Opinion
DOCKET NO. A-4708-13T2
10-21-2016
STATE OF NEW JERSEY, DEPARTMENT OF ENVIRONMENTAL PROTECTION, Plaintiff-Respondent/Cross-Respondent, v. CENTENNIAL LAND & DEVELOPMENT CORP., DEVEL, LLC and STEPHEN D. SAMOST, Defendants-Appellants/Cross-Respondents, and TOWNSHIP OF MEDFORD and COUNTY OF BURLINGTON, Defendants-Respondents/Cross-Respondents, and JOSEPH SAMOST, Defendant-Respondent/Cross-Appellant, and CENTENNIAL PINES CLUB, Defendant-Respondent Third-Party Plaintiff/Cross-Appellant, v. JOSEPH SAMOST, Third-Party Defendant/Fourth-Party Plaintiff, v. STEPHEN D. SAMOST, Fourth-Party Defendant.
Paul A. Leodori argued the cause for appellants Centennial Land & Development Corp. and Devel, LLC (Mr. Leodori, on the joint brief). Peter J. Boyer argued the cause for pro se appellant Stephen Samost (Hyland Levin, LLP, attorneys; Stephen Samost, pro se, on the joint brief). Aaron A. Love, Deputy Attorney General, argued the cause for respondent Department of Environmental Protection (Robert Lougy, Acting Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Mr. Love, on the brief). Christopher J. Norman argued the cause for respondent Township of Medford (Raymond, Coleman, Heinold & Norman, LLP, attorneys; Mr. Norman, on the brief). James J. Madden argued the cause for respondent County of Burlington (Madden & Madden, P.A., attorneys; Mr. Madden, on the brief). Jay H. Greenblatt argued the cause for respondent/cross-appellant Centennial Pines Club (Greenblatt & Laube, P.C., attorneys; Mr. Greenblatt, on the briefs). Thomas J. Hagner argued the cause for respondent/cross-appellant Joseph Samost (Hagner & Zohlman, LLC, attorneys; Mr. Hagner and Andrew T. McGuire, on the briefs).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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. Before Judges Lihotz, Nugent and Higbee. On appeal from Superior Court of New Jersey, Chancery Division, Burlington County, Docket No. C-77-04. Paul A. Leodori argued the cause for appellants Centennial Land & Development Corp. and Devel, LLC (Mr. Leodori, on the joint brief). Peter J. Boyer argued the cause for pro se appellant Stephen Samost (Hyland Levin, LLP, attorneys; Stephen Samost, pro se, on the joint brief). Aaron A. Love, Deputy Attorney General, argued the cause for respondent Department of Environmental Protection (Robert Lougy, Acting Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Mr. Love, on the brief). Christopher J. Norman argued the cause for respondent Township of Medford (Raymond, Coleman, Heinold & Norman, LLP, attorneys; Mr. Norman, on the brief). James J. Madden argued the cause for respondent County of Burlington (Madden & Madden, P.A., attorneys; Mr. Madden, on the brief). Jay H. Greenblatt argued the cause for respondent/cross-appellant Centennial Pines Club (Greenblatt & Laube, P.C., attorneys; Mr. Greenblatt, on the briefs). Thomas J. Hagner argued the cause for respondent/cross-appellant Joseph Samost (Hagner & Zohlman, LLC, attorneys; Mr. Hagner and Andrew T. McGuire, on the briefs). PER CURIAM
In this protracted litigation, the General Equity judge granted summary judgment to plaintiff, the New Jersey Department of Environmental Protection (the Department), which sought to enforce prior directives to effect repairs and maintenance as required by the Safe Dam Act (the Act), N.J.S.A. 58:4-1 to -14, and the regulations promulgated thereunder, N.J.A.C. 7:20-1.1 to -1.9, known as the "Dam Safety Standards." The dam dispute regards defendants' respective liability to perform repairs and maintenance as owners or persons having control of the Centennial Lake Dam (the dam) and its appurtenances, including the culvert, spillway, and embankments.
The dam, built in 1876 and located in Medford Township, Burlington County, impounds Centennial Lake, which is part of a more than sixty-acre residential development. In 1978, the Army Corp of Engineers identified the dam as Class I "high hazard potential structure" in need of repairs, which later became the basis of a 1979 Department directive for repairs.
The lake's shoreline is approximately 5000 feet and its width varies from 300 feet at the dam to approximately 1200 feet.
In a series of summary judgment opinions, the General Equity judge allocated responsibility among defendants for the cost of dam repairs, engineering studies, and future maintenance. Further, the judge calculated the parties' respective obligation to pay assessed statutory penalties.
On our leave granted, defendants seek interlocutory review of various determinations set forth in several orders leading to the entry of summary judgment. We identify the parties filing appeals and cross appeals.
On September 12, 2014, this court granted Development and Devel's motion for leave to appeal, as within time.
Defendant Centennial Land & Development Corp. (Development), a Pennsylvania holding company, purchased the dam and acreage surrounding Centennial Lake in 1971 to build residential homes. Development owns the dam's spillway and embankment, lakebed, and lands on both sides of Centennial Dam Road. Defendant Devel, LLC (Devel), a holding company, owns the stock of Development. Defendant Stephen D. Samost (Stephen) and his wife solely own Devel and controlled other entities, which owned various residential building lots surrounding Centennial Lake. In 2001, during a separate action, a federal district judge ordered Development to pay for the costs of repairing and improving the dam, its appurtenances, and its embankments and imposed personal liability on Joseph Samost (Joseph) and Stephen. The order was modified in 2004, after Devel acquired the stock in Development, to impose liability upon Devel. Samost v. Samost, Civil Action No. 99-3035 (D.N.J. April 1, 2004).
Collectively Development, Devel, and Stephen appeal from nine orders, which include the following: (1) December 3, 2004, rescinding the Development's deed transferring the lake and dam to the Club; (2) April 26, 2006, denying Development's motion to dismiss the complaint; (3) October 3, 2006, denying reconsideration of the prior orders and denying, without prejudice, partial summary judgment requested by Development, Devel, and Stephen; (4) November 30, 2010, granting summary judgment to the Department; (5) March 23, 2011, granting summary judgment to defendant Centennial Pines Club (the Club) denying summary judgment to defendant Joseph; (6) August 5, 2011, denying the cross-motions for summary judgment filed by Joseph and the Club; (7) March 9, 2012, apportioning liability among defendants and concluding there was no easement in favor of Medford Township; (8) May 30, 2012, denying reconsideration; and (9) June 9, 2014, fixing statutory penalties.
Joseph is Stephen's father. He solely owned Development from 1972 to 2002, when he transferred the corporation to Stephen. During Joseph's ownership, Development owned the lakebed, dam and developable residential building lots surrounding the lake. Over the years, building lots were transferred from Development to entities controlled by Joseph, which ultimately built and sold the homes. By 1983, Development's assets consisted of the lakebed, the dam and one vacant lot. As a result of a 2001 settlement of the federal litigation, Joseph transferred Development to Stephen, and also transferred building lots from his other entities to Stephen's controlled entities.
