Opinion
DOCKET NO. A-3193-12T3 DOCKET NO. A-1276-13T3
09-08-2016
STATE OF NEW JERSEY, DEPARTMENT OF ENVIRONMENTAL PROTECTION, Plaintiff-Respondent, v. KENWORTH CONSTRUCTION CO., a New Jersey Corporation, LAKEDALE ASSOCIATES, a New Jersey General Partnership, Defendants, and PINE ACRES ASSOCIATES, a New Jersey General Partnership, JOSEPH SAMOST, Individually, Defendants-Appellants/Cross-Respondents, and JAMES LAKE, ROBERT WAINER, JOHN HARM, and PAULA LUBORSKY, Intervenors. KENILWORTH LAKE HOMEOWNERS' ASSOCIATION, Plaintiff, v. SCARBOROUGH CORPORATION, a New Jersey Corporation, and LAKEDALE ASSOCIATES, a New Jersey Partnership, partners t/a PINE ACRE ASSOCIATES and JOSEPH SAMOST, a general partner of LAKEDALE ASSOCIATES, Defendants/Third-Party Plaintiffs, v. KENILWORTH COUNTRY CLUB, JOHN HARM; ROBERT WAINER; KARIN MCNAMEE and LARRY MACNAMEE, h/w; and JOYCE BODANZA; ROBERT J. FOLEY, SR., Collectively and Individually, Third-Party Defendants, and JAMES LAKE and BEVERLY LAKE, h/w; GARY LAUK and PEGGY LAUK, h/w; MILLIE DOLAN; GORDON SKORUP and MARGARET SKORUP, h/w; GREG MERLINO and TERRI MERLINO, h/w; HAZEL MCMAHON; ALFRED PARENT and SUE PARENT, h/w; GEORGE HANDZUS and LOIS HANDZUS, h/w; PHIL KRACHIN and SUE KRACHIN, h/w; Third-Party Defendants-Respondents. KENILWORTH COUNTRY CLUB, JAMES LAKE and BEVERLY LAKE, h/w; JOHN HARM; ROBERT WAINER; GARY LAUK and PEGGY LAUK, h/w; GREG MERLINO and TERRI MERLINO, h/w; HAZEL MCMAHON; ALFRED PARENT and SUE PARENT, h/w; GEORGE HANDZUS and LOIS HANDZUS, h/w; PHIL KRACHIN and SUE KRACHIN, h/w; Collectively and Individually, Fourth-Party Plaintiffs, v. LAND & GROUND REALTY, LLC; DANIEL WARD, ESQ., as Trustee for Trust f/b/o Abraham and Noah Goldstein; JOSEPH SAMOST; PINE ACRE ASSOCIATES; KENILWORTH LAKES ASSOC.; KENILWORTH LAKES REALTY CO.; KENILWORTH ASSOC.; IVA SAMOST, Individually, Fourth-Party Defendants-Respondents. STATE OF NEW JERSEY, DEPARTMENT OF ENVIRONMENTAL PROTECTION, Plaintiff-Respondent/Cross-Respondent, v. SCARBOROUGH CORPORATION, a New Jersey Corporation, and LAKEDALE ASSOCIATES, a New Jersey Partnership, partners t/a PINE ACRES ASSOCIATES, Defendants, and JOSEPH SAMOST, general partner of LAKEDALE ASSOCIATES, Defendant-Appellant, and JAMES LAKE, ROBERT WAINER, and JOHN HARM, Intervenors, and PAULA LUBORSKY, Intervenor-Respondent/Cross-Respondent. KENILWORTH LAKE HOMEOWNERS' ASSOCIATION, Plaintiff-Respondent, v. KENWORTH CORPORATION CO., a New Jersey Corporation, LAKEDALE ASSOCIATES, and PINE ACRES ASSOCIATES, a New Jersey General Partnership, Defendants/Third-Party Plaintiffs, and JOSEPH SAMOST, individually, Defendant/Third-Party Plaintiff-Appellant, v. KENILWORTH COUNTRY CLUB, JAMES LAKE and BEVERLY LAKE, h/w; JOHN HARM; ROBERT WAINER; GARY LAUK and PEGGY LAUK, h/w; GORDON SKORUP and MARGARET SKORUP, h/w; GREG MERLINO and TERRI MERLINO, h/w; HAZEL MCMAHON; ALFRED PARENT and SUE PARENT, h/w; KARIN MACNAMEE and LARRY MACNAMEE, h/w; GEORGE HANDZUS and LOIS HANDZUS, h/w; PHIL KRACHIN and SUE KRACHIN, h/w; JOYCE BODANZA; and ROBERT J. FOLEY, SR., Collectively and Individually, Third-Party Defendants. KENILWORTH COUNTRY CLUB, JAMES LAKE and BEVERLY LAKE, h/w; JOHN HARM; ROBERT WAINER; GARY LAUK and PEGGY LAUK, h/w; GREG MERLINO and TERRI MERLINO, h/w; HAZEL MCMAHON; ALFRED PARENT and SUE PARENT, h/w; GEORGE HANDZUS and LOIS HANDZUS, h/w; and PHIL KRACHIN and SUE KRACHIN, h/w; Collectively and Individually, Fourth-Party Plaintiffs, v. LAND & GROUND REALTY, LLC; PINE ACRES ASSOCIATES; KENILWORTH LAKE ASSOCIATES; KENILWORTH LAKES REALTY CO.; and IVA SAMOST, individually, Fourth-Party Defendants-Respondents/Cross-Appellants, and JOSEPH SAMOST, Fourth-Party Defendant-Appellant/Cross-Respondent, and KENILWORTH ASSOCIATES; Fourth-Party Defendant, and DANIEL WARD, ESQ., as Trustee for Trust f/b/o Abraham and Noah Goldstein, Fourth-Party Defendant-Respondent/Cross-Respondent.
