Agency of Natural Resources v. Towns

Agency of Natural Resources v. Towns  (97-162); 168 Vt. 449; 724 A.2d 1022

[Opinion Filed 31-Jul-1998]
[Motion for Reargument Denied 9-Nov-1998]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal  revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter  of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any  errors in order that corrections may be made before this opinion goes
  to press.

                                 No. 97-162


Vermont Agency of Natural Resources	           Supreme Court
                                                   On Appeal from
     v.		                                   Vermont Environmental Court

Richard Towns	                                   December Term, 1997



Merideth Wright, J.

Gary S. Kessler, Waterbury, for Plaintiff-Appellee.

John L. Franco, Jr., Burlington, for Defendant-Appellant.

PRESENT: 	Morse, J., and Martin and Katz, Supr. JJ., Allen,
                C.J. (Ret.) and Gibson, J. (Ret.),  Specially Assigned


       MORSE, J.	Defendant Richard F. Towns appeals from a decision of
  the Environmental  Court affirming a determination by the Secretary of the
  Agency of Natural Resources that Towns  had operated a solid waste
  management facility without proper certification in violation of 10  V.S.A.
  § 6605(a).  Among other claims, Towns contends that the Secretary's action
  was barred  by the statute of limitations.  We conclude that the court
  failed to make critical findings and  conclusions relating to the
  statute-of-limitations issue, and, therefore, reverse and remand for 
  further proceedings. 

                                     I.

       In 1972, Towns purchased five acres in the Town of Johnson and
  constructed a home on  the site.  Because the rear foundation of the house
  was laid adjacent to a steep embankment,  Towns commenced to deposit
  stumps, construction debris, and demolition material as fill to create  a
  usable backyard.  He also used solid waste to fill a small swimming hole
  located in the front of  the property.  Towns continued to dump materials
  on the site until he sold the property to  Christine and James Wilkens in
  June of 1987.  

 


       Although Towns had informed the Wilkenses of the existence of the fill
  prior to the sale,  and assured them that it was "safe and legal," they
  remained concerned about potential safety  hazards to their children. 
  Thus, as the trial court found, "[w]ithin a few weeks of purchasing the 
  property  .  .  . Mrs. Wilkens inquired about the legality of the fill with
  the Attorney General's  Office."  Mrs. Wilkens testified that she spoke
  with someone "involved in environmental issues."  She identified herself
  and the property in question, and explained her concern about the fill that 
  Mr. Towns had been dumping on the property.  She was asked, in turn, a
  series of questions about  the condition of the site.  Based upon her
  responses, she was informed that such dumping was a  common occurrence in
  Vermont, and that the State would not take action because the fill was 
  covered, was not visible from the road, and was not leaching into water. 
  In April of 1989, Mrs.  Wilkens again contacted the Attorney General's
  office to express her concerns about the dump  site, but again no action
  resulted.

       In 1992, the Wilkenses attempted to sell the property.  A prospective
  purchaser was  concerned about the fill, however, and arranged to have
  several test pits dug to determine its  contents.  A friend of the
  prospective purchaser contacted James Coyne, an environmental  enforcement
  officer for the Agency, who came out to observe the dig.  Each of the pits
  revealed  the presence of solid waste.  Several years later, in September
  1996, the Secretary issued an  administrative order alleging that Towns had
  constructed and operated a solid waste disposal  facility without
  certification in violation of 10 V.S.A. § 6605(a).  The order required
  Towns to  engage a consultant to "develop a site remediation plan," remove
  the solid waste, and restore the  site to grade by depositing clean fill.  

  

       Towns appealed the administrative order to the environmental court. 
  Following an  evidentiary hearing, the court affirmed the Secretary's
  determination that a violation of 10 V.S.A.  § 6605(a) had occurred, but
  vacated and remanded the order to clarify the remediation section.  The
  court ruled that its finding of a violation represented a final judgment. 
  V.R.C.P. 54(b).   This appeal followed. 	

                                     II.

       Towns renews on appeal a number of defenses that he asserted before
  the environmental  court, including claims that there was no violation
  under the applicable law, and that the action  was time-barred.  Because we
  conclude that the case must be remanded for further findings on the 
  statute-of-limitations issue which may, if favorable to Towns, be
  dispositive of the entire  proceeding, we decline at this juncture to
  address Towns's alternative contentions.  These claims  may be renewed on
  appeal in the event the trial court determines that the State's action was 
  timely. 

