The opinion
State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: February 19, 2015 517632
________________________________
In the Matter of ROBERT BERGER
et al.,
Petitioners,
v MEMORANDUM AND JUDGMENT
NEW YORK STATE DEPARTMENT OF
ENVIRONMENTAL CONSERVATION
et al.,
Respondents.
________________________________
Calendar Date: October 17, 2014
Before: Stein, J.P., McCarthy, Garry, Lynch and Devine, JJ.
__________
Nolan & Heller, LLP, Albany (Carl G. Dworkin of counsel),
for petitioners.
Eric T. Schneiderman, Attorney General, Albany (Allison B.
Levine of counsel), for New York State Department of
Environmental Conservation, respondent.
Zachary W. Carter, Corporation Counsel, New York City
(Janet L. Zaleon of counsel), for City of New York, respondent.
Jacobowitz & Gubits, LLP, Walden, for David Cook and
another, respondents.
__________
Lynch, J.
Proceeding pursuant to CPLR article 78 (transferred to this
Court by order of the Supreme Court, entered in Albany County) to
review a determination of respondent Department of Environmental
Conservation which found that petitioners and respondents David
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Cook and Jody Cook failed to operate and maintain a certain dam
in a safe condition.
The Honk Falls Dam (hereinafter the dam), located on the
Rondout Creek in the Town of Warwarsing, Ulster County, was built
in 1898 to generate hydroelectic power. In 1924, United Hudson
Electric Corporation (hereinafter Central Hudson)1 purchased a
number of parcels surrounding the Rondout Creek from the original
owner, including the dam and hydroelectric plant, and expanded
the size of the dam. Since then, and today, the dam rises 42
feet above and spans 294 feet across Rondout Creek. In 1941,
while Central Hudson was still operating a hydroelectric plant at
the dam, respondent City of New York constructed the Merriman Dam
upstream from Honk Lake and acquired through condemnation certain
real estate and the right to divert the waters of Rondout Creek.
When the City began diverting the waters in 1944, the dam no
longer had the capacity to generate power. The City and Central
Hudson, via an indenture and agreement dated March 24, 1948 and
April 21, 1948, respectively, settled Central Hudson's
compensation claims arising from the condemnation proceeding.
In 1949, Central Hudson transferred its property in the
vicinity of the dam to the Rondout Paper Mills, Inc. and,
thereafter, the property was conveyed a number of times before
Ulster County acquired part of the property in 1979 via a tax
deed. At issue herein are tax parcels 83.1-2-5 and 83.6-1-11.
Respondents David Cook and Jody Cook obtained parcel 83.1-2-5
from Ulster County at a foreclosure sale in 1999 (hereinafter the
Cook parcel), and petitioners purchased parcel 83.6-1-11 in 1992
by a quitclaim deed given by an estate (hereinafter the Berger
parcel). The Cook parcel abuts the west side of Rondout Creek at
the dam and the Berger parcel abuts the east side of the creek at
the dam.
In 1981, the United States Army Corps of Engineers issued a
safety report wherein it concluded that the dam was "unsafe" and
in need of certain remedial repairs and maintenance. The record
1
In 1927, United Hudson Electric Corporation was merged
into Central Hudson Gas and Electric Corporation.
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indicates that, beginning in 1983, respondent Department of
Environmental Conservation (hereinafter DEC) periodically
inspected the dam and issued safety reports, each time concluding
that the dam was a "class C hazard," meaning that its failure
could "result in widespread or serious damage to home(s); damage
to main highways, industrial or commercial buildings, railroads,
and/or important utilities, including water supply, sewage
treatment, fuel, power, cable or telephone infrastructure; or
substantial environmental damage; such that the loss of human
life or widespread substantial economic loss is likely" (6 NYCRR
673.5 [b] [3]). In 2006, DEC notified petitioners and the Cooks
that, as owners of the dam, they had to maintain and operate it
safely and pursuant to law. Neither petitioners nor the Cooks
completed any maintenance or repairs to the dam. By notice and
complaint dated April 27, 2007, DEC commenced an enforcement
proceeding against petitioners and the Cooks. Following a
hearing held over nine days, the Commissioner of Environmental
Conservation adopted the findings of the Administrative Law Judge
(hereinafter ALJ) and determined, as relevant here, that
petitioners and the Cooks were the joint owners of the dam and,
therefore, were jointly and severally liable for its maintenance.
DEC directed them to retain an engineer to develop a compliance
plan pursuant to the dam safety regulations (see 6 NYCRR part
673), to provide financial assurance in the amount of $500,000
and assessed a civil penalty in the amount of $116,500.
Petitioners commenced this CPLR article 78 proceeding against
DEC, the City and the Cooks seeking to, among other things, annul
DEC's determination. The Cooks filed cross claims against DEC
also challenging its determination. Supreme Court transferred
the matter to this Court.
