Maranto, Robert - Order, August 2, 1993
Order, August 2, 1993
STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION
In the Matter of
Alleged Violations of Article 24 of the Environmental Conservation Law
4393 E. Lake Road
Wilson, New York 14172
Case No. R9-3139-90-05
- This matter was previously decided by me in an order dated September 25, 1991. My determination was appealed by the Respondent, Robert Maranto, in a proceeding pursuant to CPLR Article 78. In an order and judgment of Edward A. Rath, Jr., Justice of the State Supreme Court, Niagara County, that portion of my order directing the Respondent, Robert Maranto, to pay a Five Thousand Dollar ($5,000) penalty was annulled and the matter remanded to me for further administrative proceedings concerning the issue of the fair market local dock rental value for the 1988-91 boating seasons.
- Upon remand, the matter was assigned to Administrative Law Judge (""ALJ") Edward Buhrmaster, who has prepared a report which is attached hereto and made a part of this Order.
- Upon a review of the hearing report and the record in this matter, I hereby accept and adopt the recommendation made by the ALJ. Considered with their aggravating factors, the Respondent's violations are of sufficient gravity to warrant reassessment of the $5,000 civil penalty I had initially imposed. This is so regardless of the costs avoided as the result of the Respondent's conduct. These costs for local dock rentals are only one penalty component. Standing alone, they do not determine the level at which a penalty should be set.
NOW, THEREFORE, having considered this matter, it is ORDERED that:
- Respondent Robert Maranto is assessed a civil penalty in the amount of Five Thousand Dollars ($5,000) which shall be due and payable to the Department within 30 days of the date of this Order.
- All communications between the Respondent and the Department in this matter shall be made to the Department's Region 9 Director, 270 Michigan Avenue, Buffalo, New York, 14203-2999.
NEW YORK STATE DEPARTMENT OF
THOMAS C. JORLING, COMMISSIONER
Dated: Albany, New York
August 2, 1993
TO: Robert Maranto
4393 E. Lake Road
Wilson, New York 14172
Richard C. Southard, Esq.
550 South Transit Street
P.O. Box 338
Lockport, New York 14095
Maureen A. Brady
Assistant Region 9 Attorney
NYSDEC - Region 9
270 Michigan Avenue
Buffalo, New York 14203-2999
STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
50 Wolf Road
Albany, NY 12233-1550
In the Matter
- of -
Alleged Violations of Article 24 of the Environmental Conservation Law by
4393 E. Lake Road
Wilson, New York 14172
Case No. R9-3139-90-05
SUPPLEMENTAL HEARING REPORT
- by -
Administrative Law Judge
This matter was remanded to the New York State Department of Environmental Conservation ("the Department" or "DEC") by an order and judgment of Edward A. Rath, Jr., Justice of the State Supreme Court, Niagara County. (A copy of his order is attached to this report as Appendix "A".)
The matter was remanded for a redetermination of the civil penalty that was assessed against the Respondent, Robert Maranto. In an order of the Commissioner, dated September 25, 1991, Mr. Maranto was assessed a Five Thousand Dollar ($5,000) civil penalty for two violations of the Environmental Conservation Law (ECL):
- Violation of a permit condition requiring the removal of a temporary floating dock, on or before September 30, 1987, from Eighteen Mile Creek in Olcott, Niagara County; and
- Failure to get a permit for the dock, which the Respondent continued to use after that date, in violation of ECL 24-0701, as the dock was in a regulated freshwater wetland.
The violations were found based on a motion for summary order which was made by DEC's Region 9 Staff. In an affidavit attached to that motion, Steven Doleski, the regional permit administrator, said he had calculated the avoidance costs saved by the Respondent in not having to lease dock space at a marina for his large sailboat. These avoidance costs were estimated at between $800 and $1,000 per boating season. Judith Bentley, the Administrative Law Judge ("ALJ") then assigned to the case, used this estimate to calculate the Respondent's avoided costs for the 1988-91 boating seasons as $3,600, which she then recommended as the most appropriate civil penalty.
The Commissioner adopted ALJ Bentley's findings of violations, but assessed a higher penalty of $5,000, which was the amount requested in DEC's motion papers. He said that while the penalty recommended by ALJ Bentley reflected an approximation of the costs Respondent avoided due to his violation of the law, "it is important that the penalty not merely place Respondent in the same financial position he would have been in had he complied. Accordingly, I find the full penalty requested by Staff to be appropriate." (A copy of the Commissioner's order is attached as Appendix "B". A copy of ALJ Bentley's report is attached as Appendix "C".)
