Opinion
C.A. No. KB-2014-0426
01-08-2015
EVERGREEN ESTATES MANAGING CORPORATION Plaintiff, v. TOWN OF COVENTRY; and ROBERT THIBEAULT, in his capacity as Finance Director Defendants.
ATTORNEYS: For Plaintiff: Michael A. Kelly, Esq.; Joelle C. Rocha, Esq. For Defendant: Nicholas Gorham, Esq.; Michael A. DeSisto, Esq.
DECISION Before this Court is Evergreen Estates Managing Corporation's (Evergreen or Plaintiff) Partial Motion for Summary Judgment. The Plaintiff seeks summary judgment on Counts I and II of its Complaint. In Count I, the Plaintiff seeks a declaratory judgment that Woodland III (defined herein)—Phase IV of the Planned Unit Development (PUD)—is vested with the same rights as the other Phases of the PUD, approved by the Town of Coventry (Coventry or Defendant) on August 10, 1976, and does not require further municipal board approval to construct Woodland III in accordance with the approved PUD. In Count II, the Plaintiff seeks a declaratory judgment that by having a vested right in Woodland III, Coventry is prevented from assessing impact fees associated with the development of Woodland III. Coventry opposes the Plaintiff's motion, and also moves for summary judgment pursuant to Super. R. Civ. P. 56(c). Jurisdiction is pursuant to G.L. 1956 § 9-30-1.
I
Facts and Travel
The underlying facts of this case have been fully and fairly stated in numerous Superior and Supreme Court decisions spanning the last thirty years. See Woodland Manor III Assocs. v. Keeney, 713 A.2d 806 (R.I. 1998); Woodland Manor, III Assocs., L.P. v. Reisma, No. PC89-2447, 2003 WL 1224248 (R.I. Super. Feb. 24, 2003) judgment clarified sub. nom. Woodland Manor, III Assocs., L.P. v. Reisma, No. PC89-2447, 2003 WL 21297130 (R.I. Super. May 23, 2003); Woodland Manor III Assocs., L.P. v. McLeod, No. 89-2477, 2000 WL 276820 (R.I. Super. Mar. 2, 2000); Woodland Manor III Assocs. v. Keeney, No. 89-2447, 1996 WL 937021 (R.I. Super. Dec. 12, 1996). Therefore, this Court limits its recitation to only the pertinent facts relevant to the issues currently before the Court.
Woodland Manor III Associates, LLP (Woodland Associates) is the record owner of certain property located on Assessor's Plat 27, Lot 150, in the Town of Coventry, Rhode Island. Evergreen currently holds a 100% ownership interest in Woodland Associates. To better understand the current dispute, this Court revisits the property's development history.
In the 1970s, the Plaintiff's predecessor in interest, Mapleroot Development Corporation (Mapleroot), purchased eighty-nine acres of land on Plat 28 in Coventry, Rhode Island (Master Tract or Woodland Manor). In or around 1973, Mapleroot sought approval from Coventry's Town Council to rezone the property as a PUD. The PUD contemplated the construction of various building types to be combined and integrated as a whole. The construction at Woodland Manor was to occur in separate phases. Phase I consisted of an apartment complex; Phase II included a housing facility for the elderly; Phase III encompassed the building of a nursing home; and the final phase, Phase IV, comprised of a multi-family apartment complex. On June 17, 1974, in connection with its attempt to receive municipal and state approval for the project, Mapleroot received a letter from the Rhode Island Department of Environmental Management (DEM) which stated that construction on the Master Tract would not be in violation of the Fresh Water Wetlands Act, so long as construction did not fall below a certain contour.
Also referred to in this decision as Woodland I.
Also referred to in this decision as Woodland II.
Known as the Coventry Health Center.
On November 10, 1975, Coventry amended Article XX of the Town's Zoning Ordinances allowing for Planned Unit Developments (PUD Ordinance). The application process to receive a PUD designation mirrored the procedure, found in Article XVIII of Coventry's Zoning Ordinances, for Planned Residential Districts. Mapleroot, in compliance with Sections 5(A)-(C) of Article XVIII, submitted a PUD application in order to develop the Master Tract.
See Coventry Ordinance No. 9-75-0043. The PUD Ordinance allowed for integrated developments of neighborhoods and villages for tracts of land over twenty (20) acres.
On April 8, 1976, Coventry's Planning Commission recommended, to Coventry's Town Council, that Mapleroot's application be approved. Around June 14, 1976, Coventry's Town Council and the Planning Commission received Mapleroot's final plan submission for the development of Woodland Manor. On August 10, 1976, Coventry's Town Council approved Mapleroot's final site plan for Woodland Manor and the rezoning of the Master Tract as a PUD District.
The Town Council gave preliminary approval on April 19, 1976 on the condition that there is an amendment to the intensity regulations found in the PUD Ordinance. On June 14, 1976, the Town Council adopted an amendment to the PUD Ordinance regarding intensity regulations.
Several times after receiving final site plan approval and in accordance with Article XVIII of Coventry's Zoning Ordinances, Mapleroot came before the Planning Commission to seek a modification from the site plan. Each time, the Planning Commission approved the modification determining each modification to be a minor deviation.
If a final site plan to create a PUD was approved by the Town Council, no further Planning Commission or Town Council approval was necessary before being issued a building permit. Coventry's regulations and zoning ordinances in place in 1976 did not require Planning Board approval in the form of a master plan, preliminary plan, and final plan stages for land development projects or subdivisions. See Pl.'s Ex. A.
The developers of the Master Tract then received approval from the Department of Health to construct and operate a 3.5 mile long sewer line and pump station to carry sewage, generated by the project, to West Warwick's sewerage treatment facility. The 3.5 mile sewer system was installed on or around 1978 and was paid for by Mapleroot. The sewer was designed and implemented to service all phases of the project. During the years 1978 through 1981, Mapleroot received final DEM approval for the first three construction Phases.
Since DEM approved the project in 1974, the DEM was only reviewing the drainage and grading plans for the three Phases of the PUD.
With all approvals in place, Mapleroot's contractor, Mast Construction, Inc. (Mast Construction), applied for and received a building permit for Phase I on January 16, 1979. Construction was completed, and a Certificate of Occupancy was issued for Phase I on March 27, 1981. On January 8, 1981, Mast Construction applied for and received a building permit for Phase II. Ultimately, Phase II was completed and was issued a Certificate of Occupancy. Finally, Mast Construction applied for and received a building permit and Certificate of Occupancy for Phase III, Coventry Health Center, during the early 1980s.
