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NEW YORK v. ALMY BROS.

October 24, 1994

STATE OF NEW YORK, Plaintiff,
v.
ALMY BROTHERS, INC.; LEONARD ALMY; LOUIS A. STILLOE; ROBERT J. McMAHON; and MARY A. McMAHON, Defendants.



The opinion of the court was delivered by: NEAL P. MCCURN

 INTRODUCTION

 Presently before the court is plaintiff State of New York's ("the State") motion for partial summary judgment against defendants Leonard Almy and Almy Brothers, Inc. (hereinafter referred to collectively as "the Almy defendants") and Robert and Mary McMahon (hereinafter referred to collectively as "the McMahons") concerning the issue of their liability (1) as responsible parties for the State's response costs pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9607(a) ("CERCLA"); and (2) for abatement of a public nuisance and for restitution pursuant to New York common law. In addition, the McMahons have cross-moved to (1) reopen discovery and (2) to join defendant Louis Stilloe as a defendant in the State's motion for partial summary judgment.

 On October 4, 1994, the court heard oral argument in support of, and in opposition to, these motions. At that time, the court issued decisions with respect to certain portions of these motions from the bench. In this regard, the court granted the State's motion with respect to the liability of the Almy defendants, who interposed no opposition to the relief sought, for the State's response costs pursuant to CERCLA; denied the State's motion with respect to the liability of the Almy defendants and the McMahons pursuant to New York common law of public nuisance and restitution; and denied the McMahons cross-motion to join defendant Stilloe as a defendant in the State's motion for partial summary judgment. The court reserved decision with respect to the remaining issues presented by the parties' respective motions. This Memorandum-Decision and Order constitutes the court's findings of fact and conclusions of law with respect to these outstanding issues.

 PROCEDURAL BACKGROUND

 In July 1990, Louis Stilloe ("Stilloe") commenced a private CERCLA cost recovery action against Almy Brothers, Inc., the McMahons, and the State. Almy Brothers, Inc. and the McMahons counterclaimed against Stilloe and cross-claimed against each other and the State.

 The State moved to dismiss all of the CERCLA claims asserted against it. The court denied this motion. See Stilloe v. Almy Bros., Inc., 759 F. Supp. 95 (N.D.N.Y. 1991). Therefore, in April 1991, the State filed an answer in which it asserted counterclaims and cross-claims against Almy Brothers, Inc., Stilloe and the McMahons alleging CERCLA and New York common law public nuisance and restitution causes of action. Thereafter in July 1991, the State filed a motion for reconsideration of its motion to dismiss. Upon reconsideration, the court reversed its earlier decision and dismissed all of the CERCLA claims asserted against the State. See Stilloe v. Almy Bros., Inc., 782 F. Supp. 731 (N.D.N.Y. 1992).

 In April 1992, Almy Brothers, Inc., Stilloe and the McMahons filed a stipulation of voluntary dismissal pursuant to Rule 41(a)(1)(ii) of the Federal Rules of Civil Procedure. This stipulation was approved by the court and entered by the Clerk. In July 1992, the State advised the court, by letter, that it had not consented to the stipulation of dismissal. Therefore, the State requested that its claims be reinstated. By order dated July 16, 1992, the court vacated the Rule 41(a)(1)(ii) stipulation, instructed the Clerk to reopen the case, and advised the parties to proceed with this action in accordance with the Federal Rules of Civil Procedure and this court's local rules. See Order dated July 16, 1992.

 On September 21, 1992, the State moved to realign the parties and to amend its complaint to add Leonard Almy as a defendant. On October 13, 1992, the court granted the State's motion. On November 30, 1992, the State filed and served its amended complaint. *fn1"

 At a pretrial conference held on July 5, 1994, the State notified the court of its intent to file a summary judgment motion. Eased upon this statement, the court instructed the parties to file any motions they intended to make no later than August 15, 1994. As a result of these instructions, the parties filed the present motions.

 DISCUSSION

 I. Summary Judgment Standard2

 Recently, the Second Circuit reiterated the well-established principles that govern this court's consideration of a summary judgment motion. In this regard, the Second Circuit stated

 
First, summary judgment may not be granted unless "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). Second, the burden is upon the moving party to demonstrate that no genuine issue respecting any material fact exists. See Heyman v. Commerce & Indus. Ins. Co., 524 F.2d 1317, 1320 (2d Cir. 1975). In considering that, third, all ambiguities must be resolved and all inferences drawn in favor of the party against whom summary judgment is sought. See Eastway Constr. Corp. v. City of New York, 762 F.2d 243, 249 (2d Cir. 1985), cert. denied, 484 U.S. 918, 98 L. Ed. 2d 226, 108 S. Ct. 269 (1987). Fourth, the moving party may obtain summary judgment by showing that little or no evidence may be found in support of the nonmoving party's case. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); DiCola v. SwissRe Holding (North America), Inc., 996 F.2d 30, 32 (2d Cit. 1993). When no rational jury could find in favor of the nonmoving party because the evidence to support its case is so slight, there is no genuine issue of material fact and a grant of summary judgment is proper. See Dister v. Continental Group, Inc., 859 F.2d 1108, 1114 (2d Cir. 1988) . . . . Finally, the trial court's task at the summary judgment motion stage of the litigation is carefully limited to discerning whether there are any genuine issues of material fact to be tried, not to deciding them. Its duty, in short, is confined at this point to issue-finding; it does not extend to issue-resolution.

