June 07, 2016 Articles

New Jersey Appellate Division Declines to Impose Personal Liability for Cleanup Costs

A mere assumption, the Appellate Division emphasized, is entirely insufficient to justify piercing a corporate veil.

By John J. DiChello – June 7, 2016

One company executive is breathing a sigh of relief following a recent decision by the Appellate Division of the Superior Court of New Jersey in New Jersey Department of Environmental Protection v. Navillus Group,No. A-4726-13T3, 2016 N.J. Super. Unpub. LEXIS 77 (N.J. Super. Ct. App. Div. Jan. 14, 2016). The Appellate Division in Navillus Grouprefused to pierce the corporate veil and hold the principal of a family-owned company personally liable for a judgment of $2 million under New Jersey’s Spill Compensation and Control Act, N.J.S.A. §§ 58:10-23.11 to 58:10-23.24. While the principal escaped personal liability for cleanup costs under the particular facts of the case, the ruling underscores the importance of observing corporate separateness requirements and taking precautions to avoid imposition of personal liability on officers, directors, shareholders, and members of a corporate entity.

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