Rapid Demolition Container Servs., Inc. v Maldonado
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Rapid Demolition Container Servs., Inc. v Maldonado 2004 NY Slip Op 30354(U) November 8, 2004 Supreme Court, New York County Docket Number: 105305/04 Judge: Faviola Soto Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SCANNED ON 1111012004 SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK COUNTY PART ' 5- 1- MOTION DATE -v- 02-J MOTION SEO. NO. MOTION CAL. NO. The following papers, numbered 1 to X cn were read on this motion tolfor Notfce of Motion/ Order to'Show Cause - Affidavits - Exhlblts ... ~ s t ,:F~ Cr-,,~;-p~t,+x,,c ~ VTTF d c d , t - s - $ n L - l \ a , \ - j Answering Affidavits - Exhlblte I NUMBERED I L cn 5 U Replying Affldavlta .. ,e Cross-Motion: d y e s 0 No Upon the foregoing papere, it la ordered that this motion Check if amrotxiate: ri DONOTPCJST [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK : PART 52 X RAPID DEMOLITION CONTAINER SERVICES, I N C . , ____----------------__________I_________- Plaintiff, -again3t - JOSE MALDONADO, Chairman of the City of New York Business Integrity Commission and THE CITY OF NEW YORK BUSINESS INTEGRITY COMMISSION, Index No. 1 0 5 3 0 5 / 0 4 DECISION Et ORDER Defendants Jose Maldonado, Chairman of the City of New Y o r k Business Integrity Commission (BIC) and BIC move, pursuant to CPLR 3212, for summary judgment in their favor. Plaintiff Rapid Demolition Container Services, Inc. (Rapid) cross-moves for summary judgment in its favor.' This motion and cross-motion were randomly reassigned to this City Part following Justice Braun's order of October 7, 2004. BACKGROUND Rapid, which was incorporated on March 27, 2002, is in the business of hauling construction and demolition (C&D) debris, and demolishing buildings and removing the debris (C&D business). On April 17, 2002, Rapid filed a n application f o r a trade In its cross motion, Rapid states that "there are facts sufficient to require a trial herein." Since Rapid is itself seeking summary judgment, the court concludes that the language constitutes a typographical error. In any case, on examining the papers, the court further concludes that the issues presented by both parties in the motion and cross motion are issues of law, and that they may be resolved without a trial. [* 3] waste removal license with BIC, pursuant to section 16-505 (a) of the New Y o r k City Administrative Code (Administrative Code), to enable it to remove putrescible and other wastes. On July 29, 2003, BIC denied Rapid's application for a trade waste removal license on the ground, among o t h e r s , that Rapid had filed false, incomplete, and misleading information in its license application. BIC ruled that, although Francine Najjar was listed in the license application as the sole principal of Rapid, the evidence established that her husband, Joseph Najjar, was an undisclosed principal. BIC a l s o found that Rapid had failed to disclose its affiliation with Rapid Demolition Co. Iric., the business run by Joseph Najjar, which had been barred from conducting business with New York City and New Y o r k State because of the company's failure to pay prevailing wages, and other violations of law. Rapid challenged the denial of its license in an Article 78 proceeding, arguing, among other things, that the decision of BIC was without rational basis, and constituted gender discrimination, and a denial of due process. Prior to the filing of its Article 78 petition, Rapid had entered into a stipulation with BIC allowing Rapid to continue to operate its C&D business pending the conclusion of the Article 78 proceeding. On February 23, 2004, the c o u r t rejected Rapid's arguments, and denied the petition. R a p i d Demolition Services, Inc. v Maldonado, Sup Ct, 2 [* 4] Kings County, February 23, 2004, Schneier, J., Index No. 31748/03. On or about March 22, 2004, the drivers of two of Rapid's trucks were arrested for allegedly engaging in trade waste collection without a license, and the trucks were seized. Rapid and BIC then entered into two additional stipulations, permitting Rapid to continue to provide containers for the hauling of C&D materials from private residential premises, and to haul that C&D debris without obtaining an exemption from licensing requirements, pending the filing of this action by Rapid, and the determination of B I C ' s summary judgment motion. Pursuant to the stipulations, Rapid provided BIC copies of its billing receipts f o r March and April 2004. Rapid's billing receipts were accompanied by a cover letter from Francine Najjar, president of Rapid, which stated that "[ilf by any chance there are any billing customers you would l i k e us to discontinue service to please advise us and we will." In its amended complaint, Rapid alleges that since its inception on or about March 4, 2002, plaintiff has been engaged solely in the construction and demolition hauling business, providing and distributing containers to haul demolition debris from residential premises, other non-commercial premises, and the premises of commercial establishments; hauling demolition debris therefrom; and demolishing residential and other non-commercial and commercial premises (hereinafter the "C&D business") . Amended Complaint, 3 5. 