Oil Company, Inc. - Decision, May 11, 1993
Decision, May 11, 1993
STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION
50 Wolf Road
Albany, New York 12233-1550
In the Matter
- of -
Administrative appeal of Department Staff's denial of license renewal application for
license year beginning April 1, 1992, pursuant to Title 6 of the Official Compilation of
Codes, Rules and Regulations of the State of New York (NYCRR), Part 610, and 17 NYCRR 30,
- by -
OIL CO., INC., d/b/a
EAGLE OIL,
APPELLANT
DEC LICENSE NO. 01-1662
DECISION
May 11, 1993
Decision of the Commissioner
The attached hearing report of Administrative Law Judge Kevin J. Casutto, in the matter of appeal from Staff's denial in the application of Oil Co., Inc., d/b/a Eagle Oil ("Appellant") for a Major Oil Storage Facility license for its facility at 1 Sheridan Boulevard, Inwood, New York, is adopted as the Decision in this matter.
Upon review of the record and the Hearing Report of ALJ Casutto (copy attached), I hereby adopt its Findings, Conclusions and Recommendations as my own. Appellant's notice of appeal is deficient because it was not properly served and because it does not contain a statement of reasons or facts why Staff's license renewal denial was unwarranted. More importantly, I concur with the ALJ that, even considering the merits of Appellant's proposed revised notice of appeal, it is also deficient because it fails to raise any legal defense that could be considered.
Accordingly, I hereby grant Staff's motion to dismiss the above referenced appeal. The decision to deny the Appellant's application for a major oil storage facility license for the 1992 license year is the final decision of the Department.
IN WITNESS WHEREOF, the Department of Environmental Conservation has caused this Decision to be signed and issued and has filed the same with all maps, plans, reports, and other papers relating thereto in its office in the County of Albany, New York, this 11th day of May, 1993.
_____________/s/_____________
THOMAS C. JORLING, COMMISSIONER
STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION
50 Wolf Road
Albany, New York 12233-1550
In the Matter
- of -
Administrative appeal of Department Staff's denial of license renewal application
for license year beginning April 1, 1992, pursuant to Title 6 of the Official Compilation
of Codes, Rules and Regulations of the State of New York (NYCRR), Part 610, and 17 NYCRR 30, by
OIL CO., INC., d/b/a
EAGLE OIL,
APPELLANT
DEC LICENSE NO. 01-1662
HEARING REPORT
- by -
____________/s/_____________
Kevin J. Casutto
Administrative Law Judge
Proceedings
Pursuant to Article 17 of the Environmental Conservation Law of the State of New York ("ECL"), Part 610 of Title 6 of the Official Compilation of Code, Rules and Regulations of the State of New York ("6 NYCRR"), and 17 NYCRR 30, Appellant, by letters dated August 14, 1992, seeks appeal of Staff's determination to deny Appellant's application for renewal of a Major Oil Storage Facility (MOSF) license for the 1992 license year.
Staff filed a motion to dismiss Appellant's appeal on procedural grounds. The matter was assigned to Administrative Law Judge ("ALJ") Kevin J. Casutto, New York State Department of Environmental Conservation, ("DEC" or the "Department") Office of Hearings on or about February 3, 1993.
The motion to dismiss, dated January 27, 1993 indicated a return date of February 26, 1993. However, the ALJ directed that no appearance occur on that date, and that the matter would be decided on the papers. Appellant's affidavit in opposition to the motion to dismiss, was received by the Office of Hearings on March 12, 1993, as earlier agreed upon by the parties and with consent of the ALJ.
The Department Staff appeared in this matter by Lisa Parrella, Assistant Regional Attorney, Region 1, Stony Brook, New York. The Appellant was represented by Kramer & Fisherman, Attorneys at Law, Garden City, New York, appearance by Laurice Firenze, Esq. Appellant provided an affidavit of William S. Nappo, President of Appellant corporation, in opposition to Staff's motion.
