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Costie, Arthur K. - Commissioners Decision and Order, December 16, 2003

Decision and Order, December 16, 2003

In the Matter of the Alleged Violation of Article 17
of the Environmental Conservation Law (ECL) and
Title 6 of the Official Compilation of Codes, Rules,
and Regulations of the State of New York (6 NYCRR)
Parts 612 and 613 by:

DEC Case No.: R6-19991228-91

DECISION AND
ORDER

ARTHUR K. COSTIE
d/b/a COSTIE'S BODY SHOP
Verona (T)
Oneida (Co.),

Respondent

WHEREAS:

  1. Pursuant to section 622.3 of Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York ("6 NYCRR"), staff of the New York State Department of Environmental Conservation (the "Department") served a notice of motion for order without hearing and supporting papers, in lieu of a complaint, upon respondent Arthur K. Costie.
  2. Staff's motion alleged that respondent: (a) violated 6 NYCRR 612.2(a)(2) by failing to renew the registration for his petroleum bulk storage tanks at his facility located at Route 46 and Higginsville Road in the Town of Verona, Oneida County, New York (the "Facility"); and (b) violated 6 NYCRR 613.5(a) by failing to complete required periodic tightness testing of two unprotected underground petroleum storage tanks at the Facility.
  3. A copy of the notice of motion and supporting papers was filed with the Office of Hearings and Mediation Services, and the matter was assigned to Administrative Law Judge ("ALJ") Daniel P. O'Connell.
  4. The notice of motion stated that failure to file a reply within twenty days of receipt of the notice of motion would constitute a default and waiver of respondent's right to a hearing in this matter. Respondent did not reply to staff's motion.
  5. No hearing is required as no material issue of fact exists.
  6. Upon review of the record, I hereby adopt the report prepared by ALJ O'Connell subject to my comments below. Department staff requested a penalty of at least fifteen hundred dollars for respondent's failure to timely renew the Facility's registration, a penalty of at least eight thousand dollars for respondent's failure to tightness test the underground petroleum bulk storage tanks at the Facility, and an additional suspended penalty in the amount of eight thousand dollars. Based on this record and the facts of this case, I have determined that:
    1. a penalty of one thousand five hundred dollars ($1,500) is appropriate for the failure to timely renew the Facility's registration; and
    2. in light of respondent's failure to tightness test any of his tanks since acquiring the property over ten years ago and respondent's failure to comply with direction from the Department to conduct such tests, a substantial penalty is warranted and a penalty of sixteen thousand dollars ($16,000) is assessed. As ALJ O'Connell states in his hearing report, tank tightness testing is necessary to ensure that tanks have not corroded to the point where they present an actual or potential threat to the environment.
  7. Based on this record, I am also ordering that respondent perform certain tasks including, but not limited to, closure of the tanks at the Facility. Contingent upon respondent's performance of the tasks and compliance with this order, and as recommended by Department staff and ALJ O'Connell, a portion of the total penalty will be suspended.

NOW, THEREFORE, having considered this matter, it is ORDERED that:

