Opinion
No. CV08-4015126S
March 8, 2011
MEMORANDUM OF DECISION
The plaintiffs appeal Middlebury's Water Pollution Control Authority's action revoking its approval of an allocation of 48,400 gallons of water a day to service plaintiffs' proposed project consisting of 242 units of senior residential housing on property to be located on 57 acres in the town of Middlebury. The plaintiffs claim that they are aggrieved by the WPCA's action in that they expended large sums of money in reliance on the initial approval and in pursuing approvals from other town agencies in connection with their development of the property. Plaintiffs claim that, in revoking the prior approval of a sewer connection for the property, the WPCA acted illegally, arbitrarily and in abuse of its discretion in that the revocation of the approval was not justified, that it was contrary to the findings it had made concerning the use of the property when it approved the sewer connection in 2005, it was done without proper notice, it deprived the plaintiffs of a property right without due process, and it was done for an improper purpose, i.e. to prevent or frustrate the development of the property. The plaintiffs additionally claim that the WPCA is precluded from revoking its approval by municipal estoppel.
Although the plaintiffs claim throughout their brief that they are appealing the revocation of approval of a sewer connection, WPCA correctly points out that the application was for a determination of sewer capacity and not for a sewer connection.
The WPCA counters that what was revoked was not approval for a sewer connection but an authorization of sewer capacity, that its action was justified in that the plaintiffs failed to satisfy the contingencies stated in the letter of approval or even acknowledge in writing that they had received the letter and understood the conditions set forth therein. The WPCA denies the plaintiffs' due process claim, arguing that plaintiffs have no constitutionally protected property right in an authorization for sewer capacity. Finally, the WPCA contends that municipal estoppel does not apply to this matter.
FACTS
The plaintiff developers proposed to build senior residential housing on approximately 57 acres owned or under contract for purchase by the plaintiffs. In May 2005, they applied for an allocation of sewer capacity from the Town of Middlebury WPCA. The application form which is entitled Request for determination of Availability of Sewer Capacity provides, in relevant part: This Application shall be completed and submitted prior to the preparation of any other request regarding sewer service . . . A favorable determination is NOT a permit and terminates after one year from the date of determination, if there is no further action taken with the WPCA. One additional 6-month extension may be granted by the WPCA.
Plaintiffs' engineer, Sea Consultants, Inc. indicated that an 8-inch PVC sewer line existed on the subject property, having been installed as part of a larger sewer project in the 1980s. The parties agree that no extension of the existing sewer system was necessary but a connection. On August 16, 2005, the Middlebury Water Pollution Control Authority (WPCA) authorized a maximum capacity of 48,400 gallons per day to service no more than 242 units of Senior Residential Housing. This approval was " subject to technical approval, assessment and payment discussions and decisions." The WPCA sent notice of its approval in a letter to plaintiffs' attorney, Edward Fitzpatrick, dated September 2005. The letter contained several conditions to which the approval was subject. These conditions included allocation of the expense of construction of sewer facilities to the owner of the project property, submitting the plans for the facilities to the WPCA for approval, assumption of sole responsibility by the owner of the project property and its successors for performance of all future maintenance, repairs and replacements to the private sewer system on the property, assumption by the owner of the project property and its successors of sole responsibility to install back flow preventors as part of the sewer facilities as required by the WPCA in order to properly maintain the flow of sewage to and within the Middlebury public sewer system, and indemnification of the WPCA and the Town of Middlebury for any liability caused by a sewer back up as a result of the sewer facilities installed by the owner in connection with the Project. Additionally, the plaintiffs were to obtain all the other necessary governmental agency approvals for the project within two years, although an extension could, in the sole discretion of the WPCA, be granted if requested. After obtaining the necessary governmental agency approvals for the project, the plaintiffs were to submit an application to the WPCA for a building service connection with all required engineering plans for the approval by the WPCA within three months after the approval by said governmental agencies. The WPCA also required plaintiffs' agreement to pay an assessment for the project in connection with the sewer services, the amount and method of the payment set out by the WPCA.
The plaintiff owners were to execute and deliver a "Sewer Use Agreement" with respect to all of the conditions recited above no later than three months from the date of the letter. The final paragraph of the letter stated: If the above terms are satisfactory to you, please sign, date and return the second copy of this letter. Upon our receipt of an originally signed letter, copies of the full signed letter may be submitted to other public agencies required to approve the Project.
