New York State Energy Research and Development Authority v. Nuclear Fuel Services, Inc., 531
| Citation | 666 F.2d 787 |
| Decision Date | 08 December 1981 |
| Docket Number | D,No. 531,531 |
| Parties | NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY, Plaintiff-Appellee, v. NUCLEAR FUEL SERVICES, INC., and Getty Oil Company, Defendants-Appellants. ocket 81-7736. |
| Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
Clarence T. Kipps, Jr., Washington, D. C. (Miller & Chevalier, Chartered, Alan C. Brown, Washington, D. C., Nixon, Hargrave Devans & Doyle, William D. Eggers, Jr., Rochester, N. Y., of counsel), for defendant-appellant Nuclear Fuel Services, Inc.
William I. Schapiro, Buffalo, N. Y. (Jaeckle, Fleischmann & Mugel, Buffalo, N. Y., Henry W. Killeen, III, Buffalo, N. Y., of counsel), for defendant-appellant Getty Oil Co.
Philip H. Gitlen, Albany, N. Y. (Whiteman Osterman & Hanna, John J. Cangilos, Albany, N. Y., of counsel), for plaintiff-appellee New York State Energy Research and Development Authority.
Carmine J. Clemente, Gen. Counsel, Albany, N. Y. (Howard A. Jack, Deputy Gen. Counsel, Albany, N. Y., of counsel), for plaintiff-appellee New York State Energy Research and Development Authority.
Before LUMBARD and NEWMAN, Circuit Judges, and ZAMPANO, District Judge. *
Since 1963, Nuclear Fuel Services, Inc. (NFS) 1 has been the tenant of a 3,354 acre tract of land (the Center), owned by the New York State Energy Research and Development Authority (Authority), in West Valley, thirty miles south of Buffalo. On October 20, 1981, the Western District of New York granted partial summary judgment to the Authority, and ordered NFS forthwith to vacate 158.8 acres of the leased land to the United States Department of Energy (DOE). Pending decision of NFS's appeal, we have stayed the judgment which is before us by reason of the district court's Rule 54(b) declaration that this partial summary judgment is final. 2 We disagree with the district court's finding that there are no material issues of fact relating to the Authority's right under the lease to transfer the Center to DOE and we reverse and remand for trial of those issues.
The rights and obligations of the parties here are governed by a Lease and a Waste Storage Agreement, which were executed concurrently on May 15, 1963 (together referred to as the "Agreements"). Under the Agreements, the provisions of which total 199 pages, NFS was to construct and operate for the Authority facilities for receiving spent nuclear fuel, for storing liquid high level radioactive wastes, and for burying solid low level radioactive wastes. In addition, for its own account, NFS was to construct a plant for reprocessing spent nuclear fuel elements. The Lease was to terminate on December 31, 1980, unless renewed. It appears that, for some years prior to December, 1980, the parties have been in disagreement about numerous matters and their resulting obligations, the details of which are irrelevant to this decision. Suffice it to say, NFS wishes to terminate its possession, and all responsibilities thereafter, but it insists that the Agreements require the Authority to accept its surrender of possession and responsibility. On the other hand, the Authority insists that it has the right to compel NFS to deliver possession of a particular portion of the Center, including the high level liquid waste and reprocessing facilities, to DOE 3 without any acceptance of NFS's surrender.
On December 24, 1980, NFS sued the Authority in the District Court for the Northern District of New York for enforcement of its right to have the Authority accept its surrender of possession. Six days later, on December 30, the Authority sued NFS in the Cattaraugus County Supreme Court to enjoin NFS from abandoning the low level storage facilities at the Center and directing it to continue to maintain those facilities. On that same day, the state court issued a temporary restraining order granting the Authority the relief sought. NFS promptly removed the state action to the Western District on January 7, 1981, on the ground of diversity jurisdiction. Sometime thereafter NFS's Northern District suit was transferred to the Western District, pursuant to 28 U.S.C. § 1404. 4
The Authority's claim, as set out in a lengthy amended complaint listing 32 causes of action, seeks damages and specific performance to require NFS to remain at the Center and perform its alleged obligations under the Agreement. On September 30, 1981, the Authority shifted ground and moved for partial summary judgment to require NFS to vacate a portion of the Center to DOE. 5 The district court granted the motion, holding that the Authority had the right under the New York law of property to repossess the Center upon the termination of the Lease on December 31, 1980, and that no reasonable interpretation of the Agreements supported NFS's claim that the Authority was required to accept NFS's surrender of possession. We disagree.
Provision is made for transfer of possession of the Center in Article 26 and 27 of the Lease. Article 26 provides:
Lessee, upon any expiration or earlier termination or cancellation of this Lease, will peaceably vacate, yield up and surrender to the Authority the Leased Premises, the Leased Facilities, and Lessee's Improvements....
Article 27 states that no surrender shall be valid or effective unless required by the provisions of the Lease or agreed to and accepted by the Authority in writing. The parties provided for transfer of responsibility for the radioactive wastes stored at the Center in the Waste Storage Agreement, section 3.04, which states that:
upon any cancellation or termination of the Lease, and in any event at the end of the initial term ... NFS will surrender, and the Authority will assume, full responsibility for perpetual operation, surveillance, maintenance, replacement and insurance of the then existing High Level Storage Facilities....
The district court reasoned that as the Authority had the right to receive physical possession from NFS upon termination of the Lease, and that as there was no reason to believe that the Authority's right to receive possession could not be exercised by directing that it be passed to another entity, the Authority had the right to require NFS to give possession of the 158.8 acres of the Center to DOE. Judge Elfvin wrote:
Except for the bare language of these...
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