Terranova v. General Electric Pension Trust, 457 N.J. Super. 404 (App. Div. 2019). Judge Moynihan’s opinion in this New Jersey Spill Compensation and Control Act case today addresses whether the doctrine of judicial estoppel is available in cases under that statute. Plaintiffs asserted that judicial estoppel cannot be asserted under the Spill Act because of the complexities of environmental investigation, “the broad remedial purposes of the Spill Act,” and the claim that “judicial estoppel is not a defense recognized by the Spill Act.” Judge Moynihan and the panel disagreed and affirmed summary judgments awarded to defendants.
At first, it looked like the opinion would result in a reversal. Judge Moynihan observed that the panel “cannot readily discern from the record the basis for the trial court’s decision.” Only one amended order listed judicial estoppel as the basis for the ruling in the Law Division. And “[t]he court’s oral decision on the motions is interspersed with colloquy with plaintiffs’ counsel, thwarting appellate review.”
Despite these problems, since “all parties agree[d] that the court’s summary judgment decisions were based on judicial estoppel,” the panel affirmed those rulings. Judge Moynihan applied de novo review, as required in the context of appeals from summary judgment orders, but noted that the abuse of discretion standard governed the Law Division’s decision to invoke judicial estoppel.”
One of the plaintiffs here had previously sued other defendants, who had operated a gas station under a lease on the subject property from 1981-2008, as to the environmental contamination. An arbitrator found against those defendants, ordered them to reimburse the plaintiff $45,000 for remediation costs, and required those defendants to “take over the remediation process.” Those defendants did not comply.
Plaintiffs then hired a new environmental consultant, whose investigation determined that the contamination had begun on or before 1963 and had continued through 2000. Based on that, plaintiffs sued the defendants in today’s case. Those defendants sought, and obtained, summary judgment based on judicial estoppel, predicated on the fact that plaintiffs had sued and had successfully imposed liability on the prior set of defendants for this same contamination.
Plaintiffs argued that judicial estoppel was not a defense recognized under the Spill Act, citing N.J.S.A. 58:10-23.11g(d)(1) for the idea that such defenses are limited to “an act or omission caused solely by war, sabotage, or God, or a combination thereof.” Plaintiffs also relied on Morristown Assocs. v. Grant Oil Co., 220 N.J. 360 (2015), which had cited that statute and held that the Legislature thereby intended to preclude statute of limitations defenses. But Judge Moynihan found that that decision had actually “rejected an argument that the exclusion of defenses in the contribution provision deprives a defendant of other unlisted defenses that should presumably be maintained, such as challenges to venue, service of process, and subject matter jurisdiction. Such defenses are established by court rules under the jurisdiction of the Supreme Court and are not subject to overriding legislation. Statutes of limitations, by contrast, are a product of the Legislature.”
Under that reasoning, Judge Moynihan said, judicial estoppel, an equitable doctrine, not subject to overriding legislation, is a viable defense under the Spill Act. And after discussing the law of judicial estoppel in some detail, Judge Moynihan held that it barred plaintiffs’ case. Plaintiffs had successfully argued that the prior set of defendants “alone were the culpable dischargers.” Plaintiffs’ “decision to disregard the possibility that other dischargers– from whom plaintiffs now seek contribution– were responsible under the Spill Act and pursue only [the prior defendants] is the type of inconsistent practice necessitating application of the judicial estoppel doctrine.”
Judge Moynihan was careful to point out that applying judicial estoppel “does not preclude property owners from seeking contribution from dischargers under the Spill Act. It simply compels owners to pursue, in a single action, dischargers which are known or reasonably knowable from the circumstances. That is the principle underlying judicial estoppel, and of the equitable principles of collateral estoppel and the entire controversy doctrine. The integrity of the judicial process depends on compliance with those principles.”
Invoking judicial estoppel was also consonant with the Supreme Court’s characterization in Morristown Assocs. of the goal of the Spill Act “remedial legislation designed to cast a wide net over those responsible for hazardous substances and their discharge on the land and waters of this state.” Thus, “casting that net over all dischargers in a single action upholds the integrity of the judicial system; plaintiffs are precluded from floating a lazy cast toward one discharger and then shooting a second line toward others, seeking contribution for clean-up of the same property.”