State ex rel. Cordray v. Tri-State Group, Inc.

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State: Ohio

Court: Ohio Southern District Court

Docket No: 2011-Ohio-2719

Case Date: 06/03/2011

Plaintiff: State ex rel. Cordray

Defendant: Tri-State Group, Inc.

Preview:[Cite as State ex rel. Cordray v. Tri-State Group, Inc., 2011-Ohio-2719.]
STATE OF OHIO, BELMONT COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
STATE OF OHIO, ex rel. RICHARD                                              )
CORDRAY, OHIO ATTY. GENERAL,                                                )
)
PLAINTIFF-APPELLEE,                                                         )
                                                                            )                                        CASE NO. 07-BE-38
VS.                                                                         )
                                                                            )                                        OPINION
TRI-STATE GROUP, INC., et al.                                               )
)
DEFENDANTS-APPELLANTS.                                                      )
CHARACTER OF PROCEEDINGS:                                                   Civil  Appeal  from  Court  of  Common
Pleas of Belmont County, Ohio
Case No. 00CV0180
JUDGMENT:                                                                   Affirmed
APPEARANCES:
For Plaintiff-Appellee                                                      Timothy J. Kern
Assistant Attorney General
Environmental Enforcement Section
30 East Broad Street, 25th Floor
Columbus, Ohio 43215
For Defendants-Appellants                                                   Attorney Larry A. Zink
3711 Whipple Avenue, N.W.
Canton, Ohio 44718-2933
JUDGES:
Hon. Gene Donofrio
Hon. Cheryl L. Waite
Hon. Mary DeGenaro
Dated: June 3, 2011

[Cite as State ex rel. Cordray v. Tri-State Group, Inc., 2011-Ohio-2719.]
DONOFRIO, J.
{¶1}   Defendants-appellants, Tri-State Group, Inc. and Glenn Straub, appeal
from Belmont County Common Pleas Court judgments finding them in contempt and
imposing a $247,590 penalty for failing to comply with a previously issued permanent
injunction and determining the amount appellants spent in reasonable costs to purge
the contempt.
{¶2}   Some background information is helpful here.   This case was previously
before us in State v. Tri-State Group, Inc., 7th Dist. No. 03-BE-61, 2004-Ohio-4441.
Therein, we set out the following pertinent facts:
{¶3}                                                                                         “Tri-State is an Ohio corporation fully owned by Straub. Straub is also
the sole shareholder of at least two other Ohio corporations, Ohio River Sand &
Gravel and Burrell Industries. In the early 1980's, Tri-State applied for a Permit to
Install                                                                                      (PTI) a flyash disposal site. Flyash is a waste product produced in certain
industries  which,  for  regulatory  purposes,  is  designated  as  non-toxic  and  non-
hazardous,  but  contains  heavy  metals  in  amounts  sufficient  to  contaminate
surrounding water supplies. Nevertheless, the Ohio Environmental Protection Agency
(OEPA) has approved some beneficial uses for flyash. The proposed location for the
flyash disposal site was an old sand and gravel pit on property owned by Ohio River
Sand & Gravel and was next to an Ohio Edison plant that produced flyash.
{¶4}                                                                                         “The proposed site was also located above an aquifer. That aquifer is
an excellent source of drinking water and is one of the most productive types of
aquifers in the State of Ohio. There was no natural barrier between the proposed site
and that aquifer. To ensure that the flyash did not contaminate that groundwater
source,  the  OEPA  required  that Tri-State  install a  protective  liner,  a  wastewater
disposal  system,  and  ground  water  monitor  wells.  The  PTI  further  set  forth
requirements for closing the site after it had been filled.
{¶5}                                                                                         “Tri-State was also required to apply for a National Pollutant Discharge
Elimination System (NPDES) permit in order to discharge the leachate into a settling
pond. The NPDES permit required that Tri-State conduct monthly tests of the ground
water monitor wells and report the results of those tests to the OEPA in monthly

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operating reports (MORs). The OEPA personnel would then review these MORs for
signs  of  contamination.  As  the  OEPA  personnel  explained,  it  employed  a  self-
reporting system to check for groundwater contamination.
{¶6}                                                                                       “After reviewing Tri-State's proposals, the OEPA issued the PTI on May
30, 1985, and the NPDES permit on December 12, 1985. * * *
{¶7}                                                                                       “Tri-State accepted flyash from the nearby Ohio Edison plant in 1985
and 1986. * * *
{¶8}                                                                                       “In November 1988, a landslide washed out a portion of the flyash pit.
Soon after the washout, Straub appeared onsite to direct the cleanup and authorized
remedial  efforts  to  prevent  another  washout.  For  example,  he  ordered  that  his
employees build a reinforced embankment to guard against further washouts and
authorized the placement of collection tanks to collect the leachate from the site
given the fact that the washout damaged the wastewater treatment system. Straub
testified that he knew the tank collection system was a temporary system, but he
never sought approval of that system from the OEPA and never replaced that system
with another one in compliance with the PTI. The washout also destroyed one of the
ground water monitor wells and that well was never replaced.
{¶9}                                                                                       “Over time, more problems occurred at the site. For instance, most of
the  remaining ground water monitor wells  were  either destroyed or left  capless,
rendering their results invalid. Since Tri-State did not properly maintain the ground
monitoring  system,  the  OEPA  could  not  determine  whether  the  flyash  site  was
contaminating the aquifer. After the washout, the OEPA began notifying Tri-State that
it was not complying with its permits and repeatedly asked Tri-State to do so. Tri-
State refused.
{¶10}  “Tri-State never capped the site in accordance with the PTI. That permit
required that Tri-State use a particular type of synthetic cover to cap the site. At one
point, Tri-State placed asphalt grindings on the site and in either  1992 or  1993 it
covered the site with an uneven layer of soil. At the time of trial, Tri-State had done
nothing more with the site and vegetation was growing on it.

