Michael J. Regan, Denise Regan & Andree Falardeau and Bruce Chapin & Susie Chapin v. Allen Spector, Marcia Spector, Allen Spector Retirement Trust & Town of Fayston

NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal
revision before publication in the Vermont Reports. Readers are requested to notify the Reporter
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2016 VT 116
No. 2015-415
Michael J. Regan, Denise Regan and Andree Falardeau Supreme Court
On Appeal from
v. Superior Court, Washington Unit,
Civil Division
Allen Spector, Marcia Spector, Allen Spector Retirement April Term, 2016
Trust and Town of Fayston
Bruce Chapin and Susie Chapin
v.
Allen Spector, Marcia Spector, Allen Spector Retirement
Trust and Town of Fayston
Mary Miles Teachout, J.
Marc B. Heath of Downs Rachlin Martin, PLLC, Burlington, for Plaintiffs-Appellants Regan.
Joel P. Iannuzzi and Thomas P. Aicher of Cleary, Shahi & Aicher, P.C., Rutland, for
Defendants-Appellees Spector.
James F. Carroll of English, Carroll & Boe, P.C., Middlebury, for Defendant-Appellee
Town of Fayston.
PRESENT: Reiber, C.J., Dooley, Skoglund, Robinson and Eaton, JJ.
¶ 1. REIBER, C.J. Plaintiffs Michael and Denise Regan appeal from the trial court’s
decision denying them relief with respect to their complaint alleging that the redirecting of
surface waters by defendant Town of Fayston and defendants Alan and Maria Spector and the
Spector Retirement Trust1 caused ongoing flood damage to their property. We affirm.
¶ 2. The trial court made the following findings, which are supported by substantial
evidence. Other than the Town, the parties to the two underlying cases consolidated for trial all
own property on a developed hillside in the town. The hillside is dissected by Stagecoach Road,
which crosses the upper portion of the hillside, and Farm Road, which curves across the hillside
below Stagecoach Road. The Town is responsible for maintaining the two town roads and
controlling stormwater drainage on the hillside. The cases concern the impact that activities on
the Spectors’ land had on properties owned by the downhill neighbors, including the Regans,
who own land on the lower side of Stagecoach Road east of the Spectors’ land.
¶ 3. During the 1980s, a twenty-three-lot subdivision called Fayston Farms was
developed on the hillside between Stagecoach Road and Farm Road. The Spectors became
actively involved in the development, at one time owning half of the lots. In 1992, the Spectors
purchased three lots, totaling 8.3 acres, which later became the site of their residence just below
Stagecoach Road. When the Spectors purchased the lots, culvert #7 was a fifteen-inch culvert
that carried stormwater from a portion of the hillside above Stagecoach Road, under the road,
and onto the wooded hillside below. Culvert #8, which was located to the west and uphill on
Stagecoach Road, drained in a westerly direction. Culverts #6 and #5, which were located
further to the east and downhill on Stagecoach Road, drained in an easterly direction. As the
trial court stated, the salient factual dispute in the consolidated cases was which direction the
stormwater flowed through culvert #7 both before and after it was repositioned in 2004 and then
again in 2008.
1
Hereinafter, we refer to Alan and Maria Spector and the Spector Retirement Trust
simply as the Spectors.
2
¶ 4. The same year that the Spectors purchased the three lots off Stagecoach Road, the
Town installed a culvert under Old Stagecoach Road, a farm lane that runs from Stagecoach
Road diagonally in a westerly direction downhill below the site of the Spectors’ future residence.
The Town later installed a stone-lined ditch along the upper edge of Stagecoach Road to manage
water draining downhill toward Fayston Farms. In 1996, the Town required the Spectors to
participate in the cost of enlarging the culvert under Old Stagecoach Road when the Spectors
sought a permit for a driveway at the location of culvert #7. The Spectors wanted to move
culvert #7 further up the hill to the west, closer to culvert #8, but the town road commissioner did
not want to move the culvert further to the west or the east because of concerns that it would
increase the flow of stormwater in either direction. Rather, his strategy was to divert the water
under Stagecoach Road at culvert #7 so it would disperse before its volume and speed became a
bigger problem downhill.
