Petitioners-plaintiffs, ZAHAV ENTERPRISES, INC. (ZAHAV) and EPHRAIM

Respondent-defendant MARTENS, in his October 24, 2011 decision and order, also found ZAHAV in violation of a stipulation it had entered into with the DEC to clean up the petroleum spill. The Commissioner imposed upon ZAHAV a civil penalty of $60,000 and directed ZAHAV to investigate and remediate the site in accordance with the previously agreed-to stipulation and a DEC-approved work plan.

Petitioners-plaintiffs ZAHAV and SHURKA, in December 2011, commenced this hybrid CPLR Article 78 proceeding and complaint: to find that MARTENS October 24, 2011 decision and order was arbitrary and capricious, meriting reversal; to order declarative and injunctive relief against respondents-defendants MARTENS, DEC and JOHN K. URDA (URDA), Assistant DEC Regional Attorney; and, to find causes of action against respondents-defendants W 16 and UNICORP for breach of contract and tortious interference with the stipulation between ZAHAV and DEC. Subsequently, petitioners-plaintiffs amended their pleadings and later I granted them leave to amend their pleadings with a Second Amended Petition and Complaint, thereby allowing ZAHAV and SHURKA to raise a new objection, pursuant to CPLR § 7803 (2), that MARTENS "proceeded . . . without or in excess of jurisdiction." Respondents-defendants MARTENS, DEC and URDA move, pursuant to CPLR Rule 3211 (a) (7), to dismiss the petition-complaint or in the alternative: for summary judgment pursuant to CPLR Rule 3212 (a); dismissal of the first cause of action in the complaint, pursuant to [*2]CPLR § 217; and, a transfer to the Appellate Division of the special proceeding because, pursuant to CPLR § 7804 (g), a question of substantial evidence is raised. Petitioners-plaintiffs third and fourth causes of action against respondents-defendants W 16 and UNICORP are not at issue in the instant motion by respondents-defendants MARTENS, DEC and URDA. Therefore, these causes of action are not addressed by the Court.

As will be explained, the Court grants the motion of respondents-defendants MARTENS, DEC and URDA to the following extent: dismissal of the Article 78 petition against them; and, summary judgment and dismissal the first two causes of action of the complaint against them.

ZAHAV acquired title in 1985 to the gasoline station site, 1124-1134 East New York Avenue, Brooklyn, New York. The site contained underground petroleum storage tanks. ZAHAV, in November 2007, sold the site to W 16, a holding company for UNICORP. UNICORP purchased the site to develop a drugstore and parking lot for Walgreens.

Prior to the November 2007 sale, UNICORP conducted a subsurface investigation at the site and found soil contamination by an unpermitted petroleum discharge from three active 4,000-gallon tanks on the site. The discharge was known but not reported by ZAHAV at that time, as required by law, and ZAHAV, the discharger, did not immediately clean up the discharge. When the tanks were subsequently removed in June 2008, gasoline was found to be leaking from one of the tanks and at that time thirty additional 550-gallon tanks were discovered at the site and removed. The tank removal contractor reported the spill. However, the removal of the tanks did not render the site free of contamination. The groundwater and soil under the tanks remained contaminated with spilled petroleum and required remediation, pursuant to the ECL and the NL. ZAHAV made a number of submissions to the DEC which the DEC staff deemed unsatisfactory.

Ultimately, the DEC and ZAHAV entered into a stipulation, effective January 27, 2010, requiring ZAHAV to investigate and remediate the petroleum contamination, pursuant to a corrective action plan. The stipulation imposed no penalty on ZAHAV and ZAHAV executed the stipulation. However, ZAHAV failed to prepare the remedial action plan required by the corrective action plan and submitted various plans that DEC staff found inadequate to clean up the groundwater and soil contamination on the site.

Thereafter, the DEC initiated a formal administrative enforcement proceeding on March 30, 2011, by serving an administrative motion for an order without hearing, pursuant to 6 NYCRR § 622.12, which is the DEC's administrative equivalent of a judicial summary judgment motion in lieu of a complaint. ZAHAV opposed the DEC's administrative motion with a cross-motion for an order without hearing.