Staff's Motion and Relief Sought
Licensing of MOSF's occurs on an annual basis, with licenses expiring on March 31st. 17 NYCRR 30.6(c)(1). Appellant's license renewal application addressed the one year period commencing April 1, 1992. Staff denied Appellant's application for MOSF License Renewal No. 01-1660 (1 Sheridan Boulevard, Inwood, New York) by letter dated July 20, 1992. Appellant sought review of Staff's denial by letter dated August 14, 1992, addressed to the Region 1 Director. Staff seeks to have the appeal dismissed, both because the notice of appeal delivered to the Commissioner was not sent by certified or registered mail, as required by 17 NYCRR 30.7(c), and 6 NYCRR 610.5(e)(4)(1); and because the notice did not contain a statement of facts or reasons why Appellant believes Staff's determination was not warranted, also required by 17 NYCRR 30.7(c) and 6 NYCRR 610.5(e)(4)(1).
Appellant's Affidavit in Opposition
Appellant, Oil Co., Inc., d/b/a Eagle Oil, is a Connecticut corporation authorized to do business in the State of New York. Appellant filed an affidavit of William S. Nappo, dated March 11, 1993, in opposition to Staff's motion. Mr. Nappo is President of Appellant corporation. He acknowledged receipt of Staff's denial letter from the Region 1 Director, sometime in July, 1992. That letter informed the Appellant that the license denial may be appealed in accordance with the procedures outlined in 17 NYCRR 30.7, and also stated that further inquiries concerning the matter should be directed to technical staff person John F. Hofmann. Mr. Nappo states that because he is not an attorney, and because he had been in contact with Mr. Hofmann regarding technical review of the site, he contacted Mr. Hofmann for advice on how to pursue an appeal. Appellant relied upon and followed Mr. Hofmann's advice exclusively, without referring to the regulatory provisions cited in Staff's denial letter. Mr. Nappo contends that because Appellant relied upon the advice of the Staff person identified in the Regional Director's denial letter, Staff cannot now argue that Appellant should be penalized for relying upon that advice.
Mr. Nappo states that Appellant has been a federal bankruptcy "Chapter 11 debtor in possession" for several years. Therefore, due to cash flow problems, Appellant was not able to meet the Department's statutory, regulatory and license requirements for the facility. However, Mr. Nappo asserts that Appellant was attempting to establish a compliance schedule with Staff that would allow Appellant to continue to operate while coming into compliance with statutory, regulatory and license requirements.
Mr. Nappo further suggests that because he was unaided by assistance of counsel in requesting the appeal, he should not be denied the right of appeal due to mere technical deficiencies. In addressing the two procedural defects raised by Staff, Mr. Nappo claims that his letters to the Commissioner and the Region 1 Director were sent by registered mail, although Appellant has not produced any receipts to support this claim. Concerning the omission of a statement of facts or reasons why Appellant believes Staff's denial was not warranted, Mr. Nappo asserts that he did not realize Appellant was required to provide such a statement, and that in any event, Staff knew what Appellant had been doing at the facility, because Appellant had engaged Staff in regular ongoing discussions about activities at the site.
Attached to Mr. Nappo's affidavit, one of five exhibits, is a revised notice letter which Appellant proposes to provide, upon direction of the ALJ or the Commissioner, to cure the procedural deficiencies (the "revised letter").
Findings of Fact
- Appellant Oil Co., Inc., d/b/a Eagle Oil is a Connecticut corporation, duly authorized to do business in the State of New York. Appellant's principal office is located at 1 Sheridan Boulevard, Inwood, New York.
- William S. Nappo is the President of Appellant corporation and acted on behalf of Appellant with respect to this matter.
- During the month of July, 1992, Appellant received a letter of denial from Staff for a MOSF license for its facility at 1 Sheridan Boulevard, Inwood, New York (the "facility"), in response to its application for license renewal for the license year beginning April 1, 1992.
- That denial letter set forth three grounds for Staff's determination of denial:
- Groundwater contamination exists at this site and successful remediation has not been demonstrated.
- Staff has documented violations of Article 12 of the Navigation Law, Article 17 of the ECL, and the NYCRR.
- The conditions of the previous facility license(s) have not been fully met.
- Staff's denial letter also advised Appellant that the denial may be appealed in accordance with procedures outlined in 17 NYCRR 30.7; and advised Appellant to direct any further questions to John F. Hofmann, the technical staff person, with whom Appellant had previously discussed regulatory compliance.
- However, William S. Nappo did not review 17 NYCRR 30.7 before requesting an appeal on behalf of Appellant.
- Instead, Mr. Nappo contacted Mr. Hofmann for advice on how to request an appeal, and relied upon that advice.
- Mr. Nappo states that Mr. Hofmann advised him to send letters to the Region 1 Director and the Commissioner, stating that Appellant elects to appeal Staff's determination of denial, and setting forth the reasons for doing so.
