Town recoups $3.8 million for landfill

After six years of litigation and negotiation, the township has reached a settlement agreement with the eighth and final insurance carrier named in its multiparty lawsuit filed to recover the costs of remediating the French's Landfill Superfund site.

The Township Council approved May 17 in executive session the settlement offer of $425,000 proposed by the final litigant - the New Jersey Property Liability Insurance Guaranty Association.

The township recovered $3.83 million in remediation costs from insurance carriers who had sold general and excess liability insurance policies to the township dating back to 1970.

"French's Landfill has been a major issue for every mayor and council since 1970," said Mayor Joseph C. Scarpelli.

In late 1999, the township began exploring the possibility of recovering its past and future landfill remediation costs from its historic insurance carriers. Attorney Kevin Starkey of Starkey, Kelly, Bauer, Kenneally & Cunningham, Brick, was retained to spearhead the township's efforts. Starkey had more than eight years of experience in environmental claims litigation while working for a prominent New York law firm.

Under Starkey's direction in January 2000, the township began filing claims against its historic insurance carriers to recover the costs of 20 years of remediation costs for the French's Landfill. After two years of unsuccessful negotiations, the township filed suit in April 2002 against seven insurance carriers and the New Jersey Property Liability Insurance Guaranty Association (NJPLIGA).

A court-sponsored mediator was brought in to facilitate settlement negotiations. Over the course of the next four years, settlements were reached with all of the insurance carriers and NJPLIGA. NJPLIGA was the final insurance carrier to settle on the eve of trial.

A total of $3.8 million was recovered by the township as compensation for its ongoing and future landfill remediation costs.

The settlements are broken down as follows: Utica Mutual Insurance Co., $1.27 million; Granite State Insurance Co., $400,000; ACE-USA, $700,000; Continental Casualty Co., $500,000; Fireman's Fund Insurance Co., $335,000; North River Insurance Co., $150,000; and NJPLIGA, $425,000.

Though not named in the original suit, another carrier - American Empire Insurance Co. - settled for $46,000.

"Probably the single greatest hurdle in this case was the late notice given to the insurers. The contamination at the landfill was discovered in 1980 but the insurance companies did not receive notice of the claim until approximately 20 years later," Starkey said.

"In the past, the settlement monies have been used in the general operating budget of the township," said Business Administrator Scott R. MacFadden. "Since all of the taxpayers of Brick Township have been paying for the ongoing remediation costs for the landfill, all of Brick Township's taxpayers should benefit from these insurance settlements."

French's Landfill is listed on the U.S. Environmental Protection Agency's Superfund list, yet Brick taxpayers have paid for all of the work done on the landfill. Since 1981, Brick has spent over $4.3 million to remediate the landfill.

Created by state statute, the New Jersey Property Liability Insurance Guaranty Association (NJPLIGA) provides funds to pay claims of insolvent companies. Two of the township's historic insurance carriers - Transit Casualty Co. and Integrity Insurance Co. - are insolvent and thus being handled by NJPLIGA.