3 [* 5] Rapid seeks declaratory judgment (and concomitant injunctive relief) on the amended complaint's three causes of action, to wit: (1) a person or firm engaged in hauling C&D material "solely from residential premises and other non-commercial premises is exempt from the licensing provisions of Local Law 42 without filing an exemption therefrom" (Amended Complaint, ¶ 26); (2) because neither Rapid's principal, nor her husband, has ever been engaged in a business which requires class seven or class three licenses, or has been a principal of a business required to be licensed, Rapid is not required to f i l e an application for exemption from licensing requirements to operate its C&D business; and (3) where a C&D business files an application for an exemption from licensing requirements, after review of the application, BIC must approve such an exemption. On May 24, 2004, Rapid filed an application for exemption from license requirements, pursuant to section 16-505 (a). STATUTORY SCHEME In 1996, in response to concerns about the influence of organized crime in the garbage and carting industry, Local Law 42 was enacted, transferring the authority to regulate the private collection of waste from the Department of Consumer Affairs to the New York City Trade Waste Commission, the predecessor of B I C . The regulation of C&D waste involves several interrelated sections of the Administrative Code, 4 Pursuant to section 16-505, [* 6] companies engaged in the collection of "trade waste" must obtain a license from BIC. Section 16-505 states as follows: a. It shall be unlawful for any person to operate a business for the purpose of the collection of trade waste from the premises of a commercial establishment required to provide for the removal of such waste pursuant to the provisions of section 16-116 of this code, or the removal or disposal of trade waste from such premises, or to engage in, conduct or cause the operation of such a busine$s, without having first obtained a license therefor from the commission pursuant to the provisions of this chapter. Notwithstanding the provisions of this subdivision, a b u s i n e s s s o l e l y engaged i n the removal of waste materials r e s u l t i n g from b u i l d i n g d e m o l i t i o n , c o n s t r u c t i o n , a l t e r a t i o n O E excavation shall be exempt from the licensing provisions of this subdivision where, except in regard to the principals of a business solely in either or both of the class seven or the class three category of licensees as defined in rules previously promulgated by the commissioner of consumer affairs pursuant to subchapter eighteen of chapter two of title twenty of this code,2 no principal of such applicant is a principal of a business or a former business required to be licensed pursuant to this chapter or such former subchapter eighteen. Grant of such exemption shall be made by the commission upon its review of an exemption application, which shall be in the form and contain the information prescribed by rule of the commission and shall be accompanied by a statement by the applicant describing the nature of the applicant's business and listing all principals of such business. Pursuant to the regulations of the Department of Consumer Affairs, "[tlhe C l a s s 3 license allows the transportation of materials originated and produced solely in the business operation of the permittee" with certain exceptions not pertinent here, and "[tlhe Class 7 license allows the transportation of construction and demolition debris or waste materials exclusively, that is, non-putrescible waste materials resulting from building demolition, construction, alteration and excavation," not including asbestos or asbestos containing materials. 6 RCNY 5 2-172 (d) & ( 9 ) . 5 [* 7] b. It shall be unlawful for any person to remove, collect or dispose of trade waste that is generated in the course of operation of such person's business, or to operate as a trade waste broker, without first having registered with the commission. Administrative Code 5 16-505 ( E ) (emphasis supplied). "Trade waste" is defined f o r the purposes of section 16-SO5 as follows: (1) all putrescible and non-putrescible materials or substances, except as described in paragraph (2) of this subdivision, that are discarded or rejected by a commercial establishment required to provide for the removal of its waste pursuant to section 16-116 of this code as being spent, useless, worthless or in excess to the owners at the time of such discard or rejection, including but not limited to garbage, refuse, street sweepings, rubbish, tires, ashes, contained gaseous material, incinerator residue, c o n s t r u c t i o n a n d d e m o l i t i o n debris, medical waste, offal and any other offensive or noxious material. Administrative Code § 16-501 (f) (emphasis supplied). Section 16-116 of the Administrative Code provides the following: a. Every owner, lessee or person in control of a commercial establishment shall provide for the removal of waste by a business licensed by the New York city trade waste commission as required by subdivision a of section 16-505 of this code o r register and obtain a registration number from the New York city trade waste commission as required by subdivision b of section 16-505 of this code to remove its own waste except as provided in subdivision c of this section . . . . b. Every owner, lessee o r person in control of a commercial establishment shall post a sign which states clearly and legibly the trade or business name, address, telephone number and the day and time of the pickup