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{¶11}  “In 1996, Tri-State sold most of its assets. After this, it was no longer an
operating company. Nevertheless, Tri-State was still obligated to maintain the flyash
site. * * *
{¶12}  “After the sale, Tri-State had substantial assets. In 1997, Tri-State had
$10,478,400  in assets. Between  1997 and  2000, Tri-State distributed two million
dollars to Straub, paid his daughters' company  1.9 million dollars in management
fees, and loaned the bulk of the remainder to other companies affiliated with Straub
at no interest with no assurances that the money would be repaid. By the end of
2000, Tri-State's assets were $6,606,546.
{¶13}  “On May 4, 2000, the State filed a complaint for injunctive relief and a
civil penalty against both Tri-State and Straub. * * *
{¶14}  “* * *
{¶15}  “The matter proceeded to a bench trial on three issues: 1) the terms of
a permanent injunction; 2) the appropriate civil penalty for noncompliance with the
permits; and,  3) Straub's individual liability for the noncompliance. The trial court
eventually filed two entries. In the first entry, it set forth its findings of fact and
conclusions of law. The trial court's second entry was its judgment entry ordering the
permanent  injunction,  assessing  the  civil  penalty,  and  finding  Straub  individually
liable for the noncompliance with the permits.”   Id. at ¶¶2-14.
{¶16}  On appeal, we affirmed the trial court’s judgment.   The September 2,
2003, judgment assessed a civil penalty, jointly and severally, of $362,185 against
Tri-State and Straub, with ten percent interest to accrue from the day of the judgment
entry (first civil penalty).   It further permanently enjoined appellants from continuing
the  operation  of  the  flyash  disposal  site  and  from  continuing  violations  of  R.C.
6111.07(A).   And it provided that if appellants did not immediately and in good faith
comply with the injunction, additional per-day civil penalties would accrue from the
date of the judgment entry.
{¶17}  On  March  2,  2007,  the  state  filed  a  motion  to  show  cause  why
appellants should not be held in contempt for failing to comply with the terms of the

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injunction.   Specifically, it alleged that appellants (1) failed to implement a closure of
the site; (2) failed to submit a hydrogeological investigation report and a ground water
monitoring plan and to implement ground water monitoring at the site; (3) failed to
pay the civil penalty and interest; and (4) failed to pay the additional per day civil
penalty.
{¶18}  The court held a hearing on the show cause motion.   It heard testimony
from Abbot Stevenson, an OEPA Specialist; Janet Jacobs, a hydrogeologist; and
Straub.    The court found, in its August  27,  2007 judgment entry, that appellants
violated five subparagraphs of Paragraph II of the permanent injunction, those being:
{¶19}  “(E) Submittal of a post closure plan to assure proper installation and
growth of the vegetative cover;
{¶20}  “(F) Submittal of a proposal (which must be approved by the OEPA) for
erosion controls;
{¶21}  “(G) Submittal of a proposal (which must be approved by the OEPA) for
leachate controls;
{¶22}  “(H)  Re-establishment  of  the  ground  water  monitoring  system  and
replacement of destroyed and/or non-functioning wells  (the final configuration and
amount of wells to be approved by OEPA upon hydrogeologic evaluation).
{¶23}  “(I) Imposition of deed restriction to control use of property for industrial
purposes only.”
{¶24}  The court further found that appellants violated its order by failing to
close the site within 12 months of the September 2, 2003 judgment and by failing to
provide a report from a professional engineer certifying closure work to be in accord
with the court-ordered OEPA closure plan.   And the court found appellants failed to
install, implement, maintain, and monitor for contaminants, a ground water monitoring
system in accordance with Paragraph IV, subparagraphs (A), (B), (C), (D), (E), and
(F) of the September 2 judgment entry.
{¶25}  Consequently, the court found appellants jointly and severally liable for
civil  contempt  of  court.    The  court  imposed  a  jail  term  on  Straub  to  begin  on

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November 26, 2007 and to continue indefinitely until all requirements for closure of
the site and for installation, implementation, and maintenance of the new ground
water monitoring system were completed as set forth in the September  2,  2003
judgment entry.   The court noted the sentence was conditional and that Straub would
be free if appellants agreed to do as ordered.   The court also found appellants jointly
and severally liable for an additional civil penalty of $210 per day, from June 4, 2004,
through August 27, 2007 (1,179 days x $210 = $247,590) with interest (second civil
penalty).
{¶26}  Appellants filed a timely notice of appeal from the contempt judgment
on September 18, 2007.
{¶27}  On February 27, 2008, this court put on an entry ordering this appeal to
be held in abeyance pending resolution of all claims and final adjudication by the trial
court.
{¶28}  On  August  25,  2008,  the  trial  court  held  a  hearing  on  the  deed
restriction to be applied pursuant to its September 2, 2003 judgment entry.
{¶29}  On  October  24,  2008,  this  court  continued  the  period  of  abeyance
pending further orders resolving all issues by the trial court.
{¶30}  On March 2, 2009, the trial court issued its judgment entry ordering the
recording of the deed restriction.
{¶31}  On April 23, 2010, the trial court issued its judgment entry after a “final
hearing” to resolve:                                                                       (1) the issue of the amount of reasonable costs expended by
appellants in accomplishing the court-ordered clean-up objective to assure Closure of
the  Site  and  installation,  implementation  and  maintenance  of  the  Ground  Water
Monitoring System; and (2) to determine the total amount of appellants’ second civil
penalty totaling $247,590, with accrued interest, and the amount of costs to purge the
second civil penalty.    The court determined that appellants’ second civil penalty,
assessed on August  27,  2007, plus post-judgment interest accruing from June  4,
2004 to November 4, 2009, totaled $354,875.   The court then credited appellants
$158,459.70 for reasonable costs they expended to accomplish the court-ordered

