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Exxon Mobile Corporation v. Bouras Properties, LLC

A-4357-07T1 (N.J. Super. App. Div. 2009) (Unpublished)

ENVIRONMENTAL REMEDIATION; ACCESS AGREEMENTS — If a site access agreement clearly shows where a remediation system will be located, the party responsible for remediation can reasonably rely upon the explicit scope of work set forth in the agreement and the party whose property is being accessed cannot prevent completion of that remediation work so long as the work being done has been outlined in the agreement.

An oil company was performing environmental clean-up activities at a site where the contamination had invaded a property across the street. A site access agreement was executed permitting access by the oil company to the neighboring site. When levels of certain contaminants exceeded the state’s groundwater quality standards, the New Jersey Department of Environmental Protection (DEP) sought to designate the entire affected area in a way that would temporarily bar use of groundwater. That area included a portion of its neighbor’s property. The neighbor objected to the installation of the remedial system because it would make it, the neighbor, appear to be responsible for the clean-up and would unreasonably interfere with its business operations by blocking a significant number of parking spaces. The neighbor’s refusal prevented the oil company from complying with DEP’s directives and risked the imposition of fines and penalties, so it sued the neighbor seeking to compel it to comply with the site access agreement. The neighbor counterclaimed for damages sustained as a result of the discharge of hazardous substances onto its property.

The lower court ruled in favor of the oil company, holding that the neighbor could not object to the installation of the system and had to let the oil company proceed with obtaining approvals and begin its work. It noted that when the neighbor signed the access agreement, it never asked about the location of the remedial system and the oil company relied to its detriment on the neighbor’s actions. The neighbor appealed.

The Appellate Division affirmed, holding that the neighbor did not resist the oil company’s work plan until it received negative publicity from local residents due to the remediation work on its property. It held that the agreement was clear and unambiguous and its terms must be enforced. The Court found that the agreement detailed the scope of work and included the installation of an extensive remedial system. It also noted that the neighbor never suggested that the scope of work was defective and never asked any questions about the nature or location of the remedial system despite having numerous opportunities to do so. Finally, it ruled that the oil company reasonably relied upon the explicit scope of work and the neighbor’s “compliant conduct,” holding that the neighbor was estopped from preventing completion of the remediation work as outlined in the site remediation agreement.

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