Court of Appeals of Ohio, Eleventh District, Lake
STATE OF OHIO ex rel. MICHAEL DEWINE, OHIO ATTORNEY GENERAL, Plaintiff-Appellee,
OSBORNE CO., LTD., et al., Defendants-Appellants.
Appeal from the Lake County Court of Common Pleas, Case No.
2014 CV 000166.
DeWine, Ohio Attorney General; Gregg H. Bachmann, Nicole
Candelora-Norman, and Amy Factor, Assistant Attorneys
General, (For Plaintiff-Appellee).
Richard N. Selby, II, Dworken & Bernstein Co., (For
TIMOTHY P. CANNON, J.
Appellants, Osborne Co., Ltd. and the Executors of the Estate
of Jerome T. Osborne, appeal from an August 1, 2016 judgment
of the Lake County Court of Common Pleas. The trial court
ordered appellants to pay a civil penalty for violating Ohio
Revised Code Chapter 6111 and ordered injunctive relief in
favor of appellee, State of Ohio ex rel. Michael DeWine, Ohio
Attorney General. This judgment is affirmed in part and
reversed in part for the reasons that follow.
On May 29, 2012, appellee filed a complaint, in Case No. 12
CV 001459, against Defendants Jerome T. Osborne ("Mr.
Osborne") and Osborne, Inc. Appellee subsequently filed
an amended complaint, which substituted Osborne Co., Ltd.
("Osborne Co.") for Osborne, Inc. The trial court
denied a motion for partial summary judgment filed by
appellee on January 17, 2014. On January 22, 2014, Osborne
Co. was voluntarily dismissed from Case No. 12 CV 001459, and
appellee filed a complaint against Osborne Co. in Case No. 14
CV 00166. The trial court consolidated the two cases on
January 30, 2014. On August 15, 2014, the trial court granted
a motion to substitute the Executors of Jerome T.
Osborne's Estate as defendants, following Mr.
Osborne's death. The executors are identified as Richard
M. Osborne, Sr.; Georgeanne Osborne Gorman; Michael E.
Osborne; Jacqueline Osborne Fisher; William V. Krug; Jerome
T. Osborne, III; William L. Mackey; and Jeremy Cash Osborne.
The complaints against each appellant-Osborne Co. and Mr.
Osborne's estate-set forth three causes of action, each
alleging violations of Ohio's Water Pollution Control
Laws as found in Revised Code Chapter 6111.
Count One alleges appellants violated R.C. 6111.04(A) and
R.C. 6111.07(A) by failing to obtain a certification from the
Ohio Environmental Protection Agency ("Ohio EPA")
under Section 401 of the Clean Water Act or a Section 404
permit from the U.S. Army Corps of Engineers before engaging
in certain activities within and along the East Branch
Chagrin River that resulted in "(1) the placement of
dredged or fill material and/or wastes into waters of the
State; and (2) degradation of certain portions of the East
Branch Chagrin River and the threatened degradation of other
portions [of] these waters of the state."
Count Two alleges appellants violated R.C. 6111.04(A) and
R.C. 6111.07(A) by failing to obtain a construction storm
water discharge permit before engaging in construction
activities that resulted in "disturbing one or more
acres of land within and along two miles of stream channel of
the East Branch Chagrin River."
Count Three alleges appellants violated R.C. 6111.04(A) and
R.C. 6111.07(A) because they polluted the East Branch Chagrin
River, without a permit, by discharging storm water from land
within and along two miles of stream channel of the East
Branch Chagrin River, and thereby created a public nuisance.
The parties submitted a joint stipulation of facts with
regard to many issues in the case. With regard to remaining
disputed facts, the matter ultimately proceeded to a bench
trial in January 2016.
This case arose after an employee of the Ohio EPA observed
William Franz, an employee of Osborne Co., operating a track
hoe in the middle of the East Branch Chagrin River. In his
deposition, Mr. Franz testified that he was removing silt so
the river would flow. The parties stipulated that Mr. Osborne
instructed Mr. Franz to use the track hoe to remove sand and
gravel from the stream bed and relocate this material along
the edge of the stream, on the stream banks, and in the
middle of the river. The parties also stipulated that, on
certain occasions when the track hoe's bucket could not
reach the river bank, Mr. Franz would place piles in the
river, then relocate the track hoe and move those piles to
the bank of the river. Another stipulation was that Mr.