Thomas J. Hagner argued the cause for appellant/cross-respondent Joseph Samost (Hagner and Zohlman, LLC, attorneys; Mr. Hagner and Andrew T. McGuire, on the briefs). Daniel D. Haggerty argued the cause for respondents/cross-appellants Iva Samost, Land & Ground Realty Co., Kenilworth Lakes Realty Co., and Pine Acres Associates (Kang, Haggerty & Fetbroyt, LLC, attorneys; Mr. Haggerty, and Jacklyn Fetbroyt, on the briefs). Sandford F. Schmidt argued the cause for respondent/cross-respondent Paula Luborksy (Law Offices of Paul Leodori, P.C., attorneys; Mr. Schmidt, on the brief). Andrew D. Reese, Deputy Attorney General, argued the cause for respondent/cross-respondent State of New Jersey, Department of Environmental Protection (John J. Hoffman, Acting Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Mr. Reese, on the brief). Neuner and Ventura, L.L.P., attorneys for respondent/cross-respondent former receiver Steven R. Neuner (Steven R. Neuner, on the brief). J. Llewellyn Mathews, respondent, argued the cause pro se. Michael J. Ward, L.L.C., attorney for respondent/cross-respondent Daniel L. Ward, Trustee of Abraham and Noah Goldstein Trust, joins in the brief of Joseph Samost. Respondent Kenilworth Lake Homeowners' Association has not filed a brief. Respondent/cross-respondent Theresa Prescott has not filed a brief.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Judges Messano, Ostrer and Sumners. On appeal from the Superior Court of New Jersey, Chancery Division and Law Division, Burlington County, Docket Nos. C-113-04, L-1134-11, C-73-06, and L-1244-09. Thomas J. Hagner argued the cause for appellant/cross-respondent Joseph Samost (Hagner and Zohlman, LLC, attorneys; Mr. Hagner and Andrew T. McGuire, on the briefs). Daniel D. Haggerty argued the cause for respondents/cross-appellants Iva Samost, Land & Ground Realty Co., Kenilworth Lakes Realty Co., and Pine Acres Associates (Kang, Haggerty & Fetbroyt, LLC, attorneys; Mr. Haggerty, and Jacklyn Fetbroyt, on the briefs). Sandford F. Schmidt argued the cause for respondent/cross-respondent Paula Luborksy (Law Offices of Paul Leodori, P.C., attorneys; Mr. Schmidt, on the brief). Andrew D. Reese, Deputy Attorney General, argued the cause for respondent/cross-respondent State of New Jersey, Department of Environmental Protection (John J. Hoffman, Acting Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Mr. Reese, on the brief). Neuner and Ventura, L.L.P., attorneys for respondent/cross-respondent former receiver Steven R. Neuner (Steven R. Neuner, on the brief). J. Llewellyn Mathews, respondent, argued the cause pro se. Michael J. Ward, L.L.C., attorney for respondent/cross-respondent Daniel L. Ward, Trustee of Abraham and Noah Goldstein Trust, joins in the brief of Joseph Samost. Respondent Kenilworth Lake Homeowners' Association has not filed a brief. Respondent/cross-respondent Theresa Prescott has not filed a brief. PER CURIAM
This dispute centers on Kenilworth Lakes, a community created by subdivision in the late 1950s and situated on 283 acres in Evesham Township. A centerpiece of the community is Kenilworth Lake, created by dams located at two ends — the lower dam, known as the Kenilworth Road Dam, and the upper dam, known as the Flamingo Road Dam. The development contains fifteen lake-front lots, three lots on an area surrounded by water on two sides, called "the island," and multiple undeveloped lots.
Joseph Samost (Samost) has owned the lake and the dams since 1966. Iva Samost is his wife, and Stephen Samost is his estranged son and an attorney. Samost purchased the property jointly with Pine Acres Associates (Pine Acres), originally a non-incorporated entity he owned and controlled. In the mid-1980s, Paula Luborsky, Stephen's wife, built a house on the island section of the development. The Kenilworth Lake Homeowners' Association (the Association) is a group comprised of lakefront property owners.
Our use of the word "defendants" throughout this opinion refers to Samost, Pine Acres and other related entities controlled by Samost. Documents in the record indicated that at some point, Samost formed Pine Acres LLC, although it is unclear why, and who are its members. Samost himself has acknowledged the following regarding some of the entities named in the actions in the Chancery Division: Land & Ground Realty (Land & Ground) is a limited liability company with two managing partners, Iva and Samost, with Iva owning a 55% interest and Samost owning a 45% interest; Pine Edge Associates, a limited liability company with two owners, Samost and Land & Ground each owning 50%; Lineliv, a partnership owned 50% by Samost and 50% by Pine Edge Associates; Hartford Plaza, a limited liability company owned by Pine Edge Associates.
