2006-363, NH DEPARTMENT OF ENVIRONMENTAL SERVICES v. RICHARD A. MOTTOLO

The defendant, Richard A. Mottolo, appeals an order of the

Daniel J. Callaghan on the brief, and Mr. Beeson orally), for the defendant. Devine, Millimet & Branch, P.A., of Manchester (Peter G. Beeson and

attorney general, on the brief and orally), for the State. to press. Errors may be reported by E-mail at the following address: Kelly A. Ayotte, attorney general (Peter C.L. Roth, senior assistant

NEW HAMPSHIRE DEPARTMENT OF ENVIRONMENTAL SERVICES

editorial errors in order that corrections may be made before the opinion goes No. 2006-363 Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Merrimack Readers are requested to notify the Reporter, Supreme Court of New ___________________________

THE SUPREME COURT OF NEW HAMPSHIRE

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as defense.

p. 2 hearing setting forth various defenses, including his bankruptcy discharge answer to DES’ petition was due, the defendant filed an answer after the thereto. Also, because the preliminary hearing was held before the defendant’s

court issued an order which read, in its entirety: and before DES had responded to the defendant’s discovery requests, the trial On March 16, 2006, approximately two weeks prior to the close of discovery,

discovery; and (3) the filing of motions for summary judgment and responses order fixing the dates for: (1) briefs on the bankruptcy issue; (2) the close of request for a preliminary injunction, but did issue a structuring conference barred DES’ action. Following a hearing, the trial court did not rule upon DES’ met its burden to obtain an injunction and that his bankruptcy discharge to the bankruptcy issue and to DES’ request for preliminary injunctive relief. preliminary injunction. At the hearing, the defendant argued that DES had not In February 2006, DES and the defendant filed various pleadings relative

groundwater within that area.

day before that hearing, the defendant filed an objection to DES’ request for a A preliminary hearing on DES’ motion was held in January 2006. The

order requiring the defendant to obtain a permit. Quinn. judgment and a motion for preliminary and permanent injunction, seeking an site. The cost to DES for that monitoring has been reimbursed by EPA or by December 2005, DES filed a petition for equitable relief and declaratory defendant did not obtain, or attempt to obtain, a permit. Therefore, in

area and to implement measures to restore the quality of any contaminated Rules, Env-Wm 1403.02(q), to monitor the groundwater quality in a specific requires, among other things, a “legally responsible person,” N.H. Admin. N.H. Admin. Rules, Env-Wm 1403.12. A groundwater management permit a groundwater management permit for the property. See RSA 485-A:13 (2001); In July 2005, DES contacted the defendant and requested that he obtain obtained substantial liens on the defendant’s parcel. recover the costs of remediation. As a result of those suits, DES and EPA have (Quinn) and the Lewis Chemical Company, the generators of the waste, to DES has monitored the groundwater contamination and its attenuation at the EPA. From the time of the defendant’s bankruptcy discharge to the present, owner of the property, which remained subject to the liens held by DES and bankruptcy discharge. After discharge, the defendant remained the record defendant’s bankruptcy proceedings. In 1998, the defendant received a the United States Bankruptcy Code. EPA and DES participated in the In 1996, the defendant filed for personal bankruptcy under Chapter 7 of

EPA brought actions against the defendant, as well as K. J. Quinn & Company remediation of the waste at the site. Over approximately fifteen years, DES and p. 3 3

permanent relief. the plaintiffs’ rights had been violated. Spengler, 144 N.H. at 167-70 (Brock, the defendant contends the trial court erred in granting preliminary and dissented, however, and concluded that the issue had been preserved and that consolidation. Because it did not provide notice and an opportunity to object, that the issue had not been preserved for appellate review. Chief Justice Brock and this appeal followed. 161(b) to notify the parties and provide them an opportunity to object to substantially similar to those made by the defendant here. The majority held ruling on the merits. The trial court, without comment, denied both motions was required by the New Hampshire Constitution and Superior Court Rule Spengler v. Porter, 144 N.H. 16 p. 3 3, 164-65 (1999), the plaintiffs made allegations is required for a trial court to consolidate issues under Rule 161(b). In hearing on the application. We have not squarely addressed the issue of what court may order the trial of the action on the merits be consolidated with the commencement of a hearing on an application for a preliminary injunction, the Superior Court Rule 161(b)(2) provides that before or after the

