Judge favors landlord of tainted day-care center

The Gloucester County real estate broker who acquired a closed thermometer factory in a tax sale and then rented it to Kiddie Kollege Day Care had not been properly notified by township officials that the building was contaminated, according to a written ruling issued yesterday.

State Superior Court Judge James E. Rafferty voided the deed, which means Jim Sullivan III and his family businesses are not liable for the demolition and cleanup of the Franklin Township site, estimated at more than $1 million and ordered by the state.

State inspectors' discovery three years ago that a day-care center was operating in the contaminated building gained national attention and triggered new laws. As many as 100 babies and children who attended Kiddie Kollege between 2004 and 2006 breathed toxic mercury vapors that health officials say could cause neurological and other ailments.

It's unclear from Rafferty's nine-page decision whether Sullivan and his family businesses, Jim Sullivan Inc. and Navillus Group, would still be liable in the class-action lawsuits and other litigation filed by the children's parents. They want Sullivan and others to pay for medical monitoring for their children. Some parents say the children have exhibited symptoms of mercury poisoning, but whether these symptoms can be clearly linked to the exposure is unknown.

Rafferty found that when Sullivan and his father, Jim Sullivan Jr., acquired the property, they had misunderstood an environmental report that concluded the building posed "no immediate threat" to human health or the environment. They had obtained the report from the township zoning officer.

Other parts of the report said the former Accutherm factory was contaminated with mercury, but noted some areas had low levels of contamination. It also said the building should not be a problem while it was closed.

"It was definitely a mistake," Rafferty said. He said the report contained "numerous scientific terms that would not be understood by a layperson."

Rafferty blamed Franklin Township because its tax collector failed to notify Sullivan in writing, as required by state law, that the former factory was contaminated. Sullivan had purchased a tax-sale lien, and later foreclosed, but said he was unaware of the extent of the contamination. Township attorneys argued that the township had provided a newspaper notice that warned purchasers of tax-sale certificates that any of the properties may be contaminated. But the judge said this was not adequate.

The judge reverted the deed back to the factory owner, Accutherm Inc., and its principal, Philip Giuliano, who declared bankruptcy and abandoned the contaminated building in the mid-1990s. Sullivan and his companies, the judge said, were "in no way involved with the contamination of the property." Giuliano is now responsible for the clean-up and demolition.

The Department of Environmental Protection will now have to get permission to demolish the building from Giuliano, who has moved to Virginia, or a court order. Giuliano ignored previous state orders to clean up the site.

The DEP tried to get access to the site from Sullivan last year to begin demolition, but was rebuffed. It wanted to do the work and later bill Sullivan. His attorney, Richard Hluchan, had argued that Sullivan was not the legal owner because of the township's failure to notify him of the contamination.

Hluchan could not be reached yesterday for comment. M. James Maley Jr., who represented the township, said that he had received the decision late in the day and was reviewing it. Lee Moore, spokesman for the state Attorney General's Office, which represented the DEP in the case, said he had not seen it and would have no comment.