Opinion
DOCKET NO. A-6090-10T2
04-19-2013
NEW JERSEY MEADOWLANDS COMMISSION, Plaintiff-Respondent/Cross-Appellant, v. JOHN P. KEEGAN, Defendant-Appellant/Cross-Respondent.
Francis A. Kirk argued the cause for appellant/cross-respondent (McCarter & English, attorneys; Mr. Kirk, on the brief). John H. Klock argued the cause for respondent/cross-appellant (Gibbons, P.C., Special Counsel, attorneys; Mr. Klock and Uzoamaka N. Okoye, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Fuentes, Grall and Hayden.
On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-2108-09.
Francis A. Kirk argued the cause for appellant/cross-respondent (McCarter & English, attorneys; Mr. Kirk, on the brief).
John H. Klock argued the cause for respondent/cross-appellant (Gibbons, P.C., Special Counsel, attorneys; Mr. Klock and Uzoamaka N. Okoye, on the brief). PER CURIAM
Defendant, John P. Keegan (Keegan), appeals and plaintiff, the New Jersey Meadowlands Commission (Commission), cross-appeals from a judgment entered following a bench trial on the Commission's action to recover the cost of remediating condemned property. Under Housing Authority of New Brunswick v. Suydam Investors, L.L.C., 177 N.J. 2 (2003), condemned and contaminated property is valued "as if remediated" to reflect its highest and best use, leaving liability for the cleanup to be addressed in a subsequent cost-recovery action. Id. at 23-24. In a Suydam cost-recovery action, defenses to statutory liability may be raised and third parties, such as prior owners, may be joined. Id. at 24.
The Commission asserted four bases for Keegan's liability: the New Jersey Spill Compensation and Control Act (the Spill Act), N.J.S.A. 58:10-23.11 to -23.50; the Sanitary Landfill Facility Closure and Contingency Fund Act (the Closure Act), N.J.S.A. 13:1E-100 to -116; the common law of nuisance; and unjust enrichment. Although Keegan raised an affirmative defense asserting that others created the conditions on Lot 28, he did not join a third party or file a counterclaim.
A fifth count, in which the Commission sought declaratory judgment, is not at issue here.
The trial court concluded that Keegan was not liable under the Spill or Closure Acts, but determined he would be unjustly enriched were he to receive the "as if remediated" value without contributing to remediation costs. The court awarded less than the Commission sought because it failed to establish a need for all of the remedial measures.
On appeal each party challenges the rulings on liability favorable to the other, and both contend the court erred in fixing Keegan's share of the costs. Because the evidence establishes that Keegan acquired the property knowing it was a former landfill from his father, was involved albeit tangentially in its operation, had reason to know its improper closure presented the potential environmental problems, and held the property for speculation for several decades, we conclude that the court erred in finding he was not liable under the Closure Act. Accordingly, we remand for reconsideration of the costs that the court disallowed in fashioning an award designed to do nothing more than avoid unjust enrichment.
This disposition makes it unnecessary to address other theories of liability or resolve Keegan's claim that Suydam precludes an award based on unjust enrichment in the absence of statutory responsibility. We have these observations, however.
The question whether Keegan would be unjustly enriched by receipt of compensation if he had no liability for cleanup is complex and especially so in this case where Keegan opted not to join any of the third parties allegedly responsible. See generally Borough of Paulsboro v. Essex Chem. Corp., 427 N.J. Super. 123, 12931 (App. Div.), certif. denied, 212 N.J. 460 (2012).
With respect to the Spill Act, we note that the Commission does not rely on N.J.S.A. 58:1023.11g(d)(5) or argue that Keegan is liable under this court's interpretation of that statute in an opinion issued after this case was argued. N.J. Sch. Dev. Auth. v. Marcantuone, 428 N.J. Super. 546 (App. Div. 2012); see R. 2:611(d). Under Marcantuone, Keegan would be required to show that when he purchased the property he "did not know or have reason to know that hazardous substances [such as oil] had been discharged on" Lot 28. 428 N.J. Super. at 560.
