The opinion of the court was delivered by: KEN SCHROEDER, Magistrate Judge
Pursuant to 28 U.S.C. § 636(c), the parties have consented to
the assignment of this case to the undersigned to conduct all
proceedings in this case, including the entry of final judgment.
Currently before the Court is the plaintiff's renewed motion
for summary judgment on the first and second causes of action
claiming liability pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"); the fourth
cause of action claiming breach of contract; and the sixth and
eleventh causes of action claiming that Neumade engaged in an
ultra-hazardous activity and created a public nuisance. Dkt. #54.
For the following reasons, plaintiff's motion for summary
judgment on its CERCLA contribution claim is granted, and the
remainder of plaintiff's motion for summary judgment is denied. BACKGROUND
On August 5, 1959, Benderson Development Company's
("Benderson's"), predecessor, Walden Industrial Park,*fn1
entered into a Memorandum of Lease with Morrison International
Corporation regarding real property located at 2485 Walden
Avenue. Slater Aff., ¶¶ 17, 19; Exh. 5. The term of the lease ran
from February 1, 1960 through January 31, 1982, with a right to
renew for two consecutive five-year terms. Slater Aff., ¶ 18;
Exh. 6. On May 11, 1967, Benderson consented to the assignment of
Morrison International Corporation's lease rights to Neumade
Products Corporation ("Neumade"). Slater Aff., ¶ 19; Exh. 7.
Neumade manufactures, sells and distributes equipment for the
film industry, including storage equipment, overhead projectors,
cabinets and lamp houses. Dkt. #59, ¶ 28. The lease was extended
for two consecutive five-year terms, through January 31, 1991.
Slater Aff., ¶ 20.
On July 13, 1990, staff from the New York State Department of
Environmental Conservation ("NYSDEC"), conducted a Resource,
Conservation and Recovery Act ("RCRA"), inspection at Neumade.
Exh. 12. A memorandum detailing that inspection states that
During the inspection, numerous Class I/High Priority
violations were documented. The company was not
complying with any of the hazardous waste
requirements claiming that they were unaware of our
rules and regulations. Staff observed an area on-site
near their parking lot where paint wastes were dumped
on the ground (size of disposal area was 12' × 12').*fn2
There was also a paint stain across the parking lot
at least 80 feet long where liquids migrated from the
disposal area. Although company representatives did
not admit to dumping their waste on the ground, the
preponderance of the evidence supports the
Neumade manufactures metal film and audio storage
racks. These racks are spray painted with a solvent
base paint. A solvent thinner (xylene) is also used
to clean equipment. MSD sheets indicate that most of
these paints are ignitable and some contain lead
* * *
Because of the seriousness of the violations and the
potential for an environmental release, criminal
violations should be evaluated.
Exh. 12. The staff person conducting the inspection noted that
It appears that waste paint and solvent has been
accumulated in 4 or 5 drums which were dumped
recently. The residue was still soft and there was a
solvent odor in the area.
On March 10, 1991, Neumade entered into an Order on Consent
with the NYSDEC in which it was required to comply with each of
the eighteen hazardous waste management regulations it had
violated and to comply with the terms of a Spill Clean-Up Plan
prepared by Snyder Engineering. Exh. 15. The eighteen violations cited by the NYSDEC included
Storage containers were not in good condition and
leakage or spillage had occurred;
Containers holding hazardous waste were stored in a
manner that caused it to leak; and
Neumade does not operate the facility to minimize
the release of hazardous waste constituents to the
Exh. H. Neumade plead guilty to one misdemeanor count of
violating Environmental Conservation Law § 71-2711, endangering
public health, safety or the environment, fourth degree, in the
Town of Cheektowaga Court and paid a $25,000 fine. Exh. 16.
On November 26, 1991, Benderson reported a petroleum spill
caused by five failing underground storage tanks located around a
building adjacent to Walden Avenue. Exh. B & C.
On December 9, 1991, Benderson and Neumade entered into a new
lease, which, inter alia, provided as follows:
54. A. Lessee shall not conduct any activities with
respect to the Demised Premises or the shopping
center which result in the generation, storage or
release of any toxic, hazardous or similar substances
(as those terms may be defined from time to time in
any federal, state or local law, rule or regulation).
Lessee shall bear all liability for any claim,
injury, loss or damage to any person or the
environment as a result of any such toxic, hazardous
or similar substances and Lessee will save Lessor
harmless and indemnify Lessor against any such loss,
claim, injury or damage.
* * * 54. C. Environmental Cleanup. At the end of the Lease
term, including any renewal or extension thereof,
Lessee will provide Lessor with any environmental
clearance which may be required by any governmental
authority having jurisdiction. Until such time as the
Demised Premises are delivered to the Lessor by the
Lessee in a "clean" condition, as specified by law,
Lessee will pay to Lessor the monthly rental based
upon the then fair market value during said interim
period, and will notify Lessor at least ninety (90)
days prior to obtaining a clean condition report as
specified by law.
