ANR v. Colacecci ( 2016 )

STATE OF VERMONT
SUPERIOR COURT ENVIRONMENTAL DIVISION
Environmental Division Unit Docket No. 65-5-12 Vtec
23-3-15 Vtec
Agency of Natural Resources,
Petitioner
v.
DECISION ON MOTION and
DECISION ON THE MERITS
Robert Colaceci,
Respondent
The present matter concerns two administrative orders (AOs) issued by the Vermont
Agency of Natural Resources (ANR) for alleged violations at Respondent Robert Colaceci’s used
tire facility and auto repair business on Route 15 on the Wolcott/Hardwick town line. ANR issued
the first AO in 2012 (the 2012 AO), and Mr. Colaceci timely requested a hearing (Docket No. 65-
5-12 Vtec). ANR served the second AO on Mr. Colaceci on March 17, 2015 (the 2015 AO). Mr.
Colaceci failed to request a hearing on that AO within fifteen days as required by statute. See 10
V.S.A. § 8012(c). The Court issued an order on April 16, 2015, at which point the 2015 AO became
a final judicial order. See 10 V.S.A. § 8008(d)(2). After lengthy procedural delays, the Court held
a hearing on the 2012 AO on May 15, 2015. On May 26, 2015, Mr. Colaceci filed a motion to
reopen the 2015 AO and to dismiss both enforcement actions (Docket No. 23-3-15 Vtec). That
motion, along with the merits of the 2012 AO, are now before the Court. ANR is represented by
Attorney John Zaikowski in these matters. Mr. Colaceci is self-represented.
Procedural Background
The 2012 AO alleges that Mr. Colaceci violated conditions of his solid waste management
facility certification, the Vermont Solid Waste Management Rules (VSWMR), and the Vermont
Hazardous Waste Management Rules (VHWMR). In the 2012 AO, ANR assessed a $54,000
penalty and ordered Mr. Colaceci to undertake various measures to bring his facility into
compliance. Mr. Colaceci timely requested a hearing on the 2012 AO.
Around the time the 2012 AO was served, Mr. Colaceci was undergoing Chapter 13
bankruptcy proceedings in the U.S. Bankruptcy Court for the District of Vermont. Ordinarily,
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debtors in bankruptcy enjoy an automatic stay of all litigation, but certain “police and regulatory”
actions are not subject to the automatic stay. See 11 U.S.C. § 362(a), (b). ANR therefore sought
an order from the U.S. Bankruptcy Court that the 2012 AO could continue under this “police and
regulatory” exception. See 11 U.S.C. §362(b). On February 18, 2014, the Bankruptcy Court
authorized ANR to proceed with the 2012 AO, but “only insofar as it may order Debtors to take
remedial actions or to come into compliance with applicable provisions.” In re Colaceci, No. 12-
10382cab, at 1 (Bankr. D. Vt. Feb. 18, 2014). The Bankruptcy Court specifically ordered that “the
Agency of Natural Resources is enjoined from seeking to enforce or reduce to judgment any civil
penalties sought in connection with the [2012 AO].” Id.Meanwhile, Mr. Colaceci’s solid waste facility certification—the permit that authorizes
him to accept used tires as solid waste, which ANR alleged he violated in the 2012 AO—was set
to expire in September 30, 2014. One of the conditions of his certification was that Mr. Colaceci
file a renewal application by April 2014. Mr. Colaceci failed to do so. He eventually submitted a
renewal application on September 30, 2014, which ANR received on October 3, 2014. ANR
deemed the application to be “administratively incomplete” and did not grant the renewal.