Joseph filed a cross-appeal from some of the same orders, including orders dated: (1) November 30, 2010; (2) March 23, 2011; (3) August 5, 2011; (4) June 9, 2014; he also appeals from the (5) March 9, 2012 order apportioning liability among defendants; (6) June 20, 2012 order appointing a receiver to effectuate the order fixing liability; (7) October 31, 2012 order granting final summary judgment to the Club, dismissing Joseph's complaint against Development, and denying his motion for summary judgment; (8) December 7, 2012 order denying reconsideration of the October 31, 2012 order; and (9) December 18, 2012 order apportioning payment for engineering costs.
The Club, which was formed in 1956 prior to Development's ownership of the dam, is a non-profit homeowners' association comprised of residents whose homes surround the lake. There are 192 homes in the lake community. Over the years, the Club and Development have disagreed regarding necessary repair and maintenance of the dam. Under a 1985 agreement between the parties, Development had an affirmative obligation to inform the Club of proposed development or changes. Further, the parties executed agreements addressing the use of the lake and engaged in discussions regarding the transfer of title to the lakebed and dam from Development to the Club. The Club filed a cross-appeal challenging identified paragraphs of the November 30, 2010, March 9, 2012, and June 9, 2014 orders.
Burlington County reconstructed the dam's culvert and its spillway. It argues the orders should not be disturbed as the judge properly determined the culvert repaired and not in need of further repairs. In addition, the Township of Medford, which conceded it has an easement to operate and maintain the asphalt roadway and shoulder of Centennial Dam Road, a public thoroughfare over the dam, was dismissed from the litigation by order dated November 30, 2010. The Department did not file a cross-appeal. The receiver appointed to oversee the repair and reconstruction of the dam, J. Llewllyn Matthews entered an appearance, but chose not to formally participate in the appeal.
Record references show the road is also known as Centennial Avenue or Centennial Lake Drive. The record does not contain the easement; however, the municipal tax map includes a fifty-foot right-of-way over the embankment.
We have reviewed the arguments advanced in the appeal and cross-appeals, considered in light of the record and applicable law. We affirm.
I.
The history of the development of the Centennial Lake community, the relationship between the parties and their disputed interests and responsibilities regarding the dam repairs that triggered the Department's involvement are detailed in the written opinions rendered by the trial judge. Specifically, the November 30, 2010 opinion granting summary judgment to the Department, the March 23, 2011 opinion granting summary judgment to the Club and against Joseph, and the June 9, 2014 statement of reasons granting the Department's request for summary judgment for the imposition of penalties. We incorporate these facts by reference.
This action commenced on May 17, 2004. The one-count complaint filed by the Department against Development, the Club, Medford Township, and Burlington County sought an order directing defendants to: (1) prepare a Safety Inspection Report, Emergency Action Plan, Operation and Maintenance Plan, Final Design Report, and permit application to repair the dam; (2) complete all dam repairs; and (3) pay statutory civil penalties for past statutory and regulatory violations.
Apparently reacting to the complaint's filing, Development executed a deed in July 2004 transferring the lakebed and dam to the Club. The Club moved to set aside the transfer until dam repairs were completed. The December 3, 2004 order set aside the transfer and enjoined Development from relinquishing ownership pending the litigation.
Development filed an early motion to dismiss the complaint, arguing the settlement of a prior action filed by the Department, addressed issues also raised in the new complaint. The motion was denied on April 26, 2006. The judge concluded the issues were not resolved in the prior litigation.
The next series of motions included the Department's motion to add Devel and Stephen as party defendants, which was granted; the Club's request to file cross-claims, which was also granted; and Development's motion for reconsideration of the prior orders, which was denied. Development, Devel, and Stephen next moved for partial summary judgment. This motion was denied on October 3, 2006, without prejudice, pending discovery.
The Department requested to amend its complaint a second time, to add Joseph, because he solely owned Development between 1972 and 2002, during which time agency orders to submit required reports, inspect, and repair the dam were ignored. Thereafter, the Club filed a third-party complaint against Joseph, to which he filed a counterclaim and a fourth-party complaint against Stephen.
After extensive discovery, a new judge, now assigned to preside over the matter, reviewed the cross-motions for summary judgment. The Department sought judgment against all defendants for violations of the Act or the Dam Safety Standards and to fix responsivity for dam repairs and maintenance, to achieve the dam's safety. At that time, the Department did not request penalties.
Cross-claims for summary judgment were filed as each defendant disclaimed liability. Development, Devel, and Stephen also sought summary judgment arguing the Department failed to prove the dam was unsafe and asserting the Department improperly classified the dam as a Class I high hazard dam. These defendants also argued res judicata, collateral estoppel, and the entire controversy doctrine required the Department's action be dismissed with prejudice.
Burlington County also filed for summary judgment against Stephen as reimbursement for its expense in reconstructing the dam spillway, at his request, in 1992.
In a twenty-four-page written opinion, the judge rejected the contention charging incorrect classification by the Department as a Class I high hazard dam and concluded the Department justifiably relied upon the determination of the Army Corp of Engineers. She also concluded equitable doctrines did not bar the Department's claims. Finding Development owned the dam, and concluding the Club, Burlington County, Devel, Stephen, and Joseph were "parties in control" of the dam or its appurtenances, as used in the Act, the judge concluded each was liable for repairs, maintenance, and penalty assessments. She granted the Department's motion for summary judgment and imposed liability as follows: ten percent upon the Club; forty-five percent upon Joseph and Development; forty-five percent upon Stephen and Devel.
Burlington County's percentage of liability was deferred, pending further proceedings, in which the judge concluded it had no liability because Burlington County had fully performed its obligation to rebuild the dam's culvert. Medford Township was determined not to be a party in control of the dam as defined under the Act. Its motion for summary judgment dismissal, with prejudice, was granted.
Another round of summary judgment motions resulted in dismissal of Joseph's complaint against Stephen, finding agreements between Joseph and the Club imposed personal liability on Joseph for costs the Club expended on lake and beach maintenance, and costs incurred in the litigation. The order also denied Joseph's motion for summary judgment against the Club, as well as denial of the subsequently filed motion for reconsideration. Further, Burlington County's motion for reconsideration of the dismissal of Medford Township was denied; however, the judge reconsidered the county's motion for reimbursement of prior expenditures for dam repairs claimed against Steven. The dispute between Burlington County and Steven was later resolved.
On June 20, 2012, the judge (1) appointed a receiver to oversee the reconstruction and repair of the dam, including engineering, design, and permitting; (2) created a fund to pay for engineering reports and identified repairs; and (3) ordered defendants to subsidize that fund, initially requiring $10,000 to fund the hiring of engineers to estimate the dam repair work.
The last order entered prior to interlocutory review granted the Department's motion for summary judgment to assess civil penalties for the period from May 1994 through June 2014, assessing $700,000 against Development/Devel, with Joseph and Stephen "jointly liable for the penalties assessed against the corporate entities" and $50,000 against the Club. Burlington County was not assessed.
The requests for leave to appeal were filed. Although undertaking interlocutory review, we did not stay the trial court's orders.
