STATE OF NORTH CAROLINA IN THE OFFICE OF

ADMINISTRATIVE HEARINGS

MECKLENBURG COUNTY 07 EHR 1771

METROPOLITAN GROUP, INC.,
Petitioner,
v.
SURFACE WATER PROTECTION SECTION, DIVISION OF WATER QUALITY, NC DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES,
Respondent. / ORDER ON PETITIONER’S MOTION FOR SUMMARY JUDGMENT

This case comes before the undersigned Shannon R. Joseph, Administrative Law Judge, on Petitioner’s Motion for Summary Judgment, served 21 December 2007. Respondent served its Response in Opposition to Petitioner’s Motion for Summary Judgment on 18 January 2008. A telephone hearing on the Motion was conducted on 22 January 2008. Having considered the arguments of counsel and the matters of record, including the Affidavit of James J. Gross, Petitioner’s Motion is now ripe for disposition.

ISSUE

Does application of the “third-party” exception specified in N.C. Gen. Stat. § 143-215.83 apply in this case to prohibit the imposition of a penalty against Petitioner?

FINDINGS OF FACT

1. Petitioner Metropolitan Group, Inc. (“Petitioner”) owns property at 18 Linestowe Drive in Belmont, North Carolina (“the Property”). The Property was the site of a former textile plant, which remained standing when Petitioner bought the Property. Petitioner bought the Property with the intention to redevelop it for residential or mixed use condominiums.

2. Redevelopment of the Property required demolition of the former textile plant.

3. Petitioner retained Still Services to perform the demolition of the textile plant. Still Services contracted to demolish the plant for a fee and for the right to remove and resell all of the fixtures, building materials, and any other valuable materials left on site at the time of demolition. Still Services supplied all of its own equipment and materials and retained full control and supervision of its own employees for the work. Once demolition and salvage work began, there was no one from Petitioner at the Property on a continuing basis.

4. During the demolition and salvage performed by Still Services, a Still Services employee drove a piece of heavy equipment over soil that was held in place by a brick retaining wall, causing the wall to collapse. The collapse of the brick wall severed a fuel line that formerly carried diesel fuel oil, resulting in the release of diesel fuel oil. The diesel oil reached a storm drain. Respondent asserts that there was a discharge of the oil into the Catawba River through the storm drain. No employees of Petitioner were on the Property at the time of the accident.

5. Pursuant to N.C. Gen. Stat. § 143-215.88A, Respondent jointly and severally assessed a civil penalty of $5000.00 for violation of N.C. Gen. Stat. § 143-215.83, which prohibits discharging, or causing to be discharged, oil or other hazardous substances into or upon the waters or lands within the State, regardless of the fault of the person having control over the oil or other hazardous substance, or regardless of whether the discharge was caused by accident or intentional acts.

CONCLUSIONS OF LAW

Summary Judgment Principles

1. Summary judgment is properly granted when the pleadings, depositions, answers to interrogatories, admissions, and affidavits show no genuine issue of material fact exists, and the moving party is entitled to judgment as a matter of law. N.C. R. Civ. P. 56.

2. A movant may show that summary judgment is warranted by “(1) proving that an essential element of the plaintiff’s case is non-existent, (2) showing through discovery that the plaintiff cannot produce evidence to support an essential element of his or her claim, or (3) showing that the plaintiff cannot surmount an affirmative defense.” Losing v. Food Lion, LLC, 648 S.E.2d 261, 263 (N.C. App. Ct. 2007) (quoting Draughon v. Harnett Cty. Bd. of Educ., 158 N.C. App. 705, 708, 582 S.E.2d 343, 345 (2003)).

3. In response to a motion for summary judgment, the “opposing party has no duty to come forward until the movant has met its burden; if internal inconsistencies in the movant's evidence reveal a genuine issue of material fact, summary judgment should be denied.” Beaver v. Hancock, 72 N.C. App. 306, 310, 324 S.E.2d 294, 298 (1985). “Once the movant has presented a sufficient showing, however, the non-movant cannot rest on conclusory allegations. [cite omitted] Rather, it must come forward with specific facts showing a genuine issue for trial.” Id.

