White v. Regan

• Decision Date: 24 October 1991
• Docket Number: No. 2,No. 1,1,2
• Citation: 575 N.Y.S.2d 375,171 A.D.2d 197
• Parties: In the Matter of David R. WHITE, Appellant, v. Edward V. REGAN, Individually and as New York State Comptroller, et al., Respondents. (Proceeding) In the Matter of CHATEL ASSOCIATES, Appellant, v. Edward V. REGAN, Individually and as New York State Comptroller, et al., Respondents. (Proceeding)
• Court: New York Supreme Court — Appellate Division

Page 375

575 N.Y.S.2d 375

171 A.D.2d 197

In the Matter of David R. WHITE, Appellant, v. Edward V. REGAN, Individually and as New York State

Comptroller, et al., Respondents. (Proceeding No. 1.)

In the Matter of CHATEL ASSOCIATES, Appellant, v. Edward V. REGAN, Individually and as New York State

Comptroller, et al., Respondents. (Proceeding No. 2.)

Supreme Court, Appellate Division Third Department.

Oct. 24, 1991.

Sinzheimer & Keefe, P.C. (Peter J. Molinaro, of counsel), Albany, for appellants.

Robert Abrams, Atty. Gen. (Kathleen Liston Morrison, of counsel), Albany, for respondents.

Before MAHONEY, P.J., and CASEY, WEISS, MERCURE and CREW, JJ.

MERCURE, Justice.

Appeals (1) from a judgment of the Supreme Court (Connor, J.), entered June 29, 1990 in Albany County, which, in a proceeding (No. 1) pursuant to CPLR article 78, granted respondents' motion to dismiss the petition for lack of subject matter jurisdiction, and (2) from a judgment of said court (Bradley, J.), entered September 14, 1990 in Albany County, which, in a proceeding (No. 2) pursuant to CPLR article 78, dismissed the petition due to lack of subject matter jurisdiction.

In each of these CPLR article 78 proceedings, the petition alleges, inter alia, that petitioner unwittingly took title to real property containing one or more undisclosed underground petroleum storage tanks, that the tank or tanks had previously leaked, causing a discharge of petroleum, that petitioner incurred expense in remediating the contamination, and that petitioner subsequently made application for and was wrongly denied reimbursement of cleanup and removal costs from the State Environmental Protection and Spill Compensation Fund (hereinafter the Fund) (see, Navigation Law art. 12) upon the ground that petitioner was a discharger under the Navigation Law and, thus, responsible for the cost of cleanup and removal. In each case, Supreme Court dismissed the petition due to lack of subject matter jurisdiction, holding that petitioner was required to proceed in the Court of Claims, and petitioner has appealed to this court. We agree with Supreme Court's dismissal of the petitions, although for entirely different reasons.

Initially, we agree with petitioners that Supreme Court incorrectly dismissed their petitions for lack of subject matter jurisdiction. "Under CPLR 7803(3), Supreme Court has subject matter jurisdiction over a proceeding challenging an administrative agency determination on the ground that it 'was arbitrary and capricious' " (see, Matter of Gross v. Perales, 72 N.Y.2d 231, 235, 532 N.Y.S.2d 68, 527 N.E.2d 1205). "However, '[a]ny restitution or damages granted to the petitioner must be incidental to the primary relief sought by the petitioner * * * ' " (id., quoting CPLR 7806). Here, the monetary relief sought by petitioners is merely incidental to the primary relief sought because it may be recovered only if the challenged determination is found to be irrational (see, Matter of Gross v. Perales, supra, at 236, 532 N.Y.S.2d 68, 527 N.E.2d 1205). In view of the fact that the proceedings may be determined by resolution of two legal issues, we shall dispose of the petitions rather than remit them to Supreme Court for determination.

Turning to the merits, we reject the contention that the Fund Administrator acted irrationally in denying petitioners' applications for reimbursement of cleanup and removal costs incurred in remediating their respective petroleum discharges. Even accepting the contention that all discharges of petroleum occurred prior to petitioners' ownership of their respective parcels of land and that petitioners were unaware of and did nothing to contribute to the contamination, it is nonetheless our view that petitioners are dischargers of petroleum within the purview of Navigation Law § 172(8) and, thus, not eligible for reimbursement (see, Navigation Law § 181[1]; State of New York v. Stewart's Ice Cream Co., 64 N.Y.2d 83, 87-88, 484 N.Y.S.2d 810, 473 N.E.2d 1184). This court has consistently construed Navigation Law § 181(1) so as to impose liability on the owner of a system from which a discharge occurred in the absence of evidence that the owner caused or contributed to the discharge (see, State of New York v. Wisser Co., 170 A.D.2d 918, 919, 566 N.Y.S.2d 747; State of New York v. New York Cent Mut. Fire Ins. Co., 147 A.D.2d 77, 79, 542 N.Y.S.2d 402). Further, in State of New York v. King Serv., 167 A.D.2d 777, 563 N.Y.S.2d 331, we considered and rejected the contention of the current owner of a petroleum storage system that liability for payment of cleanup and removal costs should be shifted to the entity which owned the system at the time the discharge occurred or began, holding that the current owner's liability was "predicated on [its] own status as a discharger" (id., at 778, 563 N.Y.S.2d 331). Here, as in that case, "[the current owner's] remedies lie with its direct claims against [the prior owner] * * * predicated upon [the prior owner's] liability as a discharger" (id., at 779, 563 N.Y.S.2d 331), should it be so advised.

The imposition of strict liability upon the owner of the system at the time of discovery of the discharge is entirely consistent with the overall State and Federal statutory and regulatory scheme for the prevention and remediation of accidental discharges of petroleum. The 1983 Control of the Bulk Storage of Petroleum Act (ECL 17-1001 et seq.), with legislative goals almost identical to those underlying Navigation Law article 12 (compare ECL 17-1001, with Navigation Law § 170; see, Consolidated Edison Co. of N.Y. v. Department of Envtl. Conservation, 71 N.Y.2d 186, 193-194, 524 N.Y.S.2d 409, 519 N.E.2d 320), and regulations promulgated thereunder (6 NYCRR parts 612-614) impose upon the current owner the financial obligation for proper closure of out-of-service petroleum storage facilities (see, ECL 17-1003[4]; 17-1005[2][b]; 6 NYCRR 613.9[b], [c], including the disposition of waste products in accordance with all State and Federal requirements (6 NYCRR 613.9[b][1][i]. To permit facile avoidance of this obligation under the...