State v. Getty Petroleum Corp.

• Decision Date: 03 November 2011
• Citation: 933 N.Y.S.2d 114,89 A.D.3d 262,2011 N.Y. Slip Op. 07781
• Parties: STATE of New York, Respondent, v. GETTY PETROLEUM CORPORATION et al., Defendants,andM & A Realty, Inc., Appellant.
• Court: New York Supreme Court — Appellate Division

2011 N.Y. Slip Op. 07781

89 A.D.3d 262

933 N.Y.S.2d 114

STATE of New York, Respondent,

v.GETTY PETROLEUM CORPORATION et al., Defendants,andM & A Realty, Inc., Appellant.

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

Nov. 3, 2011.

Young, Sommer, Ward, Ritzenberg, Baker & Moore, L.L.C., Albany (Kirstin Carter Rowe of counsel), for appellant.

Eric T. Schneiderman, Attorney General, Albany (Kathleen M. Arnold of counsel), for respondent.

Before: PETERS, J.P., SPAIN, LAHTINEN, STEIN and EGAN JR., JJ.

LAHTINEN, J.

Appeal from an order of the Supreme Court (Connolly, J.), entered December 3, 2010 in Albany County, which, among other things, denied a motion by defendant M & A Realty, Inc. for summary judgment declaring the lien provisions of the Navigation Law to be unconstitutional.

Defendant M & A Realty, Inc. contends that the procedures used to place an environmental lien on its real property were not authorized by the underlying statute ( see Navigation Law § 181–a), and that the procedures used violated its due process rights. A gas station has been operated for over 30 years on real property currently owned by M & A in the Town of Hyde Park, Dutchess County. Prior to M & A purchasing the property, there had been petroleum discharges in 1979 and 1983 that resulted in the Department of Environmental Conservation (hereinafter DEC) retaining contractors to clean up the spills ( see Navigation Law § 176). M & A purchased the underground petroleum and storage dispensing system at the property in 1994 and purchased the rest of the property in 2002. According to DEC, monitoring wells at and near the premises detected significant increases in petroleum products in 2003. DEC determined that this constituted a new discharge; a determination that M & A has at all times vigorously contested as it contends that the petroleum detected in 2003 was related to the prior spills and not the result of a new spill.

M & A excavated and replaced the underground tanks in 2003. Nevertheless, DEC asserted that continued remediation from 2003 to 2009 related to the alleged 2003 spill resulted in costs of about $208,000, which were paid by the State Environmental Protection and Spill Compensation Fund (hereinafter the Fund). The Attorney General demanded payment of these clean-up costs and advised M & A that failure to do so would result in the commencement of a civil action and the filing of an environmental lien. Since it was M & A's position that all such costs were related to the prior spills, it did not pay. Its attorneys requested a conference or hearing regarding M & A's position, but the request was not granted. Instead, plaintiff served a verified complaint commencing this action in January 2010 and a notice of an environmental lien on M & A's real property was filed in February 2010. M & A moved for summary judgment on its counterclaim challenging the lien procedures. M & A argued that a proper reading of Navigation Law § 181–a required that, before a lien was filed, there must be a judicial determination that the person who owns the property is liable to the Fund and further that the manner in which the environmental lien was imposed upon it violated due process. Supreme Court denied the motion and M & A appeals.

“The Legislature enacted the Oil Spill Act [Navigation Law art. 12] to prevent the unregulated discharge of petroleum and to accomplish speedy, effective cleanups when spills occur” ( State of New York v. Speonk Fuel, Inc., 3 N.Y.3d 720, 723, 786 N.Y.S.2d 375, 819 N.E.2d 991 [2004] [citations omitted] ). “To achieve this objective, the Legislature established the [Fund], which finances [s]tate cleanup efforts when the discharger is unknown, unwilling or unable to pay these costs” ( State of New York v. Green, 96 N.Y.2d 403, 406, 729 N.Y.S.2d 420, 754 N.E.2d 179 [2001] [citation omitted] ). When the Fund pays for clean-up costs, it can seek reimbursement from a party responsible for the discharge ( see Navigation Law § 187) and, as relevant here, an environmental lien can be filed on property ( see Navigation Law §§ 181–a, 181–b). The provisions of the Oil Spill Act are “liberally construed to effect its purposes” (Navigation Law § 195; see State of New York v. Speonk Fuel, Inc., 3 N.Y.3d at 723–724, 786 N.Y.S.2d 375, 819 N.E.2d 991).

M & A argues that the statutory language of Navigation Law § 181–a(1), as well as the legislative history, reveals that a judicial determination of liability is a prerequisite to filing an environmental lien. The statute provides:

The [F]und shall have a lien for the costs incurred by the [F]und for the cleanup and removal of a discharge and for the payment of claims for direct and indirect damages as a result of a discharge upon such real property located within the state:

(a) owned by a person liable to the [F]und for such costs under [Navigation Law § 181] at the time a notice of environmental lien is filed; and

(b) upon which the discharge occurred (Navigation Law § 181–a[1] [emphasis added] ).

