The Appellate Division of the Superior Court of New Jersey recently (in an unpublished opinion) applied the six year statute of limitations (“SOL”) for tortious injury to real property in barring plaintiff’s claim for permanent diminution in the value of its property. 320 Associates, LLC v. NJ Natural Gas Co., Docket No. A-1831-16T2 (N.J. App. Div. June 29, 2018). As a result, the neighboring property owner was unable to bring a claim for tortious injury to real property caused by the migration of coal tar contaminants from defendant neighboring property owner. Importantly, the court did allow plaintiff’s nuisance claim to proceed noting that if a nuisance can be abated, the failure to do so constitutes a continuing tort entitling plaintiff to relief and is not barred by the SOL.

In 320 Associates, the property owner, 320 Associates, LLC, owned a piece of commercial property located just north of defendant New Jersey Natural Gas Co.’s (“NJNG”) property. Plaintiff asserted that NJNG property was polluted with coal tar. The discharges on defendant’s property decades earlier from industrial operations had resulted in the migration of a coal tar plume onto plaintiff’s land causing damage.

Plaintiff stated in its complaint that it first learned of the migration of coal tar plumes onto its property in 2008. As a result of the newly discovered pollution, it could not sell its property to a current commercial tenant. Plaintiff further asserted that the pollution from NJNG’s land had decreased the value of plaintiff’s land and might negatively affect plaintiff’s future ability to either sell or lease the property. Damages were estimated at $2.5M. Based on these essential facts, plaintiff filed claims for negligence, negligence per se, strict liability, violation of the Spill Act, violation of New Jersey Environmental Rights Act, nuisance and trespass. In each count, the plaintiff sought the same relief, including damages for the lost sale or rental value of its property, and injunctive relief requiring NJNG to cleanup pollution on NJNG’s property and on plaintiff’s property.

The parties agreed that the applicable statute of limitations is the six year SOL for tortious injury to real property. N.J.S.A. 2A:14-1. The court confirmed the law axiom that ordinarily a cause of action would accrue when the right to institute and maintain a suit first arose. However, in environmental cases, under the so called discovery rule, a cause of action is found not to accrue until the injured party discovers, or by an exercise of reasonable due diligence and intelligence should have discovered that he may have a basis for an actionable claim.

The Appellate Division (in a de novo review) agreed with the trial court that the latest plaintiff learned about the condition was in 2008, therefore, the six year statute of limitations for a damages claim based on permanent diminution in the value of the property began to run in 2008 and expired in 2014 and therefore, was time barred. Additionally, the Appellate Court rejected plaintiff’s argument that the migration of contaminants constitutes a new “discharge” of pollutants every time it occurred. The court noted that the discharge of pollutants on defendant NJNG’s property occurred decades ago and therefore, the migration of those pollutants onto plaintiff’s land did not constitute a new discharge and therefore, the claims could not proceed based on the time bar.

Interestingly, the court reached a different conclusion with respect to plaintiff’s nuisance claim. Finding that since there was no dispute that defendant NJNG could have abated the contamination on plaintiff’s property, the failure to abate constitutes a continuing tort that entitles the plaintiff to relief and the applicable SOL did not bar plaintiff’s nuisance claim. The court further observed if the nuisance cannot be abated, there is no continuing tort, and the statute of limitations begins to run when the defendant creates the harmful condition. Finding these issues not ripe for the court’s consideration, the court found the trial court acted prematurely in dismissing plaintiff’s nuisance claim and remanded for the purpose of reinstating those claims and proceeding with discovery.

Property owners that have been impacted by contamination from a neighbor should consider bringing a nuisance claim for damages stating that the failure to abate the contaminants constitutes a continuing tort even though its other common law environmental claims may be time barred.

For more information or for a copy of this decision, please contact Michael J. Naughton at mnaughton@csglaw.com.