We refer to some of the Samost family members by their first name to avoid confusion. We mean no disrespect by this informality.
In February 1995, the New Jersey Department of Environmental Protection (DEP) notified Stephen, who at the time was representing his father and Pine Acres, that the Kenilworth Dam was "a significant hazard dam in unsafe condition due to uncontrolled seepage." DEP ordered that the lake be drained and the dam repaired. Subsequent inspections in June and August demonstrated the lake had not been drained and repairs had not been made. DEP continued to contact Stephen, who submitted inspection and engineering reports during the ensuing three years. Finally, on April 21, 1998, DEP determined that the submissions were complete, and it notified Samost that the department would begin its technical review in contemplation of issuing a dam construction permit.
In February 1999, Stephen advised DEP that he was "no longer representing the owner or developer" of the "Kenilworth Lake Dam." He told DEP, however, that it should continue to serve any correspondence at the same address it had been using. The record reflects that commencing in 2001, DEP served notices of non-compliance and enforcement orders under the Safe Dam Act (the SDA), N.J.S.A. 58:4-1 to -14, on Pine Acres, in care of Samost.
The intra-familial dispute between Samost and Stephen erupted into litigation in the federal district court that lasted for years and affected the family's vast real estate holdings. A special master was appointed and an initial order approving the special master's report was entered in 2001. Even though the litigation was essentially settled, disputes continued in effectuating the terms of the settlement, and, in April 2004, the federal judge entered an order approving the special master's second report, dividing the family's assets and requiring the plaintiffs in the federal litigation — including Samost, Iva and Land & Ground — to make necessary repairs to the Kenilworth Road and Flamingo Road Dams.
Meanwhile, inspections by DEP in January 2002, and March and June 2003, revealed that the lake had not been drained and confirmed the need for repairs. In September 2003, Samost's engineer submitted an inspection report to DEP acknowledging that the Kenilworth Road Dam was unsafe and required immediate repairs. On March 4, 2004, DEP issued an order requiring defendants to, among other things, submit a completed permit application within ninety days and drain the lake completely.
A severe storm in July 2004 caused significant damage to the Kenilworth Road Dam and also caused the Flamingo Road Dam to fail, resulting in DEP filing a verified complaint and order to show cause on July 20 against defendants, seeking enforcement under the SDA. In August, the judge ordered defendants to immediately drain the lake and submit the required permit applications to DEP and the Pinelands Commission. The order contemplated a supplemental order embodying the "schedule for dam reconstruction set forth on the record," and provided for "the possible appointment of a trustee to oversee draining and reconstruction . . . at the cost of [defendants]." In March 2005, the parties entered into a consent order by which Samost agreed to drain the lake.
By May 2006, now represented by Stephen, Luborsky and three other property owners intervened seeking an order supplementing the August 2004 order. The judge entered a supplemental order clarifying that defendants were "to effectuate all necessary repairs" to the Kenilworth Dam and setting a schedule to be followed. Also in May, the Association filed suit in the Chancery Division against defendants, alleging violations of the Association's restrictive covenants and conditions. On July 24, 2006, the judge consolidated the DEP litigation with the litigation filed by the Association.
That same month, Pine Edge Development, an entity controlled by Samost, submitted an application to DEP seeking to decommission both dams. A public hearing on the application did not take place until November 2010, and in the interim, the trial judge issued orders on five dates between January 16, 2008, and May 21, 2009, each of which required that Samost take certain prerequisite actions for reconstruction of the dams. On July 12, 2011, DEP denied the application for decommissioning. The Commissioner concluded there was no reason to interfere with the numerous federal and state court orders already entered that required Samost to reconstruct the Kenilworth Road Dam.
Additionally, on January 7, 2009, Pine Acres filed an action in lieu of prerogative writs in the Law Division against DEP, seeking to require it to act on the decommissioning application. That action was also consolidated with the other two actions and ultimately dismissed with prejudice on August 19, 2009.
Samost appealed this order, but dismissed the appeal after entering a settlement with the Association to reconstruct the dam. In re Kenilworth Lake Dam, No. A-6101-10 (App. Div. Feb. 28, 2013).
The Chancery Litigation
In May 2008, the Association and several homeowners filed a second amended fourth-party complaint that brought Iva into the litigation for the first time. On behalf of herself, Land & Ground, and Kenilworth Lakes Associates (KLA) (collectively, Iva) Iva filed an answer and asserted counterclaims. On May 21, 2009, the chancery judge entered an order dismissing Iva personally from the litigation, but denying the motions to dismiss filed by Land & Ground and KLA.
In October 2009, the judge overseeing the litigation granted Luborsky's motion in aid of litigant's rights. Noting "Samost's protracted history of non-compliance," the judge decided to appoint a receiver "to execute all necessary documents and perform all obligations on . . . Samost's behalf." In a March 31, 2010 order, the judge appointed attorney J. Llewellyn Mathews as receiver and ordered Samost to deposit $250,000 with him as an initial deposit. The money was not deposited, and, in December, the judge considered Samost's argument that he lacked the financial ability to comply with the order.
The October 14, 2009 order is not in the record.
