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Sun Val, LLC v. Commissioner of Transportation

Supreme Court of Connecticut

October 9, 2018

SUN VAL, LLC
v.
COMMISSIONER OF TRANSPORTATION

          Argued May 3, 2018

         Procedural History

         Action to recover damages sustained as a result of, inter alia, the defendant's alleged negligence, brought to the Superior Court in the judicial district of Litchfield and tried to the court, J. Moore, J., judgment for the plaintiff, from which the plaintiff appealed. Affirmed.

          Neal L. Moskow, with whom were Stephanie Dellolio and, on the brief, Deborah M. Garskof, 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. [*]

          OPINION

          MULLINS, J.

         The plaintiff, Sun Val, LLC, appeals[1] 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 professionals[5]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 that any materials should go to the high level facility, he did not include a cost for removal to that facility. To arrive at a disposal cost for the high level facility, the trial court added 10 percent to the cost used by Conte for the high level facility. Accordingly, the court calculated the disposal costs using a cost of $29 per ton for the recycling facility, $65 per ton for the low level facility, and $144.65 per ton for the high level facility. Using these rates, the court further found that ‘‘70 percent of the material, 448 tons, could legally be disposed of at a low level [facility] for a cost of $29, 120 . . . 20 percent of the material, 128 tons, needs to be legally . . . disposed of at a higher level [facility] at a cost of $18, 515.20 . . . and 10 percent, 64 tons, could be recycled for a cost of $1856 . . . . The court also agrees with [Martin] as to ancillary costs, such as survey at $1625, clearing and grubbing at $2715, erosion control measures at $801.80, excavation and direct load out at $3949.24, and engineering and consulting fees at $11, 140. Therefore, the court concludes that the plaintiff has proven that the defendant caused the plaintiff to sustain $69, 722.24 in remediation costs.''

         At the conclusion of trial, the court made the following factual findings: (1) ‘‘the plaintiff has proven the defendant negligent in its authorization of Hallberg to use the property for the disposal of materials from the project''; (2) ‘‘the amount of damages proven by the plaintiff is $69, 722.24''; and (3) ‘‘the defendant has proven that the plaintiff failed to mitigate its damages in the amount of $34, 598.41 and that, as a result, the $69, 722.24 should be reduced by $34, 598.41.'' The trial court then reduced the amount remaining by an additional 15 percent on the basis of the plaintiff's comparative negligence and, accordingly, awarded $29, 855.26 in damages. This appeal followed. Additional relevant facts will be set forth as necessary.

         I

         A

         The plaintiff first claims that the trial court improperly applied regulatory provisions governing remediation; see Regs., Conn. State Agencies § 22a-133k-1 et seq. (remediation regulations); instead of regulatory provisions governing the disposal of solid waste; see Regs., Conn. State Agencies § 22a-209-1 et seq. (solid waste regulations); in determining the plaintiff's damages. The plaintiff further claims that the trial court failed to award sufficient damages as a result of the failure to apply the solid waste regulations. The defendant responds by asserting that the trial court applied the proper regulations. Specifically, the defendant claims that the trial court relied on the report and opinion of Conte, who utilized the solid waste regulations. We agree with the defendant.

         ‘‘The scope of our appellate review depends upon the proper characterization of the rulings made by the trial court. To the extent that the trial court has made findings of fact, our review is limited to deciding whether such findings were clearly erroneous. When, however, the trial court draws conclusions of law, our review is plenary and we must decide whether its conclusions are legally and logically correct and find support in the facts that appear in the record.'' (Internal quotation marks omitted.) Stratford v. Jacobelli, 317 Conn. 863, 869, 120 A.3d 500 (2015).

         On appeal, the plaintiff claims that the trial court applied the wrong regulations and then posits that this claim presents an issue of law over which we exercise plenary review. For the reasons which follow, we disagree that the plaintiff's claim regarding the trial court's award of damages presents a question of law.