I
The subject property is Lot 28 of Block 25 on the tax map of the City of Kearny. Lot 28 is a 3.124-acre portion of a nearly 100-acre landfill known as the Keegan Landfill. Keegan's compensation for the taking was fixed at $919,500, which represents Lot 28's "as if remediated" value. The Commission has remediated 90.33 acres of the landfill, including Lot 28, at a total cost of $21,352,464.14. The only estimated cost included in the total is the cost of capping the landfill, which had not been completed. The Commission sought to recover $1,387,484.30 from Keegan — the cost of excavating oil-laden soil found only on Lot 28 plus a share of the common costs proportionate to the area of Keegan's lot.
The amount is the value set by the condemnation commissioners. Although Keegan and the Commission initially challenged the condemnation commissioners' determination, he withdrew and thereby abandoned the objection.
There is no dispute that Lot 28 is part of a former landfill. In 1946, William A. Keegan, Jr. (W.A. Keegan), Keegan's father, acquired Lot 28 from the Town of Kearny. Keegan was then about seven years old. Between 1950 and 1972, W.A. Keegan, operating as William A. Keegan, Inc., participated in a privately owned and operated joint venture known as the Municipal Sanitary Landfill Authority (MSLA), which operated the Keegan Landfill and several others. In the 1960s, the Keegan Landfill daily accepted, among other things, about forty, thirty-gallon drums containing chromate and bichromate slurry, pigment and organic waste from DuPont Chemical.
By 1972, when MSLA ceased operations at Keegan Landfill, laws affecting MSLA's operations had been adopted and were being implemented. In 1969, the Legislature established the Commission, and granted it broad authority to address the region's needs, which included the need for "special protection from air and water pollution and special arrangements for the provision of facilities for the disposal of solid waste." N.J.S.A. 13:17-1, -5, -6 (L. 1968, c. 404). Originally known as the Hackensack Meadowlands Development Commission (HMDC), N.J.S.A. 13:17-5, since 2001 the HMDC has been known as the New Jersey Meadowlands Commission. N.J.S.A. 13:17-3.1 (L. 2001, c. 232, §§ 2-3).
Although section 103 of chapter 404 provides for the law to take effect on July 1, 1968, it was not adopted until January 13, 1969 and has been deemed to be effective as of that date. Meadowlands Reg'l Dev. Agency v. State, 112 N.J. Super. 89, 124 (Ch. Div. 1970), aff'd, 63 N.J. 35, appeal dismissed, 414 U.S. 991, 94 S. Ct. 343, 38 L. Ed. 2d 230 (1973).
In 1970, the Legislature adopted the Solid Waste Management Act (SWMA). L. 1970, c. 39, §§ 1 to 15 (N.J.S.A. 13:1E-1 to 13:1E-15). The SWMA gave the Department of Environmental Protection (DEP) authority to supervise and regulate the operations of those in the business of solid waste collection and disposal, including requiring them to register. N.J.S.A. 13:1E-4, -5. Until its amendment by L. 2003, c. 231, N.J.S.A. 13:1E-5 expressly prohibited a person from "engag[ing] or continu[ing] to engage in" collection or disposal of solid waste without registration. Thus, it applied to landfills in operation prior to the effective date.
Between 1970 and 1972, the Commission made several attempts to address MSLA's activities. In 1970, the Commission directed MSLA to cease activities at the landfill until it had the necessary approvals. Consequently, MSLA sought approval in 1971. MSLA's application explained that the Keegan Landfill received 170,000 to 180,000 loads per year, fifteen to twenty percent of which was commercial and industrial waste. Keegan, who was by that time a licensed and practicing attorney, is listed as MSLA's registered agent on that application.
Thomas Marturano is the Commission's Director of Solid Waste and Natural Resources and a licensed civil engineer and professional planner who has worked for the Commission since 1984. He explained that in 1971, commercial and industrial waste commonly included waste oil and other things now classified as hazardous.