On January 14, 2011, the judge issued a revised order (the January 2011 order) granting the motion to enforce litigant's rights relative to the financial status of Samost. He found Samost failed to demonstrate that he possessed insufficient assets to comply with the March 31, 2010 order, and ordered that Samost's interests in Land & Ground, Pine Edge Associates and two other entities be frozen. The judge further ordered a daily sanction of $1000 per day until Samost, or someone on his behalf, deposited $250,000 with the receiver. On March 1 and 31, 2011, the judge entered two orders awarding counsel fees to Luborsky and several of the homeowners (the counsel fee orders).
The DEP Enforcement Action
In May 2011, DEP moved for summary judgment seeking $2,105 million in penalties commencing in 1995 under the SDA. In a comprehensive written opinion issued on July 15, 2011, Judge Karen L. Suter, who was now overseeing the litigation, recounted Samost's long history of non-compliance with prior court orders and his failure to commence reconstruction of the Kenilworth Road Dam. The judge carefully considered DEP's request seeking "penalties for four distinct time frames," which she described as follows:
(1) $5000 for unauthorized repairs conducted in 1995; (2) $5000 per month for the 113-month period between February 1995, when [DEP] first issued its directive to drain the Lake, and August 4, 2004, the date that [the prior judge] ordered the Lake to be drained; (3) $5000 per day for the 230-day period from August 4, 2004 through March 24, 2005, the date the Consent Order was signed that finally achieved compliance with the drainage order; and (4) $5000 per month for the 77-month period from August 2004 to the present for failing to comply with various orders of several courts requiring [Samost and Pine Acres] to reconstruct the Dam.
Judge Suter listed the factors we set forth in Department of Environmental Protection v. Lewis, 215 N.J. Super. 564, 572-74 (App. Div. 1987), that should inform the court's discretion in imposing financial penalties under the SDA. She concluded that the appropriate penalty was $845,000. The judge entered an order on July 15, 2011 (the summary judgment order), granting DEP summary judgment and requiring payment to be made by defendants within sixty days.
Samost moved for reconsideration, and Judge Suter denied the motion in a written decision and conforming order on September 16, 2011 (the reconsideration order).
Post-Summary Judgment Proceedings
In January 2012, Judge Suter heard argument on the receiver's motion to enforce litigant's rights. Although Samost had paid the $250,000 previously ordered, Mathews advised that most of the monies had been expended for design and engineering costs associated with rebuilding the dams. On January 6, after considering the arguments of counsel, Judge Suter granted the receiver's motions and ordered that defendants deposit $634,475 with Mathews within thirty days or be sanctioned $1000 per day for failure to do so (First Receiver Order).
In March 2012, the parties were again before Judge Suter. Defendants sought contribution from the homeowners for reconstruction and repair costs and also sought to modify a contribution formula ordered by the court two years earlier. Luborsky and the other homeowners moved for enforcement of litigants' rights yet again. The judge noted that Samost had not paid the monies due under the First Receiver Order, and concluded a second receiver should be appointed to take control of Samost's assets and ensure compliance. In her March 9, 2012 order, the judge denied defendants' motion and granted limited relief to Luborsky and the other homeowners. The judge's March 16, 2012 order (Second Receiver Order) appointed attorney Steven R. Neuner as a receiver "to assume control of all assets that are owned or controlled by . . . Samost . . . and use those assets to pay the $634,475 that he was previously ordered to pay . . . ." Neuner was to be compensated from the monies held by Mathews.
Both defendants Notice of Appeal (NOA) and Iva's NOA list the March 9, 2012 order as one for which the parties seek review. However, neither brief makes any specific claim of error, and we deem any such claim as having been waived. See, e.g., Sklodowsky v. Lushis, 417 N.J. Super. 648, 657 (App. Div. 2011) (holding that an issue not briefed is deemed waived upon appeal).
In response to motions filed by Samost and Iva, Judge Suter entered an order on June 25, 2012, discharging Neuner. In July, all claims between defendants, the Association and its members were settled, with the exception of the claims of Luborsky and two homeowners who had defaulted. Defendants and Iva then moved before Judge Suter to modify certain provisions of the March 31, 2010 order, the First Receiver Order and the Second Receiver Order. In an oral decision issued on November 2, 2012, the judge essentially granted the relief over Luborsky's objections. Defendants were tasked with submitting an order.
For reasons unexplained by the record, the order was not entered until January 29, 2013. Defendants filed this appeal, A-3193-12, in March 2013. Iva, Land & Ground and KLA filed a cross-appeal in April 2013.
The notice of cross-appeal includes Pine Acres Associates LLC as a cross-appellant. This entity never appeared as a party in the litigation.
Second Appeal (A-1276-13)
The January 29, 2013 order permitted Samost to essentially conduct the reconstruction efforts for the Kenilworth Dam. The order provided, among other relief, that Mathews was "required to approve every step of the dam reconstruction process." On August 23, 2013, Mathews again moved to enforce litigant's rights and sought $210,000 from defendants for engineering and consulting fees, as well as fees for his services.
After considering oral argument, Judge Suter entered an order on October 1, 2013, partially granting Mathews' motion. In paragraph 1(D) of the order, the judge ordered Samost to deposit certain sums with Mathews for specific services and fees, and, further required Samost to deposit $40,000 "for future fees," subject to approval by the court prior to payment.
Samost filed a timely NOA on November 12, 2013.
