Carney's Rest., Inc. v. State

• Decision Date: 10 November 2011
• Citation: 933 N.Y.S.2d 120,2011 N.Y. Slip Op. 07889,89 A.D.3d 1250
• Parties: In the Matter of CARNEY'S RESTAURANT, INC., et al., Petitioners, v. STATE of New York et al., Respondents.
• Court: New York Supreme Court — Appellate Division

2011 N.Y. Slip Op. 07889

89 A.D.3d 1250

933 N.Y.S.2d 120

In the Matter of CARNEY'S RESTAURANT, INC., et al., Petitioners,

v.STATE of New York et al., Respondents.

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

Nov. 10, 2011.

DuCharme, Harp & Clark, Clifton Park (John B. DuCharme of counsel), for petitioners.

Eric T. Schneiderman, Attorney General, Albany (Susan L. Taylor of counsel), for respondents.

Before: MERCURE, J.P., MALONE JR., KAVANAGH, McCARTHY and EGAN JR., JJ.

MALONE JR., J.

Proceeding pursuant to CPLR article 78 (transferred to this Court by order of the Supreme Court, entered in Saratoga County) to review a determination of respondent Commissioner of Environmental Conservation which found petitioners in violation of certain statutes and regulations and imposed civil penalties.

Petitioner Robert Carney is the sole shareholder, officer and director of petitioner Carney's Restaurant, Inc. (hereinafter the restaurant), which is located in an historic building in Saratoga County. Petitioners applied for a State Pollutant Discharge Elimination System (hereinafter SPDES) permit to install a septic system for the restaurant that would discharge effluent into the surface water of a tributary of Ballston Lake. The permit issued to petitioners by respondent Department of Environmental Conservation (hereinafter DEC) in 1993 contained, among other things, effluent limitations and monitoring requirements. In 1997, DEC received a complaint about petitioners' discharge and, following an investigation, DEC informed petitioners that the disposal system was exceeding the effluent limitations 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, admitted to various violations of the Environmental Conservation Law and agreed to civil penalties, and DEC set forth requirements for remedial measures and compliance activities. With each order, while legally allowed but clearly not required, nearly all of the civil penalties were suspended, on the condition that petitioners take the agreed-upon specified corrective action within an agreed-upon time period.

The parties thereafter entered into a final consent order in 2005, which required petitioners to submit an approvable plan to replace the sewage disposal system before a date certain and provided that, if they failed to do so, DEC would require them to install a new system to transport wastewater to a treatment plant and plug the septic tank outlet, all within agreed-upon specified time periods. After petitioners failed to submit the plan, install a new sewage disposal system and plug the septic tank within those specified time periods, DEC notified them that the SPDES permit would be revoked, effective September 13, 2006, and that they would be thereafter prohibited from discharging wastewater into the tributary. 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 history of petitioners' numerous violations of the Environmental Conservation Law and regulations. Petitioners filed 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 with various orders on consent, violated the restrictions contained in the SPDES permit and also discharged wastewater into the tributary without a permit after September 2006.

Respondent Commissioner of Environmental Conservation (hereinafter respondent) thereafter adopted the ALJ's hearing report and assessed a $400,000 joint and several civil penalty against petitioners. Respondent suspended $254,500 of the penalty on the condition that petitioners submit to DEC an approvable plan for the disposal of their wastewater within 30 days. Respondent also reinstated $54,500 in previously suspended penalties against the restaurant. Petitioners then commenced this CPLR article 78 proceeding challenging that determination. Respondents answered and asserted five counterclaims, seeking, among other things, enforcement of the determination. Supreme Court severed and stayed two of respondents' counterclaims and transferred the remainder of the proceeding to this Court.

Initially, petitioners challenge respondent's findings that they violated the Environmental Conservation Law and implementing regulations, as well as the SPDES permit. Respondent's findings in this regard are entitled to deference and will be upheld so long as they are supported by substantial evidence in the record ( see Matter of DeCillis v. Grannis, 69 A.D.3d 851, 851, 894 N.Y.S.2d 72 [2010], lv. denied 14 N.Y.3d 709, 2010 WL 1794995 [2010]; Matter of Riverkeeper, Inc. v. Johnson, 52 A.D.3d 1072, 1074, 861 N.Y.S.2d 155 [2008], lv. denied 11 N.Y.3d 716, 874 N.Y.S.2d 5, 902 N.E.2d 439 [2009] ). Testimony by DEC staff who inspected the restaurant's sewage disposal system provides substantial evidence to support respondent's finding that petitioners violated the Environmental Conservation Law by discharging sewage, as well as kitchen wastewater, oil and grease, from the septic tank into a tributary of Ballston Lake. This finding is also supported by petitioners' own admissions in the consent orders that such discharge had occurred. In these orders, petitioners also admitted, among other things, that they had failed to maintain their wastewater discharge system ( see ECL 17–0501, 17–0511; 6 NYCRR 703.2, 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 that petitioners were required to submit annual summary reports for the SPDES permit ( see 6 NYCRR 750–2.5[a][1] ), but that they filed only one out of the nine that were required.

Substantial evidence also supports respondent's finding that petitioners violated ECL 17–0701 and 6 NYCRR 750–2.8 by connecting two residential apartments to the restaurant's discharge system without authorization. Petitioners' application for the SPDES permit indicated that the permit would be for a “60–seat restaurant” and did not mention a hook-up to the system from any other building. The permit was thereafter issued by DEC for a restaurant as described in petitioners' application. Although petitioners contend that DEC was aware of the connection of the apartment building because, in 1993, their engineer sent DEC a letter in which he stated that the system had been installed “in substantial accordance with the [DEC]- approved plans,” this letter was not sent to DEC until after the permit had been issued. Nor does it change the fact that the additional residential connections were not disclosed on the permit application or authorized by the SPDES permit that was issued to them by DEC.

Next, petitioners challenge the finding that they violated the 2005 consent order by failing to submit an approvable plan for the replacement of the sewage disposal system within the time period specified in the consent order. Specifically, they do not dispute that they failed to submit a plan that was approved by DEC but, rather, they allege that their failure to do so was DEC's fault. This contention is not supported by the...