NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-3014-22
NORTH RIVER INSURANCE COMPANY,
Plaintiff-Respondent,
v.
CARDUNER FRONT, LLC,
Defendant-Appellant. ________________________________
CARDUNER FRONT, LLC, and ROBERT CARDUNER, individually and as the Executor of the Estates of JEAN and LUCY CARDUNER,
Plaintiffs-Appellants,
THE CONTINENTAL INSURANCE COMPANY, THE GLENS FALLS INSURANCE CO., and THE NORTH RIVER INSURANCE COMPANY,
Defendants-Respondents,
and THE GREAT AMERICAN INSURANCE COMPANY, THE SENTRY INSURANCE COMPANY, EAGLE STAR INSURANCE COMPANY, THE NEW JERSEY PROPERTY LIABILITY INSURANCE GUARANTEE ASSOCIATION, RAMP DRY CLEANING, INC., and PAUL GANGI,
Defendants.1 ________________________________
Argued September 17, 2024 – Decided July 8, 2025
Before Judges Gilson, Firko, and Bishop-Thompson.
On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket Nos. L-1947-14 and L-2753-14.
Louis Giansante argued the cause for appellants (Giansante & Assoc., LLC, attorneys; Louis Giansante, of counsel and on the briefs).
Michael J. Tricarico and Jon R. Grabowski argued the cause for respondents (Kennedys CMK LLP, attorneys for North River Insurance Company; Jon R. Grabowski (Ford Marrin Esposito Witmeyer & Gleser, LLP), attorney for respondent Continental Insurance Company, as Successor by Merger to the Glens Falls
1 Defendants The Great American Insurance Company, The Sentry Insurance Company, Eagle Star Insurance Company, The New Jersey Property Liability Insurance Guarantee Association, Ramp Dry Cleaning, Inc., and Paul Gangi have settled their issues and are not participating in this appeal. A-3014-22 2 Insurance Company; Michael J. Tricarico and Jon R. Grabowski, on the joint brief).
PER CURIAM
In this insurance coverage dispute concerning a commercial property that
was environmentally contaminated by the operation of a dry cleaning store,
Carduner Front LLC and Robert Carduner, individually and as executor of the
Jean and Lucy Carduner estates (Carduner Parties), appeal from six orders:
three orders dated October 21, 2015 dismissing claims by the Carduner Parties
against defendants North River Insurance Company (North River) and
Continental Insurance Company (Continental) (collectively, the Carduner
insurers); a November 27, 2018 order denying in part their cross-motion for
summary judgment against North River and Continental; a March 31, 2023 order
granting summary judgment to the Carduner insurers; and a May 11, 2023 order
denying reconsideration of the March 31, 2023 order.
We affirm the three October 15, 2015 orders and the November 27, 2018
order. However, we reverse and vacate the March 31, 2023 order granting
summary judgment to the Carduner Parties' insurers and the May 11, 2023 order
denying reconsideration. We conclude the 2021 Settlement Agreement (the
2021 Agreement) did not resolve and does not resolve the Carduner Parties'
A-3014-22 3 pending claims against North River or Continental. Consequently, we remand
for further proceedings on those claims.
I.
A.
Background
Jean2 and Lucy Carduner owned a shopping mall located on Routes 130
and 571 in East Windsor (the property), first as husband and wife and then as
tenants in common. They leased space to Ramp Dry Cleaning, Inc. (Ramp). In
1987, Lucy died testate. After Lucy's death, her interest in the shopping center
was conveyed to a trust for the benefit of her husband Jean.
On January 9, 1991, Jean died testate. When he died, "the [t]rust
terminated by its terms and the property reverted to his estate for distribution
under his will. Robert . . . was heir to the property under Jean's . . . will." Neither
Lucy's nor Jean's estates have produced evidence of any payment or
disbursement by the estates for the remediation of the contaminated property.
2 Parties who share a last name with other individuals are referred to by their first names for the ease of reference. By doing so, we intend no disrespect. A-3014-22 4 B.
Insurance Policies Effective in the 1980's
North River issued the three comprehensive business liability policies to
Jean and Lucy in their capacity as individuals and landlords of the property with
a $1,000,000 per occurrence policy limit: (1) liability policy number
5101049097, effective from January 5, 1982, until January 5, 1985; (2) liability
policy number 5104191573, effective from January 5, 1985, until January 5,
1986; and (3) liability policy number 5104191699, effective from January 5,
1986, until January 5, 1987. These three policies did not name or qualify any
other Carduner Parties as insureds.
Glen Falls Insurance Company (Glen Falls), the predecessor to
Continental, issued policy CBP68982, which was effective from January 5,
1978, to January 5, 1981. At inception, the named insureds on policy CBP68982
were Jean, Robert, and Jean and Lucy trading as Carduner's Liquor Store
A/T/I/M/A.3 Effective June 1, 1979, the named insureds on policy CBP68982
were amended to "Carduners Liquor Store, Inc. and/or Jean . . . and Lucy . . .
A/T/I/M/A."
3 A/T/I/M/A stands for "as their interests may appear."
A-3014-22 5 A second Continental policy, issued by Glen Falls, became effective on
January 5, 1981, and was cancelled effective January 5, 1982. The named
insureds on policy CBP316215 were "Carduners Liquor Store, Inc. and Jean . . .
and Lucy . . . A/T/I/M/A." The claims alleged by the Carduner Parties in their
second amended complaint against Continental were made under policies
CBP68982 and CBP316215. In 1987, upon Lucy's death, Robert was appointed
executor of her estate and deeded Lucy's interest to Jean in January 1988.
