Bonnieview Homeowners v. Woodmont Builders

655 F.Supp.2d 473

BONNIEVIEW HOMEOWNERS ASSOCIATION, LLC; Juan F. and Rafael Hernandez; Rene N. and Stephen J. Hrop; Renee K. Goodlow and Michael R. Berry; Yuangen Zhu and Qi Liu; G. Thomas and Sharon Perrone; San Chee and George Lee; Parhat and Sema Yasar; Fazal and Sanyakhan Bari; James and Diane Sadowski; Daniel and Pauline Roh; Louise Ann and Bruce Dostal; Joseph and Bobbi Intile; Yi Lu and Bruce Tang; and Keith Hamilton, Plaintiffs, v. WOODMONT BUILDERS, L.L.C.; Woodmont Court at Montville, L.L.C.; Donald Witmondt; Associated Sales, Inc.; David Mandelbaum and Karen A. Mandelbaum; Nathan Mandelbaum; Ronald G. Targan and Judith Targan; Anita S. Koralek; Leslie J. Koralek, as Co-Trustees under the Anita S. Koralek Living Trust; and Montville Township, Defendants.

Civ. No. 03-4317 (DRD).

United States District Court, D. New Jersey.

September 22, 2009.

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Jeffrey B. Wagenback, Esq., Stephen W. Smithson, Esq., Jaan M. Haus, Esq., Riker, Danzig, Scherer, Hyland & Perretti LLP, Morristown, NJ, for Plaintiffs.

Lee Henig-Elona, Esq., Gage Andretta, Esq., Wolff & Samson PC, West Orange, NJ, for Defendants Woodmont Builders, L.L.C., Woodmont Court at Montville, L.L.C., Donald Witmondt; Associated Sales, Inc.; David Mandelbaum and Karen A. Mandelbaum; Nathan Mandelbaum; Ronald G. Targan and Judith Targan; Anita S. Koralek; Leslie J. Koralek, as Co-Trustees under the Anita S. Koralek Living Trust.

Gregory J. Coffey, Esq., Richard J. Dewland, Esq., Coffey & Associates, Morristown, NJ, for Defendant Montville Township.

OPINION

DeBEVOISE, Senior District Judge.

This matter involves a dispute over the environmental contamination of an area of land in Montville, New Jersey, where a fruit orchard was operated in the mid-twentieth century and which was later developed into a residential neighborhood. The Bonnieview Homeowners Association, L.L.C. ("Bonnieview") and members of that association, the Individual Plaintiffs,¹ (collectively, "the Plaintiffs") assert various causes of action arising out of that environmental contamination against Woodmont Builders, L.L.C. ("Woodmont Builders"); Woodmont Court at Montville, L.L.C. ("Woodmont Court") (together, "Woodmont Properties"); Donald Witmondt (together with Woodmont Properties, "Woodmont"); Associated Sales, Inc. ("Associated Sales"); David Mandelbaum, Karen A. Mandelbaum, Nathan Mandelbaum, Ronald G. Targan, Judith Targan, Leslie J. Koralek and Richard W. Koralek as Co-Trustees under the Anita S. Koralek Living Trust (together, the "Individual Defendants"); and Montville Township ("Montville").

Woodmont, Associated Sales and the Individual Defendants (together, the "Woodmont Defendants") assert counterclaims against the Plaintiffs. The Woodmont Defendants also assert a cross-claim against Montville.

The original complaint in this case was filed on September 12, 2003. The Plaintiffs filed their First Amended Complaint ("FAC") on February 15, 2005. On August 19, 2009, after the parties had already filed their motions for summary judgment, the Plaintiffs filed their Second Amended Complaint ("SAC"), which added Donald Witmondt, the managing member of Woodmont Builders and Woodmont Court and president of Associated Sales, as a defendant. Because Mr. Witmondt was not a party to the action at the time these motions were briefed and argued, the court will not grant judgment against Mr. Witmondt on any counts at this time, but will grant summary judgment dismissing counts against Mr. Witmondt if appropriate. Additionally, although the operative complaint in this matter when these motions for summary judgment were filed was the FAC, the court will address these motions as directed to the SAC, given that the SAC is now the operative complaint. The SAC is, in any case, substantially the same as the FAC except for the addition of Mr. Witmondt as a defendant.

The court is aware that, at one time, Woodmont Court and the Plaintiffs were engaged in arbitration. While the court is unaware of the status of that arbitration, both the Plaintiffs and Woodmont Defendants consented to the inclusion of Woodmont Court in these proceedings for summary judgment (see Pls.' Opp'n Br. 64) and the court will proceed accordingly.

