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Garcia Beck Street Corp. - Ruling, September 21, 2004

Ruling, September 21, 2004

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

In the Matter of the Alleged Violation of Article
17 of the Environmental Conservation Law and
Part 612 of the Official Compilation of Codes,
Rules and Regulations of the State of New York,
by:

GARCIA BECK STREET CORP.,
Respondent.

RULING OF THE
ADMINISTRATIVE
LAW JUDGE

(Case No. 2-601039)

Summary

By written motion dated July 8, 2004, Staff of the Department of Environmental Conservation (Department Staff) requests that a default judgment be issued against Garcia Beck Street Corp. and Crescent Street Construction, pursuant to Section 622.15 of Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York (6 NYCRR 622.15). Staff maintains that Garcia Beck Street Corp. and Crescent Street Construction defaulted in this matter by failing to file a timely answer to Staff's complaint, and by failing to appear at a pre-hearing conference that was announced in Staff's notice of hearing.

Staff's motion cannot be granted as to either Garcia Beck Street Corp. or Crescent Street Construction. As further explained below, the motion cannot be granted as to Garcia Beck Street Corp. because Staff has not adequately demonstrated that Garcia Beck Street Corp. was served with the notice of hearing and complaint. Furthermore, the motion cannot be granted as to Crescent Street Construction because it was not named as a respondent in the notice of hearing and complaint.

Even if the motion could be granted, Staff's proposed order would have to be modified because, as drafted, it would require the submission of a completed application to register a petroleum bulk storage facility that Staff now acknowledges is currently registered with the Department.

Background

Department Staff initiated this action by a notice of hearing and complaint dated May 4, 2004. The complaint alleged that the Respondent, Garcia Beck Street Corp., failed to timely register its petroleum bulk storage facility located at 943 Bruckner Blvd., Bronx. This was alleged as a violation of 6 NYCRR 612.2, for which Department Staff sought payment of a Seven Thousand Five Hundred Dollar ($7,500) civil penalty and such other relief that the Commissioner should deem just and appropriate.

The hearing notice indicated that pursuant to 6 NYCRR 622.4, the Respondent was required, within 20 days of receiving the notice and complaint, to serve upon Department Staff an answer signed by the Respondent, the Respondent's attorney, or other authorized representative. The notice also advised the Respondent that, pursuant to 6 NYCRR 622.8, a pre-hearing conference would be held at 4:30 p.m. on May 20, 2004, at the Department's offices in Long Island City, in order for the Respondent and Department Staff to resolve, clarify and define the issues between them. Finally, the notice informed the Respondent that its failure to make timely service of an answer, or its failure to attend the scheduled pre-hearing conference, would result in a default and waiver of the Respondent's right to a hearing.

By written motion dated July 8, 2004, Department Staff requested a default judgment pursuant to 6 NYCRR 622.15. The default is sought as to Garcia Beck Street Corp. and Crescent Street Construction, which the motion papers cite together as "Respondent," even though Crescent Street Construction was not a named respondent in the notice of hearing and complaint. According to the default motion, Garcia Beck Street Corp. and Crescent Street Construction are in default because they failed to file a timely answer and because they failed to appear at the scheduled pre-hearing conference. The motion requests that the Commissioner issue an order finding the default, imposing a $7,500 civil penalty, requiring that a completed application to register the petroleum bulk storage facility be submitted within 30 days of the order's effective date, and directing that there be no further violations of the law and regulations.

As an administrative law judge with the Department's Office of Hearings and Mediation Services, I was assigned to this matter after the office received a copy of the default motion. After reviewing it, I wrote Staff counsel Benjamin Conlon a letter dated August 12, 2004, seeking clarification of Staff's position.

My letter noted that while Staff's proposed order would require the Respondent to submit a completed application to register the petroleum bulk storage facility, the cover letter for the hearing notice states that according to the Department's records, the Respondent registered its tanks after they were due to be registered, which suggests that the Respondent complies with the registration requirement and need not re-register at this time.

My letter also noted that Mr. Conlon's affirmation in support of the default motion justifies the proposed civil penalty in part on the "duration" of the violation of the registration requirement. Staff's proposed order (but not the complaint) said that the registration for the Respondent's facility expired on October 21, 2002. However, it was unclear from the papers as a whole if and when this violation was corrected.

I wrote that because Staff's papers were so ambiguous, the default motion could not be granted and the appropriate relief awarded until Staff clarified whether the Respondent had come back into compliance with the registration requirement. I wrote that if the Respondent had come back into compliance, I needed to know when the registration was renewed, so the duration of the violation could be determined.

Finally, pointing out that if the Respondent's facility is currently registered, it would not seem necessary to require the Respondent to submit a new registration application, I sought confirmation whether Staff wanted to withdraw that requirement from its proposed order.

