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Fort Apt. Corp. - Order, August 20, 2019

Order, August 20, 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-

FORT APT. CORP.,
Respondent.

ORDER

DEC Case No. PBS. R2-159042.9.2018

This administrative enforcement proceeding addresses allegations by staff of the New York State Department of Environmental Conservation (Department) that respondent Fort Apt. 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 June 5, 2017, the date on which its prior registration expired. Respondent's facility, which is listed as an apartment/office building, is located at 8502 Fort Hamilton Parkway, Brooklyn, New York, and includes an aboveground petroleum bulk storage tank with a capacity of 3,000 gallons (see Hearing Exhibits 6 and 7).

Administrative Law Judge (ALJ) Michele M. Stefanucci of the Department's Office of Hearings and Mediation Services was assigned to this matter and 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, and failed to appear for the adjudicatory hearing (see Hearing Report at 4 [Finding of Fact 8]). At the July 23, 2019, adjudicatory hearing, Department staff made an oral motion for a default judgment and presented its case on the merits.

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 5-6). I concur that staff is entitled to a judgment on default pursuant to 6 NYCRR 622.15. The proof adduced at hearing provides 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 June 5, 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).

At hearing, Department counsel indicated that the requirement to register PBS facilities is one of the "cornerstones" of the PBS regulatory scheme (see Hearing edirol recording). 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.

In its complaint, Department staff requested a civil penalty of ten thousand dollars ($10,000). At hearing, Department staff sought a reduced penalty of seven thousand five hundred dollars ($7,500). 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 (see Matter of 12 Martense Associates, LLC, Order of the Commissioner, December 19, 2011, at 2). For those facilities that have violated the registration requirement for more than two but less than five years, Department staff has requested, absent aggravating factors, a penalty of seven thousand five hundred dollars ($7,500).

In this case, respondent was required to register the facility on or before June 5, 2017. Since the date of the penalty "threshold", as discussed in 12 Martense Associates and its progeny, occurs during the period between service of the notice of hearing and complaint and the date of the adjudicatory hearing, it is appropriate to assess a penalty based on the longer period of time that the respondent is out of compliance (see Matter of Promesa Court Residences L.P., Order of the Commissioner, September 11, 2017, at 3). Accordingly, I am imposing a civil penalty of seven thousand five hundred dollars ($7,500) because respondent's violation exceeded two years as of the date of the adjudicatory hearing.

I direct that respondent submit the civil penalty to the Department within fifteen (15) days of the service of this order upon respondent. In addition, I direct that, within fifteen (15) days of the service of this order upon respondent Fort Apt. Corp., respondent is to submit to the Department a complete petroleum bulk storage application for the facility together with applicable and past due 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 Fort Apt. Corp. waived its right to be heard at the hearing.
  2. Based on the pleadings and evidence adduced at hearing, respondent Fort Apt. 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 8502 Fort Hamilton Parkway, Brooklyn, New York, on or before June 5, 2017, the date on which its prior registration expired.
  3. Within fifteen (15) days of the service of this order upon respondent Fort Apt. Corp., respondent shall submit to the Department a complete petroleum bulk storage application for the facility together with applicable and past due registration fees.
  4. Within fifteen (15) days of the service of this order upon respondent Fort Apt. Corp., respondent shall pay a civil penalty in the amount of seven thousand five hundred dollars ($7,500) by certified check, cashier's check, or money order made payable to the "New York State Department of Environmental Conservation."
  5. 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 Fort Apt. 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
August 20, 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-

FORT APT. CORP.,
Respondent.

HEARING REPORT

DEC Case No. PBS. R2-159042.9.2018

Procedural History

Staff of the New York State Department of Environmental Conservation (Department) served respondent Fort Apt. Corp. with a notice of hearing and complaint, dated July 5, 2018, alleging a violation of ECL 17-1009 and 6 NYCRR 613-1.9(c) for failing to renew the registration of its petroleum bulk storage facility located at 8502 Fort Hamilton Parkway, Brooklyn, New York, on or before June 5, 2017, the date on which its prior registration expired. The complaint seeks an order of the Commissioner:

  • finding respondent in violation of ECL 17-1009 and 6 NYCRR 613-1.9(c);
  • assessing a civil penalty in the amount of ten thousand dollars ($10,000);
  • 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
  • granting such other and further relief as the Commissioner shall deem just and appropriate.