Osborne personally observed some of Mr. Franz's work and
that he would usually call Mr. Franz the night before or
first thing in the morning and tell him what project to work
on each day and what to do for the project. After work was
completed, Mr. Osborne would usually call Mr. Franz to ask
how the work for the day went.
The parties stipulated that appellants were performing the
work on the river pursuant to agreements with the Village of
Kirtland Hills, reached in 1983 and 1990, to maintain the
river banks. In exchange for the work performed on the river,
Mr. Osborne was allowed to farm certain property owned by the
Village of Kirtland Hills. The work was done throughout the
years from River Mile 4.30 to River Mile 6.15. Most of the work
performed in or near the river was on property owned either
by the Village of Kirtland Hills or Mr. Osborne.
The parties stipulated that the East Branch Chagrin River is
a "water of the state, " as that term is defined in
R.C. 6111.01; that it was designated as a State Scenic River
by the Ohio Department of Natural Resources
("ODNR") on July 2, 1979; that it is designated as
an Outstanding State Water for Ecological Value; and that its
beneficial use designations are cold water habitat,
seasonal salmonid habitat, primary contact recreation, and
agricultural/industrial water supply.
The parties stipulated that Mr. Franz, at the direction of
Mr. Osborne, operated the track hoe in the river on 24
separate occasions from 2001 through 2007. Each of these
occasions involved dredging the river and placing dredged
material along the river bank or in the middle of the river.
Evidence was introduced at trial that the dredged material
formed nine piles, anywhere from eight- to twenty-feet high,
for extended distances along the river bank. At least 25, 656
cubic yards of river bottom were dredged. Most of the dredged
material was piled on property owned by either the Village of
Kirtland Hills or Mr. Osborne. One pile, referred to as
"the Oliva pile, " was located on private property
near St. Hubert's church.
According to trial testimony, the river had been excavated
down to the bedrock in many areas between R.M. 4.30 and R.M.
6.15, which resulted in the river losing access to its
floodplain and caused significant bank erosion. The state
also introduced testimony that appellants' activities
resulted in a loss or degradation of the habitat for fish and
Paul Anderson, an environmental specialist in the surface
water division of the Ohio EPA, became aware of the work
being done in the river on July 13, 2007, at which time it
ordered appellants to cease work in the river. Appellants
complied. The Ohio EPA immediately performed a site survey
and concluded the site was severely impacted by substrate
removal and reworking and by placement of removed material in
the floodplain and bankfull area: the habitat was severely
simplified, siltation was high, and erosion was potentially
The U.S. Army Corps of Engineers thoroughly inspected the
river one week later. The parties stipulated that Mr. Osborne
received a letter from the Corps in August 2007, stating the
work in the river was an unauthorized activity and in
violation of the Federal Clean Water Act. The letter stated,
The inspection found that gravel and natural stone were
excessively dredged from the stream at several locations, and
disposed or stockpiled in the floodway and below the ordinary
high water elevation, and also in the stream channel. No
Department of the Army authorization was issued for this
activity. Therefore, this work is an unauthorized activity
and in violation of the Clean Water Act.
letter directed Mr. Osborne not to perform any additional
activities in the river and advised that any further work
would be considered a knowing and willful violation of
federal law, subjecting him to civil penalties.
The parties stipulated that Mr. Osborne also received a
notice of violation from the Ohio EPA in August 2007,
alleging violations of Ohio Revised Code Chapter 6111. The
notice also alleged violations of O.A.C. 3745-1-04. This
notice stated, in part:
The illegal activity began upstream of St. Hubert's
Church on the East Branch of the Chagrin River and continued
downstream approximately 8, 700 feet. The inspection team
observed that materials had been and were being side cast
from the river bed onto various sections of the river bank.
This activity constitutes a violation of [R.C.] 6111.04,
which prohibits any person from causing pollution to any
waters of the State without a valid unexpired permit issued
by the Director of Ohio EPA. [R.C.] 6111.07 states that no
person shall violate or fail to perform any duty imposed by
rules adopted by Ohio EPA. The activities observed caused
violations of [O.A.C] 3745-1-04, which contains criteria
applicable to all waters of the State. Please be advised that
failure to comply with the above laws may be cause for
enforcement action pursuant to [R.C.] Section 6111 and
subject you to civil penalties identified in [R.C.]