improperly consolidated DES’ request for preliminary injunctive relief with a ruling on DES’ request for preliminary relief with its ruling on the merits, it The defendant first contends that when the trial court consolidated its

burden of proof to obtain one. been completed; and ( p. 3 3) granting an injunction when DES had not met its decision on the merits; (2) ruling on the bankruptcy issue before discovery had consolidating its decision on DES’ request for a preliminary injunction with its On appeal, the defendant contends that the trial court erred by: (1)

had not met its burden to obtain an injunction and that the trial court had At the same time, the defendant moved for reconsideration, arguing that DES asking whether DES would be required to comply with his discovery requests. groundwater protection statutes and regulations. issue before the court had been DES’ request for a preliminary injunction and any way affect his obligation to comply with the state’s (Emphasis added.) The defendant moved for clarification, arguing that the only and finds that the respondent’s bankruptcy discharge does not in

state statutes are not being complied with. threat of immediate irreparable harm is met by a showing that The court finds that the requirement that Petitioner show a A:1 p. 3 3. groundwater management permit as required by N.H.R.S.A. 485the respondent is ordered to obtain and comply with a request for a preliminary and permanent injunction is granted and

court is persuaded by the logic and authorities cited by the State Following hearing and submission of supplemental briefs, the permanent injunctive relief.

p. 4 consolidation of DES’ request for a preliminary injunction with its claim for defendant. In short, the trial court did not, at any time, “order” the bankruptcy discharge defense, or any of the other defenses raised by the

requires that the notice of consolidation be clear and unambiguous. not object to the trial court’s order after the fact. We disagree. Rule 161(b)

notice required by Rule 161(b). See id. at 169-70 (Brock, C.J., dissenting). sufficient. Thus, the defendant was not provided the clear and unambiguous ruling on the permanent injunction, the propriety of the defendant’s 144 N.H. at 168 (Brock, C.J., dissenting). Notice that is “implicit” is not

the time of the January 31, 2006 hearing, and, therefore, the defendant could DES contends that the trial court’s intent to consolidate was “implicit” at

P. R., Loc. 901, 453 F.2d 1171, 1172 (1st Cir. 1971).

present their respective cases.” commences or at a time which will still afford the parties a full opportunity to it intended to consolidate DES’ request for a preliminary injunction with a notice of its intent to consolidate the proceedings either before the hearing At no time prior to, during, or after the hearing did the trial court indicate that Following the hearing, the trial court initially issued only a scheduling order. limited to offers of proof and given fifteen minutes to present those offers. Here, the court held a preliminary hearing at which the parties were

N.H. at 168 (Brock, C.J., dissenting). due process, and is implicit in the rule’s use of the term “order.” Spengler, 144 of Texas v. Camenisch, 451 U.S. 390, 395 (1981). Such notice is demanded by

65(a)(2), have concluded that “the trial court must give clear and unambiguous Federal courts construing the identical federal rule, Fed. R. Civ. P. meaningful manner.” dissenting) (quotation and brackets omitted). injunction stage to give a final judgment on the merits.” Id. (Brock, C.J., “Accordingly, it is generally inappropriate for a trial court at the preliminarytrial on the merits.” Id. at 168 (Brock, C.J., dissenting) (quotation omitted). procedures that are less formal and evidence that is less complete than in a held, a preliminary injunction is customarily granted on the basis of injunctions serve only to preserve the status quo until a trial on the merits is at 167-68 (Brock, C.J., dissenting) (quotation omitted). “Because preliminary must be given the litigants before the disposition of a case on the merits.” Id. “Consistent with this guarantee, fair notice and an opportunity to be heard

process guarantees the right to be heard at a meaningful time and in a In Spengler, Chief Justice Brock noted that it is “axiomatic that due