II.
The Act, designed to regulate the construction, repair, alteration, and improvement of dams, was adopted in 1981. L. 1981, c. 249. The Legislature adopted the remedial legislation, after specifically finding "the condition of many dams, lakes, and streams throughout the State has been deteriorating at an alarming rate due to a chronic lack of maintenance," leading to the collapse of dams, which in turn caused "polluted lakes, stream flooding and property damage to homes, businesses, lake communities and public utilities." N.J.S.A. 58:4-11. Consequently, the Department's Commissioner "is vested with sweeping regulatory and enforcement powers," N.J. Dep't of Envtl. Prot. v. Alloway Twp., 438 N.J. Super. 501, 504 (App. Div.), certif. denied, 222 N.J. 17 (2015), not only for the oversight of proposed construction of new reservoirs and dams, but also to "investigate and take appropriate action regarding any dam or reservoir about which the commissioner has a security or safety concern." N.J.S.A. 58:4-1. This includes the right to: "thoroughly inspect" any dam, N.J.S.A. 58:4-4; approve proposals for the repair, alteration or improvement of existing dams, N.J.S.A. 58:4-1; request the preparation of surveys and plans of any dam, N.J.S.A. 58:4-3; take direct action and control of a dam deemed unsafe, N.J.S.A. 58:4-5; and to adopt and enforce the statutory provisions by initiating a civil action seeking injunctive relief, and demanding the payment for costs and civil penalties, N.J.S.A. 58:4-6(a), (c) and (e).
In 1985, the Department adopted the "Dam Safety Standards," which govern the design, construction, inspection, operation, maintenance, modifications, and repair of most dams in New Jersey. 17 N.J.R. 1081(a) (May 6, 1985). The regulations clarify the responsibilities imposed on those who own or have control of the dam or reservoir, mandate the minimum compliance safety standards of the dam and its appurtenances, and define the Department's enforcement powers to achieve these standards. N.J.A.C. 7:20-1.1 to -2.9.
III.
We turn to the arguments raised by Development, Devel, and Stephen. We begin with the challenges to summary judgment granted to the Department for liability to repair and maintain the dam, and to pay penalties, which are numerous.
"An appellate court reviews an order granting summary judgment in accordance with the same standard as the motion judge." Bhagat v. Bhagat, 217 N.J. 22, 38 (2014). We "must review the competent evidential materials submitted by the parties to identify whether there are genuine issues of material fact and, if not, whether the moving party is entitled to summary judgment as a matter of law." Ibid. See also R. 4:46-2(c).
We consider all facts in a light most favorable to plaintiff, the non-movant, Robinson v. Vivirito, 217 N.J. 199, 203 (2014), keeping in mind "[a]n 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." R. 4:46-2(c). "The practical effect of this rule is that neither the motion court nor an appellate court can ignore the elements of the cause of action or the evidential standard governing the cause of action." Bhagat, supra, 217 N.J. at 38.
Since the grant of summary judgment calls for a review of the "trial court's interpretation of the law and the legal consequences that flow from established facts," the trial court's decision is "not entitled to any special deference," and is subject to de novo review. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
Initially, these three defendants contended the judge erred in concluding the Club did not possess an easement for its members' use of the lake and its beaches. Defendants contend the Club, as holder of such an easement, holds sole "responsibility for reconstruction of the dam since they are the parties who will benefit," making the allocated ten percent of liability to the Club erroneous.
An easement is a non-possessory interest in the land of another, entitling the easement holder to use the landowner's property. Borough of Harvey Cedars v. Karan, 214 N.J. 384, 390 n.1 (2013); State ex rel. Comm'r of Transp. v. Dikert, 319 N.J. Super. 310, 316 (App. Div.), certif. denied, 161 N.J. 150 (1999). It is not equivalent to ownership. Seals v. Cty. of Morris, 210 N.J. 157, 177 (2012). When an easement is solely for the benefit of one party, the beneficiary is generally obligated to maintain the easement. See Island Improvement Ass'n of Upper Green Lake v. Ford, 155 N.J. Super. 571, 574-75 (App. Div. 1978) ("Convinced that with the benefit ought to come the burden, absent agreement to the contrary, [the court held] that the obligation to maintain devolves upon the dominant tenant. This is certainly the rule where the easement is solely for the benefit of the dominant estate." (citations omitted)). However, when an easement is jointly utilized for the same purposes by the property owner and the benefited parties or based upon specific agreement between the parties, this general rule changes. Khalil v. Motwani, 376 N.J. Super. 496, 507 (App. Div. 2005); Poblette v. Towne of Historic Smithville Cmty. Ass'n, Inc., 355 N.J. Super. 55, 67 (App. Div. 2002).
In this matter, the original 1957 compact between the Club and Development's predecessor, along with the 1985 amended memorandum of agreement between Development, Joseph, and the Club, expressly reserve the responsibility for lake and dam maintenance to Development. Consistent with the judge's finding, the record contains no document granting an easement. Rather, the Club was afforded use of the lake and beaches, exercised some control over the lake height and waterfront maintenance, and homeowners were permitted to erect docks and other facilities. These agreements addressed the Club's eventual acquisition of the lake and the dam. Specifically, the 1985 "Amended Memorandum of Agreement," executed coincident with the settlement of ongoing litigation clarified "[a]t any time . . . upon the mutual agreement of the parties" or when stated development thresholds of existing lots were reached, Development would
convey to the Club and the Club would accept all right, title, interest and estate in and to the bed of the lake . . . and all dams, sluices and waterways in connection therewith . . . . Pending occurrence of the above events, [Development] will at its own expense, maintain, manage and control property owned by it.
Viewing the unambiguous terms of the parties' agreement, the suggested liability for dam reconstruction rested solely with the Club is specious. We also conclude whether an easement exists does not impact the November 30, 2010 grant of summary judgment relief to the Department. The judge evaluated the rights and responsibilities between Development, its sole owner Joseph, and the Club. See Lake Lookover Property Owner's Ass'n v. Olsen, 348 N.J. Super. 53, 57-60 (App. Div. 2002) (concluding development company, its partners, who owned properties that held easements to use the lake, as well as the homeowners' association were liable for dam repairs). She further appreciated the question of whether obligations were fulfilled or breached "may affect apportionment of liability" between the parties, but whether the Club's rights rose to an implied easement would not affect the Department's imposition of liability on Development, which at all times retained legal ownership of the dam.
We reject defendants' suggestion under a "burdens follow the benefits" theory of responsibility that repair and reconstruction rest solely on the Club. The Act places responsibility on owners and persons controlling the dam who violate the statute and the regulations. Here, Development's obligations for repair, first imposed in 1979, were continuously disregarded. When negotiating the 1985 memorandum of agreement with the Club, Development and Joseph were aware compliance with the 1979 directive was ignored. The 1985 agreement expressly reserved to Development the exclusive right to: determine residential development policies and layout; manage, control, operate, and sell the property it owns," including the dam, lakebed and lots; and retain obligations for their maintenance.