C.
The 1990 Environmental Claim and 1994 Field Directive and Administrative Consent Order
In June 1990, tetrachloroethylene (PCE), a dry-cleaning solvent, was
discovered in the drainage sumps of the property owned by Carduner and was
linked to Ramp, the Carduner Parties' tenant. At about the same time, a fuel oil
leak was discovered at the property.4 The Carduner Parties' insurance agent was
notified and issued general liability loss notices to their insurance carriers,
including North River and Continental. The loss notice named Jean and Lucy
4 The exact date of the discovery is not clear in the record. The general liability loss notice sent to North River was dated October 5, 1990, and indicates the fuel oil leak was discovered in June 1990. The 2021 Agreement further establishes the contamination was found some time in June 1990. However, counsel's certification attests that contamination was found on October 10, 1990.
A-3014-22 6 as the insureds. The loss notice indicated that fuel oil had been found in the
ground water and it had determined to have occurred over an extended time.
The loss notice further stated the contamination was discovered on adjacent
property that came from a leak from the Carduner Parties' underground oil tank.
On October 5, 1990, North River received a general liability loss notice
under the North River policies regarding an oil leak discovered on adjacent
property, which allegedly emanated from an underground storage tank present
on the property (the 1990 Environmental Claim). On October 24, 1990,
Continental acknowledged receipt of such notice. In January 1991, after Jean's
death, Robert was appointed executor of his estate.
On March 30, 1994, the New Jersey Department of Environmental
Protection (NJDEP) issued a Field Directive to Robert finding he was
responsible for the discharge of the heating oil and PCE.5 The Field Directive
expressly directed Robert to "[i]nitiate treatment of contaminated ground water,
dispose of all contaminated soil stockpiled at the site at an approved facility and
remediate any hazardous vapors occurring within the basements of buildings on
the above mentioned property."
5 In the Estate of Jean and Lucy's response to North River's statement of undisputed material facts, it incorrectly asserted that the Field Directive named the estate as the owner. A-3014-22 7 On April 21, 1994, the NJDEP issued an Administrative Consent Order
(ACO) to Robert, individually, and as owner of the Ramp site located at the
Carduner's shopping center. The ACO was also issued to respondents Paul
Gangi and Michael Vernoia, the co-owners and operators of Ramp. The ACO
states "the remediation required . . . will include all contaminants at the . . .
[s]ite, and all contaminants . . . emanating from . . . the [s]ite."
Cleaning up the heating oil was resolved; afterwards, the remediation
activities focused solely on the cleanup of PCE and chlorinated solvent
contamination that emanated from the Ramp site. The Carduner Parties retained
a Licensed Site Remediation Professional (LSRP) to address the remediation
and cleanup. On August 8, 2022, the LSRP—Tellurian Environmental
Management—issued an Environmental MIHPT6 Summary "developing volume
estimates for PCE in the [s]ite's subsurface."
The summary detailed the LSRP's soil sampling efforts at the "[f]ormer
Ramp [c]leaners," and stated that it contains the required data to design and
implement a remedial action for soil and groundwater to affect a removal of
chemical contamination, which is solely attributable to Ramp. The summary
6 Membrane Interface/Hydraulic Profiling Tool. A-3014-22 8 discussed that excavation may be sufficient to remove all of the impacted soil,
and in-situ7 remediation should be able to address any remaining impacts.
D.
Disputed Ownership of the Ramp Cleaners' Site
Robert never challenged the ACO's identification of him as owner of the
Ramp site. However, in the Carduner Parties' merits brief and in their statement
of undisputed material facts submitted in support of their motion for summary
judgment, they contend the site at the time—from discovery of the
contamination until the transfer of the site to Carduner Front, LLC (Carduner
Front) in 1998—was owned by Jean's Estate. On October 21, 2015, this issue
was raised at oral argument.
From 1995 until 2005, the carriers shared the investigation and interim
remediation costs of the property. In October 1998, Robert, as executor of Jean's
will, deeded his interest in the property to Carduner Front. In 2000, the Carduner
Parties and Ramp entered into an agreement regarding the allocation of
remediation costs.
7 In-situ is defined as, "[i]n the original place." Webster's II New College Dictionary 573 (1995) A-3014-22 9 E.
The 2010 Settlement Agreement and Release
On May 27, 2010, Carduner Front, Ramp, and various insurers, including
Continental and North River, entered into a Settlement Agreement and Release
(the 2010 Agreement) regarding environmental cleanup at the property. The
2010 Agreement resolved the litigation between the Carduner Parties and
Continental regarding Continental's obligation to pay for remediation under the
insurance policies and Continental's third-party complaint against North River
and Ramp's carriers regarding the allocation of defense and indemnity
obligations related to pre-2010 remediation. The Agreement also released
potential bad faith claims.
Under the 2010 Agreement, prior to the exhaustion of the indemnity limit,
Ramp's carriers agreed to pay seventy-five percent of the investigative and
remedial costs and the Carduner's carriers agreed to pay twenty-five percent;
after the exhaustion of the indemnity limit, the Ramp's carriers would pay
seventy percent and Carduner's carriers would pay thirty percent; and no carrier
would be required to pay after the indemnity limits of all of its policies have
been exhausted. The 2010 Agreement had an initial three-year term with a
consecutive renewal. All parties agreed that "[t]he goal of the remediation is to
A-3014-22 10 take all reasonable efforts necessary to induce the NJDEP and/or LSRP to issue
a No Further Action [l]etter at the site within the three[-]year period covered by"
the 2010 Agreement. In 2010, Continental opted out of the 2010 Agreement.