 Gallo v. Prudential Residential Servs., Ltd., 22 F.3d 1219, 1223-24 (2d Cir. 1994) (emphasis added).

 It is with these guidelines in mind that the court must address the issues raised by the present motions.

 II. CERCLA Liability

 The State seeks partial summary judgment against the McMahons on the issue of their liability for the State's response costs pursuant to CERCLA. In opposition, the McMahons argue, in conclusory fashion, that there are genuine issues of material fact which preclude granting the State the relief it seeks.

 
In order to establish a prima facie case of CERCLA liability, a plaintiff must prove that (1) the defendant is a responsible party as defined by section 9607(a)(1)-(4); (2) that the site at issue is a "facility" as defined by section 9601(9); (3) that there has been a release of hazardous substances at the facility or that such a release is threatened; (4) that the plaintiff has incurred response costs in connection with that release; and that (5) the costs incurred and the response actions taken conform to the National Contingency Plan set up under CERCLA.

 General Elec. Co. v. AAMCO Transmissions, Inc., 962 F.2d 281, 285 (2d Cir. 1992) (citing Murtha, at 1198).

 Moreover,

 
if the [plaintiff] establishes each of these elements on undisputed facts, and the defendant is unable to demonstrate by a preponderance of the evidence the existence of one of the three affirmative defenses set forth in § 9607(b), then plaintiff is entitled to summary judgment on the issue of liability, even when genuine issues of material fact remain as to appropriate damages.

 United States v. Alcan Aluminum Corp., 990 F.2d 711, 720 (2d Cir. 1993) (citing Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 668 (5th Cir. 1989)).

 The only element of the State's prima facie case that the McMahons dispute is their status as "responsible parties" within the meaning of § 9607(a)(1)-(4). *fn3" Section 9607(a) defines a responsible party in the following manner:

 
notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section --
 
(1) the owner and operator of a . . . facility,
 
(2) any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of,
 
(3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, . . . of hazardous substances owned or possessed by such person, by any other party or entity, at any facility . . . owned or operated by another party or entity and containing such hazardous substances, . . .
 
(4) . . . [is a responsible party]

 42 U.S.C.A. § 9607 (West Supp. 1994). *fn4"

 The State contends that the McMahons "fall with [sic] a class of liable persons as owners of a facility at the time hazardous substances were disposed there. 42 U.S.C. § 9607(a)(2). In addition, defendant Robert McMahon operated the facility and arranged for the disposal of hazardous substances there. 42 U.S.C. § 9607(a)(2) and (3)." See Plaintiff's Memorandum of Law at 18.

 A. Facts5

 The following facts are uncontroverted. In 1981, the McMahons purchased the site - 6, 8, and 10 Jackson Street - from Dairylea Cooperative. See Leary Affidavit at P 7 and Exhibit A, 1981 Deed, attached thereto. When Dairylea owned the site, it was used as a milk processing and ice cream manufacturing plant. See id. and Exhibit B, Dairylea's Responses to NYSDEC Information Demand at 2-3, attached thereto. On March 2, 1984, the McMahons sold 8 Jackson Street to Leonard Almy. See id. at 8 and Exhibit D, Deed to 8 Jackson Street, attached thereto. There were drums located on the 8 Jackson Street property before Almy bought the property. See id. and Exhibit C, Almy Trial Transcript at 37-38, attached thereto. Almy would not close on the building until the drums were removed. See id. and Exhibit C at 39-40. By the time of the closing in March 1984, the drums had been removed from the 8 Jackson Street property. See id. and Exhibit C at 40. Almy later saw the drums elsewhere at the Site. See id. and Exhibit C at 42. On February 28, 1987, the McMahons sold the parcel at 6 Jackson Street to Almy. See id. at 9 and Exhibit F, Deed to 6 Jackson Street, attached thereto.

 On September 8, 1988, the McMahons sold the parcel located at 10 Jackson Street to defendant Louis Stilloe. See Leary Affidavit at P 10 and Exhibit G, Deed to 10 Jackson Street, attached thereto. Prior to closing, Stilloe inspected the property and discovered drums and other personal property stored there. See id. and Exhibit C, Stilloe Trial Transcript at 66-71, attached thereto. The drums were located on the 10 Jackson Street side of an alleyway that runs between 10 Jackson Street and 8 Jackson Street. *fn6" See id. and Exhibit C at 71 and 79. At the closing on September 8, 1988, the McMahons and Stilloe entered into a written contract whereby the McMahons agreed to remove all "personal property," "debris," and "stored materials" within 15 days of the date of the closing on the property. *fn7" See id. and Exhibit H, McMahon/Stilloe Contract, p. 3, P 2, attached thereto. This contract also provided that

 
In the event the [McMahons] have failed to remove said personal property, debris and stored materials or in the event any governmental agency including the Environmental Protection Agency requires additional work on the part of [Stilloe] in connection with the removal of said personal property, debris or stored materials, [Stilloe] may remove the same and the [McMahons] agree to reimburse [Stilloe] for any and all expenses in relation thereto . . .

 See id. and Exhibit H, p. 3, P 2.

 Despite this contract, the McMahons failed to remove the debris and personal property from 10 Jackson Street within 15 days of closing. See Leary Affidavit at P 14. Sometime later, however, the drums were moved from the Stilloe building to another location on the ...


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