We further disagree Development met the threshold for transfer of the dam and lake to the Club, as well as the contention the 1985 agreement made the transfer self-executing. Development's attempt to legally shift liability by filing a deed was rejected and the deed was vacated.
As Judge Bookbinder found, "[t]he contract to convey the deed requires that [Development] make repairs according to its obligations under its contract with the Club, and also pursuant to New Jersey statutes and regulations." However, following the Army Corps of Engineers's findings the dam's spillway was "seriously inadequate" and "unsafe," the Department, in August and September 1979, directed presentation of studies to assess and complete repairs, as delineated in the Army Corps's report, to assure the dam's safety. These directives were reissued in 1981 and 1982, and were routinely ignored.
Once the Act was adopted, the Department, properly exercising its regulatory authority, inspected the dam and issued a directive for implementation of necessary measures to correct the conditions deemed dangerous. N.J.S.A. 58:4-5(a)(1) to (3). The Department's March 13, 1989 notice reviewed Development's dam safety inspection report and concluded the dam was "safe with repairs necessary" and directed "the spillway structure of the dam was assessed as being inadequate . . . and detailed hydraulic and hydrologic studies by a qualified professional consultant are still required." (Emphasis added).
Judge Bookbinder found Development, as the owner when the needed repairs were first identified, abrogated responsibility. Also, without the Club's agreement, responsibility to fix the dam could not be transferred to the Club. See H.K. v. State, Dep't of Human Servs., 184 N.J. 367, 382 (2005) (holding the transfer of real property requires execution and delivery of a deed by the grantor and acceptance by the grantee).
These arguments were again raised during summary judgment. The reviewing judge considered and rejected the assertion that title to the lake and dam had passed to the Club by operation of law at the time the stated transfer criteria were met.
Indeed, the alternative contention that a misinterpretation of the 1985 agreement transfer provision and rescinding the deed created "a private cause of action" under the Act lacks sufficient merit to warrant discussion in our opinion. R. 2:11-3(e)(1)(E).
Judge Bookbinder's factual findings, adopted by the motion judge when considering summary judgment, are substantially supported by the evidence in the record. We find no flaw in the legal analysis supporting the order rescinding the deed, which will not be set aside.
We also reject claims of lack of economic benefit by these defendants. Joseph, as the owner of Development, transferred the residential lots surrounding Centennial Lake to Stephen and his related corporations, which built more than one-hundred homes.
Development, Devel, and Stephen next contend the Act limits the Department's legal authority against a private dam owner to decommissioning an unsafe dam and does not permit the allocation of financial responsibility to reconstruct the dam. We will not abide by the proffered misreading of N.J.S.A. 58:4-6(c). R. 2:11-3(e)(1)(E).
The Act permits the Department expansive recourse allowing it to seek "such relief as the commissioner may determine," against an "owner or person having control of" a dam, which includes "to cause the alterations, additions and repairs to be made within the time to be limited in the order." N.J.S.A. 58:4-5(b). Although N.J.S.A. 58:4-5(c) permits the Department to impose "the cost of removal of the dam or appurtenant structures located therein undertaken by the department" when an owner or responsible person fails to comply with orders issued pursuant to the Act, this remedy is neither exclusive nor mandatory. N.J.S.A. 58:4-5(d) (governing the Department's right to compensatory damages following its removal of an unsafe dam). Restoration of the site to assure compliance with the Act is also authorized pursuant to N.J.S.A. 58:4-6 (b)(3), (4).
Development next suggests even though it held legal title to the dam, it never had actual control of the dam or its appurtenances freeing it from liability under the Act. Devel and Stephen also seek reversal of summary judgment, arguing they were neither owners nor persons in control of the dam and when the violations occurred, suggested Development and Joseph are liable under the Act. We disagree.
This court recently considered the Act's scope of liability. Alloway, supra, 438 N.J. Super. at 501. In Alloway, we overruled a conclusion expressed in an earlier Chancery Division opinion, stating an "owner" of a dam or reservoir is liable under the Act only if found to have "constructed or exercised some degree of control over the dam or reservoir, or . . . had the legal authority to exercise control." Id. at 513 (overruling in part conclusion found in N.J. Dep't of Envtl. Prot. v. Mercer Cty Soil Conserv. Dist., 425 N.J. Super. 208, 220-21 (Ch. Div. 2009)). Rather, Alloway concluded nothing more than legal ownership of a dam or reservoir was required "to be brought under the enforcement umbrella of the [Act]." Id. at 512-13.
Compliance with the Act and responsibility for the implementation of measures to repair and maintain the dam and its "appurtenant structures" assure public safety is directed to "[a]n owner or person having control of a reservoir or dam." N.J.S.A. 58:4-5(a). "[T]he Legislature intended the [Act] to have the broadest possible remedial application and envisioned enforcement actions against multiple responsible parties." Alloway, supra, 438 N.J. Super. at 513. Therefore, it casts a "broad net" of liability "to protect the public from the loss of life and property in the event a dam fails, regardless of whether it is privately or publicly owned." Id. at 504 (citation omitted). Moreover, "[t]he Commissioner is vested with broad enforcement powers whenever the [Act], 'or any rule or regulations adopted, or permit or order issued pursuant thereto'" is violated. Id. at 505 (quoting N.J.S.A. 58:4-6(a)). Accordingly, we affirm the order imposing liability upon Development as the owner of the dam. Ibid.
Stephen and Devel challenge the trial judge's conclusions finding they too are liable. Conceding the Act's scope is broad, they maintain it cannot extend to include responsible officers of owner corporations. They argue orders imposing liability upon them for costs, maintenance, or penalties must be reversed.
In determining the Legislature's intent, construction must reflect the defined statutory purpose to preserve life and property, and also be construed sensibly in the context of the Legislature's overall statutory scheme. N.J. Dep't of Envtl. Prot. v. Huber, 213 N.J. 338, 365 (2013). In this regard, we must view the Act's provisions comprehensively and "give substantial deference to the interpretation an agency gives to a statute that the agency is charged with enforcing." Saint Peter's Univ. Hosp. v. Lacy, 185 N.J. 1, 15 (2005) (citing Smith v. Dir., Div. of Taxation, 108 N.J. 19, 25-26 (1987)).
The operative phrase of the statute challenged by Devel and Stephen to disclaim liability is found in N.J.S.A. 58:4-5(a). This provision imposes liability "to implement all measures required" under the Act and compel compliance with its provisions and regulations upon "[a]n owner or person having control of a reservoir or dam." Ibid. Similar language appears in several statutory subsections of N.J.S.A. 58:4-5 and -6. The Act's use of the disjunctive "owner or person having control" of a dam signals a Legislative design to expand, not limit, the scope of responsible parties. Alloway, supra, 438 N.J. Super. at 513. Legal responsibility is established by the exercise of control over the dam, even absent legal ownership.
The Act has no specific definition provision, but the regulations define "owner/and or operator" as "any person who owns, controls, operates, maintains, manages or proposes to construct a dam." N.J.A.C. 7:20-1.2. "Person" is defined as "any individual, proprietorship, partnership, association, corporation, municipality, county or public agency." Ibid.