In 1990, Coventry Health Center applied for and was granted a modification, pursuant to Section 5(M) of Coventry's Zoning Ordinances, to add additional rooms to its building.
From the date Mapleroot's PUD was approved through the construction of the first three Phases, Mapleroot was not required to pay impact fees.
The current controversy emanates from the events surrounding the construction of Phase IV, or Woodland III. Following the same process as for the first three Phases, Mapleroot submitted its final site plan for Phase IV to DEM. This time however, DEM found Phase IV was a significant alteration of the wetlands and refused to approve the site plan. With the threat of losing financing for the project, Mapleroot tried to rectify the problem; however, its attempts were unsuccessful, resulting in litigation between Mapleroot and DEM.
On September 30, 1992—while litigation with DEM was ongoing—Mapleroot conveyed Woodland III to the entity Woodland Associates. On February 10, 1994, the Rhode Island Superior Court found, on equitable estoppel grounds, in favor of Woodland Associates. Instead of seeking a building permit for Phase IV, Woodland Associates amended its complaint, alleging damages from a temporary taking of their property by DEM. In its suit for damages, Woodland Associates stated it was "financially infeasible" to build Woodland III as originally planned. Litigation between Woodland Associates and DEM lasted until 2003, when the Rhode Island Superior Court found that DEM's actions constituted a temporary taking. As a result, Woodland Associates was awarded more than $4 million in damages. After the litigation ended, Woodland Associates did not immediately seek a building permit for Phase IV.
After this finding, Woodland Associates had the right to seek a building permit for Phase IV; however, an application was never submitted.
Originally, Woodland III was to be built as Section 8 Housing. Financing for Woodland III was going to come from a tax syndication program and from the United States Department of Housing and Urban Development (HUD) Section 8 program. However, in October of 1986 the Tax Reform Act was enacted preventing developers from syndicating Section 8 housing projects. Involved in litigation with DEM, Woodland Associates was unable to be grandfathered in under the prior law. As a result, Woodland Associates was prevented from syndicating the financing for Woodland III.
The Court found that Woodland III had been approved by the Town of Coventry, and therefore, Woodland Associates had a compensable property interest in the property.
The damage award consisted of out of pocket expenses associated with preparing the HUD application and for lost rental value for the period in which the taking took place.
Establishment of Impact Fees
In July of 2000, the Rhode Island General Assembly enacted the Rhode Island Development Impact Fee Act, giving municipalities the authority to establish impact fees. G.L. 1956 §§ 45-22.4-1, et seq. (The Impact Fee Act). The Impact Fee Act was designed to raise additional funds for public facilities serving the new municipal growth and development and to make those benefitting from the expansion pay a fair share of the cost for new or upgraded facilities. See § 45-22.4-2. On or about September 25, 2002, the Town of Coventry enacted an ordinance entitled "Fair Share Development Fees," § 5-6 of the Town of Coventry Code of Ordinances (Impact Fee Ordinance), authorizing the assessment and collection of impact fees upon new residential development. The Impact Fee Ordinance originally assessed a fee of $7596, to be divided among select public facilities, in order to ensure that such facilities could serve and handle new growth and development in Coventry.
The Plaintiff uses the terms "impact fees" and "fair share development fees" interchangeably. For purposes of this decision, this Court will also consider these terms to be synonymous.
The Ordinance was amended on September 13, 2010. The Ordinance as amended continues to assess a $7596 impact fee; however, the amendment changes how the fee will be apportioned among Coventry's public facilities. The amended Ordinance is codified at § 106-6 of Coventry's Code of Ordinances.
On March 1, 2005, all the partners of Woodland Associates transferred their partnership interests to Evergreen. From this date forward, Evergreen continued to pay the real property taxes and fire district taxes associated with the property. Currently, Coventry's plat map shows the Master Tract properties as separate lots. According to the Plaintiff, Coventry's current zoning maps and GIS system shows the Master Tract is still zoned as a PUD.
The map depicts Lots 150 (Woodland III); 17, 19 (Woodland I and II); and 20 (Coventry Health Center).
The current map zones the property as a Planned Development or PD.
The 1991 Zoning Enabling Act and 1992 Land Development Act
In 1991 and 1992, the Rhode Island General Assembly enacted the Zoning Enabling Act and the Land Development Act, respectively. The acts incorporate standards for when an owner has vested rights in their land and describes certain elements necessary for owners to gain vested rights in a land development project. According to the Defendant, rights in a land development project vest if: the development plats have been recorded; applications for the land development project must be substantially complete; and work that is to be completed in stages must proceed on a consistent and continual basis. Further, the Zoning Enabling Act considers PUDs as a type of land development project. Secs. 45-24-31(55); 45-31-31(37). Both acts require a more extensive and thorough review for applicants seeking approval for a planned development, as compared to Coventry's 1976 PUD Ordinance. On December 19, 1994, Coventry repealed the 1976 PUD Ordinance.
Defendant points to three sections that had to be satisfied in order to vest a land development project. See §§ 45-23-28(d), 48; see also § 45-24-44(a).
Both the Zoning Enabling Act and the Land Development Act were enacted during DEM's temporary taking of Woodland III.
Coventry's Amended Zoning Ordinance
Article 19, § 1901 of Coventry's 1994 Ordinance effectively repealed the 1976 PUD Ordinance. From that point forward, Article 14—as amended in 1994—of Coventry's Zoning Ordinances governs "Land Development Projects," of which PUDs are not a permitted use. Therefore, a PUD requires approval from the Planning Board and sometimes from the Town Council. After receiving a judgment in excess of $4 million against DEM, Plaintiff waited more than ten years before seeking a building permit from the Town of Coventry. As a result of such delay, and due to the changes to Coventry's Zoning Ordinances, Coventry's Land Use Administrator informed the Plaintiff that the Planning Commission would have to once again determine whether to approve the development plans for Woodland III. The Plaintiff subsequently filed this lawsuit.
Woodland Manor's Sewer System
In 2011, the 3.5 mile sewer line built by Mapleroot before construction on the Master Tract began was sold to the Town of Coventry for $200,000. Evergreen supported the sale of the sewer line to the Town of Coventry, dismissed all lawsuits regarding any interest it could claim in the system, and took no appeal of the sale. Coventry received possession of the system free and clear of all claims, liens and encumbrances.
