The Legal Beat

The Legal Beat: Manhattan Beer Sues Contractors Seeking $2 Million For Negligent PCB and VOC Spill At Suffern Site; Benbrooke Sues Absent Tenant

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Mishandling of PCB-filled Electrical Transformers At Construction Site Causes $2.55 Million In Damages And Environmental Remediation Costs

Suffern-based Manhattan Beer Distributors in a lawsuit filed last week in Rockland County Supreme Court alleged its construction contractor, its demolition subcontractor and a Congers-based electrical contractor contaminated its Suffern facility with dielectric fluid containing Polychlorinated Biphenyls (PCBs) and volatile organic compounds (VOCs) including chlorobenzene. Manhattan Beer is seeking more than $2 million in clean-up and remediation costs related to the spill.

In 2021, Manhattan Beer Distributors, LLC, a beverage distributor, began a $50 million expansion and modernization of its facility at 20 Dunnigan Drive in Suffern. It hired Newtown, Connecticut-based Claris Construction, Inc. as construction manager for the project. Claris hired Yonkers, NY-based State Contracting as a demolition subcontractor for the property.

According to the complaint, Manhattan Beer hired Congers-based All Phase Electric to “de-energize, remove, and lawfully dispose” of two liquid-filled electrical transformers containing dielectric fluids which contain PCBs. As part of its contract, it was to drain and safely arrange for the transportation and disposal of the fluids and the transformers.Manhattan Beer Suffern

The complaint alleges All Phase disconnected the transformers, but failed to drain them, label them as hazardous, and remove them safely from the facility.

Claris engaged State Contracting, its demolition contractor, to remove the transformers and in using heavy equipment State broke the transformers, causing the spill of PCBs and VOCs, which contaminated the property, the soil, the concrete and building materials on site. The complaint also faults Claris and State for not taking proper steps to contain, control and remediate the spill.

PCBs are man-made chemicals previously used in electric transformers, which were banned in the United States in 1977. They do not easily break down and remain in the environment for an extended period of time. They are a known carcinogen and are also believed to be responsible for development problems in children, and harm to the immune, reproductive and endocrine systems in humans. Chlorobenzenes are volatile organic compounds found in degreasers, solvents, and other chemicals and cause damage to the nervous system, liver, kidneys and the immune system. Both are highly regulated and spills must be reported to state and federal authorities.

According to the New York State Department of Environmental Conservation spill database, a spill of 30 gallons of PCB oil was caused by “human error.”

The complaint alleges the plaintiffs hired an environmental remediation company to remediate the damage and had to bear the costs of the clean-up including the costs of transporting contaminated building and other materials to an off-site hazardous waste facility. It also charges delay in the project caused by the environmental spill.

Despite a recovery from its insurer of $550,000, plaintiff Manhattan Beer says the costs of remediation far exceeded its insurance recovery and is seeking an additional $2 million dollars from defendants. The suit charges negligence, breach of contract, nuisance, and breach of the standard of care related to the handling of PCBs and VOCs.

Plaintiff is joined in the suit by the title owner of the property Stef Two Realty, LLC. Plaintiffs are represented by John-Patrick Curran of NYC-based Sive, Paget & Riesel, PC.

Shopping Center Owner Benbrooke Tappan Sues O2 Korean BBQ For Abandoning Its Lease

The owner of a shopping center on Route 303 in Tappan filed a lawsuit in Rockland County Supreme Court against a Korean BBQ restaurant and two guarantors of its lease, charging the restaurant breached its lease by failing to draw plans or secure permits for construction after the shopping center owner approved its plans, improved the premises, and paid a real estate brokerage fee. In short, plaintiff charges the Korean BBQ abandoned the leased premises without ever having submitted plans to obtain permits to build out its space.

Benbrooke TappanBenbrooke Tappan, LLC, owner of a shopping center on Route 303 in Tappan, leased 4,545 square feet of space in April of 2023 to O2 Tappan Corporation to be used as a Korean BBQ restaurant. The lease agreement was guaranteed by Sung Ho Cho (individually) and Galaxy Bar & Grill Restaurant, Inc.

The lease term was for 10 years with base rent of $9,090 per month for the first year with periodic increases. Tenant was also responsible for operating costs and taxes in the amount of about $3,000 monthly.

According to the lawsuit, and under the lease, rent was not due until six months after the landlord completed about $75,000 in upgrades to the space and approved the tenant’s building plans for the space. Tenant was then required to submit plans and start the process of securing permits within five days after landlord approved the plans.

The complaint alleges the tenant never prepared or submitted plans for approval and by failing to do so, breached the lease.

Benbrooke claims it spent $75,000 on improvements and about $22,000 in brokerage fees. It is asking the court to award a judgment for the cost of the improvements and the brokerage fees, and to hold the tenant and the two guarantors responsible for the monthly rent until Benbrooke is able to re-lease the space, and for any shortfall if the new lease yields the landlord less than the Korean BBQ lease.

Benbrooke is also seeking legal fees. According to the complaint, the tenant paid Benbrooke $36,000 toward a security deposit and first month’s rent under the lease.