Court Opinion

ID: 2751744
Source: CourtListenerOpinion
Date Created: 2014-11-14 20:05:23.875407+00
Date Added: 2024-06-11T13:03:51.112004
License: Public Domain

SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

1021
CA 14-00390
PRESENT: CENTRA, J.P., FAHEY, WHALEN, AND DEJOSEPH, JJ.

BERO FAMILY PARTNERSHIP, JOHN J. BERO, III,
DONALD G. BERO, II, MARGARET B. BERO MAGGIONE,
DOROTHY C. BERO, JUDITH A. BERO, DONALD G. BERO,
THOMAS J. BERO, JOHN J. BERO, JR., MARION P. BERO,
ROBERT M. BERO, STEVEN M. BERO, DAVID M. BERO,
LORRAINE A. BERO MCGUIGAN, CHRISTINE M. MOORE AND
GREGORY MOORE, PLAINTIFFS-RESPONDENTS-APPELLANTS,

                    V                                MEMORANDUM AND ORDER

DONALD ELARDO, DEFENDANT-APPELLANT,
AND L.M. SESSLER EXCAVATING & WRECKING, INC.,
DEFENDANT-RESPONDENT.
--------------------------------------------------
DONALD ELARDO, THIRD-PARTY PLAINTIFF-APPELLANT,

                    V

L.M. SESSLER EXCAVATING & WRECKING, INC.,
THIRD-PARTY DEFENDANT-RESPONDENT,
ET AL., THIRD-PARTY DEFENDANT.

KNAUF SHAW LLP, ROCHESTER (ALAN J. KNAUF OF COUNSEL), FOR
DEFENDANT-APPELLANT AND THIRD-PARTY PLAINTIFF-APPELLANT.

PHILLIPS LYTLE LLP, ROCHESTER (CHAD W. FLANSBURG OF COUNSEL), FOR
PLAINTIFFS-RESPONDENTS-APPELLANTS.

BOND, SCHOENECK & KING, PLLC, SYRACUSE (THOMAS R. SMITH OF COUNSEL),
FOR DEFENDANT-RESPONDENT AND THIRD-PARTY DEFENDANT-RESPONDENT.

     Appeal and cross appeal from an order of the Supreme Court,
Monroe County (Ann Marie Taddeo, J.), entered August 9, 2013. The
order, among other things, granted the motion of defendant-third-party
defendant L.M. Sessler Excavating & Wrecking, Inc. seeking summary
judgment dismissing the third amended complaint and the third-party
complaint against it.

     It is hereby ORDERED that the order so appealed from is
unanimously modified on the law by denying the motion of defendant-
third-party defendant in part, and reinstating the 15th and 16th causes
of action in the third amended complaint, as well as the first and
second causes of action in the third-party complaint to the extent
that those causes of action seek “response costs” incurred within six
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                                                         CA 14-00390

years of the commencement of the third-party action, and as modified
the order is affirmed without costs in accordance with the following
Memorandum: Plaintiffs, Bero Family Partnership (Partnership) and the
current and former members thereof, commenced this action seeking,
inter alia, damages for the cost of remediating petroleum-contaminated
property in the Town of Fayette. The Partnership acquired the
property from Bero Construction, which, during the period of its
ownership, stored gasoline, diesel fuel and waste oil in underground
storage tanks (USTs) on the property. The Partnership hired
defendant-third-party defendant L.M. Sessler Excavating & Wrecking,
Inc. (Sessler) in 1995 to remove the USTs.

     The Partnership thereafter sold the property to defendant-third-
party plaintiff Donald Elardo in 2000 for less than a quarter of its
assessed value. Pursuant to the purchase and sale contract, Elardo
executed and delivered a note and mortgage to plaintiffs John J. Bero,
III, Donald G. Bero, II, and Christine M. Moore (collectively
Mortgagees). The note provided in relevant part that, “[i]f [Elardo]
learns or is notified that any removal or other remediation of any
hazardous substance is necessary, [Elardo] shall promptly take all
necessary remedial actions, and will indemnify and hold Mortgagee[s]
harmless for all damages, costs and expenses of any kind . . . related
to any such removal or remediation, regardless of the source or cause
of the contamination or other environmental law violation.”

     In 2008, the New York State Department of Environmental
Conservation (DEC) notified plaintiffs that petroleum contamination
had been detected in the former UST pits, and that DEC considered
plaintiffs to be responsible for the cleanup and removal of the
petroleum discharge. Pursuant to a stipulation with DEC, plaintiffs
completed the cleanup and removal. Plaintiffs thereafter commenced
this action against Elardo, who commenced a third-party action against
Sessler. Plaintiffs later added Sessler as a defendant in the third
amended complaint.