Proceedings in the Appellate Division
The appeals were listed back-to-back and argued on the court's March 3, 2015 calendar. Following argument, the court ordered the parties to participate in a mandatory settlement conference before retired Judge Philip S. Carchman. After several sessions, we were advised that the parties had essentially settled most of the issues raised in A-3193-12, and all of the issues raised in A-1276-13, but a remand was required to obtain the trial court's approval of a negotiated consent order.
A third appeal, A-5838-12, was also argued but has since settled.
As a result of motions filed by defendants, we entered orders on November 25, 2015, remanding the two appeals to the trial court. After numerous delays in the trial court, we were advised that the parties requested another conference with Judge Carchman. That occurred, but no settlement was reached.
On May 2, 2016, counsel for defendants advised the court that several aspects of both appeals were withdrawn. Counsel for cross-appellants Iva, Land & Ground and KLA advised that they were not withdrawing their appeals from any of the orders contained in their notice of cross-appeal.
I.
We first consider the issues raised by defendants' two appeals. In A-3193-12, they challenge the summary judgment order and the reconsideration order.
Defendants and Iva list the reconsideration order as one for which they seek review; however, they make no separate argument for reversal in their briefs. We deem the issue waived. Sklodowsky, supra, 417 N.J. Super. at 657.
Defendants contend that Judge Suter should have held a plenary hearing to "address relevant factors," and "resolve significant evidentiary issues" as to DEP's "proofs," which they claim were largely hearsay. They also challenge the amount of the penalty, arguing: 1) statutory penalties were imposed pursuant to orders entered in the Chancery Division litigation, not under the SDA, and any penalties imposed after April 2005 could not have resulted from SDA violations because the Kenilworth Road Dam had been rendered safe; 2) they complied with the August 4, 2004 order that required the draining of the lake and any penalties thereafter should be vacated; 3) any penalties imposed for the period of time between February 1995 and August 4, 2004, should be vacated because Samost never received notice of the violations and did not control the dam; 4) penalties should not have been imposed based upon DEP's delay in administrative review and because DEP urged "non-action" by defendants; 5) statutory penalties imposed for periods after March 2010 were improper because Mathews had been appointed receiver; and 6) the judge erred as a matter of law by construing the SDA so as to impose "strict liability" upon defendants for unauthorized repairs performed by others.
We have considered these contentions, in light of the record and applicable legal standards. We affirm.
"[W]e review the trial court's grant of summary judgment de novo under the same standard as the trial court." Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co., 224 N.J. 189, 199 (2016) (citing Mem'l Props., LLC v. Zurich Am. Ins. Co., 210 N.J. 512, 524 (2012)). That standard mandates that summary judgment be granted "'if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law.'" Ibid. (quoting R. 4:46-2(c)).
[A] determination whether there exists a "genuine issue" of material fact that precludes summary judgment requires the motion judge to consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party.
[Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).]
"To defeat a motion for summary judgment, the opponent must 'come forward with evidence that creates a genuine issue of material fact.'" Cortez v. Gindhart, 435 N.J. Super. 589, 605 (App. Div. 2014) (quoting Horizon Blue Cross Blue Shield of N.J. v. State, 425 N.J. Super. 1, 32 (App. Div.), certif. denied, 211 N.J. 608 (2012)), certif. denied, 220 N.J. 269 (2015). "[C]onclusory and self-serving assertions by one of the parties are insufficient to overcome the motion." Puder v. Buechel, 183 N.J. 428, 440-41 (2005). "When no issue of fact exists, and only a question of law remains, [we] afford[] no special deference to the legal determinations of the trial court." Templo Fuente De Vida, supra, 224 N.J. at 199 (citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).
Under the Safe Dam Act (the SDA), N.J.S.A. 58:4-1 to -14, the Commissioner of DEP is vested with broad powers and specifically authorized to bring summary civil enforcement actions for violations of any rule, regulation, permit or order issued under the SDA. N.J. Dep't of Envtl. Prot. v. Alloway Twp., 438 N.J. Super. 501, 504-05 (App. Div.), certif. denied, 222 N.J. 17 (2015). An enforcement action under the SDA is summary in nature, N.J.S.A. 2A:58-11(c), although the court is empowered to "hear testimony on any factual issues." Ibid.
Rule 4:67-1 applies to all actions in which the court is permitted by statute to proceed in a summary manner, including all actions brought by a state administrative agency seeking enforcement of a written order or determination. R. 4:67-6(a). The Rule does not permit a collateral attack upon the validity of the agency's order or decision. R. 4:67-6(c)(3); see also State Dep't of Envtl. Prot., Bureau of Cty. Envtl. & Waste Compliance Enf't v. Mazza & Sons, Inc., 406 N.J. Super. 13, 23 (App. Div. 2009) (stating same).
Initially, we reject defendants' claim that Judge Suter should have conducted a hearing both as to the adequacy of the evidence DEP marshaled on summary judgment and the determination of the penalty amounts. Defendants claim that the evidence in support of the motion was primarily documents from DEP's file that predated the 1999 employment of its principal engineer whose certification supported the motion. However, the authenticity of the documents was not disputed. They demonstrated defendants' abject non-compliance with prior orders from the agency. Defendants' excuses for non-compliance were self-serving and not legally sufficient to deny liability.
We also reject the argument that Judge Suter should have held a plenary hearing to properly consider the factors we set forth in Lewis, supra, 215 N.J. Super. at 574. Frankly, through Samost's certification and other documents, defendants put forth mitigating reasons as to liability and the quantum of damages. Judge Suter clearly considered these in rendering her decision on the penalty amounts, entering penalties that were substantially less than those sought by DEP.