After execution of the 2010 Agreement, the carriers selected Roux
Associates as the LSRP. The carriers explored different remedial designs,
including a traditional removal action and in-situ remedies—particularly a
thermal treatment whereby electricity passes through the ground, separating the
chlorinated solvents, which are boiled off in the groundwater and collected
beneath the structures. Further investigation, however, indicated that
contamination beneath the property was much deeper than previously thought.
Therefore, Roux concluded excavation was not an appropriate remedy because
it would disturb the parking lot and require closure of the shopping center.
Given Roux's conclusion, the carriers hired Current Environmental
Solutions (CES) to design a thermal clean-up remedy for the property. By
August 2012, after a pilot study, CES was optimistic that a thermal remedy was
feasible. On June 17, 2013, CES estimated the remediation would cost
$6,441,006 with a night and weekend surcharge to mitigate disruption to the
tenants at the property, and $6,188,035 if work was completed during normal
A-3014-22 11 business hours. The carriers did not execute contracts with CES. Instead, they
sought a less expensive alternative with another company, TerraTherm.
TerraTherm initially stated that "[i]t is not expected that occupancy in the
floors above the well field will be affected and should be able to continue
operations." However, on February 14, 2014, TerraTherm's proposed
remediation concluded the tenants would be disrupted after all. Pursuant to
section eight of the 2010 Agreement, the parties decided to mediate their
differing aims of lowering remediation costs and mitigating disruption to the
tenants.
On September 4, 2014, mediation was attempted but was unsuccessful.
On October 24, 2014, pursuant to section 6(a) of the 2010 Agreement, North
River exercised its contractual right to opt out, thereby terminating the 2010
Agreement.
F.
The North River Action
On September 3, 2014, North River filed a declaratory judgment action
against Carduner Front in the Law Division (North River Action) seeking a
declaration of no coverage for liabilities related to site contamination at the
property. After Carduner Front unsuccessfully moved to dismiss the North
A-3014-22 12 River action, it filed an answer, counterclaim, and a third-party complaint. The
third-party complaint alleged five causes of action against North River: (1)
breach of an insuring agreement as to a third-party beneficiary (count one); (2)
unjust enrichment (count two); (3) duty to reimburse Carduner Front for access
acquired through misrepresentation (count three); (4) breach of settlement
agreement (count four); and (5) negligent supervision of remediation consultants
(count five).
G.
The Carduner Parties' Action
On December 8, 2014, the Carduner Parties filed their own declaratory
judgment action in the Law Division (the Carduner Action), naming Ramp, the
Ramp carriers, North River, and Continental as defendants. On February 5,
2015, the Carduner Parties amended their complaint to allege six causes of
action against North River and Continental: (1) declaratory judgment (count
two); (2) failing to perform under the 2010 Agreement fairly and in good faith
(count four); (3) failing to fulfill their policy obligations fairly and in good faith
(count five); (4) for material misrepresentations during the negotiation and
performance of the 2010 Agreement (count seven); (5) recovery under the Spill
A-3014-22 13 Act,8 N.J.S.A. 58:10-23.11(f)(a)(2) (count eight); and (6) a declaration of rights
(count nine). On January 23, 2015, the North River and Carduner declaratory
judgment actions were consolidated.
H.
The October 21, 2015 Orders
On June 5, 2015, North River filed three motions: (1) seeking dismissal
of all claims brought by Carduner Front and Robert, individually, and all extra -
contractual counts (counts four, five, seven, eight, and nine of the amended
complaint); (2) seeking dismissal of Carduner Front's counterclaims in the North
River action; and (3) for summary judgment declaring that the North River
policies did not provide coverage to Carduner Front or Robert, and they were
not named insureds.
On June 10, 2015, Continental joined the motion to dismiss filed by North
River and filed its own motion to dismiss. Specifically, Continental sought to
narrow the issues by moving to dismiss all Carduner Front's claims under the
Glens Falls policies and Robert's claims for post-June 1, 1979 coverage under
the same policies. In addition, Continental sought dismissal of counts four, five,
8 New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 to -23.24. A-3014-22 14 seven, eight, and nine of the amended complaint, which included claims for bad
faith, unjust enrichment, misrepresentation, contribution under the Spill Act,
and statutory access.
On October 21, 2015, the motion court granted virtually all North River's
requested relief,9 including the dismissal of all pre-2010 extra-contractual
claims against North River, leaving only the claims by the estates.
On October 21, 2015, the motion court granted Continental's motion,
dismissing all Carduner Front's and Robert's claims for post-June 1, 1979
coverage. Additionally, the motion court: (1) granted North River's motion to
dismiss the counterclaim filed by Carduner Front in the North River action; (2)
granted North River's motion for summary judgment in the North River action,
concluding that Carduner Front was not an insured under any of the North River
policies and that North River has no liability to Carduner Front for any costs
associated with the property, including, but not limited to, claims for lost rental
or business income; (3) granted North River's motion to dismiss all counts by
Carduner Front and Robert, individually, as against North River; and (4) granted
9 To the extent they could do so, the order permitted the Carduner Parties to plead post-2010 unjust enrichment or bad faith claims in an amended complaint. A-3014-22 15 North River's motion to dismiss counts four, five, seven, eight, and nine of the
Carduner action.