  1. Pursuant to 6 NYCRR 622.12, Department staff's motion for order without hearing is granted.
  2. Respondent is adjudged to have violated 6 NYCRR 612.2(a)(2) when he failed to renew the Facility's registration after it expired on July 21, 2000. In addition, respondent is adjudged to have violated 6 NYCRR 613.5(a) when he failed to test the tightness of the tanks in June 1993 following his acquisition of the Facility or at any time thereafter. These violations are continuing.
  3. Respondent shall be liable for a civil penalty in the amount of seventeen thousand five hundred dollars ($17,500). Of this amount, one thousand five hundred dollars ($1,500) of the penalty is for the violation of 6 NYCRR 612.2(a)(2), and sixteen thousand dollars ($16,000) for the violation of 6 NYCRR 613.5(a).
  4. Eight thousand dollars ($8,000) of the seventeen thousand five hundred dollars ($17,500) shall be suspended provided that respondent performs all three tasks set forth below and is otherwise in compliance with this order:
    1. Within thirty (30) days of the date of this Order, respondent shall submit to Department staff a completed application to renew the registration for the Facility, as well as a certified check or money order in the amount of the registration fee(s) required by 6 NYCRR 612.3;
    2. Within thirty (30) days of the date of this Order, respondent shall permanently close all underground petroleum bulk storage tanks at the Facility, including all connecting piping systems, in accordance with 6 NYCRR 613.9(b), (c), (d), and (e). Prior to permanently closing the tanks, respondent shall provide written notice to the Department in accordance with 6 NYCRR 612.2(d); and
    3. Within sixty (60) days of the date of this Order, respondent shall submit a closure report documenting proper closure of the Facility's underground petroleum bulk storage tanks in accordance with 6 NYCRR 613.9(b), (c), (d), and (e).
  5. The unsuspended portion of the civil penalty (nine thousand five hundred dollars ($9,500.00)) shall be paid within 30 days of service of this order to the New York State Department of Environmental Conservation. Payment of this penalty shall be by cashier's check, certified check or money order drawn to the order of "NYSDEC" and delivered to the Regional Director, New York State Department of Environmental Conservation, Region 6, 317 Washington Street, Watertown, New York, 13601-3787.
  6. In the event that respondent fails to perform any one of the three tasks in Paragraph IV or is otherwise not in compliance with this order, the entire suspended portion of the penalty (eight thousand dollars ($8,000)) shall become immediately due and payable to the Department.
  7. All communications from respondent to the Department concerning this order shall be made to the Regional Director, New York State Department of Environmental Conservation, Region 6, 317 Washington Street, Watertown, New York, 13601-3787.
  8. The provisions, terms and conditions of this order shall bind respondent, his agents, servants, employees, successors and assigns and all persons, firms and corporations acting for or on behalf of respondent.

For the New York State Department of
Environmental Conservation

/s/
By: Erin M. Crotty, Commissioner

Dated: Albany, New York
December 16, 2003

To: Arthur K. Costie (By Certified Mail)
Costie's Body Shop
RD #2, PO Box 95
Canastota, New York 13032

Randall C. Young, Esq. (By Regular Mail)
Assistant Regional Attorney
New York State Department of Environmental Conservation
Region 6
Dulles State Office Building
317 Washington Street
Watertown, New York 13601-3787

STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
625 Broadway
Albany, New York 12233-1550

In the Matter

- of -

Alleged Violations of Article 17 of the Environmental
Conservation Law (ECL) and Title 6 of the Official
Compilation of Codes, Rules, and Regulations of the
State of New York (6 NYCRR) Parts 612 and 613 by:

ARTHUR K. COSTIE
d/b/a/ COSTIE'S BODY SHOP
Verona (T)
Oneida (Co.)

Respondent

DEC Case No.: R6-19991228-91

HEARING REPORT

- by -

/s/

Daniel P. O'Connell
Administrative Law Judge

Proceedings

Staff of the New York State Department of Environmental Conservation (Department Staff or Staff) initiated this enforcement action by duly serving a notice of motion for order without hearing and supporting papers upon Arthur K. Costie (Respondent). Staff's motion papers consisted of a notice of motion; a motion for order without hearing; a memorandum supporting Staff's motion by Randall C. Young, Esq., Assistant Regional Attorney; an affidavit by Donald I. Johnson, Environmental Engineer I, with attached Exhibits A through D; and an affidavit by Mr. Young with attached Exhibit E. Mr. Johnson's affidavit is dated May 14, 2003. All other documents filed by Staff are dated May 15, 2003. With a cover letter dated May 29, 2003, Mr. Young provided an affidavit of service of the motion upon Mr. Costie.

According to Mr. Young's memorandum, Respondent owns a petroleum bulk storage facility at Route 46 and Higginsville Road in the Town of Verona, Oneida County, New York (the Facility). Respondent allegedly violated provisions of Environmental Conservation Law (ECL) Article 17, and implementing regulations, when Respondent:

  1. did not renew the registration for his petroleum bulk storage tanks at the Facility in July 2000 (6 NYCRR 612.2[a][2]); and
  2. did not test the tanks for tightness in 1993 and 1998 (6 NYCRR 613.5[a][1]).

