| State of New York v LVF Realty Co., Inc. |
| 2009 NY Slip Op 01103 [59 AD3d 519] |
| February 10, 2009 |
| Appellate Division, Second Department |
| State of New York, Respondent, v LVF Realty Co., Inc., etal., Respondents-Appellants, and Sunoco, Inc. (R&M),Appellant-Respondent. |
—[*1] Robert G. Del Gadio, East Meadow, N.Y. (Bleakley Platt & Schmidt, LLP, White Plains,N.Y. [Susan Galv o and Matthew Parisi], of counsel), for respondents-appellants. Andrew M. Cuomo, Attorney General, Albany, N.Y. (Andrew D. Bing and Kathleen M.Arnold of counsel), for respondent.
In an action, inter alia, to recover damages resulting from the discharge of petroleumpursuant to article 12 of the Navigation Law, the defendant Sunoco, Inc. (R&M), appeals (1), aslimited by its brief, from so much of a judgment of the Supreme Court, Nassau County(LaMarca, J.), entered June 22, 2007, as, upon so much of a jury verdict as assessed a penaltypursuant to Navigation Law § 192 in favor of the plaintiff and against it in the principalsum of $6,000,000, and upon an order of the same court dated June 5, 2007, denying its motionpursuant to CPLR 4404 (a) to set aside so much of the jury verdict as assessed the penaltyagainst it and for judgment as a matter of law, or alternatively, to reduce the amount of thepenalty as excessive, or alternatively, to set aside that portion of the jury verdict as against theweight of the evidence and for a new trial with respect to the penalty, is in favor of the plaintiffand against it in the principal sum of $6,000,000, and (2) from a supplement to the judgmententered February 1, 2008, and the defendants LVF Realty Co., Inc., and Sun Super ServiceCenters, Inc., cross-appeal, as limited by their brief, from stated portions of the judgment which,inter alia, upon so much of the jury verdict as assessed penalties pursuant to Navigation Law§ 192 in favor of the plaintiff and against them in the principal sums of $250,000 and$75,000, upon the denial of their motion pursuant to CPLR 4404 (a) to set aside so much of theverdict as assessed the [*2]penalties against them as excessive oragainst the weight of the evidence and for a new trial with respect to the penalties, and upon somuch of an order of the same court dated March 27, 2007, as denied that branch of the motion byLVF Realty Co., Inc., which was for an award of an attorney's fee against the defendant Sunoco,Inc. (R&M), is in favor of the plaintiff and against them in the principal sums of $250,000 and$75,000, and the defendant LVF Realty Co., Inc., also cross-appeals, as limited by the brief,from stated portions of the supplement to the judgment which, inter alia, is in favor of thedefendant Sunoco, Inc. (R&M), and against it, dismissing its cross claims for fullindemnification and contribution.
Ordered that the appeal by the defendant Sunoco, Inc. (R&M), from the supplement to thejudgment is dismissed as abandoned (see 22 NYCRR 670.8 [e] [1]); and it is further,
Ordered that the judgment is affirmed insofar as appealed and cross-appealed from; and it isfurther,
Ordered that the supplement to the judgment is affirmed insofar as cross-appealed from; andit is further,
Ordered that one bill of costs is awarded to the plaintiffs payable by the defendantsappearing separately and filing separate briefs.
From 1941 to 1985 the defendant Sunoco, Inc. (R&M) (hereinafter Sunoco), owned propertylocated in Inwood (hereinafter the site) upon which a gasoline station was operated. In June 1980the defendant Sun Super Service Centers, Inc. (hereinafter Sun Super), became a tenant at thesite and agreed to operate the site as a Sunoco-brand gasoline station. On or about December 29,1983 Sunoco installed four underground fiberglass gasoline storage tanks. In 1984 Sunocoremoved two steel storage tanks and abandoned two steel tanks in place. On August 20, 1985 thedefendant LVF Realty Co., Inc. (hereinafter LVF), purchased the site from Sunoco andsubsequently, pursuant to a separate agreement, purchased the underground storage system,identified as the four fiberglass tanks. Sunoco continued to supply gasoline to the station andown the gasoline dispensers on the site. In November 1992 LVF was renovating the gasolinestation and, during the excavation, four underground steel tanks were discovered and removed.Subsequently, the State Department of Environmental Conservation (hereinafter the DEC)received an anonymous tip that contaminated soil was being removed from the site. Uponinvestigation, the State determined that the soil around the steel tanks was heavily contaminatedand subsequently discovered additional petroleum product discharges emanating from thevicinity of the fiberglass tanks. From 1993 to 1999 the State submitted several requests to thedefendants directing them to assume responsibility for a full investigation of the contamination.Since none of the defendants fully responded to the State's demands for an investigation of thesource or extent of the contamination, the New York Environmental Protection and Spill Fundpaid for the necessary investigation of the site and incurred costs in the sum of $66,120.95. TheState commenced this action to recover costs incurred for the investigation, remediation, andcleanup of contamination pursuant to Navigation Law § 181 and to impose statutorypenalties against the defendants pursuant to Navigation Law § 192.