¶ 5. In 2004, the Spectors applied for a permit to build a house on Stagecoach Road
with driveway access close to culvert #7. The town road commissioner dug out a box ditch from
the outlet of culvert #7 for several feet in an easterly direction. It sent the flow of water from
culvert #7 towards the east approximately fifteen feet, at which point the water was free to run in
sheets down the hillside. When the Spectors built their driveway close to culvert #7, they placed
a culvert in the box ditch and covered it with gravel for the driveway to run over it. The result
was that water from above Stagecoach Road flowed through culvert #7 into the box ditch and
then turned at almost a ninety-degree angle to proceed through the culvert under the Spectors’
driveway toward the east for a distance of fifteen to thirty feet.
¶ 6. In 2005, the Spectors built a three-story 7100-square-foot house off Stagecoach
Road. Clearing and grading around the house altered the contours of the land. As a result,
erosion problems below the outlet of culvert #7 occurred. As the trial court found, “[t]here may
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have been some shift of water drainage from the west to the east toward the Regan land, but it
was not significant and apparently not noticed by anyone.”
¶ 7. In 2007, the Regans purchased property adjacent to, downhill, and easterly from
the Spectors’ property on Stagecoach Road. The Regans’ house and driveway is located just off
Stagecoach Road, and their property slopes downhill to a wetland area. At the time they
purchased their property, the Regans were unaware of a small pond at the bottom of the property
that served as a sediment pond for an adjacent pond that had been built by adjoining landowners,
Bruce and Susie Chapin, in 2004.
¶ 8. In the summer of 2008, the Spectors did extensive clearcutting of trees on the
hillside below their house downhill toward Farm Road. In the fall of that year, the Spectors
sought once again to move culvert #7. The new road commissioner, who was concerned that
culvert #7 might flow to an identified well site, agreed to move the culvert as long as the
Spectors paid for the excavating work. The Town would not have proceeded with the project if
the Spectors had not requested it, but as long as the Spectors were willing to pay for it, the Town
went along because of its own concerns with culvert #7, including the troublesome maintenance
of the box ditch. In October 2008, culvert #7 was expanded to 24 inches and moved
approximately 100-150 feet downhill and easterly on Stagecoach Road closer to the Regans’
land. When the Regans saw the outlet pipe of culvert #7 directing water toward their land, they
protested to the town selectboard, which attempted to mediate a solution by requiring the
Spectors to install a stone-lined channel from the end of the outlet to redirect water back toward
the Spectors’ land.
¶ 9. In May 2009, as the trial court found, “a huge rainstorm occurred with devastating
consequences for all parties,” including the Spectors, the Regans, and other neighbors downhill
from the Spectors’ lot. A culvert on the hillside above the Spectors’ property plugged, causing
large amounts of water to skip over culvert #8, which would have carried the water in a westerly
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direction, and instead ran along Stagecoach Road through culvert #7. The water continued
downhill onto the Spectors’ land, plugged up the culvert under Old Stagecoach Road, and gushed
down the newly created stone-lined channel causing severe erosion and creating a deep gash.
The water continued through the woods in the eastern drainage, eventually entering the Regans’
land several feet above their sediment pond. Following this event, the Spectors installed a new
stone-lined channel on at least two occasions, but subsequent storms continued to overwhelm the
erosion-control device and caused sediment to be brought downhill to the Regans’ pond.