Please inform this office in writing, within ten days of
receipt of this notification, of the description of the
action(s) proposed to address these violations. Please
provide all documentation associated with this activity
including the intent of the activity, contracts with others
to perform the activity, and a record of when this activity
had been previously performed.
Mr. Osborne responded by letter, through his attorney, on
September 10, 2007. Mr. Osborne noted he began utilizing the
land located in Kirtland Hills pursuant to an oral agreement
in the late 1970s; this oral agreement was confirmed by
written agreements in 1983 and 1990. Pursuant to these
agreements, Mr. Osborne undertook erosion control and bank
stabilization measures on the property on an intermittent
basis. He indicated there were no records or documentation
associated with said erosion control and bank stabilization
measures. The letter ended by stating, "Mr. Osborne
proposes no actions at this time to address the alleged
violations" and that nothing in the letter shall be
deemed an admission as to any unlawful activities; "in
fact, for the record, Mr. Osborne denies any unlawful
On November 1, 2007, Randall Keitz, a floodplain engineer
with ODNR, surveyed the disturbed area of the river. He
testified that he concluded, as a result of this survey, that
the river was highly unstable with considerable ongoing
erosion of the river banks due to the limited channel width
and increased velocity of the water. Trees along the banks
were being undermined, and access to the floodplain was very
On November 2, 2007, the U.S. Army Corps of Engineers sent a
letter to the director of the Ohio EPA, noting the work was
done without authorization and in violation of the Clean
Water Act. It authorized the Ohio EPA to immediately begin
remedial and restoration measures without needing to obtain
any further approval or permits from the Corps.
Over the next two years, the Ohio EPA met with appellants and
the Village of Kirtland Hills to negotiate remediation of the
river. On April 29, 2009, the Ohio EPA provided a proposed
draft of a settlement, titled "Director's Final
Findings and Orders, " to appellants in an attempt to
administratively settle the violations of R.C. Chapter 6111.
The draft states, in Paragraph 3 of the Findings, that
appellants altered approximately two miles of the stream
channel in violation of R.C. Chapter 6111 and the Clean Water
Act by dredging from and depositing fill material in the
river. Paragraph 8 states that constriction of the floodplain
remains a significant concern; lowering of the stream channel
elevation and stockpiling of material along the stream banks
significantly limits the amount of energy dissipation that
can occur during flood events. Paragraphs 9 and 10 state that
placement of dredged substrates directly upon the stream bank
has increased the risk of flood damage, and lowering of the
channel bed has caused bank erosion problems. Paragraph 11
states the river is not meeting certain biocriteria outlined
in O.A.C. 3745-1-07 due to habitat modification and
The draft then outlines several Orders directing appellants
to implement a plan designed to fully remediate the river. It
states that "[t]he Plan shall focus on facilitating the
natural recovery of the river. Where appropriate, the plan
may include replacement of the stockpiled substrates within
the stream channel to provide enhanced habitat, to expedite
the stream channel recovery process or to stabilize
streambanks at specified locations."
A section of the draft, titled "Reservation of Rights,
" provides, in part:
Ohio EPA reserves the right to take any action, including but
not limited to any enforcement action for civil or
administrative penalties against Respondent for violations
specifically cited in these Orders, action to recover costs,
or action to recover damages to natural resources, action to
compel further remediation pursuant to any available legal
authority as a result of past, present, or future violations
of state or federal laws or regulations or the common law,
and/or as a result of events or conditions arising from, or
related to, the Site. Upon termination pursuant to the
Termination Section of these Orders, Respondent shall have
resolved their liability to Ohio EPA only for the Work
performed pursuant to these Orders.
Larry Reeder, enforcement supervisor of the surface water
division at the Ohio EPA, testified that it did not intend to
pursue a civil penalty against appellants at the time they
were negotiating. Cynthia Paschke also testified regarding
these negotiations. Ms. Paschke was qualified as an expert
witness, limited to the collection and analysis of habitat
data in the river, and she also represented appellants during
their negotiations with the Ohio EPA. Ms. Paschke testified
that appellants were prepared to move forward with the
negotiated restoration project had the Ohio EPA waived its
reservation of rights regarding future administrative and
civil penalties, as it had done with the Village of Kirtland
Hills. The Ohio EPA did not waive its reservation of rights,
and Mr. Reeder testified he was notified in May 2009 that
appellants would not sign the ...