On October 13, 2014, ANR sent Mr. Colaceci a notice of alleged violation for continuing
to operate his facility without a certification. Mr. Colaceci did not respond. In November of 2014,
ANR sent Mr. Colaceci a letter stating that it intended to draw upon an $8,000 escrow account
that Mr. Colaceci established in 2009 as part of his original certification, and which was dedicated
to fund closure of the facility. In January of 2015, an ANR inspector toured Mr. Colaceci’s
property, accompanied by Mr. Colaceci, to observe his facility. In February, ANR drafted its
second AO, alleging that Mr. Colaceci was continuing to operate his facility without a permit, and
posted it for public comment, as required by 10 V.S.A. § 8020. On February 25, 2015, ANR moved
to continue the merits hearing on the 2012 AO, which had been set for March 11, on the basis
that it was planning to serve Mr. Colaceci with a second AO in the near future, and that this
second AO could affect the relief it sought under the 2012 AO. ANR sent copies of that motion
to Mr. Colaceci. The Court granted the motion, noting ANR’s rationale, and sent copies of the
order to Mr. Colaceci.
ANR finally served the second AO on Mr. Colaceci on March 17, 2015 (the 2015 AO). ANR
filed a sheriff’s return of service with the Court showing that the Lamoille County Sherriff’s Office
served this AO on Mr. Colaceci on March 17, 2015. In the 2015 AO, ANR alleges that Mr. Colaceci
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continued to operate his facility after his solid waste facility certification expired on September
30, 2015. It orders Mr. Colaceci to “[i]mmediately cease operation of the facility” and to
“implement the facility closure plan.” It also orders Mr. Colaceci to provide ANR with the account
number for the $8,000 escrow account at Chittenden Bank dedicated to closing his facility. Mr.
Colaceci did not request a hearing on the second AO within fifteen days as required by statute.
See 10 V.S.A. § 8012(c). The Court issued a judgment order on April 16, 2015, at which point the
2015 AO became a final judicial order. See 10 V.S.A. §§ 8008(d), 8012(c).
On May 15, 2015, the Court held a site visit followed by a one-day merits hearing on the
2012 AO. Mr. Colaceci and ANR participated in the hearing.
On May 26, 2015, Mr. Colaceci filed a “motion to reopen” and a request for a hearing on
the 2015 AO. Mr. Colaceci also moved to dismiss the 2015 AO on grounds that ANR unfairly
refused to process his certification renewal application, and that closing his facility would violate
his Chapter 13 plan. Finally, Mr. Colaceci moved to dismiss both AOs on grounds of selective
prosecution.
Concerned that the remedy ANR sought under the 2015 AO might go beyond the scope
of the “remedial actions” authorized by the Bankruptcy Court, the Court held a hearing on Mr.
Colaceci’s motion, with particular attention to Mr. Colaceci’s arguments that the 2015 AO would
violate his Chapter 13 plan.1 At the conclusion of the hearing, the Court ordered ANR to seek
authorization to pursue the 2015 AO from the Bankruptcy Court.
On April 13, 2016, the U.S. Bankruptcy Court issued an order authorizing ANR to seek
closure of Mr. Colaceci’s facility. In re Colaceci, No. 12-10382cab, at 1 (Bankr. D. Vt. Apr. 13,
2016). It also authorized ANR to access the $8,000 escrow account at Chittenden Bank dedicated
to closure of Mr. Colaceci’s facility. The Bankruptcy Court’s order continued to enjoin ANR from
pursuing monetary penalties. Id.
Because the Bankruptcy Court’s order clarifying the scope of the “remedial actions” ANR
is allowed to take alleviates the Court’s concerns regarding Mr. Colaceci’s Chapter 13 plan, Mr.
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The Court did not hold a full hearing on Mr. Colaceci’s Rule 60(b) motion because he did not request
one. See Altman v. Altman, 169 Vt. 562, 586 (1999) (“We have held that the court deciding a Rule 60(b) motion
should hold a hearing where there has been a dismissal in the nature of a default or nonsuit. Nevertheless, our
rules plainly require that a moving party who wishes to present evidence must submit a request for a hearing with
the motion or within five days thereafter, together with a statement of the evidence offered.” (citations omitted)).
Mr. Colaceci requested a hearing on the underlying 2015 AO, but he did not request a hearing on his motion, or
offer a specific statement of evidence related to the motion. See Respondent’s Request for a Hearing at 1, filed
May 26, 2015.
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Colaceci’s motions to reopen the 2015 AO appeal, as well as the merits of the 2012 AO appeal
are now ripe for review. The Court will address Mr. Colaceci’s motion to reopen the 2015 AO
before turning to the merits of the 2012 AO appeal.
