Opinion
No. CV 07-4032730-S
May 6, 2010
MEMORANDUM OF DECISION
This is an action brought by the Commissioner of Environmental Protection to enforce an administrative order (SRD-088) of the Department of Environmental Protection (DEP). The Commissioner seeks an injunction and civil penalties against Cadlerock Properties Joint Venture, L.P. (Cadlerock Properties) for a violation of a DEP final administrative order to abate water pollution. This order was issued to Cadlerock Properties Joint Venture, L.P. on August 15, 1997. After a hearing on order number SRD-088 a final decision affirming the order was issued on October 23, 1998. The final decision was affirmed by the Superior Court on May 5, 1999 (McWeeny, J.). This decision was further affirmed by the Connecticut Supreme Court. Cadlerock Properties Joint Venture, L.P. v. Commissioner of Environmental Protection, 253 Conn. 661 (2000). The matter was further appealed to the U.S. Supreme Court, 531 U.S. 1148, 121 S.Ct. 1089 (2001). However, certiorari was denied.
The Commissioner has filed a detailed "proposed findings of fact." Cadlerock Properties took the position in its trial memorandum and also in its post-trial memorandum of law that "because it intended to stipulate to many of the facts alleged by the plaintiff, the only issue of law before the court was whether and to what extent Cadlerock Properties should be assessed a civil penalty for its non-compliance with SRD-088." While it is true that an essential objective of this action is assessment of a civil penalty for non-compliance with SRD-088, the DEP also seeks injunctive relief and recognizes the importance of producing substantial evidence to support its requests. The court has examined the proposed findings of fact, approves of same and for the purposes of this memorandum of decision includes all of them. A copy of this finding is marked as Exhibit A and is attached hereto. The complaint contains all elements of SRD-088.
It is uncontested that the defendant has not been in compliance with the order of the Commissioner for a twelve-year period. Upon proof of non-compliance, injunctive relief is mandatory when the defendant has chosen not to attack the reasonableness of the order by seeking a hearing before the Commissioner. Connecticut Water Company v. Beausoleil, 204 Conn. 38, 45 (1987). Keeny v. Old Saybrook, 237 Conn. 135, 159 (1996). In this case where a hearing was requested and the order was fully litigated, it is reasonable to conclude that injunctive relief should be ordered upon proof of violation of the final order.
The defendant admits noncompliance with the provisions of SRD-088. After a hearing and review of the transcript and briefs, the Court finds for the plaintiff as to all the material allegations at issue in Count One of the complaint. The defendant has violated DEP Order Number SRD-088 and C.G.S. Chapter 446k. The Court therefore orders a temporary and permanent injunction as requested by the Commissioner requiring the defendant Cadlerock Properties Joint Venture, L.P. (defendant Cadlerock Properties) its general partner, Cadlerock, Inc., its officers, agents and employees and its successors and assigns to undertake any and all actions required by DEP order SRD-088.
The Court agrees with the defendant's contention that the Commissioner of Environmental Protection has failed to present sufficient evidence at trial in support of the second count of the complaint, which alleges that Cadlerock Properties is "liable for reasonable costs and expenses of the state in detecting, investigating, controlling and evading such violations pursuant to Connecticut General Statutes § 22a-6a." The court considers the second count to having been abandoned.
For purposes of the Commissioner's suit for an injunction and penalties payable to the state, the Connecticut Supreme Court has stated that the court and the Commissioner are coordinate actors in the achievement of the purposes of the Water Pollution Control Act. Connecticut Water Company v. Beausoleil, supra. When a violation of the Water Pollution Control Act has been established, Conn. Gen. Stat. § 22a-438 requires that a civil penalty be assessed by the court and each day's continuance of a violation is deemed to be a separate and distinct defense.
In determining the amount of a penalty, the court may consider the factors set forth in the statute and those set forth in Carothers v. Capozziello, 215 Conn. 82 (1990). Section 22a-438(a) provides that in determining the amount of any penalty assessed under this subsection, the court may consider the nature, circumstances, extent and gravity of the violation, the person or municipality's prior history of violations, the economic benefit resulting to the person or municipality from the violation, such other factors deemed appropriate by the court. The court shall consider the status of a person or a municipality as a persistent violator.
According to Carothers v. Capozziello ( supra) in upholding the statute the court is to be guided in the exercise of their discretion by considering the following factors: 1) the size of the business involved; 2) the effect of the penalty or injunctive relief on its ability to continue operation; 3) the gravity of the violation; 4) the good faith efforts made by the business to comply with applicable statutory requirements; 5) any economic benefit granted by the violations; 6) deterrence of future violations, and 7) the fair and equitable treatment of the regulated communities.
The defendant admits the continued violation of order SRD-088 over a period of 12 years and does not contest the facts as stated by the plaintiff in its post-trial brief. The Commissioner argues for substantial civil penalties emphasizing the failure to comply for a 12-year period with no serious attempt at compliance except for a brief period in 1999 when defendant retained HRP Incorporated. Plaintiff refers to "a paucity of good faith efforts to comply with the provisions of SRD-088."
The defendant argues for no penalty or a nominal penalty. The defendant relies on two basic arguments: 1) That it does not have the funds to comply with the payment of a civil penalty and 2) That it can rely on the "underpinnings" of the case.
The first factor to be considered in deciding a civil penalty set forth by the Connecticut Supreme Court in Capozziello is "The Size of The Business Involved." Cadlerock Properties itself is a small business. The only asset is the ownership of the 355 acres in question in this case and it doesn't even have its own bank account. Cadlerock Properties, the defendant, is a general partner of Cadlerock Inc., and also is affiliated with Cadlerock Joint Venture. Together these companies are of substantial size; sufficient to sustain a debt of over 24 million dollars. Cadlerock Properties is dependent upon the other two companies which are very substantial businesses engaged in spending millions of dollars a year in the buying and selling of loans and properties. The plaintiff paints Cadlerock Properties as a "small business entity with few if any, options in the near future to increase its income, and it possesses no available assets to pay a civil penalty . . ." All three companies are under control of one person, Daniel Cadle. Having in mind that the defendant was able to finance litigation to the Supreme Court, hire HRP, remove some stacked soil at its own expense and support the present litigation as well as another lawsuit as plaintiff the court is of the opinion that it is reasonable to determine that the defendant has the ability to pay a reasonable penalty.