       The applicable statute of limitations is set forth in 10 V.S.A. §
  8015, which provides that  environmental enforcement actions "shall be
  commenced within the later of: (1) six years from  the date the violation
  is or reasonably should have been discovered; or (2) six years from the
  date  a continuing violation ceases."  The trial court determined that
  Towns's violation -- operating a  solid waste facility without
  certification -- had ceased when Towns sold the property in 1987, and 
  therefore was not of a continuing nature.  The Secretary has not challenged
  this finding.   Accordingly, the sole issue is whether the Secretary's
  enforcement action was brought within six  years from the date that the
  violation was or reasonably should have been discovered.

       Towns argued at trial that even assuming he had committed a violation,
  it was or  reasonably should have been discovered in June of 1987, when
  Mrs. Wilkens first contacted the  Attorney General's office.  Thus, Towns
  claimed that the Secretary's action, commenced some  nine years later in
  1996, was time-barred.  The trial court disagreed, stating in its oral
  ruling that  the limitations issue did not "turn on the date when Mrs.
  Wilkens first called the State or whom  she reached when she first called
  the State"; the issue turned, rather, "on the nature of the  violation
  itself."  In this regard, the court observed that the 


    violation was on private property.  It was fill being placed in a
    ravine for private  purposes.  It was not on property holding itself out as
    a disposal location or for any  other reason obvious to any regulator that
    this property should have been inspected  .  .  .  .  And, therefore, we
    must conclude that the Agency of Natural Resources  could not reasonably
    have been expected to have discovered this 

  

    violation until  1992 when it was brought to their attention.
  
       Although uncertain of the court's precise meaning, we are unable to
  agree with its  broad  conclusion that "when Mrs. Wilkens first called the
  State [and] whom she reached" was irrelevant  as a matter of law to the
  statute-of-limitations issue.  On the contrary, it appears to us that the 
  question of when the Secretary discovered or reasonably should have
  discovered the violation turns  on precisely whom Mrs. Wilkens contacted,
  when she made the contact, and what she reported.(FN1)
 
       While we have not previously construed § 8015, the general principles
  governing the  accrual of actions under discovery statutes are well
  settled.  For our purposes, these principles  may be broken down into three
  general rules.  First, a cause of action is generally said to accrue  upon
  the "`discovery of facts constituting the basis of the cause of action or
  the existence of facts  sufficient to put a person of ordinary intelligence
  and prudence on inquiry which, if pursued,  would lead to the discovery.'" 
  Union Sch. Dist. v. Lench, 134 Vt. 424, 427, 365 A.2d 508, 511  (1976)
  (quoting Omaha Paper Stock Co. v. Martin K. Eby Constr. Co., 230 N.W.2d 87,
  89-90  (Neb. 1975)).  Thus, the statute of limitation begins to run when
  the plaintiff has notice of  information that would put a reasonable person
  on inquiry, and the plaintiff is ultimately  "chargeable with notice of all
  the facts that could have been obtained by the exercise of reasonable 
  diligence in prosecuting [the] inquiry."  Lamoille County Sav. Bank and
  Trust Co. v. Belden, 90  Vt. 535, 541, 98 A. 1002, 1005 (1916).  

       A second related principle is that notice or information communicated
  to an agent is 

  

  generally presumed to be communicated to the principal.  As we observed in
  Solomon v. Design  Dev. Inc., 143 Vt. 128, 131, 465 A.2d 234, 236 (1983),
  "notice to an agent is notice to the  principal  .  .  .  regardless of
  whether the agent actually communicated his knowledge" to the  principal. 
  Furthermore, because the relationship between attorney and client is that
  of agent and  principal, notice or information conveyed to an attorney will
  be imputed to the client.  See Abell  v. Howe, 43 Vt. 403, 409 (1871)
  (where attorney had notice of a trust, "the law will presume the  notice
  was communicated to the client"); see also Irwin v. Department of Veterans
  Affairs, 498 U.S. 89, 92 (1990) ("Under our system of representative
  litigation, `each party is deemed bound  by the acts of his lawyer-agent
  and is considered to have "notice of all facts, notice of which can  be
  charged upon the attorney."'") (quoting Link v. Wabash R. R. Co., 370 U.S. 626, 634 (1962)  (quoting Smith v. Ayer, 101 U.S. 320, 326 (1880));
  McKinney v. Waterman S.S. Corp., 925 F.2d 1, 5 (1st Cir. 1991) ("Notice to
  an attorney is notice to the client").

       It follows, therefore, that notice to an attorney sufficient to
  trigger the statute of limitations  is imputed to the client, and will bar
  a claim, regardless of whether that information was actually  communicated
  to the client.  Stalberg v. Western Title Ins. Co., 32 Cal. Rptr. 2d 750
  (Cal. Ct.  App. 1994) provides a perfect illustration.  There, the court
  held that a slander-of-title action had  accrued when the plaintiffs'
  attorney discovered that the defendant had drafted and recorded a 
  fictitious easement, although the attorney had not conveyed the information
  to his client.  As the  court explained, "Since plaintiffs' attorney ought
  to have .  .  . communicated this information  to plaintiffs, plaintiffs
  must be charged with knowledge of these facts.  .  .  . Plaintiffs' imputed 
  knowledge .  .  . should have caused plaintiffs to suspect that defendant
  had slandered their title."  Id. at 752-53.  Accordingly, the facts known
  to the plaintiffs' counsel "triggered the  commencement of the limitations
  period," which expired prior to the filing of the claim.  Id. at  753.  