Request to Reopen, Request for a Hearing, and Motion to Dismiss All Enforcement Actions
Mr. Colaceci has moved to reopen the 2015 AO and has requested a hearing. Under Rule
4(a)(2) of the Vermont Rules of Environmental Court Proceedings, which governs enforcement
matters before the Court, the Vermont Rules of Civil Procedure and the Vermont Rules of
Appellate procedure apply to enforcement matters unless another procedure is expressly
provided in the V.R.E.C.P. There is no explicit procedure in V.R.E.C.P. 4 for requesting a hearing
on an AO that has already become a final judicial order. When a respondent fails to request a
hearing on an AO, the resulting judgment is akin to a default judgment; as such, Rule 55
(governing relief from default judgments) is applicable to a request to reopen an administrative
order in which no hearing has been held.2
Rule 55(c) provides that “the court may set [a default judgment] aside in accordance with
Rule 60(b) and not otherwise.” Under Rule 60(b), the court may relieve a party from the effects
of judgment in the case of: (1) excusable neglect; (2) newly discovered evidence; (3) fraud; (4)
void judgment; (5) discharged judgment; or (6) “any other reason justifying relief from the
operation of the judgment.” In the context of a default judgment, courts should be particularly
lenient in applying this standard because of the law’s strong preference for decisions on the
merits. Ying Ji v. Heide, 2013 VT 81, ¶ 6, 194 Vt. 546.
Interpreted generously, Mr. Colaceci’s motion invokes prongs 1, 4, and 6. He argues that
the judgment under the 2015 AO is void because of improper service of process of the AO, stating
that he “ha[s] no present recollection of being served any administrative order.”3 Respondent’s
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Unlike matters that come before this Court under 10 V.S.A. § 8504, a hearing on an administrative order
is not an “appeal” of a decision by ANR so much as it is a first-impression hearing on the order. Compare 10 V.S.A.
§ 8504 (titled “Appeals to the Environmental Division”) with 10 V.S.A. § 8012 (titled “Request for a Hearing”). The
Court generally applies Vermont Rule of Appellate Procedure 4(d) to late appeals under 10 V.S.A. § 8504. See, e.g.,
In re Davis WW/WS Permit, No. 167-11-14 Vtec, slip op. at 1 (Vt. Super. Ct. Envtl. Div. Feb. 18, 2015). Rule 4(d)
would preclude Mr. Colaceci’s request here, however, because a party may only move to extend an appeals
deadline for 30 days after the original deadline. V.R.C.P. 4(d). Rule 60(b), however, allows a party to move for
relief from judgment for one year after the judgment is entered.
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Mr. Colaceci adds that “[t]he only documents served on me were recently by the Lamoille County
Sheriff’s Department.” Respondent’s Response at 1, filed June 15, 2015. It is unclear what documents Mr.
Colaceci is referring to by this comment, but it is entirely possible that it was actually the 2015 AO, which the
Lamoille County Sherriff’s Deputy attests to having served in March 2015.
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Resp. to Secretary’s Mem. at 1, filed June 15, 2015. He argues excusable neglect, offering that
“perhaps some documents fell through the cracks” because his wife primarily handles paperwork
for the household, and she has been sick with cancer for some time. Id. Finally, he invokes the
sixth catch-all prong, arguing that it would be unjust to enforce the judgment because closing his
facility would harm his creditors. Finally, Mr. Colaceci’s motion also attacks the merits of the
2015 AO, arguing that ANR deliberately refused to process his renewal application; that ANR is
selectively prosecuting him; that ANR improperly interfered with a business contract; that he has
not, in fact, accepted used tires since his certification expired; that he does not need a
certification to sell used tires to his auto repair customers; and that all tires on his facility are in
trailers, which do not require solid waste facility certification.
a. Rule 60(b)(4): Voidness of the Judgment
We turn first to Mr. Colaceci’s assertion that he was not served with the 2015 AO. Where
there has been no proper service of process against a defendant and the defendant has not
waived service of process, there is no personal jurisdiction over the defendant, and a default
judgment against the defendant is void. See 10A Wright, Miller & Kane, Federal Practice and
Procedure: Civil 3d § 2695; id. § 2862. Where there has been no service of process, a defendant
may therefore move for relief from a default judgment under Rule 60(b)(4) on grounds that the
judgment is void. 10A Wright, Miller & Kane, supra § 2862; see also Blodgett Supply Co. v.
