CLEARY v. WALLACE OIL COMPANY INC (2008)

In two related actions, inter alia, to recover damages for injury to property, the defendants Wallace Oil Company, Inc., Alta East, Inc., Star Gas Partners, L.P., Meenan Oil Company, Inc., Region Oil, Petro Holdings, Inc., and Petro, Inc., appeal, as limited by their brief, from so much of an order of the Supreme Court, Orange County (Horowitz, J.), dated March 12, 2007, as denied their cross motion for summary judgment dismissing the claims of John Cleary, Karen Cleary, Erin Cleary, and John Cleary, Jr., the plaintiffs in Action No. 1, for punitive damages and those plaintiffs' causes of action to recover damages for negligent infliction of emotional distress, and granted the cross motion of Preferred Mutual Insurance Company, as subrogee of John Cleary and Karen Cleary, the plaintiff in Action No. 2, for summary judgment on the issue of liability with respect to the causes of action to recover damages pursuant to article 12 of the Navigation Law.

ORDERED that the order is modified, on the law, by deleting the provision thereof denying that branch of the cross motion of the defendants Wallace Oil Company, Inc., Alta East, Inc., Star Gas Partners, L.P., Meenan Oil Company, Inc., Region Oil, Petro Holdings, Inc., and Petro, Inc., which was for summary judgment dismissing the causes of action to recover damages for negligent infliction of emotional distress, and substituting therefor a provision granting that branch of that cross motion;  as so modified, the order is affirmed insofar as appealed from, with one bill of costs payable by the appellants to the plaintiff in Action No. 2.

In making a delivery of heating oil to the home of the plaintiffs John Cleary, Karen Cleary, Erin Cleary, John Cleary, Jr., and Daniel Cleary (hereinafter collectively the Clearys), an employee of the defendant Wallace Oil Company, Inc., attached his delivery hose to an abandoned fill pipe which was not connected to a fuel tank.   The fill pipe opened into the rafters of the basement, and the employee proceeded to pump more than 900 gallons of fuel oil into the Clearys' home.   The Clearys and their insurance carrier, Preferred Mutual Insurance Company, as subrogee of John Cleary and Karen Cleary (hereinafter PMIC), separately commenced the instant actions to recover damages from, among others, Wallace Oil Company, Inc., Alta East, Inc., Star Gas Partners, L.P., Meenan Oil Company, Inc., Region Oil, Petro Holdings, Inc., and Petro, Inc. (hereinafter collectively Wallace).

 The Supreme Court erred in concluding that a question of fact exists as to whether the Clearys could recover damages for negligent infliction of emotional distress based upon their alleged exposure to toxic substances.   A breach of a duty of care “resulting directly in emotional harm is compensable even though no physical injury occurred” (Kennedy v. McKesson Co., 58 N.Y.2d 500, 504, 462 N.Y.S.2d 421, 448 N.E.2d 1332;  see Ornstein v. New York City Health & Hosps. Corp., 10 N.Y.3d 1, 6, 852 N.Y.S.2d 1, 881 N.E.2d 1187;  DiStefano v. Nabisco, Inc., 2 A.D.3d 484, 485, 767 N.Y.S.2d 891;  Brown v. New York City Health & Hosps. Corp., 225 A.D.2d 36, 44, 648 N.Y.S.2d 880).   However, the mental injury must be “a direct, rather than a consequential, result of the breach” (Kennedy v. McKesson Co., 58 N.Y.2d at 506, 462 N.Y.S.2d 421, 448 N.E.2d 1332) and the claim must “possess some guarantee of genuineness” (Ferrara v. Galluchio, 5 N.Y.2d 16, 18, 176 N.Y.S.2d 996, 152 N.E.2d 249;  see Ornstein v. New York City Health & Hosps. Corp., 10 N.Y.3d at 6, 852 N.Y.S.2d 1, 881 N.E.2d 1187;  see DiStefano v. Nabisco, Inc., 2 A.D.3d at 485, 767 N.Y.S.2d 891).   Thus, “[t]o maintain a cause of action to recover damages for [negligent infliction of] emotional distress following exposure to a toxic substance, a plaintiff must establish both that he or she was in fact exposed to a disease-causing agent and that there is a ‘rational basis' for his or her fear of contracting a disease” (DiStefano v. Nabisco, Inc., 2 A.D.3d at 485, 767 N.Y.S.2d 891;  see Prato v. Vigliotta, 253 A.D.2d 746, 748, 677 N.Y.S.2d 386;  Abusio v. Consolidated Edison Co. of N.Y., 238 A.D.2d 454, 656 N.Y.S.2d 371;  Wolff v. A-One Oil, 216 A.D.2d 291, 291-292, 627 N.Y.S.2d 788;  Doner v. Ed Adams Contra., 208 A.D.2d 1072, 617 N.Y.S.2d 565).  “This Court has construed ‘rational basis' to mean ‘the clinically-demonstrable presence of a toxin in the plaintiff's body, or some other indication of a toxin-induced disease’ ” (DiStefano v. Nabisco, Inc., 2 A.D.3d at 485, 767 N.Y.S.2d 891, quoting Prato v. Vigliotta, 253 A.D.2d at 748, 677 N.Y.S.2d 386;  Abusio v. Consolidated Edison Co. of N.Y., 238 A.D.2d 454, 656 N.Y.S.2d 371).

