Lentz v. Mason

961 F. Supp. 709 (D. N.J. 1997)
  • Opinion Date: April 14, 1997

BROKERS; ENVIRONMENTAL LIABILITY—Just because a real estate broker acted as owner’s agent in arranging for lease of property, the broker is not a “responsible person” under CERCLA and is not liable for environmental mess left behind by evicted tenant.

Homeowners entered into a lease and a contract to sell their house. When the buyer defaulted, the owner had its tenant-buyer evicted. Upon re-entry the owner found metal tubes in the garage which contained hazardous substances. The owner sued the real estate agency and the individual broker who arranged the lease, alleging violation of the Comprehensive Environmental Response, Compensation and Liability Act . The owner claimed that the agency and the broker were liable as equitable owners of the property during the time of the disposal. Alternatively, the agency and the broker were liable under the common law private nuisance doctrine. The agency and the broker moved for summary judgment.

The United States District Court held that the owner failed to allege facts to support the contention that the real estate agency was an “equitable owner”, as that term is defined in the statute, since it never held title to the property or entered into an agreement to purchase or lease it. While the Court stated that owner liability may be extended to a lessee if the lessee participates in the disposal of hazardous wastes, real estate brokers are not lessees. The agency was not an “operator” of the property either, since it did not have control over day-to-day activity on the property. The Court held that mere knowledge of waste disposal is not enough to establish liability without proof of authority over, or capacity to control, activities on the property. The Court found that since the broker had no knowledge of the existence of the hazardous material, the broker was not an “arranger” within the statutory meaning of that term. Just because the broker acted as the owner-seller’s agent in arranging the lease did not mean that the broker “arranged” for the disposal of the hazardous waste. Claims against the broker based on the New Jersey Spill Act were also rejected because the broker lacked control over the premises. Regarding the broker’s liability under the doctrine of private nuisance, the Court found no proximate causation between the broker’s actions and the disposal of the hazardous waste. The Court declined to hold a party that neither owns the property nor creates the nuisance liable for maintaining a private nuisance.