In an October 15, 1999 decision, the Appellate Division addressed the issue of a contractor's liability to a subsequent purchaser for failure to discover underground storage tanks. The Court also examined whether storage of gasoline in underground tanks at a gasoline service station was an abnormally dangerous activity for which an operator could be deemed strictly liable.
In this case, the plaintiff purchased a former service station from Exxon Corp. Prior to plaintiff's purchase, Exxon hired Handex of New Jersey, Inc., an environmental consultant, to oversee removal of underground storage tanks on the property. Subsequent to the purchase, plaintiff discovered six additional storage tanks on the site, which Exxon then removed. Plaintiff sued Exxon and Handex for delays to his ability to use the property. The claims against Exxon included one for recovery of damages under strict liability, which the trial judge dismissed. Plaintiff also sued Handex in negligence specifically for failing to discover the tanks. The jury found Handex 15% liable. Handex filed a motion for judgment notwithstanding the verdict, which the trial judge granted.
On review, the Appellate Division upheld the dismissal of plaintiff's negligence claim against Handex, ruling that Handex owed no duty to plaintiff to discover the tanks because Handex owed no duty to Exxon to discover the tanks. The Court emphasized that Exxon retained Handex for the limited purpose of observing and documenting underground tank excavation and performing environmental remediation functions. The Court further noted that Exxon's work orders did not direct Handex to detect or excavate underground tanks.
In addition, the Appellate Division upheld the trial judge's ruling that Exxon could not be held liable under a theory of strict liability because the storage of gasoline in underground tanks at a gasoline service station does not meet all of the requirements for being an abnormally dangerous activity as laid out by the New Jersey Supreme Court in T&E Industries v. Safety Light Corp. The Court found that the strongest support for not characterizing the use of underground gasoline tanks as an abnormally dangerous activity is the fact that such activity is a matter of common usage by gasoline service stations around the country. The court also noted that a service station's value to the community is not outweighed by its dangerous attributes, and that the risk of accident caused by the tanks can be eliminated with reasonable care. DeAngelo v. Exxon Corp. and Handex of New Jersey, Inc., Appellate Division, A-791-98T3.
