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CFD Realty, LLC v. State

Superior Court of Rhode Island

March 3, 2017

CFD REALTY, LLC and JS PALLET CO., INC.
v.
STATE OF RHODE ISLAND, DEPARTMENT OF ENVIRONMENTAL MANAGEMENT

          For Plaintiff: Thomas More Dickinson, Esq.

          For Defendant: Joseph J. Lobianco, Esq.

          DECISION

          MONTALBANO, J.

         This matter is before the Court on the complaint of CFD Realty, LLC and JS Pallet Co., Inc. (Appellants) seeking judicial review of a Decision and Order of the Administrative Adjudication Division (AAD) of the Rhode Island Department of Environmental Management (RIDEM), as amended on November 26, 2012. See AAD Decision and Order. The AAD Hearing Officer found that Appellants violated G.L. 1956 § 2-1-21, Rule 7.01 of the RIDEM Rules and Regulations Governing the Administration and Enforcement of the Freshwater Wetlands Act, March 1994 and April 1998, as well as Rule 5.01 of the RIDEM Rules and Regulations Governing the Administration and Enforcement of the Freshwater Wetlands Act, June 2007. According to the amended Decision and Order, no monetary penalties would be imposed, but the Restoration Requirements in Section D (2) of the Notice of Violation would remain in full force and effect. The matter is before this Court on administrative appeal pursuant to G.L. 1956 § 42-35-15. For the reasons set forth herein, this Court affirms the AAD Decision and Order, as amended on November 26, 2012.

         Facts and Travel

         The property at issue abuts Lockbridge Street in Pawtucket, Rhode Island and runs along the Moshassuck River into Lincoln, Rhode Island. CFD Realty, LLC is the owner of the property. JS Pallet Co., Inc. is the operator of the facility on the property. Carlos DaSilva (Mr. DaSilva) is the owner of CFD Realty, LLC and the operator of JS Pallet Co., Inc.

         On September 23, 2003, in response to a complaint that "indicated there were unauthorized wetlands alterations at the property, " Howard Cook (Mr. Cook), a RIDEM senior environmental scientist, met with Mr. DaSilva and inspected the property.[1] AAD Decision and Order 1 (Oct. 31, 2012); See AAD Hr'g Tr. 80. Mr. Cook observed that unauthorized work was occurring within the Freshwater wetlands buffer zone on the property.

         In 1980, Gus Delfarno (Mr. Delfarno), a previous owner of the property, received a Notice of Violation (NOV) from RIDEM.[2] See AAD Decision and Order 3 (Oct. 31, 2012); Hr'g Tr. 21. RIDEM received a letter from Mr. Delfarno's attorney indicating either his intent to perform the restorations required by the 1980 NOV or that the remediation was already complete. See AAD Decision and Order 3 (Oct. 31, 2012). The 1980 NOV, however, was never recorded in the Land Evidence Records in Pawtucket or Lincoln, as is required by Rhode Island statute.[3] See AAD Decision and Order 2 (Oct. 31, 2012); § 2-1-24(a).

         On November 20, 2003, after Mr. Cook's previous inspection of the property on September 23, 2003, RIDEM issued a Notice of Intent to Enforce (NOIE) notifying Mr. DaSilva, as operator of JS Pallet Co., Inc., that all materials, pallets and pavement must be removed from the twenty-foot buffer zone. See AAD Decision and Order 2 (Oct. 31, 2012); Hr'g Tr. 80. The NOIE required that the restoration of the wetlands buffer zone be completed by April 15, 2004. See Joint Ex. 4. On December 29, 2003, CFD Realty, LLC acquired the property. See AAD Decision and Order 1 (Oct. 31, 2012).

         Approximately six years later, on June 16, 2009, RIDEM conducted a subsequent inspection of the property. This inspection revealed that Appellants did not fulfill the requirements of the NOIE. See AAD Decision and Order 2 (Oct. 31, 2012). Furthermore, Appellants actually made additional alterations to the wetlands buffer zone. See AAD Decision and Order 1-2 (Oct. 31, 2012). For purposes of the AAD hearing, RIDEM and Appellants jointly stipulated that Appellants committed wetlands violations within the prohibited buffer zone after purchasing the property in 2003. See AAD Decision and Order Fact No. 14, at 7 (Oct. 31, 2012). The violations included the storage of pallets and the installation of a large propane tank, heat treatment facility, and additional paving, all within the prohibited buffer zone. See id.

