MORETRAN REALTY, LLC VS. BALDEV PATEL AND SON, LLC(L-9032-14, BERGEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-2753-15T3

MORETRAN REALTY, LLC,

Plaintiff-Appellant,

v.

BALDEV PATEL AND SON,
LLC, BALDEV PATEL and
CHETAN PATEL,

Defendants-Respondents.

______________________________________

Argued February 14, 2017 – Decided August 23, 2017

Before Judges Messano and Espinosa.

On appeal from Superior Court of New Jersey,
Law Division, Bergen County, Docket No. L-
9032-14.

John R. Edwards, Jr., argued the cause for
appellant (Price, Meese, Shulman & D'Arminio,
PC, attorneys; Mr. Edwards, on the briefs).

Douglas J. Kinz argued the cause for
respondent.

PER CURIAM

Plaintiff Moretran Realty, LLC, purchased commercial real

estate property (the Property) from defendant Baldev Patel and
Son, LLC (Seller) for $1.6 million. The parties agreed to escrow

$100,000 for environmental issues pursuant to an escrow agreement

that also required personal guarantees from defendants Baldev

Patel and Chetan Patel (collectively the Patels).1 This appeal

concerns the disposition of the escrowed funds, each side claiming

entitlement to the funds. Plaintiff appeals from an order that

denied its motion for partial summary judgment and granted summary

judgment to defendants, dismissing the complaint with prejudice.

We affirm.

I.

When Seller purchased the Property in 2009, its commercial

lender obtained a Phase I Environmental Assessment Report that

identified two environmental issues on the Property. Both issues

concerned contamination discovered after the removal of two 1,000-

gallon underground heating oil storage tanks (UST) in 1999 and

2005.

Groundwater near the first UST was contaminated with gasoline

constituents that were determined to have migrated from the

adjacent U-Haul facility. Following remediation efforts under the

supervision of the New Jersey Department of Environmental

1
Because they share the same surname, we refer to these defendants
by their first names; we mean no disrespect.

2 A-2753-15T3
Protection (NJDEP), the NJDEP issued a No Further Action (NFA)

letter for the Property regarding the removal of this UST. The

second UST was found to have leaked, resulting in soil and

groundwater contamination. Following remediation efforts, NJDEP

issued an NFA letter for this UST in 2009.

In March 2012, plaintiff entered into a contract with Seller

to purchase the Property. During the ninety-day inspection period,

plaintiff's attorney sent written notice to defendants that

plaintiff elected to terminate the contract because it had

"discovered various unacceptable conditions at the Property

including . . . environmental areas of concern and significant

defects in the structure of the building and its systems."

The environmental areas of concern (AOC) were identified in

a report prepared by TRC Environmental Corporation (TRC) following

its inspection of the Property.2 TRC reported it had identified

eighteen AOCs. It recommended "additional information or further

investigation for" five AOCs:

AOC 2c Abandoned Fuel Oil UST (Unknown
Capacity)
AOC 2d Abandoned 2,500-Gallon #2 Fuel Oil
UST
AOC 9 Inactive Production Well
AOC 11 Off-Site Impacts
AOC 12 Debris Piles

2
The report provided in Plaintiff's appendix is titled,
"Preliminary Assessment/Phase I Environmental Site Assessment
Report" and is labeled "DRAFT" throughout.

3 A-2753-15T3
 TRC recommended "No Further Action . . . for the remaining

AOCs." Among those were AOC 2a and AOC 2b, which referred to the

1,000 gallon USTs removed in 1999 and 2005, respectively, and

which were the subjects of NFA letters from the NJDEP.

Plaintiff's counsel wrote a letter to defendant's attorney,

dated June 25, 2012, that "confirm[ed] the terms upon which"

plaintiff was willing to proceed with the sale. The letter set

forth a number of modifications to the contract of sale, including:

