids for a water transmission main on November 20, 1989, the first contract was entered into on December 20, 1989, and construction began on February 18, 1990. Petitioner filed its zone 12 claim on February 28, 1991, seeking reimbursement of $746,540.

Recalling his prior conclusion in denying summary decision because "petitioner discovered its damage when it committed to supply water into zones 10 and 12 and that a clear manifestation of this commitment came when it contracted to extend water lines into these areas," the arbitrator repeated his conclusion that "petitioner's zone 10 and zone 12 applications are untimely."

As to Lacey's assertion "that its prior dealings with respondent led it reasonably to conclude that claims would be reviewed without strict attention to the statute of limitations," the arbitrator noted that while it was "true that the then administrator used the commencement of construction as the discovery date of damage and thus interpreted the Act liberally to favor petitioner" with regard to its 1988 Spill Fund claims for Zone 2 and Zone 6, the arbitrator found that this did not suggest a waiver by the administrator of the one-year statute of limitations in N.J.S.A. 58:10-23.11k, or that the administrator "lulled ... [Lacey] into believing that the statute of limitations would not apply." The arbitrator denied both of petitioner's claims, concluding "that petitioner's zone 10 and zone 12 applications were untimely and that respondent did not contribute to this in any substantial way."

I

We first consider Lacey's contention, raised for the first time on appeal, that denial of the claims is "incorrect as a matter of law" because petitioner, "as a political subdivision of the State of New Jersey, has 10 years to pursue this civil claim in accordance with the clear and unambiguous language utilized by the Legislature in N.J.S.A. 2A:14-1.2." The New Jersey Department of Environmental Protection (DEP) responds that Lacey "cannot rely on N.J.S.A. 2A:14-1.2 to establish that it has ten years to file its ... Spill Fund claims" because, in N.J.S.A. 58:10-23.11k, the Legislature "clearly and unmistakably established a one-year limitation period for the filing of Spill Fund claims." We agree.

N.J.S.A. 2A:14-1.2 (L. 1991, c. 387, § 2) provides as follows:

a. Except where a limitations provision expressly and specifically applies to actions commenced by the State or where a longer limitations period would otherwise apply, and subject to any statutory provisions or common law rules extending limitations periods, any civil action commenced by the State shall be commenced within ten years next after the cause of action shall have accrued.

b. For purposes of determining whether an action subject to the limitations period specified in subsection a. of this section has been commenced within time, no such action shall be deemed to have accrued prior to January 1, 1992 c. As used in this act, the term "State" means the State, its political subdivisions, any office, department, division, bureau, board, commission or agency of the State or one of its political subdivisions, and any public authority or public agency, including, but not limited to, the New Jersey Transit Corporation and the University of Medicine and Dentistry of New Jersey.

[Emphasis added.]

N.J.S.A. 2A:14-1.2 was approved on January 16, 1992, to take effect immediately. L. 1991, c. 387 § 3.

The Senate Judiciary Committee statement for Senate Bill No. 3741 (L. 1991, c. 387) sets forth the following:

Under the common law doctrine of nullum tempus, the State and its agencies were exempt from statutes of limitations generally applicable in civil actions. In a series of recent decisions, the New Jersey Supreme Court has abolished the nullum tempus rule. The effect of these decisions is to subject the State to the same limitations periods applicable to private litigants. This bill proposes to establish a uniform ten-year statute of limitations for actions commenced by governmental entities.

This ten-year period would apply unless another statute expressly provides a different period for actions commenced by the State. As in the case of private litigants, statutory provisions extending limitations periods under particular circumstances would extend the ten-year period where applicable. The bill would also provide that in no case would the ten-year period be deemed to have begun prior to January 1, 1992.

Under the bill, "State" is defined to include not only the State but also its political subdivisions, and their departments, divisions, agencies, bureaus, boards, commissions or offices, including public authorities and public agencies.

[Emphasis added.]

In Department of Environmental Protection v. Larchmont Farms, Inc., 266 N.J.Super. 16, 628 A.2d 761 (App.Div.1993), certif. denied, 135 N.J. 302, 639 A.2d 301 (1994), we rejected defendants' argument that the "claims brought by the [Department of Environmental Protection and Energy (DEPE) ]" on January 31, 1992, were "barred by the two-year statute of limitations set forth in N.J.S.A. 2A:14-10." Id. at 30, 34, 628 A.2d 761. Instead, we ruled that the action by the DEPE, pursuant to the Pesticide Control Act of 1971, N.J.S.A. 13:1F-1 to -18, was controlled by the ten-year statute of limitations set forth in N.J.S.A. 2A:14-1.2. Id. at 34, 628 A.2d 761. Therefore, we reversed the order dismissing DEPE's complaint without prejudice and remanded the matter to the Chancery Division for a hearing for the assessment of penalties pursuant to the Pesticide Act. Id. at 34-35, 628 A.2d 761. We explained that DEPE's action under the Pesticide Act was not time-barred by N.J.S.A. 2A:14-10, because

[I]t is not "expressly and specifically clear" that the two-year statute of limitations set forth in N.J.S.A. 2A:14-10 applies to actions brought under the Pesticide Act, and therefore, this action by the DEPE was controlled by the ten-year statute of limitations set forth in ...

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