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State, Agency of Natural Resources v. Parkway Cleaners

Supreme Court of Vermont

March 29, 2019

State of Vermont Agency of Natural Resources
Parkway Cleaners et al.

          On Appeal from Superior Court, Washington Unit, Civil Division Mary Miles Teachout, J.

          Mary Miles Teachout, J. Thomas J. Donovan, Jr., Attorney General, and Nicholas F. Persampieri, Assistant Attorney General, Montpelier, for Plaintiff-Appellee.

          R. Bradford Fawley, Bruce C. Palmer and Timothy C. Doherty, Jr., Brattleboro, for Defendants-Appellants Richard S. Daniels and Hazen Street Holdings, Inc.

          PRESENT: Skoglund, Robinson and Eaton, JJ., and Dooley, J. (Ret.), and Morris, Supr. J. (Ret.), Specially Assigned

          EATON, J.

         ¶ 1. This matter arises from a trial court order finding defendant-appellant Richard Daniels liable for the release of hazardous waste on his property, granting summary judgment in favor of the State, and issuing an injunction compelling defendant to investigate and conduct remedial action on the property site. On appeal, defendant contests the award of summary judgment to the State and the scope of the injunction ordered by the court, and he contends the court erred in denying his motion to revisit his statute-of-limitations defense. We affirm.

         ¶ 2. The trial court considered the proceedings at issue in two phases, first addressing the parties' motions for summary judgment and later addressing the issue of remedies. The facts, based on the undisputed facts before the court during the summary-judgment proceedings and the factual findings later made by the court during the hearing on damages and injunctive relief, are as follows. Parkway Cleaners was a dry-cleaning business in Hartford, Vermont from the late 1970s to the late 1980s. Perchloroethylene (PERC) was a chemical used in dry-cleaning operations at the time and is now a known human carcinogen and hazardous-waste material. At some point, PERC was dumped at the Parkway Cleaners site or released from the dry-cleaning equipment. The State first became aware of contamination problems in the area in 1987. In 1989, the State found PERC on a property adjacent to the Parkway Cleaners property. From 1987 until 2006, the Agency of Natural Resources (ANR) attempted to determine the extent of PERC contamination in the area. Defendant purchased the former Parkway Cleaners dry-cleaning facility through a tax sale in 1995. Starting in 2002, ANR communicated with defendant regarding potential PERC contamination on the former Parkway Cleaners property.

         ¶ 3. In the fall of 2005, the State requested defendant conduct a Phase II environmental assessment for the property, which he did.[1] Sampling results generated from that assessment linked the Parkway Cleaners lot to PERC contamination. The sampling results showed PERC in groundwater, soil, and soil gas-the spaces between the drier soil above the groundwater level. Soil gas sampling results sent to ANR in June 2006 showed high PERC concentrations in soil vapor between six and ten feet underground, which indicated PERC could enter basements of nearby residences and affect indoor air quality, thereby presenting a risk to human health.

         ¶ 4. The State sent a "first letter" to RSD Trucking (RSD), a company owned by defendant, stating that RSD as owner of the Parkway Cleaners lot was a potentially responsible party. The letter requested that RSD: determine if indoor air at nearby residences was contaminated; determine the extent of contamination of soil, soil gas, and groundwater; and assess potential impacts to sensitive receptors, including basements of nearby buildings, nearby surface water, and any nearby drinking water sources, wetlands, or sensitive ecological areas. The State sent the letter to RSD because it mistakenly believed the property was owned by RSD, rather than defendant. In June 2006, the State learned that defendant owned the property in his individual capacity, notified him of that fact, and informed him that the State was seeking to hold him personally responsible for addressing the PERC contamination. Defendant expressed surprise that he owned the property and stated that he thought the property was owned by RSD.

         ¶ 5. In October 2006, defendant conveyed title to the property to Hazen Street Holdings, Inc. (HSH). At the time of the transfer: (1) defendant was president and director of HSH; (2) there was no consideration for the transfer; (3) the property had a listed value of $23, 100, and HSH had no other assets; (4) defendant had expressed concern that having to pay for the cleanup might ruin him financially; and (5) HSH had no business records other than the deed to the property and documents related to the investigation and cleanup.[2] By the fall of 2006, after transferring the property to HSH, defendant stopped cooperating with the State. The State continued efforts to address the indoor-air contamination of nearby residences without defendant. According to the State, PERC remains in the groundwater, soil, and soil gas at the property, and has migrated to nearby properties and, potentially, to the White River. The extent of the PERC contamination is not yet known.

