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Gowanus Industrial Park, Inc v. Hess Corp

October 19, 2011

GOWANUS INDUSTRIAL PARK, INC., PLAINTIFF,
v.
HESS CORP., DEFENDANT.



The opinion of the court was delivered by: John Gleeson, United States District Judge:

ONLINE PUBLICATION ONLY

MEMORANDUM AND ORDER

Gowanus Industrial Park, Inc. ("GIP") claims title to certain parcels of land (the "parcels"), including a strip of property approximately 200 feet wide beneath a body of water known as the Henry Street Basin. The Henry Street Basin lies at the end of Henry Street in South Brooklyn; beyond it is Gowanus Bay, and beyond that is Upper New York Harbor.

In this action, GIP complains of a bulkhead (and of a fence and piping on top of the bulkhead) maintained by Hess Corporation ("Hess"). Hess owns real property adjacent to the Henry Street Basin and uses that property as an oil terminal. GIP contends that Hess's bulkhead rests partially on the parcels. It therefore asserts nuisance and trespass claims against Hess, seeking damages and preliminary and permanent injunctive relief. GIP also asks for a declaration that it is the owner of the parcels, including the bulkhead, and that it is entitled to exclusive use and ownership of the bulkhead. Hess, in turn, challenging GIP's claim of ownership to the parcels, seeks a declaration that it owns the bulkhead as well as those portions of the parcels lying beneath and to the east of the bulkhead and seeks an injunction prohibiting GIP from interfering with Hess's use of the bulkhead or attempting to use the bulkhead without Hess's permission. Both parties have moved for summary judgment, each asking the court to grant its claims and deny the other party's claims as a matter of law.*fn1 For the reasons stated below, each party's motion is denied in part and granted in part. Specifically, GIP's claims for trespass and private nuisance are dismissed, as are its claims for declarations that (a) the bulkhead lies within the parcels; (b) GIP is entitled to "sole, exclusive and unfettered use of and access to the Bulkhead"; (c) GIP is entitled to construct a catwalk and related pile clusters on the bulkhead; and (d)Hess has no claim to the ownership or use of the bulkhead. GIP's claim for a declaration that it owns the parcels is granted. Hess's counterclaims are dismissed, except to the extent that it seeks a declaration that it owns the structures that it built and maintains on the property at issue; that declaration is granted as a matter of law.

BACKGROUND

This action is the second iteration of a dispute that was previously before my colleague Judge I. Leo Glasser in Gowanus Industrial Park, Inc. v. Amerada Hess Corp., No. 01-CV-0902 (ILG). Its background -- including a thorough history of the creation and title of the Henry Street Basin -- is set out in detail in Judge Glasser's decision on the parties' cross-motions for summary judgment in that case, 2003 WL 22076651 (E.D.N.Y. Sept. 5, 2003) ("GIP I"), as well as in several orders issued in this case, see Order Addressing Scope of Hearing, April 18, 2011, ECF No. 22; Gowanus Indus. Park, Inc. v. Hess Corp., No. 10-CV-5522 (JG) (JO), 2011 WL 1841132 (E.D.N.Y. May 13, 2011) (order denying Hess's motion to dismiss in part); Gowanus Indus. Park, Inc. v. Hess Corp., No. 10-CV-05521 (JG) (JO), 2011 WL 1431621 (E.D.N.Y. April 8, 2011) (order inviting amicus submission). I recite here only those facts necessary to resolve the motions before me. All facts are undisputed unless otherwise noted.*fn2

A. GIP's Interest in the Parcels

The parcels at issue in this case are described in letters patent recorded with the

New York Department of State on December 21, 2004. Aff. John Quadrozzi, Jr. Ex. 6, July 14, 2011, ECF No. 37-2 ("Letters Patent"). They include all lands under water at the Henry Street Basin and are bounded on the east by a bulkhead line established in 1875 that runs along the eastern edge of the Henry Street Basin. GIP I, 2003 WL 22076651, at *4; see also 1945 N.Y. Laws Ch. 899; 1875 N.Y. Laws Ch. 398. That bulkhead line also serves as the western boundary of Hess's property, which is known as the Brooklyn Terminal. The parcels were appropriated by New York State in 1912 pursuant to statute, see 1911 N.Y. Laws Ch. 746, and became part of the New York barge canal system. GIP I, 2003 WL 22076651, at *3. The state was prohibited by statute from alienating the appropriated lands, 1911 N.Y. Laws Ch. 746, § 14, but in 1944 the legislature deemed the Gowanus Bay Terminal "no longer necessary or useful as a part of the barge canal system, or as an aid to navigation thereon or for barge canal terminal purposes," 1944 N.Y. Laws Ch. 410, § 2, and transferred to the Port Authority of New York "all the right, title and interest of the state" in the lands that had been appropriated for the Gowanus Bay Terminal, id. § 3. In 1945, the 1944 Act was amended to include the underwater lands at the Henry Street Basin. 1945 N.Y. Laws Ch. 899, § 2 (inserting a new § 18 into the 1944 Act).*fn3

Together, the 1944 and 1945 Acts conveyed to the Port Authority title to the parcels at issue in this litigation.

