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New Jersey Dep't of Environmental Protection v. Wagner


August 7, 2007


On appeal from New Jersey Department of Environmental Protection, PEA030002-1352-03-0017.1

Per curiam.


Submitted April 17, 2007

Before Judges Payne and Graves.

Leo Wagner, individually and trading as LH Wagner Realty Corporation (Wagner), appeals from a final decision of the Commissioner of the Department of Environmental Protection (DEP), issued on April 21, 2006, imposing civil administrative penalties, in the amount of $6,000, for violation of the Freshwater Wetlands Protection Act, N.J.S.A. 13:9B-1 to -30, and requiring that disturbed areas be restored.

On appeal, Wagner raises the following arguments:

Issue 1

The finding of noncompliance is incorrect. Issue 2

The penalty calculations are defective. Issue 3

The ACO of October 31, 1996 is fraudulent. Issue 4

The DAG knowingly accepted wrong testimony. Issue 5

The ALJ knowingly accepted wrong testimony. Issue 6

The DEP Commissioner knowingly accepted wrong findings.

Wagner commences his brief with the following:

The Notice of Violation and Penalty Assessment is the culmination of improper and fraudulent DEP activities since 1994 that have become more vindictive and malicious through the years. We have taken numerous steps with the DEP to resolve the issues, including meetings; letters; requests for Letters of Interpretation, Exemption, and Fill Permits; and finally, Hearings for Adjudication. Invariably, the DEP, the DAG and the ALJ have promulgated lies and deceptions against us. We have offered numerous settlement options to the DEP, but to no avail. Invariably, the request for some kind of adjustment landed on the desk of the original offender, Mr. Peter Lynch, who would not admit to any error. Mrs. DiGiacomo has been aiding and abetting Mr. Lynch and continues her lies and deceptions.

From our review of the record, we discern no basis for these characterizations.

We set forth the facts of the matter as disclosed by the record on appeal. In the past, Wagner was the owner of a housing development site in Wall Township, Monmouth County. On August 31, 1987, the Wall Township Planning Board granted subdivision approval for 78 lots in the area, to be known as Fox Run Estates. It appears that ownership of the lots was transferred by Wagner to My-Ben Associates/My-Ben Development Corporation, and houses were built by the developer on all lots except Block 772, Lots 31, 32 and 33.

On November 29, 1994, a site inspection by a representative of the DEP disclosed unauthorized fill activity by My-Ben on Block 772, Lot 41, consisting of the placement of approximately 6,875 square feet of fill within regulated freshwater wetlands in violation of the Freshwater Wetlands Protection Act. On October 31, 1996, an administrative consent order (ACO) was entered that required My-Ben to conduct onsite freshwater wetlands mitigation on a two-to-one basis on Lots 31, 32 and 33 to compensate for the wetlands filling on Block 41. The mitigation plan required the creation of 13,380 square feet of wetlands, along with a fifty-foot buffer. The order further required that the mitigation areas be noted on any present or future deeds associated with the property, and that the freshwater wetlands area and buffer be maintained in perpetuity. Peter Lynch signed the ACO on behalf of the DEP.

Prior to the entry of the ACO, Lots 31, 32 and 33 had been re-conveyed by My-Ben Associates to LH Wagner Realty Corp., "free and clear of all liens and encumbrances," for no consideration, by deed dated April 16, 1996. The deed was not recorded at the time,*fn1 and contained a provision that it was to be held in escrow by My-Ben's attorneys until authorization for its release by the parties occurred. The DEP was made aware of the purported property transfer before entering into the ACO, and appears to have required re-conveyance of the property to My-Ben, as record owners, so that the remedial action could be accomplished. Nonetheless, Wagner, describing himself as the "defacto owner" of the lots, interposed objections to the remediation, premised on their scope and on the position that the DEP should accept a monetary contribution as compensation for My-Ben's violation, and should not have required the remedial steps specified in the ACO. In a letter dated April 9, 1997, the DEP rejected Wagner's position on the basis of N.J.A.C. 7:7A-14.2(a)4, which stated that: "Donations shall only be considered if the Department in consultation with the USEPA determines that other forms of mitigation are not feasible onsite or offsite in the same watershed." Because remediation on the designated lots was feasible, the DEP could not accept a contribution as an alternative remedy.