After consideration of DEC's and ZAHAV's submissions, Administrative Law Judge (ALJ) Helene Goldberger (GOLDBERGER) issued a report with 24 enumerated [*3]findings of fact, a discussion of the applicable legal standards for an order without hearing, for liability and for the penalty imposed. ALJ GOLDBERGER concluded that ZAHAV failed to put forward any material issues of fact that would defeat DEC's motion, She found ZAHAV responsible for: the illegal petroleum discharge; failing to immediately contain the discharge upon discovery; and, failing to comply with the January 27, 2010 stipulation. These findings held ZAHAV in violation of ECL §§ 17-501,

Commissioner MARTENS adopted the ALJ's report, with his own comments, in his October 24, 2011 order, which confirmed: the $60,000 civil penalty; and, ZAHAV's liability for the spill and cleanup of the site pursuant to the terms of the January 27, 2010 stipulation.

ZAHAV and SHURKA, one of its principals, in their second amended petition-complaint challenge the Commissioner's October 24, 2011 order, pursuant to CPLR Article 78. They claim that Commissioner MARTENS' determinations are: the result of bad faith and bias on the part of the DEC's Assistant Regional Attorney URDA, who brought the administrative enforcement action; not supported by the evidence because the Commissioner failed to apply the proper evidentiary standard; arbitrary and capricious in finding ZAHAV liable for discharges that may have occurred prior to ZAHAV's ownership of the subject property, ignoring that UNICORP, the party currently in possession of the subject site, is in a far superior position than ZAHAV to undertake remediation; and, made despite the Commissioner lacking subject matter jurisdiction to impose penalties.

Further, petitioners-plaintiffs seek declaratory relief, pursuant to CPLR §§ 3001 and 3017, in the first two causes of action of the complaint portion of their pleadings. ZAHAV and SHURKA seek declarations that: the January 27, 2010 stipulation is null and void because of alleged bad faith by URDA; and, URDA violated Public Officers Law (POL) §§ 74 (3) (d) and (f) by unethical conduct, warranting an injunction barring URDA from any future enforcement action involving SHURKA or any SHURKA-owned entity.

In analyzing the instant motion to dismiss the Article 78 claims and the causes of action against the State respondents-defendants, the Court will first discuss the Article 78 [*4]petition and then the two causes of action in the complaint against respondent-defendants MARTENS, DEC and URDA.

In an Article 78 proceeding the Court's function is to determine whether the action of an administrative agency had a rational basis or was arbitrary and capricious. (Pell v Board of Educ. of Union School District No.1 of the Towns of Scarsdale and Mamaroneck, Westchester County, 34 NY2d 222, 230-231 [1974]). "Arbitrary action is

A reviewing court will not substitute its own judgment for that of the agency unless the agency's determination is arbitrary, capricious or contrary to law. (See Pell at 231; Diocese of Rochester v Planning Bd. of Town of Brighton, 1 NY2d 508, 520 [1956]; Matter of Brockport Cent. School Dist. v New York State & Local Employees' Retirement System, 270 AD2d 706, 707-708 [3d Dept 2000]). Pursuant to CPLR § 7803 (3), the question raised in an Article 78 proceeding is "whether a determination was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion."

Further, it is well settled that "where . . . the judgment of the agency involves factual evaluations in the area of the agency's expertise and is supported by the record, such judgment must be accorded great weight and judicial deference." (Flacke v Onondaga Landfill Sys., 69 NY2d 355, 363 [1987]). (See Awl Indus., Inc. v Triborough Bridge & Tunnel Auth., 41 AD3d 141, 142 [1d Dept 2007]). Moreover, "[w]here the

