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MATTER OF POLING TRANSP. CORP.

May 8, 1991

IN THE MATTER OF THE COMPLAINT OF POLING TRANSPORTATION CORP., AS OWNER PRO HAC VICE, AND MOTOR VESSEL POINT BROS. NO. 7 INC., AS OWNER, OF THE M.V. POLING BROS. NO. 7, PLAINTIFFS, FOR EXONERATION FROM OR LIMITATION OF LIABILITY.


The opinion of the court was delivered by: Sweet, District Judge.

OPINION

THE PARTIES

LIRR and MTA are public benefits corporations organized and existing under the laws of New York. LIRR is a subsidiary of MTA.*fn1

Poling Transportation Corp. ("PTC") and Motor Vessel Poling Bros. No. 7, Inc. ("Poling, Inc.") (collectively, "Poling") the plaintiffs in this action, are New York corporations with offices in Staten Island. During the relevant time period, Poling, Inc. was the registered owner and PTC was the owner pro hac vice of the Motor Vessel POLING BROS. NO. 7 ("Poling No. 7"), a diesel-driven tanker.

Claimant Ditmas Oil Associates, Inc. ("Ditmas") is a New York corporation which manages the Terminal as a fuel storage facility. Ditmas is joined in its claim by various affiliated entities having interests in the Terminal and its fuel storage business.

Claimants Antonio Coca ("Coca") and David Theophilous ("Theophilous")*fn2 are individuals who were injured in the explosion and fire at the Terminal. Theophilous was employed by Ditmas and Coca was employed by one of its affiliates, Chambers Transport, Inc.

PRIOR PROCEEDINGS

Following the accident, Coca commenced suit in the New York Supreme Court for Bronx County to recover for his injuries. On December 1, 1987 Poling instituted this action for exoneration or limitation of liability pursuant to 46 U.S.C. § 183. The various claimants responded and discovery was taken. At some point, additional state court actions were filed by Theophilous, also in the Bronx, and by various parties against LIRR in Queens County.

LIRR filed its motion for summary judgment on January 24, 1991, and oral argument was heard on March 8. Following further submission from the parties, the matter was taken under advisement as of March 18.

THE FACTS

Except as otherwise noted, the following facts are not disputed.

The Terminal is situated in Long Island City between Newtown Creek on the south and 53rd Avenue on the north, in the vicinity of the Pulaski Skyway and the Queens entrance to the Mid-Town Tunnel. There are a number of fuel storage tanks on the premises, including two gasoline tanks, No. 27-East and No. 27-West, located at the north boundary, adjacent to 53rd Avenue.

Across 53rd Avenue to the north is an LIRR right-of-way along which run several sets of railroad tracks. In this vicinity there are four track switches which allow trains to move from one track to another. Because of their moving parts, such switches are susceptible to cold weather and must be kept from freezing. Methods used by railroads to keep switches from freezing include gas or kerosene open flame heaters, electric heaters, or chemical compounds which prevent ice build-up on the metal surfaces. For the four switches near the Terminal, the LIRR used kerosene burners, or "smudge pots," fairly simple devices consisting of a container of kerosene with a wick for lighting. The burner is placed between the railroad ties underneath the portion of the switch to be heated, and is lit manually when conditions warrant. Based on the evidence presented, it appears that the burner closest to the Terminal is at least seventy feet away, across 53rd Avenue and up a slight embankment. In addition to kerosene heaters, LIRR uses both gas and electric heaters at various locations in its rail system.

On the evening of December 27, 1986, Poling No. 7 arrived at the Terminal laden with gasoline. It made fast along Newtown Creek and at approximately 11:30 p.m. began to discharge gasoline into Tank No. 27-East. The operation continued until approximately 1:15 a.m. the following morning. During the discharge some amount of gasoline, asserted by LIRR to have been between 5,000 and 12,000 gallons, was spilled. The spilled gasoline was ignited and an explosion and fire followed in which Coca and Theophilous were injured and the Terminal and Poling No. 7 were damaged. For the purposes of the present motion only, LIRR concedes that the spilled gasoline was ignited by a lit smudge pot.

Evidence has been presented both that LIRR personnel working near the Terminal were aware that gasoline was stored there, and that Terminal personnel were aware of LIRR's use of the switch heaters. The manager of the Terminal, George Esayan ("Esayan"), testified during his deposition that he and a fire inspector had at one time discussed with an unidentified LIRR employee the possible danger of having an open flame across the street from a fuel depot, and that the fire inspector subsequently made telephone calls to LIRR on the topic. Esayan also testified by affidavit that he had on several occasions witnessed rubbish fires caused by refuse and debris around the tracks which had been ignited by the open flame of the heaters.

There was also evidence that in October 1986 a gasoline spill occurred at the Terminal, involving the release of between 150 and 200 gallons of gasoline. At that time, the street on the east side of the Terminal was blocked off to traffic while the spill was cleaned up. At oral argument, several parties stated that the LIRR suspended operations near the Terminal during the clean-up, but no evidence was presented to support this assertion. Following the spill, Esayan wrote to the Fire Department stating that Ditmas had ...


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