Wagner, nonetheless, persevered in efforts to develop the three lots. On October 3, 2000, he applied for a Statewide General Permit No. 6 to fill 0.94 acres of freshwater wetlands on the three lots and for letters of interpretation delineating the wetlands on the lots at issue. See N.J.A.C. 7:7A-5.6 (authorizing permitted activities on non-tributary wetlands). As a consequence, a representative of the DEP designated the area of wetlands in the manner required by N.J.A.C. 7:7A-2.3(a) and, based on its size, declared the wetlands to be of intermediate resource value pursuant to N.J.A.C. 7:7A-2.4(e). A survey performed for Wagner, dated September 18, 2001, plotted the extent of the wetlands, which included all of Lot 31 and all but a crescent of upland on Lots 32 and 33.

Wagner's application for a General Permit No. 6 was denied on June 16, 2003, on the ground that the one-acre limitation on disturbance of freshwater wetlands allowed under that permit had already been exceeded as the result of previous approvals granted for the larger Fox Run development project.*fn2 See N.J.A.C. 7:7A-4.4(a)(1) and (2); see also N.J.A.C. 7:7A-5.6(b)1. Following a contested hearing before an administrative law judge (ALJ), on June 24, 2005, the judge ruled in the DEP's favor, rejecting Wagner's claims that the lots did not contain wetlands, and if they did, the lots were exempted from wetland restrictions as the result of the municipal approvals granted in 1987.

The ALJ's initial decision upholding the DEP's denial of Wagner's permit application was adopted by the Commissioner in a final decision dated August 8, 2005. In his decision, the Commissioner addressed Wagner's argument that the wetlands at issue were exempt from regulation, stating:

Wagner's contention that his wetlands, as a matter of law, enjoy an exemption pursuant to N.J.S.A. 13:9B-4(d)(1) is clearly without basis. That exemption for sites that received preliminary site approval prior to July 1, 1989, expired as of March 2, 199[4],*fn3 when the State of New Jersey assumed responsibility for administering the Federal freshwater wetlands program (also known as the 404 program) in delegable waters as defined at N.J.A.C. 7:7A-1.4. See MCG Associates v. Department of Environmental Protection, 278 N.J. Super. 108, 111 (App. Div. 1994). There the court observed: "We read [the FWPA] as intending to exempt projects which have been approved by local planning or zoning boards prior to the effective date of the Act, unless federal regulations conditioned New Jersey's assumption of the federal program upon voiding those exemptions. In the official approval of New Jersey's application, the federal Environmental Protection Agency (EPA) made it crystal clear that the State had to void exemptions for construction in wetlands in order to assume the federal program; . . . The court reiterated, citing from the language of N.J.S.A. 13:9B-4 itself, that the FWPA eliminates the statutory exemptions if EPA "regulations providing for the delegation to the state of the federal wetlands program conducted pursuant to the Federal Act require a permit for those activities, in which case the department shall require a permit for those activities identified by that agency." The federal wetlands program makes no exceptions for projects which received subdivision approval prior to the effective date of the FWPA. Therefore, the Department may make no such exceptions . . . . (Footnote omitted.)

The Commissioner further found that Wagner had presented "no competent proof at the hearing" that would negate the presence of freshwater wetlands on the lots at issue, whereas the DEP had established the existence of such wetlands in accordance with applicable agency methodology.

While Wagner's application for a General Permit No. 6 was pending, on August 6, 2004, he also sought a letter of exception from freshwater wetland requirements pursuant to N.J.S.A. 13:9B-4(d)(1). That application was, likewise, denied on December 1, 2004. Upon Wagner's request, the exception matter was also referred to the Office of Administrative Law, where the DEP's motion for summary decision was granted by the ALJ in an initial decision that was adopted by the Commissioner, in a final decision of October 11, 2005, for the reasons set forth in his prior, August, opinion. Neither the August nor the October 2005 decision was appealed.