The Carduner Parties' Second Amended Complaint
On January 30, 2017, the Carduner Parties filed a second amended
complaint, which alleges that: "[a] former tenant, Ramp . . . contaminated the
soil and groundwater of the property with [PCE] and other chlorinated solvents."
The second amended complaint also alleges that "[t]he recent technical work at
the site definitively establishes Ramp as the sole responsible party for the [PCE]
contamination." In addition, the second amended complaint alleges that the
"Ramp defendants are . . . responsible to indemnify and hold the [Carduner
Parties] harmless from the cost of remediating and investigating the property,"
and that "Ramp and [its owners] are 100% liable for all of the [PCE]
contamination present on or beneath the Carduner's property."
J.
The 2018 Motion and Cross-Motion for Summary Judgment
On August 3, 2018, after successfully moving for summary judgment
dismissing the coverage claims by the other Carduner Parties, North River and
Continental jointly moved for summary judgment against the estates. A case
A-3014-22 16 management order expressly provided for the filing of such a motion, "solely
related to the issue" of whether the estates should be dismissed as plaintiffs
because they lacked any underlying liability. The insurers—North River and
Continental—asserted that the estates had incurred no losses, faced no claims,
and thus had no basis for seeking coverage. North River and Continental
maintained Ramp was the "actual polluter" and was fully funding the
contamination remediation. On September 11, 2018, the estates cross-moved
for summary judgment seeking a determination that it could assert claims
against North River and Continental.
On November 9, 2018, the motion court conducted oral argument on the
motion and cross-motion and reserved decision. On November 27, 2018, an
order was entered denying North River's and Continental's motions for summary
judgment, granting Robert's cross-motion for summary judgment insofar as the
motion court "determined that there is potential legal liability on the part of the
[e]states of Jean and Lucy . . . under the . . . Spill Act for the contamination that
is the subject matter of this lawsuit such that they may assert insurance coverage
claims against the North River and Continental insurance policies at issue." The
motion court also referred the matter "back [to] mediation" to see if remaining
coverage issues and defenses could be resolved.
A-3014-22 17 K.
The 2021 Settlement Agreement
On or about November 18, 2021, 10 Ramp, the Ramp carriers, and the
Carduner Parties entered into the 2021 Agreement. The second amended
complaint states the Carduner Parties received a site cleanup estimate amounting
to $6,441,006 for full scale remediation using electronic resistance heating.11
By the time of the 2021 Agreement, the parties agreed that "the currently
operating groundwater recovery and treatment system at the [s]ite [was]
ineffective and should be eliminated, but they disagree[d] as to which remedy is
appropriate for the [s]ite." Under the 2021 Agreement, the Carduner Parties
received $8,662,500 from Ramp's carriers to remedy the contamination.
The 2021 Agreement includes the following "Judgment Reduction
Provision," which states:
In the event any [c]laim related to or arising out of a [r]eleased [c]laim is brought by . . . [the] Carduner Part[ies] against an entity that is not a party to this [a]greement, and such [c]laim results in an adjudication on the merits, whether in court or another tribunal with
10 The 2021 Agreement states the date is November 18, 2021; however, the parties signed it by December 8, 2021. 11 $6,441,006 accounted for a night and weekend surcharge; the estimate was $6,188,035 if the work was completed during normal business hours.
A-3014-22 18 jurisdiction, and the recovery the Carduner Part[ies] obtain[] against such other entity includes amounts allocable to a [r]eleasing [p]arty, then the Carduner Part[ies] agree[] that it will not seek to obtain payments from such other entity or to enforce any related judgment to the extent of any sum that represents the applicable [r]eleasing [p]arty's share of the obligation owed, but rather, the Carduner Part[ies] shall voluntarily reduce any judgment, or claim against, or settlement with, such other entity by the amount, if any, that a court or tribunal determines that the applicable [r]eleasing [p]arty would have been liable to pay such other entity. To ensure that such a reduction is accomplished, the [r]eleasing [p]arties shall be entitled to assert this paragraph as a defense to any action against it for any such portion of the judgment or claim and shall be entitled to have the court or appropriate tribunal issue such orders as are necessary to effectuate the reduction to protect the [r]eleasing [p]arties from any liability for the judgment or [c]laim. In addition, the Carduner Parties agree they will not seek to obtain payment from any other person or entity of any amount or portion of any amount that a court or tribunal finds attributable or allocable to a [r]eleasing [p]arty.
[Emphasis added. 12]
The "Releasing Parties" are defined in the 2021 Agreement as follows:
(a) the Ramp Entities; (b) the Carduner Parties, (c) Great American on behalf of itself and the Great American Companies, (d) Eagle Star on behalf of itself and the Eagle Star Companies, (e) Sentry on behalf of
12 North River's and Continental's summary judgment motions relied on the emphasized language, but it was never addressed in the Carduner Parties' opposition or cross-motion.
A-3014-22 19 itself and the Sentry Companies, and (f) PLIGA13 on behalf of itself and the PLIGA Parties.
