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Terranova vs. General Electric Pension Trust: Clarifying (or complicating) defenses under the Spill Act

On January 4, 2019, the New Jersey Appellate Division handed down a decision in Terranova vs. General Electric Pension Trust, Docket No. A-5699-16T3 (hereinafter, “Terranova”). In Terranova, The New Jersey Appellate Division reviewed the Trial Court’s grant of Summary Judgment in favor of Defendants.   This suit arises out of a claim under the New Jersey Spill Compensation and Control Act (“Spill Act”) against the various named defendants as dischargers liable for contribution towards the cleanup and removal of hazardous substances. N.J.S.A. 58:10-23.11 to 23.24. The Defendants each owned the underlying Property prior to the Plaintiff’s ownership of the Property. The Trial Court granted Defendants’ motion for summary judgment based on a judicial estoppel argument made by Defendants. Judicial Estoppel estops litigants from taking positions contrary to previously taken positions which were either accepted or relied upon by the Court in reaching any judicial determination.  Thereafter, Plaintiffs filed their appeal.

The Appellate Division reviews the granting of summary judgments under a de novo standard and therefore does not afford the trial court’s ruling with any special deference. Templo Fuente De Vida Corp. v. Nat’l Union Fire Ins. Co., 224 N.J. 189, 199 (2016). The decision to invoke judicial estoppel is reviewed under an abuse of discretion standard. In re Declaration Judgement Actions filed by Various Municipalities, Cty. Of Ocean, 446 N.J. Super. 259, 261 (2016). On appeal, the Plaintiff argued that judicial estoppel should not be applicable to the Spill Act due to the complexities of environmental investigation and the Spill Act does not recognize judicial estoppel as a defense. The Appellate Division rejected these arguments and affirmed the Trial Court’s grant of summary judgment in favor of Defendants.

The Appellate Division begins by opining that it cannot glean from the record the initial basis for granting Defendants’ motion for summary judgment under the principle of judicial estoppel, as it was only referenced in the amended order.  It does not appear that summary judgment was granted on either collateral estoppel or the entire controversy doctrine, as neither was referenced by the Court during its oral decision.  All parties have agreed that the Court’s summary judgment decisions were based on judicial estoppel.  The Appellate Division rejected any argument that judicial estoppel does not apply to the Spill Act.  Relying on the New Jersey Supreme Court Case Morristown Associates v. Grant Oil Company, the New Jersey Appellate Division held the Spill Act does not “deprive 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.” Terranova at 9 (quoting Morristown Associates v. Grant Oil Co., 220 N.J. 360 (2015) (Internal citations omitted).  Judicial estoppel is rooted in the judiciary’s interest in protecting the integrity of the judicial process. Therefore, failure to reference the same in the Spill Act does not preclude its application.

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