The present matter arises from a Field Notice of Violation, signed by DEP employee Tammy DiGiacomo on October 7, 2003, stating that Wagner had violated the Freshwater Wetland Protection Act by "digging ditches through freshwater wetlands without prior approval from the Department." An Administrative Order and Notice of Civil Administrative Penalty Assessment in the amount of $6,000 was issued on March 2, 2004. In that order, it was noted that Wagner had submitted letters to the DEP, dated August 9 and August 12, 2002, in which he sought rescission of the ACO and its terms and conditions regarding the mitigation on the three lots, and that his request was rejected by the DEP in a letter dated March 5, 2003, prior to DiGiacomo's site visit. The order additionally stated that Wagner had violated N.J.A.C. 7:7A-2.2(a) by "excavation of approximately 2,065.00 square feet of ditches for drainage throughout a mapped freshwater wetland and the subsequent filling of freshwater wetlands adjacent to the ditches with the removed soils."

Upon Wagner's request, this matter was also referred to the Office of Administrative Law, where a testimonial hearing was held on December 12, 2005. At the hearing, DiGiacomo, testifying on the DEP's behalf, stated that she had been informed by the Wall Township bureau administrator that Wagner had been digging channels through the wetlands area of the property for the past three weeks. Upon arriving at the property for a site inspection, DiGiacomo "saw Mr. Wagner out on the site with rubber boots on and a shovel and a rake, and he was excavating trenches, ditches." DiGiacomo diagrammed and measured the disturbance, determining that the ditches were "[c]lose to a foot, ten inches" in depth and approximately one foot wide at the base, with "some disturbance on each side." There was water in the ditches, some of which was standing, and some was "running a little bit." Adding up the different segments of the ditches, and multiplying that linear footage by seven feet -- the area of disturbance -- DiGiacomo estimated that the disturbed area totaled 2,600 square feet. DiGiacomo affirmed her conclusion, reached at the time of the site visit, that the land was wetlands by testifying:

I looked at the soils and it was hydric soil, black muck[. T]here w[ere] hydrology indicators there as well with the . . . water, the black and wet surface, the dead wet leaves on the surface and I just noted that there w[ere] excavated ditches and spreading and raking fill over the adjacent freshwater wetlands and there appeared to be cutting and mowing as well, of the vegetation.

Photographs, taken by DiGiacomo of Lots 31 and 32, demonstrated excavation through the wetlands, groundwater within ten inches of the surface, and the black mucky soils characteristic of wetlands that had been excavated and spread on the sides of the ditches. DiGiacomo also concluded, on the basis of Wagner's prior history with the DEP, that any violation by him was knowing in nature.

Wagner and his wife testified in opposition to the DEP's position. Wagner admitted the ditching, but denied the three-week duration of his activities reported by DiGiacomo. He also minimized the amount of the disturbance, claiming the ditches to have been six to eight inches wide, three to four inches deep, and to have created a disturbance of less than one hundred square feet. The "spoils" were said to have been placed in an area of ten to twelve feet. Wagner stated that the ditching was necessary in order to divert water, discharged from two three-quarter-inch pipes on neighboring property at a flow rate of about 400 gallons per hour. According to Wagner, excess mounding of soil, in an area where a sewer trunk line had previously been installed, had caused water to collect and inundate upland soils in the area. He merely sought to channel that water in the course of performing normal farming operations. Additionally, Wagner contested the wetlands delineation performed by DEP employee Jeffrey Alpert, stating that: "Jeff Alpert, in my knowledge is one of the least responsible and least effective workers over there in Trenton." Wagner's wife, Mary Lou Wagner, confirmed that the total length of the ditches dug by her husband was 147 linear feet, and that they had a depth of four inches.

In an initial decision dated March 6, 2006, the ALJ discussed Wagner's testimony at the hearing, and he concluded:

The wetlands map being used by the Department was actually prepared for respondent [Wagner] and the wetlands lines were established in a prior OAL proceeding.