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clean-up objectives, which were to be applied dollar-for-dollar to purge the second
civil contempt penalty.   Thus, the court found the balance of appellants’ second civil
contempt penalty to be $196,415.30.   The court ordered the balance of the second
civil contempt penalty along with the balance owing from the first civil contempt
penalty ($194,508.00) to be filed as a judgment lien against appellants.
{¶32}  On May 17, 2010, this court returned the case to the active docket.
{¶33}  On May 19, 2010, appellants filed a timely notice of appeal from the trial
court’s April 23 judgment entry.
{¶34}  On June 7, 2010, this court consolidated the two appeals.
{¶35}  In appellants’ first appeal from the August 27, 2007 contempt judgment,
they raise four assignments of error.   Their first assignment of error states:
{¶36}  “THE  TRIAL  COURT  ERRED  IN  ENTERING  ITS  ORDER  OF
CONTEMPT  AND  IMPOSITION  OF  A  ‘CIVIL  PENALTY’  IN  THE  AMOUNT  OF
$247,590  WITH  NO  OPPORTUNITY  TO  FULLY  PURGE,  WHICH  ORDER  IS
CRIMINAL IN NATURE, WHEN THE COURT FAILED TO FIND THE DEFENDANTS
GUILTY BY THE STANDARD OF BEYOND A REASONABLE DOUBT.”
{¶37}  Appellants  argue  that  the  trial  court  found  them  guilty  of  criminal
contempt yet failed to use the criminal contempt standard of proof.   They assert that
the  court  never  made  a  finding  that  they  were  guilty  of  contempt                  “beyond  a
reasonable doubt.”   Appellants further contend that their penalty is punitive in nature.
They assert that the contempt penalty does not afford them an opportunity to purge
the second civil penalty because they can only purge it to the extent that they could
do so in 90 days.   They further point out that the penalty ($210/day) was three times
the penalty requested by the state ($70/day).
{¶38}  Contempt is generally classified as either civil or criminal.   Courts tend
to  distinguish  civil  and  criminal  contempt  by  the  character  and  purpose  of  the
sanction imposed.   Brown v. Executive 200, Inc. (1980), 64 Ohio St.2d 250, 253.   A
sanction, whether imposed for civil or criminal contempt, contains an element of
punishment.   Id.

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{¶39}  In ConTex, Inc. v. Consolidated Technologies, Inc.  (1988),  40 Ohio
App.3d 94, 95-96, the court elaborated on this distinction as follows:
{¶40}  “The purpose of criminal contempt sanctions is to vindicate the authority
of the court, and to punish past acts of disobedience. The penalties imposed on a
criminal contemnor are unconditional, and may take the shape of an absolute fine for
a specific amount or a determinate period of confinement.
{¶41}  “The  purpose  of  sanctions  imposed  for  civil  contempt  is  to  coerce
compliance with the underlying order or to compensate the complainant for loss
sustained  by  the  contemnor's  disobedience.  Punishment  for  civil  contempt  may,
therefore, be either: (1) remedial or compensatory in the form of a fine to compensate
the  complainant  for  the  contemnor's  past  disobedience;  or                               (2)  coercive  and
prospective, i.e., designed to aid the complainant by bringing the defendant into
compliance with the order, and conditional, wherein confinement may be terminated
by the contemnor's adherence to the court's order.”   (Internal citations omitted).
{¶42}  The  standard  of  proof  for  civil  contempt  is  clear  and  convincing
evidence.    Brown,  64 Ohio St.2d at  253.    Yet the standard of proof required for
criminal contempt is proof beyond a reasonable doubt.   Id. at 251.
{¶43}  In this case, the trial court stated that it found appellants guilty of civil
contempt:
{¶44}  “[Appellants] are jointly and severally liable for Civil Contempt of this
Court.    Therefore,  the  appropriate  punishment  is  determined  to  be  remedial  or
coercive and for the benefit of the Complainants  (State of Ohio/Belmont County).
The prison sentences are conditional.   Tri-State Group. Inc., and/or Glenn Straub
carry the keys of their prison in their own pocket since they will be freed if they agree
to do as Ordered. * * *
{¶45}  “* * *
{¶46}  “In the event Defendants would choose to purge themselves from Civil
Contempt,  to  avoid  an  indefinite  jail  sentence,  by  proceeding,  in  good  faith,  to
Closure  of  the  Site  in  accord  with  the  Court  Ordered  OEPA  Approved  Closure

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requirements and to install, implement, and maintain a new Ground Water Monitoring
System  at  the  site,  this  Court  shall  allow  the  application  of  reasonable  costs
expended by Defendants in accomplishing such objectives to be applied to reduce
the above-mentioned Civil Penalty, dollar for dollar, but only in the event such costs
are expended within the next ninety (90) days (November 26, 2007), and ‘good faith’
compliance is demonstrated to this Court.”   (August 27, 2007 judgment entry).
{¶47}  The court scheduled a review for 90 days at which time it would review
appellants’  compliance  with  its  order  and  further  suspend  the  jail  sentence  with
reviews to continue every 90 days until the site was properly closed.
{¶48}  The court found appellants guilty of civil contempt and, therefore, the
clear and convincing standard of proof applied.
{¶49}  The  jail  sentence  is  clearly  a  civil  contempt  penalty.     The  court
specifically ordered  appellants  (although  practically speaking this  applied  only to
Straub) to be jailed indefinitely until all requirements for the Site Closure and the
installation, implementation, and maintenance of the new Ground Water Monitoring
System were completed.   The court further stated that it would review the matter
every 90 days and as long as appellants were in compliance with the court’s order, it
would suspend the jail sentence.   Thus, the indefinite jail term was clearly meant to
coerce appellants into complying with the court’s order.
{¶50}  The civil penalty of $247,590 likewise is a civil, rather than a criminal,
contempt penalty.   The court gave appellants the opportunity to purge this penalty
dollar-for-dollar by the amount that they expended to fully implement the Site Closure
and Ground Water Monitoring System.   This should have been an excellent incentive
to  “light a fire” under appellants’ feet so to speak to spend the money needed to
comply with the court’s order.   This dollar-for-dollar offer was specifically designed to
aid appellee by bringing appellants into compliance with the court’s order.
{¶51}  Further, the fact that the second civil penalty was more than the penalty
requested by appellee does not make it a criminal penalty.   The court noted that the
first civil penalty it assessed against appellants was $70/day, which was the amount