Although Alloway interpreted "[a]n owner or person having control of a reservoir or dam[,]" the matter involved an individual owner of the subject dam, not a corporate owner as is presented here. Defendants Devel and Stephen insist the absence of inclusion of a "responsible corporate officer" within the definitions of "person" restricts the Act's scope and precludes an individual obligation to pay for the dam repairs and maintenance or penalties. We disagree.
As we discussed in Alloway, post-adoption amendments to the Act strengthened the Department's authority giving it the "necessary tools to efficiently enforce the provisions of the [Act]." Id. at 515 (quoting 39 N.J.R. 4894(a) (Nov. 19, 2007)). See also Senate Environmental Committee, Statement to S. 1895 (Oct. 18, 2004) (explaining the amendments as "strengthen[ing] the DEP's authority to take action regarding failing and failed dams and to integrate these measures with the provisions of the [Act]"). The Act's public safety goals stated in N.J.S.A. 58:4-11, as added by these amendments, drive home this point.
Finally, we note the Act includes N.J.S.A. 58:4-6(f), which authorizes criminal prosecution for "a person" who purposely, knowingly, or recklessly violates the Act or its regulations, or who knowingly makes a false statement in any document filed or maintained under the Act. This highlights the Legislature's intent to assure compliance with the Act by those persons controlling corporate entities, which own a dam.
Viewing the legislation as a whole, and considering it within the context of Title 18's legislation designed to protect the State's water resources, which are declared "essential to the health, safety, economic welfare, recreational and aesthetic enjoyment, and general welfare" of the public, N.J.S.A. 58:1A-2, we conclude acts by individuals exercising control of a dam, even if through a corporate entity, fall within N.J.S.A. 58:4-5 and -6.
The trial judge's opinion on this issue reasoned "[t]he Act . . . speaks broadly of 'persons' that 'control' a dam" noting, "the underlying public safety goals of the Act suggest that the term 'person in control' should be construed broadly to include a sole stockholder of the corporate owner of a dam." She considered Devel, as the sole shareholder of Development, had "complete control over the owner of the dam" and, therefore, "must be considered a person with control over the dam." (Emphasis added). Applying the same reasoning, the judge concluded Stephen, who along with his wife, owned and controlled Devel, made him liable as the person who "entirely dominates the sole owner [Development]" and "[a]s a practical matter, he controls [Development], too."
We agree the facts of record support the findings regarding the corporate ownership. Devel, owned principally by Stephen, was created for the sole purpose of holding Development's stock. Further, the record shows Development, as controlled by Joseph and later Stephen through Devel, repeatedly ignored directives from the Department to modify the dam to assure its continued safety. This evidence of their conduct began with the Army Corps of Engineers' 1979 findings of necessary remedial efforts, were followed by the 1981, 1982 and 1985 notices by the Department citing deficiencies needing correction, and reinforced by the 2001 and 2004 orders issued in the federal action reciting obligations to pay the cost of "repairing and improving the Centennial Lake Dam and embankments." Samost, supra, slip op. at 6-7.
The record also shows once the Department insisted Development act to repair the dam, corporate assets were transferred making it unable to comply with N.J.S.A. 58:4-5(a) and related regulations, N.J.A.C. 7:20-1.11(c), -1.2, -1.7(f), 1.11(a).
We are confident the legislative intent of the Act directed to assure public safety, as gleaned from its provisions, cannot countenance avoidance of responsibility by the use of layered corporate structures. See OTR Assocs. v. IBC Servs., Inc., 353 N.J. Super. 48, 51 (App. Div.) ("Where a corporation holds stock of another, not for the purpose of participating in the affairs of the other corporation, in the normal and usual manner, but for the purpose of control, so that the subsidiary company may be used as a mere agency or instrumentality for the stockholding company, such company will be liable for injuries due to the negligence of the subsidiary." (quoting Ross v. Pennsylvania R.R. Co., 106 N.J.L. 536, 538, 539 (E.& A.1930))), certif. denied, 175 N.J. 78 (2002). We conclude the judge properly found Devel and Stephen responsible under the Act. Cf. State, Dep't of Envtl. Prot. v. Ventron Corp., 94 N.J. 473, 502 (1983) (imposing liability on parent corporation as a person "in any way responsible" for discharge of hazardous substances under N.J.S.A. 58:10-23.11g(c) of the Spill Act, for its controlled subsidiary's conduct).
Next, we have considered defendants' arguments suggesting the application of the doctrines of res judicata, collateral estoppel and entire controversy bar the Department's action. We also reviewed the suggestion the litigation earlier initiated by the Department, which was voluntarily dismissed, acts to bar further relief. We reject all of these arguments principally for the reasons stated by the trial judge in her written opinion. R. 2:11-3(e)(1)(A).
We also find unavailing defendants' claim alleging due process violations because an evidentiary hearing was not held. The alleged identified disputes of material fact include whether: Medford held an easement to the roadway; the Army Corps of Engineers's report was accurate and complete; the Department adopted the Class I classification for the dam; Burlington reconstructed the culvert and spillway; or the parties tried to settle the prior litigation initiated by the Department. Our review of the record does not demonstrate a material dispute regarding any of these issues. See Globe Motor Co. v. Igdalev, 225 N.J. 469, 480-81 (2016) (discussing the nature of material disputed facts necessary to defeat summary judgment). See also Shelcusky v. Garjulio, 172 N.J. 185, 200-01 (2002) ("The very object of the summary judgment procedure . . . is to separate real issues from issues about which there is no serious dispute.").
The inclusion of an attack on the Department's classification of the dam, pursuant to N.J.A.C. 7:20-1.8(a), was never the subject of an administrative agency action. Accordingly, the court has no jurisdiction to consider that determination.
Whether Medford held an express easement was not material to determining defendants' liability under the Act. Further, the record unequivocally shows the Department adopted the Class I dam classification, Burlington County reconstructed the culvert and spillway, and the parties tried to settle the prior litigation. Therefore, no genuine issues of material fact were disputed, making consideration of summary judgment proper. W.J.A. v. D.A., 210 N.J. 229, 238 (2012).
Next, these defendants challenge the June 9, 2014 order allocating a $750,000 penalty, imposed pursuant to N.J.S.A. 58:4-6. Development, Devel, and Stephen along with Joseph were ordered to pay $700,000 and the Club was liable for $50,000. Defendants advance several arguments challenging their responsibility to pay penalties and, alternatively, contend the allocation improper and not based upon the evidence of the Club's control and benefits. We are not persuaded the judge erred in her application of N.J.S.A. 58:4-6 or that she abused her discretion in the ordered allocation.
The Act's penalty provisions signal "the Legislature's intent to deter violations." N.J. Dep't of Envtl. Prot. v. Lewis, 215 N.J. Super. 564, 575 (App. Div. 1987). N.J.S.A. 58:4-6(e) mandates
[a] person who violates any provision of the Act or any rule or regulation adopted, or permit or order issued pursuant thereto, or an administrative order . . . or a court order . . . shall be subject, upon order of
a court, to a civil penalty not to exceed [a specific amount] . . . .