         After determining that the NOIE requirements had not been met, RIDEM issued a NOV to CFD Realty, LLC on August 3, 2009, which was recorded in the Town of Lincoln and City of Pawtucket Land Evidence Records. See AAD Decision and Order 2 (Oct. 31, 2012). Appellants filed a timely appeal from the NOV on August 24, 2009. The matter came before the AAD for a hearing on September 25, 2012. The AAD Hearing Officer, David Spinella (Hearing Officer Spinella), issued a Decision and Order on October 31, 2012.

         Appellants contended that they have used the property in the same manner as their immediate predecessor. See AAD Decision and Order 4 (Oct. 31, 2012). Furthermore, Appellants argued in their appeal of the NOV before Hearing Officer Spinella that they are not responsible for violations of RIDEM rules and regulations that were unrecorded and committed by previous owners. See id.

         In the AAD Decision and Order, Hearing Officer Spinella concluded that:

"The flaw in [Appellants'] argument is that after inspection of the property in 2003 by Mr. Cook, new violations were discovered [since Mr. DaSilva took title to the property] . . . . These new violations are interrelated with the still existing wetlands encroachment issues that have plagued this property since the 1980's. Assuming, arguendo, that [RIDEM] recorded a Notice of Violation against [the previous owners] that a title search would have revealed and placed [Mr. DaSilva] on notice before he purchased the property, these [Appellants] caused the clock to be reset with new encroachments/violations they committed that were discovered during Mr. Cook's site inspection in 2003." AAD Decision and Order 5 (Oct. 31, 2012).

         Hearing Officer Spinella determined that Appellants were in violation of § 2-1-21, Rule 7.01 of the RIDEM Rules and Regulations Governing the Administration and Enforcement of the Freshwater Wetlands Act, March 1994 and April 1998, as well as Rule 5.01 of the RIDEM Rules and Regulations Governing the Administration and Enforcement of the Freshwater Wetlands Act, June 2007. Hearing Officer Spinella further ruled that no monetary penalties would be imposed, but the restoration requirement in the Notice of Violation would remain in full force and effect. See AAD Decision and Order 8 (Oct. 31, 2012).

         On November 5, 2012, the Office of Compliance and Inspection filed a Motion to Reconsider the Decision and Order. On November 26, 2012, the motion to reconsider was denied in part and granted in part-resulting in the amendment of Conclusion of Law No. 3, which now provides:

"No monetary penalties pursuant to Section E (1), (2), and (3) of the Notice of Violation (One Thousand and 00/100 Dollars) are assessed or imposed in this matter against Respondents, but the Restoration Requirements in Section D (2) of the Notice of Violation remain in full force and effect in the Decision and Order dated October 31, 2012." AAD Decision and Order 3 (Nov. 26, 2012).

         On December 24, 2012, Appellants filed a timely administrative appeal with this Court for review of the AAD Decision and Order, as amended on November 26, 2012.

         Applicable Law

         Hearing Officer Spinella concluded that the Appellants violated § 2-1-21, which provides, in pertinent part:

         "2-1-21 Approval of director.

(a)(1) No person, firm, industry, company, corporation, city, town, municipal or state agency, fire district, club, nonprofit agency, or other individual or group may:
(i) Excavate; drain; fill; place trash, garbage, sewage, highway runoff, drainage ditch effluents, earth, rock, borrow, gravel, sand, clay, peat, or other materials or effluents upon; divert water flows into or out of; dike; dam; divert; change; add to or take from or otherwise alter the character of any freshwater wetland, buffer, or floodplain as defined in § 2-1-20 without first obtaining the approval of the director of the department of environmental management . . . ." Sec. 2-1-21.

         Hearing Officer Spinella also determined that Appellants violated Rule 7.01 of the RIDEM Rules and Regulations Governing the Administration and Enforcement of the Freshwater Wetlands Act, March 1994 and April 1998, as well as Rule 5.01 of the RIDEM Rules and Regulations Governing the Administration and Enforcement of the Freshwater Wetlands Act, June 2007, prohibiting activities which may alter freshwater wetlands without a permit from RIDEM. See AAD Decision and Order 8. Rule 7.01 outlines general application requirements and provides, in pertinent part:

"Rule 7.01 Application Forms and Their Submission
"A. Forms Available
"Forms for submitting all applications as set forth in the Act and these Rules are available at ...

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