| Matter of Carney's Rest., Inc. v State of New York |
| 2011 NY Slip Op 07889 [89 AD3d 1250] |
| November 10, 2011 |
| Appellate Division, Third Department |
| In the Matter of Carney's Restaurant, Inc., et al.,Petitioners, v State of New York et al., Respondents. |
—[*1] Eric T. Schneiderman, Attorney General, Albany (Susan L. Taylor of counsel), forrespondents.
Malone Jr., J. Proceeding pursuant to CPLR article 78 (transferred to this Court by order of theSupreme Court, entered in Saratoga County) to review a determination of respondent Commissioner ofEnvironmental Conservation which found petitioners in violation of certain statutes and regulations andimposed civil penalties.
Petitioner Robert Carney is the sole shareholder, officer and director of petitioner Carney'sRestaurant, Inc. (hereinafter the restaurant), which is located in a historic building in Saratoga County.Petitioners applied for a State Pollutant Discharge Elimination System (hereinafter SPDES) permit toinstall a septic system for the restaurant that would discharge effluent into the surface water of atributary of Ballston Lake. The permit issued to petitioners by respondent Department of EnvironmentalConservation (hereinafter DEC) in 1993 contained, among other things, effluent limitations andmonitoring requirements. In 1997, DEC received a complaint about petitioners' discharge and,following an investigation, DEC informed petitioners that the disposal system was exceeding the effluentlimitations and that petitioners were not meeting the monitoring requirements. In 1998, 2001 and 2003,petitioners and DEC executed orders on consent, wherein Carney, on behalf of the restaurant, admittedto various violations of the Environmental Conservation Law and agreed to civil penalties, and DEC setforth requirements for remedial measures and compliance activities. With each order, while legally [*2]allowed but clearly not required, nearly all of the civil penalties weresuspended, on the condition that petitioners take the agreed-upon specified corrective action within anagreed-upon time period.
The parties thereafter entered into a final consent order in 2005, which required petitioners tosubmit an approvable plan to replace the sewage disposal system before a date certain and providedthat, if they failed to do so, DEC would require them to install a new system to transport wastewater toa treatment plant and plug the septic tank outlet, all within agreed-upon specified time periods. Afterpetitioners failed to submit the plan, install a new sewage disposal system and plug the septic tank withinthose specified time periods, DEC notified them that the SPDES permit would be revoked, effectiveSeptember 13, 2006, and that they would be thereafter prohibited from discharging wastewater into thetributary. Petitioners continued to discharge wastewater into the tributary until December 2006.
In 2008, DEC served petitioners with a notice of hearing and complaint, setting forth the full historyof petitioners' numerous violations of the Environmental Conservation Law and regulations. Petitionersfiled an answer asserting some purported defenses. Following a hearing, an Administrative Law Judge(hereinafter ALJ) issued a report finding, among other things, that petitioners had failed to comply withvarious orders on consent, violated the restrictions contained in the SPDES permit and also dischargedwastewater into the tributary without a permit after September 2006.
Respondent Commissioner of Environmental Conservation (hereinafter respondent) thereafteradopted the ALJ's hearing report and assessed a $400,000 joint and several civil penalty againstpetitioners. Respondent suspended $254,500 of the penalty on the condition that petitioners submit toDEC an approvable plan for the disposal of their wastewater within 30 days. Respondent alsoreinstated $54,500 in previously suspended penalties against the restaurant. Petitioners thencommenced this CPLR article 78 proceeding challenging that determination. Respondents answeredand asserted five counterclaims, seeking, among other things, enforcement of the determination.Supreme Court severed and stayed two of respondents' counterclaims and transferred the remainder ofthe proceeding to this Court.
Initially, petitioners challenge respondent's findings that they violated the EnvironmentalConservation Law and implementing regulations, as well as the SPDES permit. Respondent's findings inthis regard are entitled to deference and will be upheld so long as they are supported by substantialevidence in the record (see Matter of DeCillisv Grannis, 69 AD3d 851, 851 [2010], lv denied 14 NY3d 709 [2010]; Matter of Riverkeeper, Inc. v Johnson, 52AD3d 1072, 1074 [2008], lv denied 11 NY3d 716 [2009]). Testimony by DEC staffwho inspected the restaurant's sewage disposal system provides substantial evidence to supportrespondent's finding that petitioners violated the Environmental Conservation Law by dischargingsewage, as well as kitchen wastewater, oil and grease, from the septic tank into a tributary of BallstonLake. This finding is also supported by petitioners' own admissions in the consent orders that suchdischarge had occurred. In these orders, petitioners also admitted, among other things, that they hadfailed to maintain their wastewater discharge system (see ECL 17-0501, 17-0511; 6 NYCRR703.2, former 754.4 [c], [k]; former 756.3 [b]), and had failed to report a noncompliance event(see ECL 17-0511, 17-0815 [3]; 6 NYCRR former 754.4 [b]). DEC also offered proof thatpetitioners were required to submit annual summary reports for the SPDES permit (see 6NYCRR 750-2.5 [a] [1]), but that they filed only one out of the nine that were required.[*3]
Substantial evidence also supports respondent's finding thatpetitioners violated ECL 17-0701 and 6 NYCRR 750-2.8 by connecting two residential apartments tothe restaurant's discharge system without authorization. Petitioners' application for the SPDES permitindicated that the permit would be for a "60-seat restaurant" and did not mention a hookup to thesystem from any other building. The permit was thereafter issued by DEC for a restaurant as describedin petitioners' application. Although petitioners contend that DEC was aware of the connection of theapartment building because, in 1993, their engineer sent DEC a letter in which he stated that the systemhad been installed "in substantial accordance with the [DEC]-approved plans," this letter was not sentto DEC until after the permit had been issued. Nor does it change the fact that the additional residentialconnections were not disclosed on the permit application or authorized by the SPDES permit that wasissued to them by DEC.