The letter was neither signed nor returned to the WPCA. Without doing so, plaintiffs relied on the notice of approval and pursued approvals from other governmental agencies in connection with the project. In April 2006, Ken Pocius, the attorney for the WPCA e-mailed plaintiffs' attorney requesting the status of the letter. He indicated to plaintiffs' attorney that the plaintiffs should not represent that it has sewer service to any of the other boards until the letter was finalized. On May 18, 2006, Attorney Pocius sent another e-mail to Attorney Fitzpatrick indicating that if the signed letter was not received by the WPCA prior to the next meeting (scheduled for the 3rd Tuesday of June), the WPCA would have to reconsider its commitment. Attorney Fitzpatrick replied by e-mail that he would have the engineer review the commitment letter, and he requested that the matter be placed on the next agenda. Minutes of several subsequent meetings establish that the letter was not signed or returned.
On Tuesday, November 20, 2007, the WPCA unanimously approved a motion to withdraw the capacity reserved for the plaintiffs' project, determining that it did not make sense to keep a capacity in reserve when the contract was never signed. On the same date, the Chairman of the WPCA wrote to Attorney Fitzpatrick, advising him of the action taken. The letter contained the following explanation for the WPCA's action:
In September of 2005, to confirm its terms of authorization and as a accommodation to your client so it could expeditiously proceed with other governmental agencies, the Authority provided you with a letter that was to be signed and returned to us. The letter provided that your client could only proceed to other public agencies with its authorization after the letter was signed by the parties. The letter also stated that a final Agreement was required within three months thereafter, or the Authority could in its sole discretion, withdraw its capacity commitment. Finally, the letter stated that the final Agreement would include a provision that committed that capacity to your client for two years in order to permit it to obtain its land use approvals for the Project, and if not then obtained that the Authority could withdraw its capacity commitment.
The Chairman additionally noted that, even as of that date, the capacity letter was never signed and there was no signed agreement.
Your client elected to ignore the letter, even after a number of requests by us, including invitations for you and your client to appear at Authority meetings. Your client nevertheless, ignoring those requests, proceeded with other public agencies representing to them that the Project had a commitment for sewers (when the letter clearly states otherwise).
On December 18, Attorney Fitzpatrick attended the WPCA meeting and requested that the WPCA reinstate the capacity at least until the completion of the plaintiffs' appeal from an adverse decision by the Middlebury Planning and Zoning Commission. Attorney Fitzpatrick made the same request by way of a letter to the Chairman of the WPCA on the same date. The WPCA declined to reinstate, and this appeal resulted.
Aggrievement
"[P]leading and proof of aggrievement are prerequisites to the trial court's jurisdiction over the subject matter of a plaintiff's appeal . . ." (Citations omitted; internal quotation marks omitted.) Stauton v. Planning Zoning, 271 Conn. 152, 157, 856 A.2d 400 (2004). "The question of aggrievement is essentially one of standing . . . Because [t]he issue of standing implicates this court's subject matter jurisdiction, [the court must address] it first . . . [i]t is a basic principle of law that a plaintiff must have standing for the court to have jurisdiction." (Internal citations omitted; internal quotation marks omitted). Quarry Knoll II Corp v. Planning Zoning Comm., 256 Conn. 674, 701, 780 A.2d 1 (2001).
Straw Pond Associates, LLC, the contract purchaser of 36 acres of the subject property, CUDA Associates, LLC, the owner of 22 acres of the subject property, Straw Pond Real Estate, LLC, a contract purchaser of both parcels (36 acres and 22 acres) from Straw Pond Associates, LLC and CUDA Associates, LLC. Straw Pond Real Estate, LLC and Straw Pond Associates, LLC are the two members of Straw Pond Holdings, LLC. Based on the testimony of a principal in Straw Pond Real Estate, LLC and the agreement and the evidence presented, the court finds that the plaintiffs have a legal interest in the subject property.