Justice Brock’s analysis on the merits. C.J., dissenting). Here, the issue is properly before us, and we adopt Chief say that the trial court erred in issuing a preliminary injunction in this case. p. 5 may be apparent on the face of the record. On the record presented, we cannot

a likelihood of success on the merits. Therefore, he also appears to challenge the conclusion that DES demonstrated

fact. of law, an unsustainable exercise of discretion, or clearly erroneous findings of

before the trial court. Thus, we are constrained to review only the errors that established principles of equity. We have not been provided with a transcript of the preliminary hearing

151 N.H. 391, 394 (2004). that the trial court erred in its ruling on his bankruptcy discharge defense. it did not show an immediate irreparable harm. Also, the defendant contends errors apparent on the face of the record. Tiberghein v. B.R. Jones Roofing Co., supports the result reached by the trial court, and our review is limited to legal merits. sufficient record of the proceedings below, we assume that the evidence that preserves the status quo pending a final determination of the case on the “unsustainable exercise of discretion”). Finally, we note that without a Id.; see State v. Lambert, 147 N.H. 295, 296 (2001) (explaining

107, 109 (1998). We will uphold the issuance of an injunction absent an error

sound discretion to grant an injunction after consideration of the facts and succeed on the merits. Kukene, 145 N.H. at 4. It is within the trial court’s N.H. at 316. Also, a party seeking an injunction must show that it would likely seeking injunctive relief, and there is no adequate remedy at law. Murphy, 122 demonstrate the absence of an adequate alternative remedy at law and because issue unless there is an immediate danger of irreparable harm to the party meet its burden to obtain a preliminary injunction because it did not Kukene v. Genualdo, 145 N.H. 1, 4 (2000). An injunction should not preliminary injunction was proper. According to the defendant, DES did not must determine whether, at the time it issued its order on injunctive relief, a 122 N.H. 314, 316 (1982). A preliminary injunction is a provisional remedy been considered an extraordinary remedy. Murphy v. McQuade Realty, Inc., The issuance of injunctions, either temporary or permanent, has long

declaratory relief. denied a full opportunity to develop his evidence and arguments against argues that the trial court’s grant of preliminary relief was improper. Thus, we In addition to his arguments relative to consolidation, the defendant

vacate the trial court’s grant of permanent injunctive relief. final judgment must show prejudice as well as surprise). Accordingly, we Supp. 2d 340, 347 (D.P.R. 2006) (noting that the party contesting the entry of prejudice to the defendant. Cf. Vaqueria Tres Monjitas, Inc. v. LaBoy, 448 F. discovery from DES. Therefore, we conclude that the lack of notice resulted in Indeed, the trial court decided this case before the defendant had received

the merits hearing with the temporary hearing, the defendant was effectively Additionally, having received no notice that the court would consolidate to flow from such violations.” p. 6 6 violations of a statute’s substantive provisions, irreparable injury is presumed

this context, “when seeking a preliminary injunction, the government need not Freight Co. v. C.F. Air Freight, Inc., 882 F.2d 797, 803 (3d Cir. 1989). Thus, in on this issue was within the bounds of its discretion. Enterprises, Inc., 855 F. Supp. 534, 543 (D. R.I. 1994); see also Instant Air adequate, alternative remedy, and we conclude that the trial court’s decision injury and a balancing of the equities are not relevant.” United States v. Kasz the request that it obtain a permit, does not demonstrate the existence of an injunction, considerations applicable to private actions such as irreparable “[i]t is settled that where a statute designed to protect the public authorizes an Laboratories, Inc., 812 F. Supp. 458, 485 (D. N.J. 1993). This is so because Authority, 25 p. 6 6 F.3d 36, 50 n.15 (1st Cir. 2001); see also United States v. Barr

that when Congress decides to make available the remedy of injunction for with respect to some statutory injunction provisions, . . . courts have found injunction when an injunction is authorized by statute. However, “[a]t least compliance is sufficient to demonstrate the harm necessary to support an We have never addressed the issue of whether proof of statutory non-

suits against another party, with other potential defenses to an injunction or defendant, even if there is a statutory violation, there is no threat. the cost of that monitoring has been borne by Quinn. Thus, according to the because groundwater monitoring has been and is being done at the site, and sufficient to constitute the requisite threat, DES did not meet its burden threat. The defendant argues that, even assuming statutory non-compliance is non-compliance with state statutes was sufficient to demonstrate such a Regarding irreparable harm, the trial court found that the defendant’s