In the motion, Staff requested a total civil penalty of at least $17,500 for the alleged violations. Of that amount, Staff requested that $8,000 be suspended provided Respondent either properly renews his registration and tests the tanks for tightness, or permanently closes the Facility.

In a letter dated May 22, 2003, I informed the parties that I was the assigned administrative law judge. The May 22, 2003 letter set a return date of June 9, 2003 for Respondent's reply. I received neither a reply from Respondent, nor a request to extend the return date.

Discussion

Motion for Order without Hearing

Department Staff requested an order without hearing against Respondent pursuant to 6 NYCRR 622.12. The regulations provide that Staff may commence an enforcement action with service of a motion for order without hearing in lieu of a complaint (see 6 NYCRR 622.3[b]; 622.12[a]). Section 622.12(d) is governed by the same principles that govern summary judgment pursuant to CPLR 3212. Section 622.12(d) provides that a contested motion for an order without hearing will be granted if, upon all the papers and proof filed, the cause of action or defense is established sufficiently to warrant granting summary judgment under the CPLR in favor of any party.

The Commissioner has provided extensive direction concerning the showing the parties must make in their respective motions and replies, and how the parties' filings will be evaluated (see Richard Locaparra, d/b/a L&L Scrap Metals, DEC Case No. 3-20000407-39, Final Decision and Order of the Commissioner [June 16, 2003]). The Commissioner's discussion includes numerous citations to case law, the Department's enforcement regulations, and CPLR 3212.

The party moving for summary judgment has the burden of establishing "his cause of action or defense 'sufficiently to warrant the court as a matter of law in directing judgment' in his favor (CPLR 3212, subd [b])" (Friends of Animals v. Associated Fur Mfrs., Inc., 46 NY2d 1065, 1067 [1979]). The moving party carries this burden by submitting evidence sufficient to demonstrate the absence of any material issues of fact (see Alvarez v. Prospect Hospital, 68 NY2d 320, 324 [1986]). The affidavit may not consist of mere conclusory statements but must include specific evidence establishing a prima facie case with respect to each element of the cause of action that is the subject of the motion. Similarly, a party responding to a motion for summary judgment may not merely rely on conclusory statements and denials but must lay bare its proof (see Hanson v. Ontario Milk Producers Coop., Inc., 58 Misc 2d 138, 141-142 [Sup Ct. Oswego County 1968]). The failure of a responding party to deny a fact alleged in the moving papers constitutes an admission of the fact (see Kuehne &Nagel, Inc. v. Baiden, 36 NY2d 539, 544 [1975]).

For the following reasons, I recommend that Staff's motion for an order without hearing be granted.

Service

Since Respondent did not file a reply to Staff's motion for order without hearing, there may be a threshold issue about whether Staff properly served the motion upon the Respondent. With a cover letter dated May 29, 2003, Mr. Young filed an affidavit of service dated May 29, 2003 by Ardis Seifried. According to the affidavit of service, Ms. Seifried sent a copy of Staff's motion and supporting papers to Respondent by certified mail, return receipt requested. Attached to the affidavit is a copy of the signed domestic return receipt, which the US Postal Service returned to the Department's Region 6 Offices.

Pursuant to 6 NYCRR 622.3(a)(3), service of a notice of hearing and complaint, or a motion for order without hearing in lieu of a complaint, must be by personal service consistent with the CPLR or by certified mail. Ms. Seifried's affidavit and the signed receipt establish as a matter of law that Respondent received a copy of Staff's motion on May 22, 2003 in a manner consistent with 6 NYCRR 622.3(a)(3).

Liability

Parts 612 and 613 apply to aboveground and underground petroleum storage facilities with a combined storage capacity over 1,100 gallons. The purpose of 6 NYCRR parts 612 and 613 is to regulate how petroleum products are handled and stored so as to protect public health, and the land and waters of the state.

