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133-135 East 30th Street Corp. - Order, May 13, 2019

Order, May 13, 2019

STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL CONSERVATION

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

-by-

133-135 EAST 30TH STREET CORP.,
Respondent.

ORDER

DEC Case No. PBS.2-600779.9.2018

This administrative enforcement proceeding addresses allegations by staff of the New York State Department of Environmental Conservation (Department) that respondent 133-135 East 30th Street Corp. violated ECL 17-1009 and 6 NYCRR 613-1.9(c) by failing to renew the registration of its petroleum bulk storage (PBS) facility on or before July 7, 2017, the date on which its prior registration expired. Respondent's facility is located at 133 East 30th Street, New York, New York, and includes an aboveground petroleum bulk storage tank with a capacity of 2,500 gallons.

Administrative Law Judge (ALJ) Michael S. Caruso of the Department's Office of Hearings and Mediation Services prepared the attached default summary report, which I adopt as my decision in this matter, subject to my comments below.

As set forth in the ALJ's default summary report, respondent failed to file an answer to the complaint served by Department staff in this matter, failed to appear at a pre-hearing conference scheduled for August 13, 2018, and failed to appear for the adjudicatory hearing scheduled for September 13, 2018 (see Default Summary Report at 3 [Finding of Fact No. 8]). At the September 13, 2018 adjudicatory hearing, Department staff made an oral motion for a default judgment before Chief ALJ James T. McClymonds. Chief ALJ McClymonds reserved on the motion, and Department staff later submitted a written motion for default judgment with supporting papers. Thereafter, the matter was assigned to ALJ Caruso.

As a consequence of respondent's failure to answer or appear in this matter, the ALJ recommends that Department staff's motion for a default judgment be granted (see Default Summary Report at 5). I concur that staff is entitled to a judgment on default pursuant to 6 NYCRR 622.15. The pleadings and the papers submitted with and in support of the motion provide sufficient facts to enable me to determine that staff has a viable claim that respondent failed to renew the registration of its PBS facility on or before July 7, 2017, the date on which its prior registration expired and, therefore, is in violation of ECL 17-1009 and 6 NYCRR 613-1.9(c).

Department counsel correctly points out that the requirement to register PBS facilities is one of the "cornerstones" of the PBS regulatory scheme (see Motion for Default Judgment, Exhibit B, Affirmation of Deborah Gorman, Esq., dated March 26, 2019,
¶ 14). Proper registration assists in the oversight of other requirements for a PBS facility (e.g., leak detection, monitoring, and reporting), with the goal of protecting the environment and public health.

Department staff, in its complaint, sought a penalty of ten thousand dollars ($10,000). In its default papers and proposed order, Department staff seeks to reduce the civil penalty to five thousand dollars ($5,000). ECL 71-1929(1), which applies to the statutory and regulatory violation at issue in this proceeding, provides for a penalty of up to thirty-seven thousand five hundred dollars ($37,500) per day for each violation. In proceedings similar to this one, Department staff has requested penalties that take into account the duration of the violation. For those facilities that have violated the registration requirement within the past two years, Department staff has, absent other violations, generally requested a penalty of five thousand dollars ($5,000) (see Matter of 12 Martense Associates, LLC, Order of the Commissioner, December 19, 2011, at 2). In this matter, respondent was required to register its facility on or before July 7, 2017. Based on this record, the requested penalty of five thousand dollars ($5,000) is authorized and appropriate.

I direct that respondent submit the civil penalty to the Department within fifteen (15) days of the service of this order upon respondent.

NOW, THEREFORE, having considered this matter and being duly advised, it is ORDERED that:

I. Department staff's motion for a default judgment pursuant to 6 NYCRR 622.15 is granted. By failing to answer or appear in this proceeding, respondent 133-135 East 30th Street Corp. waived its right to be heard at the hearing.

II. Based on the pleadings and papers submitted with and in support of Department staff's motion, respondent 133-135 East 30th Street Corp. is determined to have violated ECL 17-1009 and 6 NYCRR 613-1.9(c), by failing to renew the registration of its PBS facility located at 133 East 30th Street, New York, New York on or before July 7, 2017, the date on which its prior registration expired.

III. Within fifteen (15) days of the service of this order upon respondent 133-135 East 30th Street Corp., respondent shall submit to the Department a complete petroleum bulk storage application for the facility, plus applicable and past due registration fees.

IV. Within fifteen (15) days of the service of this order upon respondent 133-135 East 30th Street Corp., respondent shall pay a civil penalty in the amount of five thousand dollars ($5,000) by certified check, cashier's check, or money order made payable to the "New York State Department of Environmental Conservation."