II
Standard of Review
In deciding a motion for summary judgment, a trial justice considers the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits and determines whether these documents, when viewed in a light most favorable to the nonmoving party, present a genuine issue of material fact. Kirshenbaum v. Fidelity Fed. Bank, F.S.B., 941 A.2d 213, 217 (R.I. 2008) (citations omitted); Lavoie v. North East Knitting, Inc., 918 A.2d 225, 227-28 (R.I. 2007) (citing Super. R. Civ. P. 56(c)); Delta Airlines, Inc. v. Neary, 785 A.2d 1123, 1126 (R.I. 2001) (citations omitted). It is well settled that a genuine issue of material fact is one which reasonable minds could differ. See, e.g., Brough v. Foley, 572 A.2d 63, 67 (R.I. 1990).
The moving party bears the initial burden of establishing that no such issues of material fact exist. Estate of Giuliano v. Giuliano, 949 A.2d 386, 391 (R.I. 2008). If the moving party is able to sustain its burden, then the opposing party must demonstrate the existence of substantial evidence to dispute that of the moving party on a material issue of fact. Parker v. Byrne, 996 A.2d 627, 632 (R.I. 2010) (citation omitted); Giuliano, 949 A.2d at 391 (citing Benaski v. Weinberg, 899 A.2d 499, 502 (R.I. 2006)); Superior Boiler Works, Inc. v. R.J. Sanders, Inc., 711 A.2d 628, 631-32 (R.I. 1998). Although it need not disclose all of its evidence, the party opposing summary judgment must demonstrate that evidence beyond mere allegations exists to support its factual contentions. See, e.g., Nichols v. R.R. Beaufort & Assocs., Inc., 727 A.2d 174, 177 (R.I. 1999) (citations omitted); Ludwig v. Kowal, 419 A.2d 297, 301 (R.I. 1980). The trial judge reviews the evidence without passing upon its weight and credibility and will deny a motion for summary judgment where the party opposing the motion has demonstrated the existence of a triable issue of fact. See Mitchell v. Mitchell, 756 A.2d 179, 181 (R.I. 2000); Palmisciano v. Burrillville Racing Ass'n, 603 A.2d 317, 320 (R.I. 1992).
Under the Uniform Declaratory Judgment Act (UDJA), the Superior Court possesses "the power to declare rights, status, and other legal relations whether or not further relief is or could be claimed." Sec. 9-30-1; see also P.J.C. Realty v. Barry, 811 A.2d 1202, 1207 (R.I. 2002) (quoting § 9-30-1). Thus, "the Superior Court has jurisdiction to construe the rights and responsibilities of any party arising from a statute pursuant to the powers conferred upon [it] by G.L. 1956 chapter 30 of title 9, the Uniform Declaratory Judgments Act." Canario v. Culhane, 752 A.2d 476, 478-79 (R.I. 2000). Specifically, § 9-30-2 provides as follows:
"Any person interested under a deed, will, written contract, or other writings constituting a contract, or whose rights, status, or other legal relations are affected by a statute, municipal ordinance, contract, or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder." Sec. 9-30-2 (emphasis added).
A trial court's "decision to grant or to deny declaratory relief under the [UDJA] is purely discretionary." Sullivan v. Chafee, 703 A.2d 748, 751 (R.I. 1997). Further, the purpose of the UDJA is "to allow the trial justice to 'facilitate the termination of controversies.'" Bradford Assocs. v. R.I. Div. of Purchases, 772 A.2d 485, 489 (R.I. 2001) (citations omitted). It is axiomatic that "[a] declaratory-judgment action may not be used for the determination of abstract questions or the rendering of advisory opinions, nor does it license litigants to fish in judicial ponds for legal advice." Sullivan, 703 A.2d at 751 (internal citations and quotations omitted).
III
Analysis
A
Woodland III's Vested Rights
1
Exhaustion of Administrative Remedies
Coventry first argues that summary judgment should not be granted in the Plaintiff's favor because Evergreen failed to exhaust their administrative remedies after its application for a building permit was denied by Coventry's Land Use Administrator. Evergreen contends that they are not required to exhaust administrative remedies, since they are only seeking a declaration that Woodland III has the same rights as in the other three Phases, and that Woodland III is not required to pay impact fees.
G.L. 1956 § 45-24-64 provides that "[a]n appeal to the zoning board of review from a decision of any other zoning enforcement agency or officer may be taken by an aggrieved party." (Emphasis added). Although serving an important purpose, a party is not required to exhaust administrative remedies when the administrative process would be futile. Rhode Island Employment Sec. Alliance, Local 401, S.E.I.U., AFL-CIO v. State Dep't of Emp't & Training, 788 A.2d 465, 467 (R.I. 2002).
Here, the Plaintiff filed suit allegedly in response to Coventry's Town Solicitor asserting that no approved plan existed for Woodland III's development. Simply put, the Plaintiff is not appealing a decision of a zoning enforcement agency or officer, thereby falling outside the purview of § 45-24-64. Instead, the Plaintiff is only seeking a declaration of rights that no further Planning Board review is necessary before Woodland III can be developed. The exhaustion of remedies rule would be applicable in this case if the Plaintiff was seeking a reversal of Coventry's denial of a building permit. See M.B.T. Const. Corp. v. Edwards, 528 A.2d 336, 337 (R.I. 1987) (finding exhaustion of remedies rule inapplicable when plaintiff challenges the validity and enforceability of an ordinance regulation itself). A challenge of Coventry's Land Use Administrator's decision however, is not before this Court.
Moreover, under the UDJA, the Superior Court has the "power to declare rights, status, and other legal relations whether or not further relief is or could be claimed." Sec. 9-30-1 et. seq. Those affected by an ordinance "are entitled to bring a declaratory judgment suit despite the possibility that administrative remedies might be available." Taylor v. Marshall, 119 R.I. 171, 180, 376 A.2d 712, 716-17 (1977). "The existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate." Super. R. Civ. P. 57; see Berberian v. Travisono, 114 R.I. 269, 272, 332 A.2d 121, 123 (1975) (holding the existence of alternative methods of relief does not prevent application of the UDJA).