Definitions of the terms, "facility" or "storage facility" are provided at 6 NYCRR 612.1(c)(10) and mean one or more stationary tanks, with associated piping and fittings that have a combined storage capacity of over 1,100 gallons of petroleum at the same site. A facility may include aboveground tanks, underground tanks, or a combination of both. An "existing facility" is one that has been constructed and is capable of being operated as of January 26, 1985 (see 6 NYCRR 612.1[c][9]).

Staff offered the following unrefuted evidence concerning Respondent's ownership of the Facility. Attached as Exhibit A to Mr. Johnson's affidavit is a copy of a petroleum bulk storage application. The name and location of the facility is Costie's Body Shop at Route 44 and Higginsville Road in the Town of Verona, Oneida County. On the application, the owner is identified as Arthur Costie. In his affidavit, Mr. Young states that he searched land records at the Oneida County Clerk's office and found a deed recorded in July 1993, which shows that Mr. Costie has owned the property located at Route 44 and Higginsville Road in the Town of Verona since June 11, 1993. Attached to Mr. Young's affidavit as Exhibit E is a copy of the deed. Mr. Young states further there is no record that shows a subsequent conveyance of the property to someone else.

As stated above, Respondent did not reply to Staff's motion. There are no disputed facts about who owns the property and the Facility. Therefore, Staff has established prima facie entitlement to a judgment as a matter of law that Respondent owns the petroleum bulk storage facility located at Route 44 and Higginsville Road in the Town of Verona, Oneida County.

1. Registration

In the motion, Staff alleged that Respondent violated 6 NYCRR 612.2(a)(2) because he did not renew the registration for the Facility after it expired on July 21, 2000. Pursuant to 6 NYCRR 612.2(a)(2), the registration must be renewed every five years from the date of the last valid registration until the Department receives written notice that the facility has been permanently closed or that ownership of the facility has been transferred.

Mr. Johnson's affidavit shows that he searched the Department's records concerning the Facility, and found that the Department issued Respondent a registration certificate for the Facility with effective dates from July 21, 1995 to July 21, 2000 (Exhibit B). In addition, Respondent did not file a renewal application when the certificate expired on July 21, 2000. Therefore, Staff established prima facie entitlement to a judgment as a matter of law that Respondent violated 6 NYCRR 612.2(a)(2) when Mr. Costie did not renew the registration for his facility after it expired on July 21, 2000. Furthermore, this violation has continued from July 21, 2000 to the present.

2. Tightness Testing Requirements

Underground petroleum storage tanks must be tested and monitored for leaks. The schedule for periodic tightness testing of the underground petroleum storage tanks is outlined in 6 NYCRR 613.5(a)(1). This regulation applies to Respondent's Facility and requires that, "any tank which is of unknown age must be tested within two years of the effective date of these regulations" (6 NYCRR 613.5[a][1][ii]). Since the effective date of the regulations was December 1985, and because the tanks at Respondent's Facility are of unknown age, the tanks should have been tested for tightness by December 1987.

The regulations require further periodic testing. Based on Table 1 of 6 NYCRR 613.5(a)(1), Category A tanks must be tested every 5 years after the initial test until the tanks are permanently closed. A Category A tank is an underground steel tank that does not have any corrosion protection (see 6 NYCRR 612.1[c][30]). The testing schedule states further that "[i]f for any reason, testing or inspection is not performed as required in this section, the tank or piping system must be replaced . . . or taken out of service pursuant to the requirements of section 613.9 of this Part" (6 NYCRR 613.5[a][1][v]).

Staff established prima facie entitlement to judgment as a matter of law that Respondent violated 6 NYCRR 613.5(a)(1) on two occasions. The first violation occurred in June 1993. As explained above, Respondent purchased the Facility in June 1993, and subsequently registered it with the Department. Mr. Johnson's affidavit and Exhibit A demonstrate that the tanks are of unknown age, and had not been tested before Respondent registered his Facility in June 1993. Therefore, Respondent was required to test the tightness of the tanks when he became the owner of the Facility. Respondent did not, and as a result he violated 6 NYCRR 613.5(a)(1). This violation has continued since June 1993. The second violation occurred five years later when Respondent failed to retest the tightness of the tanks in 1998 as required by 6 NYCRR 613.5(a)(1)(iv). The second violation has continued since 1998.