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requested by appellee here.   It then pointed out that after it imposed that penalty,
appellants went on to disregard the Site Closure and failed to implement the Ground
Water Monitoring System.   Therefore, the court stated, it chose to impose a heftier
penalty this time in the amount of  $210/day.    The  $70/day civil penalty failed to
induce appellants’ compliance with the court’s order.   Therefore, it was reasonable
for the court to increase the penalty in hopes that a steeper penalty, which it gave
appellants the opportunity to purge dollar-for-dollar with compliance, would in fact
coerce  them  into  compliance.    Additionally,  the  court  had  the  authority  to  fine
appellants up to $10,000/per day.   R.C. 6111.09(A).   Thus, the fine chosen by the
court was considerably less than the maximum permitted by law.
{¶52}  Based on the foregoing, the trial court properly classified the contempt
as civil contempt.   Therefore, it was not required to find appellants guilty by the proof
beyond a reasonable doubt standard.   Accordingly, appellants’ first assignment of
error is without merit.
{¶53}  Appellants’ second assignment of error states:
{¶54}  “WHETHER THE CONTEMPT IS CRIMINAL OR CIVIL IN NATURE,
THE TRIAL COURT ERRED IN IMPOSING THE BURDEN OF PROOF ON THE
DEFENDANTS AND NOT ON THE MOVANT.”
{¶55}  The trial court held a hearing on August 27, 2007, at which time it read
its eight-page judgment entry finding appellants in contempt into the record.   After it
did so, the court spent some time discussing the judgment entry with counsel.   At one
point it stated:
{¶56}  “Now, in regard to the burden in this case, the burden of proof was on
the  defendant[s]  to  demonstrate  compliance  with  the  court  order.     And  the
defendants have failed to demonstrate that compliance.”   (Aug. 27, 2007, Tr. 27).
{¶57}  Appellants now argue that the court erred in placing the burden on
them.    They cite to the above sentence in support.
{¶58}  In a civil contempt proceeding, the initial burden is on the movant to
prove by clear and convincing evidence that the other party violated a court order.

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Carroll v. Detty (1996), 113 Ohio App.3d 708, 711, citing Brown, 64 Ohio St.2d 250.
Once the movant has met this burden and established a prima facie case by clear
and convincing evidence, the burden shifts to the non-moving party to either rebut
the  initial  showing  of  contempt  or  establish  an  affirmative  defense  by  a
preponderance of the evidence.   Young v. Young (May 7, 2001), 7th Dist. No. 00-BA-
8, citing Pugh v. Pugh (1984), 15 Ohio St.3d 136, 140.
{¶59}  When reading the sentence relied on by appellants, it may appear as if
the court improperly placed the burden of proof on appellants.   However, a further
reading of the court’s comments reveals that was not what the court did.
{¶60}  The court elaborated on its burden comment, stating:
{¶61}  “As I said, it was Defendant’s duty and burden to comply - - excuse me,
* * * it was the defendant’s burden to comply with the orders of the court, and it was
the OEPA’s duty to enforce them if they found that they weren’t being complied with.
Both sides have failed Belmont County.”   (Aug. 27, 2007, Tr. 30-31).
{¶62}  Thus, when the court was referencing appellants’ burden, it did not
mean their burden to prove they were not in contempt.   Instead, the court was trying
to emphasize that when it puts an order on, both parties must see that it is followed.
{¶63}  Further evidence that the court applied the correct standard in this case
is seen in the court’s comment:                                                            “The Court finds, by clear and convincing evidence,
that the defendants are in contempt, civil contempt.”                                      (Aug. 27, 2007, Tr. 28).   This
comment demonstrates that the court weighed all of the evidence and determined
that appellants violated its order while applying the appropriate burden of proof.   And
once appellee met this clear and convincing evidence standard, the burden shifted to
appellants to rebut it or defend against it.
{¶64}  Accordingly, appellants’ second assignment of error is without merit.
{¶65}  Appellants’ third assignment of error states:
{¶66}  “THE TRIAL COURT ERRED IN IMPOSING A  ‘CIVIL PENALTY’ OF
$247,590  AGAINST THE DEFENDANTS, JOINTLY AND SEVERALLY, IN THAT
THE  ‘CIVIL PENALTY’ VIOLATES THE EIGHTH AMENDMENT OF THE UNITED

