Petition for review of order of Pollution Control Board.
JUSTICE SCHNAKE DELIVERED THE OPINION OF THE COURT:
Unity Ventures (Unity), a partnership engaged in the development of certain real estate in Du Page County for residential purposes, has petitioned this court under Supreme Court Rule 335 (87 Ill.2d R. 335) and section 41 of the Environmental Protection Act (Ill. Rev. Stat. 1983, ch. 111 1/2, par. 1041) for direct review of an order of the Pollution Control Board (the Board) denying Unity's request for a variance from the Board's Rule 963(a), which limits the duration of sewer construction permits to two years. Unity contends that the Board's decision was contrary to the manifest weight of the evidence, and that the Board erred by imposing certain sanctions on Unity for violation of prehearing discovery rules. The Illinois Environmental Protection Agency (the Agency) and the County of Du Page (the county) have moved this court to dismiss Unity's petition for review on grounds of mootness. These motions have been taken with the case.
On January 31, 1979, the Agency issued a joint sewer construction and operating permit for one of Unity's residential real estate developments known as Hobson Greene Unit Two. Unity Ventures was the "permittee to construct," and the Du Page County Department of Public Works (DCDPW) was the "permitee to own and operate." Pursuant to Rule 963(a) the permit included as a condition that "construction must be completed in * * * two years."
On September 29, 1980, or about 1 1/2 years after the permit was issued, Unity filed with the Board a petition for a variance from the two-year construction requirement. The petition alleged that Unity began to develop its Hobson Greene project in 1973. The project was to be developed in three phases. The second phase, Hobson Greene Unit Two, which is the subject of this proceeding, was to be located on 59 acres of land bordered by Greene Road on the east and by 75th Street on the south. It was to include 78 single-family homes and 22 multiple-family residences. Unit Two would generate sewage in the amount of 239,200 gallons per day design average flow (GPDDAF) or 2,392 population equivalents (PE). The first phase, Unit One, was to be located on a 33-acre tract of land immediately north of Unit Two on Greene Road. It was to include 35 single-family homes and would generate sewage in the amount of 14,000 GPDDAF or 140 PE. The third phase, Unit Three, was to be located on a 51-acre tract of land bordered by Greene Road on the east and 75th Street on the north. It was to consist of 121 single-family homes and "480 [sic] multiple family dwelling units" and would generate sewage in the amount of 168,400 GPDDAF or 1,684 PE. Sanitary sewer service to the Hobson Greene project was to be provided by sewer extensions ultimately tributary to the DCDPW's Lisle and Woodridge sewage treatment plants.
According to the variance petition, on February 8, 1979, Unity and DCDPW were issued a joint permit, similar to the one at issue here, to construct and operate a sewer extension to service Unit One. By the date the variance petition was filed, Unity had completed construction of that sewer extension and all improvements necessary to service Unit One. Unity had not, however, begun construction of the sewer extension to Unit Two pursuant to the permit involved here. According to the variance petition, there were two reasons for Unity's decision not to proceed. One was that there had been a substantial decrease in demand for housing as a result of increased home mortgage rates and a general downturn in the economy. The other reason involved "uncertainties" regarding the Lisle and Woodridge sewage treatment plants, which had been placed on restricted status by the Agency because they were not providing adequate sewage treatment.
The variance petition alleged that Unity had a legal right to construct and connect the sewer extension to Unit Two so long as construction was completed by January 30, 1981, because the two-year construction and operating permit was obtained before the Lisle and Woodridge sewage treatment plants were placed on restricted status. The petition also alleged that Unity would be able to complete construction by that deadline, but that to do so would require substantial expenditures for overtime labor.
According to the petition, Unity would not have begun the Hobson Greene project if it was unable to develop Units One and Two "along a parallel timeframe." The petition stated:
"To date, Unity has expended the following amounts of money with respect to Hobson Greene Units 1 and 2:
Land Development Costs $270,990.78 Land Improvement Costs 224,766.23 Interest and Real Estate Tax 1,338,856.45 _____________ Total Costs Incurred Exclusive of Raw Land Cost $1,834,613.46."
Finally, the petition alleged that the variance requested would have no adverse environmental impact. Unity sought a construction time limitation of three to five years from the date of the Board's ruling.
On October 30, 1980, the Board, by a 3-2 vote, entered an order dismissing the variance petition on the ground that the pleading of hardship was insufficient. On December 19, 1980, the Board granted Unity's motion for reconsideration, but, again by a vote of 3-2, reinstated its order dismissing the petition.
Unity petitioned this court for review, and, in an order entered under Supreme Court Rule 23 (73 Ill.2d R. 23) filed February 2, 1982, this court reversed the order of the Board dismissing the petition, and remanded the cause for a hearing.
On remand the Agency filed on June 4, 1982, a motion for an order requiring Unity to disclose certain information about the organization of its business. The motion noted that in the affidavit verifying its variance petition, Unity was represented as being a partnership. A copy of Unity's partnership agreement, obtained by the Agency in a related lawsuit in the circuit court of Du Page County, showed that it was entered into on June 1, 1979. The permit for which Unity was seeking an extension of time was, however, issued four months earlier. In a deposition taken in the related lawsuit, William A. Alter, one of Unity's partners, testified that he assumed the permit was issued to the corporation known as Unity Ventures. The Agency alleged that said corporation withdrew from doing business in Illinois three weeks after the partnership was formed. The permit included as one of its conditions that it "may not be assigned or transferred without a new permit from the Illinois Environmental Protection Agency." According to the Agency's records, there had been no transfer of the permit. The Agency's motion requested that Unity be ordered to provide additional information "concerning the original permittee, the present holder of the permit and the legal authority under which the permit may be extended for and transferred to the partnership."
On June 11, 1982, the Agency served Unity with a request for admission of facts. The 40 facts set forth related to the history of Unity's business organization as it related to acquisition of the permit; the extent of expenditures on the part of Unity, the partnership, related to the Hobson Greene project; ownership of the real estate involved; the extent of preparations on the part of Unity, the partnership, to begin construction of Unit Two; and the density of dwelling units permitted on Unit Two under a judgment order entered by the circuit court of Du Page County in case No. 75-1128-6. The Agency stated in its request for admission of facts that under Board rules failure to respond within 20 days might cause the facts to stand admitted.
Also on June 11 the Agency served Unity with 40 interrogatories which dealt with the same subjects, as well as the extent of expenditures by Unity, the corporation, and by William A. Alter, individually and doing business as Unity, related to the Hobson Greene project. The interrogatories inquired also into the basis for an assertion in Unity's variance petition that the estimated cost to carry Unit Two would be $175,000 per year until development.
Finally, on the same date that the above discovery requests were served, the Agency served Unity with a request for production of documents concerning the subjects set forth above. The request also sought Federal income tax returns as well as financial statements of Unity, the partnership; Unity, the corporation; and William A. Alter, doing business as Unity. The Agency requested Unity to respond to its interrogatories and requests to produce in 14 days or by June 25, 1982.
On June 16, 1982, Unity filed a motion requesting an extension of time to respond to the discovery requests to July 1, 1982. The record does not disclose whether this motion was ever ruled on.
On July 1, 1982, the Board denied the Agency's motion for an order requiring Unity to provide information about the history of its business organization because "normal discovery ...