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New Jersey Landowner Forfeits Damages by Allowing Defendant to Remediate

In what may be a cautionary tale for owners of contaminated property, a New Jersey appellate court has ruled that a landowner forfeited any claim to property damages when he allowed the responsible party to perform remediation. The court reaffirmed that landowners alleging contamination of their property must choose between either the diminution in property value or the reasonable costs of remediation; they cannot have both. See Favorito v. Puritan Oil Co., Inc., No. A-o (N.J. App. Ct. Apr. 29, 2014).

In 2005, Plaintiff purchased a residential property across the street from Defendant’s gas station. Unbeknownst to Plaintiff, in 1988, the Defendant oil company discovered that its underground storage tanks had been leaking and that hazardous substances had contaminated the groundwater underneath Plaintiff’s property. In 2001, the state environmental agency designated a portion of Plaintiff’s property as a Classification Exception Area (CEA), which prohibited it from being used for drinking water.  The agency also approved a remediation plan that required Defendant to screen water and soil within the CEA twice a year for hazardous substances. In 2009, Plaintiff granted Defendant access to its property and allowed Defendant to cover all costs to install two groundwater monitoring wells and test the soil on Plaintiff’s property. 

Plaintiff sued, alleging in relevant part that Defendant’s discharge of hazardous substances onto his property constituted a nuisance and trespass, and sought damages for the diminution in property value. The trial court granted summary judgment in favor of Defendant on both claims, and Plaintiff appealed. Citing a 1987 New Jersey Supreme Court opinion, the appellate court ruled that a party may recover damages for diminution in land value or the reasonable costs of restoration; loss of use of the land; and discomfort and annoyance to the occupant. Finding that Plaintiff had already accepted Defendant’s offer to pay for remediation, the appellate court held that Plaintiff could not also recover damages for diminution in property value and therefore affirmed the trial court’s summary judgment decision.

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About this Author

Benjamin E. Apple, Environmental Attorney, Beveridge & Diamond Law Firm

Ben joined the firm following his graduation from Harvard Law School, where he served as Managing Editor of the Harvard Environmental Law Review while at Harvard Law School.  He also served as Director of Academic Affairs on the Student Representative Board, and as a member of the Harvard Human Rights Clinic.  He was also a research assistant to Professor Richard J. Lazarus.

Also during law school, Ben served as a law clerk for Advocates for Human Rights in New Orleans, a law clerk for Alternatives for Community and Environment in Boston, and...

Daniel M. Krainin, Environmental Attorney, Beveridge Diamond Law Firm

Daniel M. Krainin is a Principal in the New York office of Beveridge & Diamond, P.C.  He was named to the 2011 and 2012 Super Lawyers list for the New York Metropolitan area, holds an AV Preeminent Peer Review Rating from Martindale-Hubbell, and serves as a Vice Chair of the ABA Environment Section's Environmental Litigation and Toxic Torts Committee.

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Mackenzie Schoonmaker, Environmental Lawyer, Beveridge & Diamond Law Firm

Mackenzie Schoonmaker focuses her practice on litigation and environmental regulatory matters.  Ms. Schoonmaker’s litigation practice includes representing clients in state and federal courts, as well as in data compensation arbitrations under the federal pesticide statute, FIFRA.  Most recently, Ms. Schoonmaker was part of the Firm’s trial team that secured a defense judgment in the District of Columbia Superior Court after a three week trial on tort claims alleging the client supplied corrosive water to apartment buildings.