* * *
54. E. Lessee further agrees to properly and
accurately label and segregate all materials stored
at the Demised Premises, as required by law. At all
times during the term hereof, and upon the
termination of the terms hereof, Lessee shall comply
with all applicable environmental protection laws,
rules or requirements and shall promptly cure all
violations thereof arising from its non-compliance,
including but not limited to the preparation,
delivery and/or filing with the applicable
governmental authorities and with the Lessor, of all
forms, certificates, notices, documents, plans and
other writings, and the furnishing of such other
information as may be required or requested by the
Lessor, its mortgagee or any applicable governmental
authority in connection with the sale, lease,
transfer, mortgaging or other disposition of the
building and/or lands. It is specifically
acknowledged and agreed that the provisions of this
paragraph shall survive the termination of the Lease,
regardless of the reason or cause thereof.
In a memorandum dated April 15, 1992, NYSDEC Representative Tom
Johnson detailed the remedial work being performed in accordance
with the cleanup plan prepared by Snyder Engineering. Exh. T.
With respect to Area #5, "located on the south end of the
blacktop loading area," the memorandum recounted that Visible paint waste is seen solidified on the soil
surface in this area. A pick was used to penetrate
the ½ " 1" layer of paint for soil sampling.
Immediate solvent odors were given off upon
penetration. HNU readings ranged from 250-300 ppm in
Holes were punched into the blacktop near the edge of
the drive with no HNU readings registered.
Contamination appears to have migrated downward to an
unknown depth. Excavation of this area appears to be
a feasible means of cleanup to remediate the paint
As part of proposed revisions to the cleanup plan, Snyder
Engineering noted the following:
Area 5 is located on the Southeast side of the
building at the edge of the blacktopped area. This
area is suspected by the NYSDEC of being a paint and
waste solvent disposal area. The dried paint was
scraped away and an Hnu meter reading of greater than
20 ppm was obtained from the ambient air. A hole was
dug down to a depth of approximately 12 inches.
Strong solvent odors were noted during this digging.
The Hnu meter indicated the presence of significant
concentrations of volatile organics in the material
encountered during the digging process. . . . Based
upon these preliminary findings, it appears that the
solvent concentrations decrease significantly with
depth. Due to the degree of contamination present in
this area, a determination was made that additional
shallow depth sampling and analysis in this area
would serve no purpose until the material which is
obviously contaminated (based on Hnu readings) is
removed. The actual lateral and vertical extent of
volatile organic contamination must be ascertained as
part of the excavation process.
Exh. 17. On January 20, 1993, Snyder Engineering submitted a
"Remediation Action Certification Report for Neumade Products,
Inc. in Cheektowaga, New York." Exh. 18. This report indicated
that approximately 70 cubic yards of material "contaminated with
paint solvents (xylene, toluene, and ethylbenzene) and paint
sludge" were removed from Area #5. Exh. 18; Exh. S. In addition,
material "characterized by an odor different than the paint
solvents" was also removed. Exh. 18. Tom Johnson, the NYSDEC
representative onsite during this excavation noted that
While digging at the northwest corner of the pit a
flow of blackish water flowed into the hole from
under the blacktop. A petroleum sheen was observed in
this area. Further excavation exposed a black, oily,
Exh. S. As a result of this discovery additional excavation was
undertaken until the "black stained material came to an end."
On September 14, 1993, upon review of a report dated August 4,
1993 (which does not appear to have been included in the record
before the Court), the NYSDEC "determined that the remedial
requirements of the Order have been complied with." Exh. S.
Benderson removed the five underground petroleum storage tanks
and 80 tons of contaminated soil on December 4, 1993. Exh. C. The
NYSDEC closed the site on January 4, 1994 after determining that
soil samples in the excavation area were below its soil guidance
values. Exh. C. By letter dated November 26, 1996, counsel for Benderson
advised counsel for Neumade that
During our routine pre-vacancy inspection conducted
by Bruce Marchese of our office and Mr. King Mix of
Neumade on November 21, 1996, several environmental
concerns were noted. These are directly related to
the nature of the Lessee's use of the Premises.
Prior to the expiration of the Lease, please provide
us with an inspection of the leased Premises by a
mutually acceptable environmental firm confirming the
leased Premises are not in violation of any
applicable environmental law or regulations.
On March 27, 1997, at the request of Benderson, GZA conducted a
site visit to assess potential environmental concerns at the site
and observed, inter alia, a "paint shop with several paint
booths" and "55 gallon drums of metal fragments" in the loading
dock area, which was marked as a "hazardous waste storage area."
Exh. 26. GZA recommended collection of soil samples in the areas
identified as being of concern and a sediment sample from the
"loading dock sump adjacent to the hazardous waste storage area."
On April 1, 1997, GZA obtained soil samples from the paint shop
area, under the asphalt outside the rear door, and from sediment
in the loading dock sump. Exh. 27. GZA reported that
Several volatile organic chemicals and
petroleum-based chemicals were found. NYSDEC
TAGM*fn3 levels for acetone of 2,000 ppb were exceeded in the paint shop area
which had a soil sample concentration of 4,600 ppb,
and in sump sediments in the loading dock area where
a concentration of 21,000 ppb was recorded. Levels
for m, p-xylenes 7,400 ppb and o-xylenes 3,100 ppb
were detected in the paint shop area. Sump sediments
in the loading dock area contained m, p-xylenes
15,000 ppb and o-xylenes of 6,300 ppb.