The "Carduner Parties" are defined in the 2021 Agreement as:
(a) Carduner Front LLC, Carduner Back, LLC and Brix & Mortar, LLC, and each of their past, present, and future, direct and indirect, parents, subsidiaries, and affiliates, and each of their respective directors, officers, members, managers, employees, agents, attorneys, representatives, predecessors, successors, and assigns; and (b) Robert Carduner, the Estate of Jean Carduner and the Estate of Lucy Carduner, and each of their respective past, present, and future[] managers, employees, agents, attorneys, representatives, predecessors, successors, heirs, and assigns.
The 2021 Agreement defines "claims" as:
any and all past, present, or future, known or unknown, fixed or contingent, matured or unmatured, liquidated or unliquidated, anticipated or unanticipated, foreseen or unforeseen, direct or indirect, accrued or unaccrued, claims, causes of actions, cross-claims, liabilities, rights, demands (including letter-demands, notices, or inquiries from any [p]erson), penalties, assessments, damages, requests, suits, lawsuits, costs (including attorneys' fees and expenses), interest of any kind, actions, administrative proceedings, criminal proceedings, or orders, of whatever nature, character, type, or description, whenever and however occurring, whether at law or in equity, and whether sounding in tort or contract, or any statutory, regulatory or common law claim or remedy of any type.
13 New Jersey Property and Liability Insurance Guarantee Association. A-3014-22 20 The 2021 Agreement defines "Released Claims" as the claims released in
Section II and identifies the following released claims:
1. Claims that were or could have been asserted in the [l]itigations, including any claims for costs, expenses or fees;
2. Claims resulting from groundwater contamination on or emanating from the [s]ite;
3. Claims alleging any violation (whether or not in bad faith) of any statute, regulation, or common law doctrine or rule of bad faith or extra- contractual liability, including, without limitation, Unfair Claim Practices Acts14 or similar statutes of each of the fifty states (where applicable) under, arising out of or relating to the [p]olicies;
4. Claims alleging any negligent undertaking by the [r]eleasing [p]arties under, arising out of or relating to the [p]olicies but expressly reserving any and all claims against Roux for negligence or intentional acts; or
5. Claims alleging any breach of contract, failure to abide by any duty or obligation, nondisclosure, misconduct[,] or alleged bad-faith committed by the [r]eleasing [p]arties arising out of or relating to the [p]olicies or the [p]ast [a]greements;
6. Claims by any of the Carduner Parties for (a) rent allegedly lost or forfeited, (b) payment for the Ramp Parties' use of the premises at the [s]ite, (c) money allegedly owed by the Ramp Parties to any
14 See New Jersey Unfair Claims Settlement Practices Act, N.J.S.A. 17B:30-2. A-3014-22 21 of the Carduner Parties under the [p]ast [a]greements, (d) any other sum of money or non- monetary relief that the Ramp Parties owe, owed, or ever will owe to any of the Carduner Parties arising out of the subject matter of the [l]itigation; and
7. Claims alleging any mischaracterization of any payment made by a Ramp Carrier in connection with the [r]emediation as defense costs, indemnity costs or otherwise.
All claims against the insurers in the second amended complaint relate to the
contamination caused by Ramp at the property.
L.
The March 31, 2023 Motion and Cross-Motion for Summary Judgment
Construing the 2021 Agreement as dispositive, and upon learning that an
apparent conflict of interest had developed on the part of the mediator, North
River withdrew its consent to mediation. In that regard, North River could
withdraw from mediation pursuant to terms of the mediator's retention, which
the mediator acknowledged.
On February 3, 2023, North River filed a motion for summary judgment
seeking to enforce the terms of the 2021 Agreement, which Continental joined.
North River and Continental argued that as a condition of the Carduner Parties
receiving the sum of $8,662,500 from the Ramp carriers to remedy the
A-3014-22 22 contamination, which was "significantly more" than the $6,441,006 they sought
to recover in this lawsuit, the Carduner Parties were required to relinquish all
claims against Ramp, the Ramp Carriers, and the insurers, which have "valid
cross-claims" against Ramp and its carriers. Notwithstanding the "Judgment
Reduction Provision" in the 2021 Agreement, and after receiving the settlement
funds, North River and Continental maintained the Carduner Parties continued
to pursue their claims against them. The Carduner Parties then cross-moved for
summary judgment to dismiss their cross-claims against Ramp.
On March 31, 2023, the motion court conducted oral argument on the
motions and cross-motion for summary judgment. At the conclusion of oral
argument, the motion court granted summary judgment in favor of North River
and Continental, dismissing all claims against them, and denied the Carduner
Parties' cross-motion for summary judgment.
In its oral opinion placed on the record on March 31, 2023, the motion
court ruled that the last sentence in Section III on page twelve of the 2021
Agreement was dispositive, eliminating, or waiving any claim that the Carduner
Parties, estates, or any other Carduner entity had asserted in this litigation
against the Carduner carrier defendants—North River and Continental. The
motion court highlighted the following section from the 2021 Agreement :
A-3014-22 23 . . . the Carduner Parties agree they will not seek to obtain payment from any other person or entity of any amount of portion of any amount that a court or tribunal finds attributable or allocable to a [r]eleasing [p]arty.
The motion court determined this provision, coupled with the inclusion of
the Carduner entities in the definition section of "Released Parties" in the 2021
Agreement, effectuated a complete release in favor of North River and
Continental. A memorializing order was entered.
M.
