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2206 Cornaga LLC - Order, August 26, 2019

Order, August 26, 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-

2206 CORNAGA, LLC,
Respondent.

ORDER

DEC Case No. PBS.2-117773.3.2019

This administrative enforcement proceeding addresses allegations of staff of the New York State Department of Environmental Conservation (Department or DEC) that respondent 2206 Cornaga, LLC violated ECL 17-1009 and 6 NYCRR 613-1.9(d)(1) by failing to register its petroleum bulk storage facility at 22-06 Cornaga Avenue, Queens, New York (facility) within 30 days of the transfer of ownership of the facility to it on September 16, 2013. Located at the facility is a storage tank with a capacity of 10,000 gallons.

On July 23, 2019, an adjudicatory hearing was convened before Michael S. Caruso, Administrative Law Judge (ALJ) of DEC's Office of Hearings and Mediation Services. ALJ Caruso prepared the attached hearing report, which I adopt as my decision in this matter, subject to my comments below. As set forth in the ALJ's hearing 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 February 6, 2019, and failed to appear for the adjudicatory hearing scheduled in the matter for March 8, 2019 and reconvened on July 23, 2019 (see Hearing Report at 4 [Finding of Fact No. 8]).

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 Hearing Report at 4-5). I concur that staff is entitled to a judgment on default pursuant to 6 NYCRR 622.15.

At the hearing on July 23, 2019, Department staff presented proof of facts sufficient to enable me to determine that staff has a viable claim, and proved its case on the merits by a preponderance of the evidence (see id.). Accordingly, staff is entitled to a judgment based on record evidence.

The record demonstrates that respondent was required to register the facility following the transfer of ownership of the facility to it on September 16, 2013 (see ECL 17-1009[2]; Hearing Report at 3 [Finding of Fact No. 6). Respondent was to have submitted a completed registration to the Department by October 16, 2013. Respondent's failure to properly register the facility violated ECL 17-1009 and 6 NYCRR 613-1.9(d)(1).

ECL 71-1929 provides for a civil penalty of up to thirty-seven thousand five hundred dollars ($37,500) per day for each violation of title 10 of article 17 and its implementing regulations. Department staff, in its papers, sought a civil penalty in the amount of ten thousand dollars ($10,000). Where, as here, an owner has not registered the facility for more than five years, and no other violations or mitigating or aggravating factors exist, a civil penalty of ten thousand dollars ($10,000) is consistent with administrative precedent (see Matter of 12 Martense Associates LLC, Order of the Commissioner, December 19, 2011, at 2 [penalty ranges for PBS registration violations concerning heating oil tanks in New York City apartment buildings]). The requested penalty of ten thousand dollars ($10,000) 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. I also direct that respondent submit to the Department a petroleum bulk storage application for the facility within fifteen (15) days of service of this order upon it, together with all applicable registration fees.

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

  1. 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 2206 Cornaga, LLC waived its right to be heard at the hearing.
  2. Moreover, based upon record evidence, respondent 2206 Cornaga, LLC violated ECL 17-1009 and 6 NYCRR 613-1.9(d)(1), by failing to register its petroleum bulk storage facility located at 22-06 Cornaga Avenue, Queens, New York within 30 days of the transfer of ownership of the facility to it on September 16, 2013.
  3. Within fifteen (15) days of the service of this order upon respondent 2206 Cornaga, LLC, respondent shall submit to the Department a complete petroleum bulk storage application for the facility, plus applicable registration fees.
  4. Within fifteen (15) days of the service of this order upon respondent 2206 Cornaga, LLC, respondent shall pay a civil penalty in the amount of ten thousand dollars ($10,000) by certified check, cashier's check or money order made payable to the New York State Department of Environmental Conservation.
  5. The petroleum bulk storage application, applicable registration fees, and 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.