         A review of the trial court's memorandum of decision reveals no indication that the court relied on the remediation regulations as opposed to the solid waste regulations. Instead, the record reveals that both parties' experts indicated at some point during their testimonies that the remediation regulations did not apply to removal of the Hallberg material from the property. Specifically, Conte, the plaintiff's expert, testified that the remediation regulations are ‘‘a good reference, but [they have] no bearing'' if there is no remediation taking place on the soil. He further testified that the remediation regulations ‘‘were actually set up as a means to determine when you're essentially done with your remediation. . . . [T]here's not remediation here, but it's the only standards we have in the state to compare to.'' Likewise, the defendant's expert, Martin, when asked on direct examination if the remediation regulations applied to the property, responded ‘‘[n]ot as far as I'm aware.'' He further opined that ‘‘[r]emediation, typically, you need [a] better definition of what it is you're removing and . . . the basis for the limits of what you're removing. And, typically, you know, in Connecticut, if you're performing a remediation, then you would . . . perform sampling and postremediation sampling, post-excavation sampling in this case, with the idea that you're trying to meet some regulatory end point.''

         Consistent with the testimony of the experts, the trial court's ninety page memorandum of decision is devoid of any findings regarding specific contamination levels or application of the remediation regulations. Rather, the memorandum of decision reveals that the trial court made a factual determination as to the percentages of the waste that could be allotted to the different disposal facilities on the basis of qualitative information provided by the parties' experts. This analysis by the trial court is consistent with the definitions supplied in the solid waste regulations. Furthermore, during closing arguments, the trial court pointed out that removal is not the only option for polluted soil ‘‘under [the] definition of ‘clean fill' [in the solid waste regulations].'' The court made no reference to the remediation regulations. We conclude that the trial court, after weighing the credibility of each expert and on the basis of the information they provided, made a factual determination regarding the appropriate plan for removal. Accordingly, we reject the plaintiff's claim that the issue before us is one of law. Instead, we understand the plaintiff's claim to be that the findings of the trial court regarding the percentages of the waste that could be allotted to the different disposal facilities and the costs associated with these removal methods were clearly erroneous.

         We now turn to that question. In doing so, we apply the clearly erroneous standard of review. ‘‘Although we give great deference to the findings of the trial court because of its function to weigh and interpret the evidence before it and to pass upon the credibility of witnesses . . . we will not uphold a factual determination if we are left with the definite and firm conviction that a mistake has been made.'' (Internal quotation marks omitted.) Wyszomierski v. Siracusa, 290 Conn. 225, 237-38, 963 A.2d 943 (2009).

         Throughout the course of the trial, the court heard significant testimony regarding the amount and nature of the material dumped on the plaintiff's property by Hallberg and the appropriate manner in which to remove that material. To begin with, the trial court heard testimony from a Hallberg employee, Antonelli, who described the material brought to the property by Hallbergas ‘‘fill material, '' essentially ‘‘a fill of dirt material'' with ‘‘maybe a little clay in it.'' This description of the Hallberg material was consistent with photographs that were presented to the court, which ultimately described the deposits on the northwest corner of the property as ‘‘regularly-sized piles containing earth and clay-like material . . . .'' Antonelli also testified that discarded material, such as asphalt, bricks, catch basins, and drainage pipes, depicted in additional photographs of the remainder of the property, were not brought there by Hallberg. Antonelli explained that, at the time of the dumping on the property, the highway reconstruction project was not in a phase where materials such as bricks, catch basins, and drainage pipes would have been removed from the project site.

         Next, Conte testified over the course of three days regarding his suggested plan for removal of the Hallberg material. Specifically, he described how he relied on data contained in the two environmental assessments that he had performed for the plaintiff in2006 in connection with the pending sale of the property to Bow Tie. Conte explained that the assessments, which involved taking samples from various soil piles, ‘‘indicated [that] petroleum and semi volatile organics were present in [the] soil piles throughout the site, '' the source of which was ‘‘likely coal ash or bituminous asphalt, '' and that it was his professional opinion that it was from site wide fill material. He further testified that his proposed removal plan was ‘‘based on whether or not the soil [was] polluted . . . and whether or not the soil piles were present there . . . [b]etween 2005 and 2006'' using ...


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