In 1971, the Commission sent Keegan's father a warning noting that its staff had observed the dumping of liquid waste at the landfill in violation of the Commission's regulations. In 1972, the Commission's chief engineer again wrote to MSLA reporting an observation of dumping of liquid waste at the landfill. That letter indicates W.A. Keegan confirmed the dumping, and it directs MSLA to cease and desist from disposing of waste oil without authorization. Although the Commission's chief engineer subsequently authorized an oil company to continue sending its waste oil to the Keegan Landfill, that authorization expired on April 30, 1972.
According to Marturano, it was then customary for landfills to dig pits that served as reservoirs for storage of waste oil, which landfill operators drew from to control the dust on the landfills' dirt roads. Pointing to a large dark area in the middle of Lot 28 shown on an aerial photograph taken in 1969, Marturano explained that this spot was the place where oil-laden soil was encountered on Lot 28 years later — a condition not found on other lots in the landfill.
An expert in photogrammetry, which is a form of remote sensing used to measure objects on the earth's surface, testified that an area of disturbance on the surface in the southeasterly corner of Lot 28 shrunk with time. Utilizing prints from 1969, 1970, 1971 and 1978, he determined that there was an area of "spectral reflectance," or contrast, on Lot 28 that grew smaller over the years. In 1970 and 1971, the area was "slightly smaller" than it was in 1969 and there was less contrast between dark and light. By 1978, the area of disturbance was "a lot smaller," "almost negligible," but still present. Based on the testimony and exhibits provided to us, it is not clear whether this spot is in the same location as the dark spot Marturano identified in the 1969 aerial photograph where oil-laden soil was later found. The trial court did not address that question.
Because the record is not clear, there is no reason to consider whether leaking of oil during Keegan's ownership from an open pit MSLA used to store it would be, or is, comparable to the leaking of an underground oil tank during his ownership, which unquestionably would give rise to liability under the Spill Act. See Marsh v. N.J. Dep't of Envtl. Prot., 152 N.J. 137, 146 (1997).
Before ceasing operations, MSLA challenged the new regulation of its activity. On several grounds MSLA contended that the Commission's regulations "governing the location, construction and operation of sanitary landfills within the" Meadowlands district were invalid. Mun. Sanitary Landfill Auth. v. Hackensack Meadowlands Dev. Comm'n, 120 N.J. Super. 118, 121 (App. Div.), certif. denied, 60 N.J. 283 (1972). But this court rejected all of the arguments. Id. at 123-29.
There was little evidence that any effort was made to close the landfill when MSLA ceased operations in 1972. Keegan did not know what, if anything, was done. According to Keegan's expert, before 1982, landfill regulations required nothing more than two feet of soil cover to close a landfill, but he acknowledged that there was insufficient evidence to tell how thick the soil was throughout the lot. The expert noted that there was evidence of soil cover on Lot 28 in earlier reports but did not refer to them or indicate the depth of the cover.
Cover on a landfill, as Marturano explained, is critical. As rain and snow contact solid waste, the waste disintegrates and produces leachate. Leachate is "a liquid that has been in contact with solid waste and contains dissolved or suspended materials from that solid waste." N.J.S.A. 13:1E-38(d). According to Marturano, when acid rain "hits the car bumpers or batteries . . . in a landfill it tends to dissolve and pick up some of the heavy metals," which become a component of the leachate. Cover inhibits the process.
After 1972, MSLA continued dumping operations at other landfills. Indeed, the Commission sought to enjoin MSLA from accepting solid waste from other states in 1973, and MSLA argued that the regulations were unconstitutional. See Hackensack Meadowlands Dev. Comm'n v. Mun. Sanitary Landfill Auth., 127 N.J. Super. 160, 162-63 (Ch. 1974). The trial court agreed with MSLA, but in November 1975 the Supreme Court reversed and upheld the enabling statute and regulations, 68 N.J. 451, 473-78 (1975). By 1975, there was evidence of environmental problems at the Keegan landfill — a fire in April.