Defendants contend Judge Suter should not have imposed any penalties after April 2005, because by then, the Kenilworth Road Dam was safe, penalties after that date reflect alleged violations of court orders, not orders under the SDA, and because some of the delay was due to DEP's administrative largesse.
The undisputed record shows, however, that on August 4, 2004, the court ordered Samost to immediately start draining the lake, but on March 9, 2005, DEP's inspection revealed that the lake was not drained. Samost finally installed a temporary breach on March 24, 2005, but the dam was still out of compliance with the DEP's regulations. Defendants' separate claim that there was no violation of the August 4, 2004 order upon which to base subsequent penalties lacks sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E).
DEP's enforcement action sought not only imposition of civil penalties but also to force Samost to bring the dam into compliance. Samost, however, sought to decommission the dam and now argues the court's and DEP's willingness to permit him to pursue this alternative should serve to absolve him of his continued violations. We disagree. At the eleventh hour, Samost sought an alternative, which, given the lengthy federal litigation that resulted in orders compelling him and Iva to repair both dams, and state enforcement efforts, DEP concluded decommissioning was not acceptable. Defendants complain, with a healthy dose of hubris, that consideration of the decommissioning alternative took too much time. In the interim, however, open violations of DEP's orders and directives remained.
We also reject the argument that penalties imposed for the period from 1995 to May 2001 must be set aside because the "record showed that Joseph Samost never received notice of the alleged violations." Initially, this is a collateral attack on the violations which defendants have waived because they never sought review of the agency determination. Mazza & Sons, Inc., supra, 406 N.J. Super. at 23. More importantly, the record is clear. Samost's self-serving certification acknowledged that Stephen represented him and his company until their estrangement. Notices sent after the estrangement were sent in the name of Pine Acres Associates, which Samost owned, and to defendants' place of business. The record is clear that defendants responded to and took action thereafter.
Further, we reject defendants' argument that they lacked control of the Kenilworth Road Dam from 1995 to August 2004. As we made clear in Alloway Twp., supra, 438 N.J. Super. at 513-14, DEP may enforce its orders under the SDA against both owners and those in control of a dam. It is undisputed that defendants owned the Kenilworth Road Dam.
Equally meritless is defendants' claim that monetary penalties should not have been imposed for the period of time after the first receiver was appointed because he was provided with the authority to make the necessary repairs, but failed to do so. This overlooks the fact that Samost refused to fund the receiver's efforts.
Finally, we reject defendants' argument that Judge Suter imposed strict liability on them based upon unauthorized repairs done to the dam in 1995. Citing one provision of the SDA that imposes liability upon the person actually making the repairs, see N.J.S.A. 58:4-1(a), defendants ignore the broad remedial purposes of the SDA and the liberal construction applied to the statute in order to effectuate its public safety goals. See Alloway Twp., supra, 438 N.J. Super. at 504-05. In sum, we affirm the summary judgment order.
Defendants also argue that commencing with the January 2011 order, Samost in particular was subjected to a series of orders enforcing litigants' rights, appointing receivers and imposing harsh financial penalties upon him, and these orders were entered "prematurely," despite evidence of Samost's financial inability to pay and in violation of Samost's due process rights.
DEP counters by arguing the appointments of both receivers were necessary because of defendants' failure to comply with the court's orders. Neuner argues his appointment was within the court's discretion. Luborsky correctly contends that neither the appeal or cross-appeal sought review of the March 31, 2010 order that enforced litigants' rights and ordered Samost to reconstruct and maintain the lake and dams. We overlook this procedural infirmity and examine the merits of defendants' arguments because the January 2011 order was effectively an amendment of the earlier order. We reject defendants' arguments and affirm the orders under review.
We are hard-pressed to conclude the January 2011 order was "pre-mature." Since 2001, defendants were under orders in the federal litigation to reconstruct both dams. In the chancery litigation, the court had issued a series of orders, commencing in August 2004, requiring defendants to reconstruct the Kenilworth Road Dam. In February 2008, the court entered an order requiring defendants to reconstruct the Flamingo Road Dam. Defendants provide no legal support for the proposition that a pending decommission application, first made after the initial court order, somehow absolved them of their obligations under the orders. In short, they were never relieved of the requirement to comply with the court's orders. Claims that the January 2011 order was prematurely entered because the homeowners' contribution issue was unsettled or an owner/operator of the dam had not been selected lack sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E).
We also reject defendants' arguments that the January 2011 order, the counsel fee orders, the First Receiver order and the Second Receiver order were entered despite clear evidence that Samost was unable to pay the amounts ordered by the court. Initially, we note that the focus of Rule 1:10-3 is
on the vindication of litigants' rights, [and] relief sought pursuant to Rule 1:10-3 does not necessarily require establishing that the violator of an order acted with intention to disobey. Indeed, courts have recognized that "demonstration of a mens rea, wilful disobedience and lack of concern for the order of the court, is necessary for a finding of contempt, but irrelevant in a
proceeding designed simply to enforce a judgment on a litigant's behalf.""[P]unitive or coercive relief under the Rule cannot be used against one who is not a willful violator[.]" Id. at 18.