V. The penalty payment shall be sent to the following address:

Office of General Counsel (Remediation Bureau)
NYS Department of Environmental Conservation
625 Broadway, 14th Floor
Albany, New York 12233-1500
Attn: Deborah Gorman, Esq.

VI. Any questions or other correspondence regarding this order shall also be addressed to Deborah Gorman, Esq. at the address referenced in paragraph V of this order.

VII. The provisions, terms, and conditions of this order shall bind respondent 133-135 East 30th Street Corp., and its agents, successors, and assigns, in any and all capacities.

For the New York State Department
of Environmental Conservation

By: /s/
Basil Seggos
Commissioner

Dated: Albany, New York
May 13, 2019, 2019

STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL CONSERVATION

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

-by-

133-135 EAST 30TH STREET CORP.,
Respondent.

DEFAULT SUMMARY REPORT

DEC Case No. PBS.2-600779.9.2018

Procedural History

Staff of the New York State Department of Environmental Conservation (Department) served respondent 133-135 East 30th Street Corp. (respondent) with a notice of hearing and complaint, dated July 5, 2018, alleging a violation of ECL 17-1009 and its implementing regulation, 6 NYCRR 613-1.9(c), for failing to renew the registration of its petroleum bulk storage (PBS) facility located at 133 East 30th Street, New York, New York (facility). The complaint seeks an order of the Commissioner: (i) finding respondent in violation of ECL 17-1009 and 6 NYCRR 613-1.9(c); (ii) assessing a civil penalty in the amount of ten thousand dollars ($10,000); (iii) directing respondent to register its petroleum bulk storage facility within fifteen (15) days of the service of the Commissioner's order, remit the applicable registration fee, and submit a complete registration application; and (iv) granting such other and further relief as the Commissioner shall deem just and appropriate.

Inasmuch as respondent is an active domestic business corporation in the State of New York, service of the notice of hearing and complaint on respondent was made by personally serving the New York State Department of State on July 5, 2018 (see Motion for Default Judgment, Exhibit C). Department staff also provided additional service by sending the notice of hearing and complaint to respondent by first class mail on July 5, 2018 (see id.). Respondent failed to file an answer to the complaint, and failed to appear at a pre-hearing conference scheduled for August 13, 2018, as directed in the cover letter and notice of hearing served with the complaint (see Motion for Default Judgment, Exhibit A).

As stated in the notice of hearing, on September 13, 2018, an adjudicatory hearing was convened before Chief Administrative Law Judge (Chief ALJ) James T. McClymonds. Department staff was represented by Deborah Gorman, Esq., Remediation Bureau, Office of General Counsel, New York State Department of Environmental Conservation, 625 Broadway, Albany, New York. No one appeared on behalf of respondent.

Chief ALJ McClymonds noted for the record that respondent had failed to answer the complaint, failed to appear for the pre-hearing conference and failed to appear for the adjudicatory hearing. Department staff moved orally for a default judgment pursuant to 6 NYCRR 622.15. Chief ALJ McClymonds reserved on the oral motion, allowing the record to remain open for Department staff to submit the documentation required by 6 NYCRR 622.15(b). On March 26, 2019, staff submitted a written motion for a default judgment with supporting papers (see Appendix A, attached hereto [listing documents submitted on motion]). Department staff served the motion and supporting papers on respondent by first class mail on March 26, 2019 (see Affirmation of Service of Deborah Gorman, dated March 26, 2019). On March 27, 2019, the matter was assigned to me.

Applicable Regulatory Provision

Section 613-1.9. Registration.

* * *

"(c) Renewal. Registration must be renewed every five years from the date of the last valid registration certificate until the department receives written notice and documentation from the facility owner that the facility has been permanently closed in accordance with section 613-2.6(b), 613-3.5(b), or 613-4.5(b) of this Part, or that ownership of the facility has been transferred in accordance with subdivision (d) of this section."

Findings of Fact

The following facts are found based upon the pleadings and papers submitted with and in support of staff's motion for a default judgment:

  1. Respondent 133-135 East 30th Street Corp. is the owner of a PBS facility having a capacity of over 1,100 gallons located at 133 East 30th Street, New York, New York (facility). In particular, PBS tank number 001 at the facility has a capacity of 2,500 gallons and is located aboveground. (See Motion for Default Judgment, Exhibits D, E, F, and G.)[1]

  2. Respondent is an active domestic business corporation in the State of New York. (See Motion for Default Judgment, Exhibit H.)

  3. On November 30, 1983, Martin Sanders and L.T.A. Investments, Inc. transferred all right, title and interest in the facility to 133-135 East 30th Street Corp., the facility's current owner. This deed is recorded in the Office of the City Register of the City of New York, in Reel 749 Page 1293. (See Motion for Default Judgment, Exhibit D.)