In opposition to Wallace's prima facie showing of entitlement to judgment as a matter of law, the Clearys failed to raise a triable issue of fact.   Although the Clearys' expert affirmed that the environment in the house was toxic, it is undisputed that none of the Clearys were present in the house when the oil spilled and there is no evidence or allegation that Erin Cleary, John Cleary, Jr., or Daniel Cleary were ever exposed to the toxic environment by entering the house after the spill.   Although John Cleary and Karen Cleary alleged that they entered the house on occasion to inspect and that they had some contact with their personal property, they did not present clinical evidence of some physical manifestation of contamination or evidentiary proof of “some other indication of a toxin-induced disease” (DiStefano v. Nabisco Inc., 2 A.D.3d at 485, 767 N.Y.S.2d 891).   Thus, they are not entitled to recover damages for negligent infliction of emotional distress and Wallace should have been awarded summary judgment dismissing those causes of action.

The Supreme Court correctly denied that branch of Wallace's cross motion which was for summary judgment dismissing the Clearys' claims for punitive damages.   Wallace's only argument in this regard is that it could not be held liable for punitive damages as a result of the action of its employee because there was no evidence that it “authorized, participated in, consented to or ratified the conduct giving rise to such damages, or deliberately retained the unfit servant” (Loughry v. Lincoln First Bank, 67 N.Y.2d 369, 378, 502 N.Y.S.2d 965, 494 N.E.2d 70;  see Gallo v. 800 Second Operating, 300 A.D.2d 537, 538, 752 N.Y.S.2d 394).   Here, however, the Clearys' claims for punitive damages are limited to the alleged “direct and independent gross negligence” of Wallace, i.e., actions and omissions of Wallace itself.   Thus, the case law cited by Wallace is inapposite, and Wallace's failure to address its own alleged misconduct, as opposed to the acts and omissions of its employee, requires that this branch of its cross motion be denied.

 The Supreme Court did not err in granting PMIC's motion for summary judgment on the issue of liability with respect to the causes of action to recover damages pursuant to article 12 of the Navigation Law. Pursuant to the Navigation Law, any party who has discharged petroleum is “strictly liable, without regard to fault, for all cleanup and removal costs and all direct and indirect damages, no matter by whom sustained” (Navigation Law § 181[1];  see Matera v. Mystic Transp., 308 A.D.2d 514, 517, 764 N.Y.S.2d 458).  “Discharge” is defined, in relevant part, as “any intentional or unintentional action or omission resulting in the releasing, spilling [or] pumping ․ of petroleum” (Navigation Law § 172[8] ).  “[A] ‘claim’ may only be asserted by an injured person ‘who is not responsible for the discharge’ ” (Fuchs & Bergh, Inc. v. Lance Enters., Inc., 22 A.D.3d 715, 717, 802 N.Y.S.2d 749, quoting Navigation Law § 172[3];  General Cas. Ins. Co. v. Kerr Heating Prods., 48 A.D.3d 512, 852 N.Y.S.2d 257).

 Here, PMIC established its prima facie entitlement to judgment as a matter of law on the issue of liability by demonstrating that Wallace pumped oil into an abandoned fill pipe that led to the Clearys' basement, thereby discharging oil into the house, and that the Clearys' property was damaged as a result of the discharge (see Fuchs & Bergh, Inc. v. Lance Enters., Inc., 22 A.D.3d at 717, 802 N.Y.S.2d 749;  Matera v. Mystic Transp., 308 A.D.2d at 518, 764 N.Y.S.2d 458).   Wallace failed to raise a triable issue of fact in opposition.   It relied solely upon an attorney's affirmation, in which counsel asserted that the Clearys were negligent in failing to remove the abandoned fill pipe and that this negligence contributed to the oil spill.   The affirmation of Wallace's attorney “has no probative weight and cannot raise a triable issue of fact” (Bates v. Yasin, 13 A.D.3d 474, 474, 788 N.Y.S.2d 397;  see Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718).