Mid-Town Laundry, LLC v. Pierce

• Decision Date: 14 June 2021
• Docket Number: 1:17-cv-00338 (BKS/TWD)
• Parties: MID-TOWN LAUNDRY, LLC, and STATE-ALBANY PROPERTIES, LLC, Plaintiffs, v. KIMBERLY PIERCE, Executrix of the Estate of Rosalie Donato, and JOHN DOES 1 THROUGH 10 (said names being fictitious operators), Defendants.
• Court: U.S. District Court — Northern District of New York

MID-TOWN LAUNDRY, LLC,and STATE-ALBANY PROPERTIES, LLC, Plaintiffs, v. KIMBERLY PIERCE, Executrix of the Estate of Rosalie Donato,and JOHN DOES 1 THROUGH 10(said names being fictitious operators), Defendants.

1:17-cv-00338 (BKS/TWD)

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK

June 14, 2021

Appearances:

For Plaintiffs:

Gregory J. Coffey

Coffey & Associates

310 South Street

Morristown, New Jersey 07960

For Defendant Kimberly Pierce, Executrix of the Estate of Rosalie Donato:

James M. Reilly

Herzog Law Firm P.C.

7 Southwoods Boulevard

Albany, New York 12211

Hon. Brenda K. Sannes, United States District Judge:

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

This action arises from the discovery of hazardous substances in the soil and groundwater at 1122-1124 State Street in Schenectady, New York, (the "Site" or the "Property"), a commercial property currently owned by Plaintiffs Mid-Town Laundry, LLC and State-Albany Properties, LLC, who have been tasked with the Site's remediation. (Dkt. No. 1). Plaintiffs filed this contribution and indemnification action against Rosalie Donato,¹ who owned the Property from approximately 1969 to 1988 and operated a dry-cleaning business there.² (Dkt. No. 1, ¶ 5). Plaintiffs' Complaint seeks declaratory judgment, contribution, and response costs under Sections 107 and 113 of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), as amended, 42 U.S.C. §§ 9607, 9613 (Counts I, II, III); and alleges state law causes of action for strict liability, restitution, contribution, common law indemnification, public nuisance, negligence, and tortious harm to property and business (Counts IV, V, VI, VII, VIII, IX, X).³ (Dkt. No. 1). Defendant moves for summary judgment under Federal Rule of Civil Procedure 56, and Plaintiffs cross-move for partial summary judgment as to liability. (Dkt. Nos. 97, 98). The Court heard oral argument from the parties on June 14, 2021. For the reasons that follow, the parties' motions are denied.

II. FACTS⁴

A. The Site - 1122-1124 State Street

The Site, which Plaintiffs have owned since 1988, is a .22 acre commercial property "situated in an urban area [of Schenectady] with a large number of residences nearby." (Dkt. No.99, at 33-34). Approximately seventy percent of the Site "is covered by buildings," including "two abutting structures" presently occupied by a laundromat and a Chinese restaurant; the remainder of the Site is paved. (Dkt. No. 99, at 34).

B. Discovery of Contaminants at the Site

In 1997, the New York State Department of Environmental Conservation ("DEC") discovered "low levels of solvents . . . in the groundwater near" the Site and "began investigating the source of the contamination, known as the 'Brandywine Plume.'"⁵ (Dkt. No. 98-2, at 194). Between 2009 and 2012, the DEC installed "40 wells . . . which were used to track down the source of the groundwater contamination," and collected soil, groundwater, and soil gas samples. (Dkt. No. 99, at 6-7; 98-2, at 194). The investigation identified two sources of the contamination, "one of which was" 1122-1124 State Street. (Dkt. No. 98-2, at 194). The record does not definitively identify the second source, but in his declaration, Defendant's expert, David Lent posits, based on his review of "a Record of Decision prepared by the New York department of Environmental Conservation . . . for the Former Marlou Formal Wear State Superfund Project," that "Marlou Formal Wear" building, "a tuxedo rental business that performed on-site dry cleaning," located at 1108 State Street in Schenectady, is the second site. (Dkt. No. 97, at 34-35). According to Lent, the DEC added Marlou Formal Wear to its registry of inactive hazardous waste sites and investigated it separately. (Id. at 35).

According to the 2012 Inactive Hazardous Waste Disposal Report issued by the DEC's Division of Environmental Remediation, the investigation revealed "[c]hlorinated solvent contamination," in the groundwater and soil vapor samples, specifically, tetrachloroethylene("PERC" or "PCE"), dichloroethane ("DCE"), and trichloroethene ("TCE").⁶ (Dkt. No. 98-2, at 72). The Waste Disposal Report noted that the Site was currently used as laundromat and restaurant and that its "Historic Use(s)" included "dry cleaning facility approximately from 1965 to 1987, when the property was owned by Vincent P and/or Rosalie Donato." (Id.). Having determined that the Site posed "a '[s]ignificant threat to the public health or environment' and 'action [is] required,'" the "DEC Commissioner classified the Site as a Class 2 inactive hazardous waste disposal site." (Id. at 194 (quoting N.Y. Envtl. Conserv. Law § 27-1305(2)(b)(2)). In its "Site Record," the DEC notes that the Site "is currently being used as a restaurant and laundromat," but states that it "operated as a dry cleaning facility from approximately 1969 to 1987" and that the "dry cleaning operation used a solvent called tetrachlorethene or perc." (Dkt. No. 99-2, at 34).

