Recycling, Inc. v. Comm'r of Energy & Envtl. Prot.

179 Conn.App. 127

178 A.3d 1043

RECYCLING, INC.

v.COMMISSIONER OF ENERGY AND ENVIRONMENTAL PROTECTION

AC 38868

Appellate Court of Connecticut.

Argued October 10, 2017

Officially released January 9, 2018

Alan M. Kosloff, for the appellant (plaintiff).

David H. Wrinn, assistant attorney general, with whom, on the brief, were George Jepsen, attorney general, and Kirsten S. P. Rigney, assistant attorney general, for the appellee (defendant).

David A. Slossberg, with whom was Amy E. Souchuns, for the appellee (intervenor city of Milford).

Alvord, Keller and Pellegrino, Js.

ALVORD, J.

The plaintiff, Recycling, Inc. (RCI), appeals from the judgment of the trial court dismissing its administrative appeal from the decision of the defendant¹ Commissioner of Energy and Environmental Protection (commissioner),² denying its application for an individual permit to construct and operate a volume reduction facility (individual permit) and revoking its general permit to construct and operate certain recycling facilities (general permit). On appeal, RCI claims that the trial court erred in dismissing its appeal because: (1) the denial and revocation was not warranted under the circumstances of this case; (2) the hearing officer violated its rights to a fair hearing by applying an erroneous standard of review; (3) the hearing officer erroneously excluded relevant evidence; and (4) the commissioner engaged in improper conduct during the proceedings. We affirm the judgment of the trial court.³

The following facts and procedural history are relevant to RCI's appeal. In 2008, RCI held a general permit registration to operate a limited recycling facility at 990 Naugatuck Avenue in Milford. In February of that year, RCI submitted an application to the Connecticut Department of Energy and Environmental Protection (department or DEEP) for an individual permit, which would allow RCI to increase the volume and breadth of its recycling operations. At the time, RCI was purportedly owned by Darlene Chapdelaine. Chapdelaine corresponded with the department on numerous occasions regarding the application for an individual permit, and represented herself as the sole owner of RCI. On February 10, 2012, nearly four years after RCI submitted its application, the department issued a tentative determination to approve RCI's application for an individual permit.

In April, 2012, before the department had made a final determination on the individual permit application, department staff learned of a lawsuit between Chapdelaine and Gus Curcio, Sr. over ownership of RCI. The pleadings in that lawsuit alleged that Curcio disguised his true ownership of RCI from the department to keep his past criminal convictions from tainting the permitting process. Documents attached to the complaint undermined RCI's representations to the department that Chapdelaine was the sole owner of RCI. On October 23, 2012, the court rendered judgment concluding that Curcio was the beneficial owner of 100 percent of RCI.

Consequently, in November, 2012, the department issued a tentative determination to withdraw its approval and deny RCI's application for an individual permit. The department also notified RCI that it intended to revoke its general permit registration. The department explained that the basis for its denial and revocation was RCI's failure to disclose Curcio's extensive ownership interests and its false or misleading representations as to the control of RCI. On January 24, 2013, the department issued a revised and amended notice of intent to revoke RCI's general permit registration, adding, as a basis for revocation, RCI's and Curcio's inability or unwillingness to comply with permit requirements. The notice also relied on a June 11, 2012 notice of violation (NOV) issued to RCI by the department.

On February 27, 2013, the department provided RCI with a compliance conference in accordance with General Statutes § 4–182(c),⁴ at which it was afforded the opportunity to demonstrate to department staff that it had met all of the requirements for lawful retention of its general permit. On May 17, 2013, the department notified RCI that it had not changed its position as a result of the compliance conference and that justification remained to deny RCI's application for an individual permit and revoke its general permit registration.

On November 12, 2013, a five day hearing commenced before a department hearing officer.⁵ On August 25, 2014, the hearing officer issued a proposed final decision concluding that RCI had submitted false, incomplete, and incorrect information regarding its ownership and control in its application to the department for an individual permit, and that it had demonstrated a pattern or practice of inability or unwillingness to comply with the department's permit requirements. The hearing officer found, inter alia, that Curcio tightly controlled RCI's financing, expenditures, and daily operations. In the proposed final decision, the hearing officer recommended that the department deny RCI's application for an individual permit and revoke RCI's general permit registration.