Standard of Review
Section 7-246a of the Connecticut General Statutes provides, in relevant part: "(a) Whenever an application or request is made to a water pollution control authority or sewer district for (1) a determination of the adequacy of sewer capacity related to a proposed use of land . . . the water pollution control authority or sewer district shall make a decision on such application or request within sixty-five days from the date of receipt . . . (b) Notwithstanding any other provision of the general statutes, an appeal may be taken from an action of a water pollution control agency or sewer district pursuant to subsection (a) of this section in accordance with Section 8-8."
The standard of review of the WPCA's decision is set out by our supreme court: "In considering an application for sewer service, a water pollution control authority performs an administrative function related to the exercise of its powers . . . When a water pollution control authority performs its administrative functions, a reviewing court's standard of review of the [authority's] action is limited to whether it was illegal, arbitrary or in abuse of [its] discretion . . . Moreover, there is a strong presumption of regularity in the proceedings of a public agency, and we give such agencies broad discretion in the performance of their administrative duties, provided that no statute or regulation is violated." (Citations omitted; internal quotation marks omitted.) Forest Walk, LLC v.Water Pollution Control Authority, 291 Conn. 271, 285-86, 968 A.2d 345 (2009)
Revocation of the Prior Approval by WPCA
As previously indicated, the plaintiffs' application was for authorization of sewer capacity, the determination of which is preliminary to both an extension (where applicable) and a request for a Building Service Connection. See Regulations of the Middlebury Water Pollution Control Authority, Article IV, Sections 2, 8. What plaintiffs received was an authorization of sewer capacity subject to certain conditions. Thus, it is the revocation of an authorization of sewer capacity and not that of a sewer connection by the WPCA which the plaintiffs challenge.
Plaintiffs argue that the WPCA's action revoking its approval is arbitrary and illegal because there is no provision in the regulations for revocation of previously approved connections. Because, as indicated above, plaintiffs never received approval for a connection, the court applies their argument to a revocation of determination of sewer capacity.
Pursuant to § 7-247 of the Connecticut General Statutes, a municipal water pollution control authority may establish and revise rules and regulations for the supervision, management, control, operation and use of a sewerage system. ARTICLE IV Section 2 of the Middlebury Water Pollution Control Authority Regulations applies to a request for determination of sewer capacity. That section requires an owner of property proposed for development which is to be considered for sewer service by an extension of the Public Sewer System to first request that the WPCA determine whether sewer capacity is available. It provides that a sewer capacity request must be made on the application form provided by the WPCA and with such submissions of information as the WPCA may from time to time require. The application form clearly provides instructions that must be followed by the applicant.
The record establishes that plaintiffs' property is located in an area where sewer service is available. The parties indicate that, as a result, an extension of sewer service was not in issue.
"[W]ater pollution control authorities are quasi-municipal corporations created pursuant to statute that may exercise the power to acquire, construct, maintain, supervise, manage and operate a sewer system and perform any act pertinent to the collection, transportation and disposal of sewage." (Internal quotation marks omitted.) Avalon Bay Communities, Inc. v. Sewer Commission, 270 Conn. 409, 425, 853 A.2d 497 (2004). It is well settled that a municipality has "wide discretion in connection with the decision to supply sewerage . . . Although this discretion is not absolute, [t]he date of construction, the nature, capacity, location, number and cost of sewers and drains are matters within the municipal discretion with which the courts will not interfere, unless there appears fraud, oppression or arbitrary action." (Internal citations omitted; internal quotation marks omitted.) AvalonBay Communities, Inc. v. Sewer Commission, supra, 423, quoting Archambault v. Water Pollution Control Authority, 10 Conn.App. 440, 444, 523 A.2d 931 (1987).
Plaintiffs argue that, if there is no mention of revocation of an approval in the regulations, the WPCA cannot revoke an approval or authorization for any reason. This claim has no merit.
Although, as plaintiffs point out in their brief, Connecticut courts have consistently held that land use agencies have no powers other than those expressly conferred by law, water pollution control authorities are not land use agencies. They are not subjected to the statutory limitations to which land use agencies are subjected. Rather, they have broad discretion to determine whether, and under what circumstances, they would provide sewer service within their municipalities Forest Walk, LLC v. Water Pollution Control Authority, 291 Conn. 271 at 284-85.