The maximum penalties were increased over time as a result of statutory amendments. In 1981, the maximum penalty was $5000 per day; in 2005, this was increased to $10,000 per day; and in 2007, to $25,000 per day.
When imposing penalties, a court may consider, among other things, the number of violations alleged, the frequency of violations, precautions taken to prevent mishaps, the circumstance under which the offenses occurred, and the creation of a dangerous condition. Lewis, supra, 215 N.J. Super. at 574 (citing N.J. Dep't of Health v. Concrete Specialties, Inc., 112 N.J. Super. 407, 411 (App. Div. 1970)). The amount of a penalty imposed falls within the sound discretion of the trial judge. Ibid.
Stephen first suggests the Department waived penalties. The only support for such a claim is a statement found in the Department's reply brief, submitted in support of its summary judgment request for assessing penalties. That brief outlines the basis of liability for the assessment against Development, as the owner of the dam, and Devel because it assumed all liabilities of Development when it acquired all of its stock and states Joseph and Stephen were
individually liable under the Act for payment of this penalty amount, according to
their respective periods of control of [Development] . . . . [The Department] does not seek penalties independently against Joseph Samost and Stephen Samost; instead, they are jointly liable for penalties assessed against [Development] and Devel LLC.The statement was later clarified, based on defendants' misinterpretation, and the Department made clear it was not waiving penalties, which was accepted by the judge. We reject this argument as specious, because the assertion is untethered not only to the context of surrounding arguments in the Department's brief, but also to the overall pleadings and submissions in the litigation.
Next, Devel and Stephen maintain the Act imposes penalties for direct actions and not "corporate successor liability." Stephen maintains the Department never issued an order against him directly. He reasons, absent his proven breach of a Department or court order directed to him, he cannot be liable for a penalty assessment. This argument ignores the facts and legal basis for concluding Stephen was a person having control of the dam, which is squarely grounded on the Act's design to protect the public from flooding caused by a private owner's failure to adequately maintain an unsafe dam, which is an "abnormally dangerous" act. Ventron, supra, 94 N.J. at 488.
As we discussed, the Act is a public welfare statute awarding the Department "sweeping regulatory and enforcement powers." Alloway, supra, 438 N.J. Super. at 504. Its purpose is to protect public health, safety and welfare, and prevent public harm from events which the public cannot act upon to protect itself by imposing liability upon all controlling actors. Devel and Stephen controlled Development, the legal owner of the dam, which chose to ignore its obligations under the Act.
In Alloway, although not indicative of ownership under the Act, we found these factors helpful when determining the allocation of liability to repair a dam:
(1) The nature and extent of any legal title to the underlying real property;A party's present or past performance in maintaining the dam is a related factor. Also, we agree consideration of benefits received by responsible parties should be weighed.
(2) Whether the alleged owner constructed or participated in the structure's construction;
(3) Whether the alleged owner controls, ever controlled, or participated in the control of the structure to more than a de minimis extent; and
(4) Whether the alleged owner has legal authority to exercise control of the structure.
[Alloway, supra, 438 N.J. Super. at 511 (quoting Mercer Cty. Soil Conservation Dist., 425 N.J. Super. 208, 223 (Ch. Div. 2009)).]
The record contains an order and a Department notice was issued directly to Stephen to repair the dam. The responsibility of Development, Devel, and Stephen to act was stated in the federal litigation. The 2001 order provided Stephen must pay the "cost of repairing the culvert, bridge and associated walkways and bikeways as well as the cost of repairing and improving the Centennial Lake dam and embankments." Even though the order was amended in 2004, after Stephen transferred his ownership in Development to Devel, this change in ownership, initiated solely by Stephen to his controlled holding company, does not erase his responsibility. Also, on April 7, 2005, the Department issued correspondence to Stephen notifying him of the need to provide dam repairs.
The fact that further orders from the Department were not directed to Stephen is of no consequence. Before and during this protracted litigation and the federal action that preceded it, longstanding attempts to achieve compliance with dam repairs was well-known by Devel and Stephen, as owners of Development, but never fully addressed. Indeed, in her March 9, 2012 opinion, the judge found from the date of the Department's first directive "until now, the dam had not been made safe." This finding is supported by the evidence in the record. The Department showed Development, Devel, and Stephen failed to commission an emergency action plan and prepare operational and maintenance manuals, N.J.A.C. 7:20-1.7(f), or provide for engineering inspections regularly every two years and formally every six years, N.J.A.C. 7:20-1.11(c).
We also reject the challenge to the allocation of liability, which limited payment by the Club to ten percent. The statute, N.J.S.A. 58:4-6(e), permits penalties to be imposed jointly and severally on two or more owners or persons having control over a dam at different or at the same time for continuing violations of the Act and its regulations. The judge thoroughly considered applicable factors, as outlined in Lewis, supra, 215 N.J. Super. at 574, when imposing liability among the defendants. Specific to the Club, the judge weighed the Club's cooperation with the receiver, noting a "willingness to be part of the solution" was a factor she "considered in imposing the fines." See Alloway, supra, 438 N.J. Super. at 505.
Fortunately, the dam has withstood severe storms and to date all have been spared from the incalculable loss of life and property resulting from the dam's breach. Such a fortuitous result does not mean the dam is safe or that identified remediation is obviated. Claims to the contrary are rejected. R. 2:11-3(e)(1)(E).
We discern no legal error or abuse of discretion. The penalties imposed for their failure to do so will not be disturbed.
IV.
We examine Joseph's arguments presented on cross-appeal. He disclaims responsibility by challenging various orders. In presenting his arguments, Joseph incorporates by reference most of the arguments raised by Development, Devel, and Stephen because he raises the same legal and factual challenges. For the reasons stated above, we reject Joseph's arguments suggesting: (1) as a matter of law, the Act mandates the Department pursue removal of or decommissioning the dam; (2) the judge erroneously created a private right of action to impose liability upon Joseph; (3) there was no procedural error in ordering summary judgment, without a hearing; (4) the Department waived its right to pursue penalties; (5) the imposition of Joseph's obligation to pay statutory penalties was not authorized by the Act; (6) responsibility for the dam and lake automatically transferred to the Club under the terms of the 1985 agreement; and (7) the court erred in rescinding the deed, transferring the lakebed and dam to the Club.
Next, Joseph argues the Department's claims are time barred as untimely. Joseph notes he ended his ownership of Development in 2001, and argues the two-year statute of limitations set forth in N.J.S.A. 2A:14-10, bars relief. Our review of this question is plenary. Town of Kearny v. Brandt, 214 N.J. 76, 91 (2013). We conclude the claim lacks merit.
N.J.S.A. 2A:14-10 states in pertinent part:
All actions at law brought for any forfeiture upon any penal statute made or to be made, shall be commenced within the periods of time herein prescribed:
a. Within 2 years next after the offense committed or to be committed against the statute, when the forfeiture is or shall be limited by the statute to the state of New Jersey only; . . . .