of the trade waste removal business presently serving the establishment, or if the commercial establishment removes its own waste, a registration 6 [* 8] number issued by the New Y o r k city trade waste commission shall be posted. Such sign or registration number shall be prominently displayed by affixing it to a window near the principal entrance to the commercial establishment so as to be easily visible from outside the building. If this is not possible, such sign or permit shall be prominently displayed inside the commercial establishment near the principal entrance to the premises. Administrative Code 5 16-116. This Action The dispute between the parties regarding the interpretation of t h e statutory and regulatory scheme focuses on three areas: first, the meaning of the phrase "commercial establishment," as used in sections 16-116, 16-501, and 16-505 of the Administrative Code in defining trade wastes; second, the significance of the language governing the exception from licensing for collection of trade wastes; and finally, the extent, if any, of B I C ' s discretion to deny an exemption from the licensing requirement. Commercial Establishment The term "commercial establishment" is used repeatedly in L o c a l Law 42, both in defining trade wastes, directing who must obtain a licensed waste hauler, and stating who must obtain a license, or an exemption from licensing, for removal of waste. Nowhere in the Administrative Code is the term "commercial establishment" defined. In its amended complaint, Rapid posits that commercial establishments are establishments such as retail stores, 7 [* 9] restaurants, mercantile, manufacturing, and similar establishments. See Amended Complaint, ¶ 22. Rapid contends that occupants of residential premises and other non-commercial premises3 are not required to comply with section 16-116 with respect to the removal of their wastes; that C&D wastes generated at such locations do not constitute trade wastes, pursuant to section 16-501; and that such C&D wastes are not governed by the licensing requirements of section 16-505. Since, according to Rapid, it only removes C & D debris from residential and other noncommercial premises, it is not required to obtain a license from BIC o r to o b t a i n an exemption from the licensing requirements. BIC argues that the term llcommercialestablishment" r e f e r s to the entity involved in the generation of waste, and n o t the location of the waste. Therefore, waste resulting from a construction or demolition project carried out by a contractor is encompassed by the licensing scheme, because the contractor constitutes the "commercial establishment responsible for removing its wastes," regardless of whether the project was located at a business or a residence. According to BIC, even where the waste is generated by a do-it-yourself homeowner, who merely hires a carting company to provide bins and remove the debris, the carter constitutes the "commercial establishment" In the letter accompanying billing receipts submitted to BIC pursuant to stipulation, Francine Najjar indicates that Rapid services Kingsboro Pyschiatric Center. 8 [* 10] responsible for removing wastes, Generally, an agency's interpretation of the statute and regulations under which it functions is given great deference if that interpretation is not unreasonable or irrational. Matter of S a l v a t i v E i m i c k e , 7 2 NY2d 7 8 4 , 791 ( 1 9 8 8 ) ; Matter o f A r i f v N e w York C i t y T a x i and Limousine C o m m n . , 3 AD3d 345, 346 (' Dept 1' 2004). At least to the extent that BIC interprets the phrase "commercial establishment" to apply to the entity that generates the waste, the court-does not find B I C ' s interpretation to be either irrational or unreasonable. Thus, a commercial contractor which carries out either construction or demolition, and contracts to have the wastes removed from the site, constitutes a "commercial establishment" for the purposes of the scheme, the wastes generated constitute trade wastes, and the licensing provisions are triggered. There is no need for the court to rule on the interpretation urged by BIC, that the carter constitutes the "commercial establishment" when the wastes are generated by a do-it-yourself homeowner, or to opine on whether such an interpretation can withstand scrutiny, in light of the fact that, the provision which defines "trade waste" as putrescible and non-putrescible substances that are "discarded or rejected by a commercial establishment" focuses on the generation of those wastes, rather 9 [* 11] than merely on the entity that carts them away for disposal. N o r does the court opine on Rapid's argument, premised on the assumption that a business of disposing of trade wastes is not covered by Local Law 42 where it is solely in the business of delivering waste bins to homeowners to haul away the C&D material generated in the course of their own do-it-yourself projects. T h a t is not the case here. For, even assuming that Rapid only picks up C&D material generated at residences, the receipts submitted by Rapid, pursuant to its stipulations with BIC, demonstrate that, at those sites, it regularly picks up materials that a r e generated by commercial construction or demolition contractors. Exception to Liaensing Requiremmnts Rapid contends that, because neither Francine Najjar, nor her husband Joseph Najjar, has ever been engaged in the class seven or the class three category of licenses, and neither has been a principal in a business required to be licensed, Rapid is exempt from the licensing requirements of section 16-505 of the Administrative Code, and need not file an application for exemption. Rapid's argument turns on the following language in section 16-505 (a) which sets forth those entities exempt from the In any case, Rapid's receipts also suggest that it also p i c k s up wastes at some commercial locations, as its amended complaint suggests at paragraph 5. 