On a challenge to the New Jersey Supreme Court's decision filed by the City of Philadelphia, the United States Supreme Court ultimately reversed. City of Philadelphia v. New Jersey, 430 U.S. 141, 97 S. Ct. 987, 51 L. Ed. 2d 224 (1977) (reversing and remanding); 73 N.J. 562 (1977) (decision on remand); 437 U.S. 617, 98 S. Ct. 2531, 57 L. Ed. 2d 475 (1978) (reversing).
In January 1976, Keegan purchased Lot 28, and another lot that was never part of the landfill, from his parents for $1. According to Keegan, the transaction was part of his father's estate planning; around the same time, his father gave his business interests and other commercial properties to Keegan's brother. Keegan was then about thirty-eight years old and practicing law in New Jersey, and he prepared the deed.
According to Keegan, he followed his father's advice and held the property as an investment pending the paving of a section of Bergen Avenue that would make that street a thoroughfare and the land more valuable. Although Keegan knew Lot 28 was part of the Keegan Landfill, he testified that he did not know how it was operated or closed. However, he was involved with MSLA as late as 1978, when he signed a lease for another landfill site on MSLA's behalf and as MSLA's assistant secretary.
By Keegan's account, Lot 28 was covered with tall grass and trees during his ownership, and he was unaware of any contamination until much later, when he and Marturano looked at five test pits on Lot 28 in the early 1990s. There, they saw "ten to twelve feet of waste" and "a substantial quantity of oil."
As previously noted, there was little evidence of conditions indicating the landfill was "closed" with two feet of soil cover, as Keegan's expert indicated it should have been when Keegan acquired Lot 28. When Marturano first saw it in the mid-1980s, it was an abandoned "former" landfill and there were "many cases" where "garbage was exposed at the surface" without "even a cover on it." John A. Castner, Director of County Environmental Solid Waste and Pesticide Enforcement for the DEP and an employee of the DEP since 1976, saw the landfill in the early 1990s. Castner agreed it was "abandoned," and he also saw "exposed solid waste material" and piles of trash in various locations indicative of midnight dumping — dumping without soil covering. He acknowledged only that in some areas there was "vegetative growth that had taken a hold on what soil was there." Keegan admitted there was dumping on Lot 28 during his ownership, and he testified that he addressed that problem once, after the Commission notified him by directing the dumper to remove the debris.
Environmental problems at the landfill were evident throughout Keegan's ownership. Marturano explained that by 1984 leachate was "pouring from" the Keegan Landfill into Frank's Creek, which was near its border, and into the Kearny Marsh. Between January 1976 and April 2006, the Kearny Fire Department responded to twelve fires at this landfill — two in 1976; three in 1978; one in 1979; one in 1982; a seven-day fire in 1984; one in 1995; two in 2002; and one in 2006. One of them emitted smoke that carried so much particulate that it required closure of a nearby section of the New Jersey Turnpike.
The testimony concerning the precise location of Frank's Creek prior to the re-routing of the creek, which was done as part of the closure to avoid future contamination, is difficult to follow because the witnesses pointed to exhibits without describing the location and not all of the exhibits designate the property's boundary lines. The trial court found that the creek was within 100 yards of Lot 28.
The contamination was documented in a September 15, 1989 report (the NUS Report) prepared for the United States Environmental Protection Agency (EPA) by NUS Coroporation, Superfund Division. That report was introduced at trial. It notes recommendations made to the DEP by another engineering firm in 1987 to cover the area of recent fires with two feet of soil and secure access to the landfill from Bergen Avenue. It reports that sediment samples revealed mercury, lead, chromium and polychlorinated biphenyls (PCBs). Also, mercury, lead and chromium were found in surface water samples taken from Frank's Creek, which had an "oily sheen."