Application of the Provisions of the Oil Pollution and Hazardous Substances

Control Act

4. The Oil Pollution and Hazardous Substances Control Act (“the Act”), N.C. Gen. Stat. §§ 143-215.83-143-215.94, sets forth provisions relating to Oil Discharge Controls, including the provisions on which the civil penalties levied in this case are based.

5. The Act contains a third-party exception to its provisions, specifying that “[t]his section shall not apply to discharges of oil or other hazardous substances in the following circumstances: . . . (2) When any person subject to liability under this Article proves that a discharge was caused by . . . (d) An act or omission of a third party, whether any such act or omission was or was not negligent. N.C. Gen. Stat. § 143-214.83(b)(2)(d).

6. The plain meaning of the “third-party” term used in N.C. Gen. Stat. § 143-214.83(b)(2)(d) encompasses contractors such as Still Services. See Ellison v. Gambill Oil Co., 650 S.E.2d 819, 820-21 (N.C. Ct. App. 2007) (holding that evidence that the person hired to install a monitoring system and to perform repairs to stop the leak on the subject property caused the discharge of gasoline warranted instruction to the jury on the third-party exception to the Act). Thus, proof that a discharge was caused by a contractor hired to perform work on the Property would exempt Petitioner from the application of the Act.

7. Here, Petitioner has met its burden of coming forward with evidence that demonstrates that the demolition contractor, Still Services, caused the discharge of the diesel fuel oil. Also, Petitioner has proffered evidence demonstrating that Still Services was indeed a third-party because it was acting as an independent contractor: it was hired to do a specific piece of work with a specific fee set; it supplied its own equipment and materials; it provided its own employees and retained full control and supervision over them; and it, unlike Petitioner, was in the business of demolition and salvage. See Cook v. Morrison, 105 N.C. App. 509, 514, 413 S.E.2d 922, 925 (1992) (setting forth factors indicative of independent contractorship).

8. In response, Respondent does not come forward with specific facts showing a genuine issue for trial as to whether Petitioner in fact caused the discharge. Rather, Respondent argues that the third-party exception should be interpreted narrowly, relying on the general purpose of the Act and on federal law. In Ellison v. Gambill Oil Co., 650 S.E.2d 819, 822 (N.C. Ct. App. 2007), however, the North Carolina Court of Appeals chose not to rely on cases from other jurisdictions involving federal statutes. In light of the plain language of in N.C. Gen. Stat. § 143-214.83(b)(2)(d) and the application of the provision in Ellison v. Gambill Oil Co., Respondent’s position that the third-party exception does not apply in this case is insufficient to withstand summary judgment.

For the foregoing reasons, Petitioner’s Motion for Summary Judgment is granted.

NOTICE

The Agency that will make the final decision in this contested case is the North Carolina Department of Environment and Natural Resources.

The Agency is required to give each party an opportunity to file exceptions to the decision and to present written arguments to those in the Agency who will make the final decision. N.C. Gen. Stat. § 150-36(a). The Agency is required by N.C. Gen. Stat. §150B-36(b) to serve a copy of the final decision on all parties and to furnish a copy to the parties' attorneys of record and to the Office of Administrative Hearings.

In accordance with N.C. Gen. Stat. § 150B-36 the Agency shall adopt each finding of fact contained in the Administrative Law Judge's decision unless the finding is clearly contrary to the preponderance of the admissible evidence. For each finding of fact not adopted by the agency, the agency shall set forth separately and in detail the reasons for not adopting the finding of fact and the evidence in the record relied upon by the agency in not adopting the finding of fact. For each new finding of fact made by the agency that is not contained in the Administrative Law Judge's decision, the agency shall set forth separately and in detail the evidence in the record relied upon by the agency in making the finding of fact.

This the 28th day of January, 2008.

______

Shannon R. Joseph

Administrative Law Judge

2