1. The contract price is to be amended to
$1,477,000.00. It is specifically understood
and agreed that the [P]roperty is being sold
physically, "as-is" except for the noted
issues stated herein;
2. The sum of $100,000.00 will be escrowed
at closing, to be held in trust by [S]eller's
attorney, for environmental issues related to
the two (2) underground storage tanks, and the
contamination generally identified by U-Haul.
The $100,000.00 shall be released upon the
sooner of six (6) months from the closing or
U-Haul assuming without reservation the clean-
up of the subject [P]roperty. In the event
that a Phase-I report by the lender shall
reveal any additional environmental issues,
the seller shall be entitled to cancel the
contract unless the buyer waives the
additional issues found. Additionally,
[Baldev Patel and Chetan Patel] will
personally hold [plaintiff] harmless from any
environmental issues related to the two (2)
underground storage tanks, and the
contamination generally identified by U-Haul
on the [P]roperty. The personal guarantees
shall be released upon U-Haul assuming the
clean-up as above referenced;

4 A-2753-15T3
 3. A phase I report must be accepted by
[plaintiff's] lender so the transaction may
be financed as contemplated;
4. The closing will be July 17, 2012,
subject to the substantive and scheduling
requirements of the lender; . . . .

[(Emphasis added).]

Both parties agree the closing occurred on September 11,

2012. The parties executed an escrow agreement that incorporated

terms agreed upon in the June 25, 2012 letter:

[T]he parties have agreed that an escrow shall
be established and an escrow agent shall be
appointed to enable certain environmental work
to be completed, as further described herein,
and for [plaintiff] to receive the appropriate
documentation of completion of the
environmental work . . . .

2. Seller and [plaintiff] agree that the
Escrowed Funds will be held in trust by the
Escrow Agent, for environmental issues related
to the two (2) underground storage tanks on
the Property, and the contamination generally
identified by U-Haul. The Escrowed Funds
shall be released upon the sooner of six (6)
months from the closing date, or U-Haul
assuming without reservation the clean-up of
the Property.

3. Baldev Patel and Chetan Patel jointly,
severally and personally will hold [plaintiff]
harmless from any environmental issues related
to the two (2) underground storage tanks, and
the contamination generally identified by U-
Haul on the Property. The personal guarantees
shall be released upon U-Haul assuming without
reservation the clean-up of the Property.

5 A-2753-15T3
 According to a certification submitted by John Muchmore, the

sole principal of plaintiff, "U-Haul took the position it was not

responsible for any of the clean-up" after the closing. The

parties extended time periods to further investigate the

possibility that U-Haul would assume responsibility for the clean-

up but U-Haul continued to deny any responsibility.3 Plaintiff

made numerous demands for defendants to take care of the clean-

up; defendants refused to do so or release the escrowed funds for

plaintiff to use for clean-up costs. Muchmore certified further

"[t]he Property was contaminated at and prior to the . . . sale"

and that "defendants are solely responsible for the costs" which

plaintiff has incurred and will incur.

In the certification he submitted in opposition to

plaintiff's motion, Chetan stated there was no contamination on

the Property and no clean-up necessary at the time of the closing.

Remediation of the U-Haul site continued under the direction

of Environmental Resources Management (ERM). In January 2013, ERM

conducted groundwater sampling of eleven monitoring wells on the

U-Haul site. Finding no excess levels of the gasoline constituents

in wells close to the Property, ERM concluded there was no evidence

3
This assertion was not supported by any corroborating evidence
and was disputed.

6 A-2753-15T3
of any contamination migrating from the U-Haul site and that no

clean-up was necessary on the Property.

When the six-month period expired, plaintiff's counsel

requested an extension for ninety days. He also demanded the

escrowed funds not be released and that Seller "immediately

undertake the required clean-up, including . . . the groundwater

remediation." A letter from plaintiff's counsel, dated April 5,

2013, confirms that defendants did not agree to the extension.

An email, dated July 26, 2013, from Alex Yankaskas, Vice

President of Environmental Compliance Monitoring, Inc. (ECM), a

licensed site remediation professional (LSRP), to plaintiff's

counsel provided his interpretation of a report on groundwater

sampling information from the U-Haul site. Yankaskas stated, "At

this first, quick glance, this does not appear to support a strong

contention relative to an off-site source migrating eastwardly."

Although the email stated Yankaskas would take a more thorough

look at the report, there is no evidence that his conclusion was

altered by further review.

Plaintiff's counsel asserted that he and Yankaskas had

conversations with defendants' former attorney, Bennett

Wasserstrum, that purportedly reflected an agreement by defendants

"to do the work they were obligated to do" regarding the site.