RCI subsequently raised exceptions to the proposed final decision. On November 12, 2014, Deputy Commissioner Susan K. Whalen⁶ heard argument on the exceptions.

On February 5, 2015, the deputy commissioner adopted the proposed final decision and denied RCI's individual permit application and revoked its general permit registration.

In March, 2015, RCI appealed to the Superior Court, challenging the department's decision. The trial court heard oral argument on January 7, 2016. On January 20, the court dismissed the appeal. This appeal followed.

I

RCI first claims that the court erred in upholding the deputy commissioner's decision because the department's denial of its application and revocation of its general permit registration was "arbitrary and capricious and an abuse of discretion ...." Specifically, it argues that department "[s]taff failed to demonstrate a pattern or practice of noncompliance sufficient to warrant revocation of the general permit or denial of the individual permit," and "[e]ven if RCI's compliance history demonstrated a pattern of noncompliance, revocation and denial is not warranted." We disagree.

The following additional facts, which are based on the hearing officer's findings, are relevant to this claim.

The hearing officer concluded that RCI provided false and incomplete information regarding its ownership in violation of section 6 of the general permit,⁷ which demonstrated a pattern or practice of noncompliance with the terms and conditions of the general permit. James Barrett, who was nominated by Curcio as RCI's first president in 2008, testified that he owned all of RCI's stock at the time of the general permit application. That application requires, in relevant part, that the applicant or permittee (1) identify the owner and operator of the facility; (2) sign the application certifying that it is "true, accurate and complete"; and (3) report any changes in information provided. Barrett testified that he did not remember signing the general permit application. The signature on the registration certificate of the application read "Barret," with one "t" rather than two. Additionally, a letter concerning RCI's use of its property for recycling operations accompanied the application. The letter purported to be from and signed by Barrett, but Barrett testified that he did not write or sign the letter. Barrett testified that the signature on the application was not his, and that he did not know who signed the letter in his name.⁸

As the hearing officer found, "Curcio considered himself to be the owner of RCI and controlled RCI through Barrett." Barrett's testimony supported this conclusion. He testified, in relevant part, that: (1) he did not know where the books and records for RCI were kept and maintained; (2) he could not recall signing more than one check on behalf of RCI; (3) checks were "signed" by a rubber stamp of his signature, which he thought was kept by Chapdelaine; (4) he knew that Curcio was "financing the [department] application process," but did not know whether he was the sole source of money; (5) he was unaware of whether RCI paid any taxes while he was president; (6) he was unaware of whether operations were ongoing at the 900 Naugatuck site; and (7) when he filed for bankruptcy in December, 2008, he did not list RCI as a business in which he was an officer or director or in which he owned 5 percent or more of the voting securities within the past six years.

In October, 2009, Chapdelaine replaced Barrett as the president of RCI. Despite the requirement that a registrant or permittee report any changes provided on the general permit application to the department, RCI did not correct the registration information as required until February, 2010, when Chapdelaine signed the registration renewal application as president of RCI. Despite Chapdelaine's representations to the department that she owned and controlled the operations of RCI, the hearing officer found that "Chapdelaine's claim that she [was] the owner of RCI and the exclusive holder of 100 percent of RCI's stock is not supported by the record and the logical conclusions that can be drawn from it." She based this conclusion, in relevant part, on the facts that: (1) there was no evidence that shares of RCI's stock were registered in Chapdelaine's name; (2) Chapdelaine executed a document shortly after her nomination as president providing that she is the owner of record of RCI " 'in name only' " and referencing other documents that show that she could be dispossessed of this ownership at any time by Curcio; (3) a shareholder's agreement signed by Chapdelaine in 2011 explicitly stated that she owned 10 percent or ten shares of RCI's stock and was required to offer it to RCI and the other stockholders before selling them to a third party; and (4) evidence received regarding the 2012 litigation between...