Purchaser of Property With Old Tank Not Eligible for Reimbursement from NY Oil Spill Fund

Purchaser discovered "orphan" UST following closing and remediated contamination. When it filed an application for reimbursement from the NY Oil Spill Fund, the claim was denied on the grounds that the property owner was a "discharger" under the NY Navigation Law and therefore not eligible for reimbursement.

Property owner sought judicial review under Article 78,  asserted it was an innocent purchaser because it never used the tank and was not aware of the tank at the time of purchase.

Relying on State v Green, the court upheld the decision of the Spill Fund. The court said that the Navigation Law imposed strict liability and awareness of a tank was not a defense to liability. Moreover, the tank was deemed to be a fixture attached to the property and therefore, owner/petitioner was owner of the tank system. In Matter of Eugene Veltri, 2011 N.Y. App. Div. LEXIS 762 (App. Div-3rd Dept. 2/10/11)

Commentary: While the Oil Spill Fund can be a tool for developers of brownfield sites impacted with petroleum contamination, the Oil Spill Fund takes a broad definition of a "discharger" and that if there is a tank at the site when the developer takes title, it will be considered to be a discharger. Thus, it is essential that due diligence be used to identify historic tanks and would be prudent to have the tanks prior to taking title.