¶ 10. There was also significant damage to the properties of downhill neighbors in the
western drainage caused by the clearcutting the Spectors had done the previous year. One of
those neighbors, Susie Chapin, sued the Spectors and the Town in October 2010. In January
2012, the Regans also sued the Spectors and the Town, alleging trespass and nuisance against the
Spectors and inverse condemnation against the Town.2 The Regans sought an injunction
requiring the Spectors and the Town to relocate culvert #7 from where it had been moved in
2008 back to its original location and configuration. They also claimed money damages, but the
trial court precluded them from presenting evidence on their damage claim as a discovery
sanction. Chapin opposed the Regans’ claim for injunctive relief and settled her claim for money
damages contingent on culvert #7 remaining in its current location.
¶ 11. At trial, the court heard extensive testimony from various experts with a variety of
specialized training and experience. The experts from the opposing parties fundamentally
disagreed about whether the water that flowed through old culvert #7 before 2004, and again
between 2004 and the fall of 2008 when the culvert was moved 100-150 feet downhill and
easterly on Stagecoach Road, drained toward the west or east. The Regans’ expert opined that
before 2004 water flowing through culvert #7 drained to the west, that the Town’s construction
2
Another downhill neighbor joined in the Regans’ lawsuit against defendants, but by the
time of trial she no longer sought affirmative relief and remained in the case only to participate
in any action that might affect her property.
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of the box ditch in 2004 significantly changed the storm water flow by sending water from
culvert #7 toward the eastern drainage, and that the situation was further exacerbated in 2008 by
the relocation of culvert #7 further to the east. The Spectors’ expert testified that neither the
addition of the box ditch in 2004 nor the relocation of culvert #7 in 2008 had a significant impact
on the volume of water flowing into the wetlands region of the Regans’ property above their
pond. The Town’s expert opined that it was impossible to know exactly where water flowed
before the box ditch was added in 2004, and he agreed with the Spectors’ expert that the
relocation of culvert #7 did not significantly change the amount of water affecting the Regans’
pond.
¶ 12. The court found that it was virtually impossible to know where water flowed from
culvert #7 before 2004, but that the former road commissioner had the best opportunity to
observe pre-2004 conditions. The court found credible his testimony that before he installed the
box ditch, the water from culvert #7 sheeted out as it went downhill but was directed to some
degree to the west by the Old Stagecoach Road culvert. According to the court, the most
credible evidence indicated that both before and after 2004, when the box ditch was put in, there
was not a single linear path of drainage from culvert #7, but rather some water drained to the
west and some water drained to the east. The court could not find that “installation of the box
ditch resulted in an all-or-nothing shift of water drainage from west to east, or that there was a
linear pattern of drainage exclusively to the west prior to the construction of the box ditch.”
Moreover, the court found that the relocation of culvert #7 in 2008 “increased the amount of
water flowing from above Stagecoach Road through culvert #7 to some degree but not to the
degree of being a major shift in direction.” The court further found that the road commissioners’
decisions in 2004 and 2008 to install a box ditch at culvert #7 and then to move the culvert
further east were both reasonable in light of the circumstances at the time.
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¶ 13. The court also found that mitigation measures installed on the Spectors’ land
since 2009 “have slowed and dispersed water in the eastern drainage to a very significant
degree.” The court rejected the Regans’ claim of significant damage to their pond, finding that
“there has been a marginal increase in the amount of water flowing through culvert #7 in the
eastern drainage” and that “much of such flow enters the wetland further to the east of the Regan
pond and the amount is not significant.” The court explained that the Regans’ pond was an
artificially-made sediment pond that could be preserved only through ongoing cleaning and
maintenance, which the Regans had not done. The court further found, based on expert
testimony, that fallen trees such as the Regans had observed were part of the normal processes in
a seepage wetland where the pond was located.
¶ 14. Hence, the court concluded that “the conditions on the ground of which Regan
complains are due almost entirely to the natural evolution of a seepage wetland that was
disturbed by and is incorporating over time the installation of two unnatural and unmaintained
ponds.” The court further concluded that the box ditch at culvert #7 and the relocation of the
culvert had “little, if any, effect on current conditions,” and that returning culvert #7 to its
original location was “highly unlikely to have positive impact on the Regan pond of any
consequence.” Given the Regans’ failure to prove “any substantial, ongoing injury” attributable
to the Spectors or the Town, the court found no need to consider the Regans’ claim for inverse
condemnation. The court briefly noted, however, that the Town’s decisions regarding the
location of culvert #7 were part of their duty to maintain roads and drainage systems, and that
there was no incursion amounting to an easement on the Regans’ land.
¶ 15. On appeal, the Regans argue that the trial court: (1) abused its discretion by
imposing a discovery sanction that precluded them from submitting evidence on money
damages; (2) applied the wrong legal standard in rejecting their claim of inverse condemnation;
and (3) erred in rejecting their nuisance and trespass claims because the Spectors’ construction of
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the stone-lined channel in 2008 constituted an alteration of the pattern of flow within the
watershed.
¶ 16. We need not consider the Regans’ first claim of error because we are upholding
the trial court’s decision in favor of the Spectors and the Town as to liability and causation,
which, as the Regans’ acknowledged at oral argument, moots their claim that the court abused its
discretion by precluding evidence of money damages as a discovery sanction. We recognize that
the trial court made few findings and conclusions regarding the impact of the Spectors’
clearcutting their hillside in 2008, but its findings demonstrate that the clearcutting impacted
only the western drainage, and not the eastern drainage in which the Regans’ property is located.
As noted, the downhill landowner most affected by the clearcutting, Susie Chapin, settled with
the Spectors and is not a party to this appeal. The Regans’ claim for injunctive relief and money
damages centered on the repositioning of culvert #7, which the trial court found to have no
significant impact on the land around Regans’ pond.
¶ 17. The Regans’ second claim of error is that the trial court applied the wrong legal
standard in rejecting their inverse condemnation claim against the Town. In their view, the court
erroneously applied a “substantial injury” test focusing on the degree of damage to their property
rather than the nature and character of the invasion of the property. In making this argument,
they rely on two Vermont cases. The first case, Doty v. Village of Johnson, involved a situation
in which a portion of the plaintiff landowner’s property was flooded periodically after the
defendant village raised the height of a dam beyond the benchmark height to which it had a right
to maintain the water level. 84 Vt. 15, 77 A. 866 (1910). The injury to the landowner was found
to be comparatively slight as measured against what the village would incur if it were required to
lower the dam. After noting that the raising of the dam caused the water to periodically cover a
portion of the landowner’s property, this Court held that “where some degree of injury is shown”
and “seems likely to continue, equity will not refuse to interfere because the damage is slight.”
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Id. at 22, 77 A. at 869. The Court held that the landowner was entitled to “at least nominal
damages” because the record showed an “invasion of the [landowner’s] rights, continuous in its
nature, which[,] continued a sufficient length of time under a claim of right[,] may ripen into an
easement.” Id. at 23, 77 A. at 869.
¶ 18. The second case, Ondovchik Family Ltd. Partnership v. Agency of
Transportation, rejected a claim of inverse condemnation that was based on alleged damages
caused by a state agency depositing snow on the plaintiff’s property when periodically
snowplowing the adjacent highway. 2010 VT 35, ¶ 17, 187 Vt. 556, 996 A.2d 1179. In so
ruling, this Court relied upon the two-part test established in Ridge Line, Inc. v. United States,
346 F.3d 1346, 1355-56 (Fed. Cir. 2003), for determining when governmental conduct amounts
to a potential taking as opposed to a possible tort. Ondovchik Family Ltd. P’ship, 2010 VT 35,
¶¶ 16, 18. Under that test: (1) “a property loss compensable as a taking only results when the
government intends to invade a protected property interest or the asserted invasion is the direct,
natural, or probable result of an authorized activity and not the incidental or consequential injury
inflicted by the action”; and (2) “[e]ven where the effects of the government are predictable, to
constitute a taking, an invasion must appropriate a benefit to the government at the expense of
the property owner, or at least preempt the owners[’] right to enjoy his property for an extended
period of time, rather than merely inflict an injury that reduces its value.” Ridge Line, Inc., 346
F.3d at 1355-56 (quotation omitted). In Ondovchik Family Ltd. Partnership, we emphasized
that: (1) “temporary, repeated incursions . . . rise to the level of a taking . . . only in instances
where the incursions amount to the taking of an easement”; (2) “courts generally find a taking of
an easement only when the government requires an ‘onerous’ dedication of property”; and (3)
“[w]hen the intrusion is ‘limited and transient’ in nature and occurs for legitimate governmental
reasons, it does not amount to a taking.” 2010 VT 35, ¶ 18.
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¶ 19. There is nothing in the trial court’s decision indicating that the court failed to
follow the law as stated above. The court did not apply a substantial-injury test, but rather noted
that it did not need to consider in depth the Regans’ inverse condemnation claim because the
Regans had failed to prove a “substantial injury potentially warranting equitable relief.” To the
extent that the court did consider the inverse condemnation claim, it concluded that there was no
permanent physical occupation or temporary incursions by the Town amounting to an easement
on the Regans’ land. The court further concluded that the evidence showed that the substantial
cause of the ongoing minor erosion on Regans’ land was due almost entirely to the natural
evolution of the seepage wetland near the sediment pond rather than any repositioning of culvert
#7 on Stagecoach Road. There was ample evidence, including expert testimony, to support the
court’s findings and conclusions concerning the cause of the condition of the Regans’ property
near their pond. See Highgate Assocs., Ltd. v. Merryfield, 157 Vt. 313, 315-16, 597 A.2d 1280,
1281-82 (1991) (“Where the trial court has applied the proper legal standard, we will uphold its
conclusions of law if reasonably supported by its findings.”); see also Obolensky v. Trombley,
2015 VT 34, ¶ 27, 198 Vt. 401, 115 A.3d 1016 (emphasizing that it is province of trial court to
determine credibility of witnesses and weigh persuasiveness of evidence).
¶ 20. Finally, the Regans briefly argue that the trial court should have found in their
favor on their trespass and nuisance claims due to the Spectors’ redirection of the flow of surface
water toward their property through construction of the stone-lined channel. In so arguing, they
rely upon Canton v. Graniteville Fire District No. 4, where we stated that a property owner “is
entitled to have surface water pass to lower lands in its natural condition,” but “cannot artificially
change the manner of flow by discharging it onto the lower land at a different place from its
natural discharge.” 171 Vt. 551, 552, 762 A.2d 808, 810 (2000).
¶ 21. We reject this argument because, as noted above, the trial court found by a
preponderance of the evidence that: (1) the conditions on the Regans’ property of which they
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complain “are due almost entirely to the natural evolution of a seepage wetland that was
disturbed by and is incorporating over time the installation of two unnatural and unmaintained
ponds”; (2) “the precise location of the culverts on Stagecoach Road have little, if any, effect on
current conditions”; and (3) returning culvert #7 to its original location and configuration, if
possible, “would be highly unlikely to have positive impact on the Regan pond of any
consequence.” The evidence, including expert testimony, supports the court’s findings, and
those findings support its conclusions. See Merryfield, 157 Vt. at 315-16, 597 A.2d at 1281-82
(“The trial court’s findings of fact must stand unless they are clearly erroneous, viewing the
supporting evidence in a light most favorable to the prevailing party and excluding the effect of
modifying evidence. A finding will not be disturbed merely because it is contradicted by
substantial evidence; rather, an appellant must show there is no credible evidence to support the
finding.” (citations omitted)). While some of the trial court’s findings indicate that some
sediment was carried down to the area of the Regans’ pond through the stone-lined channel
during past severe storms, the preponderance of the evidence and the court’s findings
demonstrate that the condition of the area around the pond of which the Regans complain was
almost entirely the result of natural processes and not the repositioning of culvert #7.
Affirmed.
FOR THE COURT:
Chief Justice
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