NRB v. Stratton Corp

Vermont Superior Court·Decided November 17, 2016·No. 106-7-14 Vtec·Published

Opinion

STATE OF VERMONT

SUPERIOR COURT ENVIRONMENTAL DIVISION Docket No. 106-7-14 Vtec

NATURAL RESOURCES BOARD, Petitioner,

v. DECISION ON THE MERITS

THE STRATTON CORPORATION, Respondent.

DECISION ON THE MERITS

This case presents an uncommon intervention by a third party seeking to increase the penalty in a permit enforcement action by the state. The third party, Treetop at Stratton Condominium Association, Inc. (Association or Treetop), represents owners of 75 townhouse condominium units near Stratton Mountain in the Town of Stratton, Vermont. The parties to the enforcement action are the Natural Resources Board (NRB), the Agency of Natural Resources (ANR), and The Stratton Corporation (Stratton or Respondents), Treetop’s developer. The Association has asked the Court to vacate the $42,375 penalty imposed on Stratton for failure to comply with its Act 250 land use permit and stormwater permit when Stratton built the townhouse condominium development. Ultimately, the Association seeks a higher penalty.

Stratton has admitted its permit violations. Those include unapproved changes to the stormwater management system that most notably have resulted in a leaky detention pond. To address the deficiencies, Stratton applied for and received an amended Act 250 permit in 2013 that alters the original Act 250 Permit and requires remedial work. In 2014, the NRB, in coordination with ANR, entered into an Assurance of Discontinuance (AOD) with Stratton. The AOD outlines the violations, assesses the penalties, and requires Stratton to comply with its permits.1 A deadline of September 1, 2014 was set for completing the remedial work. However,

1 Pursuant to 10 V.S.A. § 8007(a), the Secretary of Natural Resources or the Board may accept from a respondent an assurance of discontinuance of a violation as an alternative to administrative or judicial proceeding. In an AOD, the respondent admits the violation and agrees to perform specific actions to rectify environmental problems.

due to this case, the AOD and Stratton’s obligations under it have been held in abeyance. 10 V.S.A. § 8012(d).

The Court has issued two pre-trial decisions that narrow the scope of this appeal. The only remaining issue is sufficiency of the penalty against Stratton. A two-day merits hearing was held on October 13 and 14, 2016 in the Costello Courthouse in Burlington, Vermont. The Association is represented by Attorney A. Jay Kenlan; Stratton is represented by Attorney Lisa B. Shelkrot; and the NRB and ANR are represented respectively by Attorneys Peter J. Gill and Elizabeth Schilling. Based on the evidence presented at trial, which was put into context by a site visit conducted on October 4, 2016, the Court renders the following findings of fact and conclusions of law.

Findings of Fact

1. Stratton received Act 250 Land Use Permit 2W1142 (Original LUP) for the development of 25 three-unit townhouse buildings (Project) on November 18, 2002.

2. Stratton built out the Project in three phases from 2002 to approximately 2006. 3. Stratton failed to construct the Project in full accordance with the Original LUP and failed to seek and obtain a prior amendment to the Original LUP for the deviations from the Original LUP.

4. The as-built construction of the Project deviated from the Original LUP in three broad ways: three-point paved turnarounds for fire truck access were not properly constructed; ledge cuts and slope gradients were constructed instead of approved and required retaining walls, which necessitated unapproved tree cutting and land clearing on about two acres; and the stormwater conveyance and treatment system was not built in accordance with Stormwater Discharge Permit #1-1537, resulting in a leaky detention pond among other problems.

5. In March of 2012, Stratton filed an Act 250 application to amend the Original LUP, (“-D” Application). This amendment sought some restoration of the Project to the permitted conditions of the Original LUP and also sought certain amendments to the Original LUP to conform with as-built conditions.

6. Treetop participated in the consideration of the amendment application before the District II Environmental Commission.

7. Stratton and Treetop have a strained and litigious relationship. In 2009, Treetop initiated a civil action against Stratton relating to alleged construction defects of the Project. The parties settled the matter with Stratton paying the Association approximately $5 million dollars.

8. Due in part to the strained relations and in part to Treetop’s disagreement with remedial efforts within the “-D” application, Treetop did not support the application.

9. Furthermore, for some time, Treetop would not allow Stratton access to the subject property for Stratton to address the violations of the Original LUP and associated environmental concerns.

10. On October 21, 2013, the District 2 Environmental Commission issued LUP Amendment 2W1142-D (“-D” Permit), which included some restoration of the Project to the permitted conditions of the Original LUP and also sought certain amendments to the Original LUP to conform with as-built conditions.

11. The “-D” Permit was not appealed and is final and binding. 12. In the fall of 2012, Stratton began remedial efforts as set forth in the “-D” Permit. 13. To date, not all remedial actions as set forth in the “-D” Permit are complete. 14. The NRB, in consultation with ANR, entered into an AOD with Stratton on July 15, 2014.

15. Both ANR and the NRB use a penalty calculation matrix for calculating penalties.

The matrix is used to maintain uniformity and it tracks with the penalty factors that NRB and ANR are legally required to consider under 10 V.S.A. § 8010.

16. The AOD requires Stratton to pay a civil penalty of $42,375; to reimburse the NRB and ANR for the value of the time their officials committed to responding to the violations, including prosecution of these violations, at $1,163.40; and to pay the $10 recording fee for notice of the AOD to the town of Stratton. The AOD also requires Stratton to come into conformity with its permits.

17. The deadlines for Stratton’s remedial work were set according to the date the Court entered the AOD as an order.

18. Due to Treetop’s intervention and challenge of the penalties in this matter, the Court has not yet entered the AOD as an order.

19. The Project is located within the Styles Brook watershed. The watershed is impaired, but not for stormwater. The watershed is impaired as a result of sediment, or dirt, flowing in.

20. A failure of the stormwater system could further impair Styles Brook. 21. Stratton’s illegal clearing of about two acres of land caused erosion that impacted an intermittent stream and a wetland, caused a rock fall, and created excessive icing in the Project’s roads, driveways, and garages.

22. Association President Matthew Stoltz has fallen on the ice. 23. The fire truck turnarounds were not built to specifications. 24. The icy conditions and deficient fire truck access were potentially dangerous, but no major actual impact resulted.

25. NRB and ANR reacted timely to Respondents, attempted to have them voluntarily bring the Project into compliance, and did not act with unreasonable delay.

26. One of the stormwater detention ponds was constructed with the unauthorized burial of stumps, logs, and boulders.

27. Stratton knew or should have known of the permit violations at the Project prior to 2006.

28. There is clear evidence that Stratton knew of its various permit violations by November 2010, but did not report the stormwater permit violations until 2012.

29. Stratton chose to pursue its development interests prior to seeking and obtaining permit amendments.

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