  6. 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.
  7. The provisions, terms and conditions of this order shall bind respondent 2206 Cornaga, LLC, 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: August 26, 2019
Albany, New York

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-

2206 CORNAGA, LLC,
Respondent.

HEARING REPORT

DEC Case No. PBS.2-117773.3.2019

Procedural History

Staff of the New York State Department of Environmental Conservation (Department) served respondent 2206 Cornaga, LLC (respondent) with a notice of hearing and complaint, dated January 3, 2019, alleging a violation of ECL 17-1009 and 6 NYCRR 613-1.9(d)(1) for failing to register its petroleum bulk storage facility located at 22-06 Cornaga Avenue, Queens, New York within 30 days of the transfer of ownership of the facility to it. The complaint seeks an order of the Commissioner: (1) finding respondent in violation of ECL 17-1009 and 6 NYCRR 613-1.9(d)(1); (2) assessing a civil penalty in the amount of ten thousand dollars ($10,000); (3) directing respondent to register its petroleum bulk storage facility within fifteen (15) days of service of the Commissioner's order by remitting the applicable registration fee along with a complete registration application; and (4) granting such other and further relief as the Commissioner shall deem just and appropriate.

Because respondent is an active domestic limited liability company in the State of New York, service of the notice of hearing and complaint on respondent was made by serving the New York State Department of State on January 3, 2019 (see Staff Exhibit 2). Department staff provided additional service by sending the notice of hearing and complaint to respondent by first class mail on or about January 3, 2019 (see id.). Respondent failed to file an answer to the complaint and failed to appear at a pre-hearing conference scheduled for February 6, 2019, as directed in the notice of hearing and accompanying cover letter (see Staff Exhibit 1).

As stated in the notice of hearing, on March 8, 2019, an adjudicatory hearing was convened before the undersigned. Department staff was represented by Deborah Gorman, Esq., Senior Attorney, Office of General Counsel, New York State Department of Environmental Conservation, 625 Broadway, Albany, New York. No one appeared on behalf of respondent.

Department staff indicated that it was prepared to proceed with the hearing, proffering a staff witness. Noting 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. I reserved on the default motion, allowing the record to remain open for Department staff to submit the documentation required by 6 NYCRR 622.15(b), and indicated that, upon staff's request, the hearing would be reconvened on a subsequent date and on notice to respondent.

On July 2, 2019, the Office of Hearings and Mediation Services served a Notice of Hearing on respondent by first class mail, advising respondent that the hearing would be reconvened on July 22, 2019 and each day thereafter. On July 23, 2019, the adjudicatory hearing was reconvened before me at the Department's Central Office at 625 Broadway, Albany, New York. Department staff was represented by law student intern Connor Hilbie, under the supervision of the Office of General Counsel.[1]No one appeared on behalf of respondent.

Department staff orally renewed its motion for a default judgment. Department staff called one witness, Benjamin Conlon, Associate Attorney with the Department's Office of General Counsel, and Section Chief in the Bureau of Remediation. In all, eleven (11) exhibits were received in evidence.

Applicable Regulatory Provision

613-1.9 Registration [2]

* * *

(d) Application procedure for initial registration or transfer of ownership.

(1) If ownership of the real property on which a facility is located is transferred, the new facility owner must submit an application to initially register the facility with the department within 30 days after the transfer.

Findings of Fact

The following facts are found based upon the preponderance of evidence presented at the hearing, see 6 NYCRR 622.11(c):