Additionally, the court finds no merit in the plaintiffs' contention that the WPCA was required to verbalize the conditions on the record at the meeting. The fact that the approval was conditional was clearly expressed at the meeting. The letter was sent very shortly after the meeting, and the plaintiffs fail to demonstrate either any violation of a regulation by the WPCA or any harm suffered by the plaintiffs because the conditions were not set out during the meeting but rather in a letter written shortly thereafter.
The plaintiffs next argue that imposing an assessment as a condition for authorizing sewer capacity is illegal and a violation of procedural due process because there was no notice to them that an assessment was part of determination of sewer capacity and because they were not given the statutorily required hearing. Plaintiffs are correct in their assertion that whether the assessment is a benefit assessment pursuant to Connecticut General Statutes § 7-249, a "hook-up" charge pursuant to Connecticut General Statutes § 7-255, or a combination of both, they are entitled to a hearing prior to having the amount of the assessment determined. "[T]here is a strong presumption of regularity in the proceedings of a public agency, and we give such agencies broad discretion in the performance of their administrative duties, provided that no statute or regulation is violated." Forest Walk, LLC v Water Pollution Control Authority, 291 Conn. 271 at 285-86.
General Statutes § 7-249 provides, in relevant part: "At any time after a municipality, by its water pollution control authority, has acquired or constructed, a sewerage system or portion thereof, the water pollution control authority may levy benefit assessments upon the lands and buildings in the municipality which, in its judgment, are especially benefitted thereby, whether they abut on such sewerage system or not, and upon the owners of such land and buildings, according to such rule as the water pollution control authority adopts, subject to the right of appeal as hereinafter provided."
Connecticut General Statutes § 7-250 provides in part: "No assessment shall be made until after a public hearing before the water pollution control authority at which the owner of the property to be assessed shall have an opportunity to be heard concerning the proposed assessment . . ."
Connecticut General Statutes § 7-255 provides, in relevant part: The water pollution control authority may establish and revise fair and reasonable charges for connection with and for the use of a sewage system. The owner of property against which any such connection or use charge is levied shall be liable for the payment thereof . . . No charge for connection with or for the use of a sewerage system shall be established or revised until after a public hearing before the water pollution control authority at which the owner of property against which the charges are to be levied shall have an opportunity to be heard concerning the proposed charges . . . In establishing or revising such charges the water pollution control authority may classify the property connected or to be connected with the sewer system and the users of such system . . . and may give consideration to any factors relating to the kind, quality or extent of use of any such property or classification of property or users including, but not limited to . . . (6) the quality and character of the material discharged into the sewerage system . . .
It is clear that the plaintiffs are entitled to a hearing on the proposed assessment, and failure to afford the plaintiffs a hearing is a violation of their procedural due process rights. However, the record discloses an absence of any mention of the assessment by the plaintiffs. There was no question or complaint, but only silence. The fact and amount of the assessment were raised only on appeal to this court. Moreover, a careful reading of the September 2005 letter clearly provides the plaintiffs three-months to agree to the conditions set forth therein. Presumably, the plaintiffs could have demanded the required hearing or negotiated with the WPCA concerning the assessment during that interval. The only act they were required to perform during that three-month interval was to sign, date and return a second copy of the letter if the terms (including the three months to come to an agreement about the conditions) were acceptable. They failed to do that.
Because there is no indication that the plaintiffs would have been denied the statutorily required hearing on the assessment, the court finds that the conditions imposed in connection with the authorization for sewer capacity are neither oppressive nor unreasonable. Moreover, the record demonstrates that the WPCA cautioned the plaintiffs several times about their failure to sign and return the letter of approval. The court finds that the plaintiffs cannot prevail on the ground that the action of the WPCA in revoking its approval of the plaintiff's application for determination of sewer capacity was illegal, arbitrary, oppressive or fraudulent.
Due Process Claim
Plaintiffs contend that they were denied due process in that they were deprived of a property right without prior notice or a public hearing. WPCA counters that plaintiffs have no property interest that is entitled to federal protection.
In Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972), the United States Supreme Court expanded the concept of property to include not only what is owned, but also what is sought. The court stated that to be a protected property right, there must be "a legitimate claim of entitlement." Id., 577. This expanded concept of property, however, requires more than "an abstract need or desire" or "a unilateral expectation" of what is sought. Board of Regents v. Roth, supra, 408 U.S. at 577, 92 S.Ct. at 2709. Instead, there must be "a legitimate claim of entitlement." Id.; Perry v. Sindermann, 408 U.S. 593, 601, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972). The "clear entitlement" test was adhered to by the Second Circuit in RRI Realty Corp., Inc. v. Village Of Southampton, 870 F.2d 911, 918 (2nd Cir. 1989). In RRI, Judge Newman, writing for the court, stated that "[a]pplication of the test must focus primarily on the degree of discretion enjoyed by the issuing authority, not the estimated probability that the authority will act favorably in a particular case." The Connecticut Supreme Court adopted the Second Circuit Court of Appeals' "clear entitlement" test as a guide to determining whether a civil rights claimant in a land regulation case has stated a due process claim under the federal constitution. "The clear entitlement test asks whether there is a certainty or a very strong likelihood that the application in question would have been granted, but for the wrongful conduct of the local officials . . . A very strong likelihood means not simply a high probability of approval, but rather a virtual assurance of approval because any discretion is narrowly circumscribed . . . Application of the [`clear entitlement'] test must focus primarily on the degree of discretion enjoyed by the issuing authority, not on the estimated probability that the authority will act favorably in a particular case." (Internal quotation marks omitted; internal citations omitted.) Giamo v. New Haven, 257 Conn. 481, 509, 778 A.2d 33 (2001); Kelley Property Development, Inc. v. Lebanon, 226 Conn. 314, 321-22, 627 A.2d 909 (1993).
Application of the clear entitlement test to the facts of this case compels the court to conclude that a conditional approval of sewer capacity did not confer on the plaintiffs a property right entitled to constitutional protection. Pursuant to Connecticut General Statutes § 7-247(a), "a municipality has wide discretion in connection with the decision to supply sewerage . . . Although this discretion is not absolute, [t]he date of construction, the nature, capacity, location, number and cost of sewers and drains are matters within the municipal discretion with which the courts will not interfere, unless there appears fraud, oppression or arbitrary action." (Internal quotation marks omitted.) Forest Walk, LLC v. Water Pollution Control Authority, 291 Conn. at 282. The court has determined that there was no fraud, oppression or arbitrary action on the part of the WPCA. The plaintiffs cannot prevail on this ground.
MUNICIPAL ESTOPPEL
"The standards governing the application of equitable estoppel are well established. There are two essential elements to an estoppel — the party must do or say something that is intended or calculated to induce another to believe in the existence of certain facts and to act upon that belief; and the other party, influenced thereby, must actually change his position or do some act to his injury which he otherwise would not have done . . . [I]n order for a court to invoke municipal estoppel, the aggrieved party must establish that: (1) an authorized agent of the municipality had done or said something calculated or intended to induce the party to believe that certain facts existed and to act on that belief; (2) the party had exercised due diligence to ascertain the truth and not only lacked knowledge of the true state of things, but also had no convenient means of acquiring that knowledge; (3) the party had changed its position in reliance on those facts; and (4) the party would be subjected to a substantial loss if the municipality were permitted to negate the acts of its agents." (Citation omitted; internal quotation marks omitted.) Conservation Comm. v. Red 11, LLC, 119 Conn.App. 377, 386, 987 A.2d 398 (2010); O'Connor v. Waterbury, 286 Conn. 732, 757-58, 945 A.2d 936 (2008).
The record clearly establishes that no agent of the WPCA did or said anything calculated or intended to induce the plaintiffs to believe that their approval was without conditions. Their reliance on the verbal approval at the August 2005 hearing is unjustified in light of the fact that the approval was subject to conditions. Not only do the plaintiffs fail to satisfy the first requirement to claim municipal estoppel but they fail to satisfy the second and third requirements as well. Rather, the record demonstrates the attempts by the WPCA to have plaintiffs comply with the simple requirement to sign and return the letter. The plaintiffs' claim that they relied on the August 2005 approval when they spent money seeking approvals for their project from other agencies is disingenuous inasmuch as they were advised that they could not seek other approvals until the letter of conditional approval was signed and returned. Thus, their claim of municipal estoppel is without any merit.
Conclusion
For the reasons set forth herein, the court finds that the evidence fails to support the plaintiffs' claims. Accordingly, the appeal is dismissed.