Because 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 serving the New York State Department of State on July 5, 2018 (see Staff Exhibit 3). Department staff provided additional service by sending the notice of hearing and complaint to respondent by first class mail on or about July 5, 2018 (see id.). Respondent failed to file an answer to the complaint.

As stated in the notice of hearing, an adjudicatory hearing was convened on September 13, 2018, before Administrative Law Judge (ALJ) Michael Caruso (see Staff Exhibit 1). 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 requested that the matter be adjourned in contemplation of settling the matter with respondent. The matter was adjourned and it was noted for the record that if the matter did not settle, it would be reconvened upon request by staff and notice to respondent.

The matter did not settle, and Department staff requested that the matter be reconvened. On February 19, 2019, the Office of Hearings and Mediation Services (OHMS) served a notice of hearing on respondent by first class mail, advising respondent that the hearing would be reconvened on April 8, 2019. On April 8, 2019, Ms. Gorman appeared before ALJ Caruso on behalf of Department staff. No one appeared on behalf of respondent.

Department staff indicated that it was prepared to proceed with the hearing and proffered a staff witness. Noting for the record that respondent had not answered the complaint and failed to appear for the reconvened adjudicatory hearing, Department staff moved orally for a default judgment pursuant to 6 NYCRR 622.15. ALJ Caruso 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 June 25, 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 the undersigned at the Department's Central Office at 625 Broadway, Albany, New York. Department staff was represented by law student intern Elizabeth Burns, 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, ten (10) exhibits were received in evidence.

Applicable Regulatory Provision

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 preponderance of evidence presented at the hearing (see 6 NYCRR 622.11[c]):

  1. Respondent Fort Apt. Corp. is the owner of a petroleum bulk storage facility with a capacity of over 1100 gallons located at 8502 Fort Hamilton Parkway, Brooklyn, New York (facility). Petroleum storage tank number 001 at the facility has a capacity of 3,000 gallons and is located aboveground. (See Testimony of Benjamin Conlon [Conlon Testimony]; Staff Exhibits 6, 7, and 8.) Respondent is an active domestic business corporation in the State of New York (see Conlon Testimony; Staff Exhibit 5).
  2. Pursuant to a registration application received March 21, 2012, the Department issued Petroleum Bulk Storage (PBS) Registration Certificate No. 2-159042 to Fort Apt. Corp. identified on the certificate as the owner of the facility, on April 4, 2012 with an expiration date of June 5, 2017. The PBS application received by Department staff on March 21, 2012, identifies the owner as Fort Apt. Corp. (See Conlon Testimony; Staff Exhibits 6, 7 and 8.)
  3. On August 1, 1988, Kings Eldorado Associates, by deed, transferred all right, title and interest in the facility to respondent Fort Apt. Corp., the facility's current owner. This deed is recorded in the Office of the City Register of the City of New York, on Reel 2208, Page 578. (See Conlon Testimony; Staff Exhibit 4.)
  4. 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.)
  5. 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 respondent's registration expired on June 5, 2017, and, as of July 22, 2019, had not been renewed. (See Conlon Testimony; see also Staff Exhibits 6 and 8.)
  6. As shown by Receipt for Service No. 201807230430 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 petroleum bulk storage facility located at 8502 Fort Hamilton Parkway, Brooklyn, New York, on or before June 5, 2017, the date the prior registration expired. 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 Staff Exhibits 1 and 3; see also Hearing edirol recording.)
  7. Respondent failed to file an answer to the complaint and failed to appear for the adjudicatory hearing scheduled in the matter for April 8, 2019 and reconvened on July 23, 2018, as directed in the notices of hearing (see Hearing edirol recording).

