ANR v. Second City Prop, LLC ( 2013 )


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  •                                             State of Vermont
    Superior Court—Environmental Division
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    ENTRY REGARDING MOTION
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    ANR v. Second City Prop., LLC & Second City, LLC                                   Docket No. 100-7-11 Vtec
    (ANR Enforcement Emergency Order)
    Title: Motion for Sanctions (Filing No. 5)
    Filed: June 18, 2012
    Filed By: Petitioner Agency of Natural Resources
    Response: None
    X Granted                           Denied                            Other
    This matter relates back to a July 19, 2011 Stipulated Emergency Order. Respondents
    have failed to comply with the July 19 Order and several more recent orders. The Court held a
    hearing on the pending motion for post-judgment sanctions on August 2, 2012. This Entry
    Order expresses the findings and order rendered on the record at the conclusion of the in-
    person hearing.
    On October 24, 2011, the Vermont Agency of Natural Resources (ANR) petitioned the
    Court for an order to show cause why Second City Property, LLC and Second City, LLC
    (Respondents)1 should not be sanctioned for contempt. Following a status conference with the
    parties, the Court continued the December 20, 2011 hearing on the Order to Show Cause to
    allow Respondents time to complete certain activities identified in the Corrective Action Plan
    (the CAP). The hearing reconvened January 23, 2012; February 10, 2012; April 25, 2012; and
    August 2, 2012. The current timeline for completion of the CAP was established in our April 26,
    2012 Order.
    Appearing in these proceedings for ANR is John Zaikowski, Esq. John Ruggiero,
    Manager of Respondents, appeared pro se on behalf of Respondents and participated in the
    December 20, 2011 hearing and the April 25 and August 2, 2012 reconvened hearings. Neither
    Mr. Ruggiero nor any other representative of Respondents was present for the January 23 and
    February 10 hearings.
    On April 5, 2012, ANR filed a Motion for Post-Judgment Sanctions asking that the
    purgeable $250-per-day fine set forth in this Court’s February 16, 2012 Entry Order be imposed
    as a non-purgeable sanction and continue to accrue until completion of the CAP. ANR is asking
    for these sanctions because Respondents have not completed the CAP activities, which include
    excavation and disposal of contaminated soil and installation of a granular iron permeable
    reactive barrier.
    1
    84 Woodstock, LLC was added as a Respondent as part of the Court’s February 16, 2012 Entry Order.
    ANR v. Second City Prop., LLC, No. 100-7-11 Vtec (EO on Motion for Sanctions) (08-09-2012)   Page 2 of 4.
    During the April 25 and August 2, 2012 reconvened hearings, the Court received
    testimony and evidence regarding the lack of progress by Respondents with regard to the CAP
    activities. Mr. Matthew Becker, Environmental Analyst for ANR, testified that he is the ANR
    staffer in charge of tracking CAP activities for this matter. Mr. Becker testified that as of 8:45
    a.m., August 2, 2012, no on-site excavation or off-site barrier installation activities had been
    undertaken. Mr. Becker testified that, although 84 Woodstock Avenue had recently been
    cleared of vegetation and rubbish in preparation for excavation, no excavation work was
    apparent. Mr. Becker also observed a single cut in the concrete slab at 84 Woodstock Avenue,
    presumably also in preparation for excavation.
    The Court also received testimony on behalf of ANR from Mr. Ethan Abatiell, Vice
    President of JAMAC. JAMAC owns the parcels identified as lots 5 and 6 which are adjacent to
    the subject property and front on Harrington Avenue. The granular iron permeable reactive
    barrier is to be installed on lots 5 and 6. Mr. Abatiell testified regarding JAMAC’s negotiation
    with Mr. Ruggiero for the purchase of the two JAMAC parcels. Mr. Abatiell’s testimony was in
    accord with Mr. Ruggiero’s testimony summarized below.
    In response to the testimony offered by ANR, Mr. Ruggiero testified that he has
    renegotiated his contracts with an engineer and an excavation company to perform the CAP
    activities. Furthermore, Mr. Ruggiero testified that he has made arrangements for the disposal