For respondent to baldly assert now that these are uplands and that he was merely protecting his property from flows originating on adjacent land is an insubstantial defense. Moreover, other than simply saying he was farming, there is no indication in the record that respondent meets any of the preconditions for a farming exemption, see, N.J.A.C. 7:7A-2.8. Ms. DiGiacomo credibly opined that respondent was likely draining the wetlands on his property.

The ALJ thus concluded, on the basis of the evidence presented, that Wagner had "knowingly performed unauthorized work in a wetlands area and that the penalty was appropriately calculated under N.J.A.C. 7:7A-16.8." Payment of the penalty and submission of a restoration plan within thirty days was thus ordered.

Upon further review by the Commissioner, the ALJ's findings as set forth in his initial decision were affirmed as supported by the record and the facts already established by prior OAL proceedings. The Commissioner thus determined that the DEP had met its burden of showing by a preponderance of the evidence that Wagner knowingly engaged in unauthorized ditching and disruption of wetlands in violation of N.J.A.C. 7:7A-2.2, and that the penalty imposed was both appropriate and properly calculated in accordance with N.J.A.C. 7:7A-16.8. The ALJ's initial decision was therefore adopted.

We have carefully considered the arguments raised by Wagner in his appeal and find them to be without sufficient merit to warrant extended discussion in a written opinion. R. 2:11-3(e)(1)(D) and (E). Our review of the decision of the Commissioner in this matter is limited. As stated by the Supreme Court in Matter of Musick:

Courts can intervene only in those rare circumstances in which an agency action is clearly inconsistent with its statutory mission or other state policy. Although sometimes phrased in terms of a search for arbitrary or unreasonable action, the judicial role is generally restricted to three inquiries: (1) whether the agency's action violates express or implied legislative policies, that is, did the agency follow the law; (2) whether the record contains substantial evidence to support the findings on which the agency bases its action; and (3) whether, in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors. Campbell v. Department of Civil Serv., 39 N.J. 556, 562 (1963). [Musick, supra, 143 N.J. 206, 216 (1996).]

In the present matter, we find ample support in the record for the factual findings made by the ALJ and adopted by the Commissioner in his final decision. Although those facts were contested by Wagner, both at the hearing and in his briefing, if the version adopted by the ALJ was factually supported, as it was in the present case, we must accept it. In re Pub. Serv. Elec. & Gas Co.'s Rate Unbundling, 167 N.J. 377, 384 (2001). We reject Wagner's argument, unsuccessfully raised twice before, that he was exempted from the State's freshwater wetlands regulations by N.J.S.A. 13:9B-4(d)(1) as the result of the receipt of Wall Township Planning Board approvals for the development in 1987, and in that regard, adopt the reasoning of the Commissioner as set forth in his August 2005 decision.

As a final matter, we reject Wagner's claim that the 1996 ACO was invalid because it was executed by My-Ben and not by Wagner. As the DEP has maintained throughout, at the time of the entry of the order, My-Ben was the record owner of the affected property, since its transfer, without consideration, was not recorded until 2000. Moreover, at the time the consent order was executed, Wagner essentially conceded its applicability to him, as well as to My-Ben, arguing to the DEP only that a different remedy should have been imposed. My-Ben's right to enter into the ACO was not challenged by Wagner until 2002, at a time long after the remediation had occurred and the wetland areas had been created. In the circumstances presented, any dispute arising now as to ownership is properly between Wagner and My-Ben, not Wagner and the DEP.

In his brief, Wagner has principally advanced ad hominem arguments in opposition to the DEP's position that he violated the Freshwater Wetlands Preservation Act and was subject to its penalties. We do not accept Wagner's position that employees of the DEP, the deputy attorney general assigned to the case, and the ALJ "lied," and otherwise engaged in unprofessional conduct in their dealings with Wagner. It was their obligation to enforce the State's environmental laws. They did so, and as a consequence, Wagner's wrongdoing was discovered and appropriately sanctioned. We discern no legal defect, no misfeasance and no malfeasance in the proceedings that occurred.

Accordingly, the final decision of the Commissioner is affirmed.

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