In response to my letter, Alyce Gilbert of the Department's Division of Environmental Enforcement, who works under Mr. Conlon's supervision, submitted an affidavit dated August 24, 2004. Her affidavit indicated that the facility's petroleum bulk storage registration expired on October 21, 2002, and that the facility remained unregistered until November 15, 2003, when it was registered again.

In a follow-up conversation with Ms. Gilbert on August 31, 2004, she said that because the facility is currently registered, Staff agreed to withdraw its request that the Respondent be directed to submit a new registration application.

No response to the default motion has been made by or on behalf of Garcia Beck Street Corp. or Crescent Street Construction.

- - Garcia Beck Street Corp.

The default motion cannot be granted as to Garcia Beck Street Corp. because Staff has not adequately demonstrated that Garcia Beck Street Corp. was served with the notice of hearing and complaint.

As noted above, Garcia Beck Street Corp. was the only named respondent in the notice and complaint. The notice and complaint were served on May 7, 2004, by Ms. Gilbert, who states in an affidavit (Exhibit "C" to the default motion) that she placed a true and correct copy of the documents in a secure postpaid wrapper, addressed as follows:

Garcia Beck Street Corp
Crescent Street Construction
36-44 13th Street
Long Island City, NY 11106

According to Ms. Gilbert, she mailed the notice and complaint by certified mail return receipt requested. A copy of the signed return receipt card, attached to the motion as Exhibit "D", shows the following address for delivery:

Crescent Street Construction
Garcia Beck Street Cor
p 36-44 13th Street
Long Island City, NY 11106

When the card was returned to Department Staff, it indicated a delivery date of May 11, 2004. The name of the recipient is not decipherable from that person's signature on the card, and Staff has not identified the recipient either.

According to the Department's regulations, a notice of hearing and complaint may be served by certified mail, in which case service is considered complete when the notice of hearing and complaint are received [see 6 NYCRR 622.3(a)(3)]. In this case, the papers were received, but it is not evident that they were received by or on behalf of Garcia Beck Street Corp.

The return receipt card, by itself, assures the Department only that the papers were delivered at the address to which they were sent, not that the address is an appropriate one for service upon their intended recipient. Also, the card identifies two addressees, with Crescent Street Construction appearing at the top.

Whatever legal relationship Crescent Street Construction has to Garcia Beck Street Corp. is not explained in Mr. Conlon's affirmation, Ms. Gilbert's affidavit, or any other evidence provided as part of the default motion. Nor is there any evidence connecting Garcia Beck Street Corp. to the Long Island City address.

Department Staff did not do separate mailings for Garcia Beck Street Corp. and Crescent Street Construction; it mailed one set of documents for two intended recipients. Though the notice and complaint were delivered at the Long Island City address, it is not clear on whose behalf they were accepted, or to which of the addressees they were forwarded.

In summary, Staff's default motion is inadequate as to Garcia Beck Street Corp. because it does not contain proof that Garcia Beck Street Corp. was served with the notice and complaint, a required element for such a motion. [See 6 NYCRR 622.15(b)(1), which states that a motion for a default judgment must contain proof of service upon the respondent of the notice of hearing and complaint or such other document which commenced the proceeding.]

- - Crescent Street Construction

The default motion cannot be granted as to Crescent Street Construction because Crescent Street Construction was not named as a respondent in the notice of hearing and complaint, even if one were to conclude that it, and not Garcia Beck Street Corp., was served with the pleadings.

Because the notice of hearing and complaint identified only Garcia Beck Street Corp. as Respondent, it alone was obliged to answer the complaint and appear at the pre-hearing conference. The failure of Crescent Street Construction to answer or appear does not constitute a default, because Staff's hearing notice put it under no obligation to respond to the charges. If Staff wants to add Crescent Street Construction to this action, it should move to amend the complaint.

- - Duty to Register

Finally, even if one could find the basis for a default in this matter, Staff's proposed order would have to be modified. Where, as here, Staff now concedes that the petroleum bulk storage facility has been re-registered with the Department, it makes no sense to require the submission of another registration application.

Ruling

The motion for default judgment is denied as to both Garcia Beck Street Corp. and Crescent Street Construction.

/s/
Edward Buhrmaster
Administrative Law Judge

Albany, New York September 21, 2004

TO: Benjamin A. Conlon, Esq.
NYS Dept. of Environmental Conservation
625 Broadway, 14th Floor
Albany, New York 12233-5500
Garcia Beck Street Corp.
36-44 13th Street
Long Island City, New York 11106
Crescent Street Construction
36-44 13th Street
Long Island City, New York 11106

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