Under the 1944 Act, the Port Authority held title to the parcels subject to certain restrictions. Although the act was entitled, in part, "An Act providing for the abandonment of a barge canal terminal and barge canal terminal lands," the Port Authority was required to "rehabilitate" the pier properties, and it could not use the lands "for any purpose which will materially and substantially interfere with their use for pier and terminal purposes." Id. § 2(a),

(b). The act specified that the Port Authority, in maintaining the pier properties, would be "performing an essential governmental function" by providing "needed transportation and terminal facilities" to the people of New York and New Jersey. Id. § 12. The land was to remain non-taxable. In addition, the Port Authority was prohibited from granting or conveying title to the lands "to any person or legal entity other than the state." Id. § 2(c).

Despite this restriction on alienation, the Port Authority purported to sell the parcels to GIP in 1997 for $3.5 million and to transfer title by quitclaim deed. GIP subsequently initiated the 2001 action before Judge Glasser. It alleged that it held title to the parcels and that the bulkhead constructed by Hess encroached on the parcels and constituted a trespass. On cross-motions for summary judgment, Judge Glasser determined that the bulkhead was partially located within the boundaries of the parcels, GIP I, 2003 WL 22076651, at *7-*9, but he also held that GIP did not own the parcels. He found the attempted 1997 transfer void because the Port Authority was prohibited by the 1944 Act from transferring title to any entity other than the state. Id. at *9. Because Judge Glasser also found that GIP was not in possession of the disputed property, he granted summary judgment in Hess's favor on GIP's trespass claim. Id. at *2. Judge Glasser also considered a claim of ownership by Hess to a portion of the parcels. He held that Hess did not hold title to any portion of the parcels, and that decades-long acquiescence by the Port Authority to the presence of the bulkhead had not shifted the property line to the location of the bulkhead because the Port Authority had taken no action indicating its adoption of a new boundary line. Id. at *7-9.

On November 29, 2004, in response to Judge Glasser's decision, the Port Authority assigned its interest in the parcels to the state by quitclaim deed. On December 21, 2004, the state deeded the property to GIP by letters patent. The letters patent state that the transfer from the state to GIP was made "pursuant to Section 50 of the Public Lands Law and Findings of the First Deputy Commissioner of General Services dated December 15, 2004 and in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration paid by [GIP]." Letters Patent at A-91. The letters patent are signed by Robert J. Fleury, First Deputy Commissioner of General Services, and approved by an assistant attorney general on behalf of Attorney General Eliot Spitzer. Both the quitclaim deed and the letters patent refer to Judge Glasser's 2003 opinion and state an intent to cure the defect he identified. Aff. John Quadrozzi, Jr. Ex. 5 at 1-2, July 14, 2011, ECF No. 37-2; Letters Patent at A-95.The December 15, 2004 findings also cite Judge Glasser's opinion and state that GIP applied to the State Office of General Services "requesting that the State of New York ratify or confirm title in GIP." Charles S. Sims Letter Ex. A, March 30, 2011, ECF No. 12 ("Dec. 15 Findings").

B. Hess's Interest in the Brooklyn Terminal

By deeds executed in1940 and 1942, Ira S. Bushy & Sons, Inc. ("Bushy") acquired from the estate and heirs of Jeremiah P. Robison title to the land referred to here as the Brooklyn Terminal, the western boundary of which is the eastern bank of the Henry Street Basin. Bushy became a wholly-owned subsidiary of Hess in 1977, and Hess now holds title to the Brooklyn Terminal. Hess's title includes lands and structures along the eastern side of the Henry Street Basin, including a pier known as the finger pier, extending 500 feet southward into the Gowanus Bay. Since acquiring Bushy in 1977, Hess has operated an oil depot on the Brooklyn Terminal property. Oil is offloaded from vessels docked at the finger pier into pipelines for transport to three above-ground storage tanks, which are located on Hess's property within thirty feet or less of the Henry Street Basin. From there, the oil is piped into trucks for delivery to homes and businesses throughout the New York City metropolitan area. The oil tanks were constructed by Bushy or its tenant, Patchogue Oil Co., and were in place by the 1960s.