  4. Pursuant to a registration application received May 21, 2012, the Department issued PBS Certificate Number 2-600779 to 133-135 East 30th Street Corp. on July 6, 2012 with an expiration date of July 7, 2017. (See Motion for Default Judgment, Exhibits E, F and G.)
  5. On June 29, 2018, a search of the Department's PBS registration database revealed that the registration for the facility expired on July 7, 2017 and, as of June 29, 2018, had not been renewed. (See Motion for Default Judgment, Exhibit A, Affirmation of Deborah Gorman, Esq., dated July 5, 2018, ¶¶ 9-12.)
  6. As of March 26, 2019, respondent had not registered the facility (see Motion for Default Judgment, Exhibit B, Affirmation of Deborah Gorman, Esq., dated March 26, 2019, ¶ 9; see also Exhibit G).

  7. As shown by Receipt for Service No. 201807230217 issued by the New York State Department of State, respondent was served personally, on July 5, 2018 pursuant to section 306 of the Business Corporation Law, with a notice of hearing and complaint dated July 5, 2018, alleging a violation of ECL 17-1009 and its implementing regulation, 6 NYCRR 613-1.9(c), together with a cover letter, statement of readiness and supporting affirmation, for failure to renew the registration of its PBS facility located at 133 East 30th Street, New York, New York. Consistent with CPLR 3215(g)(4), Department staff also provided additional service by sending the notice of hearing and complaint to respondent by first class mail on or about July 5, 2018. (See Motion for Default Judgment, Exhibit C.)

  8. Respondent failed to file an answer to the complaint, failed to appear at a pre-hearing conference scheduled for August 13, 2018, as directed in the cover letter and notice of hearing served with the complaint, and failed to appear for the adjudicatory hearing scheduled in the matter on September 13, 2018, as directed in the notice of hearing. (See Motion for Default Judgment, Exhibit B, Affirmation of Deborah Gorman, Esq., ¶¶ 4-6.)

Discussion

A respondent upon whom a complaint has been served must serve an answer within 20 days of receiving a notice of hearing and complaint (see 6 NYCRR 622.4[a]). A respondent's failure to file a timely answer "constitutes a default and a waiver of respondent's right to a hearing" (6 NYCRR 622.15[a]). In addition, attendance by a respondent at a scheduled pre-hearing conference or hearing is mandatory, "and failure to attend constitutes a default and a waiver of the opportunity for a hearing" (6 NYCRR 622.8[c]; see also 6 NYCRR 622.15[a] ["A respondent's ... failure to appear at the hearing or the pre-hearing conference ... constitutes a default and waiver of respondent's right to a hearing"]).

Upon a respondent's failure to answer a complaint or failure to appear for a pre-hearing conference or hearing, Department staff may make a motion to an ALJ for a default judgment. Such motion must contain: (i) proof of service upon respondent of the notice of hearing and complaint; (ii) proof of respondent's failure to appear or to file a timely answer; and (iii) a proposed order (see 6 NYCRR 622.15[b][1] - [3]).

As the Commissioner has held, "a defaulting respondent is deemed to have admitted the factual allegations of the complaint and all reasonable inferences that flow from them" (Matter of Alvin Hunt, d/b/a Our Cleaners, Decision and Order of the Commissioner, July 25, 2006, at 6 [citations omitted]). In addition, in support of a motion for a default judgment, staff must "provide proof of the facts sufficient to support the claim[s]" alleged in the complaint. (Matter of Queen City Recycle Center, Inc., Decision and Order of the Commissioner, December 12, 2013, at 3.) Staff is required to support its motion for a default judgment with enough facts to enable the ALJ and the Commissioner to determine that staff has a viable claim (see Matter of Samber Holding Corp., Order of the Commissioner, March 12, 2018 [Samber], at 1 [citing Woodson v Mendon Leasing Corp., 100 NY2d 62, 70-71 (2003)]; see also CPLR 3215[f]).

The record establishes that: (i) Department staff served the notice of hearing and complaint upon respondent; (ii) respondent failed to file an answer to the complaint and failed to appear at a pre-hearing conference scheduled for August 13, 2018, as directed in the cover letter and notice of hearing served with the complaint; and (iii) respondent failed to appear for the adjudicatory hearing scheduled on September 13, 2018, as directed in the notice of hearing. Department staff has submitted a proposed order (see Motion for Default Judgment, Exhibit J). Based upon the foregoing, the Department is entitled to a default judgment in this matter pursuant to the provisions of 6 NYCRR 622.15. Staff also served respondent with copies of the motion for default judgment and supporting papers (see Affirmation of Service of Deborah Gorman, dated March 26, 2019, ¶ 3).