Under ECL 15-0507 (1), "[a]ny owner of a dam or other
structure which impounds waters shall at all times operate and
maintain said structure and all appurtenant structures in a safe
condition." For purposes of the enforcement statute, an "owner"
is "any person or local public corporation who owns . . . or uses
a dam . . . which impounds waters" (ECL 15-0507 [1]).2 The
2
The DEC abandoned its claim that either petitioners or
the Cooks "used" the dam for purposes of the enforcement statute.
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statute, which was enacted in 1999 after certain dam failures,
was intended to address "the 'life threatening' dangers created
by dams and the fact that many dams had not been properly
maintained" (Hosmer v Kubricky Constr. Corp., 88 AD3d 1234, 1236
[2011], lv dismissed 19 NY3d 839 [2012], quoting Senate Mem in
Support, Bill Jacket, L 1999, ch 364 at 7). Accordingly, the
Legislature "shift[ed] responsibility from the [DEC] to dam
owners . . . to encourage proper maintenance by owners in
recognition of the fact that '[they] are ultimately liable for
damage caused downstream as a result of negligence'" (id.,
quoting Senate Mem in Support, Bill Jacket, L 1999, ch 364 at 7).
In this proceeding, the primary issue presented is whether
petitioners and the Cooks own the dam. After finding that each
party admitted ownership of the parcels abutting the creek, that
each was named as an owner of the parcels in their recorded deeds
and crediting the opinion of DEC's surveyor that the boundary
between the Cook parcel and the Berger parcel is the midpoint of
the dam's spillway, the ALJ concluded that they owned the dam.
We do not agree.
Generally, we will not disturb an administrative
determination made following a hearing unless it is shown that it
was not supported by substantial evidence in the record (see 300
Gramatan Ave. Assoc. v State Div. of Human Rights, 45 NY2d 176,
179 [1978]; Matter of Rauschmeier v Village of Johnson City, 91
AD3d 1080, 1081-1082 [2012], lv denied 19 NY3d 802 [2012]). In
our view, the Commissioner, who adopted the findings of the ALJ,
erred because his findings were made without regard to the
statutory basis for the agreement and indenture by and between
the City and Central Hudson, and his conclusions were based on an
incomplete record with regard to the condemnation proceeding. As
such, we cannot conclude that the determination was supported by
substantial evidence.
Historically, the City's authority to take land for its
water supply derives from the Laws of 1905 (ch 724), known as the
Water Supply Act (hereinafter WSA) (see generally Matter of Van
It is undisputed that today, the only "use" of the dam is to
impound Honk Lake.
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Etten v City of New York, 226 NY 483, 492-493 [1919]). The WSA
sets forth the procedure that allowed the City to acquire "lands
or interest" necessary "to provide for an additional supply of
pure and wholesome water" (L 1905, ch 724). "The statute
contemplates a proceeding to condemn the fee of the real property
required by the [C]ity, and a proceeding to determine the damages
arising for a decrease in the value of an established business"
(Matter of Board of Water Supply, City of N.Y., 211 NY 174, 183
[1914] [internal citations omitted]). As relevant here, the WSA
required the City to identify potential water sources and to
approve a "final map" depicting the proposed water sources
(L 1905, ch 724, § 3). Following the filing of the "final map,"
additional maps were to be generated showing "the various parcels
of real estate on, over or through which [dams] are to be
constructed or maintained, or by which may be necessary for the
prosecution of the work authorized by [the WSA]" and "plainly
indicat[ing] which parcels the fee, and over or through which
parcels the rights to use and occupy the same in perpetuity, is
to be acquired" (L 1905, ch 724, § 5). The City was then
required to file these maps (see L 1905, ch 724, § 6) and
commence a proceeding by a petition that "set[s] forth the action
theretofore taken by the [City's] board of water supply and by
the [City's] board of estimate and apportionment, and the filing
of such maps" (L 1905, ch 724, § 7). The petition had to state
"a general description of all the real estate to, in, or over
which any title, interest, right or easement is sought to be
acquired for the . . . [C]ity . . ., each parcel being more
particularly described by a reference to the number of said
parcel as given on said maps, and the title, interest or easement
sought to be acquired to, in or over such parcel, whether a fee
or otherwise" (L 1905, ch 724, § 7 [emphasis added]).