In this case, given Woodland III's lengthy and drawn out involvement with the judicial system, this Court finds it necessary to exercise its discretion to determine the rights of the parties. Furthermore, it is appropriate for this Court to issue a declaration of rights since the Plaintiff raises solely legal questions in its complaint. See Nolan v. Fitzpatrick, 9 N.J. 477, 486-87, 89 A.2d 13, 17 (1952) (stating exhaustion of administrative remedies is not necessary when party raises questions of law since agency determinations "would amount to useless delay"). Determining the rights of the parties in this controversy keeps with the underlying purpose of the UDJA. See Millett v. Hoisting Engineers' Licensing Div. of Dep't of Labor, 119 R.I. 285, 291, 377 A.2d 229, 233 (1977) (stating the purpose of the UDJA is determine legal rights and duties without proof of a wrong committed by one against another, aiding in the termination of controversies). Therefore, the Plaintiff's lawsuit is not barred for its failure to exhaust administrative remedies.
2
Doctrine of Laches
Defendant next contends that the Plaintiff sat on their rights for over thirty years before seeking a building permit, and therefore, the doctrine of laches should be applied to bar the Plaintiff's lawsuit. The Plaintiff argues that its right to develop Woodland III is not barred by the doctrine of laches because the Defendant has failed to demonstrate how its delay in enforcing its rights to build has prejudiced Coventry.
The doctrine of laches "is an equitable defense that precludes a lawsuit by a plaintiff who has negligently sat on his or her rights to the detriment of a defendant." O'Reilly v. Town of Glocester, 621 A.2d 697, 702 (R.I. 1993) (citing Fitzgerald v. O'Connell, 120 R.I. 240, 245, 386 A.2d 1384, 1387 (1978)). "[A]pplication of the defense of laches is generally committed to the discretion of the trial justice." Id. at 703 (citing Nickerson v. Cass, 93 R.I. 495, 498, 177 A.2d 384, 385-86 (1962)). The defense of laches involves '"not only delay but also a party's detrimental reliance on the status quo."' Andrukiewicz v. Andrukiewicz, 860 A.2d 235, 241 (R.I. 2004) (quoting Adam v. Adam, 624 A.2d 1093, 1096 (R.I. 1993)). Laches implies not merely a delay, but rather a delay causing a disadvantage to another. Chase v. Chase, 20 R.I. 202, 203-04, 37 A. 804, 805 (1897). A two-part test is used to determine if the doctrine of laches is applicable. Hazard v. East Hills, Inc., 45 A.3d 1262, 1270 (R.I. 2012). "First, there must be negligence on the part of the plaintiff that leads to a delay in the prosecution of the case. Second, this delay must prejudice the defendant." O'Reilly, 621 A.2d at 702 (citing Fitzgerald, 120 R.I. at 245, 386 A.2d at 1387)) (internal citations omitted). The party claiming laches has the burden of proving both elements. Raso v. Wall, 884 A.2d 391, 395 n.12 (R.I. 2005).
When faced with a defense of laches claim, the determination of delay and prejudice to a defendant are typically questions of fact, which makes a grant of summary judgment inappropriate. See Haffenreffer v. Haffenreffer, 994 A.2d 1226, 1231 (R.I. 2010) (stating summary judgment should not be granted when there are genuine issues of material fact). However, our Supreme Court has granted summary judgment when the defense of laches has been satisfied as a matter of law. See Hazard, 45 A.3d at 1270-71. Therefore, this Court will determine whether the defense of laches should be applied to bar the Plaintiff's lawsuit.
a
Delay
To prevail on a laches claim, the defendant must not only demonstrate that the plaintiff delayed his, her, or its claim, but also that such delay was unreasonable. Hazard, 45 A.3d at 1270; Adam, 624 A.2d at 1096. In Hazard, our Supreme Court upheld the grant of summary judgment on laches grounds when the plaintiff's family delayed asserting their rights for over a hundred years. 45 A.3d at 1271. The Court reasoned that it would be "hard-pressed to conceive of a clearer example of the proper application of laches than in the case before [it], in which a party delays bringing a claim for more than a century." Id. Although the Court in Hazard did not establish a bright-line rule to determine when a delay should be considered unreasonable as a matter of law, the Hazard decision is persuasive on this Court's analysis of the facts before it presently. See Id. (holding the party defending against a claim of laches has the burden of providing the reason for the delay).
In this case, the Defendant argues laches is appropriate due to the fact that for more than thirty years, the Plaintiff and its predecessors have not yet come forward to assert their rights to develop Woodland III. The Defendant contends that to allow Evergreen to come forward now and exercise its developmental rights would be extremely prejudicial to Coventry, which has undergone extensive transformation since 1976. However, merely asserting the duration of time the Plaintiff has sat on their rights is insufficient for laches to apply, since it must also be demonstrated that the delay was unreasonable. See Adam, 624 A.2d at 1096 (holding delaying claim alone is not enough to sustain a laches defense, but must show that delay was unreasonable). Here, the PUD was approved in 1976, and the Master Tract was rezoned as a PUD District. Section 5K and 5L in Article XVIII of Coventry's Zoning Ordinances included the procedure to be followed to receive approval for a PUD. Section 5 did not include a provision for when an approved final site plan would lapse, and it also fails to discuss when construction was required to begin once final site plan approval was received. See Stipulated Ex. 17. What is unreasonable in this case is the fact that Coventry failed to include in the PUD Ordinance a limitation on the time within which final site plan approval would last, in the event that no further action was taken on the approved plan.
Further, the original developers tried to develop the project in the 1980s and would have been successful in doing so had it not been for DEM's involvement. As a result of DEM's actions, litigation concerning Woodland III lasted until 2003. To characterize the Plaintiff, who received ownership of Woodland III in 2005, as sitting on its rights is inappropriate in this case. Here, the Plaintiff's delay does not rise to the level of unreasonableness as a matter of law. See Hazard, 45 A.3d at 1271. Therefore, under the present circumstances, the reasonableness of Plaintiff's delay remains a question of fact, making summary judgment inappropriate. See Raso, 884 A.2d at 396 (holding the unreasonableness of a delay must be made according to the circumstances of a particular case).