Noting that elsewhere in the Oil Spill Act the phrase “potentially liable” is used (Navigation Law § 181–b[5] ), M & A asserts that the absence of the word “potentially” in Navigation Law § 181–a(1)(a) connotes a legislative intent to require a judicial determination of liability before an environmental lien can be filed. We are unpersuaded.

“It is fundamental that a court, in interpreting a statute, should attempt to effectuate the intent of the Legislature [and][t]he starting point is always to look to the language itself” ( State of New York v. Patricia II., 6 N.Y.3d 160, 162, 811 N.Y.S.2d 289, 844 N.E.2d 743 [2006] [internal quotation marks and citation omitted] ). Although the words of the statute control if unambiguous, consideration may also be given to corresponding legislative history ( see Riley v. County of Broome, 95 N.Y.2d 455, 463, 719 N.Y.S.2d 623, 742 N.E.2d 98 [2000] ). “Our objective ... is ‘to discern and apply the will of the Legislature, not the court's own perception of what might be equitable’ ” ( Matter of Orens v. Novello, 99 N.Y.2d 180, 185, 753 N.Y.S.2d 427, 783 N.E.2d 492 [2002], quoting Matter of Sutka v. Conners, 73 N.Y.2d 395, 403, 541 N.Y.S.2d 191, 538 N.E.2d 1012 [1989] ).

The statute makes no specific mention of a judicial determination as a prerequisite to filing a lien. The absence of the word “potentially” in Navigation Law § 181–a(1)(a) is simply insufficient to provide a sound basis for reading into the statute such a requirement. If the Legislature had intended a pre-filing judicial determination of liability, it undoubtedly would have not only affirmatively so stated, but also would have provided at least cursory guidance to pertinent procedural issues.¹ The legislative history ties the environmental lien to a sense of urgency to act as it reveals a concern about a party frustrating Fund collection efforts by quickly disposing of the property ( see Sponsors' Mem., Bill Jacket, L. 1991, ch. 488). It seems incongruent with such concern that, if the Legislature intended a pre-filing judicial determination, it would not set forth expedited procedures for such a determination. It also merits noting that Navigation Law § 181–b(5), which uses the phrase “potentially liable,” addresses the contents that a lien must contain. However, if Navigation Law § 181–a (which does not include the word “potentially”) mandated a judicial determination of liability before a lien could be filed (and thus before the contents became relevant), the use of “potentially” in section 181–b(5) would be surplusage. This is not to suggest that the statute is a model of clarity, and the parties have extracted phrases from the legislative history arguably supportive of their respective positions. Nevertheless, when read in the context of the entire statutory article, considered in light of the statutory purpose and accorded the legislatively directed liberal interpretation, we conclude that Navigation Law § 181–a(1) does not require a pre-filing judicial determination of liability for an environmental lien.

Next, we consider whether that lack of a pre-filing judicial determination runs afoul of due process.² Initially, we note that “legislative enactments are presumed valid and that one who challenges a statute bears the burden of proving the legislation unconstitutional beyond a reasonable doubt” ( Rochester Gas & Elec. Corp. v. Public Serv. Commn. of State of N.Y., 71 N.Y.2d 313, 319–320, 525 N.Y.S.2d 809, 520 N.E.2d 528 [1988]; see State of New York v. Dennin, 17 A.D.3d 744, 747, 792 N.Y.S.2d 682 [2005], lv. dismissed 5 N.Y.3d 824, 804 N.Y.S.2d 38, 837 N.E.2d 737 [2005] ). Plaintiff does not dispute that the environmental lien constitutes an impairment to a significant property interest such that due process protection is implicated ( see Connecticut v. Doehr, 501 U.S. 1, 11, 111 S.Ct. 2105, 115 L.Ed.2d 1 [1991] ). The familiar factors weighed in assessing what process is due are set forth in Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 47 L.Ed.2d 18 [1976] and include: “(1) the private interest affected; (2) the risk of erroneous deprivation through the procedures used and the probable value of other procedural safeguards; and (3) the government interest” ( County of Nassau v. Canavan, 1 N.Y.3d 134, 142, 770 N.Y.S.2d 277, 802 N.E.2d 616 [2003]; see State of New York v. Dennin, 17 A.D.3d at 746, 792 N.Y.S.2d 682).

The environmental lien does not deprive M & A of the possession and use of its property, but it does cloud title and affects its ability to transfer the property. While the risk of erroneous deprivation is not reduced to the same level as matters supported by documentary proof ( see Connecticut v. Doehr, 501 U.S. at 14, 111 S.Ct. 2105, 115 L.Ed.2d 1; Diaz v. Paterson, 547 F.3d 88, 98–99 [2008], cert. denied ––– U.S. ––––, 129 S.Ct. 2789, 174 L.Ed.2d 290 [2009] ), nevertheless the risk is low given that liability under the...