[In re N.J.A.C. 5:96 & 5:97, 221 N.J. 1, 17 (2015) (quoting Lusardi v. Curtis Point Prop. Owners Ass'n, 138 N.J. Super. 44, 49 (App. Div. 1975)).]
The March 2010 order appointed Mathews as receiver and required Samost to deposit $250,000 with him. In May, Samost sought reconsideration claiming he lacked the necessary funds. This led to further motion practice, wherein the judge ordered the release of financial records to Luborsky and others, which in turn led to a motion to enforce litigants' rights in November, wherein sufficient proof was adduced demonstrating Samost's financial holdings. The judge clearly determined that Samost was in willful noncompliance based upon those proofs, and there is nothing to suggest that decision was erroneous. Indeed, the record includes a letter from Mathews to the court dated January 21, 2010, acknowledging receipt of the $250,000.
Defendants' challenge to the counsel fee orders are without any merit given the procedural history we just outlined, and Judge Suter considered Samost's claims of impecuniosity before entering the First Receiver Order and the Second Receiver Order.
The challenge to the counsel fee orders includes a claim that the award of fees was made, in part, to parties who had never made a request for fees. However, there is a lack of any citation to the record demonstrating that defendants challenged the fee award on this basis.
Defendants next argue that the appointment of Neuner was improper because there was not a "judgment or judgment creditor involved in the action," his appointment was not necessary and it violated Samost's due process rights.
We begin by recognizing that
[t]he Court Rules overall evince an intent toward flexibility when the enforcement of rights is at stake. They provide various means for securing relief and allow for judicial discretion in fashioning relief to litigants when a party does not comply with a judgment or order. In addition to the mechanism of Rule 1:10-3, Rule 4:59-2(a) provides related support for assisting a litigant in securing relief:
If a judgment or order directs a party to perform a specific act and the party fails to comply within the time specified, the court may direct the act to be done at the cost of such defaulting party by some other person appointed by the court, and the act when so done shall have like effect as if done by the defaulting party.
[In re N.J.A.C. 5:96 & 5:97, supra, 221 N.J. at 17-18 (quoting R. 4:59-2(a)).]"[T]he Chancery Division has discretion in appointing a receiver or special fiscal agent." New Jersey Realty Concepts, LLC v. Mavroudis, 435 N.J. Super. 118, 123 (App. Div. 2014) (citing Ravin, Sarasohn, Cook, Baumgarten, Fisch & Rosen, P.C. v. Lowenstein Sandler, P.C., 365 N.J. Super. 241, 249 (App. Div. 2003); Roach v. Margulies, 42 N.J. Super. 243, 246 (App. Div. 1956)). We review the court's decision under an abuse of discretion standard. In re Alleged Violations of Law by Valley Road Sewerage Co., 154 N.J. 224, 239 (1998).
The appointment of a custodial receiver requires compliance with Rule 4:53-1. "A court may appoint a receiver 'only for the short period of time required to protect assets pending a final resolution of litigation or a dissolution of the business enterprise.'" Mavroudis, supra, 435 N.J. Super. at 125 (quoting Kassover v. Kassover, 312 N.J. Super. 96, 100 (App. Div. 1998)). On the other hand, "[t]he appointment of a 'special fiscal agent' to oversee the disbursements of a solvent corporation [is] a 'pendente lite device . . . contrived to avoid more stringent measures'" such as appointment of a receiver. Ibid. (alteration in original) (quoting Kassover, supra, 312 N.J. Super. at 100).
Defendants first contend that it was error to appoint Neuner because there was no judgment or judgment creditor in the litigation. This argument misconceives the difference between a statutory receiver, appointed pursuant to N.J.S.A. 2A:17-66 as an aid in execution, and a custodial receiver appointed under the inherent powers of a court of equity. See Ravin, Sarasohn, supra, 365 N.J. Super. at 249 (explaining differences).
We also reject the contention that Neuner's appointment was not "reasonably necessary." This claim bootstraps upon several arguments regarding the reasons for Samost's delays that we have already addressed.
Lastly, defendants' due process claims lack sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E). The very first order in this case, entered in August 2004, put Samost on notice that the judge intended to appoint "a trustee" to ensure compliance with the repairs and reconstruction of the Kenilworth Road Dam. In sum, we affirm the orders under review.
We turn to the arguments defendants make in A-1276-13, starting with some necessary context.
The March 31, 2010 order appointed Mathews as receiver and made Samost responsible for "any and all reasonable costs incurred by the receiver in furtherance of overseeing the reconstruction and repair of the Kenilworth Road Dam Flamingo Road and the Flamingo Road Lake and Dam" as required by four prior court orders. We need not reiterate all the orders entered between March 31, 2010, and the October 1, 2013 order entered by Judge Suter. It suffices to say that the January 29, 2013 order permitted Samost to essentially conduct the reconstruction efforts for the Kenilworth Dam, subject to Mathews' supervision and approval, and further required the receiver's invoices to be paid or objected to within thirty days of submission.
As noted, after the NOA in A-3193-12 was filed, Mathews again moved to enforce litigant's rights and sought $210,000 from defendants for engineering and consulting fees, as well as fees for his services. Judge Suter considered oral argument and entered an order requiring, in paragraph 1(D), that Samost deposit $40,000 with Mathews for "future fees" which "must be approved by the court prior to payment."
