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North River Mews Assocs. v. Alcoa Corp.

ELR Citation: 46 ELR 20098
Nos. 14-8129, (D.N.J., 05/19/2016) (Arleo, J.)

In an unpublished opinion, a district court held that a developer may go forward with its CERCLA, tort law, and fraudulent concealment claims against the former owner of contaminated property under which PCB-contaminated USTs were discovered after the developer purchased the property. The developer purchased the site in 1997 but didn't discover the USTs until 2013 after it demolished a building on the site. Despite the former owner's arguments to the contrary, the developer's tort claims are not time barred. At the time of purchase, the USTs were hidden under a building with a layer of concrete used to cover up any access to the tanks via manholes. Moreover, while other USTs were listed on environmental reports for the site, the USTs at issue here were not. Based on these facts, reasonable diligence would not necessarily have led to the discovery of these tanks before 2008, when the statute-of-limitations clock would have lapsed. Nor did the developer's knowledge of PCB contamination generally at the time of purchase trigger a duty to investigate, as there is no basis to believe that a reasonably diligent investigation would have discovered the hidden USTs. The court also denied the former owner's motion to dismiss based on contractual releases. The purchase agreement is ambiguous as to whether it released the developer's right to seek contribution only or whether it is a blanket release. Likewise, an environmental indemnity agreement that relieved the former owner of any obligation for cleanup costs related to the demolished building is also ambiguous. But the court granted the former owner's motion to dismiss the developer's unjust enrichment claim because it is preempted by CERCLA.