In addition, the Defendant has failed in demonstrating prejudice. Although the Defendant accurately points to substantial changes to Coventry since the PUD was approved in 1976, the Defendant fails to provide specific facts relating to how Coventry will be prejudiced if Phase IV is constructed. The Defendant contends the doctrine of laches is appropriate because the public expects the Planning and Zoning Boards to review large development projects. Although this Court agrees with such sentiments, such a review took place when the project received initial approval. In fact, under the 1976 Zoning Ordinance, the public had the right to comment on the project before it was approved. Claims that the Defendant will be prejudiced if the project is allowed to go forward—in accordance with the approval granted in 1976—without additional evidence demonstrating how Coventry's public facilities will be overburdened makes the defense of laches inappropriate in this case. See Laurence v. R.I. Dep't of Corrections, 59 A.3d 1182, 1184 (R.I. 2013) (self-serving statements do not create a genuine issue of material fact for summary judgment purposes). Therefore, the Defendant has not met its burden to sustain a doctrine of laches defense, and it should not be applied in this case.
3
Estoppel
The Defendant next contends that summary judgment should be entered in its favor since the Plaintiff is judicially and collaterally estopped from raising the argument that Woodland III possesses vested rights similar to the first three Phases. Particularly, the Defendant argues that many of the issues raised in the Plaintiff's current suit were argued and decided by Judge Thompson in Manor v. Reisma, No. PC89-2447, 2003 WL 1224248 (R.I. Super. Feb. 24, 2003). The Plaintiff objects, arguing that neither collateral nor judicial estoppel is applicable to its case.
a
Collateral Estoppel
The doctrine of collateral estoppel holds that "an issue of ultimate fact that has been actually litigated and determined cannot be re-litigated between the same parties or their privies in future proceedings." Commercial Union Ins. Co. v. Pelchat, 727 A.2d 676, 680 (R.I. 1999) (citing Mulholland Constr. Co. v. Lee Pare & Associates, Inc., 576 A.2d 1236, 1238 (R.I. 1990)). In Rhode Island, for collateral estoppel to apply, it must be shown,
"(1) that there be an identity of issues,Courts will look to three requirements to determine whether there is an identity of issues. First, the issue sought to be precluded must be identical to the issue determined in the earlier proceeding; second, the issue must actually have been litigated in the prior proceeding; and third, the issue must necessarily have been decided. Id. at 1186 (citing Chase, 588 A.2d at 122 (citing Lucido v. Superior Court, 795 P.2d 1223, 1225 (Cal. 1990))).
(2) that the prior proceeding resulted in a final judgment on the merits, and
(3) that the party against whom collateral estoppel is asserted be the same as or in privity with a party in the prior proceeding." E.W. Audet & Sons, Inc. v. Fireman's Fund Ins. Co. of Newark, New Jersey, 635 A.2d 1181, 1186 (R.I. 1994) (citing State v. Chase, 588 A.2d 120, 122 (R.I. 1991)).
In this case, the Defendant contends that Evergreen's current suit is barred by the doctrine of collateral estoppel, since previous litigation involving Woodland III has resulted in a final determination of the issues the Plaintiff now seeks to litigate. Specifically, the Defendant argues that the issue of whether the Plaintiff has the right to use the property—after February 1994, once DEM was enjoined—has already been determined. Also, the Defendant contends that the issue of whether the Plaintiff was made whole for their out-of-pocket expenses associated with Phase IV has also reached a final decision on the merits.
Although such issues have in fact been tried, the Plaintiff's current suit centers around what rights currently exist for Woodland III. The Defendant's reliance on the previous cases involving Woodland III as its basis for why the Plaintiff cannot bring this current suit is misplaced. First, the Court's recorded decision in 1994 involved a finding of whether DEM should be equitably estopped from changing its conclusion that the Fresh Water Wetlands Act was inapplicable to Phase IV. After receiving a favorable decision, the Plaintiff's predecessors sought damages from DEM on the basis that DEM's actions constituted a temporary taking. In 2003, the Superior Court found that a temporary taking existed, and awarded damages for the length of time the taking took place. See 2003 WL 1224248, at *21.
It is clear that the previous cases involving Woodland III focused on DEM's actions, and the resulting damages. There was never a determination or holding that Woodland III had the right to develop the property according to the 1976 PUD approval, hence the reason the Plaintiff is here today. Further, the issues of whether impact fees are applicable to Woodland III and whether Woodland III has the same vested rights as Phases I—III are not identical to the issues in the previously decided cases. The previous cases focused on the property being temporarily taken by DEM from 1986 to 1994. However, in this lawsuit, Evergreen focuses on whether municipal approval is necessary to develop Woodland III and whether Evergreen will be liable for impact fees if the plans to develop Woodland III are carried out. Therefore, it has not been demonstrated that the issues raised in the Plaintiff's current suit are identical to the issues previously litigated, nor has it been shown that a final judgment on the merits was previously reached with respect to the controversy surrounding Woodland III's vested rights, or the applicability of impact fees. See E.W. Audet & Sons, Inc., 635 A.2d at 1186.
b
Judicial Estoppel
Judicial estoppel is applied by the courts to prohibit a party "from 'deliberately changing positions according to the exigencies of the moment.'" Gaumond v. Trinity Repertory Co., 909 A.2d 512, 520 (R.I. 2006) (quoting New Hampshire v. Maine, 532 U.S. 742, 750 (2001)). Being such extraordinary relief, judicial estoppel should not be applied "'unless the equities clearly [are] balanced in favor of the part[y] seeking relief.'" Southex Exhibitions, Inc. v. R.I. Builders Ass'n, Inc., 279 F.3d 94, 104 (1st Cir. 2002) (quoting Greenwich Bay Yacht Basin Assocs. v. Brown, 537 A.2d 988, 991 (R.I. 1988)). "Judicial estoppel focuses on the relationship between the litigant and the judicial system as a whole." D & H Therapy Assocs. v. Murray, 821 A.2d 691, 693 (R.I. 2003) (citation omitted). In deciding whether to invoke the doctrine of judicial estoppel, a court should consider whether "the 'party seeking to assert an inconsistent position would derive an unfair advantage . . . if not estopped.'" Id. at 694 (quoting New Hampshire, 532 U.S. at 751). Also, a court must determine whether a previous court was persuaded to accept a party's earlier argument "so that judicial acceptance of an inconsistent position in a later proceeding would create 'the perception that either the first or the second court was misled.'" Id. (quoting New Hampshire, 532 U.S. at 750).