The second factor for consideration in the assessment of a penalty is "The Effect of The Penalty On The Ability to Continue Operation." "The effect of the order has been the making of the property unmarketable." This has no bearing upon the court's consideration of a penalty. In the opinion of the court the assessment of a penalty would have no effect on the ability of the company to continue in operation.
The third circumstance to be considered by the court is "The Gravity of The Violation." This case concerns the violation of the Water Pollution Control Act. The order was issued in 1997 at which time the Commissioner invoked his power to order the remediation of potential water pollution under the provisions of § 22a-432 of the Connecticut General Statutes. The gravity of the situation is established, in part, by the determination in favor of the Commissioner. In the Supreme Court decision Cadlerock Properties Joint Venture, L.P. 253 Conn. 661 (2000). Evidence that there has been no pollution of drinking wells for residential properties surrounding the property in question has no bearing on the gravity of the violation over a considerable period of time.
The fourth factor to be taken into consideration in assessing a penalty is "Good Faith Efforts to Comply With Statutory Requirements." Shortly after the final decision was issued on October 23, 1998, the defendant engaged the services of HRP in an effort to comply with the order. While the defendant's appeal of the final decision was still pending, HRP then performed a number of activities and complied with the order including the hiring of contractors to stage the soil that had been removed from the wire burning site and the northwest disposal area and making plans to remove the stated soil to an approved facility. HRP then submitted its "scope of study" in accordance with Section B(4)(a) of the order on March 4, 1999. The scope of study was not approved by the Commissioner. Thereafter without giving any reason the defendant failed to take any steps whatsoever toward the remediation ordered by the Commissioner. This failure to comply with the remediation order from 1999 until 2009 when there was an appearance of a consultant on the site and the hiring of several individuals to remove some of the debris located on the map of the property leads only to the conclusion that the defendant lacked good faith with respect to the remediation for a very long period of time.
The fifth item to be taken into consideration in assessing a penalty is "Any Economic Benefit Gained by the Violations." There is no evidence that there was an economic benefit gained by the defendant with respect to the violations.
Consideration number six is "Deterrence of Future Violations." This sixth consideration poses a purely academic problem. If the court imposes too severe a punishment it certainly would not tend to deter future violations but might very well encourage them by making it impossible for the subject to pay. To impose no penalty or a nominal penalty would only be encouraging the violator to continue the violation rather than undertaking the cost of the remediation. The defendant takes the position that its financial inability to conduct a cleanup in accordance with order SRD-088 can only be exasperated rather than remedied by the imposition of a substantial civil penalty.
The seventh factor to be considered is "The Fair and Equitable Treatment of The Regulated Community." The Commissioner quotes from Holbrook v. Cadle Properties of Connecticut, Inc., supra page 15 citing Student Public Interest Research Group of New Jersey, Inc. v. AT Bell Laboratories, 617 F.Sup. 1190, 1201 (D J 1985). The defendant also cites from Student Public Interest. The defendant would have the court take into consideration that the Commissioner did not take into account the fact that the property had not been polluted by the defendant but by others before the defendant acquired it and that the persons responsible for the contamination, although known to the Commissioner, had not been held accountable and if the DEP had considered the fair and equitable treatment of the regulated community "it would have taken the prior owners and users of the property to task for their misdeeds."
The Commissioner on the contrary cites the above case stating "fair and equitable treatment of the regulated community demands the violator be punished and that no penalty be born by those who comply with the spirit and letter of environmental legislation." The Court agrees with the Commissioner that the focus of fairness takes into account the violator's degree of willfulness, good faith, ability to pay, degree of cooperation with the regulators and other factors.
The Commissioner looks at the bare facts of the case. The defendant goes into what is referred to as the "underpinnings" i.e., the history of transaction and also certain other related considerations. In addition to the underpinnings i.e., the acquisition of the property by foreclosure of a mortgage and the fact that the defendants were not the polluters, the defendant would have the court take into account several collateral matters; such things as the fact that the defendant has never contributed to the pollution; that they did attempt to remove some of the stacked soil at their own expense but not in conformity with the order and its allegations, unproven, that the aerial map used by the Commissioner indicates areas of potential pollution which were not taken into consideration in the original order and that large portions of the 355 acres are unpolluted and, of course, the fact that for the last 10 years there has been no proof of any pollution of well water of residents surrounding the property in question. The court agrees that with respect to the underpinnings the court would be entitled to take into account such facts in assessing a penalty. However, that would apply only in such a case as the first or second violation. After ten years it has no bearing whatsoever. With respect to the collateral matters the court is of the opinion that most of it is speculation and, however, the actual condition of the property today can only be determined by the defendants fulfilling at least the first phase of the order G-9 paragraph B.4a.
Based upon the seven factors as they apply to this case the court is of the opinion it must apply a substantial penalty. The Commissioner has not exerted much pressure since 1999 to enforce the remediation order. Through this lawsuit it has now indicated that it intends to seriously enforce the remediation ordered. The penalty suggested by the Commissioner multiplies the basic penalty by the length of time that the defendant has been in violation. The court assesses a penalty of $282,000. This is a penalty assessed at a much lower figure than that proposed by the Commissioner but is however a graduated penalty. It is ordered at a lower rate in the hope that it will urge the defendant to proceed with a good faith attempt to follow the Commissioner's original order and escape further penalty at increased rates.
Hale, JTR
EXHIBIT A II. Proposed Findings of Fact.
1. The Plaintiff is the Commissioner of Environmental Protection of the State of Connecticut ("Commissioner," "DEP"). Compl. ¶ 1; Ans. ¶ 1.
Chapter 446k of the General Statutes empowers the Commissioner, if she finds that "any person has established a facility or created a condition . . . or is maintaining any facility or condition which reasonably can be expected to create a source of pollution to the waters of the state" to "issue an order to such person to take the necessary steps to correct such potential source of pollution." Conn. Gen. Stat. § 22a-432; See also Conn. Gen. Stat. § 22a-424(f).