- Mr. Nappo, acting on behalf of Appellant, sent letter-notices of appeal dated August 14, 1992 to the Commissioner and to Region 1 Director Ray E. Cowan.
- Neither letter-notice of appeal was delivered by certified or registered mail.
- Neither letter-notice of appeal contained a statement of facts or reasons why the Appellant believes Staff's denial of its MOSF license renewal was not warranted.
- Appellant's proposed revised letter-notice of appeal, acknowledges its continued non-compliance with statutory, regulatory and license requirements (Exhibit "E" of William S. Nappo's Affidavit in Opposition [dated March 11, 1993]).
- Appellant's proposed revised letter cites Appellant's lack of financial resources and consequent federal bankruptcy status as the sole reason which has precluded Appellant from bringing its facility into compliance.
Applicable Law
- Jurisdiction and authority to initiate this administrative appeal is based upon Environmental Conservation Law (ECL), Article 17, Titles 3 and 10; Navigation Law, Article 12; 6 NYCRR Part 610 and 17 NYCRR Part 30.
- 17 NYCRR 30.7(c) requires that, "[a] notice stating that applicant appeals the determination of the department, along with a statement of facts or reasons why the applicant feels the department's denial, refusal to renew or insertion of special conditions or requirements was not warranted, shall be sent to the commissioner by certified or registered mail."
- 6 NYCRR 610.5(e)(4)(i) requires, in pertinent part, that the method of requesting a license denial appeal is that, " a notice stating that the applicant appeals the determination of the department, along with a statement of facts or reasons why the applicant feels the department's determination was not warranted, shall be sent to the commissioner by certified or registered mail..."
Discussion
The Notice of Appeal
Staff asserts that Appellant's August 14, 1992 notice of appeal letters, sent to the Region 1 Director and the Commissioner are deficient, both because the letters were not sent by certified or registered mail, and because the letters do not contain a statement explaining why Staff's license denial is unwarranted, as required by 17 NYCRR 30.7(c) and 6 NYCRR 610.5(e)(4)(i). I reject Appellant's assertion that the notice to the Commissioner was sent by registered mail. Not only does Appellant state that it has no receipt to document the registered mail delivery, but the Commissioner's Office has confirmed that the only copy of Appellant's letter which was received by that Office was received by electronic facsimile transmission to the Commissioner, on August 14, 1992.
Appellant asserts, essentially, that the doctrine of equitable estoppel precludes Staff from pursuing its motion to dismiss for failure to use certified or registered mail delivery, because Appellant relied upon incorrect or incomplete information provided by the Staff contact person. Appellant was notified in Staff's denial letter, that, "[the] license denial may be appealed in accordance with the procedures outlined in 17 NYCRR Part 30.7." Appellant imprudently chose to ignore that instruction. Instead, Appellant's President, Mr. Nappo, contacted the technical staff person identified in the denial letter, John Hofmann. Mr. Nappo states he relied upon the advice of Mr. Hofmann. Mr Hofmann instructed Mr. Nappo to send letters to the Region 1 Director and the Commissioner, stating that Appellant elects to appeal the license denial, and setting forth the reasons for doing so, but did not advise Mr. Nappo to send the letters by certified or registered mail.
Appellant argues that because Appellant relied upon incorrect or incomplete information provided by Staff's contact person, Staff should be precluded from pursuing its motion to dismiss. However, Appellant admits that Mr. Hofmann advised Appellant that the letter requesting appeal should contain a statement of reasons why Appellant was appealing the determination of license denial. Nonetheless, Appellant chose to ignore that advice and failed to include any such statement in its initial letters requesting appellate review. Although the courts have not absolutely precluded the possibility of estoppel against a government agency, the general rule is that estoppel is unavailable against a government agency when acting in a governmental capacity. (New York State Medical Transporters Association, Inc. v Perales, 564 NYS2d 1007, 77 NY2d 126, 566 NE2d 134 [1990]). Those who deal with the government are expected to know the law, and cannot rely on the conduct of government agents, contrary to the law's basis, for "manifest injustice" claims to estop government. Accordingly, estoppel against a government agency is foreclosed in all but the rarest cases. (See, generally, N.Y.S. Medical Transporters Association, Inc. v Perales, supra; and Matter of Parkview Associates v City of New York, 71 NY2d 274, cert. denied, 488 US 801). In the present case, Appellant's selective reliance upon Staff's advice should not inure to Appellant's benefit. Appellant is expected to know the law, and additionally, Staff's denial letter directed Appellant to the appropriate regulatory provisions governing appeal. Therefore, I find that doctrine of estoppel is not available to Appellant in this matter.