Lowery, No. 2005-141, 2005 WL 6152378, at 1 (Vt. 2005) (mem.).
A sheriff’s return of service is prima facie evidence of proper service if it identifies the
address of service and the person served. See Blodgett, 2005 WL 6152378, at *1 (citing Taft v.
Donellan Jerome, Inc., 407 F.2d 807, 808–09 (7th Cir. 1969)). A defendant’s sworn denial of
receipt of service will overcome the presumption created by a sheriff’s return of service, but only
if the defendant swears to “specific facts to rebut the statements in the process server’s
affidavits.” Old Republic Ins. Co. v. Pac. Fin. Servs. of Am., Inc., 301 F.3d 54, 57 (2d Cir. 2002)
(quoting Simonds v. Grobman, 277 A.D.2d 369, 369 (N.Y. App. Div. 2000)). Furthermore, the
Vermont Supreme Court has held that lack of technical service of process in a suit does not render
a default judgment void where a defendant has actual notice of a pending suit. Myers v. Brown,
143 Vt. 159, 167 (1983).
Here, ANR submitted a sheriff’s return of process to the court when it filed its 2015 AO.
That return of service states that the Lamoille County Deputy Sheriff served Mr. Colaceci in hand
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at 7013 Route 15 in Wolcott, Vermont. This is prima facie evidence of proper service. Mr.
Colaceci equivocally denies service, stating that he has “no present recollection of being served.”
Respondent’s Resp. at 1, filed June 15, 2015. He offers no “specific facts” to rebut the sheriff’s
return of service, however, and thus fails to rebut the presumption that service was proper. See
Old Republic, 301 F.3d at 57.
Furthermore, the 2015 AO should not have come as a surprise to Mr. Colaceci. In the fall
and winter of 2014 and 2015, Mr. Colaceci had five distinct indications that a second AO was
imminent: in October 2014, ANR sent him a notice of alleged violation (which it has no obligation
to do, see 10 V.S.A. § 8006(a)); in November, ANR sent him a letter stating that it was drawing on
his facility-closure escrow account; in February, it moved to continue the hearing on the 2012
AO, explaining that it was planning to serve a second AO on Mr. Colaceci, and ANR sent a copy of
that motion to Mr. Colaceci; and, finally, the Court issued an entry order granted ANR’s motion
to continue and noting that a second AO was imminent, and mailed a copy of that entry order to
Mr. Colaceci. At the very least, Mr. Colaceci had constructive notice that a second AO was
imminent. In this context, Mr. Colaceci’s equivocal denial of service is not sufficient to rebut the
sheriff’s return of service or the layers of constructive notice. Therefore, we conclude that the
judgment is not void for lack of service.
b. Excusable Neglect
Mr. Colaceci argues that the 2015 AO may have slipped through the cracks due to his
wife’s and his son’s illness. When a party seeks relief from a default judgment on grounds of
excusable neglect, the court must consider whether neglect is excusable considering: (1) the
degree of defendant’s culpability (2) the prejudice to the non-defaulting party caused by the
defaulting party’s delay; (3) whether the defaulting party raises material issues of fact or
meritorious defenses; and (4) the significance of the interests at stake. LaFrance Architect v.
Point Five Development S. Burlington, LLC, 2013 VT 115, ¶ 15, 195 Vt. 543.
As to the first factor, Mr. Colaceci is culpable for his failure to timely respond to the 2015
AO. As discussed above, he had ample notice throughout the fall and winter of 2014 and 2015
that a second AO was forthcoming. Not only did Mr. Colaceci fail to timely request a hearing on
the 2015 AO, but he failed to promptly move for relief—his 60(b) motion comes seventy days
after he was first served with the AO and fifty-five days after the deadline to request a hearing
on the 2015 AO. While the Court is sympathetic to Mr. Colaceci’s wife’s illness and to Mr.