In D & H Therapy Assocs., the defendant, sued by the plaintiff for unpaid therapy bills, believed the amount charged for services was unreasonably high. 821 A.2d at 692-93. In a separate personal injury action, regarding the defendant's involvement in a motor vehicle accident necessitating the defendant's physical therapy, the defendant told the court that the therapy bills were fair and reasonable. Id. In order to explain the inconsistent positions in later litigation, the defendant argued that he did not review the bill before his first trial, and in his own opinion, believed the cost of services were excessive. Id. The Court in D & H Therapy Assocs. found the two positions taken by the defendant in two separate suits to be completely inconsistent, and prevented the defendant from now raising the argument that the bills were excessive. Id. at 694.
This Court does not find the Plaintiff's position to be wholly inconsistent with ones previously raised. Unlike the defendant in D & H Therapy Assocs., the Plaintiff here has not changed its position. Id. at 694. Here, the Defendant relies on a statement made by the Plaintiff's predecessor in interest during Woodland Manor III's 1994 suit against DEM in which counsel for Woodland Manor III told the trial justice that Woodland III could not proceed as planned because it was "impossible, impracticable, [and] financially infeasible." See Woodland Manor III Assocs. v. Keeney, 713 A.2d 806, 810 (R.I. 1998). When viewing the entirety of the circumstances surrounding this statement, it is clear that this statement alone does not demonstrate an inconsistent position. First, the statement was made to indicate the adverse economic impact Woodland Manor III suffered as a result of DEM's actions, and to support a finding of a temporary taking. See Woodland Manor III, 2003 WL 1224248, at *13-14.
Further, Woodland III was originally going to be built as Section 8 housing with certain loans coming from HUD Section 8 housing program. However, due to DEM's actions and the enactment of the Tax Reform Act of 1986, the Plaintiff's predecessors were unable to syndicate Woodland III as originally planned. Therefore, Woodland Manor III could not build, and it was in fact impossible to build, as a Section 8 housing development as originally intended. See Pl.'s Ex. L. The position taken by the Plaintiff—that there are vested rights to develop Woodland III—is further supported by the fact that Woodland III is not limited under the approved plan to be built as Section 8 housing. Woodland III can, as previous courts have acknowledged, be developed even if slightly different from the original plan. See id. at *21 (finding the plaintiffs still had the present ability to implement a new profitable use).
Furthermore, the Defendant's argument that the recovery of $4 million by Woodland Manor III prevents the Plaintiffs from arguing it has vested rights to develop the property is without merit. In the previously heard case before Judge Thompson, Woodland Manor III received damages stemming from DEM's temporary taking. See 2003 WL 1224248, at *15. After finding DEM liable, the plaintiff was awarded damages for lost rental value and out of pocket expenses associated with its HUD application. See id. at *16. These were not the only two categories of damages sought by the plaintiff. Id. at *21. The Court refused to award additional damages because Woodland Manor III now owned the land without "the previous prohibitions." Id. To award all the damages sought by Woodland Manor III, and to allow for Woodland III to be developed, would have created a windfall. Id. Clearly, Judge Thompson was aware of the fact that Woodland III could still be developed by its owners in the future. Id. The Plaintiff's assertion that it now has a right to develop Woodland III is not inconsistent with previous statements made to the Court by Woodland Manor III. Since there is also no threat of this Court reaching an inconsistent finding, the Defendant's judicial estoppel argument must fail.
4
Vested Rights
The Plaintiff next argues that Woodland III has the same vested rights as the first three Phases of Woodland Manor's development under the approved PUD. The Plaintiff contends that the fact that a building permit for Woodland III was never sought for over thirty years is irrelevant, since Coventry's 1976 PUD Ordinance does not contain an expiration date for an approved plan nor does it contain a provision for when construction has to commence. Conversely, the Defendant argues that the Plaintiff has not begun developing nor made any attempts to develop Woodland III before Coventry amended its Zoning Ordinance. The Defendant contends that the amended Zoning Ordinance now requires the Plaintiff to restart the application process, allowing for municipal review of Plaintiff's plans for Phase IV. Defendant argues that a building permit can only be issued after the Plaintiff receives municipal approval.
An amendment to a municipality's zoning ordinance making a once permitted use illegal can result in revocation of permits issued under a previous ordinance. Delbonis Sand & Gravel Co. v. Town of Richmond, 909 A.2d 922, 926 (R.I. 2006) (citing A. Ferland & Sons, Inc. v. Zoning Bd. of Review of East Providence, 105 R.I. 275, 278, 251 A.2d 536, 538 (1969)). However, when a "permittee has incurred substantial obligations or made significant expenditures in reliance on the permit, or, if the actions of the permittee in reliance on the permit were such that equity favored his interest to that of the municipality, then he retained an equitable right to develop the subject land as if it were governed by the previous zoning law." Id.; see also Tantimonaco v. Zoning Bd. of Review of Johnston, 102 R.I. 594, 597, 232 A.2d 385, 387 (1967); Shalvey v. Zoning Bd. of Review of Warwick, 99 R.I. 692, 699, 210 A.2d 589, 593 (1965).
The Defendant relies on Delbonis to support its contention that Woodland III is not vested with the same rights as the other Phases of the project. 909 A.2d at 922. In Delbonis, the plaintiff received municipal approval to subdivide two parcels of land under the Town of Richmond's Zoning Ordinance, which allowed for lot sizes of two acres. Id. at 924. After receiving approval, the Town's Zoning Ordinance was amended, increasing the minimum lot size to three acres. Id. As a result, certain lots owned by the plaintiff were merged together. Id. The plaintiff sued the Town of Richmond arguing he had obtained equitable rights under the prior Zoning Ordinance. Id. The Supreme Court held that the plaintiff had not established an equitable right in their approved subdivision plan. Id. at 928. The Court reasoned that the plaintiff only received subdivision approval, but never commenced construction, nor did the plaintiff seek building permits. Id. In conclusion, the Court found the plaintiff took no action in reliance on the approved subdivision plan, and therefore retained no equitable right to maintain the two-acre lots. Id.