  1. Respondent 2206 Cornaga, LLC (respondent) is the owner of a petroleum bulk storage facility having a capacity of over 1,100 gallons located at 22-06 Cornaga Avenue, Queens, New York (facility). In particular, petroleum storage tank number 001 at the facility has a capacity of 10,000 gallons. See Testimony of Benjamin Conlon (Conlon Testimony); Staff Exhibits 3, 5, 6, and 7.
  2. Respondent is an active domestic limited liability company in the State of New York. See Conlon Testimony; Staff Exhibit 4.
  3. Pursuant to a registration application received June 20, 2012, the Department issued Petroleum Bulk Storage (PBS) Registration Certificate No. 2-117773 to 2206 Realty Corp identified on the certificate as the owner of the facility, on June 11, 2012 with an expiration date of July 19, 2017. In bold capital letters, at the bottom of the Certificate is the following declaration: "THIS REGISTRATION CERTIFICATE IS NON-TRANSFERABLE." The PBS application received by Department staff on June 12, 2012 identifies the then owner as 2206 Realty Corp. See Conlon Testimony; Staff Exhibits 5 and 6.
  4. On September 16, 2013, 2206 Realty Corp., by deed, transferred all right, title and interest in the facility to respondent 2206 Cornaga, LLC, the facility's current owner. This deed is recorded in the Office of the City Register of the City of New York, as City Register File No. 2013000421403.See Conlon Testimony; Staff Exhibit 3.
  5. Benjamin Conlon is an Associate Attorney in the Department's Office of General Counsel, serving as a Section Chief in the Bureau of Remediation, whose responsibilities include enforcement of the Petroleum Bulk Storage, Chemical Bulk Storage, and Major Oil Storage Facilities laws and regulations. Mr. Conlon is authorized to access and inspect the Department's unified information system (UIS) and the electronic repository for scanned documents known as DecDOCS. The UIS and DecDOCS are databases maintained by the Department and contain petroleum bulk storage facility records filed with the Department, which records include petroleum bulk storage facility registrations filed pursuant to 6 NYCRR 613-1.9. See Conlon Testimony.
  6. On July 22, 2019, Benjamin Conlon searched the petroleum bulk storage facility records contained in the Department's UIS and DecDOCS databases for any petroleum bulk storage facility registration application filed by respondent for the facility. Mr. Conlon determined that, as of July 22, 2019, respondent had failed to file a petroleum bulk storage facility registration application since respondent took ownership on September 16, 2013.See Conlon Testimony; see also Staff Exhibits 3, 7, 8 and 9.
  7. As shown by Receipt for Service No. 201901150034 issued by the New York State Department of State, respondent was served personally, on January 3, 2019, pursuant to section 303 of the Limited Liability Company Law, with a notice of hearing and complaint dated January 3, 2019, alleging a violation of ECL 17-1009 and its implementing regulation, 6 NYCRR 613-1.9(d)(1), together with a cover letter, statement of readiness and supporting affirmation, for failure to register its petroleum bulk storage facility located at 22-06 Cornaga Avenue, Queens, New York within 30 days of the transfer of ownership of the facility to it. 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 January 3, 2019. See Staff Exhibits 1 and 2; see also Hearing Record.
  8. Respondent failed to file an answer to the complaint, failed to appear at a pre-hearing conference scheduled for February 6, 2019 as directed in the notice of hearing and the accompanying cover letter, and failed to appear for the adjudicatory hearing scheduled in the matter for March 8, 2019 and reconvened on July 23, 2019, as directed in the notices of hearing. See Hearing Record.

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 a 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" (Matter of Queen City Recycle Center, Inc., Decision and Order of the Commissioner, December 12, 2013, at 3). Staff is required to support their 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, 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 February 6, 2019, 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 March 8, 2019 and reconvened on July 23, 2019, as directed in the notices of hearing. Department staff has submitted a proposed order.

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 register its petroleum bulk storage facility located at 22-06 Cornaga Avenue, Queens, New York within 30 days of the transfer of ownership of the facility to it, in violation of ECL 17-1009 and 6 NYCRR 613-1.9(d)(1) (see Matter of Samber Holding Corp . , Order of the Commissioner at 1). Based upon the foregoing, the Department is entitled to a default judgment in this matter pursuant to the provisions of 6 NYCRR 622.15.

Moreover, the proof adduced at the hearing, conducted in respondent's absence, demonstrates by a preponderance of the evidence that respondent failed to register its petroleum bulk storage facility located at 22-06 Cornaga Avenue, Queens, New York within 30 days of the transfer of ownership of the facility to it, in violation of ECL 17-1009 and 6 NYCRR 613-1.9(d)(1). The Department is entitled to judgment upon the facts proven.

In its complaint, Department staff seeks an order imposing a civil penalty of ten thousand dollars ($10,000). ECL § 71-1929(1) provides for a civil penalty of up to thirty-seven thousand five hundred dollars ($37,500) per day for each violation. In proceedings concerning violations of PBS registration requirements in the New York City area, calculation of an appropriate penalty turns in part on the duration of the violations.See e.g. Matter of 540 Jackson Realty Corp., Order of the Commissioner, May 18, 2016, at 2; see also Matter of 12 Martense Associates LLC, Order of the Commissioner, December 19, 2011 (12 Martense Associates), at 2.

