N.J. day-care owners, factory liable for $6 million cleanup

A New Jersey Superior Court judge has ordered the multiple owners of a building that had housed a contaminated thermometer factory and then was converted into a day-care center known as Kiddie Kollege to pay a total of $6.13 million for the cleanup they failed to do and for punitive damages.

More than 100 infants and children were exposed to mercury vapors in the day-care center for up to 18 months after it opened in Franklin Township, Gloucester County, in 2004. After the story grabbed national attention, changes were made in New Jersey and elsewhere and day-care facilities were subject to more thorough inspections.

In an 11-page decision, Judge Anne McDonnell held the former factory owner, Philip J. Giuliano, and his now-defunct Accutherm manufacturing company liable for $4.09 million in punitive damages for abandoning the building after the state Department of Environmental Protection ordered the mercury spills remediated.

She also said Giuliano should share the $2.04 million cost of cleaning up the site and demolishing the building with another responsible party, Jim Sullivan Inc. and its principals. Jim Sullivan III and his family, who owned a real estate business, acquired the building through a tax-delinquency foreclosure and leased it to the day-care operators. The building was razed in 2010.

Acting Attorney General John J. Hoffman announced the judge's decision Thursday, calling it "a very significant legal win" for the public and for the state's environmental protection efforts. "It is only fitting that the original polluters - as well as those who bought the property from them and leased it to others without doing their homework - are held accountable." The state Attorney General's Office had filed a motion for summary judgment to recoup the money the state paid for the cleanup and to assess damages against Giuliano.

Giuliano, who had filed for bankruptcy and then moved to Virginia, said "no comment" when reached by phone Thursday.

Richard Engel, a deputy attorney general who filed the motion, said Giuliano's bankruptcy had been denied by a judge and he just "walked away" from the site, ignoring DEP orders.

Jim Sullivan III, who had operated a real estate company next to the former factory, did not return calls for comment. His lawyer, Alan Milstein, said an appeal was planned.

Jeff Tittel, director of the New Jersey chapter of the Sierra Club, which lobbied for reforms after contamination at the day-care center was discovered, issued this statement: "One of the worst nightmares in New Jersey's long toxic history is finally coming to an end. . . . This court decision is a victory not only for the environment but for all those children and families that suffered because of what happened at that day-care center." He said the state ordinarily files only two lawsuits a year to recoup cleanup costs from polluters.

The DEP abruptly closed Kiddie Kollege in July 2006 after several tests determined the vapors, which can cause brain and kidney ailments, were found in concentrations 30 to 50 times the acceptable level. Several months earlier, a DEP inspector was surprised to see children in the building, which was on the state's contaminated sites list awaiting cleanup.

Though the Sullivan family denied knowing the site was contaminated, the judge said they could have found out about it had they done research on the building, or "by following their attorney's advice to engage an environmental professional to assess the property before proceeding to foreclose on the tax-sale certificates."

After a class-action lawsuit was filed on behalf of the Kiddie Kollege children, a trial was held, and former Judge James Rafferty found the state DEP, county, town, and the owners of the building negligent. The various government agencies had oversight over the day-care center but failed to prevent the children's exposure, the judge said in a 2011 ruling. He established a $1.5 million medical-monitoring fund to cover neuropsychological testing for the children through their mid-20s.

But only about 30 children participated in the annual testing, about to enter its third round. Many parents said the testing was too late to be significant because the children were exposed to the toxics six years earlier.

Tina DiSilvio, a Franklin mother of two children who attended Kiddie Kollege, said the parents' worries persisted, though she has moved on.

None of the parents have sued for damages for their children, she said, because most are discouraged by the lengthy legal process.

A baby who suffered seizures while attending the day care stopped having them after Kiddie Kollege closed, DiSilvio said, but the parents would rather focus on their child than litigation.

"It took six years before the testing was ordered," she said. "And now it took a full eight years from start to finish for a judge to say who's responsible for the cleanup."