7 A-2753-15T3
 In an email relied upon by plaintiff dated March 26, 2014,

Yankaskas states:

I reached and spoke with Bennett Wasserstrum
just now. He is onboard with our recent
discussions. We will provide him a proposal
this week for the borings.
One point that came to mind relative to
Patel vs. [plaintiff] as the client: The
results will be the client's (whomever that
may be) and therefore, there should be an
agreement between the parties to share those
findings.
As part of that agreement, it would be
prudent to add/confirm mutual objectives for
the work, especially given the potential LSRP
aspect (if on-site contamination is
confirmed).

[(Emphasis added).]

ECM presented the following Proposed Scope of Work:

The proposed investigation will consist of a
limited soil boring and ground water sampling
program and associated reporting. This
program is designed to assess general
environmental conditions relative to two
[USTs] previously removed from the site and
potential gasoline groundwater contamination
migrating from the adjacent (U-Haul) site.

A draft agreement prepared by plaintiff's attorney stated the

parties agreed ECM would "conduct the investigation and take the

LSRP position in remediating the [P]roperty as required by existing

law." This agreement was never executed.

Plaintiff brought this action, seeking declaratory judgment

pursuant to the Spill Compensation and Control Act, N.J.S.A. 58:10-

8 A-2753-15T3
23.11 to -23.24, that defendants are jointly and severally liable

for all investigatory, cleanup and removal costs and expenses and

also seeking treble damages and indemnification. In addition,

plaintiff alleged causes of action based on negligence, strict

liability, nuisance, breach of contract and indemnification from

the Patels pursuant to their personal guarantees. Defendants

filed an answer and counterclaim in which they demanded judgment

against plaintiff compelling the release of the escrowed funds.

Plaintiff filed a motion for partial summary judgment, to compel

the release of the escrowed funds for it to use for clean-up costs

and to require the Patels to be liable for those costs. Defendant

filed a cross-motion for summary judgment, seeking the dismissal

of the complaint and release of the escrowed funds.

At oral argument, defense counsel argued plaintiff had

produced no evidence of contamination to support its claims.

Plaintiff contended such evidence existed, citing a reference in

a certification from Wasserstrum to TRC's recommendation for

"further investigation" regarding two USTs, AOC 2c and AOC 2d, one

2,500 gallon tank and the other of unknown capacity. In the

certification, Wasserstrum maintained there was no contamination

associated with these two tanks. He further asserted that

plaintiff's concern and the subject of the escrow agreement were

the two USTs removed from the Property in 1999 and 2005.

9 A-2753-15T3
 The trial judge denied plaintiff's motion for partial summary

judgment, granted defendants' cross-motion for summary judgment

and set forth her reasons on the record. She stated:

Plaintiff has conceded that U-Haul refused to
assume responsibility for any cleanup of the
[P]roperty since its testing revealed no
evidence of ongoing contamination and the need
for any such cleanup. Accordingly, more than
six months have passed from the closing date,
under the express language of the
agreement . . . the escrow funds must be
released.

The trial judge also noted the existence of evidence to

support the conclusion that there was no contamination on the

Property and the absence of evidence to the contrary.

In its appeal, plaintiff argues summary judgment should not

have been granted4 because there were genuine issues of material

fact (Point I), the matter was not ripe for summary judgment (Point

II) and the trial judge erred in making factual determinations

based on information that related to the U-Haul site rather than

to the Property (Point III). After reviewing these arguments in

light of the record and applicable principles of law, we conclude

they lack merit and further, the arguments raised in Points II and

III require no discussion. R. 2:11-3(e)(1)(E).

4
Plaintiff has not argued the trial judge erred in denying its
motion for partial summary judgment.

10 A-2753-15T3
 II.

In reviewing a decision on a summary judgment motion, we view

the evidence "in the light most favorable to the non-moving party,"

Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 529 (1995),

to determine whether the competent evidential materials presented

"show that there is no genuine issue as to any material fact

challenged and that the moving party is entitled to a judgment or

order as a matter of law," R. 4:46-2(c).5

In Cortez v. Gindhart, 435 N.J. Super. 589 (App. Div. 2014),

certif. denied, 220 N.J. 269 (2015), we described the proofs

necessary to defeat a motion for summary judgment:

[T]he opponent must "'come forward with
evidence' that creates a genuine issue of
material fact." "An issue of fact is genuine
only if, considering the burden of persuasion
at trial, the evidence submitted by the
parties on the motion, together with all
legitimate inferences therefrom favoring the
non-moving party, would require submission of
the issue to the trier of fact."