The foregoing evidence of conditions was also set forth in a report that Keegan obtained in June 1992, which was prepared for the Commission by the officer who conducted public hearings on the Commission's proposal to open a new sanitary landfill on the site after addressing the contamination. See generally In re Certain Amends. to Adopted and Approved Solid Waste Mgmt. Plan of Hackensack Meadowlands Dev. Comm'n Solid Waste Mgmt. Dist., 275 N.J. Super. 375 (App. Div.) (discussing the hearing officer's report and the Commission's proposal and upholding the agency action adopting the proposal), certif. denied, 139 N.J. 289 (1994).
This court quoted that officer's report in addressing challenges to the Commission's proposal to remediate the Keegan Landfill on the ground that evidence of need for remediation was inadequate:
"[O]ne only has to walk the site to see that there is leachate flowing from the site, that the color of the water in Frank's Creek gets progressively greener as it flows through the site, and that numerous underground fires over the years have
scarred site vegetation. Further evidence of site contamination was found by the USEPA [the United State Environmental Protection Agency] in their investigation of the site.
. . . .
The [NUS] report[] concluded that the site poses a potential threat of contamination to surface waters. Downstream water samples indicated concentrations of chromium significantly greater than upstream samples. The same could be said for the sediment samples. . . . Further, there is significant evidence of routine dumping throughout the site.
The report went on to say that '. . . [a] fence should be installed around the site to limit access to the landfill.'"
[Id. at 390].
The NUS Report was also admitted as a joint exhibit in this trial.
Keegan took no action to address those problems, but in 1993 he filed a tax appeal to reduce the assessed value of Lot 28 and the nearby Lot 25, arguing, among other things, that the Lot's contamination diminished its value. Stressing that his lawyer, not he, prepared the appeal, Keegan admitted that it characterized Lot 28 as "grossly contaminated" and plagued by leachate, underground fires, methane gas, mercury, lead, chromium, PCBs and semi-volatile compounds. At trial, Keegan explained he never took any step to address those conditions because he was never asked or directed to do anything.
A
The foregoing evidence establishes Keegan's liability under the Closure Act. The Closure Act was adopted in 1981 and took effect in 1982. L. 1981, c. 306, § 18 (approved November 25, 1981). It "provides a mechanism for compensating parties who are injured by the operation or improper closure of landfills.[] To generate revenue for the Fund, the Act both taxes and imposes liability on owners and operators of sanitary landfills." In re Adoption of N.J.A.C. 7:1I, 149 N.J. 119, 132 (1997). Through the Closure Act, "[t]he Legislature imposed the burden of remediation costs on the landfill industry." Id. at 132-33.
Claims for compensation must be filed within one year of the claimant's discovery of damage, N.J.S.A. 13:1E-107, a requirement Keegan did not meet.
The Closure Act states: "Every owner or operator of a sanitary landfill facility shall be jointly and severally liable for the proper operation and closure of the facility, as required by law, and for any damages, no matter by whom sustained, proximately resulting from the operations or closure." N.J.S.A. 13:1E-103. The Closure Act defines the terms owner and operator to include "in addition to the usual meanings thereof, every owner of record of any interest in land whereon a sanitary landfill facility is or has been located . . . ." N.J.S.A. 13:1E-102(b). Read literally, the definition includes Keegan, but the Supreme Court has determined that this definition is ambiguous and cannot be read literally. In re Adoption of N.J.A.C. 7:1I, supra, 149 N.J. at 128.
The Court held "that the Legislature intended that the liability associated with improper closure and operation of landfills rest with those parties exercising ownership or control over the site during the landfill's operation and subsequent closure." Id. at 128. In our view, the facts of the case before the Court in In re Adoption of N.J.A.C. 7:1I and the Court's reasoning compel the conclusion that Keegan is liable.
