United States District Court, D. Minnesota
Friedrich A. P. Siekert, Assistant United States Attorney, UNITED STATES ATTORNEY'S OFFICE, for plaintiff.
Molly R. Hamilton, MESSERLI & KRAMER P.A., for defendants.
MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT
JOHN R. TUNHEIM, District Judge.
Plaintiff, the United States of America, sued Bradd Louis James Mlaskoch ("Bradd"), Mlaskoch Excavating, Inc. ("MEI"), and Danielle Johnson Mlaskoch ("Danielle") (collectively, "Defendants"), under Sections 309(b) and (d) of the Clean Water Act ("CWA"), 33 U.S.C. § 1319(b), (d). In Count I, the United States' complaint alleges that Defendants violated Sections 301(a) and 404 of the CWA, 33 U.S.C. §§ 1311(a), 1344, by discharging dredged and fill materials into the waters of the United States in Pine County, Minnesota, without authorization from the United States Army Corps of Engineers ("the Corps"). The United States moves for summary judgment with respect to liability for Count I as to all Defendants. Because no material issue of fact remains regarding Bradd's and Danielle's liability for violation of Section 301(a) and 404, the Court will grant the United States' motion with respect to the Mlaskochs. The Court will deny the motion with respect to MEI because a material issue of fact remains regarding whether MEI had sufficient involvement with the work resulting in the discharge of dredged or fill materials to impose CWA liability.
I. THE PARTIES
The Mlaskochs live in Sturgeon Lake, Minnesota, and operate MEI out of Willow River, Minnesota. Bradd initially formed MEI, a Minnesota S corporation, as an excavating company that specialized in laying fiber optic. (Dep. of Bradd Mlaskoch ("Bradd Dep.") 11:6-9, Mar. 29, 2013, Docket No. 42; Dep. of Danielle Mlaskoch ("Danielle Dep.") 15:24-16:3, Mar. 29, 2013, Docket No. 43.) Bradd is the president of MEI and Danielle is the company's secretary and vice president. (Danielle Dep. 11:4-11, 15:3-6.)
During the relevant time period the Mlaskochs conducted some of their residential and/or rental housing activities under the name Westside Properties. (Bradd Dep. 19:9-21; Danielle Dep. 27:3-9.) Westside Properties is not and has never been an actual corporate entity (Danielle Dep. 30:4-11) and the parties do not dispute that actions taken under the name Westside Properties were controlled by the Mlaskochs.
II. THE SITE
On January 13, 2005, Bradd purchased the real property ("the Site") at issue in this matter. (Bradd Dep. 15:16-16:9; Decl. of Friedrich A. P. Siekert, Ex. 3 at 1, Mar. 29, 2013, Docket No. 34.) The Site is a 200-acre parcel located in Pine County, Minnesota, approximately 5.5 miles east of the Willow River exit off of Interstate Highway 35. (Bradd Dep. 16:10-11; Compl. ¶ 29, June 28, 2010, Docket No. 1; Answer ¶ 13, Nov. 12, 2010, Docket No. 6.) The Site is bordered on the north by Waletzko Road, also known as River Road. (Decl. of Timothy J. Smith, Ex. B ("Site Investigation"), 1-5, Mar. 29, 2013, Docket No. 36; Compl., Ex. A.) A map of the Site is shown below, along with the division of the Site into discrete areas that was done for purposes of the investigation giving rise to this case.
(Compl., Ex. A.)
Prior to Bradd's ownership, the Site was comprised primarily of a forested wetlands complex, swamps, bogs, and upland areas. (Site Investigation 1-6, 1-7.) The Site contained an abandoned homestead and an overgrown farm access road. ( Id. 1-6; Bradd Dep. 36:3-17.) Bradd purchased the Site with the intent to "[c]lean it up" and "[m]ake it usable" in order to subdivide the Site and sell it. (Bradd Dep. 25:22-24, 43:14-17, 67:5-23; Danielle Dep. 26:26:23-25.) This cleanup included, among other things, shoring up the existing north-south road to improve access to the Site, excavating at least two ponds, and removing some trees and heavy brush. (Bradd Dep. 43:21-44:9, 70:15-71:5; Danielle Dep. 28:23-25.) Bradd eventually sold the Site to the Kettle River Land Company on January 18, 2006, for approximately $450, 000. (Bradd Dep. 21:5-22:4; Siekert Decl., Ex. 5 at 11; id., Ex. 26 at 2.)
