N.Y. State Elec. & Gas Corp. v. Cnty. of Chemung

• Decision Date: 31 March 2016
• Court: New York Supreme Court — Appellate Division
• Parties: NEW YORK STATE ELECTRIC & GAS CORPORATION, Appellant, v. COUNTY OF CHEMUNG et al., Respondents.

137 A.D.3d 1550

29 N.Y.S.3d 579

2016 N.Y. Slip Op. 02507

NEW YORK STATE ELECTRIC & GAS CORPORATION, Appellant,

v.COUNTY OF CHEMUNG et al., Respondents.

Supreme Court, Appellate Division, Third Department, New York.

March 31, 2016.

Brickley, Sears & Sorrett, PA, Boston, Massachusetts (Joseph G. Curran of Ward Greenberg Heller & Reidy LLP, Rochester, of counsel), for appellant.

Barclay Damon, LLP, Elmira (Bryan J. Maggs of counsel), for County of Chemung, respondent.

Lynch Law Office, PLLC, Syracuse (Ryan L. Abel of counsel), for Town of Horseheads, respondent.

Lippman O'Connor, Buffalo (Gerard E. O'Connor of counsel), for Village of Horseheads, respondent.

Before: PETERS, P.J., GARRY, ROSE, LYNCH and CLARK, JJ.

LYNCH

, J.

Appeal from an amended order of the Supreme Court (O'Shea, J.), entered June 4, 2015 in Chemung County, which, among other things, granted defendants' motions to dismiss the complaint.

Plaintiff provides natural gas to residential and commercial customers in the Town and Village of Horseheads, Chemung County. The natural gas is distributed through gas mains, pipes and equipment owned by plaintiff that were first installed underground during the mid to late nineteenth century. Defendant County of Chemung owns and operates the Chemung County Sewer District, which designed and constructed a sewer system in the 1960s in the Town and Village of Horseheads, which included underground main and lateral pipes. Defendants Town of Horseheads and Village of Horseheads each provide water to their residents through a system of underground water mains and service lateral pipes. These structures were also constructed in the 1960s. In 2005 and again in January 2011, there were gas explosions and fires at separate homes in the Village (see Peterson v. New York State Elec. & Gas Corp., 115 A.D.3d 1029, 1029, 981 N.Y.S.2d 834 [2014]

). The subsequent investigation revealed that the explosion was caused by a leak in the lateral gas line that led from the gas main to the house, and the leak was caused by stress corrosion cracking in the lateral line.

Following the 2011 explosion, plaintiff hired Lucius Pitkin, Inc. (hereinafter Pitkin), a metallurgical consulting firm, to assess the fitness of its medium pressure gas service lateral pipes located in the Town and Village. Pitkin analyzed 67 lateral pipes; 49 were selected because they were proximate to water and/or sewer lines and 18 were selected at random. After investigating all 67 pipes, Pitkin issued a report in November 2013 wherein it concluded that 39 gas lateral pipes located near sewer and/or water mains exhibited certain damages, including damage to pipe coating, accompanied by “loss of metal pipe wall thickness” and/or “significant deformation.” In contrast, Pitkin concluded that of the 18 randomly selected pipes, 12 pipes that were not located near water and/or sewer mains pipes did not exhibit comparable damage. Pitkin recommended that plaintiff replace all the service laterals in the Town and Village that were adjacent to water and/or sewer utilities. Plaintiff accepted the recommendation and the pipes have now been replaced.

In January 2014, plaintiff filed essentially identical notices of claim against each defendant. By these notices, with reference to Pitkin's review and the 2005 and 2011 explosions, plaintiff advised that it was seeking to recover for property damages resulting from, among other things, defendants' interference with plaintiff's lines and/or improper construction or maintenance of their sewer and/or water mains. In June 2014, defendants questioned plaintiff's representative at a hearing held pursuant to General Municipal Law § 50–h

. In July 2014, plaintiff commenced this action seeking, among other things, compensatory damages for repairing all one-inch and 1 ¼–inch steel service laterals in the Town and Village and a permanent injunction requiring defendants to prevent further damage to plaintiff's service laterals. Defendants each moved to dismiss the complaint. Plaintiff opposed the motions to dismiss and cross-moved to amend the notices of claim to include all of the addresses where it had replaced service laterals. Supreme Court granted defendants' motions to dismiss and denied plaintiff's cross motion. Plaintiff now appeals.

A party seeking to commence a tort action against a municipal corporation must first serve a notice of claim that states “the time when, the place where and the manner in which the claims arose” (General Municipal Law § 50–e[2]

). The purpose of the notice is “[t]o enable authorities to investigate, collect evidence and evaluate the merit of a claim” (Brown v. City of New York, 95 N.Y.2d 389, 392, 718 N.Y.S.2d 4, 740 N.E.2d 1078 [2000] ; see

O'Brien v. City of Syracuse, 54 N.Y.2d 353, 358, 445 N.Y.S.2d 687, 429 N.E.2d 1158 [1981] ). The notice must “sufficiently describe when and where a particular accident took place, but does not have to be detailed with literal nicety or exactness” (Gagnon v. City of Saratoga Springs, 14 A.D.3d 845, 847, 788 N.Y.S.2d 249 [2005] [internal quotation marks and citations omitted] ). Further, “[d]eficiencies in the notice, if any, may be cured by testimony provided at a General Municipal Law § 50–h hearing” (id. ).