Defendants argue this was an improper modification of the March 31, 2010 order which, at the time, was the subject of appeal. The contention lacks any merit. R. 2:11-3(e)(1)(E).
First, as we noted, defendants did not list the March 31, 2010 order in their NOA for A-3193-12. Only orders designated in the NOA are subject to the appellate review. See Pressler & Verniero, Current N.J. Court Rules, comment 6.1 on R. 2:5-1 (2016) (collecting cases). Moreover, even though the filing of an appeal normally divests the trial court of jurisdiction, Rule 2:9-1 specifically vests the trial court with jurisdiction to "enforce judgments and orders pursuant to [Rule] 1:10." That is what occurred in this case.
We affirm the October 1, 2013 order.
II.
In her cross-appeal, Iva seeks review of all the orders that were the subject of defendants' appeal, as well as orders entered on February 8 and November 26, 2008, January 20, May 21, and October 14, 2009. Luborsky urges us to dismiss the cross-appeal on a number of grounds, and she and DEP contend the cross-appeal lacks merit.
These orders were also contained in defendants' NOA but were withdrawn.
In Point I of her legal argument, Iva contends the entry of the Second Receiver Order was an abuse of discretion, without sufficient proofs being adduced and in violation of due process. She also argues that Neuner should not have received his fees. These contentions are without merit. R. 2:11-3(e)(1)(E). We add only the following brief comments.
Luborsky notes that the consent settlement order relieved Iva, Land & Ground and KLA of any "legal obligation, duty, or responsibility related to" the two dams "and/or any other obligations of Joseph Samost." She argues that Iva has no standing to press an appeal regarding the Second Receiver order. We agree.
Judge Skillman noted in Janicky v. Point Bay Fuel, Inc., 410 N.J. Super. 203 (App. Div. 2009), that "[a] 'order . . . consented to by the attorneys for each party . . . is . . . not appealable.'" Id. at 207 (alteration in original) (quoting Winberry v. Salisbury, 5 N.J. 240, 255, cert. denied, 340 U.S. 877, 71 S. Ct. 123, 95 L. Ed. 638 (1950)). A consent order may preserve the rights of a party to appeal an interlocutory order by providing that the judgment or order would be vacated if the appellant prevailed, ibid., but the settlement agreement in this case did not.
Iva claims in her reply brief that she has standing because Land & Ground owns property fronting on the same lake as Luborsky and Iva "maintains interest[s] in various entities owning real estate surrounding the upper lake." However, we are unsure how this makes Iva an "aggrieved party" for purposes of the Second Receiver Order. See Ellson v. Evergreen Cemetery, 266 N.J. Super. 74, 78 (App. Div. 1993) (the respondent must be aggrieved by the order or judgment from which she is cross-appealing). Assuming arguendo that Iva might have standing because the Second Receiver Order permitted Neuner to examine the financial records and documents of Samost and related entities, for the reasons already cited, the judge did not abuse her power in appointing a second receiver. Finally, the order awarding Neuner's fees was not contained in the cross-NOA. We therefore refuse to consider arguments now raised about the award of fees.
We also reject Iva's attempt to establish her bona fide standing by expanding the record without leave by citing, in her reply brief and in its appendix, Luborsky's motion again seeking to enforce litigant's rights filed after Iva's NOA was filed. --------
In Point II of her brief, Iva argues that to the extent it addressed the Flamingo Road Dam and the upper lake, the January 2011 order was not "based on sufficient evidence," the sanctions it imposed were "excessive" and the judge relied upon statements attributed to Samost that were contained in a prior, unpublished decision. We first note that by the time the January 2011 order was entered, Iva had been dismissed from the litigation, although Land & Ground and KLA were not. The other cross-appellants make many of the same arguments as Samost does regarding the impropriety of ordering Samost to post $250,000. We reject them as we did above.
Cross-appellants also contend in Point III that prior orders did not specifically control rights and obligations as to the Flamingo Road Dam and the upper lake, and that Luborsky, who was not named in the Association's lawsuit, intervened and improperly sought to import orders from the federal litigation into the chancery action. In his February 8, 2008 order, the chancery judge cited four prior federal court orders that imposed obligations upon Samost for the repairs to the Flamingo Road Dam and Flamingo Road. He determined that those orders were applicable to the present chancery action under principles of "res judicata, collateral estoppel and the Entire Controversy Doctrine." We agree.
Cross-appellants argue that Luborsky improperly utilized the federal lawsuit to expand the chancery action, and did so without proper notice. However, Iva, Land & Ground and KLA were not brought into the litigation until April 2008. In June 2008, an attorney representing cross-appellants objected, in part, asserting a lack of proper notice. In August 2008, the judge entered an order that required Iva to disclose all properties in which she had an interest, and what those interests were. In January 2009, the judge entered an order that "legally barred and/or estopped" cross-appellants from contesting Samost's obligation to reconstruct the "Kenilworth Lakes and dams." (Emphasis added).
We reject any claim that cross-appellants were not provided with proper notice, or that the chancery judge entered relief that was not already the subject of federal court orders to which Iva and related entities were parties. It is obvious that cross-appellants' efforts at the trial level were dilatory tactics that required the chancery judges to frequently entertain applications that lacked any merit given the extended litigation history. We affirm on the cross-appeal.
Affirmed in A-3193-12 and the cross-appeal; affirmed in A-1276-13. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION