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Lamar Exploration Corp. - Order, April 11, 2003

Order, April 11, 2003

STATE OF NEW YORK: DEPARTMENT OF ENVIRONMENTAL CONSERVATION

In the Matter of Alleged Violations of the Environmental Conservation Law Articles 23 and 71, and Title 6 of the Official Compilation ORDER of Codes, Rules and Regulations of the State of New York Parts 551 and 555,

by:

Lamar Exploration Corp.,
Respondent.

DEC Case No.:D9-1065-0111

WHEREAS:

  1. Pursuant to . 622.15 of Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York ("6 NYCRR"), on December 23, 2003, Staff of the New York State Department of Environmental Conservation (the "Department") duly served a motion for default judgment upon Respondent, Lamar Exploration Corp., by first class mail addressed to Respondent at (i) Respondent's last known address as reported to the Department on Respondent's Organizational Report and (ii) the address provided by Respondent to the Secretary of State for service of process.
  2. The motion and supporting papers provide that on November 5, 2002, Staff duly served a Notice of Hearing and Complaint upon Respondent by service on the New York Secretary of State, Respondent's statutory agent for service of process pursuant to New York Business Corporation Law .306(b)(1). The Notice of Hearing included a statement, pursuant to 6 NYCRR . 622.3, that failure to respond within twenty (20) days of receipt of the Complaint constitutes a default and waiver of the right to a hearing. Staff documents that the time for service of the answer expired with no reply from Respondent.
  3. Respondent has failed to serve a reply to Staff's motion for a default judgment.
  4. Failure to answer a complaint is a ground for a default pursuant to 6 NYCRR 622.15.
  5. I adopt the findings of Administrative Law Judge Susan J. Dubois in the summary report annexed hereto.

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

  1. Pursuant to Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York ("6 NYCRR") .622.15, Respondent, Lamar Exploration Corp., is found to be in default and, accordingly, the allegations against Respondent contained in Staff's Complaint are deemed to have been admitted by Respondent.
  2. Respondent violated Environmental Conservation Law ("ECL") .23-0305.8(f) and 6 NYCRR 551.2 by failing to submit Annual Well Reports for calendar years 1999 to 2001, inclusive.
  3. Respondent violated ECL .23-0305.8(e) and 6 NYCRR 551.4 by failing to file and maintain financial security coverage for Respondent's well at any time since July 13, 1998.
  4. Within thirty (30) days from the date of this Order, Respondent must correct all violations set forth herein by submitting Annual Well Reports for calendar years 1999 to 2001, inclusive, in compliance with 6 NYCRR 551.2 and filing financial security coverage for its well in compliance with 6 NYCRR 551.4.
  5. The penalty for such violation is fixed at Twelve Thousand, Two Hundred and Thirty-eight Dollars ($12,238.00), Three Thousand, Five Hundred Dollars ($3,500.00) of which must be paid within thirty (30) days of the date of this Order by cashiers or certified check or by Money Order payable to "NYSDEC." Payment of the balance of the penalty, Eight Thousand, Seven Hundred and Thirty-Eight Dollars ($8,738.00), is suspended provided Respondent shall comply with the provisions of paragraph IV hereof within the time period provided for therein.
  6. Respondent shall permanently cease and desist from any and all violations of the ECL and rules and regulations promulgated pursuant thereto.
  7. All communications from Respondent to the Department concerning this Order, including the payment of penalties, shall be made to Richard A. Sherman, Esq., Assistant Counsel, Office of General Counsel, 625 Broadway, 14th Floor, Albany, New York 12233-5500.
  8. The provisions, terms and conditions of this Order shall bind the Respondent, its agents, servants, employees, successors, and assigns and all persons, firms, corporations acting for or on behalf of Respondent.

For the New York State Department of Environmental Conservation

/s/
By: Erin M. Crotty, Commissioner
DATED: April 11, 2003
Albany, New York

TO: LAMAR EXPLORATION CORP.
9372 Douglas Fir Court
Clarence Center, NY 14032

RICHARD A. SHERMAN, ESQ.
Assistant Counsel
Division of Environmental Enforcement
New York State Department of Environmental Conservation
625 Broadway, 14th Floor
Albany, New York 12233-5500

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

In the Matter of an Alleged Violation of Articles 23 and 71 of the Environmental Conservation Law and Parts 551 and 555 of Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York

-by-

LAMAR EXPLORATION CORP.,
Respondent

Case No. D9-1065-0111

DEFAULT SUMMARY REPORT

Summary

The present report concerns a motion for a default judgement which the Division of Environmental Enforcement Staff of the Department of Environmental Conservation (the "Department Staff") served in the matter of Lamar Exploration Corp., 9372 Douglas Fir Court, Clarence Center, New York 14032 (the "Respondent") 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"). The report recommends that the motion be granted.

Proceedings

On November 5, 2002, the Department Staff served a Notice of Hearing and Complaint upon the Respondent. The Complaint alleged that the Respondent had violated 6 NYCRR Sections 551.2 and 551.4 and Environmental Conservation Law ("ECL") Sections 23-0305.8(f) and 23-0305.8(e) by failing to submit annual well reports and failing to maintain financial security for an oil and/or gas well owned by the Respondent. The well is C.R.E. King Unit #1, API Well No. 31-013-20391-00-00.

The Notice of Hearing and Complaint were served upon the Respondent through the Office of the Secretary of State on November 5, 2002 by Marina Feldman, a Paralegal employed by the Department. Ms. Feldman also served copies of the Motion for Default Judgement upon the Respondent on December 23, 2002 by first class mail addressed to the Clarence Center address above and to P.O. Box 711, Amherst, New York 14226-0711.

The Notice of Hearing required the Respondent to serve upon the Department an Answer to the Complaint within 20 days of receipt of the Notice of Hearing and Complaint. The Notice stated that the Answer must be submitted both to the DEC Office of Hearings and Mediation Services and to Richard A. Sherman, Esq., of the DEC Division of Environmental Enforcement. The Notice further stated that failure to timely answer would result in a default and a waiver of the Respondent's right to a hearing. The Notice stated that the Department's Office of Hearings would set a date for hearing upon the filing by the Department Staff of a Statement of Readiness for Adjudicatory Hearing. The Notice did not set a specific date for a pre-hearing conference.

As of December 23, 2002, the Department Staff had not received any Answer nor any other contact from the Respondent. As of February 7, 2003, the DEC Office of Hearings and Mediation Services had not received any Answer from the Respondent.

On December 23, 2002, the Department Staff moved for a default judgement based on the Respondent's failure to answer the Complaint. The motion was sent to the DEC Office of Hearings and Mediation Services on December 23, 2002, with a copy sent to the Respondent. As of February 7, 2003, the Office of Hearings and Mediation Services had not received any response from the Respondent concerning the motion for a default judgement.

On January 10, 2002, the DEC Staff sent to the Office of Hearings and Mediation Services a copy of the Notice of Hearing and Complaint.

Discussion

The procedures for a default judgement are provided in 6 NYCRR Section 622.15. The regulation provides that a respondent's failure to file a timely answer constitutes a default and a waiver of the respondent's right to a hearing. In this event, the Department Staff may make a motion to the Administrative Law Judge ("ALJ") for a default judgement. Failure to appear at a hearing or at a scheduled pre-hearing conference also constitute defaults, although those circumstances are not under consideration in the present case.

6 NYCRR 622.15(b) requires that a motion for default judgement contain: (1) proof of service upon the respondent of the notice of hearing and complaint or other such document which commenced the proceeding; (2) proof of the respondent's failure to appear or failure to file a timely answer; and (3) a proposed order. The regulation further provides that upon a finding by the ALJ that the requirements of Subdivision 622.15(b) have been adequately met, the ALJ will submit a report, which will be limited to a description of the circumstances of the default, and the proposed order to the Commissioner.

6 NYCRR 622.3(a)(3) provides that service of the notice of hearing and complaint must be by personal service consistent with the Civil Practice Law and Rules ("CPLR") or by certified mail. CPLR Section 311(a)(1) provides that service upon a business corporation may be made pursuant to Business Corporation Law Section 306, under which service may be made by service upon the New York State Secretary of State and is complete when the Secretary of State is served.

In the present case, the Department Staff has submitted an affirmation by Mr. Sherman and an affidavit of service by Ms. Feldman which prove that the Notice of Hearing and Complaint was served upon the Respondent on November 5, 2002 by hand delivery to the Office of Secretary of State, in Albany. The Notice of Hearing informed the Respondent that failure to make timely service of an answer would constitute a default and would result in waiver of the right to be heard in the matter. The Notice of Hearing directed that the Respondent file an Answer with the Department within 20 days following receipt of the Complaint, which would have been November 26, 2002.

The Respondent's time for serving an Answer to the Complaint expired on November 26, 2002. Mr. Sherman's affirmation proves that the DEC had not received an Answer nor response of any kind from the Respondent as of December 23, 2002, the date of Mr. Sherman's affirmation. Ms. Feldman's December 23, 2002 affidavit proves that a copy of the DEC Staff's motion for default judgement was served upon the Respondent by first class mail on December 23, 2002. The Office of Hearings and Mediation Services has not received any response to the motion from the Respondent as of February 7, 2003.

The Department Staff submitted a proposed order with the motion for a default judgement.

Thus, the requirements of 6 NYCRR 622.15(b) have been met with respect to the motion for a default judgement in this matter. In accordance with 6 NYCRR 622.15(c), this summary report will be submitted to the Commissioner accompanied by a proposed order.

Recommendation

The Commissioner should grant the default judgement requested by the Department Staff in this matter.

/s/
Susan J. DuBois
Administrative Law Judge
Albany, New York

TO: Lamar Exploration Corp.
9372 Douglas Fir Court
Clarence Center, New York 14032

Lamar Exploration Corp.
P.O. Box 711
Amherst, New York 14226-0711

Richard A. Sherman, Esq.
Division of Environmental Enforcement
NYS Department of Environmental Conservation
625 Broadway, 14th Floor
Albany, New York 12233-5500

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