On April 4, 1997, the parties reached a Lease Modification
Agreement, which extended the term of the lease and set rent
through June 30, 1997, at which time Neumade agreed to "promptly
vacate and surrender the Demised Premises . . . time being of the
essence." Exh. 9.
On June 17, 1997, Benderson sent Neumade a letter noting
Neumade's failure to respond to its letter of November 26, 1996,
referencing the Hazardous Substances provisions in the lease, and
specifically advising that
As set forth in paragraph 54C of the Lease, Neumade
must provide Benderson Development with an
environmental clearance for the premises and must
continue to pay rent for ninety (90) days after
providing us with a clean condition report on the
It is our concern that there are significant
environmental problems as a result of your use of the
premises. As a result, we solicited a proposal from
GZA, Geo Environmental of New York for subsurface
explorations and a sump evaluation of the site, a
copy of which is attached for your review. The issues surrounding your contamination of the
property must be resolved as soon as possible. Please
contact me at your earliest convenience regarding a
proposed resolution to this problem.
Exh. 11. Benderson commenced this action on April 8, 1998. Dkt.
In a report to counsel for Benderson dated April 6, 1999, GZA
Residual contamination (ethylbenzene, xylene and
acetone) was detected at several locations on-site.
These areas include the former paint shop area, spill
area #5 and B-1 (north of the building).
The concentrations of ethylbenzene and xylenes
(compounds commonly associated with petroleum)
detected in soil samples (for the samples described
in this report) are below the NYSDEC guidance for
remediation of petroleum contaminated sites (STARS)
with the exception of B-3 (m&p xylene at 181 ug/kg).
The NYSDEC guidance for mixed xylenes is 100 ug/kg.
Location B-3 is associated with Spill Area #5 which
reportedly was suspected to be a paint and waste
solvent disposal area. Additional criteria for
cleanup of these compounds includes the NYSDEC
recommended soil cleanup objective (TAGM 4046), for
use at inactive hazardous waste site. [sic] The TAGM
4046 criteria for total xylene is 1,200 ug/kg. The
total detected xylene at B-3 (291 ug/kg) is below the
TAGM 4046 criteria.
The concentration of acetone detected in soil samples
are below the NYSDEC recommended soil cleanup
objective for use at inactive hazardous waste site
[sic] (TAGM 4046) for acetone. It is also noted that
acetone is a common laboratory contaminant, and its
reported presence is often an artifact of the
Based on the sampling and testing for this report, no
additional work related to impacted soil is
recommended. However, impact from possible sump water
contamination is not known.
Exh. 29. Neumade's former plant manager, King Mix, was deposed on August
3, 1999. Exh. 19. He admitted Neumade's use of products
containing acetone and xylene. Exh. 19. In addition, Material
Safety Data Sheets, Waste Disposal Notification Sheets and
Neumade's List of Hazardous Compounds and Reportable Quantities
contained in it's Spill Prevention Control and Countermeasure
Plan all indicate that Neumade utilized acetone, ethylbenzene,
toluene and xylene in its production process. Exh. 21, 22 & 23.
Mr. Mix explained that the paint sludge in the parking lot area
resulted from Feldman Barrel employees tipping over 55-gallon
paint drums to dump water which had accumulated in the empty
barrels before loading them onto their truck for removal from the
premises. Exh. 19. Prior to 1991, "Feldman Barrel would remove
the empty barrels from Neumade's property, refurbish them and
return them to the manufacturer of the paint." Mix Aff., ¶¶ 7,
By letter dated September 8, 1999, GZA reported the following
results of "additional subsurface explorations . . . to further
evaluate possible soil and drainage structure sediment
Toluene, ethylbenzene, and/or xylenes were detected
at eight of the eleven geoprobe soil samples tested.
The concentrations of toluene (detected in three
samples) ranged from 10 ppb to 22 ppb, ethylbenzene
(four samples) from 40 ppb to 3,340 ppb, and xylenes
(eight samples) from 16 ppb to 11,700 ppb. Acetone
was detected at ten of the eleven soil samples
tested. The acetone concentration detected ranged
from 48 ppb to 2,660 ppb. . . .
Drainage Structure Samples
Various volatile organic compounds . . . were
detected in the three drainage structures sampled.
The highest concentration of ethylbenzene (3,500
ppb), toluene (2,050 ppb), xylenes (7,800 ppb) and acetone (3,450 ppb)
were detected in the ramp sump sediment sample.
Exh. 30. GZA noted that
The NYSDEC TAGM clean-up criteria were exceeded only
in the sump (at the loading dock) and in soil boring
B-22 (borings at one foot yielded results for m,
p-xylene at 5,900 ppb and o-xylene at 1,490 xylenes
of 1,200 ppb and at a depth of five feet yielded
readings of m, p-xylene of 11,700 ppb).
CRA Services conducted a Phase I Environmental Site Assessment
for a prospective tenant in November of 1999 and determined that
there were no recognized environmental conditions or ...