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STATES   CONSTITUTION   AND   ARTICLE   I   SECTION                                              9   OF   THE   OHIO
CONSTITUTION PROHIBITING EXCESSIVE FINES.”
{¶67}  Appellants argue here that the court’s fine of $247,590 was excessive.
The  only  support  appellants  offer  is  the  fact  that  the  state  requested  a  fine  of
$88,350.
{¶68}  The Excessive Fines Clause of the Eighth Amendment does not apply
to civil contempt sanctions.   Sullivan v. Curry, 2d Dist. No. 23293, 2010-Ohio-5041, at
¶50; Ohio Elections Comm. V. Ohio Chamber of Commerce & Citizens for a Strong
Ohio, 158 Ohio App.3d 557, 2004-Ohio-5253, at ¶33.   Thus, the fine in this case did
not violate the constitutional ban on excessive fines as appellants allege.
{¶69}  Furthermore, the civil penalty was not excessive.
{¶70}  A trial court has broad discretion in determining the amount of a civil
penalty according to R.C. 6111.09.   State ex rel. Celebrezze v. Thermal-Tron, Inc.
(1992),  71 Ohio App.3d  11,  19.    Thus, we will not disturb its decision absent an
abuse  of  discretion. Abuse of  discretion  connotes more than  an  error of  law or
judgment; it implies that the trial court’s judgment was arbitrary, unreasonable, or
unconscionable.   Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219.
{¶71}  “When determining the appropriate amount of a civil penalty, the trial
court should consider the following factors: 1) the harm or threat of harm posed to the
environment  by  the  person  violating  R.C.  6111.07;  2)  the  level  of  recalcitrance,
defiance, or indifference demonstrated by the violator of the law (also referred to in
case law as the defendant's good or bad faith); 3) the economic benefit gained by the
violation; and, 4) the extraordinary costs incurred in enforcement of R.C. 6111.07.
While making this determination, the trial court must remember that because a civil
penalty is an economic sanction designed to deter violations of R.C. Chapter 6111,
the penalty must be large enough to hurt the offender.”                                          (Internal citations omitted.)
State v. Tri-State Group, Inc., 7th Dist. No. 03-BE-61, at ¶104.
{¶72}  The trial court cited to these factors in determining the appropriate civil
penalty.   It further found that appellants knowingly, recklessly, and contumaciously

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disregarded the court’s orders to close the site and implement a new ground water
monitoring system.   The court cited this disregard as the reason for increasing the
civil penalty from $70/day to $210/day.   Consequently, the court found that $210/day
was appropriate.   The court also set out its formula for reaching its total penalty:
number of days of violations  (1,179) x  $105 per day per each of the two permits
violated (PTI Permit and NPDES Permit) = $247,590.
{¶73}  Based on the above, we cannot conclude that the trial court abused its
discretion in setting appellants’ civil penalty.   It considered the appropriate factors, it
considered appellants’ disregard for its prior order, and it came up with and applied
an appropriate formula.   Accordingly, appellants’ third assignment of error is without
merit.
{¶74}  Appellants’ fourth assignment of error states:
{¶75}  “THE  TRIAL  COURT  ERRED  IN  IMPOSING  CIVIL  PENALTIES
AGAINST THE DEFENDANTS FOR THE TIME PERIOD PRIOR TO FEBRUARY 24,
2006  WHEN  THE  STATE  OF  OHIO  AND  TRI-STATE  ENTERED  INTO  A
SETTLEMENT  AGREEMENT  RESOLVING  ALL  MONETARY  CLAIMS  AGAINST
THE DEFENDANTS FOR PENALTIES AND FINES.”
{¶76}  Appellants argue that the Settlement Agreement they entered into with
appellee  on  February  24,  2006,  barred  any  civil  penalty  before  that  date.    The
Settlement Agreement provides in pertinent part:
{¶77}  “WHEREAS, it is the intention of the parties hereto to resolve any and
all monetary claims asserted against Tri-State and Straub as a result of a certain
Judgment Entry dated September 2, 2003 * * *
{¶78}  “* * *
{¶79}  “3) This Settlement Agreement shall be a full and complete satisfaction
and release of all monetary claims against the Defendants in the above captioned
lawsuit including claims for sums of money due, accounts, judgments, damages,
penalties, fines,  interest,  executions,  claims  and demands  whatsoever which  the

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State of Ohio has against the Defendants in connection with all monetary matters and
issues raised against said Defendants in the above captioned case.”
{¶80}  Appellants argue that by imposing the second civil penalty from June 4,
2004, the trial court included 625 days prior to the settlement date of February 24,
2006, which it should have excluded.   They assert that these 625 days resulted in
$131,250 of the second civil penalty.
{¶81}  The trial court addressed this issue in its August 27 judgment:
{¶82}  “In order that the record will clearly evidence the Court’s reasoning
herein, the Court finds that the imposition of this Civil Penalty is separate and distinct
from the Civil Penalty imposed by the Court in the amount of three hundred sixty-two
thousand  one  hundred  eight-five  dollars                                                   ($362,185.00),  which  penalty  was
subsequently compromised, without the approval of this Court, by a settlement
agreement between Plaintiffs and Defendants, and which settlement evidence an
unpaid Civil Penalty balance in the amount of one hundred ninety-six thousand thirty-
six dollars ($196,036.00).   Rather, this Civil Penalty is imposed for the direct violation
of this Court’s Order for Defendants to comply with the OEPA Approved Closure Plan
and the installation, implementation and maintenance of a Ground Water Monitoring
System and the agreement between the parties to compromise the original Civil
Penalty imposed by the Court, in no manner, affects this Civil Penalty for Defendants’
knowing, reckless, and contumacious violations of this Court’s Order for injunctive
relief.”                                                                                      (Emphasis sic.)
{¶83}  At  the  time  the  parties  entered  into  the  Settlement  Agreement,
appellants had the $362,185 first civil penalty due and owing.   Per the terms of the
Settlement  Agreement,  appellants  agreed  to  pay  $162,500  immediately  and  the
remaining  $200,000  upon  their  sale  of  certain  inventory.    Further,  at  this  time
although it seems appellants were not complying with the trial court’s September 2,
2003 judgment, appellee had not yet filed a show cause motion.   In fact, appellee did
not file its motion to show cause until March 2, 2007, a year after the parties signed
the Settlement Agreement.   Thus, at the time the parties entered into the Settlement