2. Defendant Cadlerock Properties Joint Venture, L.P. is a limited partnership under the laws of the State of Ohio with a principal place of business at 1 North Center Street, Newton Falls, Ohio 44444. Compl. ¶ 2; Ans. ¶ 2. Cadlerock Properties Joint Venture, L.P. is not registered to do business in the State of Connecticut. Compl. ¶ 2; Ans.¶ 2.
3. The general partner of Cadlerock Properties Joint Venture, L.P. (hereinafter "Cadlerock Properties") is Cadlerock, Inc., an Ohio corporation. Transcript ("Tr.") Cadle 1/21/10 p. 29. Daniel C. Cadle was the president of Cadlerock, Inc. until 2008 and is now the chairman of Cadlerock, Inc. Id. Cadlerock Properties buys real estate and loans, obtains title to those and obtains financing from banks jointly with Cadlerock Joint Venture, L.P., an affiliated entity, whose general partner is also Cadlerock, Inc. Tr. Cadle, 1/21/10, pp. 29-31.
4. Cadlerock Properties is the record owner of approximately 335 acres of property located between 392 and 460 Squaw Hollow Road ("the site"), also known as Route 44, in the towns of Ashford and Willington, Connecticut by virtue of a deed dated November 15, 1996 and recorded at volume 110, page 576 of the Town of Ashford land records and at volume 128, page 534 of the Town of Willington land records. Exhibit ("Exh.") D-QQ.
5. Cadlerock Properties obtained ownership of the site from an affiliated entity, Cadle Properties of Connecticut, Inc., which had received a deed in lieu of foreclosure dated September 7, 1995 from Ashford Development Co. Exhs. D-PP, D-QQ; Tr. Cadle, 1/21/10, pp. 34-35. The Commissioner issued a pollution abatement order to Cadle Properties of Connecticut, Inc. on February 7, 1997. Exh. P-2, p. 15. After learning that Cadle Properties of Connecticut, Inc. had transferred the site to Cadlerock Properties, the Commissioner withdrew that order and issued Order No. SRD-088 ("Order") to Cadlerock Properties on August 15, 1997. Exhs. P-1; P-2.
6. An administrative hearing was held over five days on Order No. SRD-088 and a final decision affirming the Order was issued on October 23, 1998. Exh. P-2. The final decision was appealed to Superior Court and affirmed in a memorandum of decision dated May 5, 1999 (McWeeny, J.). Compl. ¶ 5; Ans. ¶ 5.
7. The superior court decision was subsequently affirmed by the Connecticut Supreme Court. Cadlerock Properties Joint Venture, L.P. v. Commissioner of Environmental Protection, 253 Conn. 661 (2000), cert. denied 531 U.S. 1148, 121 S.Ct. 1089 (2001). Compl. ¶ 6; Ans. ¶ 6. Order No. SRD-088 is a final order. Id.
8. The Order applies to the entire site. Exhs. P-1, P-2, pp. 20-21; Tr. Warzecha, 1/20/10, p. 72. The Order requires that Cadlerock Properties hire a consultant to perform a comprehensive investigation to determine the potential impact of the conditions at the site on human health and the environment both on-site and off-site, including, but not limited to, the existing and potential extent and degree of soil, ground water and surface water pollution. Exhs. P-1, P-2, pp. 1-2; 5-9; 10-12; 13-14; 18-21; Tr. Warzecha, 1/14/10, p. 125. Prior investigations of the site by Rizzo Associates, Inc. for Shawmut Bank and by DEP were limited in scope, focus and duration. Exh. P-2, pp. 5-6, 14. Additional soil and groundwater sampling are necessary to fully ascertain and characterize the degree and extent of soil and groundwater pollution at the site. Id.
9. The groundwater at the site is classified as GAAs, the most pristine drinking water classification, groundwater that is a tributary to a public water supply reservoir, pursuant to the Connecticut Water Quality Standards. Tr. Warzecha, 1/14/10 p. 120. The groundwater on the western side of the site flows southerly to Fisher's Brook. Id., p. 119; 1/20/10, at pp. 47-48. The groundwater for the rest of the property flows easterly toward Moritz Pond and then southerly to a larger water body. Tr. Warzecha, 1/14/10, p. 119. The groundwater from this site eventually flows to Mansfield Hollow Reservoir, the Willimantic drinking water supply. Id., p. 120. All water in the area of the site is supplied by private drinking water wells and there are no public sewers in the area. Id. The area surrounding the site is almost entirely residential. Id., p. 123.
The Water Quality Standards are adopted pursuant to Conn. Gen. Stat. § 22a-426.
10. Cadlerock Properties notified DEP, pursuant to Paragraph B.1. of the Order, by letters dated December 15, 1998 and January 20, 1999, of its retention of Thomas Chapman of HRP Associates, Inc. as its environmental consultant to prepare the documents and oversee the actions required by the Order. Exhs. P-3, P-4.
11. The Cadle Company and HRP Associates, Inc. executed a contract dated January 21, 1999, subject to modification on the part of The Cadle Company, in the amount of $33,750.00 for services in connection with "soil remediation" in an area of the site identified as "the Northwest Disposal Area" and for preparation of a Scope of Study for Investigation to be submitted for DEP approval. Exh. P-5, p. 1; 5, Appendix A, pp. 8-9. (January 12, 1999 letter.)
12. HRP Associates, Inc. notified DEP on January 29, 1999 that, pursuant to Paragraph B.3.a. of the Order, "solid waste, including metal and petroleum hydrocarbon-contaminated soils and surficial debris, will be excavated at the site beginning on Monday February 1, 1999." Exh. P-6. HRP Associates, Inc. also informed DEP on the same date of the proposed solid waste facilities that would likely be used for the disposal of hazardous soils and non-hazardous soils from the site. Exh. P-7.
13. HRP Associates, Inc., by letter dated February 4, 1999, requested an extension of the deadline for solid waste excavation pursuant to the Order due to heavy rain, and reported that approximately 100 cubic yards of contaminated soil had been excavated and staged on-site and that several loads of scrap metal had been removed from the site. Exh. P-8.
14. HRP Associates, Inc. submitted a Scope of Study for Environmental Investigations to DEP dated March 4, 1999 in accordance with Paragraph B.4.a. of the Order. Exhs. P-9; P-10.
Paragraph B.4.a. of the Order requires the submission, for the Commissioner's review and written approval, of a scope of study for the investigation of the activities described in the Order "and the potential impact of such activities on human health and the environment both on-site and off-site, including but not limited to the existing and potential extent and degree of soil, ground water and surface water pollution. Such scope of study shall include at least the proposed location and depths of ground water monitor wells and soil and surface water sampling, a proposed sampling and analytical program including at least the parameters to be tested, proposed sampling and analytical methods, and quality assurance and quality control procedures, and a schedule for conducting the investigation." Exhs. P-1; P-2.
15. The purpose of a Scope of Study for Investigation is to develop a plan as to how each area of environmental concern identified on a site will be investigated in accordance with the pollution abatement order. Tr. Warzecha, 1/20/10, pp. 8-9. It includes developing a conceptual site model of each area of concern, determining which constituents of concern may exist in each area and the types of waste material that might be present. Id., p. 9. The DEP Site Characterization Guidance Document dated September 2007 provides the basis and foundation for the conceptual site model and for conducting a Phase 1, Phase 2 and Phase 3 investigation from which a remedial action plan can be developed. Exh. P-44; Tr. Warzecha, 1/20/10, p. 9. The standards in 1999 were DEP's Draft Site Characterization Guidance Document, and the ASTM Standards which both provide for a Phase 1, Phase 2 and Phase 3 investigation consistent with the September 2007 document. Id., pp. 9, 11-14, 16.
16. A Phase I investigation consists of a file review of documents regarding the property in state, local and federal files and a site walk by an environmental professional to inspect the property for stressed vegetation and the presence of waste material, to determine past and current conditions at the site, and to compile the information into a Phase I report to be used as a basis to decide whether the next step, a Phase 2, is needed. Tr. Warzecha, 1/20/10, pp. 14, 16-17. No sampling is done in a Phase I investigation and typically there is no subsurface investigation. Id., p. 17. A Phase 2 investigation is a more invasive investigation requiring the collection and analysis of soil, groundwater, sediment and surface water samples to determine whether a release of pollution to the environment occurred in any identified area of concern, whether by improper disposal of waste material on the surface or in the subsurface. Id., pp. 14, 17-18. A Phase 2 investigation is followed up by a Phase 3 investigation the purpose of which is to determine the full extent and degree of contamination, both horizontally and vertically, on and emanating from the site to determine how far the release has emanated from the release area and its impact on the environment. Id., pp. 14, 18-19.
17. The Phase 3 investigation is followed by the development of a remedial action plan that describes how the pollution will be remediated or abated using various options. Tr. Warzecha 1/20/10, pp. 19-20. Remediation options may differ depending on the type of waste material disposed. Id., p. 20. Remediation of the site is required to be conducted in accordance with the Connecticut Remediation Standard Regulations adopted pursuant to Conn. Gen. Stat. § 22a-133k. Id., pp. 26-27.
18. On April 12, 1999 HRP Associates, Inc. responded to DEP's request for the disposal locations of all material recently removed from the site. "To date, the material removed from the site has consisted of surficial debris (couches, concrete and plastic) and scrap metal. No contaminated soil or buried solid waste has been removed from the site." Exh. P-11.
19. On July 14, 1999 DEP sent to The Cadle Company a letter of disapproval of the Scope of Study for Investigation. Exh. P-13. Although the Scope of Study proposed a number of investigatory and remedial tasks to be undertaken at the site, "the limited nature of the proposed subsurface and groundwater investigation proposed within the Scope of Study renders it deficient, and it must be revised and resubmitted to DEP . . ." Id. The disapproval letter set forth the scope of investigation required in a revised Scope of Study, including "a proposal for the investigation of all waste disposal areas at the site and all other potential waste disposal areas identified during previous investigations and during the continuing work at the site; a groundwater monitoring program for both on-site and off-site locations, including areas where wastes are identified; a residential well sampling program for wells downgradient of the site; removal and disposal of all wastes identified or staged at the site; and a proposed schedule and sequence for conducting all of the work tasks referenced in the Scope of Study." Exh. P-13.
20. On July 30, 1999 HRP Associates, Inc. informed DEP that "per our client's request, HRP will be sampling the existing monitoring wells on-site and collecting soil and groundwater samples from test pit locations previously excavated." Exh. P-14 (emphasis added.) HRP stated that it would conduct the field work, revise the Scope of Study, submit it to The Cadle Company and subsequently submit it to the DEP by early September 1999. Id. A revised Scope of Study has not to date been submitted to DEP. Tr. Warzecha, 1/20/10, pp. 21, 104.
21. HRP Associates, Inc. notified Daniel Cadle of The Cadle Company on October 20, 1999 that his assertion in an October 7, 1999 letter to the Office of the Attorney General that all problems at the site have been identified and the contaminated soil is ready to be removed is not accurate. "HRP feels that [it] is our obligation to inform you of our concern that additional areas of contaminated soil may exist on-site. Additionally, not all previously identified contaminated soil locations have been excavated. It is HRP's belief that the contaminated soil that may exist on-site has not been adequately identified, evaluated, quantified, excavated, or staged in piles. Additional subsurface investigation is needed to evaluate the presence of contamination on site." Exh. P-15. The letter states that it was not sent to DEP. Id.
22. Work done on the site by HRP Associates, Inc. and BM Excavating, Inc. from January to August 1999 was paid for by The Cadle Company. Exh. P-58; Tr. Cadle 1/21/10, pp. 25-29. HRP gave estimates to The Cadle Company after 1999 but did not do much work. Tr. Cadle 1/26/10, pp. 104-05.
23. No documents responsive to the requirements of the Order have been submitted to DEP since July 30, 1999, nor has an environmental consultant provided notification to DEP or submitted documents in accordance with the Order since 1999. Tr. Warzecha, 1/20/10, pp. 23, 102, 103-06.
24. In the summer of 2005 there were discussions and correspondence between Cadlerock Properties and DEP with regard to the status of the Order after access to the site was sought by the U.S. Environmental Protection Agency ("USEPA"), and with regard to the proper disposal of contaminated soils stockpiled on the site. Exhs . P-16, P-17, P-18, P-19, P-20; Tr. Warzecha 1/20/10, pp. 25-26, 28-29. DEP told Cadlerock Properties that USEPA was looking at the feasibility of doing a time critical removal action in the Northwest Disposal Area ("NWDA") on Lot 11 based on the presence of contaminated soil that was hazardous and posed a risk to human health. Tr. Warzecha, 1/20/10, p. 28, 30. DEP asked Cadlerock Properties if it was willing to do that cleanup on its own rather than have USEPA do it. Id., pp. 28-29. Cadlerock Properties refuted DEP's determination that the soil was hazardous. Exhs. P-18, P-20; Tr. Warzecha, 1/20/10, pp. 36-37.
25. In connection with USEPA's site assessment, D. James Fitting, a trained hydrogeologist and environmental scientist who works for DEP, prepared a map of the site which incorporated historically disturbed areas on the basis of historical aerial photographs. Exh. P-46; Tr. Fitting, 1/14/10, pp. 10, 14-15. He analyzed historical aerial photographs of the site which allowed him to identify areas of historical disturbance or disposal, focusing on excavated areas, disturbed areas, the presence of vehicles or equipment and areas of potential waste disposal. Tr. Fitting, 1/14/10, pp. 14-15.
26. On April 12, 2007, USEPA's Emergency Planning and Response Branch notified Cadlerock Properties of its potential liability and invited it to perform or finance site cleanup activities. Exh. D-UU, pp. 5, 6. On the basis of its Preliminary Assessment/Site Investigation Report of January 2007, USEPA determined on July 30, 2007 that the threat to human health and the environment from hazardous substances necessitated a removal action at the site. Exh. P-25, Exh. D-UU, p. 5. On August 9, 2007 DEP conducted a site reconnaissance of the Northwest Disposal Area and Lot 3 along with USEPA and its contractors. Exh. P-24.
27. USEPA's Time Critical Removal Action program addresses conditions that pose an imminent risk to human health or the environment on sites for which there is no responsible party or one not willing to perform the work. Tr. Warzecha, 1/20/10, p. 32. The scope of the removal action is driven by the hazardous nature of the material and the source of funding for the program. Id., pp. 33, 54-55. The program does not address other types of pollutants that may pose a risk, such as petroleum hydrocarbons. Id., pp. 33, 35. The purpose of the USEPA Time Critical Removal Action is to abate pollution to alleviate the emergency level or condition. Id., pp. 33.
28. The removal action on the site was limited to addressing public health concerns regarding the approximately one-acre former wire burning area located in the NWDA on Lot 11 and the stockpiled soils excavated from that area in 1999. Exhs. P-27, P-29. Tr. Warzecha 1/20/10, pp. 33-34. The stockpiled soils on Lot 11 were hazardous for lead, and trespassers, hunters and riders of dirt bikes and ATVs, were using the property and coming into contact with the material. Tr. Warzecha, 1/14/10, p. 128; 1/21/10, pp. 30, 33-34. The plastic on the stockpiled soil was in poor condition, had been compromised and the material was exposed to the elements, creating a potential to leach to soil and groundwater. Tr. Warzecha, 1/21/10, p. 42.
29. Using geophysical surveying equipment, USEPA in 2009 encountered stacks of cars buried below the surface on Lot 11 near Lot 3. Exh. P-29 (photo NW-G270); Tr. Warzecha, 1/20/10, pp. 49-51, 57-59. USEPA detected metal debris in the subsurface in the South Central Disposal Area ("SCDA") and the southern portion of the NWDA. Exh. P-29 (figures 3-6); Exh. P-38, Tr. Warzecha, 1/20/10, pp. 50-54. USEPA did not remove all buried debris, but only that in the wire burning area of the NWDA. Exh. P-29 (figures 3-6); Exh. P-38; Tr. Warzecha, 1/20/10, pp. 54, 61.
30. Antimony exceeding the direct exposure criteria of the Remediation Standard Regulations ("RSRs") remains in some areas of Lot 11 after USEPA completed its emergency removal action. Exhs. P-27, P-29, Tr. Warzecha 1/20/10, pp. 33-34, 61-62. Other areas of environmental concern, such as buried cars, not addressed by the USEPA removal action, remain on Lot 11. Exh. P-29; Tr. Warzecha 1/21/10, p. 64. USEPA cleaned up the area related to wire burning activities and stockpiling of lead-contaminated soil. Tr. Warzecha, 1/20/10, p. 61. It was not a complete cleanup in accordance with the RSRs. Id. Soil, sediment and groundwater impacted by antimony must be remediated by the defendant. Id., pp. 63-64, 153-54.
31. Post-remediation monitoring of the residential drinking water wells is necessary to assure that neighboring property owners' wells are not impacted. Tr. Warzecha, 1/20/10, pp. 136, 153. There are contaminants on the site, that, at very low concentrations, may represent a significant health risk to people who may drink water polluted by them. Id., pp. 136-37. A person cannot see, smell or taste these pollutants. Id. DEP has been testing drinking water wells in the area periodically and will continue to do so. Id., pp. 117, 137.
32. DEP conducted an inspection of the 335-acre site on March 11 and March 12, 2008 to document surface debris and look for remaining visible evidence of historically disturbed areas and site activities documented on historical aerial photographs. Exhs. P-32, P-33, P-38; Tr. Fitting 1/14/10, p. 12, 29. DEP photographed numerous areas of waste on the surface of the ground that it encountered during its inspection and located it on the site using global positioning satellite technology ("GPS") and using DEP's Geographic Information System ("GIS"), a computer database of geographical information and related tables. Id., pp. 10, 12. DEP used that information along with the previously created map of the historically disturbed areas on the site to create a new site map entitled "Locations of Site Reconnaissance Photographs" dated April 1, 2008. Exhs. P-32, P-33, P-38, P-39, P-40, P-41; Tr. Fitting 1/14/10, pp. 17-18. That site map depicts both the areas of environmental concern identified from DEP's review of historical aerial photographs for site activities and disturbances and the areas of concern identified during the DEP site inspection in March 2008. Id., pp. 17-19, 35. The map, with one exception, did not include areas from historic aerial photographs where vehicles were present or stored on the site. Tr. Fitting, 1/14/10, p. 34.
33. DEP's review of aerial photographs identified areas where waste may have been buried below the surface and identified activities that may have resulted in pollution which may not be visible to the naked eye today but may be detectable through the collection and analysis of samples of soil, groundwater, surface water or sediments. Tr. Fitting 1/14/10, pp. 36, 48.
34. DEP's site reconnaissance work, while thorough, does not constitute a comprehensive site investigation, capable of fully characterizing the environmental conditions of the site. Tr. Fitting 1/14/10, pp. 35, 48. DEP did not conduct any type of subsurface investigation, such as sampling of soil, sediment, groundwater or surface water, as part of its site inspections in order for it to determine the existence or nonexistence of contamination or the extent and degree of pollution at any of the site locations visited. Id., p. 48.
35. On March 11 and 12, 2008, DEP observed numerous areas of concern, including crushed drums, metal debris and leachate staining (Lot 11); drums, metal debris and piping (Lot 3); partial car frame, four empty compromised drums and a soil pile (Lot 6); four rusty, compromised drums and pile of sheet metal (Lot 7); metal debris and a partially covered soil pile with torn plastic (Lot 8); five gallon plastic bucket with unknown liquid (Lot 9); remnants of a riding lawn mower and cleared area excavated and backfilled and identified as the Northeast Disposal area ("NEDA") (Lot 13); a car engine, three car doors, drum remains, metal debris, old appliance, drum water heater and the area identified as the North Central Disposal Area ("NCDA") (Lot 19). Exh. P-32 (Photos 13, 15, 21, 31, 35-37, 42, 47, 50, 54, 56, 58, 59); Tr. Fitting, 1/14/10, pp 20-26.
Leachate staining is a precipitate on the surface that is indicative of iron oxide and is associated with buried solid waste. Tr. Fitting, 1/14/10, p. 24; Tr. Warzecha, 1/20/10, p. 108.
36. In the summer of 2009, relatives of Daniel Cadle and an employee of The Cadle Company removed the majority of the surficial waste located on the site. Exh. P-36, Tr. Cadle, 1/21/10, p. 105; Tr. Fitting, 1/14/10, p. 27. DEP was not notified of the planned activity nor the identity of the solid waste facility to which any wastes were taken as required by Paragraph B.3.b. of the Order. Exh. P-36, Tr. Warzecha, 1/20/10, pp. 67-68. No environmental consultant contacted DEP regarding the removal of surface debris from the site before or after such activity. Tr. Warzecha, 1/20/10, pp. 68, 83-84. Removal of surface waste does not constitute remediation and does nothing to address pollution resulting from wastes buried beneath the surface. Exh. P-36. The surface debris is not necessarily representative of all waste that may have been placed on the property. Tr. Fitting, 1/14/10, p. 36. Some activities may result in pollution not visible to the naked eye, but detectable through sampling. Id. Some of the materials observed in March 2008 were drums which were empty but could have been placed there full and subsequently ruptured. Id. In that case the waste would no longer be visible but could still be a source of pollution remaining on the site. Id., pp. 36-37.
37. DEP made follow-up site inspections September 9, September 16, September 21 and October 21, 2009. Exhs. P-37, P-42; Tr. Fitting 1/14/10, p 27; Tr. Warzecha, 1/20/10, pp. 71-72.
38. During the October 21, 2009 site inspection, DEP staff visited more than fifty locations across the site and used lot numbers to identify some areas of concern. Exh. P-37, Tr. Warzecha, 1/20/10, pp. 71-72. DEP staff encountered Thomas Chapman of HRP Associates, Inc. on the site who indicated that the purpose of his visit was to perform a Phase 1 investigation, on behalf of Dan Cadle, on twelve individual parcels comprising the site. Exh. P-37; Tr. Warzecha, 1/20/10, p. 95.
39. William Warzecha, a hydrogeologist, registered sanitarian and supervising environmental analyst for DEP with more than 27 years of experience, stated repeatedly that the historical waste disposal activities and "checkered past" of this site made it a suspect site with regard to activities that may have caused pollution. Exh. P-45; Tr. Warzecha, 1/14/10, p. 115; 1/20/10, pp. 112, 143-44. Rain water is a strong solvent and as precipitation infiltrates the ground; if it comes in contact with waste material on or below the surface, it has the ability to dissolve it and carry that pollutant dissolved in groundwater to the point where it discharges either to a drinking water well or to a wetland, stream or watercourse. Tr. Warzecha, 1/14/10, p. 113.
40. William Warzecha's expert opinion was that there were areas of environmental concern on Lot 3, Lot 6, Lot 7, Lot 8, Lot 9, Lot 10, Lot 11, Lot 11A, Lot 13 and Lot 19 that require subsurface investigation and site characterization consistent with the DEP Site Characterization Guidance Document, and possibly remediation in accordance with the RSRs. Exhs. P-38, P-44; Tr. Warzecha, 1/20/10, pp. 74-76, 81-85, 87-94. Lot 3 contains a large wetland, and the westerly side of that lot was disturbed in the past. Id., p. 93. Lots 6, 7, 9 and 10 contain the South Central Disposal Area, a historically disturbed area with evidence of historic dumping and buried waste. Id., pp. 87-93. Lot 8 contains a soil pile, metal debris and test pit. Id., p. 90. Lot 13 contains a wetland with an open field and evidence of dumping. Id., pp. 84-85. The NEDA is located on Lot 13 raising a concern that waste is buried at that location. Id. Lot 19 contains the NCDA, a sand and gravel pit, a portion of the NEDA, and evidence of dumping at the perimeter of Moritz Pond. Exhs. P-32, P-38; Id., pp. 83-85, 93-94. Verification is needed to assure that there are no buried materials there based on the presence of waste material at the surface. Id. Based on experience, every place where waste was strewn on the top of the ground raises a concern that there is buried waste in that location. Id., p. 79. The northern half of Lot 10 was greatly disturbed, based on aerial photos; it is now overgrown, but there is widespread evidence of earth-moving activities that give rise to a concern regarding the burial of waste. Id., pp. 87-88. Lot 11A requires subsurface investigation because of its proximity to Lot 11 and its use as an access route for trucks to Lot 11, the potential for improper disposal or nighttime disposal on such a lot is high. Id., pp. 78-79.
41. It was Mr. Warzecha's expert opinion that, though there was no evidence of dumping on Lot 27, a subsurface investigation of groundwater from Lot 27 could be accomplished by placing a groundwater monitoring well downgradient of that lot to determine whether there has been any impact to groundwater. Exhs. P-38, P-44; Tr. Warzecha, 1/20/10, p. 80. Lot 14 is a one-acre size parcel situated on Route 44 between two residential properties. Exh. P-38; Id., pp. 85-86. It was Mr. Warzecha's opinion that there is no need for further investigation of that parcel as there was no evidence of disturbance. Id. If Lot 14 is developed and a well installed, he would request that the local health district require testing of that well for heavy metals and volatile organic compounds to assure that there is no impact to groundwater from waste on the site. Id., pp. 86-87.
42. Following the July 14, 1999 disapproval of Cadlerock Properties' proposed scope of study for investigation, the defendant has not submitted a revised scope of study to the Commissioner in accordance with Paragraphs B.4.a. and B.5. of the Order. Tr. Warzecha, 1/20/10, p. 104.
43. Cadlerock Properties has not performed investigative work sufficient to support a determination of the potential impact of conditions on the site on human health and the environment both on-site and off-site, including the existing and potential extent and degree of soil, ground water and surface water pollution. Tr. Warzecha, 1/20/10, pp. 25, 74-76, 78-79, 83-85, 87-94, 104. Until those areas of concern are fully investigated and characterized and remediated, we will not know whether drinking water wells and groundwater in the area are threatened. Tr. Warzecha, 1/20/10, p. 153.
44. Cadlerock Properties did not perform an environmental investigation of the site pursuant to an approved scope of study as Paragraph B.4.c. of the Order requires, nor has any consultant notified DEP of the installation of monitoring wells or soil or groundwater sampling since 1999. Exhs. P-1, P-2; Tr. Warzecha, 1/20/10, p. 102, 104.
45. Cadlerock Properties has not removed all solid waste disposed of at the site to a lawfully operating solid waste facility in accordance with Paragraph B.3.a. of the Order. Tr. Warzecha, 1/20/10, p. 103. The removal by persons associated with the Cadle Company in June 2009 was limited to surficial material only. Id.
46. Cadlerock Properties has not submitted a report detailing a comprehensive investigation of the site to the Commissioner for her review and approval in accordance with Paragraph B.4.d. of the Order. Tr. Warzecha, 1/20/10, pp. 104-05. Cadlerock Properties has not submitted a report to the Commissioner describing the extent and degree of soil, surface water and groundwater pollution on and emanating from the site in accordance with Paragraph B.4.d. of the Order. Id., p. 105. Cadlerock Properties has not submitted a report evaluating the alternatives for remedial action for this site in accordance with Paragraph B.4.d. of the Order. Id.
47. Cadlerock Properties has not proposed remedial alternatives to the Commissioner for the areas of environmental concern in accordance with Paragraph B.4.d. of the Order. Tr. Warzecha, 1/20/10, p. 105. Likewise Cadlerock Properties has not complied with the requirements of Paragraph B.4.e. (submittal of contract plans and specifications for the approved remedial actions) or Paragraph B.4.f. (perform approved remedial actions in accordance with an approved schedule). Id., pp. 105-06. Cadlerock Properties has not performed remedial environmental work at the site in accordance with the Order and has not performed environmental monitoring to determine the effectiveness of remedial action at the site in accordance with Paragraph B.4.g. of the Order. Exh. P-1, Id., p. 106. Cadlerock Properties has not submitted quarterly groundwater monitoring reports to determine the effectiveness of remedial actions in accordance with Paragraph B.4.h. of the Order. Id. The period of Cadlerock Properties' noncompliance with the requirements of the Order from 1999 to the trial is more than 10 years. Tr. Warzecha, 1/20/10, p. 106.
48. William Warzecha reviewed Draft Phase I Reports prepared for Cadlerock Properties and Cadlerock, Inc. by HRP Associates, Inc. dated December 2009 which were offered by Cadlerock Properties as exhibits for identification only. Exhs. D-AA through D-LL for ID . Tr. Warzecha, 1/20/10, p. 96. Neither those draft reports nor any other reports were submitted to DEP. Id. A Phase 1 investigation is limited to a site walk to see whether there are any visible problems on the surface that might be a threat to the environment, a file search of state, federal and local files and the compilation of a report and recommendations for further investigation. Id., pp. 96-97.
49. The conclusions and recommendations contained in HRP Associates' Draft Phase 1 Reports were that subsurface investigations, or Phase 2 investigations, should be conducted on nine of the twelve lots which comprise the site. Exhs. D-AA through D-LL; Tr. Warzecha 1/20/10, pp. 98-99. HRP Associates' recommendations are generally consistent with William Warzecha's expert opinion that additional subsurface investigations need to be performed in numerous areas of the site. Id.
50. It is William Warzecha's expert opinion that subsurface investigations also need to be performed for Lot 11A and for Lot 27, although the investigation for Lot 27 could be accomplished by initially placing monitoring wells downgradient of that lot. Tr. Warzecha, 1/20/10, p. 99. The HRP Associates' recommendations are not consistent with this aspect of Mr. Warzecha's expert opinion. Id.
51. Cadlerock Properties is affiliated with The Cadle Company. Exhs. D-P, D-Q, D-R, P-53, P-54, P-55, Tr. Cadle 1/21/10, pp. 65-66. The Cadle Company performs certain services for its affiliates and charges a fee which includes reimbursement for its expenses. Exh. D-ZZ, p. 6. The fees certain affiliates may pay is limited by the affiliates' agreements with financial institutions. Id. Cadlerock Properties reimburses The Cadle Company for its expenses if it has cash and otherwise it does not. Tr. Cadle, 1/21/10, p. 124, 1/26/10 pp. 27, 29-30. Cadlerock Properties does not have its own checking account. Id., 1/21/20, pp. 118, 125; 1/26/10, p. 5. The Cadle Company has paid for some expenses of the defendant. Id., 1/26/10, pp. 19-20. Daniel Cadle does not know who is paying the attorneys fees for this action and the inverse condemnation lawsuit. Id., p. 20. The defendant or affiliated entities sued Benjamin Schilberg and other parties regarding the site. Tr. Cadle 1/21/10, pp. 104-05. Daniel Cadle has never been to the site. Tr. Cadle 1/21/10, p. 102.
52. Cadlerock Properties presented U.S. Internal Revenue Service ("IRS") Form 1065, U.S. Return of Partnership Income, for Cadlerock Properties for the years 2005 through 2008 to support its claim that it is unable to pay a civil penalty for violations of the Order. Exhs. D-K, D-L, D-M, D-N; Tr. Cadle, 1/21/10, pp. 55-58. The forms show no income or expenses for Cadlerock Properties. Exhs. D-K through D-N. The Cadle Company is designated as the tax matters partner for each year. Id. In 2005, 2006 and 2007, the general partner is listed as The Cadle Company, which Daniel Cadle testified was an error. Exhs. D-K, D-L, D-M; Tr. Cadle, 1/21/10, pp 114-17.
53. Cadlerock Properties presented IRS Forms 1120S, U.S. Income Tax Return for an S Corporation, for Cadlerock, Inc. to support its claim that it is unable to pay a civil penalty for violations of the Order. Exhs. D-G, D-H, D-I, D-J; Tr. D. Cadle, 1/21/10, pp. 55-63. Daniel Cadle is the sole shareholder of Cadlerock, Inc. Exhs. D-G, D-H, D-I, D-J. No income from Cadlerock Properties is reported on tax returns for Cadlerock, Inc. for the years 2005 through 2008. Id.
54. On November 15, 1996 Cadlerock Properties and an affiliated entity, Cadlerock Joint Venture, L.P. ("Cadlerock JV"), obtained a loan for $47 million from CS First Boston Mortgage Capital Corp. Exh. P-53; Tr. Cadle, 1/21/10, pp. 31-32; 1/26/10, pp. 5-6. The note was secured by real estate in various states, including the site at issue in Ashford and Willington, Connecticut. Id. The real estate secured was owned by Cadlerock Properties. Tr. D. Cadle, 1/21/10, pp. 29-30. Numerous other loans were subsequently obtained by Cadlerock Properties and Cadlerock JV from U.S. Bank National Association. Exhs. P-54, P-55, D-P, D-Q, D-S, D-T; Tr. Cadle, 1/21/10, pp. 30-32; 1/26/10, pp. 7-9. The Cadle Company and Daniel C. Cadle are guarantors of those loans. Exhs. D-P through D-T, P-53, P-54, P-55. As of January 31, 2005 the principal balance of the term loans from U.S. Bank was $24,641,240.72. Tr. Cadle, 1/21/10, pp. 30-32; 1/26/10, pp. 8-9. At time of trial, Cadlerock Properties is not in default on its loan and does not anticipate that it will be in default this quarter. Exhs. D-R, D-T, Tr. Cadle, 1/21/10, pp. 76-79; 1/26/10, pp. 19, 21. The bank lent more money to the defendant in the second half of 2008 to purchase additional pools of loans. Tr. Cadle, 1/26/10, p. 18.
55. The defendant did not use the proceeds of several properties sold in 2005 and 2009 to comply with the Order. Tr. Cadle, 1/21/10, pp. 129-30, 134-35. Logging operations at the site 8 or 10 years ago yielded $32,250. Id., 1/26/10, pp. 4-5. Cadlerock Properties has not paid real estate taxes on the site since 2002. Tr. Cadle, 1/21/10, pp. 132-33. The determination not to pay taxes was a "business judgment." Tr. Cadle, 1/26/10, pp. 30-31.
56. On June 14, 2007 Cadlerock Properties borrowed $1,122,836.27 from Cadlerock JV and secured the note with a mortgage deed on only one property, the site at issue in Ashford and Willington, Connecticut. Exhs. P-56, P-57. Cadlerock Properties has not paid back the loan. Tr. Cadle, 1/26/10, pp. 11-13, 14.
57. Cadlerock Properties' gross income from payments on property it has owned from 2005 through 2009 was $3,401,026.84. Exh. D-A, Tr. Cadle, 1/21/10, pp. 38-40. The principal balance of loans on ten properties was $629,390.73. Exh. D-A. Cadlerock Properties sold thirty properties from 2002 through 2009, closed out three additional properties as bad debts and currently owns eleven properties. Exh. D-B.; Tr. D. Cadle, 1/21/10, pp. 44-46.
58. Three properties owned by Cadlerock Properties are encumbered by tax assessments or tax liens and one is encumbered by a demolition lien. Exh. D-D. The known amounts on those liens total $5,912.71. Id. The encumbrances on the Ashford/Willington site are held by related or affiliated entities, Cadlerock JV and The Cadle Company of Connecticut, Inc. Id. No other properties list encumbrances. Id.
59. The defendant offered an audited financial statement for The Cadle Company for the period ending December 31, 2008. Exh. D-ZZ. Its total revenue for 2008 was $9.5 million. Exhs. D-ZZ, p. 3, P-51. The Notes state that The Cadle Company "continues to aggressively pursue lawsuits against the former owner and polluters of the [Ashford/Willington] site for reimbursement of the actual and anticipated costs of cleanup." Exh. D-ZZ, p. 9.
60. Cadlerock Properties, Cadlerock Joint Venture, L.P. and Cadlerock, Inc. file a joint tax return and an independent auditor prepares a joint audited financial statement for the affiliated entities. Tr. Cadle, 1/21/10, pp. 55, 58. The tax returns for Cadlerock, Inc. report income of $57,826 for 2005; $22,141 for 2006, $11,462 for 2007 and minus $1,639 for 2008. Exhs. D-G through D-J.
61. A December 2, 2009 amendment to the Cadlerock Properties Agreement of Limited Partnership amended the Term of Partnership to provide that "the Partnership shall terminate on December 31, 2009 . . ." Exh. P-52. Under Ohio law, the partnership cannot be reinstated. Tr. Cadle, 1/26/10, pp. 37-38.