In an order dated August 9, 2006 the Supreme Court, inter alia, granted the State's motion forsummary judgment on the causes of action against LVF and Sun Super alleging that theseentities were strictly liable as dischargers for the State's cleanup and removal costs under article12 [*3]of the Navigation Law. The Supreme Court held that theState was entitled to the sum of $64,818.60 plus pre-judgment interest on those causes of action.Subsequently, a jury trial was held to determine, among other things, the defendants' respectiveresponsibilities for the discharges of petroleum products at the site and the amount of penalties tobe assessed against them. The defendants entered into a stipulation at trial (hereinafter thestipulation), which was included in the charge to the jury, providing, in relevant part, thefollowing: "[I]f Sunoco is held to be 100 percent responsible for the oil discharge, LVF and SunSuper are entitled to recover direct and indirect costs, including attorney's fees of this action. IfLVF or Sun Super are in any part at fault with respect to the oil discharge they are not entitled torecover directly costs including attorney's fees of this action."
On November 30, 2006 the jury returned a verdict concluding, inter alia, that Sunoco wasresponsible for 80% of the State's cleanup and removal costs, LVF was responsible for 15%, andSun Super was responsible for 5%. Additionally, the jury assessed penalties in favor of the Stateand against Sunoco, LVF, and Sun Super in the principal sums of $6,000,000, $250,000, and$75,000, respectively, for their failure to "investigate, contain and/or cleanup" the discharges.The court denied the motion of LVF and Sun Super pursuant to CPLR 4404 (a) to set aside somuch of the jury verdict as assessed the penalties against them as excessive or against the weightof the evidence and for a new trial with respect to the penalties. In an order dated June 5, 2007,the court also denied Sunoco's motion pursuant to CPLR 4404 (a) to set aside so much of theverdict as assessed the penalty against it and for judgment as a matter of law, or alternatively, toreduce the penalty as excessive, or alternatively, to set aside that portion of the verdict as againstthe weight of the evidence and for a new trial with respect to the penalty.
In an order dated March 27, 2007 the Supreme Court denied that branch of LVF's motionwhich was for an award of an attorney's fee against Sunoco because, inter alia, the jury did notfind LVF to be without fault under the Navigation Law. Thereafter, judgment was entered onJune 22, 2007 which, among other things, is in favor of the State and against the defendants inthe principal sums of the penalties. A supplement to the judgment was entered on February 1,2008 which, among other things, dismisses LVF's cross claims for full indemnification andcontribution against Sunoco.
Contrary to Sunoco's contentions, the penalty imposed against it pursuant to Navigation Law§ 192 is supported by legally sufficient evidence. To determine, as a matter of law, that ajury verdict is not supported by legally sufficient evidence, there must be no valid line ofreasoning and permissible inferences which could possibly lead rational persons to theconclusion reached by the jury on the basis of the evidence presented at trial (see Mazzella v Capobianco, 27 AD3d532 [2006]; Leha v Yonkers Gen.Hosp., 22 AD3d 809, 811 [2005]). In this regard, the State presented ample evidence ofSunoco's failure to investigate and clean up the contamination despite being aware of thecontamination emanating from the vicinity of the former location of the steel tanks, which hadbeen abandoned by Sunoco. Moreover, without any testing in the former location of these steeltanks, Sunoco summarily informed the State that the contamination on site was not caused by itsprior use of the site.
Additionally, the State presented expert testimony that Sunoco was responsible forcontamination arising from the former steel tank bed, as well as expert testimony that residualpetroleum products had been improperly left in the steel tanks when they had been abandoned inplace by Sunoco. The State's expert witness further testified that releases from the former steeltank [*4]bed had caused extensive contamination to the soil. Insum, the record fully supports the jury's determination of the amount of the penalty imposedagainst Sunoco given the seriousness of its repeated and continuing violations of its obligationsunder the Navigation Law occurring over several years. Further, it should be noted that Sunocoand the State stipulated that any penalty, if applicable, would not accrue until December 17,1999, three years prior to the commencement of this action. Sunoco failed to investigate, contain,and/or clean up the contamination from December 1999 to the date of trial in November 2006.This constituted a continuing violation for which Navigation Law § 192 authorizes thejury to consider a penalty of up to $25,000 per day and, thus, the $6,000,000 penalty was wellwithin the bounds set by the statute.
Similarly, the penalties imposed against LVF and Sun Super also were justified and notexcessive based upon the evidence of their inaction and failure to respond to numerous requestsfrom the DEC to investigate and/or remediate the site despite their knowledge of discharges fromthe areas of the steel and fiberglass tanks (see State of New York v Super Value, 257AD2d 708 [1999]).
As the Supreme Court properly determined in denying LVF's motion for an award of anattorney's fee against Sunoco, the jury's findings, the stipulation, and the Navigation Law,preclude LVF from recovering direct and indirect costs, including an attorney's fee from Sunoco.The stipulation precluded recovery "if LVF or Sun Super are in any part at fault withrespect to the oil discharge" (emphasis added). Although the jury did not find LVF at fault forcausing or contributing to the oil spills from either the steel or fiberglass tanks, the jurydetermined that LVF was at fault for the failure to investigate and clean up the oil discharge. Inthis regard, the jury properly assessed a penalty in the principal sum of $250,000 against LVF,found that LVF was 15% responsible for the State's cleanup and removal costs, and determinedthat LVF should pay 100% of its own cleanup costs. Moreover, the jury's finding that Sun Supercaused or contributed to the oil spill from the vicinity of the fiberglass tanks is another basis toreject LVF's claim for an attorney's fee.
The parties' remaining contentions are either unpreserved for appellate review or withoutmerit. Skelos, J.P., Santucci, McCarthy and Dickerson, JJ., concur. [See 16 Misc 3d1112(A), 2007 NY Slip Op 51398(U).]