    of the excavated contaminated material. Mr. Ruggiero testified that he has a verbal agreement
    to purchase JAMAC lots 5 and 6, that he has prepared draft deeds for the purchase and shared
    them with Mr. Abatiell, and that last week Mr. Abatiell provided revised deeds acceptable to
    Mr. Ruggiero. Mr. Ruggiero explained that, without first purchasing the JAMAC lots, he does
    not have any right to access the JAMAC lots to install the barrier required by the CAP.
    Mr. Ruggiero acknowledged that Respondents have not completed the CAP. Mr.
    Ruggiero then testified that Respondents are without funds to carry out the CAP activities
    beyond purchasing the JAMAC lots and that this is the reason for the ongoing delay in CAP
    completion. He also stated that he had thought that a real property sale he undertook in April
    would have provided the needed funds; however, he is now contemplating filing bankruptcy
    because sufficient funds were not generated by that sale. Mr. Ruggiero stated that he needs
    approximately $161,000 to complete the CAP.
    At the close of the August 2, 2012 hearing, the Court took a brief recess to allow the
    parties to develop a revised approach for CAP completion. Based on the evidence presented
    during the hearing, the Court also concluded that fines are appropriate in this matter, and we
    discuss those now.
    Section 122 of Title 12 of the Vermont Statutes Annotated provides for the initiation of
    contempt proceedings against any party who violates a court order, regardless of whether the
    case is currently active. 12 V.S.A. § 122. This section does not limit the parties against whom
    contempt proceedings may be initiated, nor does it limit the persons who may be punished for
    their actions that are in contempt of a court order. See Vt. Women’s Health Ctr. v. Operation
    Rescue, 
    159 Vt. 141
    , 145 (1992); Horton v. Chamberlain, 
    152 Vt. 351
    , 354 (1989).
    Compensatory fines and coercive sanctions may be imposed on a civil contemnor;
    however, coercive sanctions must be purgeable, i.e., avoidable by adherence to the court’s
    order. Mann v. Levin, 
    2004 VT 100
    , ¶ 32, 
    177 Vt. 261
     (citing Vt. Women’s Health Ctr., 159 Vt. at
    151); State v. Pownal Tanning Co., 
    142 Vt. 601
    , 603-604 (1983). Further, imprisonment can be
    ANR v. Second City Prop., LLC, No. 100-7-11 Vtec (EO on Motion for Sanctions) (08-09-2012)   Page 3 of 4.
    imposed as a means to compel the party to perform some act ordered by the court. See In re
    Sage, 
    115 Vt. 516
    , 517 (1949); 12 V.S.A. § 123.
    This Court’s February 16, 2012 Entry Order imposed the following purgeable fine:
    a. Beginning on the date of this Order [February 16], and continuing until
    CAP completion, Respondents are hereby sanctioned a $250.00 per day
    fine. This accumulating fine is fully purgeable upon timely completion of
    the CAP . . . .
    This Court’s April 26, 2012 Entry Order continued this sanction unmodified. These prior
    orders provided that should Respondents fail to complete the CAP upon the terms of the
    schedule set forth in the Orders, then the fine will become due upon motion made by ANR, and
    would be payable to the Vermont State Treasurer.
    With the current pending motion, ANR has again sought sanctions against Respondents,
    arguing that Respondents have failed to complete the CAP within the schedule set by the
    Court’s April 26, 2012 Order. ANR has calculated that Respondents are responsible for 100
    days of continuing violations, and, therefore, ANR asks for a fine of $25,000. ANR asserts that
    this level of fine is an appropriate response to Respondents’ failure to complete the CAP and
    will encourage both these Respondents and the regulated community as a whole to comply
    with court orders.
    In response to ANR’s request for sanctions, Mr. Ruggiero argues that full completion of
    the CAP was not within his control until JAMAC was subpoenaed into Court for the April 26,
    2012 hearing, as Respondents were without access to the JAMAC parcels. Mr. Ruggiero argues
    that he believes a $1,000 fine is more appropriate in this matter.
    The Court determines that a FINE of $5,000 is warranted for Respondents’ failure to
    timely complete the CAP, for Respondents’ disregard of this Court’s prior orders to either