C. The Bulkhead, Fence and Piping

At some point prior to 1945 -- and likely before 1920 -- a wooden bulkhead was sunk into the tidebed roughly following the eastern edge of the Henry Street Basin. According to surveys conducted in 1966 and 1972, the wooden bulkhead lay west of the 1875 bulkhead line by distances ranging from five inches to nearly fifteen-and-a-half feet. In the early 1980s, the United States Army Corps of Engineers notified Hess that a portion of the Brooklyn Terminal waterside improvements, including portions of the wooden bulkhead, were deteriorating and should be repaired, as they were "in imminent danger." Hess therefore made modifications to the waterfront in 1984 or 1985. Its repairs included installation of a new bulkhead -- the bulkhead at issue in this litigation -- for the purpose of shoring up the eastern shoreline of the Henry Street Basin (and the western boundary of the Brooklyn Terminal). The bulkhead is made of steel and enclosed with a thirty-inch concrete cap. It is not fit for docking or mooring commercial vessels for loading or offloading goods. This new bulkhead, like its wooden predecessor, lies west of the 1875 bulkhead line. Its encroachment onto the property west of that line ranges from one inch at some parts of the bulkhead to just over six feet at others. Hess estimates that modifying the Brooklyn Terminal to accommodate a bulkhead situated fully to the east of the 1875 bulkhead line would require the approval of various governmental agencies, cost more than $10 million, and place the depot out of service for at least one year.*fn4

D. The Present Action

In March of 1998, after the Port Authority attempted to transfer title to GIP but before that transfer was declared void in GIP I, GIP sent Hess a letter complaining that Hess was trespassing on its property. Hess refused to vacate the property, and in 2001 GIP commenced the action before Judge Glasser. After the Port Authority and the state attempted for a second time to transfer title to GIP in the wake of GIP I, GIP sent a letter dated June 24, 2008 to Hess, again complaining of trespass and demanding that Hess vacate the parcels. Hess once again refused, and GIP initiated this action on November 20, 2010, seeking monetary, injunctive and declaratory relief for Hess's alleged trespass.

On February 18, 2011, Hess filed a motion to dismiss GIP's initial complaint on the grounds that GIP does not hold title to the parcels and that GIP's claims are barred by res judicata. Oral argument on the motion was held on March 29, 2011. At oral argument, GIP indicated that its initial complaint did not set out the uses to which GIP intended to put the disputed sliver of underwater land, and acknowledged that consideration of those intended uses might be significant in determining whether Hess's continuing use and maintenance of the bulkhead exceeded its riparian rights. I therefore granted GIP leave to amend its complaint, which it did on April 5, 2011. In an order dated April 7, 2011, I deemed Hess's arguments in its motion to dismiss to have been made against the amended complaint, and I reserved judgment on the motion. On May 13, 2011, I issued a partial denial of Hess's motion to dismiss, holding that GIP's trespass and nuisance claims were not barred by res judicata or collateral estoppel.

I reserved judgment on Hess's other argument, i.e., that GIP's claims should be dismissed because it does not hold title to the property. I noted that the state, which sought to convey the parcels to GIP, might have an interest in the court's resolution of GIP's claim of title. I therefore invited the Attorney General of New York State to file an amicus curiae brief on behalf of New York, addressing the question of whether the 2004 letters patent successfully vested title to the parcels in GIP. On May 13, 2011, the Attorney General filed an amicus brief, to which Hess responded by memorandum on May 27, 2011. Meanwhile, the portion of Hess's motion to dismiss based on GIP's alleged lack of title has been subsumed within the instant motion for summary judgment.

In its amended complaint, GIP asserts claims for trespass and nuisance and seeks damages and preliminary and permanent injunctive relief. GIP also seeks a declaration that (a) the offending bulkhead lies within the parcels; (b) GIP holds title to the parcels, including the bulkhead; (c) GIP "is entitled to sole, exclusive and unfettered use of and access to the Bulkhead"; (d) GIP may construct a series of pile clusters alongside the bulkhead and construct catwalks attaching the pile clusters to the bulkhead; and (e) Hess has no claims to ownership or use of the bulkhead. In its answer filed on May 23, 2011, Hess asserted a counterclaim, seeking a declaration that (a) GIP lacks title to the parcels; (b) GIP is not entitled to use of or access to the bulkhead; (c) Hess owns title to those portions of the parcels lying beneath and to the east of the bulkhead; and (d) Hess is entitled to exclusive use and maintenance of the bulkhead and those portions of the parcels lying beneath and to the east of the bulkhead. Hess also seeks a permanent injunction enjoining GIP from (a) attempting to eject Hess from the bulkhead; (b) interfering or attempting to interfere with Hess's possession and occupancy of the bulkhead; or (c) using the bulkhead for any purpose whatsoever without Hess's prior permission. The parties have cross-moved for summary judgment pursuant to Fed. R. Civ. P. 56. Each seeks judgment in its favor on each of its own claims and dismissal of all claims raised by its opponent.

DISCUSSION A. The Legal Standard for a Rule 56 Motion for Summary Judgment

A motion for summary judgment pursuant to Fed. R. Civ. P. 56 should be granted only if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A fact is "material" within the meaning of Rule 56 if its resolution "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute over a fact is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.

Summary judgment is proper when the moving party can show that "little or no evidence may be found in support of the nonmoving party's case." Gallo v. Prudential Residential Servs., 22 F.3d 1219, 1223-24 (2d Cir. 1994). When applying this standard, the court must "resolve all ambiguities, and credit all factual inferences that could rationally be drawn, in favor of the party opposing summary judgment." Brown v. Henderson, 257 F.3d 246, 251 (2d Cir. 2001) (internal quotation marks omitted). The court may not make credibility determinations or weigh the evidence, and "it must disregard all evidence favorable to the moving party that the jury is not required to believe." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150-51 (2000).

B. GIP's Claims for Trespass and Nuisance

GIP claims that Hess's bulkhead, fence and piping constitute a trespass and a private nuisance. A trespass is an unauthorized entry upon the land of another. Burger v. Singh, 816 N.Y.S. 478, 480 (2d Dep't 2006). A private nuisance is an interference with another's right to use and enjoy his land. Kaplan v. Inc. Village of Lynbrook, 784 N.Y.S.2d 586, 588 (2d Dep't 2004). In order to maintain an action for trespass or nuisance, a plaintiff must demonstrate an interest in the invaded property. To prevail on a claim of trespass, the plaintiff must demonstrate a right to exclusive possession of the invaded property, see Curwin v. Verizon Commc'ns (LEC), 827 N.Y.S.2d 256, 257 (2d Dep't 2006) ("The essence of trespass is the invasion of a person's interest in the exclusive possession of land[.]" (internal quotation marks omitted)), and to prevail on a claim of nuisance, the plaintiff must show a right to use and enjoy the property, see Copart Indus., Inc. v. Consolidated Edison Co. of New York, 41 N.Y.2d 564, 568 (an "essential feature" of private nuisance is "the interference with the use of enjoyment of land . . . actionable by the individual person or persons whose rights have been disturbed"). The nature of the defendant's incursion is also relevant to a claim for trespass or nuisance. A defendant can defeat a trespass action by showing that its entry onto the property was authorized. See Golonka v. Plaza at Latham, 704 N.Y.S. 703, 706 (3d Dep't 2000) ("[A] person entering upon the land of another without permission, whether innocently or by mistake, is a trespasser." (emphasis added) (internal quotation marks omitted)); cf. Curwin, 827 N.Y.S.2d at 257-58 ("[A]n action alleging trespass may not be maintained where the alleged trespasser has an easement over the land in question."); O'Brien v. Ginter, 744 N.Y.S.2d 511, 512 (2d Dep't 2002) ("A license to remove items such as minerals, crops, or timber from property is a complete defense to an action to recover damages for trespass."). Similarly, the plaintiff in a nuisance action must show that the defendant's interference with its enjoyment of its property was unreasonable. See Kaplan, 784 N.Y.S.2d at 588 (claim for nuisance could not succeed where plaintiffs "failed to show that their use and enjoyment of their land was substantially and unreasonably interfered with"); Weinberg v. Lombardi, 629 N.Y.S.2d 280, 280 (2d Dep't 1995) (the elements of private nuisance include an interference with plaintiff's right to use and enjoy land that is "unreasonable in character" (citing Copart Indus., 41 N.Y.2d at 570)).

GIP premises its claims of trespass and nuisance on its alleged ownership of the parcels. Hess argues that GIP's claims fail because it does not hold title to the parcels. Hess further argues that it has obtained title to the portion of the parcels on which the bulkhead sits by adverse possession. Finally, Hess contends that its incursion onto the parcels is an authorized and reasonable exercise of its riparian rights, and accordingly cannot give rise to a claim for trespass or nuisance. For the reasons stated below, I find as a matter of law that GIP holds title to the entirety of the parcels, but that it does so subject to Hess's rights as an uplands owner. I further find that Hess's construction ...


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