LSRP or Non-LSRP?

Projected Future Use of Site, Former Use of Site, and Possible Contaminant(s) at Issue are Key Factors

Experience and Trustworthiness are Major Components to Selecting a Consultant

Spill Compensation and Control Act, N.J.S.A. 58:10-23.11g(d)(5), elements of the defense include:

Acquired property after discharge of hazardous substance

Person did not know, and had no reason to know, that a hazardous substance had been discharged

Person did not discharge the hazardous substance and is not “in any way responsible”

Person gave notice of the discharge after discovery to the NJDEP

To establish that a person had “no reason to know” that any hazardous substance had been discharged:

“the person must have undertaken, at the time of acquisition, all appropriate inquiry on the previous ownership and uses of the property based upon generally accepted good and customary standards”

September 14, 1993 is a key date for the Defense

Post-Sept. 14, 1993 acquisition requires a PA/SI in accordance with NJDEP regulations

Pre-Sept. 14, 1993 acquisition requires a showing that due diligence was in accord with “generally accepted good and customary standards” at the time of acquisition See N.J. Schools Development Authority v. Marcantuone, 428 N.J. Super. 546 (App. Div. 2012)

1) The Existence of a Duty

2) The Breach of that Duty

3) Proximate Causation of Damages

See Conklin v. Hannock Weisman, 145 N.J 395 (1996)

Consultant did not locate former

“degreaser well” during PA/SI. Because concrete was over location of

degreaser well, no contamination was found.

After purchase, significant TCE contamination was detected.

Significant clean-up and litigation costs as a result

PA conducted, found a closed spill in NJDEP

file review that had NFA. Consultant concluded that no further review

was necessary. PA missed the former dry cleaner on the

property during review. Years later, buyer wanted to re-finance and

bank required PA/SI. PCE contamination located on-site

Consultant sued for Negligent Misrepresentation

Buyer hired consultant to conduct due diligence Consultant looked into past uses and uses in

surrounding area and determined that no further environmental investigation was necessary

During development, remains of municipal garbage dump on adjacent property that extended underneath buyer’s property discovered

Consultant sued for professional malpractice Federal District Court articulated standard of care

as what the “reasonable consultant” would do under the circumstances

Attorneys – Yes Petrillo v. Bachenberg, 139 N.J. 472 (1995)

– Attorney for seller of real estate owed a duty to a potential buyer

Engineers – Yes Carvalho v. Toll Bros, 143 N.J. 565 (1995)

– Foreseeable reliance required

Environmental Consultants - ??