NOT FOR PUBLICATION WITHOUT THE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
MORETRAN REALTY, LLC VS. BALDEV PATEL AND SON, LLC(L-9032-14, BERGEN COUNTY AND STATEWIDE)
Combined Opinion