       Irwin is also instructive.  There, the United States Supreme Court
  held that a thirty-day  claims-filing period was triggered when the
  claimant's attorney received notice of the claimant's 

 

  right to sue.  As the high court observed, notice to an attorney or "to an
  attorney's office .  .  .  qualifies as notice to the client."  498 U.S.  at
  93.  Consequently, the Court held that the claim was  time-barred. 
  Similarly, in McKinney the court of appeals ruled that information conveyed
  to the  plaintiff's attorney would be imputed to the plaintiff so as to
  trigger the statute of limitations and  bar the plaintiff's personal injury
  claim.  925 F.2d  at 4-5.  	

       Finally, the determination of the accrual date of a claim is generally
  a question reserved  for the trier of fact.  See Lillicrap v. Martin, 156
  Vt. 165, 172, 591 A.2d 41, 44 (1991). 		

       Applying the foregoing principles to the case at bar, the critical
  question that emerges is whether the Secretary knew or should have known of
  the violation following Mrs. Wilkens's discussion with the Attorney 
  General's Office in June of 1987.  Although the Agency employs a number of
  its own attorneys,  the attorney general also serves as the agency's
  counsel.  The attorney general is statutorily  responsible for
  "represent[ing] the state in all civil and criminal matters as at common
  law and as  allowed by statute."  3 V.S.A. § 152.  Indeed, the
  administrative order issued by the Secretary  in this case warned that
  failure to comply may result in an enforcement action "pursuant to the 
  provisions of 10 V.S.A. Chapters 201 and 211."  Chapter 211 authorizes the
  Secretary to bring  a civil enforcement action and specifically provides
  that "[t]he action shall be brought by the  attorney general in the name of
  the state."  10 V.S.A. § 8221(a) (emphasis added).  Chapter 201,  providing
  for the administrative enforcement of environmental violations, authorizes
  the Secretary  to enforce the provisions of 10 V.S.A. Chapter 159 relating
  to solid waste, see id. § 8003(a)(12),  and Chapter 159 in turn authorizes
  the Secretary to "request[] that the attorney general or  appropriate
  state's attorney commence an action for injunctive relief, or for the
  imposition of  penalties and fines .  .  . and other relief as
  appropriate."  Id. § 6610a(a)(2) (emphasis added).

       Thus, there is no doubt that the attorney general served as the
  Agency's counsel in this  matter, and that, under the principles outlined
  above, information supplied to the attorney general  was imputable to the
  Secretary.  As noted, the trial court found that Mrs. Wilkens 

  

  "inquired about  the legality of the fill with the Attorney General's
  Office" in June of 1987.  The court made no  findings, however, on such
  critical questions as the identity of the person with whom she spoke,  and
  the nature and content of the information she conveyed.  Nor did the court
  draw any  conclusion as to whether that information should reasonably have
  triggered an investigation that  would have disclosed the alleged violation
  and prompted an enforcement action.  We conclude,  therefore, that the case
  must be remanded to the trial court for further proceedings to address
  these  factual and legal issues relating to the statute-of-limitations
  defense.  We note in this regard the  general principle that the burden of
  establishing a statute-of-limitations defense rests with the party 
  pleading it.  See Monti v. Granite Sav. Bank & Trust Co., 133 Vt. 204, 209,
  333 A.2d 106, 109  (1975).

       Reversed and remanded for further proceedings consistent with the
  views expressed herein.



                               FOR THE COURT:


                               _______________________________________
                               Associate Justice




FN1.  The fact that the site was located on private property and was
  not visible  from the road did not necessarily render it any less
  discoverable.  Had the  Secretary received information sufficient to
  trigger an investigation, an  investigator could have entered, inspected,
  and obtained samples from the  premises, or obtained a warrant to do so. 
  See 10 V.S.A. § 6609 (Secretary may  enter, inspect, and obtain samples
  from any person storing, treating, or  disposing of solid waste, and "upon
  any refusal of entry may .  .  .  apply  for and obtain a warrant or
  subpoena to allow such entry, inspection, [or]  samplying"); id. § 8005(2)
  ("An investigator may investigate upon receipt or  discovery of information
  that an activity is being or has been conducted that  may constitute or
  cause a violation.").