The May 11, 2023 Motion for Reconsideration
The Carduner Parties moved for reconsideration of the motion court's
March 31, 2023 order. On reconsideration, the Carduner Parties raised new facts
and argued concerning a reservation of rights provision contained in Section
VI(F) in the 2021 Agreement. That reservation states: "This Agreement does
not create any rights in any person or entity other than the [p]arties. Nothing in
this Agreement affects any rights that the Carduner Parties may have against
their insurers." The Carduner Parties contended that the reservation can only be
construed to preserve their pending claims in this lawsuit, and which had been
sustained through North River's prior motion for summary judgment filed in
2018.
A-3014-22 24 On May 11, 2023, the motion court conducted oral argument. Following
argument, the motion court denied the Carduner Parties' motion for
reconsideration on the basis the Carduner Parties raised new facts and arguments
that were not presented at the time the motions for summary judgment were
submitted and decided and entered a memorializing order. This appeal followed.
On appeal, the Carduner Parties present the following issues for our
consideration:
(1) the motion court correctly reconsidered its March 30, 2023 ruling even though it ultimately reached the wrong result;
(2) the Carduner Parties intended to preserve their existing claims against North River and Continental in the 2010 Agreement involving Ramp;
(3) North River's and Continental's motions for summary judgment were procedurally defective and that defect caused a chaotic briefing and discussion of the issues;
(4) the motion court erred in denying the Carduner Parties' cross-motion for summary judgment;
(5) the motion court had ruled that there was coverage under the Carduner policies and North River and Continental and, therefore, North River and Continental faced only breach of contract claims or equitable claims not prohibited by the judgment reduction provision of the settlement agreement; and
A-3014-22 25 (6) the motion court should not have dismissed claims related to the policies issued to Carduner Liquor Store, Inc.
II.
We review a court's decision on a motion for summary judgment de novo,
applying the same standard as the trial court. Samolyk v. Berthe, 251 N.J. 73,
78 (2022). We must consider "whether the competent evidential materials
presented, when viewed in the light most favorable to the non-moving party, are
sufficient to permit a rational factfinder to resolve the alleged disputed issue in
favor of the non-moving party." Ibid. (quoting Brill v. Guardian Life Ins. Co.
of Am., 142 N.J. 520, 540 (1995)); see also R. 4:46-2(c).
We review the denial of a motion for reconsideration under an abuse of
discretion standard. Branch v. Cream-O-Land Dairy, 244 N.J. 567, 582 (2021).
We will not disturb a judge's denial of a motion for reconsideration absent "a
clear abuse of discretion." Pitney Bowes Bank, Inc. v. ABC Caging Fulfillment,
440 N.J. Super. 378, 382 (App. Div. 2015) (citing Hous. Auth. of Morristown v.
Little, 135 N.J. 274, 283 (1994)).
Reconsideration "is not appropriate merely because a litigant is
dissatisfied with a decision of the court or wishes to reargue a motion." Palombi
v. Palombi, 414 N.J. Super. 274, 288 (App. Div. 2010). Rather, reconsideration
A-3014-22 26 should be utilized only for those cases which fall into that narrow corridor in which either (1) the [c]ourt has expressed its decision based upon a palpably incorrect or irrational basis, or (2) it is obvious that the [c]ourt either did not consider, or failed to appreciate the significance of probative, competent evidence.
[Ibid. (quoting D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)).]
"A contract arises from offer and acceptance and must be sufficiently
definite 'that the performance to be rendered by each party can be ascertained
with reasonable certainty.'" Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435
(1992) (quoting Borough of W. Caldwell v. Borough of Caldwell, 26 N.J. 9, 24-
25 (1958)). "Courts enforce contracts 'based on the intent of the parties, the
express terms of the contract, surrounding circumstances and the underlying
purpose of the contract.'" Manahawkin Convalescent v. O'Neill, 217 N.J. 99,
118 (2014) (quoting Caruso v. Ravenswood Devs., Inc., 337 N.J. Super. 499,
506 (App. Div. 2001)). The agreement "must be considered in the context of
the circumstances under which it was entered into and it must be accorded a
rational meaning in keeping with the express general purpose." Joseph Hilton
& Assocs., Inc. v. Evans, 201 N.J. Super. 156, 171 (App. Div. 1985).
"A subsidiary provision is not so to be interpreted as to conflict with the
obvious 'dominant' or 'principal' purpose of the contract." Newark Publishers'
A-3014-22 27 Ass'n v. Newark Typographical Union, 22 N.J. 419, 426 (1956). "The plain
language of the contract is the cornerstone of the interpretive inquiry; 'when the
intent of the parties is plain and the language is clear and unambiguous, a court
must enforce the agreement as written, unless doing so would lead to an absurd
result.'" Barila v. Bd. of Educ. of Cliffside Park, 241 N.J. 595, 616 (2020)
(quoting Quinn v. Quinn, 225 N.J. 34, 45 (2016)).
"The interpretation of a contract is generally subject to de novo review."
Arbus, Maybruch & Goode, LLC v. Cohen, 475 N.J. Super. 509, 515 (App. Div.
2023). "The judicial task is simply interpretative; it is not to rewrite a contract
for the parties better than or different from the one they wrote for themselves. "
Kieffer v. Best Buy, 205 N.J. 213, 223 (2011).
Nevertheless, "we permit a broad use of extrinsic evidence to achieve the
ultimate goal of discovering the intent of the parties." Conway v. 287 Corp. Ctr.
