In this special proceeding, petitioner, Botanical Realty Associates, seeks a judgment pursuant to Article 78 of the CPLR, vacating, annulling and setting aside the final determination by the New York City Department of Environmental Protection (hereinafter referred to as the "DEP"). Specifically, on April 7, 2003, the DEP denied petitioner's appeal which sought to cancel or revoke certain surcharges and late payment fees that were assessed by respondent DEP's Water Board upon petitioner's real property for failing to timely install water meters at the premises.

By a written correspondence dated June 13, 2000, petitioner Botanical Realty Associates requested that DEP perform the meter installation on its property located at 2985 Botanical Square, Bronx, New York. DEP received the request on June 20, 2000, but it did not act upon it by the June 30, 2000-meter installation deadline. On and after the effective date of July 1, 2000, DEP began to impose a surcharge on petitioner's water and sewer bill on the subject property. Late charges also accrued. Reportedly acting to avert the imposition of further surcharges, on August 27, 2000, petitioner had a private plumber install the necessary water meters upon its property. It then applied for and received reimbursement from DEP for the expense of hiring a private plumber to perform the meter installation. By that time, the amount of surcharges and late fees that had accrued exceeded $6,000.

Subsequently, DEP's Water Board denied petitioner's numerous requests for the cancellation of the surcharges and late fees assessed on its property during the July 1, 2000 through August 27, 2000 period. Finally, by correspondence dated April 7, 2003, DEP denied petitioner's administrative appeal of the Water Board's denial of petitioner's claim to cancel the surcharge, based upon the June 20, 2000, request for DEP to install the water meter. In its denial, DEP did not dispute that a timely request had been made; instead, DEP denied Botanical Realty Associates' appeal reasoning that: (1) petitioner had "two mutually exclusive options;" (2) petitioner voided its initial option and timely request to have DEP perform the meter installation through its subsequent election to have the required meter installed by a private plumber; and (3) the subject installation was untimely, having been effectuated subsequent to the June 30, 2000-deadline. The instant Article 78 application then ensued, seeking to invalidate the DEP's determination denying the cancellation of the surcharge and late fees assessment.

Here, this Court finds that DEP's interpretation of the pertinent water rate regulation was irrational and had no basis in law. As noted above, DEP held at the administrative appeal that petitioner was presented with two mutually exclusive options for the installation and by choosing their own private meter installation, respondent lost the benefit of the first option, which initially petitioner had timely exercised. Such interpretation of the water meter rate regulation is [*3]irreconcilable with the plain meaning of the governing regulation. It is abundantly clear that the plain language of the regulation placed the onus upon the customer to install a water meter by the June 30, 2000 deadline unless the customer requested, by that date that DEP install the water meter. See Fiscal Year 2000 Water Board Rate Schedule, Appendix A, Part II, Section 3. However, such timely request shifted the onus to DEP. Nothing in the regulation required customers to provide DEP notice at any particular date before June 30, 2000, so as to give DEP ample time to comply by the deadline. Instead, the regulation explicitly derogated DEP's responsibility— triggered by the timely request —only if "a customer refuse[d] to permit installation, repair, replace, inspect of either meter or water reading or water consuming fixture." Id.

Under the circumstances, it is abundantly clear that petitioner's action of procuring private installation of the water meter, rather than waiting for DEP to install it, was triggered by the unexpected conduct by DEP of improperly imposing a surcharge despite the timely request to DEP. It was thus a reasonable attempt to avoid any further surcharge. Indeed, to hold otherwise would reward DEP for its strained interpretation of the pertinent regulation. If DEP had preferred its customer to rely exclusively upon one of two mutually exclusive options it should have explicitly promulgated such a regulation on notice to its customers; it was not properly achieved by means of a specious interpretation of its own regulation.

In short, DEP's misinterpretation of its own regulation rendered its decision arbitrary and capricious. Although the interpretation of regulations made by the agency responsible for their administration is generally to be accorded deference, an agency is not thereby freed of the obligation to read those regulations reasonably and rationally. See Howard v. Wyman, 28 NY2d 434; Venezia v. Venezia, 144 AD2d 948; Nester v. Nester, 135 AD2d 878; In Re Application of Mutual Development Houses, Inc., 279 AD2d 300 (1st Dept. 2001). DEP's ruling— that petitioner's own action of installing its own meter negated its initial timely request and relieved DEP of its duty to install water meters as triggered by the timely request — was irreconcilable with the plain meaning of the governing regulation.

This constitutes the Decision, Order and Judgment of the Court.

Dated: March 31, 2005_________________________

Bronx, New York Hon. Dianne T. Renwick, J.S.C.