Department staff's proposed order seeks a civil penalty of ten thousand dollars ($10,000). This requested civil penalty is consistent with the Department's penalty policy as well as applicable provisions of ECL article 71 and administrative precedent (see 12 Martense Associates, at 2).

Conclusion of Law

By failing to register its PBS facility located at 22-06 Cornaga Avenue, Queens, New York within 30 days of the transfer of ownership of the facility to it, respondent violated ECL 17-1009 and 6 NYCRR 613-1.9(d)(1).

Recommendations

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

  1. Granting Department staff's motion for default, holding 2206 Cornaga, LLC in default pursuant to the provisions of 6 NYCRR 622.15;
  2. Holding that, based upon the proof adduced at the adjudicatory hearing, respondent 2206 Cornaga, LLC violated ECL 17-1009 and 6 NYCRR 613-1.9(d)(1) by failing to register its petroleum bulk storage facility located at 22-06 Cornaga Avenue, Queens, New York within 30 days of the transfer of ownership of the facility to it;
  3. Directing respondent 2206 Cornaga, LLC to submit to the Department, within fifteen (15) days of service of the Commissioner's order, a complete petroleum bulk storage registration application for the facility, together with applicable registration fees;
  4. Directing respondent 2206 Cornaga, LLC to pay a civil penalty in the amount of ten thousand dollars ($10,000) 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: July 30, 2019
Albany, New York

[1]Law student interns, under the immediate supervision of a supervising attorney, are authorized to represent the Department in contested and uncontested matters pursuant to the order of the Appellate Division, Third Department dated February 15, 2018 (effective through August 31, 2020).

[2]ECL 17-1009(2) requires facility registrations to be "renewed every five years or whenever ownership of a facility is transferred, whichever occurs first." In addition, for violations occurring before October 11, 2015 (the effective date of 6 NYCRR 613-1.9), Department staff's pleadings incorporate former 6 NYCRR 612.2(b) by reference, which read, "Transfer of Ownership. If ownership of a facility changes, the new owner must re-register the facility with the Department within thirty (30) days of ownership transfer."

EXHIBIT CHART - PBS EXPEDITED PROCEEDINGS

Matter of 2206 Cornaga, LLC
22-06 Cornaga Avenue, Queens, New York - DEC Case No. PBS.2-11773.3.2019

July 23, 2019 - Central Office

Edirol File Nos. 190723130413& 190723135206

Exhibit No. Description ID'd? Rec'd? Offered By Notes
1 Cover Letter from Deborah Gorman, Esq. to respondent, with Notice of Hearing, Complaint, and Statement of Readiness, and Affirmation of Deborah Gorman all dated January 3, 2019 Department Staff
2 Affidavit of Service of Dale Thiel, sworn to July 19, 2019 with New York State Department of State Receipt for Service dated January 3, 2019 Department Staff
3 New York City Department of Finance, ACRIS Title Search, dated July 18, 2019, and deed to respondent, dated September 16, 2013 Department Staff FN1
4 NYS Department of State Entity Information, current through July 17, 2019 Department Staff FN1
5 PBS Application received June 20, 2012 from 2206 Realty Corp. Department Staff FN1
6 PBS Registration Certificate issued June 11, 2012 to 2206 Realty Corp, expiration date July 19, 2017 Department Staff FN1
7 PBS Program Facility Information Report, printed July 10, 2019 Department Staff FN1
8 Correspondence from 2206 Realty Corp., dated April 25, 2017 Department Staff FN1
9 DEC Notice, dated June 29, 2017 with PBS change of ownership application attached Department Staff FN1
10 Affirmation of attempted contact of Deborah Gorman, dated July 17, 2019 Department Staff
11 Proposed Order Department Staff
Notice of Hearing dated July 2, 2019 OHMS File Copy

1 Witness testified that databases were searched, and documents were reviewed on July 22, 2019. Witness initialed and dated the exhibit to confirm information remained accurate as of July 22, 2019.

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