Department staff's submissions in support of the motion for a default judgment provide proof of facts sufficient to enable me to determine that staff has a viable claim that respondent failed to renew the registration of its petroleum bulk storage facility located at 133 East 30th Street, New York, New York, in violation of ECL 17-1009 and 6 NYCRR 613-1.9(c) (see Samber at 1).

Staff's complaint requested a civil penalty in the amount of ten thousand dollars ($10,000). In its motion for default judgment and proposed order, Department staff seeks to reduce the civil penalty to five thousand dollars ($5,000). Staff's submissions on the motion for a default judgment elaborate on the requested penalty, discussing the Department's Civil Penalty Policy, DEE-1, and administrative precedent relating to similar violations (see Motion for Default Judgment, Exhibit A, Complaint, at Wherefore Clause ¶ II; see also Exhibit B, Gorman Affirmation, dated March 26, 2019, ¶¶ 13-17). Accordingly, staff's motion to reduce the civil penalty to five thousand dollars ($5,000) should be granted because respondent is not prejudiced by reducing the penalty requested.

I conclude that staff's request for a civil penalty in the amount of five thousand dollars ($5,000) is consistent with the Department's penalty policy as well as applicable provisions of ECL article 71 and administrative precedent (see e.g. Matter of 12 Martense Associates LLC, Order of the Commissioner, December 19, 2011, at 2).

Conclusion of Law

By failing to renew the registration of its PBS facility located at 133 East 30th Street, New York, New York on or before July 7, 2017, respondent violated ECL 17-1009 and 6 NYCRR 613-1.9(c).

Recommendation

Based upon the foregoing, I recommend that the Commissioner issue an order:

1. Granting Department staff's motion for default judgment, holding respondent 133-135 East 30th Street Corp. in default pursuant to the provisions of 6 NYCRR 622.15;

2. Holding that respondent 133-135 East 30th Street Corp. violated ECL 17-1009 and 6 NYCRR 613-1.9(c) by failing to renew the registration of its PBS facility located at 133 East 30th Street, New York, New York on or before July 7, 2017, the date the prior registration expired;

3. Directing respondent 133-135 East 30th Street Corp. to submit to the Department, within fifteen (15) days of service of the Commissioner's order a complete registration application for the facility, together with the applicable registration fees;

4. Directing respondent 133-135 East 30th Street Corp. to pay a civil penalty in the amount of five thousand dollars ($5,000) within fifteen (15) days of service of the Commissioner's order; and

5. Directing such other and further relief as he may deem just and appropriate.


/s/
Michael S. Caruso
Administrative Law Judge

Dated: Albany, New York
April 26, 2019

APPENDIX A

Matter of 133-135 East 30th Street Corp.

DEC File No. PBS.2-600779.9.2018

Motion for Default Judgment

1. Cover letter, dated March 26, 2019, addressed to Chief Administrative Law Judge James T. McClymonds of the Department's Office of Hearings and Mediation Services, attaching staff's motion papers.

2. Notice of Motion for Default Judgment dated March 26, 2019.

3. Motion for Default Judgment dated March 26, 2019, attaching Exhibits A and B;

A. Cover letter, Notice of Hearing, Complaint, Statement of Readiness, and Affirmation of Deborah Gorman, Esq., dated July 5, 2018.

B. Affirmation of Deborah Gorman, Esq., dated March 26, 2019, attaching Exhibits C, D, E, F, G, H and J;

C. Affidavit of Service of Dale Thiel, sworn to March 26, 2019, attaching Department of State Receipt for Service, dated July 5, 2018, reflecting service upon respondent pursuant to section 306 of the Business Corporation Law;

D. Printout of search on Automated City Register Information System (ACRIS), dated February 15, 2019, attaching deed dated November 30, 1983;

E. Petroleum Bulk Storage (PBS) Application from 133-135 East 30th Street Corp., PBS No. 2-600779, received May 21, 2012;

F. PBS Certificate, PBS No. 2-600779 issued to 133-135 East 30th Street Corp., on July 6, 2012, with an expiration date of July 7, 2017;

G. Facility Information Report, PBS No. 2-600779, printed March 15, 2019.

H. NYS Department of State, Division of Corporations, Entity Information Sheet regarding 133-135 East 30th Street Corp., reflecting information through March 25, 2019;

J. Draft Order.[2]

4. Affirmation of Service of Deborah Gorman, Esq., dated March 26, 2019.


[1] Department staff's papers include two Exhibit Gs. The first Exhibit G is a Facility Information Report printed March 15, 2019. The second Exhibit G is a New York State Department of State Entity Information for 133-135 East 30th Street Corp. current through March 25, 2019. Pursuant to CPLR 2001, I am sua sponte correcting the record to identify the Department of State Entity Information, and any reference thereto, as Exhibit H.

[2] There is no Exhibit I.

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