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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.

© 2020 Beveridge & Diamond PC National Law Review, Volume IV, Number 342


About this Author

Benjamin E. Apple Environmental Litigation Attorney Beveridge & Diamond Washington, DC

Ben helps clients navigate the complex environmental regulatory and litigation landscape of renewable energy development, brownfields due diligence and acquisition, and Superfund cleanups.

Ben also works closely on general environmental compliance issues surrounding electrical utilities in his role supporting firm Chairman Ben Wilson with his duties as Court-Appointed Monitor for the Duke Energy coal ash spill remediation project.

Ben’s core practice areas include:

  • Navigating the myriad environmental issues that arise in renewable energy development from land...
Daniel M. Krainin Environmental Litigation Attorney Beveridge & Diamond New York, NY

Dan deploys more than two decades of environmental litigation experience to resolve clients’ legal and business challenges.

Primarily focused on environmental and toxic tort litigation, Dan helps clients successfully resolve groundwater contamination, hazardous waste site remediation, natural resource damages, permit defense and product-related matters. He enjoys using his skills as a litigator to help clients solve environmental problems.

Among his many wins, Dan successfully led a team that defeated an emergency challenge to a permit that Dan’s client needed to continue its operations. The favorable result that Dan and his team achieved allowed the client to avoid losing millions of dollars’ worth of production.

In a toxic tort case involving an alleged international conspiracy, Dan led a successful briefing effort that resulted in early dismissal of all claims against his clients, saving them from protracted litigation and protecting their reputation.

While focusing his practice on litigation, Dan also provides practical and actionable advice designed to minimize environmental risk and potential liabilities. 

An active member of various bar associations, Dan is a past chair of the American Bar Association’s Environmental Litigation and Toxic Torts Committee, and currently co-chairs the New York State Bar Association Environment Section’s Toxic Torts Committee. Dan has also served as a member of the firm’s Management Committee.

Before joining Beveridge & Diamond, Dan clerked for The Honorable Carlos R. Moreno, U.S. District Judge for the Central District of California. Prior to attending law school, Dan served as editor-in-chief of the environmental news service Greenwire.

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Mackenzie S. Schoonmaker Environmental Litigation Attorney Beveridge & Diamond New York, NY

Mackenzie’s practice includes both litigation and regulatory matters arising under FIFRA, the Clean Water Act, and related environmental laws.

She is passionate about conserving air, water, wildlife, and land for future generations, and enjoys helping clients navigate and enforce the detailed framework of environmental law because she believes compliance is key to preventing adverse impacts to the environment.

Mackenzie is a co-chair of Beveridge & Diamond’s Industrial Hemp & Cannabis industry team. She advises clients, and regularly writes and presents, on federal...