III. DEVELOPMENT OF THE SITE
After purchasing the Site, the Mlaskochs began development activities. The parties do not dispute that the Mlaskochs never applied for or obtained a permit from the Corps for any of the construction or development activities described below. (Compl. ¶ 48; Answer ¶ 32; Bradd Dep. 99:7-9; Smith Decl. ¶ 18.)
A. The Road
During 2005, at the Mlaskochs' direction, someone removed the brush that had overgrown the existing north-south road ("the Road") that runs through the Site, in order to make the Road more serviceable. (Bradd Dep. 38:4-39:1.) The Road was then widened in order to bring it into compliance with Pine County specifications for roadways. ( Id. 190:10-24; Site Investigation 1-5.) Using a bulldozer, a trac-hoe, and a dump truck the Mlaskochs added swales or ditches on each side of the Road, and deposited the soil from those ditches onto the center of the Road. (Bradd Dep. 38:13-39:11, 129:1-130:21, 131:2-7, 149:3-6.) Additionally, the Mlaskochs brought gravel onto the Site and placed it on the Road. ( Id. 36:1-3, 36:13-17, 36:23-25, 39:9-16; Site Investigation 1-5.)
During 2005, the Mlaskochs also used a bulldozer and trac-hoe to excavate the ponds existing on the Site. (Bradd Dep. 183:20-184:1.) The Mlaskochs began by clearing some trees and digging out tree stumps from the ponds and placing those stumps around the edges of the ponds. ( Id. 72:23-73:3, 185:5-22.) A trac-hoe was used to dredge soil from the center of the ponds to make them deeper. ( Id. 73:4-8, 186:1-12.) In Area C on the Site, the Mlaskochs created a new pond, rather than expanding a preexisting one. ( Id. 73:11-18, 186:13-19.) After the ponds had been excavated, the material removed from the ponds was spread and smoothed out around the edges of the ponds. ( Id. 186:20-187:10; Smith Decl. ¶ 8.) In total, the Mlaskochs expanded three ponds and created one new pond. (Bradd Dep. 72:15-22, 73:11-20.)
C. Timing of Development
The parties dispute when the development activities at the Site occurred. The dispute is relevant to Defendants' argument that the statute of limitations on the United States' claims has run. In the complaint, the United States alleges that work at the Site - including landclearing, road construction, and pond excavation - began in the summer of 2005 and continued through late 2005. (Compl. ¶ 42.) In their answer, Defendants "admit only that roadwork was completed at the Norman Township Site in the Spring of 2005" but "deny the remaining allegations." (Answer ¶ 26.)
In response to a request for information from the Environmental Protection Agency ("EPA") pursuant to 33 U.S.C. § 1318(a) that asked for a timeline of the activities that occurred at the Site, Defendants stated:
No known work occurred at the Site until after Mlaskoch purchased the Site in January of 2005. Some excavating/road work was performed from the months of early summer 2005 until Late 2005....
(Siekert Decl., Ex. 8 at 15.) Bradd testified that his reference to "excavating/road work" in this response referred to both the "roadwork and the pond work." (Bradd Dep. 48:23-49:9.)
