Opinion
No. 03-CV-6530 CJS.
June 23, 2004
Alan J. Knauf, Esq., Knauf Shaw, LLP, Rochester, New York, for Plaintiff.
Kenneth Crosby Acquisition Corp., Kenneth Crosby Co., Inc., Kenneth Crosby-New York, Inc., T.T. Bearing Co., Inc., Rochester Tool Corp., Jasco Tools, Inc., and Jayne C. Summers, Alexander Geiger, Esq., David Rothenberg, Esq., Geiger and Rothenberg, LLP, Rochester, New York, for defendants.
DECISION AND ORDER
INTRODUCTION
This is an action pursuant to, inter alia, the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601, et seq., and New York State Law, the New York Environmental Conservation Law ("ECL") and New York Navigation Law. Now before the Court is defendant's motion [#14] to dismiss the complaint in this action pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons that follow, that application is granted in part and denied in part.
BACKGROUND
This action involves environmental contamination of a parcel of land known as 640 Trolley Drive ("640 Trolley Drive," "the property," or "the site") in the Town of Gates, County of Monroe and State of New York. According to the complaint in this action, "since about 1948, the property has been owned by members of the Ciufo family or business entities that they controlled." Complaint ¶ 43. While it is not clear from the complaint, apparently one of these business entities was a partnership known as Trolley Park Associates. Plaintiff Emerson Enterprises, LLC ("plaintiff") is a New York limited liability company formed on July 28, 1998. For some unspecified time prior to that date, plaintiff was a general partnership, and was the managing partner of Trolley Park Associates. According to the complaint, "[o]n February 8, 1989, plaintiff became an owner of the Property." Id. at ¶ 48. (emphasis added). On December 21, 1989, Trolley Park Associates dissolved and assigned all of its assets, including leases, to plaintiff. Id. at ¶¶ 8, 56.
Prior to 1960, the property was vacant land In or about 1960, a 12,300 square-foot masonry structure was constructed on 640 Trolley Drive, and since that time the owners have leased out the premises for industrial purposes. Defendant Clark Witbeck, Inc. ("Clark Witbeck") leased the property "from the early 1960s until 1992." Complaint ¶ 46. Clark Witbeck's business involved "distributing industrial tools and supplies, including abrasives, cutting tools, fasteners, and other products." Id. at ¶ 47. In 1992, defendant Kenneth Crosby Acquisition Corp. ("Kenneth Crosby Acquisition") purchased Clark Witbeck's assets, and from 1992 until 2000, Kenneth Crosby Acquisition leased the property from plaintiff. Kenneth Crosby Acquisition's CEO, defendant Jayne C. Summers ("Summers"), personally guaranteed the Kenneth Crosby Acquisition lease. During the period between 1992 and 2000, Kenneth Crosby Acquisition "continued the Clark Witbeck business, with many key employees doing the same jobs and similar working conditions and processes." Id. at ¶ 50. The complaint alleges that, during that same period, Summers "operated" other businesses on the premises, including defendants Rochester Tool Corp. ("Rochester Tool") and T.T. Bearing Co., Inc. ("T.T. Bearing."). The complaint further alleges that defendant Jasco Tools, Inc. ("Jasco") "conducted operations" on the premises. Kenneth Crosby Acquisition's lease term ended on December 30, 2000, however, at some time prior to October 2000, Kenneth Crosby Acquisition, Rochester Tool, T.T. Bearing, and Jasco vacated the premises.
The complaint actually indicates that in 1992, "Trolley Park [Associates] and plaintiff entered into a lease" with Kenneth Crosby Acquisition. However, that statement is inconsistent with plaintiff's allegation that Trolley Park Associates was dissolved in 1989 when it transferred its assets to plaintiff. Complaint ¶¶ 8, 56.
Thereafter, plaintiff leased the premises to an entity known as AAA Environmental, Inc. ("AAA"). On October 27, 2000, AAA was clearing brush from around the building when it discovered a dry well containing substances later determined to include polychlorinated biphenyls ("PCBs"), 1,1,1-trichloroethane ("TCA"), and "other volatile organic compounds ("VOCs"), semi-volatile organic compounds ("SVOCs"), acetone, and petroleum (including xylene and other petroleum constituents.)." Id. at ¶¶ 3, 60. Prior to AAA's discovery, plaintiff was not aware of the existence of the dry well or of any contamination or waste disposal at the site, and plaintiff contends that "Clark Witbeck and/or other defendants had concealed the existence of the dry well from plaintiff and its predecessors." Id. at ¶ 67. Plaintiff further alleges that Clark Witbeck's employees dumped hazardous substances in the dry well, and that, "[u]pon information and belief, the dumping of contaminants was continued by the Kenneth Crosby Corporations after they occupied the Property." Id. at ¶ 71. Upon being notified of the contamination, the New York Department of Environmental Conservation ("NYDEC") listed the property on the state's Registry of Inactive Hazardous Waste Disposal Sites, and arranged for the dry well to be removed in January 2002. The complaint alleges that the NYDEC "plans to conduct further investigation of the property, and if necessary further remedial work," at a potential cost of "$500,000 or more." Id. at 79. Plaintiff further contends that the NYDEC "has made claims against the plaintiff . . . repeatedly demanding that plaintiff conduct investigation and remediation of the contamination at the property, and pay for the work it has done to date." Id. at 80.
On October 27, 2003, plaintiff commenced this action. In addition to Clark Witbeck, Kenneth Crosby Acquisition Corp., Summers, Rochester Tool, T.T. Bearing, and Jasco, plaintiff sued various companies allegedly associated with Kenneth Crosby Acquisition, individuals who are former owners of Clark Witbeck, and various insurance companies. The complaint purports to allege eighteen separate causes of action: 1) a claim that all defendants are strictly liable for cleanup costs pursuant to CERCLA, 42 U.S.C. § 9607(a); 2) a claim for contribution against all defendants pursuant to CERCLA, 42 U.S.C. § 9613(f)(1); 3) a claim for breach of contract against Kenneth Crosby Acquisition and Summers; 4) a claim for breach of contract against Clark Witbeck; 5) a claim that all defendants are strictly liable for damages under New York State Environmental Conservation Law ("ECL") Article 37; 6) a claim that all defendants are strictly liable for cleanup costs under New York State's "Superfund Law," ECL § 27; 7) a claim against all defendants for negligence; 8) a claim against all defendants for strict liability; 9) a claim against all defendants for public nuisance; 10) a claim against all defendants for waste; 11) a claim against all defendants for equitable or implied indemnification; 12) a claim against all defendants for restitution; 13) a claim against all defendants for trespass; 14) a claim against all defendants for private nuisance; 15) a claim against all defendants for cleanup of any petroleum waste pursuant to New York Navigation Law § 181(5); 16) a claim against all defendants for contribution pursuant to Navigation Law Article 12; 17) a claim against the defendant insurance companies for breach of contract; 18) a claim against the defendant insurance companies for plaintiff's damages and/or for contribution and indemnification pursuant to Navigation Law sections 190 and 176(8) and "common law and equitable principles of contribution and indemnification."
This includes Kenneth Crosby Co., Inc., Kenneth Crosby-New York, Inc., and Jasco Tools.
This includes defendants Brian J. Cain, Curtis S. Kling, Vernon Goodrich, and Dean R. Brodie.
This includes defendants Glens Falls Insurance Co., PG Insurance Co. of New York, and The Travelers Insurance Co.
On March 24, 2004, defendants Kenneth Crosby Acquisition, Kenneth Crosby, Co., Inc., Kenneth Crosby-New York, Inc., Rochester Tool, T.T. Bearing, Jasco Tools, Inc., and Summers moved to dismiss the complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. The motion to dismiss alleges that: 1) the first cause of action must be dismissed, since plaintiff is itself a "potentially responsible party" within the meaning of CERCLA, and therefore may not to recover damages under CERCLA § 107, but instead may only sue for contribution under CERCLA § 113(f)(1); 2) the second cause of action for indemnification under § 113(f)(1) must be dismissed as premature, since no civil action or administrative proceeding has yet been commenced against plaintiff; 3) the remaining state-law causes of action should be dismissed pursuant to 28 U.S.C. § 1367(c)(3), in the event that the Court dismisses the federal causes of action; 4) the fifth and sixth causes of action should be dismissed because the sections of the New York ECL under which they are brought do not provide for a private right of action; 5) the ninth cause of action for public nuisance fails to state a claim; 6) the third, eleventh, and twelfth causes of action, seeking indemnification and restitution, must be dismissed because "no underlying liability on plaintiff's part has been determined"; 7) the complaint must be dismissed as against Jasco because it alleges no basis to impose liability against Jasco; 8) the complaint must be dismissed as against Summers because it alleges no basis to impose liability against her; 9) the complaint must be dismissed as against Jasco, Rochester Tool, and T.T. Bearing, as it alleges no conduct by these defendants; 10) the complaint must be dismissed as against Kenneth Crosby-New York, Inc., as that is merely an assumed named of Kenneth Crosby Acquisition Corp.
Defendants Kenneth Crosby Co., Inc., Kenneth Crosby-New York, Inc., and Jasco Tools are also moving to dismiss.
On June 17, 2004, counsel for the plaintiff and the moving defendants appeared before the undersigned for oral argument. The Court has thoroughly considered the parties' submissions and the arguments of counsel.
ANALYSIS
Pursuant to Federal Rule of Civil Procedure 12(b)(6), a court may dismiss a complaint for "failure to state a claim upon which relief can be granted." It is well settled that in determining a motion under Fed.R.Civ.P. 12(b)(6), a district court must accept the allegations contained in the complaint as true and draw all reasonable inferences in favor of the nonmoving party. Burnette v. Carothers, 192 F.3d 52, 56 (1999). While the Court must accept as true a plaintiff's factual allegations, "[c]onclusory allegations of the legal status of the defendants' acts need not be accepted as true for the purposes of ruling on a motion to dismiss." Hirsch v. Arthur Andersen Co., 72 F.3d 1085, 1092 (2d Cir. 1995) ( citing In re American Express Co. Shareholder Litig., 39 F.3d 395, 400-01 n. 3 (2d Cir. 1994)). The Court "may dismiss the complaint only if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (internal quotations omitted) ( citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).
Generally, on a motion to dismiss pursuant to Rule 12(b)(6), the Court must consider only the complaint, which is deemed to include "any written instrument attached to it as an exhibit or any statements or documents incorporated in it by reference." Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002) (citations and internal quotations omitted). Moreover, "[e]ven where a document is not incorporated by reference, the court may nevertheless consider it where the complaint relies heavily upon its terms and effect, which renders the document integral to the complaint." Id. at 153. Rule 12(b) provides that, if, in connection with a 12(b)(6) motion,
matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.
The Motion to Dismiss the First Cause of Action Under CERCLA § 107
The first issue the Court will address is whether or not plaintiff, who is admittedly a potentially responsible party ("PRP") under CERCLA § 107, may nonetheless sue defendants for response costs under that same section. CERCLA § 107(a), 42 U.S.C. § 9607(a), lists the persons who may be held liable for cleanup costs under CERCLA, including "the owner and operator of a . . . facility" and "any person who at the time of the disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of." Such liability, however, is expressly subject to certain defenses set forth in 42 U.S.C. § 9607(b). For example, it is a defense that
the release or threat of release of a hazardous substance and the damages resulting therefrom were caused solely by- . . . an act or omission of a third party other than an employee or agent of the defendant, or than one whose act or omission occurs in connection with a contractual relationship, existing directly or indirectly, with the defendant . . . if the defendant establishes by a preponderance of the evidence that (a) he exercised due care with respect to the hazardous substance concerned, taking into consideration the characteristics of such hazardous substance, in light of all relevant facts and circumstances, and (b) he took precautions against foreseeable acts or omissions of any such third party and the consequences that could foreseeably result from such acts or omissions.42 U.S.C.A. § 9607(b) (1995) (emphasis added). Defendants argue that plaintiff may not sue to recover under CERCLA, since it is a PRP by virtue of having been the owner of 640 Trolley Drive during the alleged period of contamination. In that regard, defendants cite Bedford Affiliates v. Sills, 156 F.3d 416, 423-24 (2d Cir. 1998), wherein the Second Circuit held that persons who are PRPs under CERCLA § 107(a), 42 U.S.C. § 9607(a), generally cannot bring a cost recovery action under that section against other PRPs, but instead, must bring an action for contribution under CERCLA § 113(f)(1), 42 U.S.C. § 9613(f)(1). See, Bedford Affiliates v. Sills, 156 F.3d at 424 ("The language of CERCLA suggests Congress planned that an innocent party be able to sue for full recovery of its costs, i.e., indemnity under § 107(a), while a party that is itself liable may recover only those costs exceeding its pro rata share of the entire cleanup expenditure, i.e., contribution under § 113(f)(1)."). Defendants further allege that plaintiff is not entitled to raise the defense contained in § 107(b), because it had a contractual relationship with the alleged polluters, that is, it was a party to a lease with both Clark Witbeck and Kenneth Crosby Acquisition.
Plaintiff, however, contends that even though it is a PRP as defined in § 107(a), it may nonetheless bring an action under that section against defendants because it is, in fact, entitled to assert defenses to liability pursuant to § 107(b). In that regard, plaintiff notes that in Bedford Affiliates, the Second Circuit indicated that PRPs who were entitled to raise one of the defenses contained in § 107(b) could nonetheless bring an action under § 107(a): "[W]e hold that a potentially responsible person under § 107(a) that is not entitled to any of the defenses enumerated under § 107(b) . . . cannot maintain a § 107(a) action against another potentially responsible person." Id. at 425 (emphasis added). In other words, plaintiff maintains that while it is presumptively liable under § 107(a), it will avoid any liability because of the affirmative defenses contained in § 107(b), and may therefore itself sue under § 107(a). More specifically, plaintiff contends that it is entitled to the "third party" defense contained in § 107(b)(3), as set forth above, and the "innocent purchaser" defense set forth in 42 U.S.C. § 9601(35)(A) (D). Plaintiff alleges that it is entitled to these defenses "because it did not contribute to, and was not aware of the contamination, it acted with due diligence, . . . the dumping was solely the result of third parties and could not have been anticipated by plaintiff," and the contamination did not occur in connection with a contractual relationship between the parties. Pl. Memo of Law [#24], p. 14.
Clearly, the complaint alleges that plaintiff had a contractual relationship with the alleged third-party polluters, as it states that plaintiff was a party to a lease with Clark Witbeck from 1989 to 1992, and with Kenneth Crosby Acquisition from 1992 to 2000. However, the Second Circuit has indicated that the mere existence of a contractual relationship with another PRP is not sufficient to prevent a party from qualifying for a defense. Rather, the statutory reference to acts or omissions occurring "in connection with a contractual relationship" requires that there be a nexus between the contract and the hazardous substances:
We hold that . . . the phrase `in connection with a contractual relationship' in CERCLA § 107(b)(3) requires more than the mere existence of a contractual relationship between the owner of land on which hazardous substances are or have been disposed of and a third party whose act or omission was the sole cause of the release or threatened release of such hazardous substances into the environment, for the landowner to be barred from raising the third-party defense provided for in that section. In order for the landowner to be barred from raising the third-party defense under such circumstances, the contract between the landowner and the third party must either relate to the hazardous substances or allow the landowner to exert some element of control over the third party's activities.Westwood Pharm., Inc. v. Nat'l Fuel Gas Distrib. Corp., 964 F.2d 85, 91-92 (2d Cir. 1992) (emphasis added); accord, State of New York v. Lashins Arcade Co., 91 F.3d 353, 360 (2d Cir. 1996). As to when a contract "relates to hazardous substances," a quote from Westwood Pharm., Inc. is instructive:
[A] landowner is precluded from raising the third-party defense only if the contract between the landowner and the third party somehow is connected with the handling of hazardous substances. The result would be the same if the contract allows the landowner to exert some control over the third party's actions so that the landowner fairly can be held liable for the release or threatened release of hazardous substances caused solely by the actions of the third party.Westwood Pharm., Inc. v. Nat'l Fuel Gas Distrib. Corp., 964 F.2d at 89 (emphasis added). Here, the moving defendants have alleged merely that "plaintiff was the lessor for the polluting offender[s] . . ., during the time of active dumping of hazardous substances." Def. Reply Memo [#28], p. 3. Defendants have not, however, alleged that in connection with those leases, plaintiff anticipated the handling of hazardous substances on the premises, or that it exerted control over the tenants' actions.
In State of New York v. Westwood-Squibb Pharm. Co., Inc., 138 F. Supp.2d 372 (W.D.N.Y. 2000) (Curtin, J.), a case which involved environmental contamination by "wastes that are typically created by a manufactured gas plant," one of the issues was whether or not the existence of a lease between one of the defendants and another PRP barred the defendant from raising the "third-party defense" of 42 U.S.C. § 9607(b)(3). Id. at 374, 387-88. Notably, the court found that the lease had anticipated that the third party would "conduct its manufactured gas operations on the [premises]." Id. at 387. In finding that the defendant was barred from raising the third-party defense, the court expressly distinguished State of New York v. Lashins Arcade Co., and by implication, Westwood Pharm., Inc. v. Nat'l Fuel Gas Distrib. Corp.:
Finally, on this issue of whether the lease . . . was a defense-barring agreement, [defendant] relies on State of New York v. Lashins Arcade Co., 91 F.3d 353 (2d Cir. 1996). However, Lashins Arcade is not contrary to the court's conclusion here. In that case, the court was faced with a "straightforward sale" of contaminated property and concluded that the contract of sale "clearly did not `relate to hazardous substances. . . .'" Id. at 360 (citation omitted). The contract at issue in this case differs critically, because in this case there was a lease, not a sales contract. Furthermore, the lease here, unlike the sales contract in Lashins Arcade, related to [the third party's] operation of the Manufactured Gas Plant. Thus, there is no reason to doubt that the lease was "connected with" or "related to" the handling of hazardous substances.New York v. Westwood-Squibb Pharm. Co., Inc., 138 F. Supp.2d at 388. Despite language in the foregoing quote suggesting as much, this Court does not believe that the fact that the contract in question here is a lease, as opposed to some other type of contract, is dispositive. Rather, it appears that regardless of the type of contract, the issue is whether the contract relates to hazardous substances. As the court in Westwood-Squibb Pharm. Co. found, the lease in question there related to hazardous substances, since it "related to" the operation of a manufactured gas plant, which as the court also noted, typically produced the pollutants found on the premises.
The instant case is readily distinguishable from that in Westwood-Squibb Pharm Co. for several reasons. First, that case was at the summary judgment stage, while here we are merely at the pleading stage. To the Court's knowledge, no discovery has been conducted in this case, and the subject leases are not before the Court. Instead, the complaint merely alleges that pursuant to the respective leases, Clark Witbeck, Kenneth Crosby Acquisition, and Summers, "agreed to defend, indemnify, and compensate plaintiff for the Contamination and presence of Hazardous Substances at the Property." Complaint, ¶¶ 104, 109. While this language suggests that the leases may have contemplated that the tenant-defendants were actually handling hazardous substances on the premises, the Court cannot make such a finding at this stage. For example, it is unclear whether the language referred to by plaintiff was mere boilerplate. In any event, defendants have not argued that the allegations at ¶¶ 104 and 109 of the complaint establish a nexus between the leases and hazardous substances. Therefore, if the Court were to find that these allegations barred plaintiff from raising the third-party defense, it would be doing so sua sponte, which the Court declines to do. Consequently, the Court cannot say, as a matter of law, that the leases anticipated the handling of hazardous substances, or that the leases gave plaintiff any measure of control over the activities of the tenants. Nor can the Court say, as a matter of law, that the business engaged in by Clark Witbeck and Kenneth Crosby Acquistion, that is, the "distributi[on of] industrial tools and supplies, including abrasives, cutting tools, fasteners, and other products," would have obviously involved the handling of hazardous substances. There is also no evidence before the Court that would be determinative of plaintiff's ability or inability to pursue the innocent purchaser defense. Accordingly, since the Court cannot say at this point whether or not plaintiff will be able to establish either the third-party defense or the innocent purchaser defense, defendants' motion to dismiss plaintiff's § 107 claim must be denied.
For purposes of this decision and order only, the Court assumes, without deciding, that such language in the leases that was mere boilerplate might not require a finding that the leases involved the handling of hazardous substances.
The Motion to Dismiss the Second Cause of Action Under CERCLA § 113(f)(1)
Next, the Court will consider whether or not plaintiff may bring an action for contribution under CERCLA § 113(f) when plaintiff has not yet been the subject of a lawsuit or administrative action relating to cleanup of the site. As the parties concede, this issue is currently unsettled. Some courts have allowed plaintiffs to bring contribution claims under § 113(f)(1) even though the plaintiffs have not been sued in judicial or administrative proceedings. For example, in Alloy Briqueting Corp. v. Niagara Vest, Inc., 756 F. Supp. 713 (W.D.N.Y. 1991), this court, Skretny, J., held that a plaintiff's claims, seeking both indemnification under § 113(f) and a declaratory judgment under that section, were not premature, even though the plaintiff had not yet been the subject of a judicial or administrative proceeding. The court stated:
[P]laintiff in the instant case seeks contribution pursuant to § 113 of CERCLA in its Second Claim for Relief and a declaratory judgment setting forth the rights and obligations of the parties with regard to the hazardous waste contamination in its Sixth Claim for Relief. If plaintiff prevails on its Sixth Claim, it will establish the rights and obligations of the parties under CERCLA. Thereafter, plaintiff's Second Claim for contribution, which must be considered in conjunction with its Sixth Claim for declaratory relief, will determine how such liabilities are to be apportioned. Therefore, plaintiff's Second Claim for Relief is not premature.Id. at 718 ( citing Rockwell Int'l Corp. v. IU Int'l Corp., 702 F. Supp. 1384 (N.D. Ill. 1988); internal quotation marks omitted). The instant case is similar to Alloy Briquetting Corp., since here, plaintiff is seeking contribution for response costs which it has already incurred, as well as a declaratory judgment that defendants "are responsible for their equitable share of future response costs." Complaint ¶ 102. On the other hand, the Fifth Circuit Court of Appeals, in Aviall Servs., Inc. v. Cooper Indus., Inc., 263 F.3d 134 (5th Cir. 2001) (" Aviall I"), with one judge dissenting, held that a PRP may sue another PRP for contribution under § 113(f)(1) only if it has itself already been the subject of a proceeding. See, Id. at 137 ("[W]e hold that a party can seek a § 113(f)(1) contribution claim only if there is a prior or pending federal § 106 or § 107(a) action against it."). Subsequently, the Fifth Circuit, En Banc, with three judges dissenting, reversed, and held that § 113(f)(1) "allows a [PRP] to seek contribution from other PRPs for environmental cleanup costs when no civil action has been brought under CERCLA §§ 106 or 107(a)." Aviall Servs., Inc. v. Cooper Indus., Inc., 312 F.3d 677, 679 (5th Cir. 2002) ("Aviall II"). The Fifth Circuit is apparently the only Circuit Court to directly address this issue to date. Id. at 695 (Garza, J., dissenting). On January 9, 2004, the United States Supreme Court granted certiorari to review the Fifth Circuit's En Banc decision, See, 124 S.Ct. 981, and oral arguments will apparently be heard in the near future. Accordingly, this Court will refrain from ruling on this portion of defendants' motion until after the Supreme Court rules on the appeal of the Aviall II decision.
The Motion to Dismiss All of the State-Law Claims Pursuant to 28 U.S.C. § 1367(c)
Since the Court is not dismissing plaintiff's federal claims, defendants' motion to dismiss the supplemental state-law claims pursuant to 28 U.S.C. § 1367(c) is denied. That is the only basis upon which defendants moved to dismiss plaintiff's fourth, seventh, eighth, tenth, and thirteenth-through-eighteenth causes of action. See, Def. Notice of Motion [#14]; Def. Memo of Law in Support of Motion, p. 4. Therefore, defendants' motion to dismiss the fourth, seventh, eighth, tenth, and thirteenth through eighteenth causes of action in their entirety is denied. However, plaintiff additionally contends that particular defendants, namely Summers, Jasco, Rochester Tool, T.T. Bearing, and Keneth Crosby-New York, Inc., should be dismissed from the those causes of action, and the Court will discuss those arguments later in this decision and order.
The Motion to Dismiss the Fifth and Sixth Causes of Action
The Court will now consider defendants' motion to dismiss the fifth and sixth causes of action. Plaintiff's fifth cause of action seeks damages and cleanup costs under ECL Article 37, while the sixth cause of action seeks cleanup costs, as well as indemnification and contribution, pursuant to "the State Superfund Law ([ECL] Article 27, Title 13)." Defendant contends that the ECL provides no statutory basis for these causes of action. In response to defendants' motion, plaintiff discusses the two claims separately. As for the fifth cause of action, plaintiff contends that the New York Supreme Court, Appellate Division, Second Department, recognized a private right of action under ECL Article 37 in Berens v. Cook, 263 A.D.2d 521, 694 N.Y.S.2d 684 (2d Dep. 1999). The Berens decision is not entirely on point, since there, the court did not discuss the precise question here, rather, it seems to have assumed that there is a private right of action under ECL § 37-0107. Id. at 521-22. Nonetheless, Berens does clearly suggest that such a private right of action exists, and defendants did not address the issue further in their reply papers. Accordingly, defendants' motion to dismiss the fifth cause of action is denied.
At least one commentator has discussed Berens's assumption that a private right of action exists: "Interestingly, the court [in Berens] upheld without discussion a private right of action under this section [ECL § 37-0107], which is surely consonant with the legislative intent to prevent the storing or release of such substances." Philip Weinberg, 2000 Supplementary Practice Commentaries to ECL § 37-0107 (McKinney 2004 pocket part).
As for the sixth cause of action, plaintiff concedes that there is no express statutory basis for a private right of action under New York's Superfund Law, ECL Article 27, Title 13. However, plaintiff contends that Article 27, as well as common law, imposes an "underlying duty" on defendants, which permits plaintiff to pursue common law claims for indemnification and contribution. Pl. Memo of Law [#24], pp. 17-21. Despite this explanation by plaintiff, the sixth cause of action in the complaint does not purport to be a common law claim, but rather, it clearly states that it is a claim "pursuant to the State Superfund Law." Moreover, the complaint already contains a separate common law claim for indemnification (the Eleventh cause of action). Accordingly, the sixth cause of action should be dismissed for failure to state a claim.
The Motion to Dismiss the Ninth Cause of Action for Public Nuisance
The Court will next consider defendants' motion to dismiss the ninth cause action, alleging public nuisance, for failure to state a claim. Defendants contend that the claim is deficient because it: 1) fails to allege that defendants' actions endangered the property, health, or safety of a considerable number of persons; and 2) fails to allege that plaintiff suffered injury beyond that suffered by the community at large. Plaintiff, not surprisingly, disagrees and maintains that its public nuisance claim is adequately pled. The law concerning claims for public nuisance in New York is well settled:
A public nuisance exists for conduct that amounts to a substantial interference with the exercise of a common right of the public, thereby offending public morals, interfering with the use by the public of a public place or endangering or injuring the property, health, safety or comfort of a considerable number of persons. A public nuisance is a violation against the State and is subject to abatement or prosecution by the proper governmental authority. A public nuisance is actionable by a private person only if it is shown that the person suffered special injury beyond that suffered by the community at large. This principle recognizes the necessity of guarding against the multiplicity of lawsuits that would follow if everyone were permitted to seek redress for a wrong common to the public. A nuisance is the actual invasion of interests in land, and it may arise from varying types of conduct.532 Madison Ave. Gourmet Foods, Inc. v. Finlandia Center, Inc., 96 N.Y.2d 280, 292 (2001) (citations omitted). As for the necessity of showing that one has suffered "injury beyond that suffered by the community at large," it is not sufficient for a plaintiff to allege that he suffered the same type of injury as the community at large, but to a greater degree. Id. at 294. Rather, a plaintiff must allege that its injury is "special and different in kind, not merely in degree." Id. Here, as to the first disputed element, the Court finds that the complaint adequately alleges that "defendants' actions endangered the property, health, or safety of a considerable number of persons." See, State of N.Y. v. Shore Realty Corp., 759 F.2d 1032, 1051 (2d Cir. 1985) ("We have no doubt that the release or threat of release of hazardous waste into the environment unreasonably infringes upon a public right and thus is a public nuisance as a matter of New York law.") (citation omitted). Moreover, as to the disputed second element, the Court finds that the complaint adequately alleges that plaintiff has suffered injury that is special and different in kind, not merely in degree, from the general public. See, Bologna v. Kerr-McGee Corp., 95 F. Supp.2d 197, 205 (S.D.N.Y. 2000) ("Plaintiffs adequately have alleged a public nuisance claim. The complaint states that as a result of the migration of hazardous substances into the land, air and groundwater around the site, `Plaintiffs suffer damages different in kind and degree from the general public in that the creation and maintenance of the nuisance caused plaintiffs to incur and continue to incur substantial costs for controlling, sampling, investigating and remediating the contamination released on its site.'"); accord, State of New York v. Solvent Chem. Co., Inc., 880 F. Supp. 139, 144 n. 2 (W.D.N.Y. 1995) ("[A]s private parties who may be liable for response costs under CERCLA, [plaintiffs] may be able to show that they have suffered harm of the kind necessary to establish standing to maintain a public nuisance action."); Westwood Pharm., Inc. v. National Fuel Gas Distrib. Corp., 737 F. Supp. 1272, 1281 (W.D.N.Y. 1990) ("[I]f [plaintiff] can establish, as it claims, that it has incurred response costs . . ., those costs will be sufficient to meet this criterion for bringing a public-nuisance action.") (citations omitted). Accordingly, defendants application to dismiss the ninth cause of action for public nuisance is denied.
The Motion to Dismiss the Third, Eleventh, and Twelfth Causes of Action for Indemnification
Next, the Court will consider defendants' motion to dismiss the third, eleventh, and twelfth causes of action, to the extent that they seek indemnification. The eleventh cause of action purports to seek indemnification only, while the third cause of action requests restitution and indemnification, and the twelfth cause of action seeks only restitution. Here, defendants make an argument analogous to the one they made concerning CERCLA § 113(f)(1), which is that these claims are premature since there has not yet been any adjudication of liability against plaintiff, nor any judicial or administrative proceedings commenced. However, a party may become entitled to indemnification where it pays monies that it is legally obligated to pay, even where there has been no legal proceedings commenced, and no judgment:
Although the twelfth cause of action expressly seeks only restitution, defendants, in their brief state that, "[r]egardless of their denomination, these three claims [3rd, 11th, 12th] seek to impose liability against some of all of the defendants for indemnification of plaintiff's purported costs in connection with the alleged contamination of its property." Def. Memo of Law [#14], p. 12.
A cause of action for indemnity . . . does not accrue until the actual payment of the main claim, whether such payment be made pursuant to judgment, or the loss or damage be voluntarily paid by the innocent party who is legally liable without waiting for judgment.Antonelli v. City of Mount Vernon, 20 Misc.2d 331, 332, 189 N.Y.S.2d 52, 54 (N.Y.Sup. 1959) (emphasis added). Of course, a party that seeks indemnification for monies voluntarily paid must establish that he was legally obligated to make the payment, and that the amount paid was reasonable. Van Epps v. Town of Verona, 758 N.Y.S.2d 751, 752 (4th Dept. 2003) (citation omitted). Here, the complaint indicates that plaintiff has paid out some monies in connection with the alleged contamination of the property. Complaint ¶ 73. Therefore, plaintiff's claims for indemnification for amounts already paid are not premature as a matter of law. The majority of the amounts for which plaintiff seeks indemnification, however, are the amounts that the DEC is apparently requesting from plaintiff as and for response costs, but which plaintiff has not paid. See, Complaint ¶¶ 75-80. As to those amounts, a party may seek a declaratory judgment regarding a defendant's duty to indemnify. See, Cabrini Med. Ctr. v. KM Ins. Brokers, 531 N.Y.S.2d 1, 1-2 (1st Dept. 1988), appeal dismissed, 73 N.Y.2d 785 (1988). However, the case must present a justiciable controversy:
To determine whether a declaratory judgment action presents an actual controversy, a court must examine "whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Maryland Casualty Co. v. Pacific Coal Oil Co., 312 U.S. 270, 273 (1941); see also Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 241 (1937) ("It must be a real and substantial controversy admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts."). Where the contingent event upon which the controversy rests is unlikely to occur, the controversy is not of "sufficient immediacy and reality" and a declaratory judgment may not be issued. See, e.g., Certain Underwriters at Lloyd's, London v. St. Joe Minerals Corp., 90 F.3d 671, 675 (2d Cir. 1996) (holding that a declaratory judgment action by excess insurers seeking an adjudication of their responsibilities to their insured for environmental claims did not present a justiciable controversy where "there was no practical likelihood that St. Joe's liability would reach the layers of its excess insurance").Ingersoll-Rand Co. v. Textron Inc., No. 96 Civ. 2582 (MBM),1996 WL 680266 at *3 (S.D.N.Y. Nov. 25, 1996); see also, Olin Corp. v. Consol. Aluminum Corp., 5 F.3d 10, 17 (2d Cir. 1993). In the instant case, the dispute between plaintiff and the DEC is not hypothetical. Rather, the complaint recites that the DEC has conducted testing at the site which is owned by plaintiff, has identified various hazardous substances on the premises, has indicated that the site poses a "significant threat to the public health or environment, has conducted some remedial work, and plans to conduct further remedial work. Complaint ¶¶ 73-79. Further, DEC has made claims against plaintiff, "repeatedly demanding that plaintiff conduct an investigation and remediation of the contamination at the property, and pay for the work it has done to date." Id. at ¶ 80. Compare, Olin Corp v. Consolidated Aluminum Corp., 5 F.3d at 17 (Wherein the court found that a claim seeking a declaratory judgment as to indemnity involving potential environmental contamination did not present a justiciable case or controversy: "The record fails to indicate the location of these sites, and we do not even know the types of claims that might be asserted in the future."). Accordingly, defendants' application to dismiss the third, eleventh, and twelfth causes of action for indemnification, on the grounds that they are premature, is denied.
The Motion to Dismiss the Entire Complaint as Against Summers, Jasco, Rochester Tool, and T.T. Bearing
The Court will now consider defendants' application to dismiss the complaint in its entirety as against Summers, Jasco, Rochester Tools, and T.T. Bearing, on the grounds that it fails to allege any basis for imposing liability against them. As noted above, CERCLA § 107(a), 42 U.S.C. § 9607(a), lists the persons who may be held strictly liable for cleanup costs under CERCLA, including "the owner and operator of a . . . facility" and "any person who at the time of the disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of." The complaint alleges that "[d]uring the Crosby Lease, Summers operated the Kenneth Crosby Corporations, T.T. Bearing and Rochester Tool at the property, and Jasco also conducted operations at the property." Notably, though, apart from an allegation that Summers personally guaranteed the Kenneth Crosby Acquistion lease, these are the only allegations in the complaint concerning these particular defendants. While defendant vigorously contends that these allegations are false, the Court, in ruling upon a motion under Rule 12(b)(6), must accept them as true. Consequently, the Court finds that the complaint states a claim against these defendants under CERCLA. Similarly, the Court finds that the third cause of action, for breach of lease, states a claim as against Summers, since the complaint alleges that Summers guaranteed the Kenneth Crosby Acquistion lease, and that Kenneth Crosby Acquisition has refused to perform its obligations under the lease. However, the Court agrees that as to all of the remaining causes of action, the complaint fails to state a claim against Summers, Jasco, Rochester Tools, and T.T. Bearing. For example, ECL § 37-0107 provides, in relevant part, that "[n]o person shall store or release to the environment substances hazardous or acutely hazardous to public health, safety or the environment," while Navigation Law § 181, states, in relevant part, that "[a]ny person who has discharged petroleum shall be strictly liable . . . for all cleanup and removal costs." The complaint, though, contains no allegations that these four defendants stored or released hazardous substances or discharged petroleum. Rather, under the portion of the complaint entitled "THE CAUSE OF THE CONTAMINATION," plaintiff alleges only that employees of Clark Witbeck and Kenneth Crosby Acquisition dumped contaminants on the property. Nor does the complaint contain any allegations as against these four defendants with regard to the remaining causes of action. Accordingly, the complaint is dismissed as against Jasco, Rochester Tool, and T.T. Bearing, on all but the first and second causes of action, and the complaint is dismissed as against Summers on all but the first, second, and third causes of action.
The Motion to Dismiss the Entire Complaint as Against Kenneth Crosby-New York, Inc.
As for defendants' application to dismiss the complaint in its entirety as against defendant Kenneth Crosby-New York, Inc., during oral argument of the motion, counsel stipulated that Kenneth Crosby-New York, Inc. is merely an assumed named of Kenneth Crosby Acquistion. Accordingly, defendants application to dismiss the complaint as against Kenneth Crosby-New York, Inc., is granted.
CONCLUSION
Defendants' motion to dismiss [#14] is granted in part and denied in part as follows: The application to dismiss the sixth cause of action is granted; the application to dismiss the entire complaint against Jasco, Rochester Tool, and T.T. Bearing is granted, except as to the first and second causes of action under CERCLA; the application to dismiss the entire complaint against Summers is granted, except as to the first and second causes of action under CERCLA, and the third cause of action for breach of lease; the motion to dismiss the entire complaint as against Kenneth Crosby-New York, Inc. is granted; the motion to dismiss the second cause of action will be held in abeyance pending the U.S. Supreme Court's ruling on the Aviall appeal, and as to that, counsel for the moving defendants is directed to monitor the progress of that appeal, and to immediately notify this Court once the Supreme Court has disposed of the appeal; and except as stated above, defendants' motion to dismiss is denied.
So Ordered.