The factual underpinnings of this case are inapposite to the Delbonis case. First, Coventry already approved a final site plan for this project on August 10, 1976. This Court takes notice of the fact that the buildings to be constructed on the Master Tract were to be integrated as a whole, even though construction was to occur in separate Phases. The final site plan granted by Coventry's Town Council approved the entirety of the project, subject to the issuance of building permits. This fact becomes important when determining whether Woodland III is vested with the same rights as Phases I—III. Unlike the plaintiff in Delbonis, the Plaintiff and its predecessors incurred substantial costs associated with developing Woodland Manor, as a whole. It is beyond dispute that the first three Phases were issued building permits and constructed, at considerable costs, in accordance with the final site plan. Further, Judge Thompson did not award damages for infrastructure costs associated with Phase IV. See Reisma, 2003 WL 1224248, at *17-18. The unrecovered costs demonstrate expenditures incurred by Plaintiff's predecessors in reliance on final site plan approval. This Court cannot find that the developers or Woodland Manor received final site approval and did nothing, which demonstrates reliance on such approval being granted before Coventry amended its Zoning Ordinance.
This Court finds the facts of this case similar to those in A. Ferland. 105 R.I. at 275, 251 A.2d at 536. In A. Ferland, the plaintiff received a special permit to erect a multi-apartment dwelling in a residence A Zone. Id. at 276, 251 A.2d at 537. The issuance of the permit was appealed by interested parties to the Supreme Court. Id. While the appeal was pending, the applicable zoning ordinance reclassified the plaintiff's lots which no longer allowed for a special permit to be issued, effectively preventing the plaintiff from continuing with his development plans. Id. at 277, 251 A.2d at 537. After the Supreme Court case was dismissed, the plaintiff applied for a building permit pursuant to his special exception. Id. The building inspector denied the permit, and the Zoning Board of Review later determined the plaintiff would have to file a new application of relief under the new ordinance. Id. The Court recited the precedent discussing when a party, in reliance on the issuance of a permit, retains vested rights under the ordinance in effect at the time the permit was issued. The Court upheld the belief that reliance on a permit's issuance prevents it from being revoked by subsequent amendments to a Zoning Ordinance. Id. at 279, 251 A.2d at 538. However, the Court reasoned this rule was inapplicable because the plaintiff failed to produce evidence demonstrating that he incurred a substantial investment or expenditure in reliance on his special permit, and therefore, could not receive vested rights under the original Zoning Ordinance. Id.
What the plaintiff in A. Ferland failed to do, the Plaintiff and its predecessors have successfully done. There has already been substantial development on the Master Tract, and costs incurred to develop Woodland III, which have not been recovered. It would be inequitable to require the Plaintiff to now seek approval again for Phase IV only because Coventry's Zoning Ordinance was amended after final approval was given to the entire project. See Tantimonaco, 102 R.I. at 602, 232 A.2d at 389 (quoting 1 Yokley, Zoning Law and Practice (3d ed.), § 9-5 at 409) (stating that existing rights under an ordinance may not be abolished by enacting a new ordinance when a party, relying on an existing ordinance, incurs expenses in preparation for the issuance of a permit).
Further, when reviewing the regulations and ordinances in place as of August 10, 1976, nowhere in Article XX entitled "Planned Unit Development" or Article XVIII entitled "Planned Residential Districts" is there a time limitation when construction must begin after final site approval. See Stipulated Exs. 1, 2. Furthermore, there is no condition stating that a party has to restart the application process if there is a period of inaction following final site plan approval. See Bourque v. Bruce, No. CIV. A. 03-6614, 2004 WL 877615, at *4 (R.I. Super. Apr. 13, 2004) (citing 4 Rathkopf, The Law of Zoning and Planning, § 70:15 (2002)) (stating a duty to act within set time frames only exists when time limitations are found within the applicable regulations or ordinances under which an application is filed). Therefore, without such restrictions in place, a mere delay in moving forward with Phase IV of the approved PUD does not force the Plaintiff to start the approval process over in order to complete Woodland Manor.
Article XVIII is applicable only in regards to the procedure a party must follow to receive PUD zoning. All other sections of Article XVIII do not apply to Article XX.
Additionally, the Defendant brings to the Court's attention § 45-23-48(c) to support its contention that the Plaintiff does not have vested rights. Section 45-23-48(c), enacted in 1992, states that a phased project has vested rights if construction is consistently proceeding, is inapplicable to this case. Finding that the Plaintiff can develop Phase IV according to the regulations and ordinances in place at the time the PUD was approved, this Court finds § 45-23-48(c) should not be applied in this case, since it was enacted after the Plaintiff's rights vested. See State v. Healy, 122 R.I. 602, 606, 410 A.2d 432, 434 (1980) (stating a statute operates prospectively, not retrospectively, unless there is clear language implicating the Legislature intended the statute to have retroactive effect).
B
Impact Fees
Additionally, both parties move for summary judgment regarding whether Coventry may apply impact fees to Phase IV of the PUD. The Defendant contends that applying impact fees to Woodland III does not constitute retroactive application, because Coventry's Impact Fee Ordinance calls for the application of such fees upon the issuance of a building permit. Since Evergreen was not issued a building permit before Coventry enacted its Impact Fee Ordinance, the Defendant argues it is appropriate for the Town to assess such fees. Conversely, the Plaintiff contends that applying an impact fee—in an amount close to $1 million—to a development approved twenty-four years before Coventry's Impact Fee Ordinance, constitutes retroactive application of the Impact Fee Act. Further, the Plaintiff argues that since Woodland III is vested to the regulations and ordinances in place in 1976, the year Woodland Manor was approved, Coventry cannot assess such fees on Phase IV as there existed no authority for its assessment at the time the PUD was approved.
1
Timing of Impact Fee Assessment
The Defendant contends that the General Assembly not only gave municipalities the right to enact an Impact Fee Ordinance, but also left to the discretion of the municipalities when such impact fees were to be assessed. What must first be determined is at what point in time a city or town may assess an impact fee, based on the language found in the Impact Fee Act and Coventry's Impact Fee Ordinance.
A municipality, through a grant of authority, may impose impact fees by either enacting an ordinance or through an amendment to a current ordinance. Sec. 45-22.4-8. Specifically, the Impact Fee Act states:
"All impact fees imposed pursuant to the authority granted in this chapter shall be assessed upon the issuance of a building permit or other appropriate permission to proceed with development and shall be collected in full upon the issuance of the certificate of occupancy or other final action authorizing the intended use of a structure." Sec. 45-22.4-5(b) (emphasis added).Coventry's Impact Fee Ordinance allows the Town to assess and collect impact fees on all new residential development. Coventry's Impact Fee Ordinance states:
"Any person or legal entity applying for any building permit after the effective date of this section which creates an additional residential dwelling unit is hereby required to pay a fair share development fee, also known as an 'impact fee[.]'" Stipulated Ex. 33 (emphasis added).The intended purpose behind Coventry's implementation of impact fees was to promote orderly growth and development by "imposing upon new development a proportionate fair share of the cost of new and/or upgraded public facilities needed to serve new growth and development within the community." Stipulated Ex. 33 § 106-6(A).