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Agreement  the  only claim  appellee  had  against  appellants  and  the  only  penalty
appellants had assessed against them was for the first civil penalty in the amount of
$362,500 as set out in the September 2, 2003 judgment.
{¶84}  The Settlement Agreement does not bar the trial court’s second civil
penalty, which the court determined started to accrue on June 4, 2004.   The reason
the court picked June 4, 2004, as the start date for the penalty was because this was
the first day after the nine months it had allotted for the re-implementation of the
ground water monitoring system.   Accordingly, June 4 was the first day appellants
were in contempt of the court’s order.
{¶85}  The Settlement Agreement clearly states that its purpose is to resolve
“any and all monetary claims” against appellants as a result of the September  2,
2003  judgment.    The  second  civil  penalty,  however,  was  not  a  result  of  the
September 2 judgment.   Instead, it was a result of appellants’ disregard of that order
and its failure to comply with its terms.
{¶86}  Furthermore, the September  2 judgment had two main components:
(1)  the  first  civil penalty;  and                                                            (2)  the  injunctive  relief  requiring  Site  Closure  and
Ground Water Monitoring.   The Settlement Agreement, by its terms, applied only to
“monetary claims.” Thus, it dealt only with the civil penalty.   It did not operate to settle
or  change  the  injunction  terms  requiring  the  Site  Closure  and  Ground  Water
Monitoring.    And  because  the  second  civil  penalty  was  a  result  of  appellants’
contemptuous  conduct  in  disregarding  the  terms  of  the  injunction,  the  resulting
second civil penalty is not barred by the Settlement Agreement.
{¶87}  Accordingly, appellants’ fourth assignment of error is without merit.
{¶88}  In its second appeal, appellants raise three additional “points,” which
are essentially assignments of error.   Thus, we will treat them as such and continue
as if they were appellants’ fifth, sixth, and seventh assignments of error.   Appellants’
fifth assignment of error states:
{¶89}  “THE TRIAL COURT ERRED IN IMPOSING, WHAT IS IN EFFECT, A
STATUTORY  ENVIRONMENTAL  COVENANT  ON  ALL  132  ACRES  OF  REAL

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PROPERTY OWNED BY TRI-STATE WHEN THE FLY ASH DISPOSAL SITE WAS
APPROXIMATELY FIVE (5) ACRES.”
{¶90}  On March  2,  2009, the trial court ordered that appellants record the
deed  restriction  submitted  by  appellee.    The  flyash  disposal  site  is  limited  to
approximately five acres of appellants’ property.   But the deed restriction applies to
all                                                                                               132  acres of  appellants’ property, including the five flyash acres.    The deed
restriction  applies  in  perpetuity  to  the  disposal  site  and  to  a  buffer  zone  to  be
determined  by  the  court.    The  deed  restriction  applies  to  the  remainder  of  the
property for at least five years after commencement of the ground water monitoring
or until April 30, 2013.   At that time, appellants may make a request to the OEPA and
the court to exclude the remaining property from the deed restriction.
{¶91}  Appellants argue that the deed restriction should only apply to the five
acres of property where the flyash site is located and not to all 132 acres of their
property.   In support, they point to the testimony of Michael Kearns who referenced
the location of the flyash site and the southeast water flow as set forth in Defendant’s
Exhibit  2.   Defendant’s Exhibit  2 is a map for the site depicting water flow to the
southeast, which is away from the remaining Tri-State acreage.   And they contend
that appellee offered no reason why the restriction should apply to the entire  132
acres.
{¶92}  Appellants essentially argue here that the trial court’s determination that
the deed restriction applies to all  132 acres is against the manifest weight of the
evidence.
{¶93}  “Judgments supported by some competent, credible evidence going to
all the essential elements of the case will not be reversed by a reviewing court as
being against the manifest weight of the evidence.”   C.E. Morris Co. v. Foley Constr.
Co. (1978), 54 Ohio St.2d 279, at the syllabus.   See, also, Gerijo, Inc. v. Fairfield
(1994),                                                                                           70  Ohio  St.3d                                                                     223,   226.     The  court   “must  indulge  every  reasonable
presumption in favor of the lower court's judgment and finding of facts.” Gerijo, 70
Ohio St.3d at 226, (citing Seasons Coal Co., Inc. v. Cleveland [1984], 10 Ohio St.3d

- 16 -
77).                                                                                            “In the event the evidence is susceptible to more than one interpretation, [the
court]  must  construe  it  consistently  with  the  lower  court's  judgment.”    Id.    The
rationale of giving deference to the findings of the trial court is that the trial judge is
best able to view the witnesses and observe their demeanor, gestures and voice
inflections,  and  use  these  observations  to  weigh  the  credibility  of  the  proffered
testimony. Seasons Coal Co., 10 Ohio St.3d at 80.
{¶94}  The trial court heard testimony from several witnesses on the subject of
whether the deed restriction should apply to the entire 132 acres or only to the five-
acre disposal site.
{¶95}  Michael Kearns is a civil engineer with a firm that was hired to do work
on the site closure plan.   Kearns stated that as part of the closure plan a Mr. Siplivy
prepared  a  hydro-geologic  report.                                                            (Aug.  25,  2008,  Tr.  40).    He  also  identified
Defendant’s Exhibit  2, which is an underground mine map that shows the ground
water movement under the site.   (Aug. 25, 2008, Tr. 42).   This exhibit was part of the
closure plan that was accepted by the OEPA.                                                     (Aug.  25,  2008, Tr.  45).    Kearns
testified that given the readings he had monitored on the wells, the water flow went to
the southeast.                                                                                  (Aug.  25,  2008, Tr.  43-44).    He stated that the disposal site was
located in the northeast corner of appellants’ property.                                        (Aug.  25,  2008, Tr.  43).
Kearns testified that in his opinion, the deed restriction should only apply to the five-
acre disposal site.                                                                             (Aug. 25, 2008, Tr. 48). He stated this was because he did not
think it was reasonable to hold the deed restriction to the whole 132 acres when only
five  acres posed an environmental danger.  (Aug.  25,  2008, Tr.  48-49).    Kearns
further stated that because the disposal site was located in the northeast portion of
the property and the water flowed to the southeast, the remaining 132 acres would
not be affected by what was going on in the northeast corner.                                   (Aug. 25, 2008, Tr.
51).   On cross-examination, Kearns acknowledged that he was not the person who
prepared the hydro-geologic report.   (Aug. 25, 2008, Tr. 53).
{¶96}  Jane  Jacobs,  the  OEPA  ground  water  expert,  also  testified  on  the
subject.   She stated that she approved Defendant’s Exhibit 2 as part of the hydro-