The Proposed Revised Letter
Regarding Staff's second basis for dismissal, Appellant concedes that the August 14, 1992 letters do not contain a statement explaining why Staff's license denial is unwarranted. Therefore, a straightforward application of the regulatory requirements of 17 NYCRR 30.7(c) and 6 NYCRR 610.5(e)(4)(i) to the facts of this case, should result in a decision granting Staff's motion.
However, Appellant's Affidavit in Opposition contains a proposed revised notice letter, offered in an attempt to cure the failure to provide a statement explaining why Staff's license denial is unwarranted (Exhibit "E" of William S. Nappo's Affidavit in Opposition [dated March 11, 1993]). This proposed revised letter is analogous in CPLR practice, to an application to reopen a default judgment. Since no party will be substantially prejudiced in doing so, I will therefore consider the substance of Appellant's proposed revised letter. One element of review of application to reopen a CPLR default requires some showing of a meritorious defense. In the present matter, that is also a requirement of 17 NYCRR 30.7[c] and 6 NYCRR 610.5[e][4][i], in that the Appellant must provide a statement explaining why Staff's license denial is unwarranted. Accordingly, the proposed letter is reviewed to determine whether Appellant has made a facial showing of a meritorious defense.
Appellant attempts to cure the procedural deficiencies described above, by submitting a revised letter-notice of appeal. The revised letter recites Appellant's lack of financial resources and consequent federal bankruptcy status as the sole reason which has precluded Appellant from bringing its facility into compliance with regulatory requirements. However, Appellant's lack of financial resources is not a legal defense to Staff's permit denial.
It is fundamental that the applicable statutory, regulatory and license conditions provide minimally acceptable standards for operation of MOSFs. Appellant concedes it has not been able to operate within those requirements, and has not challenged any of the three substantive bases which Staff relied upon in making its determination of denial. Staff's denial letter sets forth as reasons for denial, the existence of groundwater contamination at the site, which has not been successfully remediated; violations of Navigation Law, Article 12 , 17 NYCRR, the ECL and 6 NYCRR; and that license conditions of the previous license have not been fully met. . Instead, Appellant seeks authority to continue the non-complying operation until such time as its financial circumstances improve (if ever), allowing Appellant to afford the costs of attaining compliance. Appellant does not assert that the facility has been brought into compliance, nor does it even assert that the facility will be brought into compliance in the immediate future. In fact, in the revised letter, Appellant acknowledges that its several attempts to bring the facility into compliance were not adequate.
Therefore, Appellant's revised letter fails to state any meritorious fact or reason to show that Staff's license renewal denial determination was unwarranted.
Conclusions
- Appellant failed to comply with the requirements of 17 NYCRR 30.7(c) and 6 NYCRR 610.5(e)(4)(i), in that Appellant's letter-notice of appeal to the commissioner was not delivered by certified or registered mail.
- Appellant failed to comply with the requirements of 17 NYCRR 30.7(c) and 6 NYCRR 610.5(e)(4)(i), in that Appellant's letter-notice of appeal to the commissioner did not contain a statement of facts or reasons why the Appellant believes Staff's denial of the MOSF license renewal, was not warranted.
- Appellant's revised letter-notice of appeal fails to state any fact or reason which could show that Staff's license renewal denial determination was unwarranted.
- Appellant's financial inability to achieve compliance is not a sufficient reason to warrant disturbing Staff's denial of the license renewal; nor is the fact that Appellant has been operating the facility in violation of regulatory requirements during the term of its previous license a sufficient reason to warrant disturbing Staff's denial of the license renewal.
- I conclude that Appellant's revised letter-notice of appeal constitutes an admission of its continued non-compliance with statutory, regulatory and license requirements.
Recommendations
Upon consideration of the foregoing, and upon a complete review of the record in this matter, including Staff's motion to dismiss and Appellant's affidavit in opposition, it is recommended that Staff's motion to dismiss the appeal should be granted. Further, Appellant's appeal should be denied, even considering its revised notice of appeal, because Appellant's revised letter fails to state any fact or reason which could show that Staff's license renewal denial determination was unwarranted.