In re Adoption of N.J.A.C. 7:1I involved the liability of the Township of Voorhees for costs of addressing the inadequate closure of a landfill on property Voorhees purchased. Id. at 120-21. While the landfill was in operation, Voorhees had sent its waste there, and Voorhees knew the property was a former landfill when it made the purchase for $1 in 1977 with the intention of using it as a park in the future. Id. at 121-22.
The Court stressed that when Voorhees made the purchase it "believed, and had no reason to doubt, that the landfilling operation had been properly closed in accordance with existing laws and regulations." Id. at 121. The Court emphasized that "Voorhees had no reason to believe that the lot would experience environmental problems" and did not have notice of the "potential" for environmental problems until 1986, when DEP directed Voorhees to install monitoring wells and Voorhees promptly complied. Id. at 122. And, the Court dismissed DEP's argument that its interpretation would encourage speculation in landfills, noting that Voorhees purchased the property for use as a park. Id. at 131.
The issue before the Court was whether DEP erred in denying Voorhees' request to recover its cost for remediating the site from the Sanitary Landfill Facility Contingency Fund, N.J.S.A. 13:1E-105. Liability was at issue because DEP denied compensation on the ground that Voorhees was liable for the costs and, therefore, ineligible to recover. In re Adoption of N.J.A.C. 7:1I, supra, 149 N.J. at 123. After considering the Closure Act's comprehensive scheme — a contingency fund for cleanup financed by taxes imposed on participants in the industry, N.J.S.A. 13:1E-104; payments for claims filed within one year of the claimant's discovery of damage, N.J.S.A. 13:1E-107; the conditioning of any payment from the fund on DEP's "acquiring, by subrogation, all rights of the claimant to recovery of the damages from any owner or operator of a sanitary landfill," N.J.S.A. 13:1E-111; and the notice provision, which precludes any person from selling property used, at any time, as a landfill without giving notice of that fact, N.J.S.A. 13:1E- 116(a), the Court disagreed with the DEP's determination that Voorhees was liable for remediation costs. It held:
Because this case turns on whether Voorhees benefitted from the use of the property as a sanitary landfill and was responsible for closure activities, the fact that Voorhees knew that the site was previously utilized as a landfill and actually sent waste to the facility is of no import. Voorhees never owned or operated the landfill and never took part in any closure activities. Therefore, it is not liable for cleanup costs and is entitled to reimbursement for such costs from the Contingency Fund.The Court also noted that its interpretation would advance the Legislature's goal by encouraging owners of former landfills "to take prompt and appropriate action to remedy environmental problems that threaten the public welfare." Id. at 130.
[In re Adoption of N.J.A.C. 7:1I, supra, 149 N.J. at 131.]
For several reasons Keegan falls within the Court's interpretation of the scope of liability. He not only knew Lot 28 was part of the landfill but acquired it from a former operator who was doing estate planning. As one of the operator's prospective heirs, Keegan was in a position to benefit himself and his brother, who had acquired the father's business, by foregoing the expense of closing the landfill MSLA abandoned or seeking to compel MSLA to do it. Moreover, Keegan's forbearance while he held Lot 28 for speculation was in derogation of the Legislature's intention to encourage prompt remediation of landfills.
There was an indirect benefit to Keegan, even if Keegan incorrectly assumed that he was not liable for closure of the landfill. Had Keegan attempted to sell Lot 28 at any time after the effective date of the Closure Act in 1982, he would have been required to disclose its prior use as a landfill — a disclosure that would obviously diminish its fair market value. See N.J.S.A. 13:1E-116.
As we understand Suydam, the diminishment of fair market value flowing from the disclosure cannot be considered in fixing "as if remediated" value, and it is not a function of liability of the sort that can be considered in a Suydam cost-recovery action. See generally Borough of Paulsboro, supra, 427 N.J. Super. at 129-31.