Here, plaintiff advised that its claim was that the Village and Town “[n]egligent[ly] install[ed], design[ed], engineer[ed], construct[ed], maintain [ed], servic[ed], operat[ed] and/or repair[ed] ... the water main, water lines, water manhole, water structures, drainage systems or other pipes, utilities or public works owned or controlled” by the Village and Town; “[i]nterfer[ed] ... deflect[ed] ..., undermin[ed] ..., damag[ed] ... and/or improper[ly] repair [ed] [plaintiff's] gas utilities” throughout the Village and Town; and “[f]ail [ed] to safeguard against” or to notify plaintiff of these damages. Pursuant to the notice of claim, the affected water structures and gas utilities were located “throughout [the Village and Town] generally, including but not limited to the properties identified [in the Pitkin report].” As to the County, plaintiff claimed that it “[n]egligent[ly] install [ed], design[ed], engineer [ed], construct[ed], maint[ained], service[d], operat[ed] and/or repair[ed its] sewer main, sewer lines, sewer manhole, sewage structures, drainage system or other pipes, utilities or public works owned or controlled by [the County] ... [, i]nterfer[ed] with, deflect[ed] ..., undermin [ed] ..., damage[d] and/or improper[ly] repair[ed] [plaintiff's] gas utilities” and that the County “[f]ail[ed] to safeguard against” and notify plaintiff of such damages. As with the Town and Village, the affected sewer structures and gas utilities were located “throughout Horseheads, New York generally, including but not limited to the properties identified [in the Pitkin report].”

Following receipt of the notices of claim, defendants demanded a hearing pursuant to General Municipal Law § 50–h

. The Pitkin report was provided and made a part of the hearing record. Documented therein were the three categories of damages discovered—deformation of the service lateral, coating damage to the service lateral and reduction of pipe wall thickness. Each of the 39 service laterals exhibited one or more of these damages and each was proximate to either a water main, sewer main or both that had been installed beneath the gas laterals. Plaintiff also produced its employee, Robert Letson, who was present during the Pitkin excavation project. Letson testified that he observed the majority of the 67 excavations and confirmed that, during the excavation project, asserted third-party damage was discovered at 39 of the selected locations. Letson was not able to tell when the specified damage was done and was able to assume only that, because the water and sewer lines went in after the gas lateral lines, there was some third-party excavation done after the gas laterals were installed. Letson further confirmed, without knowledge of specifics, that based on state regulation, plaintiff undertook to replace certain laterals that had been installed before 1971. When asked what third-party activity caused the damage to the laterals identified in the Pitkin report, Letson testified that it could have been improper backfilling, improper excavation, improper support or actual contact between a backhoe or shovel and the pipe.

Initially, we find that plaintiff's notices of claim, as supplemented by the General Municipal Law § 50–h

hearing and the Pitkin report, were sufficient to permit the municipalities to investigate the claims asserted with regard to the 39 service laterals identified in the notices and the report. In our view, however, the notices were not sufficient to permit inclusion of the approximately 800 additional properties as alleged in the complaint. Therefore, plaintiff's action must be limited to the 39 service laterals identified in the January 2014 notices of claim (see

O'Brien v. City of Syracuse, 54 N.Y.2d at 358, 445 N.Y.S.2d 687, 429 N.E.2d 1158 ).

To the extent that we have found that plaintiff's notices of claim were sufficient, the further question is whether plaintiff's action with regard to the 39 laterals was timely. Pursuant to General Municipal Law § 50–i

, plaintiff's action for damages to real property had to be commenced within one year and 90 days after the occurrence of the event that is the basis for the claims, not from the date the action accrued (see Klein v. City of Yonkers, 53 N.Y.2d 1011, 1012–1013, 442 N.Y.S.2d 477, 425 N.E.2d 865 [1981]

; Serkil, L.L.C. v. City of Troy, 259 A.D.2d 920, 921–922, 686 N.Y.S.2d 892 [1999], lv. denied 93 N.Y.2d 811, 694 N.Y.S.2d 633, 716 N.E.2d 698 [1999] ; Nebbia v. County of Monroe, 92 A.D.2d 724, 725, 461 N.Y.S.2d 127 [1983], lv. denied 59 N.Y.2d 603, 463 N.Y.S.2d 1028, 450 N.E.2d 252 [1983] ). Further, claims against a county for “invasion of personal or property rights, of every name and nature, and whether casual or continuing...