The Woodmont Defendants and Montville now move for summary judgment to dismiss all counts of the SAC. The Plaintiffs move for partial summary judgment on some counts of the SAC and to dismiss the Woodmont Defendants' counterclaims and two of the defenses pled in their Answer. For the reasons set forth below, the Woodmont Defendants' motions will be granted in part and denied in part; Montville's motion will be granted; and the Plaintiffs' motions will be granted in part and denied in part.

I. BACKGROUND

A. The Property

The land that is the subject of this litigation was originally comprised of approximately 130 contiguous acres in the Township of Montville, Morris County, New Jersey ("the Property"). Bonnieview Farms, which is not a party to this litigation, owned and operated the Property for agricultural purposes, including as a fruit orchard, from 1941 until it was abandoned some time prior to 1970. In 1970, the Individual Defendants obtained title to the Property. Mr. David Mandelbaum testified that when the Individual Defendants purchased the Property it was not being farmed, but that he knew it had been previously used as an apple orchard. He also testified that the land was not farmed from the time that the Individual Defendants purchased the Property until approximately 1988. Sometime after 1988, a portion of the Property was used for foresting. A June 27, 1989 letter from William Roe, the consulting forester at the Property, reflects that he had been managing the property since 1975, at which time he completed an "inventory and plan." This document also reflects that there was a timber sale at the Property in 1977.

The Woodmont Defendants maintain that the Property was never used for agriculture other than foresting during the time that the Individual Defendants owned it and that the Individual Defendants were not aware of any environmental problems on the Property during the time they owned it. The Plaintiffs dispute this contention based on the fact that in 1989, David Mandelbaum submitted an Application for Farmland Assessment to the State of New Jersey which stated both that the entire Property was used for "fruit crops" and that the entire Property was used for "woodland products." The Defendants argue that the listing of "fruit crops" on the Farmland Assessment was in error and that the Property could not have been used for both fruit crops and woodland products at the same time.²

In 1998, at the request of the Department of Planning & Development of the County of Morris (in which Montville Township is located), former defendant Post, Buckley, Schuh & Jernigan, Inc. ("PBS & J"), an environmental consulting firm, performed an environmental assessment of the Property and issued a Phase I Environmental Assessment report, dated April 1998. The report included a review of aerial photographs of the site from various years between 1939 and 1991. The report stated that the Property "was forested in all the photographs viewed" and that the eastern portion "contained rows of trees, indicating that the area may have been a tree nursery, while the western portion was naturally occurring forest." (Certification of Stephen Smithson, May 14, 2009 (hereafter, "May 14 Smithson Cert."), Ex. G at 3.) The report revealed that the Property had assorted debris on it, such as tires, wood and metal debris, cement, household debris, abandoned vehicles, hot water heaters, refrigerators, and empty aboveground storage tanks and drums, but did not mention any of the hazardous substances at issue in this case or possible soil contamination. (Id. at 12-14.) The report concluded that "none of the observed debris was considered hazardous, [but] additional material in lower layers could be classified as such." (Id. at 21.) While no sampling was recommended at the time, the report stated that "when the debris is removed, the lower layers should be carefully examined." (Id.)

In 1999, Montville engaged former defendant Princeton Hydro, LLC ("Princeton"), an environmental consulting firm, which provided a report dated May 10, 1999. That report did not mention any discharge of pesticide constituents or other contaminants onto the soil and did not recommend any action with respect to the alleged contaminants.

B. Sale of the Property and Construction of the Individual Plaintiffs' Homes

At some point prior to October 1997, Woodmont Builders entered into an agreement with David Mandelbaum, Nathan Mandelbaum, Ronald Targan and the Estate of Adolph Koralek whereby Woodmont would develop the Property for the construction of single family dwellings houses, the proceeds of the sale of which would be shared by the parties to the agreement. On or around September 24, 1998, the Montville Township Planning Board approved an application to construct a residential subdivision on a 30-acre portion of the Property. On February 10, 1999, Montville acquired an approximately 100-acre portion of the Property from the Individual Defendants for use as "open space" (hereafter, the "Open Space Parcel").³ On June 18, 2000, Woodmont Court acquired the remaining 30-acre portion of the Property (hereafter, the "Residential Lots") from the Individual Defendants and thereafter began construction of a residential subdivision. The Plaintiffs allege that Woodmont did not conduct any due diligence before acquiring the residential lots. Mr. Witmondt, however, testified that, in purchasing the Residential Lots, Woodmont Court relied upon the review by PBS & J and the fact that Montville's Board of Health reviewed the lots in connection with the proposed residential development. (Witmondt...