Assocs., 187 N.J. 259, 270 (2006); see also Renee Cleaners, Inc. v. Good Deal
Super Mkts. of N.J., Inc., 89 N.J. Super. 186, 190 (App. Div. 1965) ("In general,
the polestar of construction is the intention of the parties as disclosed by the
language used, taken in its entirety, and evidence of the attendant circumstances
may be considered, not to change the agreement made but to secure light by
which to measure its actual significance.").
A-3014-22 28 A contract should be read "as a whole in a fair and common sense
manner," mindful that "[d]isproportionate emphasis upon a word or clause or
single provision does not serve the purpose of interpretation." Boyle v. Huff,
257 N.J. 468, 478 (2024) (first quoting Hardy ex rel. Dowdell v. Abdul-Matin,
198 N.J. 95, 103 (2009); then quoting Republic Bus. Credit Corp. v. Camhe-
Marcille, 381 N.J. Super. 563, 568-69 (App. Div. 2005) (alteration in original)).
Accordingly, "[w]ords and phrases are not to be isolated but related to the
context and the contractual scheme as a whole, and given the meaning that
comports with the probable intent and purpose." Ibid. (quoting Republic Bus.
Credit Corp., 381 N.J. Super. at 569 (alteration in original)). In Boyle, we
recognized in the condominium association contract at issue that the
indemnification provision read in isolation could support indemnification;
however, our Supreme Court found after considering other provisions
throughout the contract that indemnification was limited to third-party claims.
Id. at 481-82.
We first address the October 21, 2015 orders dismissing claims by the
Carduner Parties against North River and Continental relative to policies issued
to Jean and Lucy Carduner t/a Carduner Liquor Store and Carduner Liquor
A-3014-22 29 Store, Inc., dismissing claims asserted by Carduner Front, LLC against North
River and Continental, and denying the Carduner Parties' coverage claims
against Continental and North River.
Our review of the record reveals the Carduner Parties state in their noti ce
of appeal and their amended notice of appeal that they are appealing from the
three orders dated October 21, 2015. However, the Carduner Parties did not
address the October 21, 2015 orders in their merits brief. Thus, the Carduner
Parties failed to comply with Rule 2:6-2, which addresses the required contents
of an appellant's brief. They also failed to comply with Rule 2:6-1(a)(1)(I),
which requires "a statement of all items submitted to the court on the summary
judgment motion" to be included in the appendix.
We decline to consider issues that are not formally briefed. See, e.g., In
re Bloomingdale Convalescent Ctr., 233 N.J. Super. 46, 49 n.1 (App. Div. 1989)
(dismissing an appeal that was not briefed). See also State v. D.F.W., 468 N.J.
Super. 422, 447 (App. Div. 2021) (disallowing consideration of issues not
formally briefed by defendant). In light of these deficiencies, we affirm the
October 21, 2015 orders.
A-3014-22 30 B.
The Carduner Parties also challenge the November 27, 2018 order
denying, in part, their cross-motion for summary judgment against North River
and Continental. As stated, North River's and Continental's motions for
summary judgment were denied. The motion court held the estates may have
"potential legal liability" under the . . . Spill Act for the contamination and thus
may assert insurance coverage claims against North River and Continental.
Before us, the Carduner Parties contend the November 27, 2018 order compelled
North River to defend and indemnify them, subject to a reservation of rights.
We reject this argument.
According to the Carduner Parties, the motion court "sustained" their
claims against North River and Continental based on our decision in Metex
Corp. v. Fed. Ins. Co., 290 N.J. Super. 95, 107 (App. Div. 1996). In Metex, the
insured property had environmental contamination covered by a third-party
comprehensive general liability insurance policy. Id. at 99-100. The insurer
asserted it was not liable for the contamination because the NJDEP had not
initiated enforcement proceedings and there was no proof of off-site
contamination. Id. at 100.
A-3014-22 31 The policy in Metex, however, was an occurrence, not a claims-made
policy. See id. at 103. We therefore interpreted the word "damages" to include
environmental response costs and remediation expenses. Ibid. (citing Morton
Int'l. Inc. v. Gen. Accident Ins. Co. of Am., 134 N.J. 1, 27 (1993)). In other
words, the policy did "not require any 'enforcement,' 'claim' or 'suit' by a
third[-]party in order to entitle the plaintiff to coverage." Id. at 104. Thus, we
held that coverage for "damages," without any such limitation, extended to
compliance with statutory mandates, including the Spill Act. Ibid.
As part of their arguments, the Carduner Parties stress that the motion
court sustained their claims against North River and Continental under the
Metex decision, however, the motion court failed to compel their insurance
carriers to provide the defense the Carduner Parties were entitled to under
Metex. The Carduner Parties argue the motion court should have granted such
relief as a matter of law. They also maintain the motion court erred by denying
their cross-motion for summary judgment on their breach of contract and unjust
enrichment claims.
North River and Continental counter that unlike in Metex, here the NJDEP
had issued an ACO ordering remediation, identified the responsible parties —
Ramp as the polluter and Robert Carduner as the property owner—and imposed
A-3014-22 32 no obligation on the Carduner Parties. Further, North River and Continental
argue that the responsible parties here undertook a site clean-up, fully funded by
Ramp.
Based upon our de novo review, we conclude the facts in Metex are
distinguishable from the facts in this matter. The motion court allowed the
Carduner Parties' claims to proceed against North River and Continental but
specifically rejected the Carduner Parties' proposed order containing language
requiring North River and Continental to defend and indemnify them.