N.J.S.A. 2A:14-10 applies to forfeiture actions filed regarding property used in furtherance of an unlawful activity or the proceeds of an illegal activity. Forfeiture is permitted only when a statutory provision authorizes the remedy. N.J. Dep't of Envtl. Prot. v. Larchmont Farms, Inc., 266 N.J. Super. 16, 32 (App. Div. 1993), certif. denied, 135 N.J. 302 (1994). The Act does not authorize, nor did the Department seek, forfeiture. See N.J.S.A. 58:4-6 (listing permissible remedies provided by the Act). Importantly, enforcement and penalty actions are subject to the ten-year statute of limitations, as provided by N.J.S.A. 2A:14-1.2(a). Here, the judge correctly concluded the Department's action filed in May 2004, could address penalties for conduct occurring from 1994.
The statute states:
Except where a limitations provision expressly and specifically applies to actions commenced by the State or where a longer limitations period would otherwise apply, and subject to any statutory provisions or common law rules extending limitations periods, any civil action commenced by the State shall be commenced within ten years next after the cause of action shall have accrued.
[N.J.S.A. 2A:14-1.2(a).]
Joseph argues the judge also erred in denying his application to bar the Club's claims because they fell outside of the six-year statute of limitations for contract actions. See N.J.S.A. 2A:14-1. We are not persuaded.
First, Joseph never raised the statute of limitations defense as a bar to relief in his answer to the Club's third-party complaint. Statutes of limitations are ordinarily held not to be self-executing and, therefore, are required to be affirmatively pleaded in an answer, or are deemed waived. See R. 4:5-4 ("affirmative defense such as . . . statute of limitations" not pleaded "specifically and separately" are waived); Notte v. Merchs. Mut. Ins. Co., 185 N.J. 490, 500 (2006); Dynasty Bldg. Corp. v. Ackerman, 376 N.J. Super. 280, 286 (App. Div. 2005). Although a party may assert a claim is barred by the statute of limitations when filing for summary judgment because the party fails to state a claim for which relief may be granted, the facts supporting the bar must be evident on the face of the complaint. Prickett v. Allard, 126 N.J. Super. 438, 440 (App. Div.), aff'd o.b., 66 N.J. 6 (1974). Here, a statute of limitations bar is not clear on the face of the complaint.
The Rule was amended effective Sept. 1, 2016 following disposition of this matter.
Second, the Club's third-party complaint acknowledged Joseph paid costs arising before August 29, 2001; however, the 1985 documents also required him to reimburse the Club for lake maintenance costs arising after August 29, 2001. The action, triggered upon the date of the breach, not the date of the contract, see Lynch v. Rubacky, 85 N.J. 65, 70 (1981), timely addressed the Club's alleged claims accruing after that date.
In her order adjudicating the Club's claims, the trial judge held the Club was not entitled to "recovery of a portion of the expense of $1,770.43 incurred in the year 2001."
We also disagree with Joseph's contention that his transfer of the dam in 2001, severed his liability under the Act. The plain language of the statute unquestionably encompasses violations during Joseph's prior control. The fact the Club, Stephen, and Devel were also found to exercise control does not replace Joseph's past control. See Alloway, supra, 438 N.J. Super. at 513 ("[T]he Legislature intended the [Act] to have the broadest possible remedial application and envisioned enforcement actions against multiple responsible parties."). Here, the Department's action sought relief for violations occurring when Joseph solely owned and controlled Development.
Various provisions of the statute support this conclusion. N.J.S.A. 58:4-5(b) permits the commissioner to take "action as authorized . . . against the owner or person having control of the reservoir or dam for such relief as the commissioner may determine." Similarly, N.J.S.A. 58:4-6(c) allows the Department to institute a civil action "for appropriate relief from any violation." The Department's action against all violators was authorized. N.J.S.A. 58:4-6; Alloway, supra, 438 N.J. Super. 514 n.4 ("[The Department's] enforcement powers are not limited to a single 'owner or person in control' of the dam or reservoir.").
Further, the remedy provision found at N.J.S.A. 58:4-6(a) "applies to a person who has violated any provision of the . . . Act." Subsection (c) reinforces the Commissioner's authority to initiate "a civil action in Superior Court for appropriate relief from any violation of any provision of [the Act] or any rule or regulation adopted, or permit or order issued pursuant thereto." Finally, N.J.S.A. 58:4-6(e), authorizing imposition of civil administrative penalties against any "person who violates any provision of [the Act] or any rule or regulation adopted, or permit or order issued pursuant thereto, or an administrative order issued . . . or a court order . . . ."
These unambiguous provisions of the Act do not limit legal actions to a current owner or person currently having control of a dam. Judicial allocation of prospective costs of dam reconstruction and repair may be assessed against the sweeping scope of liable actors. For the reasons stated, we conclude Joseph was liable for past violations and failures to perform dam maintenance and repairs. He also was responsible for penalties related to those violations.
Next, arguing "with the benefit ought to come the burden[,]" Island Improv., supra, 155 N.J. Super. at 574, Joseph contends the judge failed to require the Club's individual homeowners to bear a portion of the cost. We are not persuaded. In the course of the litigation, Joseph did not seek to add individual homeowners as a party; an appeal is inappropriate to rectify this omission. Liability was imposed on the Club, which was joined in the action. Nevertheless, we disagree with a suggestion the homeowners' rights to use the lake and, therefore, benefit from the dam, imposed upon them absolute and sole liability. We need not repeat the basis of Joseph's liability for his violations of the Act and its regulations.
We also refer to the provisions of the 1985 amended memorandum of agreement between Development, Joseph, and the Club, which imposed responsibility for lake maintenance on Joseph and Development, not the Club and its members. --------
We reject as unfounded Joseph's claim that summary judgment was obviated by material factual disputes. He argues he vehemently disputed his level of involvement with the dam, the degree of benefit, and how his inaction caused or perpetuated a violation. We disagree a plenary hearing was required as these questions were fully addressed in the summary judgment record. See Llewelyn v. Shewchuk, 440 N.J. Super. 207, 217 (App. Div. 2015) (emphasizing an evidentiary hearing is not necessary when moving papers fail to demonstrate a prima facie dispute of material fact).
The record supports the summary judgment findings for imposing liability, including: (1) Burlington County paid over $500,000 to repair the dam; (2) the Club, at its expense, obtained permits and regulated the lake's water levels and waterfront for years; (3) Development, Joseph, Stephen, and Devel collectively owned the dam for over thirty-five years and ignored the recommendations of Development's engineers to evaluate the condition of the dam in 1997, and again in 2004; and (4) Joseph controlled Development, which owned the dam in 1979 through 2001 when the Department issued notices of necessary repairs and the need for submissions, all of which were ignored.
Reviewing the claims of the Department, we conclude the summary judgment record did not contain materially disputed facts. The judge properly proceeded to apply the law and enter summary judgment.
Among the legal challenges to the imposition of his obligation to pay statutory penalties, Joseph complains the $15,000 per year assessed between 1994 and 2001 was error because the Department sent notices to Stephen as Development's attorney, not him. The argument is untenable. Joseph knew problems existed with respect to the dam beginning with the issuance of the 1979 Army Corps of Engineers's report recommending specific corrective actions.