     Supreme Court properly granted that part of plaintiffs’ motion
seeking summary judgment on the seventh cause of action, for breach of
contract against Elardo, and properly denied that part of Elardo’s
motion seeking summary judgment dismissing that cause of action.
Plaintiffs established as a matter of law that they are entitled to
judgment pursuant to the indemnification provision of the note. The
language of that provision, considered in light of the circumstances
of the sale of the property, clearly expresses the intention of the
parties to the note that Elardo would indemnify plaintiffs for the
costs of any environmental remediation (see Drzewinski v Atlantic
Scaffold & Ladder Co., 70 NY2d 774, 777; Schreiber v Cimato, 281 AD2d
961, 961-962; see generally Duffy v Hobaica, 170 AD2d 1031, 1032).
The court properly rejected Elardo’s contention that the term
“hazardous substances” in the indemnification provision was intended
not to include petroleum. The language of the provision expresses the
understanding of the parties to the note that Elardo was assuming
responsibility for all environmental “remediation, regardless of the
source or cause of the contamination” (cf. Time Warner Entertainment
Co. v Brustowsky, 221 AD2d 268, 268). In contrast, nothing in the
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                                                         CA 14-00390

record supports Elardo’s contention that the parties intended to adopt
the definition of “hazardous substance” in the Comprehensive
Environmental Response, Compensation, and Liability Act (42 USC § 9601
[14]), which does not include petroleum (see generally Last Time
Beverage Corp. v F & V Distrib. Co., LLC, 98 AD3d 947, 951-952).

     The court also properly rejected Elardo’s further contention that
the discharge of the mortgage in 2006 extinguished his obligations
under the indemnification provision of the note (see Copp v Sands
Point Mar., 17 NY2d 291, 293-294; CIT Group/Bus. Credit, Inc. v
Walentas, 28 AD3d 224, 224). Finally, even if we were to agree with
Elardo’s further contention that the indemnification provision was
intended to benefit the Mortgagees rather than the Partnership, we
would nevertheless conclude that his obligations under that provision
would remain the same. His obligations are not limited by virtue of
the fact that they are owed to only three of the plaintiff partners
rather than the Partnership (see generally Gramercy Equities Corp. v
Dumont, 72 NY2d 560, 565-566).

     The court erred, however, in granting those parts of Sessler’s
motion seeking summary judgment dismissing the 15th and 16th causes of
action in the third amended complaint against it, for common-law
indemnification and for contribution pursuant to CPLR 1401,
respectively, and further erred in granting those parts of Sessler’s
motion seeking summary judgment dismissing the first and second causes
of action in the third-party complaint against it, for violating the
Navigation Law and seeking “response costs,” including attorneys’
fees, incurred by Elardo within six years of the commencement of the
third-party action in connection with such violation, and we therefore
modify the order accordingly (see Sunrise Harbor Realty, LLC v 35th
Sunrise Corp., 86 AD3d 562, 566; Starnella v Heat, 14 AD3d 694, 694-
695). We agree with Sessler that it may be liable as a discharger
under the Navigation Law only if it actively contributed to the
contamination of the property by introducing petroleum-contaminated
backfill from off site (see Smith v Cassidy, 93 AD3d 1306, 1307). We
conclude, however, that Sessler failed to establish as a matter of law
that it did not introduce such petroleum-contaminated backfill onto
the property and, in any event, the opinion of Elardo’s expert
environmental geologist is sufficient to raise a triable issue of fact
with respect to Sessler’s liability under the Navigation Law (see
generally Angona v City of Syracuse, 118 AD3d 1318, 1320-1321). We
further conclude that Sessler failed to establish as a matter of law
that plaintiffs alone are at fault for the contamination of the
property, and thus it failed to establish that plaintiffs should be
barred from seeking common-law indemnification or contribution
pursuant to CPLR 1401 (see Sweet v Texaco, Inc., 67 AD3d 1322, 1323;
Union Turnpike Assoc., LLC v Getty Realty Corp., 27 AD3d 725, 727).

     We have considered the parties’ remaining contentions and
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                                                         CA 14-00390

conclude that none requires further modification of the order.

Entered:   November 14, 2014                    Frances E. Cafarell
                                                Clerk of the Court