The Respondent sought to annul the Commissioner's order in a court challenge which was made pursuant to Article 78 of the Civil Practice Law and Rules. The result was an order enforcing the Commissioner's directive that the illegal dock be removed, but annulling the $5,000 penalty. The court remanded the matter for "further administrative proceedings concerning the issue of the fair market local dock rental value for the 1988, 1989, 1990 and 1991 boating seasons." (See order and judgment of Judge Rath, attached as Appendix "A".) This issue was to be looked at in relation to the civil penalty, there being no issue regarding liability.
Upon remand the matter was assigned to me since ALJ Bentley is no longer employed by the Department. On January 26 and March 4, 1993, I had conference calls with counsel for the parties. Speaking for the Department was Maureen Brady, assistant Region 9 attorney, Buffalo, New York. Speaking for the Respondent was Richard Southard, Esq., of Lockport, New York. The calls addressed the basis for the court's action and how the issue, as remanded, should be litigated.
As the parties agreed, the apparent basis for the remand was that the hearing record did not contain enough evidence to support ALJ Bentley's finding (which the Commissioner then adopted) that the Respondent's average avoided costs for the 1988-1991 boating seasons were $3,600. (See page 5 of the report of ALJ Bentley, attached as Appendix "C".) The only proof was Mr. Doleski's affidavit, which said these costs were between $800 and $1,000 per season, but did not state the basis for these figures.
On March 5, 1993, I wrote a letter to the parties, noting that the Commissioner had issued a civil penalty policy, dated June 20, 1990, which discusses factors DEC should consider in setting penalties for any ECL violation. The policy states that among other considerations, DEC should look at the benefit component, defined as the Respondent's economic benefit from non-compliance. This benefit component includes the value of avoided costs which would have been expended if compliance had occurred when required.
In my direction to the parties, I said that the benefit component would be the costs the Respondent would have incurred during the four years in question by docking his sailboat, in a lawful manner, at a dock affording comparable water access. I said testimony would be allowed as to the fair market local dock rental value, provided it was given by persons (in particular, other dock owners) who had first-hand knowledge. I added that if the Respondent was offered other space during the years in question, I would also hear testimony as to prices he was actually quoted.
I said I would hear testimony as to what other dockage was available and whether it was offered free of charge to the Respondent. But I said I would not hear testimony about expenses the Respondent alleges he incurred at his illegal dock. This is because avoidance costs should be figured in relation to lawful alternatives that were actually available at the time of the violation.
In recommending a proposed civil penalty, I said I would look at evidence the parties might present on the issues identified above. Also to be considered, I said, would be the report of ALJ Bentley, to the extent it was confirmed by the Commissioner, since civil penalties are calculated not only in relation to avoidance costs, but also in relation to other factors which are outlined in the Commissioner's civil penalty policy.
To eliminate surprise and best ensure the timely completion of the hearing, I ordered that the parties pre-file their direct testimony. The Department filed affidavits from three witnesses: Dean Johnson, the owner of the Beccue Boat Basin in Wilson, New York; James McDonough, owner of McDonough Marine in Olcott, New York; and Beverly Collins, Newfane town clerk, who keeps dock rental records for the town's marina in Olcott. The Respondent filed affidavits from two witnesses: Anthony Southard, a local boater who docked at a floating mooring in Olcott Harbor; and Kevin Colpoys, a former local boater, who had a legal dock next to the Respondent's on Eighteen Mile Creek. At my request, the parties also provided a map depicting locations of the Respondent's illegal dock as well as the other docks, moorings, and marinas referred to in their testimony. (A relevant part of this map is attached as Appendix "D".)
Upon receipt of the parties' submissions, I had a conference call with their counsel. During this call, which took place on May 20, 1993, the parties agreed to my receipt of each other's pre-filed affidavits. Cross-examination was waived and therefore the hearing, which had been scheduled for May 24, was canceled. The parties requested and were allowed an opportunity to make written closing statements. After their receipt, the hearing record closed on June 22, 1993.
POSITIONS OF THE PARTIES
The Department Staff seeks reassessment of the $5,000 penalty which it had initially requested and received.
Averaging the figures for rental costs which were submitted in its and the Respondent's affidavits, Department Staff figured the Respondent's avoided costs for the 1988-91 boating seasons as $2,626.00. The Department said the Respondent should have to pay the full amount of these costs as well as an additional amount based on a "gravity component" referred to in the Commissioner's penalty policy. The Department argued that this gravity component, which would raise the penalty to $5,000, should consider the following:
- The Respondent's continued use of the temporary floating dock for four boating seasons while knowing that the dock permit had expired;
- The presence of the dock on Eighteen Mile Creek, a class I wetland;
- The dock's incompatibility with the wetland's preservation, protection and conservation; and
- The Respondent's prior compliance history, based on his unpermitted construction of a dock extension, which was resolved by DEC consent order (File No. 86-94; R9-1788-86-06) dated July 17, 1986.