True, there is no evidence that Keegan was involved in the day-to-day operations of the landfill. Although he was a practicing attorney, he denied any knowledge of or involvement in MSLA's litigation to escape regulation. Accepting that testimony as true, Keegan was by no means a stranger to MSLA's operations. MSLA's 1971 application for approval to operate the landfill listed the type of waste accepted and listed Keegan as MSLA's registered agent. Moreover, in 1978, two years after he acquired Lot 28, Keegan signed a lease for another landfill as MSLA's assistant secretary.
There is another important distinction between Voorhees and Keegan that the trial court overlooked. Prior to and throughout Keegan's ownership of Lot 28, it was apparent that despite the cessation of authorized dumping the Keegan Landfill had been abandoned, not closed. There were multiple indications of its improper closure — midnight dumping, regular fires, waste on the surface that was not covered at all, and the greenish color of and oily sheen on the water in Frank's Creek. The trial court found credible Keegan's testimony that he did not know about the evident environmental problems until the 1990s, but the Supreme Court applied a different standard to Voorhees — belief that the landfill had been closed properly and no reason to know it had not.
In considering Keegan's liability, courts should not overlook the circumstances of the transaction. Here, those circumstances include: his relationship with the former operators of the Keegan Landfill — MSLA and his father; that his father conveyed Lot 28 to Keegan and his interest in MSLA to Keegan's brother as part of his estate plan; and the benefit all received from the landfill operations over the years without incurring the expense of closing it.
The trial court apparently equated Keegan's acquisition of Lot 28 in those circumstances with Voorhees' purchase of a landfill that it believed the operator had properly closed and without any reason to believe otherwise. In our view, the only similarity between the transactions was the $1 purchase price. The connection between the buyer and seller is different; the benefit from the operation of and evidence of closure costs for the landfill is different; the condition of the landfills is different and the purchasers' purposes for holding the property distinguish them. Keegan, not Voorhees, took the property and held it for profit.
For the foregoing reasons, we conclude that the trial court erred in determining that Keegan was not liable under the Closure Act.
B
As noted at the outset of this opinion, the determination that Keegan is liable under the Closure Act may affect the damage award and, for that reason, warrants a limited remand. Under the Closure Act, Keegan is "jointly and severally liable for the proper operation and closure of the facility, as required by law, and for any damages, no matter by whom sustained, proximately resulting from the operations or closure." N.J.S.A. 13:1E-103. The trial court, however, fashioned an award to avoid Keegan's unjust enrichment.
Because the Commission sought only a portion of the cost to close the Keegan Landfill from Keegan, $1,387,484.30, the question presented is narrow. It is whether some expenses were disallowed on a ground consistent with avoidance of unjust enrichment but inconsistent with liability under the Closure Act. As previously noted, the Commission's demand included the full cost of excavating the oil-laden soil found only on Lot 28 and a share of common remedial measures included in this project that involved the remainder of 90.33 acres of the Keegan Landfill. Keegan's share of the common costs was calculated based on the ratio of Lot 28's 3.124 area to the total area remediated. The formula was devised by the Commission's expert in landfill closure, Dr. Issa S. Oweis. Keegan's expert, Bashaar Assadi, did not dispute the validity of that formula as a measure for discerning the cost of remediating Lot 28. Instead, he disputed some of the expenses included in the total.
The Commission does not seek damages in a greater amount on appeal, and could not do so given its limited request in the trial court.
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The common features of the closure plan for which the trial court assessed .3454 to Keegan are: the leachate collection system; the pump stations needed to get the leachate to a treatment facility; manholes; and a force main.
The court also included costs for other common features of the project Assadi assigned to Lot 28. Those costs included expenses for engineering and permitting, re-grading the site, common fill, surcharge material, monitoring wells and ongoing maintenance and monitoring. Assadi excluded $39,936 for two feet of processed dredged material (PDM) for the landfill cap, and Dr. Oweis also testified that he did not include that cost. Thus, the trial court's deduction of that cost is well-supported by the record.