Joseph also argues the allocation of the imposed penalties was arbitrary because Burlington County was not included. The judge explained Burlington County had already replaced the culvert and spillway, the dam appurtenances over which it exercised control. The judge's order reflects a reasoned exercise of discretion, which we will not disturb.
We will not review Joseph's challenge, presented for the first time on appeal, asserting the Department's application of penalties was "procedurally defective." We reject the late justification, noting
[i]t is a well-settled principle that our appellate courts will decline to consider questions or issues not properly presented to the trial court when an opportunity for such a presentation is available unless the questions so raised on appeal go to the jurisdiction of the trial court or concern matters of great public interest.
[Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) (citations omitted).]
The next set of arguments challenge the grant of summary judgment in favor of the Club regarding claims in the third-party complaint. Joseph argues the judge erred in misconstruing the agreements executed by Development and the Club, and imposed liability upon him. Our review of issues regarding interpretation of a contract is de novo. Vosough v. Kierce, 437 N.J. Super. 218, 241 (App. Div. 2014), certif. denied, 221 N.J. 218 (2015).
Joseph relies on (1) his assertion that he signed the 1985 agreement with the Club as an "officer of a corporate entity in his corporate capacity" and could not be held personally liable; (2) the settlement and his $50,000 payment ended all liability to the Club; (3) the entire controversy doctrine precludes liability; (4) no facts support a breach of the 1985 agreement; and (5) individual performance was impossible or impractical once Development was transferred to Stephen.
Following our review, we reject each of Joseph's arguments, which we find ignore the facts of record and the applicable law. We affirm the grant of summary judgment substantially for the reasons stated by the trial judge in her March 23, 2011 opinion, which concluded Joseph was personally liable under the 1985 agreement, and the $50,000 settlement did not relate to any and all past and future claims for dam maintenance or repair. R. 2:11-3(e)(1)(A). We also affirm the August 5, 2011 order denying Joseph's motion for reconsideration.
Joseph's final challenge regards the October 31, 2012 order denying his motion to amend his complaint and granting Stephen's motion to dismiss. He argues the judge erroneously rejected his claims for indemnification and denied his motion to amend his pleading. Allowing the amendment of a complaint is a matter addressed to the judge's sound discretion. Kernan v. One Washington Park Urban Renewal Assocs., 154 N.J. 437, 457 (1998). The record here supports the judge's determination.
Joseph filed his fourth-party complaint on December 28, 2007. As the judge noted, nearly five years had elapsed and "[t]he litigation [wa]s too far along and too complex to amend at this time." Substantively, Joseph's claim against Stephen was grounded "exclusively" on the 2001 settlement order in the federal litigation, even though the order was amended in 2004. Further, Joseph moved in the federal court for indemnification, based on the order; his action was dismissed.
We cannot conclude the judge abused her discretion in denying Joseph's request to amend or dismiss the fourth-party complaint for failure to state a claim. The motion was made years after the complaint was filed and the complaint lacked factual support. Pressler, Current N.J. Court Rules, comment 2.2.2 on R. 4:9-1 (2017).
V.
The Club filed a cross-appeal attacking allocation of its liability for any repairs and maintenance of the dam. The Club argues the judge erroneously shifted responsibility away from Development. The argument relies on the premise only a dam's owner controls maintenance and repairs and must solely have liability. Factually, the Club notes any action it took to lower the lake was subject to permission from Joseph then Stephen. The Act's imposition of liability on the Club is squarely addressed in Alloway's holding that the Legislature's use of "or" in N.J.S.A. 58:4-5(a) "did not mean that either the 'owner' or 'the person in control,' but not both, could be subject to [the Department]'s enforcement action." Alloway, supra, 438 N.J. Super. at 513. Consequently, the Club's argument seeking to narrow the scope of liable parties is rejected.
Challenging the imposition of the penalty assessment, the Club argues its minor contact with the dam is insufficient to impose liability. Further, the Club argues no penalty is warranted because it: (1) never violated the SDA, its regulations, or the Department's orders; (2) received only a 1990 directive from the Department, which it ignored, but enforcement is precluded by the statute of limitations; (3) expended efforts for years seeking the Department's action against the owners and provided assistance to aid the enforcement of the Act; and (4) did not benefit from the violations.
The record shows the Club controlled the lake's water level for more than forty-five years, paid for and performed some repair work, placed signs pronouncing the area as private property and stating its interest, maintained the waterfront, and hired professionals to conduct engineering. However, the judge's findings were supported by the record also showing the Club failed to perform updated studies of the dam after its own engineer issued recommendations in 2004, and failed to comply with Department's directive to perform engineering studies and prepare the plans and reports mandated by the Act for the dam's safety. As noted, N.J.S.A. 58:4-5(a) requires persons having control of a dam to implement all measures ordered by the Department, including the required plans. The judge also considered the Club's cooperation with the receiver's efforts.
In light of these findings we do not agree the imposition of the penalty was erroneous, Lewis, supra, 215 N.J. Super. at 574, or the amount was an abuse of discretion, see N.J.S.A. 58:4-6(e) (allowing civil penalty "not to exceed $25,000 per day of the violation, and each day during which the violation continues shall constitute an additional, separate, and distinct offense"); N.J.A.C. 7:20-2.6 (providing a matrix to calculate civil administrative penalties under the Act).
VI.
One final issue is raised, not in the appeal or cross-appeals, but presented for the first time in the reply brief filed by Development, Devel, and Stephen. Further, the Department, without benefit of filing an appeal, submits a similar challenge in its responsive brief. Specifically, these parties seek reversal of the November 30, 2010 order dismissing Medford from the litigation, suggesting this court must review the legal issue de novo. We decline to do so.
We decline issues raised for the first time before us in a reply brief. Like Rule 2:5-1(f)(3)(A), which mandates the notice of appeal in all civil actions "designate the judgment, decision, action or rule or part thereof appealed from," our determination not to address issues presented for the first time in a reply brief impacts responding parties' notice of the scope of the appeal. See Borough of Berlin v. Remington & Vernick Eng'rs, 337 N.J. Super. 590, 596 (App. Div.) (stating "[r]aising an issue for the first time in a reply brief is improper" because the parties have not "properly addressed" it), certif. denied, 168 N.J. 294 (2001). Further, the basis of liability now presented requires factfinding on matters not raised or developed before the trial court. See CFG Health Sys., LLC v. Cty. of Essex, 411 N.J. Super. 378, 391 (App. Div. 2010).
The Department's contention is also rejected because it has not filed a notice of appeal. Therefore, the presentation of its challenge to an order is not properly before the court and will not be considered. See 1266 Apartment Corp. v. New Horizon Deli, Inc., 368 N.J. Super. 456, 459 (App. Div. 2004) ("[I]t is clear that it is only the judgment or orders designated in the notice of appeal which are subject to the appeal process and review . . . .").
Any arguments raised by any party on appeal or cross-appeal not otherwise addressed are rejected and deemed to lack sufficient merit to warrant discussion in our opinion. R. 2:11-3(e)(1)(E).
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION