Landowner Liability for Petroleum Spills Reviewed by the Fourth Department

In 1093 Group, LLC v. Canale, 72 A.D.3d 1561 (4th Dept., 2010), the Appellate Division, Fourth Department, addressed the question of liability of both a subsequent purchaser and prior landowner for a petroleum spill on their property.  In Canale,  the plaintiff, a subsequent purchaser of property, sued the prior owner seeking to hold her liable under Article 12 of the New York Navigation Law for approximately $50,000 in costs incurred in cleaning up petroleum contamination caused by a leaking underground storage tank on the property.  The Erie County Supreme Court granted the plaintiff’s cross-motion for summary judgment and the previous owner appealed.

The Fourth Department began its analysis by reaffirming that in order to establish the liability of a party as a “discharger” under Article 12 of the Navigation Law, the plaintiff has the initial burden to prove that the party actually caused or contributed to the discharge.  Citing a line of past Navigation Law cases, the Court stated that a Navigation Law claim can only be brought by an “injured person,” who is not responsible for the discharge.  Thus, a subsequent purchaser cannot assert a Navigation Law claim against a prior property owner if the leak occurred during the time that the subsequent purchaser owned the land (making that subsequent owner liable for the spill). 

The Fourth Department, citing one of its own Navigation Law precedents, Drouin v. Ridge Lumber, 209 A.D.2d 957 (4th Dept., 1994 ), stated that “liability as a ‘discharger’ is based upon conduct not status.  Article 12 [of the Navigation Law] speaks in terms of imposition of liability upon ‘dischargers’ or persons ‘responsible for the discharge….and discharge is defined, in turn, in terms of an ‘action or omission resulting in’ a petroleum spill (Navigation Law § 172[8]). Nothing in the statute could be construed as making a landowner responsible solely because it is a landowner.” 

In light of its interpretation of the scope of landowner liability under the Navigation Law, the Court ruled that the plaintiff failed to meet it initial burden of showing that the discharge occurred during the time that the prior landowner owned the property and not during the time in which it (the plaintiff) owned it.  Accordingly, the Court unanimously reversed the judgment of the Supreme Court in this case.

For Navigation Law practitioners, both plaintiff and defense counsel, this case will be useful.  It succinctly summarizes the burden necessary for establishing the liability of a both a prior owner and subsequent purchaser of petroleum contaminated property.  Further, it reaffirms that Navigation Law liability of a property owner is not based upon status of an owner but, rather, upon a party’s act or omission resulting in a petroleum spill.