Next, petitioners challenge the finding that they violated the 2005 consent order by failing to submitan approvable plan for the replacement of the sewage disposal system within the time period specifiedin the consent order. Specifically, they do not dispute that they failed to submit a plan that wasapproved by DEC but, rather, they allege that their failure to do so was DEC's fault. This contention isnot supported by the record, and the affidavit of engineer Thomas Andress, on which petitionersprimarily rely as support for this claim, is not part of the administrative record because it was obtainedby petitioners subsequent to the hearing (see Matter of Levine v New York State Liq. Auth.,23 NY2d 863, 864 [1969]; Matter of City of Saratoga Springs v Zoning Bd. of Appeals of Townof Wilton, 279 AD2d 756, 760 [2001]). In any event, there is substantial evidence in the recordthat petitioners did not comply with all of the terms and conditions set forth in the consent order,including respondent's finding that petitioners discharged wastewater into the tributary without a permitin violation of ECL 17-0505. The record reflects that, in August 2006, DEC informed petitioners thatthe permit would be revoked effective September 13, 2006. A DEC employee inspected the site onSeptember 14 and December 7, 2006. The employee testified at the hearing that, both times, heobserved that petitioners were continuing to discharge wastewater into the tributary. The record alsoreflects that petitioners did not inform DEC that they had plugged the septic tank until December 14,2006. Based on all of the foregoing, respondent's determination to enforce the previously-suspendedcivil penalties associated with the 2005 consent order is supported by substantial evidence.
Petitioners also challenge respondent's determination finding Carney personally liable for certainviolations. However, the record reflects that, as sole officer and shareholder of the restaurant, Carneywas the sole individual personally and directly responsible for making decisions regarding therestaurant's sewage disposal system, was the named permittee for the SPDES permit and was theindividual responsible for filing discharge monitoring reports. The record further shows that Carneyknew about the septic system failures and did not comply with repeated requests by DEC to replace it.He also knew about the effluent limits and the repeated violations of those limits and similarly did nottake action to remedy them. Finally, Carney admitted that he repeatedly failed to comply with theconsent orders and offered no plausible excuse for his failures. As such, substantial evidence supportsrespondent's determination that Carney is personally liable for the SPDES permit violations, the illegaldischarge of wastewater after the permit was revoked and the failure to take any corrective action asset forth in the consent orders (see LakeGeorge Park Commn. v Salvador, 72 AD3d 1245, 1247 [2010], lv denied 15 NY3d712 [2010]; Matter of Jackson's Marina v Jorling, 193 AD2d 863, 866 [1993]).
To the extent that they are properly preserved, we are not persuaded by petitioners' [*4]remaining contentions, including their claim that their due process rightswere violated. Notably, to the extent that the ALJ conformed the pleadings to the proof at the hearing,because DEC did not seek enforcement of the affected claims in their counterclaims, petitioners are notaggrieved by any alleged deficiencies in the complaint. In any event, the complaint "need only bereasonably specific" and the record reflects that, read as a whole, the complaint adequately apprisedpetitioners of the charges against them and allowed them the opportunity to prepare a defense(Matter of Block v Ambach, 73 NY2d 323, 333 [1989]; see Matter of Mangini vChristopher, 290 AD2d 740, 743 [2002]). Notably, petitioners did not object to either theadequacy of the complaint or to DEC's introduction of evidence both at the hearing and upon theiradministrative appeal. Petitioners also contend that they were deprived of an opportunity to presentcertain defenses. However, the record shows that the ALJ permitted petitioners an opportunity topresent additional defenses in their own post-hearing brief, as well as in their reply brief to DEC'spost-hearing brief, and were also given the opportunity by the ALJ to submit additional evidence, butthen failed to do so. As such, it cannot be said that petitioners' due process rights were violated as aresult of the alleged deficiencies (see Matterof Ostad v New York State Dept. of Health, 40 AD3d 1251, 1251-1252 [2007]; Matterof Mangini v Christopher, 290 AD2d at 744).
Finally, we do not find the penalty imposed to be unjust or inappropriate such that it constitutes anabuse of discretion as a matter of law (see Matter of Pell v Board of Educ. of Union Free SchoolDist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222,232-234 [1974]). The record contains substantial evidence of petitioners' repeated and clearlylongstanding violations of the Environmental Conservation Law and associated regulations over thecourse of more than 10 years. The record also reveals that petitioners were offered many opportunitiesto remedy those violations but failed to do so. Considering that the Environmental Conservation Lawpermits civil penalties of up to $37,500 per day (see ECL 71-1929) and the penalties imposedherein were well under that limit, given the circumstances presented here, it simply cannot be said thatthe penalty imposed is an abuse of discretion.
Mercure, J.P., Kavanagh, McCarthy and Egan Jr., JJ., concur. Adjudged that the determination isconfirmed, without costs, and petition dismissed.