Once maps were created and the petition filed,
commissioners of appraisal were sworn to determine the amount to
be paid to those whose property was "taken or affected" (L 1905,
ch 724, § 9). Upon the filing of the commissioner's oaths, the
City was "seized in fee of all those parcels of real estate which
are on the maps . . . described as parcels, of which it [had]
been determined that the fee should be acquired" (L 1905, ch 724,
§ 11; see Matter of Van Etten v City of New York, 226 NY at 490-
491). Thereafter, the City could "immediately or at any time or
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times thereafter take possession of the [real estate depicted on
the maps] . . . and it [could] enter upon and use and occupy in
perpetuity all the parcels of real estate described in said map
for the purpose of . . . maintaining on, in, under, or over the
same, the said . . . dams" (L 1905, ch 724, § 11). The "just and
equitable compensation" for the property "taken or affected"
could be paid pursuant to either an order by the Supreme Court in
the special proceeding (L 1905, ch 724, §§ 13-16) or by agreement
(L 1905, ch 724, § 24). Significantly, "[t]he term real estate
as used in [the WSA] shall be construed to signify and embrace
all uplands, lands under water, the waters of any lake, pond or
stream, all water rights or privileges, and any and all easements
and incorporated hereditaments and every estate, interest and
right, legal and equitable, in land or water, . . . and liens
thereon by way of judgment, mortgages or otherwise, and also all
claims for damage to such real estate" (L 1905, ch 724, § 25; see
Matter of Van Etten v City of New York, 226 NY at 486-487).
Consistent with the procedure set forth in the WSA, the
record before the Court includes a map of real estate situated
along Rondout Creek prepared by the City's Board of Water Supply.
The map, delineated as the Rondout Riparian No. 2 map, identifies
and numbers the separate parcels located along the creek at the
northern outlet of Honk Lake, as well as the dam and section of
the creek located at the southern outlet of the lake. As
acknowledged by the City, the map includes a date of May 6, 1941,
representing the date the oaths were filed and, thus, the date
the City acquired "the various parcels of real estate" set forth
on the map (L 1905, ch 724, § 5; see L 1905, ch 724, § 11). It
is not disputed that Central Hudson owned the parcel numbered 33
on the map and that the dam is within parcel 33.
Also consistent with the WSA, the record includes the
indenture and agreement executed by the City and Central Hudson
in 1948. The indenture expressly refers to "rights and
properties" acquired in the 1941 condemnation proceedings, and
quitclaims certain "property" of Central Hudson to the City in
accord with their agreement to settle Central Hudson's
compensation claim. As relevant to this proceeding, such
property included "[a]ll real estate of Central Hudson . . . –
Rondout Riparian Section No. 2 . . . , more particularly
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described as . . . all rights in the real estate hereinafter
described to the waters of Rondout Creek and the natural flow
thereof; [a]ll those certain lots, pieces or parcels of real
estate . . . designated as Parcels 25 to 59, inclusive, shown
upon [the Rondout Riparian Section No. 2 map]" and "the right and
easement in perpetuity to divert all or any part of the waters of
the Rondout Creek . . . originating above the Merriman Dam of the
Rondout Reservoir . . . in and against the parcels of real estate
described as [a]ll those certain lots, pieces or parcels of real
estate [designated and] . . . shown upon [three different and
separately described maps]." By the agreement, authorized by the
Laws of 1946 (ch 804), the parties acknowledged that the City
acquired the right to divert the waters of the Rondout Creek at
the Merriman Dam and that "by reason of the acquisition of the
right to divert and the actual diversion by the City of the
waters of Rondout Creek, Central Hudson . . . [has] been damaged
substantially as a result [and has] filed [a] verified claim[ ]
for damages." In settlement of Central Hudson's damage claim,
the City, among other things, agreed to construct the Neversink
Aqueduct and to allow Central Hudson to connect to the aqueduct
and use the water for a new hydroelectric plant. By the
agreement, Central Hudson warranted that when the oaths were
filed in accordance with the WSA in 1941, it had both "title to
lands designated as parcel 33" and that it had "rights,
privileges and immunities consisting principally of flowage and
ponding rights and rights appertaining thereto in [certain other
parcels, including parcel 33]."
Upon review of the indenture and agreement, the ALJ
concluded that the purpose of the documents was to "memorialize
the agreement reached between Central Hudson and the City
regarding compensation for Central Hudson for its right to the
natural flow of Rondout Creek and its right to use the diverted
waters." Finding that neither the indenture nor the agreement
expressly referenced a conveyance of the dam, the ALJ concluded
that neither document transferred ownership of the dam to the
City. While we agree that the indenture and agreement
memorialized the settlement and release of Central Hudson's
damages claim, the ALJ failed to recognize that the property
actually taken was as defined in the maps filed pursuant to the
WSA. The ALJ simply focused on the agreement as authority for
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his conclusion that, in the condemnation proceeding, the City
acquired only the right to divert water upstream from the dam.
By the indenture, however, it is apparent that, in addition to
the right to divert water, the City also acquired property,
namely, the "real estate . . . described to the waters of the
[c]reek and to the natural flow thereof" at parcel 33. The
Rondout Riparian Section No. 2 map, filed pursuant to the WSA,
clearly shows that parcel 33 was owned by Central Hudson and was
improved by the dam.