The court also included other charges for common features that Dr. Oweis listed but Assadi did not. Those measures were vents to allow for the escape of methane and the re-location of Frank's Creek. Dr. Oweis calculated the expense for diversion of the creek using the ratio between Lot 28's area and the total area of properties bordering the creek. In his opinion, the diversion was an "essential" component of closure that would avoid leachate from reaching the creek that traversed the marsh and emptied into a river. Those determinations are also amply supported by the record.
Our concern is with the trial court's exclusion of the expenses incurred to raise the grade of the landfill and construct a slurry wall around its perimeter. The court denied those costs on the ground that the Commission had not established that DEP would have required these features if Lot 28 had been remediated on its own.
The Closure Act provides some guidance in the context of identifying closure costs recoverable from the contingency fund N.J.S.A. 13:1E-106(a)(4) provides:
The costs of the design, construction, installation, operation and maintenance of any device or action deemed necessary by the [DEP] to clean up, remedy, mitigate, monitor or analyze any threat to the public health, safety or welfare of the citizens of this State, including the installation and maintenance of methane gas monitors and vents and leachate monitoring wells and collection systems, and the sampling and analysis of any public or private potable water supply.
In this case, the DEP approved the Commission's plan for closing the landfill and re-opening for a time to accept a limited class of solid waste. The trial court correctly noted that DEP's approval does not expressly indicate that DEP required a grade of the height the Commission proposed or a slurry wall. Although the distinction between measures the DEP approved and mandated may be relevant to unjust enrichment, it is not appropriate in determining the costs of closing this landfill.
Given our conclusion of liability under the Closure Act, the question was whether these measures were appropriate to close the landfill. The record compels the conclusion that the slurry wall was a reasonable approach to closure of the Keegan Landfill, of which Lot 28 was a part. Additionally, the slurry wall is the type of measure contemplated under N.J.S.A. 13:1E-106(a)(4). Dr. Oweis explained that the slurry wall is a containment element designed to prevent leachate from migrating offsite and keeping it within the landfill where it can be pumped to a treatment plant. And the trial court found, on more than adequate evidence, that the Commission established Lot 28's role in contributing to the leachate.
Dr. Oweis further testified that the DEP requires leachate management, that the slurry wall is a part of that system for this landfill and that a slurry wall is a device that has been used throughout the Meadowlands. Assadi indicated that he had been involved with two landfills in New Jersey where the DEP required slurry walls and others where the DEP did not. But he acknowledged that this slurry wall was a better solution, while positing that it was not the only one. Assadi also acknowledged that excavating the oil-laden soil on Lot 28 and moving it behind the slurry wall was the "most cost-effective way of managing the oil," which as noted previously, was only found on Lot 28. Finally, Castner of the DEP explained that the agency does not require a slurry wall for a former landfill in circumstances where the material is innocuous and has no potential for contamination, circumstances not present in this case.
Accordingly, there is evidence that the slurry wall was a reasonably necessary measure related to closure of this landfill in a manner that would prevent any additional migration of its leachate. Therefore, the trial court's exclusion of that cost warrants reconsideration in light of Keegan's liability under the Closure Act.
With the exception of the slurry wall, we find no basis for questioning the court's assessment of the amount Keegan should contribute. The trial court's exclusion of costs related to the grade of the landfill was not based on the basis for liability. It was based on the trial court's assessment of the evidence. The record supports the court's determination that the grade was, in large part, dictated by the Commission's effort to provide a plateau-like cap, the top of which would be suitable for playing fields. In turn, the steep grade was related to the size of basins for collection of storm water. Because the trial court disallowed costs based on evidence that these expenses were not related to closure of the landfill, our finding of liability under the Closure Act does not affect that determination.
Keegan argues that the trial court erred in awarding costs not proximately caused by Lot 28, by failing to limit the award to costs that would be incurred to develop Lot 28, and by failing to deduct a hypothetical tax credit for remediation that would be available to him if the property were developed for retail. Those arguments lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Remanded for reconsideration of damages in light of our determination that Keegan is liable under the Closure Act.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION