Opinion
C.A. No. 00A-01-003
July 12, 2001
John Sergovic, Jr., Esquire.
Kevin P. Maloney, Esquire.
Dear Counsel:
The matter before the Court is an appeal of a decision of the Environmental Appeals Board ("Board" or "EAB") that affirms a decision of the Secretary ("Secretary") of the Department of Natural Resources and Environmental Control ("DNREC") denying a riparian landowner a permit to build a pier and dock. For the following reasons, I affirm the Board's decision.
STATEMENT OF FACTS
Mark and Joanne Woodruff (the "Woodruffs") entered into a contract with The Glade, L.L.C. to buy a waterfront lot, number 68, in The Glade subdivision. The contract to purchase the lot was conditioned on the granting of a permit to build a dock. The Glade and the Woodruffs filed a joint application with DNREC on August 14, 1996, and their request was denied by the Secretary on July 3, 1997. As a result of the denial, the Woodruffs did not buy lot 68 and bought another lot in The Glade community that already had a dock. The Glade appealed the denial to the EAB, which upheld the Secretary's decision, and is now appealing the decision of the EAB to this Court.
There were two letters of denial, one to The Glade and the other to the Woodruffs.
The application in question was one of many applications related to the development of The Glade, and this appeal is the culmination of a long process of negotiation and review by The Glade, the property owners, and DNREC. There are 41 riparian lots in The Glade development that is situated on and takes its name from the Holland Glade. When it became apparent that these lot owners were interested in building docks, The Glade hired Edward M. Launey ("Launey"), the president of the environmental consulting firm Environmental Resources, to conduct an analysis of different options available to residents who wanted boating access, including a marina, individual docks, and a large, central dock. Launey and The Glade attempted to determine which residents wanted docks and began to consider ways to minimize the impact these docks and piers would have on the environment. To minimize the impact, many of the lot owners agreed to share piers with their neighbors, so that there would be one pier extending along the property line. That single walkway would have two docks at the end, forming a "Y." Thus each property owner would have a dock, but the number of piers (the walkways to the docks) was cut by half.
Other measures to minimize impact were also considered, such as making the docks smaller and using metal pilings instead of treated wood. DNREC suggested to Launey and the Glade to combine the applications into a package, so that the cumulative impact of all of the docks and piers could be considered together. Four of the residents who wanted docks submitted their applications before the package was submitted, and these were held by DNREC pending negotiations with The Glade. The group application was submitted on August 20, 1996, and included thirteen applications for twelve shared piers and one single pier (the single pier is the subject of the appeal).
DNREC evaluated the four earlier applications first, and approved three of them (one of the three was for the repair and replacement of an existing dock, not a permit to construct a new dock). At some point during the consideration process, DNREC developed a matrix system that assigned scores for various aspects of the docks/piers that covered the following factors: whether the pier was shared or individually owned, the distance of the dock from the mouth of the Holland Glade, encroachment, the length of the walkway, the extent to which an applicant's impact would exceed his or her allotted impact, and the mean low water depth at the dock. Each of the scores for the various factors was weighted according to the importance placed upon them by DNREC, and a final score was derived. DNREC set and met a goal of a 50% reduction in the impact of the applications. The 50% reduction corresponded to denying applications for about half the docks, not including the three docks applied for before the group application was submitted. DNREC admitted that later settlement negotiations resulted in approval of docks that put the approval rate over the threshold. DNREC did not attempt to reduce the possible docks by 50%, because it was not known what that number would be, since even though there were only 41 riparian lots, each lot possibly could have more than one dock.
After the appeal to the Board was initiated, the parties entered into settlement negotiations to assess whether the applicants who were denied docks could reach a compromise with DNREC and get approval. On April 28, 1998, The Glade (the sole owner of Lot 68, since the Woodruffs decided not to buy it) tried to revise the original application into a joint application with the owner of lot 69, Darius Sypek ("Sypek"), for a permit to construct a pier on the lot 68 and lot 69 property line. The Appellants have supplied a copy of the draft order stating the terms of the settlement, but it was never signed by DNREC. In a letter dated October 29, 1998, DNREC informed The Glade and Mr. Sypek that it would not settle:
The purpose of this letter is to inform you that we are unable to settle on the terms proposed in your settlement offer (enclosed) because of the inclusion of Mr. Sypek's structure on the plans. As you know, Mr. Sypek never applied for a permit and, accordingly, was not a party to the process leading to settlement of the other appeals. The Department is without legal authority to authorize a structure which has not been through the administrative process. This decision is without prejudice to any future applications or for the Glade LLC to proceed with its pending appeal.
The letter was addressed to The Glade and Sypek, and was from Kevin Maloney, Deputy Attorney General. Because of the refusal of DNREC to consider Sypek's and The Glade's revised application, The Glade continued with its appeal to the EAB.
After the refusal of DNREC to settle, DNREC moved to dismiss and for a motion in limine. In support of its Motion to Dismiss, DNREC argued that it could not proceed with The Glade's application because under the Marina Regulations, developers are not allowed to apply for dock permits, and once the Woodruffs dropped the appeal, there was no longer a residential property owner to receive the permit. The Motion in Limine was to exclude any testimony related to the settlement negotiations. The EAB denied the Motion to Dismiss, but granted the Motion in Limine.
At the beginning of the hearing before the Board, DNREC renewed its Motion to Dismiss, and the Board, which reserved judgment on it until the close of the hearing, denied it. The Board concluded that the Secretary's denial of the application was not arbitrary and capricious, the evidence presented to the Board supported the Secretary's decision, and that the denial was reasonable and not treated in a discriminatory manner.
STAGE OF PROCEEDINGS AND STANDARD OF REVIEW
After the Secretary denied The Glade's application, The Glade appealed to the Environmental Appeals Board pursuant to 7 Del. C. § 6008. After holding a hearing, the Board affirmed the Secretary's decision, and now The Glade appeals to this Court the Board's decision pursuant to 7 Del. C. § 6009(a).
This Court may affirm, reverse, or modify the Board's decision, and must accept the Board's findings of fact if there is substantial evidence that reasonably supports those findings. 7 Del. C. § 6009(b). "On an appeal from the Board, this Court's role is to determine whether the Board's decision is supported by substantial evidence and is free from legal error." Tulou v. Raytheon Service Co., Del. Super., 659 A.2d 796 (1995), citing 29 Del. C. § 10142 and Stoltz Management v. Consumer Affairs Board, Del. Supr., 616 A.2d 1205, 1208 (1992). "Absent an abuse of discretion, the decision of the tribunal below must be affirmed." State, Dept. of Labor v. Med. Placement Ser., Del. Super., 457 A.2d 382 (1982). Even if this Court would have reached a different conclusion, it will not substitute its judgment for that of the Board. Director of Revenue v. Stroup, Del. Super., 611 A.2d 24, 26 (1992).
DISCUSSION
This appeal presents two questions. First, was the denial of the permits arbitrary and capricious? Second, should DNREC have issued the permit as part of a settlement?
A. Was the denial of the permits arbitrary and capricious?
In order to examine whether DNREC abused its discretion in denying The Glade's application, there are two aspects of the decision that must be considered: first, whether the creation and adoption of the matrix system was arbitrary, and, second, whether it was applied in a manner that was consistent and fair to all of the applicants. The Appellant challenges DNREC's decision by claiming that both the adoption and application of the matrix were arbitrary and an abuse of DNREC's discretion.
The Delaware Legislature gave DNREC broad authority to protect wetlands under 7 Del. C. § 6601 and this broad authority has been supported by In re Department of Natural Resources Envtl. Control, Del. Super., 401 A.2d 93 (1978). DNREC presented extensive testimony to the EAB regarding the impact a large number of docks and boats would have on the Holland Glade's overall condition, from the marsh that bordered the stream, to the water quality of the stream itself, to the life of creatures who dwell in the sediment on the bottom of the stream. From the evidence presented by DNREC, it is obvious that a large number of docks would have serious detrimental effects on the wetlands surrounding the Holland Glade and on the waterway itself. Indeed, presumably one of the reasons that people desired to live in The Glade, was that it was in a naturally beautiful area, so the lot owners had an interest in maintaining the attractiveness of the area surrounding their homes. Thus DNREC had the need and the statutory authority to reduce those effects, and it had to do so in a manner that was fair to all of the riparian lot owners who were interested in building docks. The matrix was developed to do just that.
To this extent they were fortunate, since the State of Delaware already owned the land across the glade from The Glade subdivision and intended to keep it in its natural state. However, one of Appellant's arguments is that "the applied matrix imposed restrictions on private property to benefit State owned property, thereby impermissibly depriving private property owners of their private property rights for an economic benefit to be conferred upon State owned property." This assertion is not supported by any evidence on the record, and is somewhat unusual since it is not clear exactly what economic gain the State could receive, since the land was to be preserved in its natural condition.
The matrix also was developed as a means of handling the large influx of applications. At the October 12, 1999 EAB hearing, the Program Manager of the Wetland and Subaqueous section within the Division of Land and Water Resources, Laura Herr, told the EAB that "it's very rare for us to have a system like the Holland Glade that is relatively undeveloped and then suddenly have altogether within a six-week or two-month period a large influx of applications." She also testified that DNREC's experience with the two earlier applications for docks on the Holland Glade made DNREC aware of how difficult it would be to balance the interests of the riparian lot owners with the need to protect the natural qualities of Holland Glade.
In order to avoid the arbitrariness of considering one application at a time, DNREC developed the matrix to provide an objective ranking system to determine the environmental impact of each of the applications. DNREC considered which factors were most important in determining environmental impact, and divided the considerations into six categories: whether the walkways were shared or individual; the extent of the dock and boat's encroachment into the waterway; the mean low water depth at the dock; the location of the pier relative to the mouth of the Holland Glade; the length of the walkway; and whether the application exceeded its allotment of impact in comparison to the other docks. These factors were the ones considered most important to DNREC, and DNREC assigned weights to each factor depending on its overall environmental impact. One advantage of the matrix system is that it helps to reduce the importance of any one factor on the overall decision, so ultimately it is in fact less arbitrary.
Appellant challenges DNREC's adoption of a 50% goal in the reduction of the environmental impact of the docks. This Court will uphold a decision of an administrative agency when that decision was the result of the agency's particular knowledge and expertise. DNREC had a number of its experts actually visit the site, and from their testimony before the EAB, it is clear that they are very familiar with the Holland Glade. Considering the broad authority DNREC has over wetland areas and the uniqueness of the Holland Glade waterway, DNREC was justified in seeking an appropriate reduction in impact and deriving, based on its expertise, the 50% goal. The decision to reduce impacts by a certain figure was the product of extensive knowledge of and experience with the environmental qualities of the ecosystem of the Holland Glade.
Appellant also argues that the 50% target should have taken into consideration all of the potential docks, based on the total number of riparian lots in The Glade subdivision. However, to base a goal on that number, DNREC would have to assume that all of those lot owners wanted a dock, and this was not the case. And as Ms. Herr at the EAB hearing testified, there is no restriction on the number of docks that can be applied for each lot, so there is no way that a set number could have been derived on which to base the reduction goal. Also, the goal was for a 50% reduction in impact, which does not necessarily correspond to the number of docks. Cutting the number of docks in half does not necessarily reduce the impact by half, since there are so many factors that contribute to impact beyond just the number of docks, such as length of the walkway to the actual dock and the depth of the water at the dock. For example, two small docks with short walkways near the mouth of the Holland Glade may have less impact than a large dock far up the waterway.
Considering the influx of applications and the potential impact that a large number of docks and piers would have on the Holland Glade's ecosystem, DNREC was justified in developing a system that could balance varying homeowners' interests and the environmental impacts that DNREC had to consider.
The second question that this Court must consider is whether the matrix was used the way it was designed to be used, or whether it was exercised in a discriminatory manner. Appellant argues that DNREC used the wrong figures in its calculation of The Glade's score in the matrix. At the EAB hearing, Appellant presented testimony of its expert, Mr. Launey, who had developed his own matrix and disagreed with DNREC's assignment of values for the different factors it considered. However, the points and weights used for The Glade's application were applied to all of the applications, and there was no set of special point values that were used just for The Glade's application. These types of disagreements are sure to arise in this kind of situation and without a showing that the scores were discriminatorily applied to The Glade's application itself, this Court will not attempt to reassign points under the matrix system. While Mr. Launey is well-qualified in his field, DNREC and the EAB chose to give greater weight to DNREC's experts and this choice was reasonable considering the extensive experience of DNREC's experts and their familiarity with the Holland Glade. The Glade's application received a score of 155, while the highest passing score for an application was 125. Scores of 140 and 135, which were both below The Glade's score, were also denied.
With respect to the three applications that were approved before the batch submitted by Mr. Launey, DNREC had valid reasons for issuing those permits. According to Ms. Herr, two of the applications, of Reed and Strother, were received "years prior to the point where the batch applications finally came in," and the application of Mrs. Engle was actually for the repair and replacement of an existing structure. Ms. Herr noted that when allocating resource allotments, first come first served is a factor. Indeed, the difficulties that DNREC discovered in negotiating with Reed and Strother and in encouraging them to reduce the impact of the docks caused DNREC to seek a more efficient and equitable process for evaluating the applications, the matrix.
Considering the well-established need to protect the Holland Glade, the broad authority of DNREC to regulate potentially harmful activities on wetlands, and the circumstances that created the need to develop a standard system to compare and weigh the effects of the applied-for docks, DNREC's adoption of the matrix was a valid exercise of its agency power in this particular situation. Appellant has failed to show that DNREC's application of the matrix prejudiced The Glade's application for the permit.
B. Was a settlement agreement reached?
Appellant asserts that a settlement agreement was reached between DNREC and The Glade on the application for a joint pier for lots 68 and 69. This matter is not appropriate to be decided by this Court or as part of this current appeal. First, the appeal before this Court is from the decision of the EAB which affirmed DNREC's decision to deny The Glade's and the Woodruffs' application for a dock to serve lot 68. The alleged settlement, meanwhile, involved a joint pier for lots 68 and 69 — a completely separate application from the one that is being appealed. The EAB in its Final Order and Decision of December 23, 1999, did not consider the allegations regarding the settlement agreement and there was no evidence brought to its attention for it to consider. Thus this Court will not decide a matter that is not properly before it. It is worth noting that if this Court were to agree with both of Appellant's arguments — that a settlement agreement existed and that the EAR's decision was wrong — then The Glade would get a permit for a dock on lot 68 as well as a dock on the property line of lots 68 and 69.
Second, specific performance of a settlement agreement is an action properly brought in a court of equity. Thus even if the settlement concerned the present matter before this Court, this Court does not have the authority to order specific performance. 10 Del. C. § 341. Finally, even if this issue were properly before the correct court, the lack of a signature on the alleged "settlement agreement" and the fact that The Glade attempted to alter DNREC's offer would seem to suggest that there was no meeting of the minds required for such an agreement. See State v. Jefferic Enterprises, Inc., Del. Super., C.A. No. 90C-AU-20, Steele, J. (Nov. 19, 1990) (Mem. Op.) (stating, "Jefferic's attempt to establish a contract based upon the acceptance of an offer fails because Jefferic attempted to modify the Department's original offer and returned an altered proposed contract to the Department. In order for the acceptance to be effective, it must be identical to the offer and unconditional.").
CONCLUSION
For the foregoing reasons, this Court affirms the decision of the Environmental Appeals Board.
IT IS SO ORDERED.