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geologic assessment report.                                                                (Aug. 25, 2008, Tr. 61).   But she testified that it is only
an underground workings map that shows an underground mine.   (Aug. 25, 2008, Tr.
61-62).   This is different, she explained, from a potentiometric map, which shows
ground water flow.                                                                         (Aug.  25,  2008, Tr.  61-62).   Jacobs testified that Defendant’s
Exhibit 2 shows the dip of the bedrock but it is incorrect to say that the water flow
follows the dip in a sand and gravel aquifer.   (Aug. 25, 2008, Tr. 62-63).
{¶97}  Jacobs further expressed concern that flow from the disposal site could
migrate to the rest of appellants’ property.                                               (Aug. 25, 2008, Tr. 65).     She stated that
based on the difference in elevation between the monitoring wells, the ground water
could flow from the disposal site to other parts of appellants’ property.                  (Aug.  25,
2008, Tr. 65, 75-77).   Additionally, she testified that during the five-year monitoring
period, it was possible for the ground water flow to change.                               (Aug. 25, 2008, Tr. 66).
Jacobs went on to testify that it would take the entire five years of monitoring to
determine whether the flyash from the disposal site was contaminating the ground
water on the rest of appellants’ property.  (Aug.  25,  2008, Tr.  67-69).    Thus, she
stated that she was not in a position at this time to make a conclusion one way or the
other whether the flyash disposal site was going to impact the rest of the property.
(Aug. 25, 2008, Tr. 70).
{¶98}  Additionally, Abbot Stevenson, an OEPA inspector, testified regarding a
washout at the site that had occurred years earlier.                                       (Aug. 25, 2008, Tr. 89-90).   Due
to the washout, there had been concerns that leachate had leaked out and migrated
down into the sand and gravel and travelled beyond the disposal site.                      (Aug.  25,
2008, Tr.  91-92).   Stevenson opined that the deed restriction should run with the
entire 132 acres during the five-year monitoring period and that after that time, the
restriction should run with the five-acre tract and a buffer zone.                         (Aug. 25, 2008, Tr.
103).
{¶99}  Given  the  testimony,  the  trial  court’s  decision  to  apply  the  deed
restriction  to  the  entire                                                               132  acres  was  not  against  the  manifest  weight  of  the
evidence. Kearns, who is not a ground water expert, testified that the water flow,

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according to Defendant’s Exhibit  2, travelled away from appellants’ property.    He
opined  that  the  deed  restriction  should  only  apply  to  the  five-acre  disposal  site
because this was the only area that posed a risk of harm.   Jacobs, who is a ground
water expert, testified that the water flow could potentially flow from the disposal site
to other parts of appellants’ property due to the elevation levels.   She also testified
that it is possible for water flow to change over time.   Jacobs stated that it would take
five years of monitoring the wells to determine whether the flyash from the disposal
site  would  affect  the rest  of  appellants’ property.    Finally,  Stevenson,  an  OEPA
inspector, opined that the restriction should run with the entire 132 acres during the
five-year monitoring period.
{¶100}  The trial court gave more weight to Jacobs’ testimony than to Kearns’
testimony.    Clearly,  this  was  a  matter  of  conflicting  testimony.    And  when  the
evidence  is  susceptible  to  more  than  one  interpretation,  we  must  construe  it
consistently with the trial court’s judgment.   Gerijo, 70 Ohio St.3d at 226.   Because
there is competent, credible evidence to support the court’s judgment, we cannot find
that it is against the manifest weight of the evidence.   Accordingly, appellants’ fifth
assignment of error is without merit.
{¶101}  Appellants’ sixth assignment of error states:
{¶102}                                                                                          “THE TRIAL COURT ERRED IN IMPOSING, WHAT IS IN EFFECT, A
STATUTORY  ENVIRONMENTAL  COVENANT  ON  ALL  132  ACRES  OF  TRI-
STATE’S   REAL   PROPERTY   WHEN   THE   ENVIRONMENTAL   COVENANT
STATUTE, RC 5301.82, DID NOT BECOME EFFECTIVE UNTIL DECEMBER 30,
2004,  SIXTEEN  MONTHS  AFTER  THE  TRIAL  COURT’S  JUDGMENT  ENTRY
IMPOSING A DEED RESTRICTION FOR INDUSTRIAL PURPOSES ONLY.”
{¶103}  Here appellants’ argument does not give any reasons in support of its
assigned error.   Instead, appellants argue that the trial court erred by ordering more
stringent deed restrictions in its March 2, 2009 judgment than it did in its September
2, 2003 judgment.

- 19 -
{¶104}  In  its  September                                                                        2,                                                                        2003  judgment,  the  trial  court  set  out  ten
requirements for the court-ordered Site Closure Plan.   One of these requirements
was  for  “[i]mposition  of  deed  restriction  to  control  use  of  property  for  industrial
purposes only[.]”
{¶105}  The actual deed restriction imposes the following limitations:                            (1) the
property  is  to  be  used  for  industrial  use  only;                                           (2)  the  integrity  of  any  soil  and
vegetative cover over the disposal site must be maintained in compliance with the
Site Closure Plan; (3) all leachate and erosion controls installed at the disposal site
must be maintained in compliance with the Site Closure Plan; (4) the ground water
monitoring wells must remain fully operational until no longer required in accordance
with the Ground Water Monitoring Plan; and (5) ground water underlying the property
shall not be extracted or used for any purpose unless specifically authorized by the
OEPA.   Thus, the restriction is more detailed than simply stating that the property is
for industrial use only.
{¶106}  But these limitations, although not spelled out as part of the deed
restriction, were included in the September 2, 2003 judgment.   In its requirements for
the Site Closure Plan, the court, in addition to the industrial use deed restriction, also
required:                                                                                         (1)  detailed  specifications  for  installation  of  the  soil  cover;   (2)  proper
installation and growth of the vegetative cover;  (3) re-establishment of the ground
water  monitoring  system;  (4)  submittal  of  proposal  for  erosion  controls;  and  (5)
submittal of proposal for leachate controls.    Therefore, the deed restriction is not
more stringent than the court indicated in its September 2, 2003 judgment.
{¶107}  Furthermore,  appellants  make  no  argument  as  to  why  this  is  an
environmental covenant as opposed to a deed restriction.
{¶108}  Accordingly, appellants’ sixth assignment of error is without merit.
{¶109}  Appellants’ seventh assignment of error states:
{¶110}                                                                                            “THE  TRIAL  COURT  ERRED  IN  FAILING  TO  CONSIDER,  IN
ARRIVING  AT  THE  CIVIL  CONTEMPT  PENALTY,  THE  INTERNAL  COSTS
INCURRED  BY  TRI-STATE  TO  PERFORM  CERTAIN  SITE  CLOSURE  WORK

