State v. Stewart's Ice Cream Co., Inc.
| Decision Date | 18 December 1984 |
| Citation | 484 N.Y.S.2d 810,473 N.E.2d 1184,64 N.Y.2d 83 |
| Parties | , 473 N.E.2d 1184 STATE of New York, Respondent, v. STEWART'S ICE CREAM COMPANY, INC., et al., Defendants, and Brundige Oil Company et al., Doing Business as Brundige Oil Company, Appellants. |
| Court | New York Court of Appeals Court of Appeals |
When the State has expended moneys from the New York Environmental Protection and Spill Compensation Fund for the cleanup and removal of discharged petroleum, an action for common-law indemnity lies against any party who caused the discharge. Such an action is governed by a six-year Statute of Limitations and accrues upon any related expenditure by the State.
In 1977, the Legislature added a significant environmental protection measure by enacting the Oil Spill Prevention, Control, and Compensation Act (). Grounded in the recognition of the extreme, deleterious effect oil spills have on the State's lands and waterways (see Navigation Law, § 170), the Act seeks both to prevent the unregulated discharge of petroleum and to provide for speedy cleanups when spills occur (see Navigation Law, § 171).
This first policy is advanced by provisions requiring the licensing of facilities used to transport and store petroleum and the reporting by these facilities of their operations and activities (see Navigation Law, § 174). Also imposed on any party discharging oil is strict liability "for all cleanup and removal costs and all direct and indirect damages, no matter by whom sustained." (Navigation Law, § 181, subd. 1.) Prompt removal of discharged oil is facilitated by the statute's creation of a special fund, out of which expenditures may be made for cleanup activities and for compensation to the owners of damaged property. Once a spill has occurred, the State has a primary duty to respond promptly, evaluate the environmental impact of a spill, and to engage an agent or contractor or to itself undertake a cleanup effort (Navigation Law, § 176).
The instant litigation arose from a leak in oil storage tanks located in Montgomery County and owned by defendant Brundige Oil Company. The leak, discovered in September 1978, contaminated the water well of a local restaurant, known as Chuck's Lunch. In late 1979, the State acted to contain and remove the discharge. By the time the task was completed, nearly $10,000 had been expended. The State commenced this action in August 1982, seeking to recover its expenditures.
Defendant moved to dismiss the action as time-barred. It asserted that the action arose from a liability imposed by statute and was governed by a three-year Statute of Limitations (see CPLR 214, subd. 2) which commenced to run upon discovery of the oil spill. Supreme Court denied the motion. While the court agreed that a three-year limitation period applied, it reasoned that the action sounded in indemnity and did not accrue until the State made payment for the cleanup, thereby discharging defendant's primary responsibility. The court determined, however, that the suit was untimely as to those payments made more than three years before the action was commenced.
The Appellate Division modified by applying a different accrual time. 99 A.D.2d 201, 472 N.Y.S.2d 943. The court agreed that the action was governed by a three-year Statute of Limitations. Relying on the strong legislative policy to protect the environment, however, the court held that the statute for the instant action should not commence to run until the final payment for the cleanup is made by the State or the identity of the party who discharged the oil is discovered, whichever occurs last. In this way, the court reasoned, satisfaction of the policy to hold dischargers of petroleum strictly liable would be assured. The part of the complaint seeking recovery for the early payments was, therefore, reinstated.
Defendant was granted leave to appeal to this court on a certified question. This court now affirms, but on different grounds.
As described above, the Navigation Law sets forth a statutory scheme that regulates the cleanup of oil spills and the respective obligations of the State and any party who has caused a discharge. Whereas both are required to pay for the cleanup, the discharger bears ultimate responsibility for the costs incurred (Navigation Law, § 181, subd. 1). It is a well-settled principle that "person who, in whole or in part, has discharged a duty which is owed by him but which as between himself and another should have been discharged by the other, is entitled to...
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...as between himself and another should have been discharged by the other, is entitled to indemnity." State of N.Y. v. Stewart's Ice Cream Co., 64 N.Y.2d 83, 88, 473 N.E.2d 1184 (1984) (citing McDermott v. City of N.Y., 50 N.Y.2d 211, 217, 406 N.E.2d 460 (1980); Restatement, Restitution, § 76......
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