Relief

1. Civil Penalty

For violations of ECL Article 17, Title 10 and implementing regulations at 6 NYCRR parts 612 and 613, ECL 71-1929 authorizes a maximum civil penalty of $25,000 per day for each violation, according to Staff's notice of motion. In the motion for order without hearing, Staff requested a total civil penalty of at least $17,500 with $8,000 suspended provided Respondent complies with the directives outlined in the Commissioner's order concerning renewing the registration and conducting tightness tests.

In his memorandum, Mr. Young explained Staff's requested civil penalty. Staff relied on the guidance outlined in the Civil Penalty Policy. Referring to the policy, Staff contended that the civil penalty should be the sum of the economic benefit and the gravity component.

The benefit component of the civil penalty should be an estimate of the economic gain accrued to the violator by not complying with the regulations. According to Mr. Johnson, the cost of a tightness test is about $500 per tank. Respondent should have conducted at least two tightness tests on each of the two tanks. The first test should have occurred in June 1993 after Respondent purchased the Facility. The second test should have occurred five years latter in 1998, as required by 6 NYCRR 613.5(a)(1)(iv). In addition, Staff argued that Respondent avoided the cost of paying a registration fee in July 2000 after the initial registration expired. For facilities with storage tanks having a capacity between 2,000 and 5,000 gallons, the registration fee is $150.00 per facility (see 6 NYCRR 612.3[a]). Therefore, the total value of Respondent's economic benefit is $2,150.

The gravity component of the civil penalty should reflect the seriousness of the violations. A factor identified by Staff is that Respondent disregarded Staff's reminders to conduct tightness testing and to notify the Department about whether the Facility will be substantially modified. As explained above, Staff sent two letters to Mr. Costie. One was dated January 2, 1998 (Exhibit C), and another dated February 18, 1999 (Exhibit D). Both reminded him about complying with the applicable regulations. Respondent did not respond to either, and such disregard should be considered a significant aggravating factor in determining the appropriate civil penalty.

The tightness testing requirements are necessary, particularly with respect to underground petroleum storage tanks to ensure that old, unprotected tanks have not corroded to the point where their continued use presents an actual or potential threat to the environment.

The civil penalty requested by Staff is consistent with the amount authorized by ECL 71-1929, and with the guidance outlined in the Civil Penalty Policy. With respect to the issue of relief, Staff established a prima facie entitlement to judgment as a matter of law. Therefore, the Commissioner should assess a total civil penalty of $17,500. This recommendation accounts for the continuous nature of the violations. The amount should be apportioned as follows:

  1. $1,500 for violating 6 NYCRR 612.2(a)(2) by not renewing the registration of the tanks at the Facility in a timely manner in 2000; and
  2. $16,000 for violating 6 NYCRR 613.5(a)(1) by not testing the tightness of the two 2,000 gallon tanks at the Facility in 1993 and 1998.
2. Permanent Closure

In addition to the requested civil penalty, Staff requested an order from the Commissioner that would direct Respondent to close and remove all underground petroleum storage tanks from the Facility consistent with the requirements outlined in 6 NYCRR 613.9(b)(1), and to submit a closure report required by 6 NYCRR 613.9(c). For any underground petroleum storage tank that is permanently out of service, liquid and sludge must be removed from the tank and connecting lines. Any waste products removed must be disposed of in accordance with all applicable state and federal requirements. In addition, the tank must be rendered free of petroleum vapors. Provisions must be made for natural breathing of the tank to ensure that the tank remains vapor-free. Then, all connecting lines must be disconnected and removed or securely capped or plugged. Manways must be securely fastened in place. Finally, underground tanks must either be filled to capacity with a solid inert material (such as sand or concrete slurry) or removed. If an inert material is used, all voids within the tank must be filled. Pursuant to 6 NYCRR 613.9(b)(2), "[s]torage tanks or facilities which have not been closed pursuant to paragraph (1) of this subdivision are subject to all the requirements of this Part and Part 612 of this Title, including but not limited to periodic tightness testing, inspection, registration and reporting requirements."