- 20 -
AFTER AUGUST,  2007 WHEN THE RECORD EVIDENCE OF THE EPA’S SITE
INSPECTOR AND TRI-STATE’S PRESIDENT ESTABLISHED THE NATURE AND
EXTENT OF THE WORK PERFORMED AND MATERIALS PROVIDED FOR THE
SITE CLOSURE.”
{¶111}  Appellants argue here that the trial court failed to consider the internal
costs they incurred for the trucking and equipment used to bring subsoil and topsoil
to the site and re-grade the site.   They assert that the trial court should have included
these costs in the offset to their civil penalty.
{¶112}  The trial court held a hearing on November 2, 2009, to determine the
reasonable costs expended by appellants in accomplishing the clean-up objective,
which would then be deducted from their civil penalty.
{¶113}  At the hearing, Stevenson testified that appellants were required by
the  Closure  Plan  to,  and  satisfactorily  did,  re-grade  an  approximately               200,000
square-foot area.                                                                             (Nov. 2, 2009, Tr. 15, 19).   Stevenson further agreed that there
was excavating and trucking of subsoil onto the site and that there was labor and
equipment used for re-grading the subsoil.                                                    (Nov. 2, 2009, Tr. 22).   Stevenson also
testified  that  she  did  not  receive  any  invoices  from  appellants  for  these  items
however.   (Nov. 2, 2009, Tr. 26).
{¶114}  Straub testified as to several items for which he did not have invoices.
He testified that appellants spent $40,000 for subsoil used for re-crowning (Nov. 2,
2009, Tr. 35); $48,000 for “excavating, trucking subsoil and regarding borrow area of
8,000 tons at $6 per ton” (Nov. 2, 2009, Tr.35); $19,200 for “labor and equipment for
placement and re-grading of subsoil to create resloping [sic.] and crowning of fly ash
area” (Nov. 2, 2009, Tr. 37-38); $15,000 for “screening topsoil, loader and portable
screening plant” (Nov. 2, 2009, Tr. 39); $53,693 for topsoil (Nov. 2, 2009, Tr. 40-41);
$24,600 for “trucking, 246 trips at $50 an hour” (Nov. 2, 2009, Tr. 42); $1,000 for
bales of hay (Nov. 2, 2009, Tr. 44); and $4,000 for “rip/rap material” to protect against
grading (Nov. 2, 2009, Tr. 45).   For all of these items, Straub explained the work that
was done and how he reached the figures he did.   He also testified that some of

- 21 -
these costs were internal and some of the work was done by outside contractors.
(Nov. 2, 2009, Tr. 55).   The total of these items is $204,493.
{¶115}  The trial court determined that the amount of appellants’ second civil
penalty, plus post-judgment interest totaled $354,875.   It further credited appellants
$158,459.70 for reasonable costs expended to accomplishing the clean-up, leaving a
balance of $196,415.30.
{¶116}  This issue appears to be a weight of the evidence one.   Appellants
claim they proved various expenses they incurred while appellee claims they did not.
Thus, the manifest weight of the evidence standard applies here.
{¶117}  The  trial  court  found  that  appellants                                               “failed  to  establish,  by  a
preponderance of the evidence, that certain materials were, in fact, purchased and/or
certain work performed.   Rather, the testimony establishes guesstimates and/or
speculation on the part of Straub as to hours worked and/or exact services
provided and/or materials purchased.”                                                            (Emphasis sic.; Aug. 23, 2010 judgment
entry).   The court went on to reference the specific invoices submitted by appellants,
for which it credited appellants dollar-for-dollar.   It then explained that it did not credit
appellants for the costs testified to by Straub because (1) they were not supported by
invoices or other documentation and (2) appellants did not present evidence as to if
the costs were reasonable, even though the work may have been proximately related
to the site clean up.   Nonetheless, the court recognized that appellants expended
reasonable efforts to bring about the closure of the site and, therefore, awarded
appellants an additional  $50,000 for the site clean up to be used to reduce the
second civil penalty.
{¶118}  The trial court’s judgment is supported by the evidence.   Appellants
submitted  numerous  invoices  documenting  work  they  had  performed  in  order  to
effectuate the Site Closure.   For all of these items, the court credited appellants.   But
for  numerous  other  items,  appellants  presented  only  Straub’s  testimony.    They
provided  no  documentation  or  invoices  showing  the  money  spent.    It  was  not
unreasonable for the court to choose to accept the documented costs and reject the

- 22 -
undocumented  costs.    As  the  court  noted,  Straub’s  testimony  was  somewhat
speculative on these items and he testified that many of the costs were “internal.”
{¶119}  Accordingly, appellants’ seventh assignment of error is without merit.
{¶120}  For the reasons stated above, the trial court’s judgments are hereby
affirmed.
Waite, P.J., concurs.
DeGenaro, J., concurs.

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