The Respondent states that between 1988 and 1991, the years of the alleged violations, he could have placed his boat at a legal dock adjacent to his own at no cost except for a small maintenance fee. In the alternative, he claims he could have used a lawful floating mooring, also on Eighteen Mile Creek, for a modest charge.
According to the Respondent, it would be inappropriate to consider docking fees at three marinas cited by DEC Staff because these marinas lacked available space during the years in question or are too far from the Respondent's illegal dock, and therefore would not have been convenient to use.
Overall, the Respondent contends that the rental fees he would have incurred had he not used the illegal dock are much lower than calculated by DEC Staff. For these reasons, he states that no penalty should be assessed or, if one is assessed, that it should be nominal in amount.
FINDINGS OF FACT
- Beccue Boat Basin is a 150-slip marina on Beccue Island in Wilson, New York. The marina is on Tuscarora Bay, which connects to Lake Ontario. It is eight miles west from Eighteen Mile Creek.
- In 1988, the marina charged $1,050 for dockage of a large sailboat (in other words, a sailboat between 28 and 31 feet in length). In 1989, the charge was $1,450; in 1990, $1,750; and in 1991, $1,850.
- McDonough Marine is a 60-slip marina on Eighteen Mile Creek in Olcott, New York.
- In 1988 and 1989, the marina would have charged $850 for dockage of a large sailboat. In 1990 and 1991, the charge would have been $1,000 to $1,200.
- The Town of Newfane has a marina on Eighteen Mile Creek in Olcott, New York.
- In 1988 and 1989, the marina would have charged $590 for dockage of a large sailboat. In 1990, the charge would have been $670; and in 1991, $730.
This case has been remanded for reassessment of a civil penalty. The factual issue remanded by the courts (fair market local dock rental value) bears on the issue of avoided costs, which in turn relates to the Respondent's economic benefit from use of the illegal dock. This benefit is one component among others to be considered in the determination of an appropriate penalty.
By four years' use of the illegal dock, the Respondent avoided costs he otherwise would have incurred to dock his boat lawfully at a marina. The court remanded the matter to determine the fair market value of dock rentals for the 1988-91 boating seasons. The fair market value would be the price at which a contract would be entered by a willing lessor and lessee, neither under compulsion or obligation to each other.
In its pre-filed testimony, DEC Staff provided affidavits from people associated with three marinas at which the Respondent had sought dockage in 1987. The Respondent had approached these marinas after DEC had reminded him that the permit for the temporary dock, which he was then using, was about to expire.
The affidavits cite various figures for docking a sailboat between 28 and 31 feet in length. In the case of Beccue Boat Basin, the cited fees were those actually charged to another customer. For McDonough Marine and the Newfane Town Marina, they are fees that "would have" been charged, although it is not clear whether they were actually charged to other users.
Based on the affidavits and in the absence of cross-examination, it is hard to calculate fair market values for the four years in question. It is unknown what the marinas look like and therefore how comparable they are to each other and to the dock which was actually used by the Respondent. Looked at together, the rental fees vary quite widely among the three marinas, suggesting that each has different features or provides a different level of service, or both.
The prior record shows that in 1987, the Respondent tried to find dockage at the three marinas cited by DEC, each of which provides access to Lake Ontario (even though one, the Beccue Boat Basin, is eight miles west along the lake from Eighteen Mile Creek). Because the Respondent approached these marinas, it is presumed that they had suitable dockage for his boat, and that he would have taken the dockage, had it been available.
Had the Respondent used one of the three cited marinas between 1988 and 1991, his costs would likely have been between $2,580 (four years at the Newfane Town Marina) and $6,100 (four years at Beccue Boat Basin). These were docking costs he avoided by continued use of the illegal dock. Somewhere in that range, one would likely find the fair market local dock rental value.
The marina prices cited by DEC should be used to figure the Respondent's avoided costs, despite the fact that when the Respondent approached the marinas in 1987, they had no available space. The fact the marinas had waiting lists in 1987 (in the range of two to three years) does not mean they did not have suitable space. Also, the charge for that space would be relevant to knowing what costs the Respondent avoided. The Respondent's argument that space could not be found is not availing, especially since he failed to seek it out in a timely fashion, knowing that he was moored at a temporary dock which, by special permit condition, would have to be removed by the end of September, 1987.