    complete the CAP or negotiate with ANR for additional time, and for deterrent value. The
    Court concludes that there are mitigating circumstances which reduce the full fine of $25,000.
    First, the CAP, in part, required work upon land to which Respondents had no access. Mr.
    Ruggiero, on behalf of Respondents, has negotiated for the purchase of these necessary lots, has
    agreed to purchase the lots and is granting ANR full access for CAP completion. Further
    mitigating the level of fine is Respondents’ separate agreement to reimburse ANR for its costs in
    completing the CAP and providing ANR with liens upon real property to secure this
    reimbursement.
    Based upon the foregoing, we find and conclude that Respondents have failed to
    complete the CAP as incorporated into the Court’s July 19, 2011 Stipulated Emergency Order
    and as amended most recently by the Court’s April 26, 2012 Order. ANR’s Motion for Sanctions
    is GRANTED, and we ORDER the following.2
    2
    This Order incorporates the parties’ agreement whereby Respondents will acquire the
    JAMAC lots and ANR will undertake completion of the CAP, and, once the CAP is completed,
    Respondents will reimburse ANR for the costs of the CAP.
    ANR v. Second City Prop., LLC, No. 100-7-11 Vtec (EO on Motion for Sanctions) (08-09-2012)             Page 4 of 4.
    1. Pursuant to the parties’ agreement and as ordered during the August 2, 2012 hearing, on or
    before August 9, 2012, Respondents shall purchase JAMAC lots 5 and 6 located off of
    Harrington Avenue. Respondents shall cause copies of deeds, with the town clerk’s
    notation of the date, book and page of recording, to be both filed with this Court and served
    on ANR. Copies of the recorded deeds shall be mailed to the Court and ANR on or before
    August 10, 2012.
    2. During a recess of the August 2, 2012 hearing, the parties entered into an access agreement
    providing ANR with the right to enter and carry out all CAP activities on 84 Woodstock
    Avenue and JAMAC lots 5 and 6, located off of Harrington Avenue. The access agreement
    is hereby incorporated and made part of this Order. Thus, ANR now has the right to enter
    these properties, undertake the physical removal of source area contaminated soil, and
    install a granular iron permeable reactive barrier as identified in the CAP.
    3. Any reasonable costs that ANR incurs in carrying out the CAP are fully reimburseable by
    Respondents. Furthermore, ANR is hereby entitled to a lien on the subject three properties
    for this reimbursement. John Ruggiero, as the sole member of 84 Woodstock, LLC; 5
    Harrington, LLC; and 6 Harrington, LLC, acknowledged his authority and provided assent
    to the lien securing the refundable CAP costs. ANR, in consultation with the Attorney
    General, will work with Mr. Ruggiero as to the form and documentation for these liens.
    4. Respondents shall pay a FINE of $5,000 payable to the Treasurer, State of Vermont. This fine
    is due and payable within 30 days of this Order. Payment shall be by check made payable
    to the “Treasurer, State of Vermont” and forwarded to:
    Sarah Hosford, Administrative Assistant
    Compliance and Enforcement Division
    Agency of Natural Resources
    103 South Main Street/Old Cannery
    Waterbury, VT 05671-4910
    5. Upon completion of the CAP, ANR is directed to file a brief report with the Court so that
    this matter may be concluded.
    ANR’s petition also seeks incarceration. The Court will POSTPONE consideration of
    such relief at this time; however, incarceration may be considered if Respondents fail to comply
    with this Order. The hearing on the Order to Show Cause is CONTINUED. The Court will
    hold a reconvened hearing on the Order to Show Cause upon motion by ANR.
    _________________________________________                                        August 9, 2012
    Thomas G. Walsh, Judge                                                        Date
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    Date copies sent to: ____________                                           Clerk's Initials _______
    Copies sent to:
    John Zaikowski, Attorney for Petitioner Vermont Agency of Natural Resources
    Respondents Second City Properties, LLC; Second City, LLC; and 84 Woodstock, LLC
    

Document Info

Docket Number: 100-7-11 Vtec

Filed Date: 8/9/2013

Precedential Status: Precedential

Modified Date: 4/24/2018