We recognize that a riparian owner's right to the natural
flow of water along its land is properly classified as real
property, equally with the land (see Matter of Van Etten v City
of New York, 226 NY at 486). As such, a party could acquire an
interest in the water flow separate and distinct from the land
under the water (see Matter of Niagara Mohawk Power Corp. v
Cutler, 109 AD2d 403, 405 [1985], affd 67 NY2d 812 [1986]). The
controlling point here, however, is that the "real estate"
acquired in the condemnation, in conjunction with the indenture
and agreement, is as defined under the WSA. The comprehensive
statutory definition for "real estate" embraces both the water
and the "lands under water." Because the ALJ considered only the
"rights" that the City acquired by the condemnation and not the
"property," the ALJ's conclusion that petitioners own the dam is
not supported by substantial evidence in the record.
The February 1943 order of Supreme Court (Schirick, J.) in
the condemnation proceeding does not compel a contrary result.
By that order, the court cited the report of the commissioners
appointed pursuant to the WSA "to ascertain and determine the
compensation to be made to the owners of . . . the real estate
laid down on a map entitled 'Rondout Riparian Sec. No. 2' . . .
and described in the petition for the appointment of said
commissioners of appraisal to the waters of the Rondout Creek and
the natural flow thereof and any and all rights appurtenant
thereto." The City contends that this order demonstrates that by
the condemnation, the City took only Central Hudson's riparian
rights. We cannot agree. The order does not include or resolve
Central Hudson's claim as to parcel 33. Moreover, the record
does not include the petition, and the order does not alter the
nature of the real estate interest described in the Rondout
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Riparian Section No. 2 map, as mirrored in the indenture.3
Without the petition, we are thus left with the comprehensive
definition of real estate in the WSA that includes "land under
water," the Rondout Riparian Section No. 2 map that delineates
the specific parcels and the indenture that describes the real
estate acquired by the City with reference to the map. The dam
is clearly depicted on the map and, in the context of a
condemnation proceeding, "'[a]n appropriation of land, unless
qualified when made, is an appropriation of all that is annexed
to the land, whether classified as buildings or as fixtures'"
(Matter of City of New York [Kaiser Woodcraft Corp.], 11 NY3d
353, 359 [2008], quoting Jackson v State of New York, 213 NY 34,
36 [1914]).
We note that, even if the City only acquired riparian
rights at parcel 33, a riparian right to the natural flow of a
stream is "natural and inherent" to those that own "land
contiguous to a natural watercourse" (United Paper Bd. Co. v
Iroquois Pulp & Paper Co., 226 NY 38, 44-45 [1919]). Only a
riparian owner, or one who owns riparian rights, may construct
and use a dam (see Warren's Weed, New York Real Property § 151.08
[3]). If the City acquired exclusive riparian rights, including
"ponding rights," it follows that only the City has the right to
"use" the dam.
Having found that the ALJ failed to properly assess the
property acquired through the condemnation proceeding, we
necessarily conclude that the subsequent conveyances are of no
moment in resolving this dispute. Notably, while Central Hudson
conveyed a number of parcels in the vicininty of the creek and
dam by deed in 1949, that deed included a covenant against using
the property for hydroelectric power generation and was expressly
"subject to the rights acquired by the City of New York pursuant
3
The omission of the petition is significant because,
under the Laws of 1905 (ch 724, § 7), the petition must identify
"the title interest or easement sought to be acquired to, in or
over such parcel, whether a fee or otherwise." Any
qualifications or limitations as to the nature of the taking had
to be set forth in the petition.
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to various condemnation proceedings heretofore taken." On this
record, it appears that because the City completed the
condemnation acquisition in 1948, Central Hudson could not convey
the same property – whether it was a riparian right to use the
dam or the dam itself – to the Rondout Paper Company in the 1949
deed (see Real Property Law § 245; City of Kingston v Knaust, 287
AD2d 57, 60 [2001]). Similarly, the subsequent 1976 conveyance
into Recycled National Paper Corporation, petitioners' deed from
an estate, and the Cooks' 1999 deed from Ulster County could not
transfer any such rights in the dam. Finally, we discern no
basis in this record to conclude that any property owner has
"possessed" the dam since the condemnation proceeding. As such,
we do not find substantial evidence to support the ALJ's
determination that either petitioners or the Cooks owned the dam.
Having found that DEC's determination was not supported by
substantial evidence, the Cooks' cross claims are dismissed as
academic, and it is not necessary for us to consider the
arguments raised with respect to the cross claims (see Matter of
Arcuri v Kirkland, 113 AD3d 912, 916 [2014]).
McCarthy, Garry and Devine, JJ., concur; Stein, J.P., not
taking part.
ADJUDGED that the determination is annulled, without costs,
and petition granted.
ENTER:
Robert D. Mayberger
Clerk of the Court