10 [* 12] licensing requirements: Notwithstanding the provisions of this subdivision, a business solely engaged in the removal of waste materials resulting from building demolition, construction, alteration or excavation shall be exempt from the licensing provisions of this subdivision where, except in regard to the principals of a business solely in either or both of the class seven or the class three category of licensees as defined in rules previously promulgated by the commissioner of consumer affairs pursuant to subchapter eighteen of chapter two of title twenty of this code, no principal of such applicant is a principal of a business or a former business required to be licensed pursuant to this chapter or such former subchapter eighteen. According to B I C ' s interpretation of the provision, any business engaged solely in the removal of C&D materials need not obtain a trade waste license, so long as the principal of that business is not, or was not, the principal of a business required to be licensed pursuant to Local Law 4 2 . The exception to the exemption from licensing does not apply, however, to companies whose principals were also the principals of another C&D business. Plaintiff's request for relief b e f o r e this c o u r t , however, is not that BIC erred by not determining Rapid's licensing exemption application. Rapid goes further, and asserts that because its business and principal fall within the exemption language, it need not even a p p l y f o r an exemption from licensing. In so arguing, Rapid a p p e a r s to ignore the following sentence in section 16-505, which is quite clear, and which states: 11 _.. ...- -. . . . . . ._. . -- [* 13] Grant of such exemption shall be made by the commission upon its review of an exemption application, which shall be in the form and contain the information prescribed by rule of the commission and shall be accompanied by a statement by the applicant describing the nature of the applicant's business and listing all principals of such business. Administrative Code 5 16-505 (a) (emphasis supplied). Accordingly, a business which argues it is exempt from tile licensing requirement, must seek that exemption by applying and providing the information mandated pursuant to 17 RCNY 5 2-03. If the exemption is granted, the business will be issued a registration. See Administrative Code § 16-507 (a), which refers specifically to " a business issued a registration by reason of the grant of an exemption from the requirement for a license pursuant to section 16-505 of this chapter." Furthermore, since, as Rapid indicates, its business encompasses the actual construction and demolition of buildings, and the removal of that C&D material which it generates, Rapid is required to register as a self-hauler, pursuant to section 16-505 (b) which states: "[i]t shall be unlawful for any person to remove, collect or dispose of trade waste that is generated in the course of operation of such pelrsonls business . . . without first having registered with the commission." Therefore, Rapid's argument that it need not even apply for an exemption from the licensing requirement fails. 12 [* 14] B I C ' s Authority Regarding Lieenee Exemptions Finally, in its third cause of action, Rapid contends that once it has applied f o r an exemption from licensing pursuant to section 16-505, BIC is required to grant the exemption. Rapid relies on the language of section 16-505 ( a ) which states: "Grant of such exemption shall be made by the commission upon its review of an exemption application . . . . ' I The Appellate Division has recently rejected the argument that grant of such an exemption is mandatory, stating: * Administrative Code § 16-509 ( b ) permits the BIC to "refuse to issue a license o r r e g i s t r a t i o n to an applicant . . . who has knowingly failed to provide the information and/or documentation required by the [BIC]" . . . (emphasis added). In sum, the BIC may "review" the application for an exemption registration (Administrative Code § 16-505 [ a ] ) , may investigate any matter within its jurisdiction (Administrative Code 5 16-504 [c]), and may deny such application in those cases where the applicant fails to provide the necessary information, o r knowingly provides false information (Administrative Code 5 16-509 [b]). Matter of Attonito v Maldonado, 3 AD3d 415, 418 ( l n Dept 2004). t Therefore, Rapid's argument that BIC must grant an exemption on the mere filing of an application fails. 13 [* 15] Accordingly, it is hereby ORDERED that defendants' motion for a summary judgment i s g r a n t e d , and the complaint is dismissed; and i t i s further ORDERED that p l a i n t i f f ' s cross motion is d e n i e d ; and it is further ORDERED that the C l e r k shall e n t e r judgment accordingly. Dated: N e w York, New York November 8 , 2 0 0 4 ENTER: Copies mailed .Am. 14
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