The opinion of the court was delivered by: ROBERT W. SWEET
Plaintiff United States of America (the "Government") has moved for partial summary judgment against defendants Jordan W. Berkman ("Berkman"), John A. Petrillo ("Petrillo"), and Joseph and Mario Curto (the "Curtos") (collectively, the "Berkman Defendants"), pursuant to Rule 56, Fed. R. Civ. P., on the ground that the defendants are jointly and severally liable under 42 U.S.C. § 9607(a) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C. §§ 9601 -9675, for costs incurred and to be incurred by the Government in response to the release or threatened release of hazardous substances at the Brewster Wellfield Site (the "Site") in Putnam County, New York. For the following reasons, the Government's motion for partial summary judgment is denied.
The parties, prior proceedings, and background of this action were described more fully in prior opinions of this Court, reported at 747 F. Supp. 1014 (S.D.N.Y. 1990) and 788 F. Supp. 1317 (S.D.N.Y. 1992), familiarity with which is assumed. Defendant Berkman is an attorney admitted to practice in New York State who specializes in real estate law. Petrillo was a builder engaged in the construction business. The Curtos are retired individuals. The Berkman Defendants presently hold title as one-third tenants in common to a piece of real property and the improvements thereon, consisting of a single one-story building (the "Building") and a parking lot, located at the intersection of Routes 6 and 22 in the Town of Southeast, in Putnam County, New York (the "Property").
Defendant Ben Forcucci ("Forcucci") is the sole shareholder, officer and director of A & N Cleaners and Launderers, Inc., a/k/a Alben Cleaners & Launderers ("A & N"). He alone was responsible for the day-to-day operation of the dry cleaning machines and the disposal of waste. Defendant Marine Midland Bank, N.A. ("Marine") was the lessor of the Property from 1970 through 1990. From 1970 to the present, Marine has maintained a branch bank at the Property. Since 1990, Marine's lease at the Property relates only to that part occupied by its branch office.
The Government filed its complaint on October 16, 1989 (the "Complaint"). On September 20, 1990, the Court denied a motion by third-party defendant Utica Mutual Insurance Company to dismiss a third-party claim brought against them by Marine. See 747 F. Supp. 1014 (S.D.N.Y. 1990). On June 5, 1991, this Court ordered that the case be bifurcated for the litigation of liability and damages. On April 3, 1992 (the "April 3 Opinion"), this Court granted the Government's motion for summary judgment as to the CERCLA liability of the Berkman Defendants, but held that triable issues of fact remained as to two affirmative defenses pled by the Berkman Defendants: the third-party affirmative defense and the innocent landowner affirmative defense. See United States v. A & N Cleaners & Launderers, Inc., 788 F. Supp. 1317 (S.D.N.Y. 1992).
Argument was heard on the present motions on October 13, 1993. On November 15, 1993, the Berkman Defendants, through their attorneys, supplied the Court with a supplemental statement of material facts pursuant to Rule 3(g) of the Civil Rules for the Federal Courts of the Southern and Eastern Districts of New York. On December 9, 1993, the Government wrote to the Court to respond to the Berkman Defendants' November 15 letter and to provide further support for the Present motion. On December 14, 1993, Marine, through its attorneys, wrote to the Court to respond to the Government's letter of December 9, 1993. The Government responded to this letter by letter to the Court on January 18, 1994. This motion was considered fully submitted as of January 18, 1994.
This action arises out of the Government's investigation of and remedial actions relating to contamination at the Site. The Government has alleged that releases of hazardous substances at the Property caused it to incur response costs for which the defendants are liable.
The Property consists of a one-story brick building akin to a shopping mall, which is surrounded by a parking lot and adjacent grassy area on a total of approximately 1.8 acres. The Building occupies 12,500 square feet and is currently occupied by a Marine branch office, A & N, and a limousine service company. Significant to this action, a floor drain (the "Drain") traverses the entire length of the interior of the Building and allegedly empties into a dry well (the "Dry Well") under the parking lot in the rear of the Property near the septic tank.
Until 1979, title to the Property was held by Six & Twenty-Two Real Estate Company ("Six & Twenty-Two"). Effective October 1, 1970, Marine leased the entire Property from Six & Twenty-Two for a term of ten years, with a renewal option for two successive five year terms (the "Marine Lease"). Both renewal options were exercised, giving Marine a continuous leasehold over the Property from 1970 through 1990. Marine currently holds a two-year lease for only that portion of the Property occupied by its branch office.
The Marine Lease was subject and subordinate to prior leases to portions of the Property. Six & Twenty-Two assigned to Marine all of its right, title and interest in each of those leases and authorized Marine to collect rents and enforce all of the obligations of the tenants under them. One of the leases was held by Pircio's Aristocratic Cleaners Corp. ("Pircio's") and was to run until November 30, 1972 (the "Pircio's Lease"). The Pircio's Lease provided that the premises were to be used and occupied as a dry cleaning establishment and that responsibility for the care and maintenance of the Dry Well belonged to Pircio's.
On October 5, 1970, Marine notified Pircio's to make all rent payments to Marine "as your new landlord." Shortly thereafter, Marine was notified that A & N had succeeded to Pircio's rights under the Pircio's Lease. Like Pircio's, A & N occupied the premises as a dry cleaning business. In 1971, the Pircio's Lease was extended through October 31, 1977, and A & N was given the option to renew for one three-year term and one two-year term. In 1982, A & N entered into a sublease with Marine, running through 1985. The 1982 Sublease specifically provided that the premises would be used and occupied for a dry cleaning, rug cleaning and laundry establishment. Marine extended the lease term on August 12, 1985, subject to cancellation by either party on 90-days notice.
Meanwhile, the Berkman Group had purchased the Property from Six & Twenty-Two on March 2, 1979, taking title to the ...