alternative remedy at law. We agree with DES. management permit does not demonstrate the existence of an adequate the existence of another party who might be required to obtain a groundwater remedy was not, in fact, adequate. We agree that requiring DES to resort to injunction. Thus, it made the subsidiary determination that this potential a groundwater management permit for the property, the trial court granted the defendant’s argument that DES could attempt to require a third party to obtain Condo. Owners’ Assoc. v. Ventullo, 151 N.H. 571, 58 p. 6 6 (2004). Despite the to support its general finding that DES had met its burden. See Nordic Inn we nonetheless assume that the trial court made subsidiary findings sufficient While the trial court made no findings or rulings directly on this issue,

obtain a groundwater management permit. In response, DES contends that DES could have requested that Quinn, as another “legally responsible person,” to DES before entering the injunction. Specifically, the defendant argues that contends that the trial court did not consider other potential remedies available As to the element of an adequate, alternative remedy, the defendant the trial court’s determination that DES had shown a likelihood of success on

p. 7 state permitting requirements. Having reviewed the record, we find no error in

court.

defendant’s bankruptcy discharge did not affect his obligation to comply with defendant. From these submissions, the trial court concluded that the against the defendant’s bankruptcy defense with virtually no response from the

is being completed and paid for is insufficient to demonstrate error by the trial

injunctive relief, the trial court had before it DES’ fully-developed arguments threat of irreparable harm. Thus, when ruling upon the request for preliminary had not demonstrated the absence of an adequate, alternative remedy or the 7 trial court’s ruling on injunctive relief, the defendant argued primarily that DES

presumed, DES has met its burden on this element. The fact that monitoring danger of a continuing violation. Because, in such an instance, injury may be statute because no party holds a required permit, and that there is some it demonstrated a likelihood of success. pleadings demonstrated that the bankruptcy discharge did not bar this action, discharge defense did not bar DES’ action. DES counters that because its

pleadings on the issue and deferred full briefing on the matter. Prior to the bankruptcy defense. The defendant, in contrast, elected to file only scant detailed memorandum setting out its arguments against the defendant’s memoranda on the bankruptcy issue. Prior to that deadline, DES submitted a In its structuring conference order, the trial court set a deadline for filing

established, at least for purposes of a preliminary injunction, violation of the or entity is in the process of obtaining a permit. Therefore, DES has

contends that the trial court erred in determining that his bankruptcy Finally, as to the likelihood of success on the merits, the defendant

requirement that he obtain one. Finally, there is no evidence that any person defendant does not dispute that some party should hold a permit, but only the groundwater management permit for the defendant’s property. Also, the Here, it is not disputed that no “legally responsible person” has obtained a showing a violation of the statute and some danger of recurrent violations. RSA 485-A:13, II. Thus, we conclude that DES can meet its burden by authorizes the issuance of injunctions for violations of its requirements. See to prevent nuisances and potential health hazards.”). Moreover, the statute supplies, to prevent pollution in the surface and groundwaters of the state and public. See RSA 485-A:1 (“The purpose of this chapter is to protect water Here, the statute at issue is undoubtedly one designed to protect the

cognizable danger of recurrent violations.” Id. at 544 (quotation omitted). establishes that the defendants have violated the statute and there exists some requirements for statutory injunctive relief are met when . . . the government injury is to be presumed.” Kasz Enterps., p. 8 855 F. Supp. at 543. “The show that irreparable injury will result in the absence of injunctive relief; such 8

for further proceedings consistent with this opinion. we vacate the grant of the permanent injunction and remand to the trial court injunction without complying with the requirements of Rule 161(b). Therefore,

preliminary injunction to DES, but that it did err in ruling on the permanent

BRODERICK, C.J., and DALIANIS, DUGGAN and HICKS, JJ., concurred.

In sum, we conclude that the trial court did not err in granting a

opinion, however, as to the ultimate merits of the bankruptcy issue. the merits sufficient to sustain a preliminary injunction. We express no