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Colaceci’s financial difficulties, these difficulties do not absolve him of his responsibility to
respond to legal matters in a timely fashion, especially when he has ample warning of the need
to respond.
As to the second factor, ANR has suffered unusual prejudice due to Mr. Colaceci’s delay
in this matter. ANR specifically moved to continue the merits hearing on the 2012 AO because
the pending 2015 AO could affect the relief sought in the first enforcement action. Had Mr.
Colaceci timely responded to the 2015 AO, the two AOs could have been coordinated and
considered in a single trial. If the Court were to grant Mr. Colaceci’s request for a hearing on the
2015 AO, ANR would be forced to undergo significant effort and expense that could have been
avoided by timely response.
As to the third factor (regarding meritorious claims or defenses), in his motion, Mr.
Colaceci asserts that ANR unfairly refused to process his renewal application, that ANR is
selectively prosecuting him, and that an ANR agent interfered with a lucrative business contract
and caused his bankruptcy. Reading his motion generously, he also challenges the substance of
the alleged violation and invokes two exceptions to the Solid Waste Management Rules’
certification requirement—the recycling exception and the transport exception. See VSWMR
§§ 6-301(b)(4), (7).
ANR’s decision not to renew Mr. Colaceci’s solid waste facility certification occurred on
October 3, 2014. This decision was appealable under 10 V.S.A. § 8504. Mr. Colaceci did not
appeal the decision. It is therefore final and binding, and cannot be challenged here. Mr.
Colaceci’s motion also fails to make out a prima facie case of selective prosecution. While he
does allege that others similarly situated have not been prosecuted for conduct similar to his, he
has not shown or alleged impermissible motives on the part of ANR (such as race, religion, or his
exercise of constitutional rights), a necessary element of a selective prosecution defense. See
State v. Zaccaro, 154 Vt. 83, 92 (1990). And, while Mr. Colaceci’s allegations that an ANR agent
interfered with a business contract might state a valid tort claim, that claim is not a defense in an
enforcement action. Finally, though Mr. Colaceci implicitly invokes two valid exceptions to the
permit requirement, he offers no facts or legal arguments as to why he qualifies for these
exceptions.4
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The recycling exception excepts “[r]ecycling facilities which accept, aggregate, store and/or process less
than 50 tons of recyclable materials per year. VSWMR § 6-301(b)(4). Mr. Colaceci has not alleged that he meets
this tonnage requirement or that he is a “recycling facility.” The transport exception exempts “Mobile Sold Waste
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Turning to the fourth factor, the Court does register some concern about the weight of
the interests at stake. The AO seeks a broad remedy—it orders Mr. Colaceci to “cease operation
of his facility.” This penalty is serious. Furthermore, the violation alleged in the 2015 AO is that
Mr. Colaceci is continuing to operate his facility despite his expired solid waste facility
certification. It does not allege any other substantive violation of the Vermont Solid Waste
Management Rules or Vermont Hazardous Waste Management Rules. Thus, this second AO
essentially arises out of ANR’s own decision to deny Mr. Colaceci’s renewal application, and the
AO itself is silent as to the reasons for denying that application.
While the Court registers some concern that it does not know the reasons for ANR’s denial
of Mr. Colaceci’s September 2014 renewal application, we note that Mr. Colaceci could have
avoided this entire situation had he timely filed a renewal application for his solid waste facility
certification in April of 2014. He ultimately filed a renewal application on the very day his
certification was set to expire. This allowed no cushion for addressing deficiencies in his facility
or his application. Any imbalance between the severity of the violation alleged in the 2015 AO
(failure to recertify) and the remedy sought (closure) is therefore partly due to Mr. Colaceci’s
own neglect.