The Respondent contends he could have moored his boat at rental fees considerably less than those cited by DEC Staff, and that these are his true avoided costs. He has provided an affidavit from Anthony Southard, another local boater, which states that during the four years in question, floating moorings were available from Gordon Bald and Hedley Boat Co., at a rate of $150 per year, including maintenance. A second affidavit was provided from Kevin Colpoys, one of the Respondent's boating colleagues. Mr. Colpoys owned a house next to the illegal dock and writes that "if during the years 1987 through 1991 inclusive, Mr. Maranto had needed a dock for whatever reason, he would have been able to moor at my personal docks during each boating season without cost except for his share of maintenance (less than $50/year) or reimbursement if damage occurred."
In my findings, I have not credited the affidavits from Mr. Southard and Mr. Colpoys. The Southard affidavit is not credited because a floating mooring is not equivalent, in terms of convenience, to a dock attached to the land. The Colpoys affidavit is self-serving and, for that reason, it too is not credited. It sets out charges that are apparently based on friendship, not on fair market values. These charges are described as what would have been imposed had the Respondent needed a dock for any reason. Still, for the years in question, he did need a dock, as the one he had lacked a permit. Mr. Colpoys does not say that during the four years in question, he actually offered the terms he now describes in his affidavit. This undermines his claim, made in retrospect, as to what he would have proposed, were these rates even relevant to the issue remanded by the courts.
Other Penalty Factors
The Respondent's avoided costs (which, for the sake of this report, are estimated as between $2,580 and $6,150) are only one factor to be considered in assessing a civil penalty. While not determinative, they are important to know, as a penalty should never be so small that it is overall more costly to comply with the law than it is to violate the law and pay the penalty imposed by the Department.
In his penalty policy, the Commissioner writes of a benefit component (which here may be figured in relation to the Respondent's avoided costs) and a gravity component, which reflects the seriousness of a violation. According to the policy, "removing the benefit of non-compliance only places the violator in the same position in which it would have been if compliance had been achieved on time. Both deterrence and fundamental fairness require that the penalty include an additional amount to ensure that the violator is economically worse off than if it obeyed the law. This additional penalty amount should reflect the seriousness of the violation and is referred to as the "gravity component"." (Civil penalty policy issued 6/20/90, page 3 of 15.) This component is defined in relation to (a) potential harm and actual damage which are caused by a violation; and (b) relative importance of the type of violation in the regulatory scheme (penalty policy, page 7 of 15).
In this matter, there is no proof of actual harm, although one must note that the illegal dock was located on Eighteen Mile Creek, which is a Class I freshwater wetland. Among regulated wetlands, Class I wetlands afford the greatest degree of wetland benefits. Therefore, even though damage was not shown, the potential harm was great, which affects the violations' gravity.
Also affecting the gravity are the type of violations presented: use of a dock beyond its permit's expiration, and violation of a permit condition requiring that dock's removal before a certain date. These violations bear directly on the goals of the Freshwater Wetlands Act, which are to protect wetlands' benefits, to prevent wetland despoliation, and to regulate wetland use and development in a way that secures wetlands' natural benefits, consistent with the general welfare and the beneficial development of the state. (See ECL 24-0103, Declaration of policy.)
The gravity of the violations presented in this matter warrants a civil penalty much greater than just the Respondents' avoided costs. In addition, there are aggravating factors which warrant an upward penalty adjustment, consistent with the Commissioner's policy.
- Culpability. The Respondent continued to use the temporary floating dock for four years while knowing that its permit had expired. He did not act in a timely manner, prior to the permit's expiration, to find other dockage.
- Violator Cooperation. Despite contact with DEC's Region 9 Staff, the Respondent failed to cooperate in remedying his violations. According to ALJ Bentley's report (Appendix "C", at page 3) the Respondent agreed in September, 1987, to a proposed settlement whereby he would be given an additional two years of dockage if he withdrew his application to place a floating wooden dock in the same location as the temporary dock, whose permit expiration was imminent. After accepting this arrangement, the Respondent failed to withdraw his permit application; therefore, no consent order was signed, and the Respondent remained for four years at what became an illegal dock.
- Respondent's Prior Compliance History. According to a DEC order on consent (File No. 86-94; R9-1788-86-06) dated July 17, 1986, the Respondent built an extension on the temporary floating dock that was not permitted and which encroached on the regulated wetland. He was ordered to pay a $100 penalty, remove the extension, and limit moorage at the remainder of the dock to one sailboat and one powerboat.
Considered with their aggravating factors, the Respondent's violations are of sufficient gravity to warrant reassessment of a $5,000 civil penalty. This is so regardless of the costs avoided as a result of the Respondent's conduct. Even if these costs are as small as alleged by the Respondent, they would not affect my conclusion that the full penalty requested by Staff is appropriate. As noted above, it is hard to figure these costs with precision, based on the existing hearing record.
The Respondent should be assessed a civil penalty in the amount of Five Thousand Dollars ($5,000).