         ¶ 6. In July 2010, the State filed a complaint against defendant, asserting that he was liable for the release of PERC on the property. In January 2014, defendant moved for summary judgment, asserting that he was not liable because the State had not demonstrated that there was a release or threatened release of hazardous material during the time defendant owned the property. The State cross-moved for summary judgment and sought injunctive relief requiring defendant to undertake all investigation, removal, and remediation actions necessary to abate the release and threatened release of hazardous materials at the facility and surrounding properties, as well as past-response costs. Although the statute of limitations was listed as an affirmative defense in the answer to the complaint, defendant's counsel at the time did not raise the statute of limitations in response to the State's summary-judgment motion and failed to support the defense with factual materials to show that there was a material issue of fact with respect to the defense or that he should prevail as a matter of law based on undisputed facts.

         ¶ 7. The court granted the State's motion for summary judgment, holding defendant liable as a current owner under 10 V.S.A. § 6615(a)(1). As to injunctive relief, the court determined that "the State is entitled to an injunction requiring defendant to undertake such further 'investigation, removal and remedial action' as is reasonable and necessary." However, the court did not approve the specific terms of the injunctive relief sought by the State in the summary-judgment ruling, stating that the State "has not provided language for the injunction that is 'specific in terms.'" The court declined to enter summary judgment on past-response costs, permitted discovery on the amount of response costs, and scheduled a hearing "to permit [defendant] to challenge the figures."

         ¶ 8. In October 2015, a notice of substitution of counsel for defendant was filed, and defendant moved to reopen discovery. In June 2016, the court approved the substitution of counsel and denied the motion for additional discovery. Later in June 2016, defendant moved to reopen the court's summary-judgment ruling in order to pursue the statute-of-limitations defense that had not been pursued by defendant's former counsel. The court denied the motion.

         ¶ 9. The court held a trial regarding the issues of damages and the scope of injunctive relief in April and June 2017. In January 2018, the court issued a written order. On the State's request for injunctive relief, the court ruled that because defendant was liable under § 6615 as a current owner and had not taken the necessary steps to assume his legal responsibilities and investigate the extent of the PERC hazard, the State was entitled "to an order requiring [defendant] to undertake 'remedial actions . . . to mitigate hazard to human health or the environment'" pursuant to 10 V.S.A. § 8221(b)(2). On the State's request for past costs, the court ruled that defendant must reimburse the State for certain response costs related to investigation of the site but denied the State's request for reimbursement of the bulk of its past-response costs. At the court's request, the State submitted a proposed form of judgment and gave defendant the opportunity to file any objections, which he did. Following briefing on the objections, the court entered judgment in the form presented by the State in April 2018. Defendant now appeals to this Court regarding the judgment granted to the State, the final injunction, and the denial of the motion to reopen the summary-judgment determination to allow him to assert his statute-of-limitations defense.

         ¶ 10. On appeal, defendant argues: (1) that a release or threatened release during the ownership period is required for current-owner liability under 10 V.S.A. § 6615(a)(1); (2) the trial court lacked authority to issue an injunction requiring an investigation; and (3) the court abused its discretion in declining to reopen. The State argues that: (1) defendant failed to preserve his arguments regarding the applicability of § 6615(a)(1) and the scope of the injunction for appeal; (2) even if these arguments were preserved, the plain language of § 6615(a) confers current-ownership liability on defendant and multiple statutes authorize an injunction requiring investigation, including §§ 6615, 6615b, and 8221; and (3) the court did not abuse its discretion in declining to reopen the motion for summary judgment to consider defendant's statute-of-limitations defense.

         ¶ 11. This Court reviews summary-judgment rulings de novo, applying the same standard as the court applies in the first instance-summary judgment is appropriate if there is no genuine issue of material fact and a party is entitled to judgment as a matter of law. Farrell v. Vt. Elec. Power Co., 2012 VT 96, ¶ 9, 193 Vt. 307, 68 A.3d 1111; V.R.C.P. 56(a). "The party opposing summary judgment is given the benefit of all reasonable doubts and inferences." Farrell, 2012 VT 96, ¶ 9.

         ¶ 12. Defendant's first argument raises a question of statutory construction. This Court reviews issues of law or statutory interpretation de novo. In re Village Assocs. Act 250 Land Use Permit, 2010 VT 42A, ¶ 7, 188 Vt. 113, 998 A.2d 712.

         ¶ 13. His second argument raises the propriety of an injunction and its terms. We review a grant of injunctive relief for abuse of discretion and "will not set aside factual findings unless there is no credible evidence in the record to support them." Obolensky v. Trombley, 2015 VT 34, ¶ 18, 198 Vt. 401, 115 A.3d 1016. We also review a trial court's decision not to reopen a ruling awarding summary judgment for abuse of discretion. See Bostock v. City of Burlington, 2011 VT 89, ¶ 14, 190 Vt. 582, 30 A.3d 651 (mem.); Fragoso v. Lopez, 991 F.2d 878, 888 (1st Cir. 1993) (explaining that where summary-judgment motion granted, trial court has substantial discretion in deciding whether to reopen proceedings to allow unsuccessful party to introduce new material or argue new theory).

         ¶ 14. First, we address defendant's arguments regarding the applicability of 10 V.S.A. § 6615(a)(1). The trial court determined that defendant was liable as the current owner of the former Parkway Cleaners property under § 6615(a)(1). Defendant argues that even though he is the current owner of the property, he is not liable under § 6615(a)(1) because no release or threatened release of PERC occurred on the property during his ownership. He contends that any release of PERC on the property occurred under prior ownership, and therefore the court erred in granting summary judgment in favor of the State. The State asserts that defendant's argument on this point is incorrect based on the plain language of the statute and that it was not preserved because it was not timely raised in opposition to the State's motion for summary judgment.

         ¶ 15. We do not address whether defendant properly preserved his argument regarding his liability as the current owner under 10 V.S.A. § 6615(a)(1) because even if the argument was preserved for appeal, based on our interpretation of the statute we find it to be meritless. According to the plain language of § 6615(a)(1), as the current owner, defendant was liable for the release of PERC at the property prior to his ownership.

         ¶ 16. When construing a statute, our first goal is to effectuate the Legislature's intent. Springfield Terminal Ry. Co. v. Agency of Transp., 174 Vt. 341, 346, 816 A.2d 448, 453 (2002). In doing so, we look first to the plain language of the statute. Id. Where the language of the statute is challenged, "we must ascertain legislative intent through consideration of the entire statute, including its subject matter, effects and consequences, as well as the reason and spirit of the law." In re Estate of Cote, 2004 VT 17, ¶ 10, 176 Vt. 293, 848 A.2d. 264. "All relevant parts of the applicable statutory scheme are to be construed together to create, if possible, a harmonious whole." Id. We have held that "[r]emedial statutes ought to be liberally construed" to accomplish their remedial purposes. Wilk v. Wilk, 173 Vt. 343, 346, 795 A.2d 1191, 1193 (2002).

         ¶ 17. Section 6615 of Title 10 is part of Vermont's Waste Management Act, which parallels its federal counterpart the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9607, "in many relevant aspects."[3] See Hardwick Recycling & Salvage, Inc. v. Acadia Ins., 2004 VT 124, ¶ 28, 177 Vt. 421, 869 A.2d 82; see also State v. Howe Cleaners, Inc., 2010 VT 70, ¶ 61, 188 Vt. 303, 9 A.3d 276 (Johnson J., dissenting in part, and concurring in part) ("The purpose and statutory scheme of the [Vermont Waste Management Act], and its federal counterpart [CERCLA], indicate that the remedial goals of these statutes were intended to be quite broad and that the exceptions to liability quite narrow."). Section 6615, at issue here, is based on § 9607 of CERCLA and its purpose, like § 9607, is to protect public health and the environment by facilitating the cleanup of hazardous-waste sites. Hardwick Recycling & Salvage, Inc., 2004 VT 124, ¶ 28; see also Carson Harbor Vill. v. Unocal Corp., 270 F.3d 863, 880 (9th Cir. 2001) ("CERCLA was enacted to protect and preserve public health and the environment by facilitating the expeditious and efficient cleanup of hazardous waste sites." (quotation omitted)).

         ¶ 18. Relevant to our analysis, § 6615(a) outlines four categories of individuals who are liable for the release or threatened ...

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