The Court has been sympathetic to Mr. Colaceci’s family’s financial and medical
difficulties. But, even with these difficulties, Mr. Colaceci’s failure to promptly respond to the
2015 AO is not excusable given the degree of warning leading up to the 2015 AO. Given that
three of the four factors weigh against Mr. Colaceci, and that the fourth weighs but little in his
favor, the Court concludes that Mr. Colaceci’s neglect is not excusable, even in the more lenient
and equitable context of a default judgment. The Court therefore rejects his motion as to Rule
60(b)(1).
c. “Any other reason”
Rule 60(b) contains a final “catchall” provision, allowing a court to vacate a judgment for
“any other reason” it deems just. V.R.C.P. 60(b). The “other reasons” Mr. Colaceci identifies are
Collection Operations” if the vehicle is registered and inspected, the vehicles used prevent release of solid wastes,
and the solid wastes collected are delivered to a solid waste management facility within 48 hours of collection.
V.S.W.M.R. § 6-301(b)(7). Mr. Colaceci appears to acknowledge that his tire trailers lack proper registration. In
any evident these trailers appear to have been on his property for a long period of time—they do not deliver tires
to a certified facility within 48 hours.
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that he is “judgment-proof” and that closing his business will harm his creditors in his Chapter 13
proceedings.
The Bankruptcy Court has enjoined ANR from seeking monetary penalties, and ANR seeks
none in the 2015 AO. The fact that Mr. Colaceci is “judgment-proof” is therefore not relevant to
this enforcement action. Mr. Colaceci claims that Chittenden Bank has taken the escrow account
established for the ultimate closure of his facility and that he therefore has no funds to comply
with the closure order. Respondent’s Mot. to Reopen at 2. But this does not excuse him from
the responsibility of providing ANR with the account number for his escrow account, as required
in the 2015 AO, so that ANR can confirm or deny this claim. Furthermore, the Bankruptcy Court
has authorized ANR to pursue enforcement of the 2015 AO, even though it seeks to close the
facility and claim the $8,000 escrow account. Mr. Colaceci’s proffered reasons do not entitle him
to relief under Rule 60(b)(6).
In conclusion, the judgment in the 2015 AO is not void for lack of service of process, Mr.
Colaceci’s neglect in responding to the 2015 AO is not excusable, and there are no other reasons
to justify relieving him from judgment under the 2015 AO. The Court therefore DENIES Mr.
Colaceci’s request to reopen and request for a hearing. Because the 2015 is a final and binding
judgment that the Court will not revisit, the Court also DENIES Mr. Colaceci’s motion to dismiss
the 2015. The 2015 AO stands as a valid judicial order.
Merits of the 2012 AO
ANR issued the 2012 AO on May 15, 2012, ordering that Mr. Colaceci pay a $54,000
penalty and to take the following steps to bring his facility into compliance: (1) cease burning
used oil; (2) sample and test his stored used fuel oil; (3) move all used tire piles at least 10 feet
from his property line; (4) build tire bunkers for his used tires; (5) post a copy of his facility
management plan on-site; (6) refrain from storing solid waste on his property without a
certification; (7) submit quarterly reports and franchise tax returns; (8) label used oil containers
and store them on impervious surfaces; (9) hire an environmental consultant to develop a work
plan for investigating and remediating contaminated areas, and complete the necessary
remediation work; and (10) remove junk vehicles from the property.
The Court ultimately held a full merits hearing on the 2012 AO on May 15, 2015, and the
merits of that AO are now under advisement. Given the Court’s decision not to reopen the 2015
AO which orders Mr. Colaceci to close his facility in accordance with a facility closure plan,
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however, the remedies sought in the 2012 AO are now unnecessary. The 2012 AO also seeks a
monetary penalty, which, pursuant to the Bankruptcy Court’s order, the Court is not authorized
to impose. The merits of the 2012 AO are therefore MOOT.
Conclusion
We DENY Mr. Colaceci’s motion for relief from judgment under Rule 60(b), and decline to
hold a hearing on the merits of the 2015 AO. The 2015 AO therefore stands as a valid judicial
order, and Mr. Colaceci must comply with its provisions. In light of this decision, the relief sought
in the 2012 AO is MOOT.
This concludes the matters before the Court. A judgment order accompanies this
decision.
Electronically signed on August 19, 2016 at 02:23 PM pursuant to V.R.E.F. 7(d).
_________________________________________
Thomas G. Walsh, Judge
Superior Court, Environmental Division
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