Article 78 review is limited to the facts and the record made before the agency at the time of the challenged action. (Levine v New York State Liquor Authority, 23 NY2d 863, 864 [1969]; Celestial Food Corp. v New York State Liquor Authority, 99 AD2d 25, 26-27 [2d Dept 1984]; Fanelli v New York City Conciliation and Appeals Board, 90 AD2d 756, 757 [1d Dept 1982]; Sun v Division of Housing and Community Renewal, 137 Misc 2d 434, 436 [Sup Ct, NY Co. 1987]). Petitioners-plaintiffs amended their pleadings to raise a new objection, pursuant to CPLR § 7803 (2), relief in the nature of prohibition, [*5]asserting that DEC lacked subject matter jurisdiction to administratively impose the penalties assessed by Commissioner MARTENS. This claim amounts to stating that the DEC exercised its jurisdiction in an arbitrary and capricious manner. However, ZAHAV and SHURKA failed to raise the validity of the Commissioner's penalty assessment in the administrative proceeding, as they acknowledge at page 7 of their Memorandum of Law. This question is not part of the administrative record. Therefore, it is not properly before this Court for review and therefore must be denied.

A proceeding seeking prohibition is usually brought prospectively to prevent an agency from acting outside its jurisdiction. In the instant proceeding it is sought retrospectively. The DEC has, and has had, subject matter jurisdiction in the administrative proceeding here challenged. It is the agency charged with implementing and enforcing the ECL and the oil spill provisions of NL. Courts have repeatedly denied relief in the nature of prohibition brought on similar grounds, that the DEC did not have jurisdiction or authority to take some specific kind of enforcement action. (See Portville Forest Prods. v Commissioner of NY State Dept. of Envtl. Conservation, 117 Misc 2d 770 [Sup Ct., Livingston County 1982]; Matter of Johnson Orchards & Farms, Inc.. 70 Misc 2d 647 [Sup Ct, Albany County 1972]). The Court, in Matter of City of New York v Maltbie (248 AD 36 [3d Dept 1936], affd 274 NY 464 [1937]) held:

Prohibition is not favored by the courts, and is never issued as a matter

of right, but only in a sound discretion when there is no other remedy; it

is not given for the correction of errors, but only to prevent usurpation

of jurisdiction, or the exercise of power in an illegal manner or beyond

the jurisdiction conferred; and it will be granted only in extreme necessity

when the grievance cannot be redressed by the ordinary proceedings at

law, in equity, or by appeal.

If the question of penalties were properly raised during an administrative proceeding it would be subject to certiorari review by the Court as part of the administrative record, where the review standard is whether the action taken was arbitrary or capricious. (Pell at 231; Village of Camillus v Diamond, 76 Misc 2d 319 [Sup Ct, Onondaga County 1973], affd 45 AD2d 982 [4d Dept 1974], appeal denied 35 NY2d 645 [1974], cert denied 421 US 931 [1975]). Commissioner MARTENS had a rational basis for his October 24, 2011 decision. He applied the proper evidentiary standard. There was no bad faith or bias on the part of respondents-defendants MARTENS, DEC and URDA.

Further, in the instant Article 78 proceeding there is no dispute as to the facts. Therefore, there is no need to transfer this matter to the Appellate Division for a determination of whether the Commissioner's decision to assess penalties against ZAHAV is supported by "substantial evidence," pursuant to CPLR § 7803 (4). (Sunrise [*6]Manor Center for Nursing and Rehabilitation ex. rel. Gronert v Novelo, 19 AD3d 426 [2d Dept 2005]). "The mere fact that the petition alleges the lack of substantial evidence supporting the determination is not dispositive, for the question of whether an article 78 proceeding must be transferred to the Appellate Division is one to be decided by [Supreme Court], not by petitioners." (Bonded Concrete, Inc. v Town Bd. of Town of Rotterdam, 176 AD2d 1137, 1137 [3d Dept 1991], quoting Matter of Save the Pine Bush, Inc. v Planning Bd. of the City of Albany, 83 AD2d 741 [3d Dept 1981]). (See Cornelius v City of Oneonta, 71 AD3d 1282 [3d Dept 2011]). "Here, there is no substantial evidence question as the facts are not in controversy and the only question is whether the agency exercised its authority in an arbitrary and capricious manner. Thus, a transfer to the Appellate Division is not warranted." (McAtee v Environmental Control Board, 34 Misc 3d 547, 549 [Sup Ct, Kings County 2011]). It is clear that the actions of the Commissioner were not arbitrary and capricious or an abuse of discretion.

