State v. Shell Oil Co.

Sweeney, J. P., and Kane, J.,

dissent and vote to reverse in the following memorandum by Sweeney, J. P. Sweeney, J. P. (dissenting). We disagree with the majority’s conclusion that Special Term properly denied defendant’s motion to dismiss the complaint and, therefore, dissent. Section 182 of the Navigation Law requires that the administrator, upon receipt of any claim, shall “as soon as practicable inform all affected parties of the claim”. This notice requirement applies whether the claim is for damages or for cleanup and removal costs. In order for a person challenging a claim for cleanup and removal costs to commence an arbitration proceeding, it is necessary that he file a written notice with the administrator “no later than seven calendar days after such claim for payment is received by the administrator” (2 NYCRR 403.1). Consequently, a person would have to be notified within seven days after the claim is received by the administrator so that he could file his challenge in compliance with 2 NYCRR 403.1. If not so notified, the person could be precluded from challenging the claim through arbitration simply by the administrator’s failure to issue notification of the claim until eight days after receiving the claim. The Legislature could not have intended such a result. Statutes are to be construed so as to avoid incongruous, unreasonable or unjust results (Matter of Pell v Coveney, 37 NY2d 494, 496; Matter of Murphy v Acito, 65 AD2d 661, 662, mot for lv to app den 45 NY2d 897). Accordingly, when a claim is filed for cleanup and removal costs, the administrator must notify the person allegedly responsible within seven days of receipt of the claim by the administrator in order for such notice to be given “as soon as practicable” within the meaning of section 182 of the Navigation Law. Through arbitration, a person may “contest the validity or amount of damage claims or cleanup and removal costs” (Navigation Law, § 185, subd 1). In the present case, defendant was effectively precluded from so challenging the cleanup and removal costs by the administrator’s failure to notify defendant within seven days after the administrator received the claim (Navigation Law, § 182; 2 NYCRR 403.1). The majority concludes that defendant was not prejudiced by this lack of notification because defendant was adequately apprised of developments during the course of its participation in the cleanup, negotiations to complete the cleanup, efforts to avoid liability and rejection of a demand for payment for certain work performed. None of defendant’s actions, however, served to make it aware of when the claims for cleanup and removal were filed with the administrator and, thus, defendant was, in effect, prevented from challenging the claims in arbitration. The administrator’s failure, therefore, to comply with the notice requirement of section 182 of the Navigation Law by notifying defendant within seven days after receiving the claims was prejudicial to defendant and should bar the administrator from seeking reimbursement pursuant to section 188 of the Navigation Law. The order should be reversed and the complaint dismissed.