C. The DEC's Notification of Contamination and Plaintiffs' Response

At some point prior to October 2015, the DEC notified Plaintiffs by registered mail that it had discovered "in-ground contaminants" "on various parts of the property," that it was "concerned that these contaminants would release further contaminants into the air of the property," and that it intended to take air samples at the Site. (Dkt. No. 98-2, at 36-37). Charles Padula, the sole member of the Plaintiff LLCs, testified that he had not noticed anything "environmentally" in operating the laundromat prior to receiving the registered letter from the DEC. (Id. at 38). On October 2, 2015 and October 26, 2015, O'Brien and Gere, an engineering firm the DEC had hired, took borings and air samples from the Site. (Id. at 42-43, 122).

By letter dated November 4, 2015, the New York Department of Health ("DOH") informed Plaintiffs that, among other things, PERC had been found in the "indoor air" of the building at the Site and that both PERC and TCE were discovered in the "soil vapor beneath the building." (Id. at 119). The DOH therefore recommended that "immediate and effective actions be taken to reduce inhalation exposures to site-related contaminants," such as building ventilation, increased fresh air exchanges, the installation of air filters or a "sub-slab depressurization system." (Id.). The DOH enclosed a copy of the laboratory data sheet regarding the air and vapor samples collected from the Site as well as several "Fact Sheets" with information on PERC and TCE.⁷ (Id. at 120).

In a letter to Plaintiffs' attorney dated November 6, 2015, the DEC recounted the sampling results, and explained that "[t]he sampling on October 26 was performed because the sampling in the basement of the Chinese restaurant on October 2 showed very high levels of PERC." (Id. at 122). The DEC stated that the sampling showed "significant concentrations" of TCE and PERC "in the indoor air and basement air," and advised that Plaintiffs were required "to take immediate action . . . to reduce contaminant levels," including the installation of an air filtration unit "within 14 days of the date of this letter," which must be "maintained continuously until additional long-term measures, such as an air handling system" could be installed. (Id. at 122-23).

In response, Plaintiff have installed a vapor mitigation system, removed a 275-gallon oil tank, and installed and sealed new flooring and vapor barriers in certain areas of the basement. (Id. at 44, 146, 204-05). In total, Plaintiffs assert they have spent more than $90,000 inremediation costs and legal fees, for which they seek contribution and indemnification from Defendant, as a prior Site owner and potentially responsible party under CERCLA. (Id. at 154).

D. Prior Owners of the Site

Rosalie and Vincent Donato purchased 1122-1124 State Street in 1969; they bought the laundromat business from Hermie Friedman and bought the building from a second individual. (Dkt. No. 98-2, at 86, 100). Mr. Friedman had used the building for a dry-cleaning operation before the Donatos purchased it. (Id. at 101). The Donatos operated a laundromat and dry cleaners. (Id. at 86). On a day-to-day basis, Mr. Donato operated the business at the Site and took care of the books; Ms. Donato "had nothing to do with" the laundromat and dry-cleaning business. (Id. at 88, 94). Ms. Donato testified that she was not familiar with, or involved in purchasing, the solvents that were used in the dry-cleaning operation. (Id. at 95). She further stated she had no knowledge of whether dry-cleaning solvents were used or stored on the property or how they were disposed of. (Id. at 95, 101). Before her death, Rosalie Donato submitted an affidavit stating that she knew "of no spill or discharge of any drycleaning solvent or any other 'hazardous' chemical at the premises while [she and her husband] owned and operated the laundromat and building." (Dkt. No. 97, at 9).

In 1987,⁸ Mieco Corporation installed a coin-operated laundromat at the Site and was running the laundromat while attempting to sell it as a business. (Dkt. No. 98-2, at 27, 29). The Donatos had discontinued the dry cleaning operation prior to Mieco's installation of the new laundromat, but they continued to own the property. (Id. at 30-31).

On or about June 13, 1988, Plaintiffs purchased 1122-1124 State Street from the Donatos and the laundromat business from Mieco. (Id. at 13, 17-18, 21-22, 30-31). At the time of purchase, there were coin operated washers and dryers, a bill changer, and soap vending equipment as well as folding tables, hot water equipment, and a boiler in 1124 State Street; 1122 State Street was vacant.⁹ (Id. at 23-24, 28, 34). In or about 1990, Plaintiffs leased half the Site to a Chinese restaurant, which has occupied the space continuously since. (Id. at 35). The Padulas operated the laundromat at the premises for approximately ten years as "Midtown Laundry Center" before...