With respect to the first two causes of action in the complaint against the State

The first cause of action is a challenge to the propriety of an administrative action. It asserts that the January 27, 2010 stipulation was arbitrary and capricious because of DEC's alleged bias and bad faith. This claim replicates the Article 78 claim made before and rejected by Commissioner MARTENS. Further, since this proceeding-action was brought more than four months after the execution of the January 27, 2010 stipulation the cause of action is time-barred, pursuant to CPLR § 217. The stipulation was in effect on January 27, 2010, and the acts alleged all occurred in 2010, except the initiation of the enforcement action, in March 2011. This proceeding-action was brought in December 2011, well beyond the four months within which a challenge to an administrative action is allowed. (CPLR § 217 [1]). If "examination reveals that the rights of the parties sought to be stabilized in the action for declaratory relief are, or have been, open to resolution through a form of proceeding for which a specific limitation period is statutorily provided, then that period limits the time for commencement of the declaratory judgment action." (Solnick v Whalen, 49 NY2d 224, 230-231 [1980]). Here the rights of the parties were subject to "stabilization" by a timely-brought Article 78 proceeding challenging the January 27, 2010 stipulation and any DEC actions alleged to have been performed in bad faith.

Moreover, petitioners-plaintiffs' allegations of bad faith and bias by the DEC and URDA, are not founded in fact but are merely conclusory and based upon unsupported suspicion. This does not establish any clear legal right to any relief and certainly not to the extraordinary relief of mandamus. Mandamus may issue to compel the performance of an official duty clearly imposed by law, where there is no other adequate specific remedy. The duty must be positive, not discretionary, and the right to its performance must be so clear as to not admit any reasonable doubt or controversy. "The extraordinary remedy of mandamus will lie only to compel the performance of a ministerial act, and only where there exists a clear legal right to the relief sought." (Morales v Gugerty, 120 AD3d 1349 [2d Dept 2014]).

The allegations of bias and bad faith made in the two causes of action asserted in the "complaint" portion of petitioners-plaintiffs' pleadings are substantially identical to those asserted in opposition to the DEC's administrative enforcement action. Those claims, conclusory in nature and unsupported by facts, were properly rejected by

In this proceeding, ZAHAV and SHURKA offer no more in support of their claims of bias and bad faith than the same mere conclusory assertions based upon speculation and their own bias. Plaintiffs' primary witness through his affidavits, James [*8]M. DeMartinis,

Moreover, the two causes of action espoused by ZAHAV and SHURKA sound in malicious prosecution, but they do not begin to meet the requirements of such a claim: (1) the commencement or continuance of a proceeding by the defendant against the plaintiff; (2) the termination of that proceeding in favor of the plaintiff; (3) the absence of probable cause for the proceeding; and (4) actual malice. (Cantalino v Danner, 96 NY2d 391, 394 [2001]). Though ZAHAV meets the first requirement, it fails to meet the other three. SHURKA fails to meet any of the requirements.

Moreover, there was a proceeding initiated by the DEC's Office of General Counsel, at the request of the DEC's staff, against ZAHAV. The proceeding did not terminate favorably for ZAHAV, which was found liable for violations of various statutes and the January 27, 2010 stipulation. Clearly, there was probable cause for the DEC's proceeding, since ZAHAV failed to comply with the stipulation. While ZAHAV and SHURKA allege bias and bad faith by URDA, they have failed to show any. They have only shown that URDA enforced the law as required of him.

The DEC and its staff have offered proof in evidentiary form, through their affirmation, affidavit and administrative record, sufficient to support summary judgment in their favor. Petitioners-plaintiffs have offered nothing more than what they presented in the administrative proceeding. Therefore, the State respondents-defendants are entitled to summary judgment dismissing the first and second causes of action in the complaint against them because they do not meet the requirements of an action sounding in malicious prosecution and fail to state a claim for which the Court may grant relief.

ORDERED, that the motion of respondents-defendants JOSEPH MARTENS, as Commissioner of New York State Department of Environmental Conservation, the

This constitutes the Decision and Order of the Court.

ENTER