Moreover, the motion court referred the matter back to the mediator to resolve
the remaining issues. Therefore, we conclude the motion court properly denied,
in part, the Carduner Parties' cross-motion for summary judgment. The record
justified that decision, and we therefore affirm the November 27, 2018 order.
Next, we address the Carduner Parties' argument that the motions for
summary judgment were procedurally defective because they were filed without
the motion court's permission at a time when its case management orders had
directed mediation. However, the Carduner Parties fail to cite to any orders that
precluded North River and Continental from filing summary judgment motions
when they did.
A-3014-22 33 Moreover, North River was no longer involved in the mediation because
it opted out by the time its summary judgment motion was filed. We conclude
the motion court was within its discretion to permit the summary judgment
motions to proceed under Rule 1:1-2(a), which provides that "any rule may be
relaxed or dispensed with by the court in which the action is pending." We also
discern no prejudice because the Carduner Parties cross-moved for summary
judgment. Therefore, we reject the Carduner Parties' argument that the motions
for summary judgment were procedurally defective.
The Carduner Parties also argue that the motion court correctly
reconsidered its March 30, 2023 ruling even though it ultimately reached the
wrong result. In that vein, the Carduner Parties contend the 2021 Agreement
reflects their intent to preserve their claims against their own insurance
carriers—North River and Continental. They further assert the motion court's
reading of the Judgment Reduction Provision in the 2021 Agreement contradicts
a material term in section VI(F) because it renders that provision meaningless.
The Carduner Parties contend section VI(F) excludes existing claims against
their insurers from the impact of the Judgment Reduction Provision.
A-3014-22 34 The Carduner Parties point to the text of section VI(F), "nothing in this
Agreement affects any rights that the Carduner Parties may have against their
insurers," which they contend preserved their intent to assert claims against
North River and Continental. The Carduner Parties contend the drafting history
of the 2021 Agreement supports their position, and preservation of their claims
against North River and Continental was "paramount" to them during the
mediation process.
The Carduner Parties spotlight the language from the initial draft of the
2021 Agreement in June 2021, to the final draft of the 2021 Agreement and
argue the language in section VI(F) is "identical" in each succeeding draft.
According to the Carduner Parties, this history demonstrates the "material
nature" of section VI(F) as a "precondition" to their agreement to mediate. The
Carduner Parties also point out that that section III(A) of the 2021 Agreement—
the Judgment Reduction Provision—was only intended to address liability
"attributable or allocable to Ramp and the Insurance Companies." In addition,
the Carduner Parties assert that section VI(F) does not render section III(A)
meaningless, considering the number of potential third parties who could be
impacted by claims.
A-3014-22 35 North River and Continental counter they are not parties to the 2021
Agreement. They rely on the Judgment Reduction Provision that states:
In addition, the Carduner Parties agree that they will not seek to obtain payment from any other person or entity of any amount of portion of any amount that a court or tribunal finds attributable or applicable to a Releasing Party.
North River and Continental also responded that the Carduner Parties are
included within the definition of "Releasing Parties" contained in the 2021
Agreement, and they are precluded from seeking recovery against anyone,
including the insurers, for any amount attributable or allocable to the "Releasing
Parties." North River and Continental contend they are third-party beneficiaries
of the Judgment Reduction Provision and are thereby protected against any
claims brought by the Carduner Parties against an entity—such as their
insurers—who are not parties to the 2021 Agreement.
This dispute before us boils down to a disagreement over whether the
terms of the 2021 Agreement bar the present claims by the Carduner Parties
against North River and Continental. North River and Continental moved for
summary judgment based on their interpretation of the plain language of the
2021 Agreement. The court's task is to determine the intended meaning of the
release-related language, as expressed within the 2021 Agreement.
A-3014-22 36 The 2021 Agreement is only between the Carduner Parties and the Ramp
parties. Those parties are clearly defined in the 2021 Agreement. The Ramp
parties include the dry-cleaning company and its insurers. There is no dispute
that North River and Continental are not parties to the 2021 Agreement.
Moreover, releases were only given to the parties to the 2021 Agreement, which
we reiterate, did not include North River or Continental. Therefore, we are
convinced the Carduner Parties' claims against North River and Continental
were not released or precluded by the 2021 Agreement.
North River and Continental also misconstrue the cited Judgment
Reduction Provision. That language is only triggered when "a court or tribunal
finds" that some other entity might be required to pay what is "allocable to a
Releasing Party." It is plainly stated that a court or tribunal has to make that
determination. Consequently, we conclude the Carduner Parties can pursue their
claims against North River and Continental, and the 2021 Agreement does not
bar those claims. Ultimately, if the Carduner Parties obtain a judgment, the
court or tribunal granting that judgment will have to determine if any of that
amount is the responsibility of Ramp or its carriers and then deduct that amount
from the judgment.
A-3014-22 37 Based upon our de novo review, we reverse and vacate the March 31, 2023
order granting summary judgment to the Carduner Parties' insurers and the
May 11, 2023 order denying reconsideration.
III.
This matter is remanded, and the Carduner Parties can pursue their
pending claims against North River and Continental. As already noted, if the
Carduner Parties are successful on their claims, the motion court will need to
determine whether that recovery is "attributable or applicable to a Releasing
Party" under the 2021 Agreement, and, if so, deduct that amount from the
recovery.
Affirmed in part, reversed and vacated in part, and remanded. We do not
retain jurisdiction.
A-3014-22 38