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, 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 for April 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 renew the registration of its petroleum bulk storage facility located at 8502 Fort Hamilton Parkway, Brooklyn, New York, on or before June 5, 2017, the date on which its registration expired, in violation of ECL 17-1009 and 6 NYCRR 613-1.9(c) (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 renew the registration of its petroleum bulk storage facility located at 8502 Fort Hamilton Parkway, Brooklyn, New York, in violation of ECL 17-1009 and 6 NYCRR 613-1.9(c). 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 has generally requested a penalty of five thousand dollars ($5,000) for violations extending up to two years, seven thousand five hundred dollars ($7,500) for violations extending from two to five years, and ten thousand dollars ($10,000) for violations exceeding five years in duration (see 12 Martense Associates at 2).

I note that in this matter, the two-year threshold for non-compliance was reached on June 5, 2019, after service of the notice of hearing and complaint but before the date of the reconvened adjudicatory hearing. Staff's proof demonstrates that the violation continued as of July 22, 2019. Under 12 Martense Associates and its progeny, if the "threshold" date occurs between service of the notice of hearing and complaint and the date of the adjudicatory hearing, it is appropriate to award the penalty amount related to the longer time period (see Matter of Promesa Court Residences L.P., Order of the Commissioner, September 11, 2017, at 3; see also Matter of 1160 President Street Hous. Dev. Fund Corp., Order of the Commissioner, October 3, 2017, at 2).

At hearing and in Department staff's proposed order, staff seeks a civil penalty of seven thousand five hundred dollars ($7,500) (see Staff Exhibit 10). 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 renew the registration of its PBS facility located at 8502 Fort Hamilton Parkway, Brooklyn, New York, on or before June 5, 2017, the date the prior registration expired, respondent violated ECL 17-1009 and 6 NYCRR 613-1.9(c).

Recommendations

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

  1. Granting Department staff's motion for default, holding respondent Fort Apt. Corp. in default pursuant to the provisions of 6 NYCRR 622.15;
  2. Holding that, based upon the proof adduced at the adjudicatory hearing, respondent Fort Apt. Corp. violated ECL 17-1009 and 6 NYCRR 613-1.9(c) by failing to renew the registration of its petroleum bulk storage facility located at 8502 Fort Hamilton Parkway, Brooklyn, New York, on or before June 5, 2017, the date the prior registration expired;
  3. Directing respondent Fort Apt. Corp. 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 Fort Apt. Corp. to pay a civil penalty in the amount of seven thousand five hundred dollars ($7,500) 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/
Michele M. Stefanucci
Administrative Law Judge

Dated: July 29, 2019
Albany, New York


[1] The law student intern program is authorized by order of the Appellate Division, Third Department, dated February 15, 2018.

EXHIBIT CHART - PBS EXPEDITED PROCEEDINGS

Matter of Fort Apt. Corp.
8502 Fort Hamilton Parkway, Brooklyn, New York - DEC Case No. PBS.2-159042.9.2018

July 23, 2018 - Central Office

Edirol File No. 190723112937

Exhibit No. Description ID'd? Rec'd? Offered By Notes
1 Cover Letter from Deborah Gorman, Esq. to respondent, with Notice of Hearing, Complaint, Statement of Readiness, and Affirmation of Deborah Gorman all dated July 5, 2018. Department Staff
2 Notice of Hearing from Office of Hearing and Mediation Services dated February 19, 2019. Department Staff
3 Affidavit of Service of Dale Thiel, sworn to July 22, 2019, with New York State Department of State Receipt for Service dated
July 5, 2018.
Department Staff
4 New York City Department of Finance, ACRIS Title Search, dated
July 18, 2019, and deed to respondent, dated August 1, 1988.
Department Staff
5 NYS Department of State Entity Information, current through
July 17, 2019.
Department Staff
6 PBS Application, received March 21, 2012 for facility located at 8502 Fort Hamilton Parkway, Brooklyn, New York. Department Staff
7 PBS Program Facility Information Report, printed July 10, 2019. Department Staff
8 PBS Registration Certificate issued April 4, 2012, expiration date June 5, 2017. Department Staff
9 Affirmation of attempted contact of Deborah Gorman, dated
July 17, 2019.
Department Staff
10 Proposed Order. Department Staff
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