5
Plaintiff was required and did not support its motion with a
statement of material facts that includes

a citation to the portion of the motion record
establishing the fact or demonstrating that
it is uncontroverted. The citation shall
identify the document and shall specify the
pages and paragraphs or lines thereof or the
specific portions of exhibits relied on.

[Rule 4:46-2(a).]

11 A-2753-15T3
 Although we must view the "evidential
materials . . . in the light most favorable
to the non-moving party" in reviewing summary
judgment motions, we emphasize that it is
evidence that must be relied upon to establish
a genuine issue of fact. "Competent
opposition requires 'competent evidential
material' beyond mere 'speculation' and
'fanciful arguments.'"

[Id. at 605 (citations omitted).]

The issues presented by this appeal concern a question of

law, the interpretation of the escrow agreement language, and a

question of fact, whether the evidence supported the disbursement

of the escrowed funds to Seller.6

A.

Because the interpretation of a contract is a question of

law, our review is de novo. Kieffer v. Best Buy, 205 N.J. 213,

222 (2011). "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." Id. at 223. Contractual

terms should be read and interpreted by using "their plain and

ordinary meaning." M.J. Paquet, Inc. v. N.J. Dep't of Transp.,

171 N.J. 378, 396 (2002). However, "[i]f the terms of the contract

are susceptible to at least two reasonable alternative

interpretations, an ambiguity exists," Chubb Custom Ins. Co. v.

6
Defendants concede that their agreement to indemnify plaintiff
survives the dismissal of plaintiff's complaint.

12 A-2753-15T3
Prudential Ins. Co. of Am., 195 N.J. 231, 239 (2008), and extrinsic

evidence may be used to discern the parties' intent, Conway v. 287

Corp. Ctr. Assocs., 187 N.J. 259, 270 (2006).

Neither party contends the language of the escrow agreement

is ambiguous and we agree. The funds were explicitly "held in

trust . . . for environmental issues related to the two (2)

underground storage tanks on the Property, and the contamination

generally identified by U-Haul." The escrow agreement also

established the criteria for the release of the escrowed funds:

"The Escrowed Funds shall be released upon the sooner of six (6)

months from the closing date, or U-Haul assuming without

reservation the clean-up of the Property."

The parties agree the closing occurred on September 11, 2012.

It is also undisputed that U-Haul never assumed responsibility for

a clean-up of the Property and, in fact, affirmatively disclaimed

any responsibility for a clean-up. Contrary to plaintiff's

assertion, there is no evidence in the record that defendants

agreed to an extension of the six-month period. Therefore, the

escrow agreement provided for the release of the escrowed funds

at the end of the six-month period.

B.

Plaintiff contends summary judgment should not have been

granted because it presented evidence in the form of "the no

13 A-2753-15T3
further action letter, the TRC report and the proposed scope of

work to be done sent on March 31, 2014" that established a genuine

issue of fact as to the existence of contamination on the Property.

We disagree.

As we have noted, the escrow agreement called for the release

of funds no later than six months after the closing. The discovery

of any contamination on the Property thereafter would not,

therefore, have any bearing on whether the escrowed funds should

be released. Plaintiff has produced no evidence of any

contamination from "the two (2) underground storage tanks on the

Property, and the contamination generally identified by U-Haul"

within that six-month period. The ERM tests done in January 2013

found no evidence of any contamination migrating from the U-Haul

site, the basis for U-Haul's conclusion that no clean-up was

necessary on the Property. Plaintiff has presented no evidence

that refutes that conclusion within the six-month period.

Even if we review the record beyond the six-month period,

plaintiff has still produced no evidence of actual contamination

relating to the issues identified in the escrow agreement. At

best, plaintiff has produced a proposal from ECM to conduct

investigative borings. But even in making the proposal in March

2014, Yankaskas referred to activity that would occur "if on-site

contamination is confirmed." (Emphasis added). Thus, even a year

14 A-2753-15T3
after the escrow period had expired, there was no proof of

contamination relating to the USTs referenced in the escrow

agreement or contaminants that had migrated from the U-Haul site.

Affirmed.

15 A-2753-15T3