Thirty days before the owner of a tank or facility permanently closes a tank or facility, the owner must notify Staff pursuant to 6 NYCRR 613.9(c). The rule at 6 NYCRR 613.9(c) refers to the notification requirements set forth at 6 NYCRR 612.2(d), and states, in pertinent part, that "[w]ithin 30 days prior to substantially modifying a facility, the owner must notify the department of such modification on forms supplied by the department."

Since the age of the tanks is not known, and because the tanks are unprotected, there is a high potential for environmental harm. Consequently, the Commissioner should direct Respondent to close the tanks permanently in a manner consistent with the requirements outlined in 6 NYCRR 613.9(b), and the notice requirements set forth in 6 NYCRR 613.9(c) and 6 NYCRR 612.2(d).

Findings of Fact

Based on the foregoing discussion, the following facts are established as a matter of law:

  1. Department Staff served the notice of motion for order without hearing, dated May 15, 2003 and supporting papers in lieu of a complaint by certified mail, return receipt requested, upon Arthur K. Costie. Respondent received Staff's motion on May 23, 2003.
  2. On June 11, 1993, Respondent purchased the petroleum bulk storage facility located at Route 44 and Higginsville Road in the Town of Verona, Oneida County (the Facility). Mr. Costie continues to own the property and the Facility.
  3. The Facility consists of two 2,000 gallon underground petroleum storage tanks, plus one tank with a storage capacity of 275 gallons. It is unknown when the tanks were installed at the Facility. They are unprotected steel tanks. The tanks have never been tested for tightness.
  4. On July 19, 1995, Mr. Costie filed a petroleum bulk storage registration application with the Department for the tanks at the Facility. With his application, Mr. Costie included payment of the $150 registration fee. Subsequently, Staff issued a registration certificate to Mr. Costie that was effective from July 21, 1995 to July 21, 2000.
  5. In a letter dated January 2, 1998, Donald Johnson, Environmental Engineer I from DEC Region 6, reminded Mr. Costie that the tanks at the Facility should have been tested for tightness. Mr. Johnson requested tightness test results from Respondent by January 31, 1998.
  6. In a letter dated February 18, 1999, Mr. Johnson explained that Mr. Costie must give the Department 30 days notice before the Facility is substantially modified.
  7. As of the date of Staff's motion, the Department has not received any tightness test results concerning the tanks at the Facility. In addition, the Department has not received notice from Respondent that the Facility will be either substantially modified or permanently closed.
  8. It costs about $500 to test a tank for tightness.

Conclusions

  1. Staff established as a matter of law that Respondent was served with a copy of Staff's motion for order without hearing in a manner consistent with 6 NYCRR 622.3(a)(3).
  2. Respondent violated 6 NYCRR 612.2(a)(2) when he failed to renew the Facility's registration after it expired on July 21, 2000. This violation has continued since July 2000.
  3. Respondent violated 6 NYCRR 613.5(a)(1) on two occasions. The first violation occurred when Respondent failed to test the tightness of the tanks after he purchased the Facility in June 1993. This violation has continued to the present. The second violation occurred when Respondent failed to re-test the tightness of the tanks five years later in 1998. This violation has continued to the present.

Recommendations

The Commissioner should grant Staff's motion for order without hearing. If the Commissioner grants Staff's motion, the Commissioner should assess Respondent a total civil penalty of $17,500, and direct Respondent to close the underground petroleum storage tanks at his Facility consistent with the requirements outlined in 6 NYCRR 613.9(b) and (c). A portion of the civil penalty may be suspended provided Respondent complies with all the directives in the Commissioner's order.

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