But during his deposition Bradd testified that all work at the Site, including the Road development was done in "just early '05, " which he described as April and May ( Id. 50:14-16, 51:3-12, 52:19-23.) As support for this timeline, Bradd claims that the work at the Site began shortly after he obtained written approval for the project from Robin Poppe of the Pine County Soil and Water Conservation District. ( Id. 50:3-7.) At his deposition, Bradd produced a document purportedly from Poppe, dated March 5, 2005. (Siekert Decl., Ex. 12 at 27-28.) Poppe submitted a declaration stating that the written approval produced by Bradd at his deposition is "not an original but appears to be a photocopy, " and that the Pine County Soil and Water Conservation District file on the present lawsuit does not contain any such document. (Decl. of Robin Poppe ¶ 7, Mar. 29, 2013, Docket No. 39.) Furthermore, Poppe avers that she did not meet Bradd at any point in 2005, never gave Bradd verbal or written permission to go ahead with projects at the Site, and only heard about the activities on the Site on September 20, 2005. ( Id. ¶¶ 8-9.) Finally, Poppe notes that her last name did not become Poppe until she was married in mid-August 2005, and therefore the document produced by Bradd with the name "LGU Person Contacted: Robin Poppe" is either false or incorrectly dated. ( Id. ¶ 10.)
Later in his deposition, when questioned about the veracity of the document in light of the timing of Poppe's name change, Bradd admitted that it was possible he had not received the document until August 15, 2005, and completed the work not in the spring of 2005, but in August 2005. (Bradd Dep. 238:22-239:15.) He elaborated that "[i]t took several months of digging out there. I don't know. I don't know. Like I say, we started that summer and I'm not sure when we finished. It's hard to say." ( Id. 241:2-6.)
In opposition to the present motion, the Mlaskochs submitted affidavits stating that the development activities with respect to the ponds on the Site were completed by mid to late May 2005. (Aff. of Danielle Mlaskoch ("Danielle Aff.") ¶ 7, Apr. 19, 2013, Docket No. 51; Aff. of Bradd Mlaskoch ("Bradd Aff.") ¶ 4, Apr. 19, 2013, Docket No. 50.) They further aver that improvements to the Road began in early October 2005 and were completed later that month. (Danielle Aff. ¶ 8; Bradd Aff. ¶ 5.)
D. MEI's Involvement
During the relevant time period the Mlaskochs conducted, directed, and/or controlled the development activities that occurred at the Site. ( See, e.g., Bradd Dep. 38:4-19, 41:1-13, 201:3-17.) The parties dispute, however, whether MEI took part in any of the development activities that occurred at the Site. Minnesota Department of Natural Resources ("DNR") Conservation Officer, Julie Olson, stated that when she spoke with Danielle in November 2005 regarding a Cease and Desist Order that was issued for development activities at the Site, Danielle told her that "she was the person responsible for putting in the road on the subject property and that Mlaskoch Excavating, Inc. was performing the work." (Decl. of Julie M. Olson ¶ 11, Mar. 29, 2013, Docket No. 40.) Danielle, however, denies telling Olson that MEI was doing work on the Site and avers that "the work was being performed in conjunction with [the] Westside Properties business." (Danielle Aff. ¶ 9.) Additionally, the Mlaskochs testified that MEI did not have any involvement with the work that was done on the Site. (Danielle Dep. 16:10-14; Bradd Dep. 146:17-25.) Bradd also testified, however, that MEI's dump truck was used to haul gravel out to the Site. (Bradd Dep. 149:4-6.)
Danielle testified that individuals and/or contractors who performed work on the Site were paid by the Mlaskochs personally or through Westside Properties. (Danielle Aff. ¶ 9; see also Danielle Dep. 16:23-8.) Bradd testified that he could not remember if payments for work performed at the Site were made by MEI. (Bradd Dep. 147:1-4.)
IV. CHRONOLOGY OF THE INVESTIGATION
In October 2005, Poppe of the Pine County Soil and Water Conservation District notified Olson at the DNR of a potential wetland violation at the Site. (Olson Decl. ¶¶ 4-5.) Following the tip, Olson drove to the Site and performed a visual inspection. ( Id. ¶ 6.) Based upon these observations, Olson "determined that a wetland violation had occurred on the property in the form of the discharge of dredged and fill material in wetlands." ( Id. ) Olson then notified the Pine County ...