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New Jersey Department of Environmental Protection v. Navillus Group

ELR Citation: 46 ELR 20018
Nos. A-4726-13T3, (N.J. Super. Ct., 01/14/2016)

A New Jersey appellate court, in an unpublished opinion, reversed and remanded portions of a lower court summary judgment against a corporation, its principal, and a general partnership for costs related to remediation of the site of a former thermometer manufacturing plant. The corporation and the partnership are run by members of the same family. The trial court found them liable under the New Jersey Spill Compensation and Control Act and under the theory of unjust enrichment. The trial court also determined that the general partners were personally liable for the judgment against the partnership, and it pierced the corporate veil and determined that the principal was also personally liable. But the trial court's decision to pierce the corporate veil is not supported by sufficient undisputed evidence. Writing a check for another entity on one occasion, during the corporation's 20-plus year existence, hardly demonstrates a pattern of commingling assets that might serve as a foundation for piercing a corporate veil. Similarly, the corporation's purchase of the property for one dollar, and its later disbursement of assets to individual partners, without any evidence of the reason for the transfers or the circumstances under which they were made, are inadequate to grant summary judgment against the partners based on piercing a corporate veil. There was also insufficient undisputed evidence on the record to impose liability on the defendants on a theory of unjust enrichment. The court, therefore, reversed and remanded for further proceedings as to these two issues. But the court otherwise affirmed the summary judgment, including the lower court's rejection of defendants' claims that they were "innocent purchasers" of the site.