A New York state court recently issued a decision under the New York Navigation Law, regarding a landowner's ability to obtain summary judgment against a former owner based upon claimed contamination of the claimant's property.

In One Flint St. LLC v. Exxon Mobil Corp. et al., Index No. 2011/4470 (S.Ct. Monroe Cty., 2012), the Court considered a claim by a property owner (One Flint) for reimbursement of environmental costs expended due to alleged discharge of petroleum by a predecessor-in-interest of defendant Exxon Mobil, which owned and operated an oil refinery on the site from 1878 to 1935. Refinery operations included manufacturing grease, storing petroleum in tanks and preparing barrel drums. Thereafter, the site was operated by Rochester Baling Corp. as a scrap metal/salvage yard. A 1,000- gallon underground storage tank, in use at the time, was removed in 1993. Heating oil was later detected in the site's soil, and One Flint incurred costs remediating the heating oil contamination.

One Flint sought summary judgment: (a) declaring Exxon Mobil (as successor -in-interest to the prior owner) strictly liable under Navigation Law § 181(1) for all remedial costs; (b) requiring Exxon Mobil to pay for site remediation; and (c) requiring Exxon Mobil to compensate One Flint for remedial costs incurred.

The Court denied plaintiff One Flint's motion, holding that plaintiff failed to prove, as it must, that Exxon Mobil's predecessor actually caused or contributed to the heating oil release. The possibility that the discharge did not occur during subsequent scrap or salvage-yard operations had not been foreclosed. And, the Court added, it was "uncertain that Plaintiffs themselves are blameless here." While the evidence suggested that Exxon Mobil may ultimately share some liability for the cleanup of the site, the Court noted that a prior owner may not be held liable under the Navigation Law without proof of its ability to control activities occurring on the property, and its actual or constructive knowledge that petroleum products are stored there. Mere status as a prior landowner is not enough.

The Court also considered that many of the named defendants had yet to answer Plaintiff's complaint, and discovery had just begun. Thus, the Court concluded that too many relevant questions remained unanswered, and defendants had not had a reasonable opportunity to investigate the allegations being made against them.

Implications for Property Owners

One Flint Street illustrates the standards of proof required to subject prior owners to liability under the Navigation Law. Navigation Law claims against prior owners require proof of ability to control activities, and knowledge of petroleum storage on site. That proof may be difficult to obtain when the defendant left the site years or decades before current owner's operations began. Further, the One Flint Street holding shows that a claim may only be asserted by an injured person who is not responsible for the discharge.

The One Flint Street decision may be limited by its facts. The decision arose in a case where many of the named defendants had yet to answer the complaint and, as the Court recognized, discovery had "hardly even begun." Thus, the Court recognized plaintiff's right to present its summary judgment motion anew, at a later point when the record is more fully developed.