Agency of Natural Resources v. Godnick

• Decision Date: 21 October 1994
• Docket Number: No. 94-057,94-057
• Citation: 652 A.2d 988,162 Vt. 588
• Parties: AGENCY OF NATURAL RESOURCES, State of Vermont v. Edward M. GODNICK.
• Court: Vermont Supreme Court

Page 988

652 A.2d 988

162 Vt. 588

AGENCY OF NATURAL RESOURCES, State of Vermont v. Edward M. GODNICK.

No. 94-057.

Supreme Court of Vermont.

Oct. 21, 1994.

Jeffrey L. Amestoy, Atty. Gen., and Conrad W. Smith and Ron Shems, Asst. Attys. Gen., Montpelier, for plaintiff-appellee.

Edward R. Seager and Bernard J. Boudreau of Edward R. Seager, P.C., Rutland, for defendant-appellant.

Before ALLEN, C.J., and GIBSON, DOOLEY, MORSE and JOHNSON, JJ.

DOOLEY, Justice.

Defendant Edward Godnick appeals a $10,270 penalty assessed by the Environmental Law Division (ELD) pursuant to the administrative penalty provisions of the Uniform Environmental Law Enforcement Act, 10 V.S.A. §§ 8001-8018, enacted in 1989. Plaintiff, the Vermont Agency of Natural Resources (ANR), cross-appeals, charging that the ELD failed to assess a penalty for the first year of defendant's violation and erroneously evaluated the statutory criteria in determining the penalty. We affirm the ELD's calculation of the penalty, but remand for a determination of penalties for the first year of violation.

In August of 1987, defendant purchased a parcel of land on Route 7 in Rutland for the purpose of building a furniture warehouse. The site contained a highway right-of-way held by the Vermont Agency of Transportation (AOT). Before he bought the property, defendant received a letter from the District AOT office informing him that the use of highway right-of-way on the site was subject to AOT guidelines. The letter, evidently in response to defendant's inquiry, stated that plantings in the right-of-way must not interfere with sight distances or highway maintenance activities. While pursuing his purchase of the property, defendant applied to the District I Environmental Commission (Commission) for an Act 250 land use permit to allow construction of the warehouse. The permit was granted, but it reserved the Commission's right to impose additional conditions when the buildings and grading were complete.

The completed warehouse did not conform to the plans approved by the permit. Concerned about the visual impact of the warehouse along Route 7, the Commission informed defendant that he would have to submit a revised landscaping plan to achieve the same screening results as those originally approved. Defendant submitted a revised plan, and although this plan depicted plantings in the right-of-way, it made no reference to the AOT guidelines. Defendant did not seek AOT approval until after the Commission approved the plan. On June 23, 1989, the Commission issued an amended Act 250 permit requiring defendant to make plantings which would screen the visibility of the warehouse from the highway, and set October 1, 1989, as the deadline for implementing the plan.

When AOT received the revised plan in the amended Act 250 permit, it instructed defendant not to plant within the right-of-way without its approval and notified the Commission of the conflict. Defendant tried to arrange a meeting in which AOT and the Coordinator of the District Commission could discuss the conflict, but the Coordinator was unable to attend. On September 27, 1989, AOT sent defendant a letter stating that the landscaping plan must be redesigned to meet AOT's highway right-of-way guidelines.

Despite the October 1, 1989 deadline for implementing the landscaping plan, this AOT letter marks the last time that defendant communicated with either the Commission or AOT until June of 1992, when the ANR initiated enforcement action against him. Between October 2, 1989 and October 14, 1992, a period of three years, defendant did no landscaping on the site except to plant grass. Finally, in 1992, defendant submitted an application for a further amendment to address the landscaping concerns of the District Commission within AOT requirements. This application was approved by both AOT and the Commission. The Commission issued the further amended permit on October 14, 1992, and, consequently, defendant was in compliance on that date. During the following month, defendant completed the required landscaping at a cost of $10,000.

In December of 1992, the Secretary of the Vermont Agency of Natural Resources issued an administrative order pursuant to 10 V.S.A. §§ 8008 and 8010 imposing penalties for violations of the amended permit between October 2, 1989 and October 14, 1992. Defendant appealed the administrative order to the ELD. Although the ELD concluded that defendant was in violation during the three-year period, it imposed a penalty for only the last year of violation calculated to equal the amount of economic benefit defendant gained.

On appeal, defendant argues that the ANR is estopped from issuing an administrative order, and that the ELD erred in its assessment of penalties against defendant. On cross-appeal, ANR argues that the ELD's assessment of penalties was improper because it failed to impose penalties for the first year of violation, and failed to apply the penalty criteria of the statute. We consider first defendant's estoppel argument, and then will review the ELD's calculation of the penalty.

Defendant argues that the Secretary is estopped from issuing the administrative order because defendant's noncompliance stemmed directly from the conflicting directions of the Commission and AOT, and that the Commission never advised him of his obligation to resolve this conflict. Defendant argues that the Commission's silence about the conflict implied that it would resolve the problem with AOT and would so notify defendant. We affirm the conclusion of the environmental law judge that estoppel is inappropriate in this case.

The doctrine of equitable estoppel "is based upon the grounds of public policy, fair dealing, good faith, and justice." Dutch Hill Inn, Inc. v. Patten, 131 Vt. 187, 193, 303 A.2d 811, 815 (1973). The party asserting estoppel has the burden of establishing: (1) the party to be estopped must know the facts; (2) the party to be estopped must intend that its conduct shall be acted upon, or the conduct must be such that the party asserting estoppel has a right to believe it is intended to be acted upon; (3) the party asserting estoppel must be ignorant of the true facts; and (4) the party asserting estoppel must detrimentally rely on the conduct of the party to be estopped. Fisher v. Poole, 142 Vt. 162, 168, 453 A.2d 408, 411-12 (1982). Estoppel against the government is rare; it is appropriate only when the injustice that would ensue from a failure to find an estoppel sufficiently outweighs any effect upon public interest or policy that would result from estopping the government in a particular case. In re McDonald's Corp., 146 Vt. 380, 383, 505 A.2d 1202, 1203-04 (1985).

The ELD found that defendant failed to meet the third element of estoppel, and we agree. Defendant knew that he faced an October 1, 1989 deadline and that the conflict between permit requirements and those of AOT were not resolved as of that date. The question of who had to resolve the conflict is not a "fact" for purposes of the estoppel elements. See In re Conway, 152 Vt. 526, 531, 567 A.2d 1145, 1147 (1989) (no estoppel where Act 250 applicants knew that they had to give notice to all adjoining property owners, but failed to do so, allegedly relying upon the District Coordinator's advice that such notice was not required). Thus, defendant was cognizant of the true facts.

We also emphasize that consistent with the requirement of good faith, estoppel will not be invoked in favor of a party " 'whose own omissions or inadvertence contributed to the problem.' " Id. (quoting Town of Bennington v. Hanson-Walbridge Funeral Home, Inc., 139 Vt. 288, 294, 427 A.2d 365, 369 (1981)). Defendant's nonfeasance contributed significantly to the prolonged period of noncompliance. Defendant took no action to develop a landscaping plan which would satisfy the requirements of both the Commission and AOT. By doing nothing to resolve the conflict, defendant remained in noncompliance for three years despite his obligation to ensure that his project complied with all relevant regulations. Defendant failed to act in good faith, and estoppel, an equitable remedy, is inappropriate in such circumstances.

Both parties contest the civil penalty imposed by the ELD, but for different reasons. The ELD concluded that defendant violated Act 250 during the three-year period between October 2, 1989 and October 14, 1992. It assessed a penalty of $10,270, representing economic gain for one year of the three-year violation. It decided not to impose any penalty under 10 V.S.A. § 8010 for violations which occurred before the statute took effect, and for the approximately eleven-month period after November 2, 1990, when the Secretary failed to pursue the violation, concluding this delay in enforcement was so unreasonable that full mitigation of the penalty for that period was warranted. On appeal, defendant argues that it was error for the ELD to assess any penalty. Conversely, on cross-appeal, ANR contends that it was error for the ELD not to apply administrative penalty provisions retrospectively, that the ELD erred in concluding that the delay was unreasonable and in completely mitigating the penalty during this period, and that the ELD failed to make specific findings on all the statutory penalty criteria of § 8010(b).

We begin with the challenge to the failure to impose a penalty for the first year of violation. ELD concluded that the imposition of administrative penalties for this year constituted an impermissible retrospective application of 10 V.S.A. §§ 8008 and 8010 because the Secretary's power to determine penalties did not arise until November 2, 1990, when the environmental law judge was appointed. See 1989, No. 98, § 6 (provisions of Uniform Environmental Law Enforcement Act authorizing Secretary to assess penalties "shall not take effect until the rules required by section 8016 of Title 10 have been adopted and an...