Sun Val, LLC v. Comm'r of Transp.

• Decision Date: 09 October 2018
• Docket Number: SC 20045
• Citation: 193 A.3d 1192,330 Conn. 316
• Court: Connecticut Supreme Court
• Parties: SUN VAL, LLC v. COMMISSIONER OF TRANSPORTATION

330 Conn. 316

193 A.3d 1192

SUN VAL, LLC

v.COMMISSIONER OF TRANSPORTATION

SC 20045

Supreme Court of Connecticut.

Argued May 3, 2018

Officially released October 9, 2018

Neal L. Moskow, with whom were Stephanie Dellolio and, on the brief, Deborah M. Garskof, Fairfield, for the appellant (plaintiff).

Christine Jean-Louis, assistant attorney general, with whom were Charles Walsh, assistant attorney general, and, on the brief, Eileen Meskill, assistant attorney general, and George Jepsen, attorney general, for the appellee (defendant).

Palmer, McDonald, Robinson, Mullins and Kahn, Js.^*

MULLINS, J.

The plaintiff, Sun Val, LLC, appeals¹ from the judgment of the trial court rendered in its favor against the defendant, the Commissioner of Transportation. On appeal, the plaintiff contends that the trial court improperly (1) applied the wrong environmental regulations to determine whether materials left on the plaintiff's property were contaminated and, as a result, failed to award appropriate damages for removal of those contaminated materials, (2) determined that the plaintiff failed to mitigate its damages, and (3) rejected the plaintiff's claim for lost profits. We disagree and, accordingly, affirm the judgment of the trial court.

The record reveals the following facts, as found by the trial court, and procedural history relevant to our resolution of this appeal. The plaintiff was formed in August, 2002, for the limited purpose of purchasing and managing a parcel of real property (property) located in the town of New Milford. The property, consisting of slightly less than eleven and one-half acres, had been used for a variety of purposes over the years, including as a farm, a gravel quarry, and an all-terrain vehicle course. In September, 2002, the plaintiff purchased the property with the intent to regrade it and resell it for possible development.

In the summer of 2006, Hallberg Contracting Corporation (Hallberg) was hired as a subcontractor for a highway reconstruction project undertaken by the defendant. Shortly thereafter, and with the defendant's consent, Hallberg entered into an oral contract with Dominick Peburn, an individual that Hallberg believed had authority to act on behalf of the plaintiff, to use the property for "crushing and stockpiling" construction materials related to the project. Without verifying Peburn's authority, Hallberg proceeded to haul approximately thirty-two truckloads of "mostly soil and clay-like material, including only a minimal amount of milled asphalt and concrete," and deposited it in an area occupying one-quarter acre in the northwest corner of the property.² In September, 2006, the plaintiff's real estate agent visited the property and informed the plaintiff's members that material was being deposited on the property. Thereafter, Peter Joseph and Jeffrey Serkes visited the property on behalf of the plaintiff to examine the materials deposited by Hallberg.

While pursuing its legal remedies for the unauthorized dumping on its property, in December, 2006, the plaintiff entered into a contract to sell the property to BTP New Milford, LLC (Bow Tie) for $2,025,000. The contract of sale included contingency provisions relating to, inter alia, clear title, compliance with applicable laws, regulations, and ordinances, and the payment of taxes. Under the contract, Bow Tie was obligated to perform standard due diligence on the property, including engineering studies, a market analysis, a Phase I environmental assessment, and to investigate the applicable zoning regulations. Phase I environmental assessments are limited, and include the following three components: (1) identify areas of concern or previously recognized environmental conditions; (2) review historical record research back to 1940 or the earliest known development; and (3) conduct visual site visits and interviews. A Phase I environmental assessment does not involve sampling or testing of soil or material on the property.

The contract also contained additional contingencies as a result of the recent dumping on the property. Specifically, the plaintiff agreed to hire an environmental consultant to perform both a Phase I and Phase II environmental assessment of the property. A Phase II environmental assessment is field oriented and involves taking test samples from areas of concern previously identified in the Phase I environmental assessment. Samples may be taken by digging, drilling, or boring.

The contract provided that, in the event that the test results revealed evidence of contamination on the property, Bow Tie would have the option of terminating the contract if the cost to remediate the soil was greater than $150,000. The contract, however, did not specify whether the assessments would be limited to only areas of new dumping. The plaintiff hired an engineering and environmental consulting firm to perform the Phase I and Phase II environmental assessments. Prior to this time, the plaintiff had not requested or seen the results of any Phase II environmental assessment on the property and, therefore, had not reviewed results of soil sampling on the property. The results of the Phase I environmental assessment were issued on January 31, 2007, and the results of the Phase II environmental assessment were issued on February 20, 2007. After receipt of these assessments, the contract for the sale of the property to Bow Tie terminated.

As early as November, 2006, Hallberg offered to remove thirty truckloads of material from the plaintiff's property. Then, in January, 2007, Hallberg again presented the plaintiff with a written offer to restore the property to its original condition.³ Hallberg offered, inter alia, to remove approximately thirty truckloads of material, the amount that Hallberg admitted to depositing on the property. In return, Hallberg demanded a release from all liability of itself, its agents, and its employees associated with dumping the materials on the plaintiff's property. The plaintiff rejected Hallberg's offer.

Subsequently, the plaintiff commenced the present action,⁴ alleging, inter alia, that the defendant negligently authorized Hallberg to deposit construction materials on the property. The plaintiff sought damages in the amount of $483,864 for remediation of the property and $1,146,500 for lost profits. In response, the defendant pleaded, inter alia, failure to mitigate damages as a special defense. The case was tried before the court.

At trial, both parties presented numerous exhibits, and the court heard testimony from multiple witnesses pertaining to the amount, quality, and location of material deposited by Hallberg. Indeed, each party introduced testimony from environmental professionals⁵ who testified about the appropriate manner in which to remove the dumped material from the plaintiff's property.

The plaintiff introduced testimony from Brian Conte, a licensed environmental consultant who primarily performs field work as part of environmental due diligence for real estate transactions. Conte submitted a plan for removing the Hallberg material from the property, which suggested that 60 percent of the material be sent to a high level, more expensive, facility; 30 percent of the material be sent to a low level, less expensive, facility; and 10 percent of the material be sent to a recycling facility. Under this plan, the cost of removing thirty-two truckloads would be $105,122.⁶ Conte also produced a report in which he opined that the material on the property was "lightly polluted" and that it "would not qualify as clean fill under [applicable] solid waste regulations."

The defendant introduced testimony from Douglas Martin, a licensed environmental professional with more than thirty years of professional environmental experience and expertise in the area of environmental site assessments. Martin testified and submitted a plan for removing the Hallberg material from the property. In his plan, he opined that 90 percent of the material should be sent to a low level, less expensive, facility, and that 10 percent of the material should be sent to a recycling facility at a cost of $60,492. In support of this plan, Martin produced a report stating that "much of the subject material appears to be consistent with the definition of [clean fill] under the [solid waste] regulations ...."

In addition to testimony from these experts regarding the quality of the material deposited by Hallberg, photographs of the property were presented, which also provided insight into the quality of material attributable to Hallberg. These photographs, which were taken by Hallberg's risk manager, Brian Festa, revealed that the northwest corner of the property contained regularly sized piles of earth and clay, which were not present throughout the rest of the property. Alan Antonelli, a Hallberg employee, provided testimony that Hallberg only deposited soil and clay-like material on the property.

After considering all of the testimonial and documentary evidence presented at trial, the trial court found that the Hallberg material must be removed, but did not adopt either Conte's or Martin's proposed plan in full. Instead, the court explained that Conte's plan was partly based on flawed assumptions and extrapolations and that Martin's plan was "too conservative." The court also credited the photographs showing the material dumped on the northwest corner of the property to largely consist of soil or clay and Antonelli's corroborating testimony, thus suggesting that a larger portion of the material could be sent to the low level facility.

The trial court agreed with both experts that thirty-two truckloads would comprise 640 tons. The trial court then compared the costs for disposal in each of the expert's reports. The trial court found that Conte's costs for disposal were lower because the report was five years older than the report from Martin. Therefore, the trial court used the higher figures from Martin's report. Because Martin did not opine...