In its Ordinance, Coventry refers to impact fees as fair share development fees. For clarity, this Court will continue to refer to such fees as impact fees.
Based upon the clear language of the Impact Fee Act, a municipality can impose impact fees either "upon the issuance of a building permit" or "[upon] other appropriate permission to proceed with development." Sec. 45-22.4-5(b). Coventry's Impact Fee Ordinance clearly chose to assess an impact fee upon the application for a building permit, which creates an additional residential dwelling. See Stipulated Ex. 33. It was clearly the intent of the General Assembly to empower such government entities to impose impact fees to ensure growth and development; it was also found that impact fees did not place "an undue financial burden upon existing taxpayers." Sec. 45-22.4-2(c)(3, 5). Therefore, since Phase IV has not been issued a building permit, this Court finds that impact fees can be assessed at the time Plaintiff applies for a permit.
2
Vested Right and Retroactive Application
The Plaintiff argues that applying Coventry's Impact Fee Ordinance to Woodland III constitutes retroactive application of the Ordinance since the final site plan received approval in 1976. The Plaintiff contends its vested right to develop Woodland III will be impaired if impact fees are assessed, and therefore, that its vested right should prevent the imposition of said fees.
Generally, a statute operates prospectively, and not retrospectively, "unless it appears by clear, strong language or by necessary implication that the Legislature intended to give the statute retroactive force and effect." Healy, 122 R.I. at 606, 410 A.2d at 434 (citing Langdeau v. Narragansett Ins. Co., 96 R.I. 276, 279, 191 A.2d 28, 30 (1963)). Further, a statute should not be applied retroactively when such application would impair a vested right under a previous law. Vartelas v. Holder, 132 S. Ct. 1479, 1486-87, 182 L.Ed. 2d 473 (2012) (quoting Soc'y for Propagation of Gospel v. Wheeler, 22 F. Cas. 756, 767 (No. 13, 156) (CCNH 1814)).
This Court must determine whether impact fees may be assessed against an incomplete portion of a development, which has vested rights under a previous ordinance that does not impose such fees. In this case, Coventry attempts to impose impact fees on Phase IV of the approved PUD, which has not received a building permit nor begun construction. Although other jurisdictions are divided on whether a retroactivity argument prevents the application of such fees, this Court finds such an argument to be unpersuasive. First, an impact fee does not affect the use of the Plaintiff's land, but rather, only creates an additional charge for developers participating in new growth and development. See Pavlina v. City of Vancouver, 94 P.3d 366, 371 (Wash. App. 2004). There is no impairment of Plaintiff's right to construct Woodland III as originally approved. Further, Coventry assesses impact fees upon the application for a building permit. Therefore, any other forms of approval are irrelevant as to whether such fees apply. See id.
An individual or entity cannot avoid impact fees solely by relying on vested rights. The Plaintiff in this case can still proceed to build Woodland III under the approved PUD without any additional municipal review or approval. However, this right does not guarantee that a city or town will not assess or impose fees for municipal services. See City of Key West v. R.L.J.S. Corp., 537 So. 2d 641, 646 (Fla. Dist. Ct. App. 1989). From the above-referenced cases, although impact fees were not enacted at the time final approval was granted, such fees can still be assessed in the future without disturbing a parties' vested rights. There cannot be a justifiable assumption that impact fees will not be imposed at some point in time, even if final approval has been granted. Id. at 648.
More condemning to the Plaintiff's position is the fact that a building permit has yet to be issued for Woodland III, either before or after Coventry enacted its Impact Fee Ordinance. Therefore, Plaintiff's argument that the Impact Fee Ordinance is being applied retroactively is without merit. By its own terms, impact fees become due in Coventry upon the issuance of a building permit. Although the final site plan was approved before the Impact Fee Ordinance, a building permit has not been issued; therefore, application of this Ordinance does not constitute retroactive application. See City of Pontiac v. Mason, 50 Ill. App. 3d 102, 107, 365 N.E.2d 145, 149 (1977) (holding the city's sewer connection fee, enacted in 1973, was properly applied to a developer who received approval in 1972 to construct a shopping center, because the ordinance assessed such a fee at the time of issuance of an occupancy permit). New taxes, or in this case new fees, represent "the usual hazards of the business enterprise." Westfield-Palos Verdes Co. v. City of Rancho Palos Verdes, 73 Cal. App. 3d 486, 494, 141 Cal. Rptr. 36 (Ct. App. 1977). There still exists the opportunity to pass on this additional cost to the end user through a variety of different ways, including but not limited to increasing the rent for each unit. Further, if the developer intends to sell the property once construction is completed, there exists the possibility to recoup the amount of the impact fees by adjusting the sale price for Woodland III.
Therefore, since the Plaintiff has not received a building permit for Woodland III, application of the Impact Fee Ordinance cannot be viewed as being applied retroactively. Further, the argument that Coventry's imposition of impact fees impairs Plaintiff's vested rights is without merit in light of the applicable case law. The assessment of impact fees simply does not disturb the Plaintiff's right to construct Phase IV as originally planned. See City of Key West, 537 So. 2d at 646.
IV
Conclusion
Upon reviewing the papers, motions, and arguments presented by the parties, this Court finds that Woodland III is vested with the same rights as the first three Phases of the project, and therefore, does not need to seek additional municipal review before receiving a building permit, so long as the intended development conforms to the approved PUD. If any amendments to the 1976 final site plan are sought, the procedures utilized by the Plaintiff's predecessor when seeking a modification should be followed accordingly. Additionally, this Court finds that Coventry may assess impact fees on Woodland III. Therefore, the Plaintiff's Motion is denied in part and granted in part, and the Defendant's Motion is denied in part and granted in part. Counsel shall prepare the appropriate judgment for entry.
ATTORNEYS:
For Plaintiff: Michael A. Kelly, Esq.; Joelle C. Rocha, Esq. For Defendant: Nicholas Gorham, Esq.; Michael A. DeSisto, Esq.