| Matter of Huntington & Kildare, Inc. v Grannis |
| 2011 NY Slip Op 07774 [89 AD3d 1195] |
| November 3, 2011 |
| Appellate Division, Third Department |
| In the Matter of Huntington and Kildare, Inc., et al.,Petitioners, v Alexander B. Grannis, as Commissioner of Environmental Conservation,Respondent. |
—[*1] Eric T. Schneiderman, Attorney General, Albany (Morgan A. Costello of counsel), forrespondent.
Malone Jr., J. Proceeding pursuant to CPLR article 78 (transferred to this Court by order of theSupreme Court, entered in Albany County) to review a determination of respondent which found thatpetitioners had discharged petroleum on their property.
Petitioner Metz Family Enterprises, LLC (hereinafter MFE) is the successor in interest of petitionerHuntington & Kildare, Inc. (hereinafter H&K) to a parcel of property located in the Town ofGermantown, Columbia County that contains underground storage tanks that were used for the storageof petroleum products. In 2005, the Department of Environmental Conservation (hereinafter DEC)commenced an administrative enforcement proceeding against petitioners, charging them with, amongother things, discharging petroleum at the site (see Navigation Law § 173), failing toimmediately contain a discharge of petroleum (see Navigation Law § 176) anddischarging petroleum into the waters of the state in contravention of water quality standards(see ECL 17-0501; 6 NYCRR 703.5). Petitioners answered and moved to file a third-partycomplaint seeking indemnification and contribution from Stewart's Ice Cream Company, Inc., a former[*2]tenant on the property.[FN1]Following the denial of this motion, a hearing was held and, at the conclusion of the hearing, theAdministrative Law Judge issued a hearing report finding that petitioners were guilty of the violationsalleged in the complaint. Respondent adopted the ALJ's report and ordered, among other things, eachpetitioner to pay a civil penalty in the amount of $15,000 and to submit a work plan to close theunderground storage tanks and remediate the site. Petitioners thereafter commenced this proceedingchallenging that determination.
Petitioners disclaim liability for the petroleum contamination found on their property by contendingthat they cannot be liable as dischargers because they do not own the underground storage tankslocated thereon. This argument is misplaced, however, because respondent's finding of liability waspremised on petitioners' control over the property on which the discharge occurred and their failure toremediate the contamination, rather than their ownership of the storage tank system. Indeed, "strictliability under the [Navigation Law] need not be premised on ownership of land or a petroleum systemat the time a discharge occurs; instead, such liability may be founded either upon a potentiallyresponsible party's capacity to prevent spills before they occur or the ability to clean up contaminationthereafter" (State of New York v C.J. BurthServs., Inc., 79 AD3d 1298, 1301 [2010] [emphasis omitted], lv dismissed 16NY3d 796 [2011]; see State of New York vSpeonk Fuel, Inc., 3 NY3d 720, 724 [2004]; State of New York v Green, 96NY2d 403, 406-408 [2001]). Ownership of the storage system is likewise not a prerequisite forliability for the discharge under the Environmental Conservation Law (see ECL 17-0501 [1];17-0301; 6 NYCRR 703.5).
The record here reflects that both H&K and MFE had control over the activities conducted on theproperty when each owned it, and that each had reason to know that petroleum products had been,and were being, used on the property (see State of New York v Green, 96 NY2d at406-408). Notably, it is undisputed that the property has been used as a gas station for approximately70 years and had an active on-site gas station at the time of each petitioner's purchase. In addition,petitioners were aware that a discharge had occurred and each had the ability to clean up thecontamination but did not do so (see State of New York v C.J. Burth Servs., Inc., 79 AD3d at1301; State of New York v LVF Realty Co.,Inc., 59 AD3d 519, 522 [2009], lv denied 12 NY3d 871 [2009]).
The record shows that, in April 1998, H&K, the then-owner of the property, was notified by DECthat the property contained a petroleum contaminant plume consistent with gasoline. Three years later,following further investigation, DEC notified H&K that the three underground storage tanks had notbeen properly closed in place (see 6 NYCRR 613.9) and directed H&K to either remove thetanks or properly close them in place, and to conduct quarterly sampling of on-site monitoring wellslocated in the vicinity of the tanks. Although H&K hired a consultant to monitor groundwater samplestaken from the property, which samples consistently showed petroleum contamination in the vicinity ofthe tanks, H&K did not remediate the site or take action to properly close the tanks. When H&K soldthe property to MFE in February 2004, James Metz, who had been directly involved in theinvestigation and treatment of the underground tanks for nearly 20 years,[FN2]continued working as a consultant on the issue for [*3]MFE. Thus, itcannot be said that MFE was unaware of the underground storage tanks or of the need to remediatethe ongoing discharge, yet it took no action to do so. Based on the foregoing, respondent'sdetermination that petitioners are responsible as dischargers is supported by substantial evidence(see CPLR 7803 [4]; Matter ofRiverkeeper, Inc. v Johnson, 52 AD3d 1072, 1075 [2008], lv denied 11 NY3d 716[2009]).
To the extent not specifically addressed, petitioners' remaining contentions have been consideredand found to be without merit.
Rose, J.P., Kavanagh and McCarthy, JJ., concur. Adjudged that the determination is confirmed,without costs, and petition dismissed.
Footnote 1: Stewart's Ice Cream leased thepremises from Peterson Petroleum, Inc.
Footnote 2: Metz had purchased PetersonPetroleum's stock in 1986 and had been hired by H&K as a consultant in 1988.