Woodland Manor III Associates v. Keeney

• Decision Date: 25 June 1998
• Docket Number: No. 97-68-A,97-68-A
• Citation: 713 A.2d 806
• Parties: WOODLAND MANOR III ASSOCIATES v. Timothy R.E. KEENEY, in His Capacity as Director of the Rhode Island Department of Environmental Management. ppeal.
• Court: Rhode Island Supreme Court

Page 806

713 A.2d 806

WOODLAND MANOR III ASSOCIATES v. Timothy R.E. KEENEY, in His Capacity as Director of the Rhode Island Department of Environmental Management.

No. 97-68-Appeal.

Supreme Court of Rhode Island.

June 25, 1998.

Joseph Avanzato, Providence/John B. Webster, Warwick, Patricia Rocha/Edward L. Maggiacomo, Providence, for Plaintiff.

Michael L. Rubin, Catherine Robinson Hall, Providence, for Defendant.

Before WEISBERGER, C.J., and LEDERBERG, BOURCIER, FLANDERS and GOLDBERG, JJ.

OPINION

LEDERBERG, Justice.

This case came before the Supreme Court on the appeal of the plaintiff, Woodland Manor III Associates, from a summary judgment entered in favor of the defendant, Timothy R.E. Keeney, in his capacity as director of the Rhode Island Department of Environmental Management. ¹ For the following reasons, we sustain the appeal.

Facts and Procedural History

The history of this case spans nearly twenty-five years. On or about February 4, 1974, Mapleroot Development Corporation (Mapleroot), by and through its president, John Assalone (Assalone), filed a "Request for Freshwater Wetlands Applicability Determination" with the Rhode Island Department of Environmental Management (DEM), pursuant to G.L.1956 §§ 2-1-18 through 2-1-22. Mapleroot planned construction on an eighty-nine acre tract of land it owned in Coventry, Rhode Island. ² A site plan was submitted along with the request. The proposal contemplated a "Planned Unit Development" that included various types of buildings to be combined as an integrated whole, with construction to occur in phases: phase 1, an apartment complex (Woodland Manor I); phase 2, a housing facility for the elderly (Woodland Manor II); phase 3, a nursing home (Coventry Health Center); and phase 4, a condominium complex (Woodland Manor III).

Following a site inspection and review of Mapleroot's request, DEM notified Mapleroot in correspondence dated June 17, 1974 (1974 letter), that:

"[p]rovided there is no construction or regrading below the 147.5 foot contour as shown on the above referenced plan and that final grading and drainage plans and computations are submitted for review and approval of this Department prior to start of construction, it is our conclusion that the Fresh Water Wetlands Act does not, at this time, appear applicable to this proposal." (Emphasis added.)

The parties agreed that the reference in DEM's letter to a 147.5-foot contour line was erroneous; it should have read "the 247.5 foot contour" line.

After receiving the 1974 letter, Mapleroot proceeded to present the proposed project to the various state and local regulatory agencies whose approvals were required for construction and completion of the development. In so doing, Mapleroot expended substantial sums of money on site preparations, including the design and installation of a 3.5-mile sewer system to service the multiphase project. In 1978, pursuant to the terms of the 1974 letter regarding review of final grading and drainage plans, Mapleroot submitted a site plan for phase 1 to DEM, and DEM subsequently notified Mapleroot in a letter dated June 29, 1978, that "[u]nder the following provisions: Adequate measures are taken to prevent sediments from entering adjacent wetlands, * * * it is our conclusion that the Fresh Water Wetlands Act does not appear applicable to this proposal." (Emphasis added.) Likewise, in response to a subsequent site plan for phase 2, DEM indicated in a letter dated January 15, 1980, that

"[u]nder the following provisions: 1. Only work specifically shown on the aforementioned site plan is allowed; 2. Adequate measures are taken to prevent sediments from entering adjacent wetlands * * *; 3. The drainage excavation at the southeastern edge of the project must conform to the proposed contours approved * * *, it is our conclusion that this proposal represents an insignificant alteration of a fresh water wetland. Therefore, under the aforementioned provisions, a permit to alter fresh water wetlands will not be required." (Emphasis added.)

The required proposal for phase 3 received a similar response from DEM, which advised in a letter dated January 19, 1981, that

"[u]nder the following provisions: 1. Only work specifically shown on the aforementioned site plan is allowed. 2. Adequate measures are taken to prevent sediments from entering adjacent wetlands * * *, it is our conclusion that this proposal represents an insignificant alteration of a fresh water wetland. Therefore, under the aforementioned provisions, a permit to alter fresh water wetlands will not be required." (Emphasis added.)

The genesis of the instant controversy occurred in 1986, after the first three phases of Mapleroot's 1974 proposal had been completed. In a manner consistent with its past practices, Mapleroot submitted a site plan for phase 4 to DEM. In correspondence dated August 28, 1986 (1986 denial letter), DEM advised "It is our conclusion that this proposal represents a SIGNIFICANT ALTERATION of a Fresh Water Wetland for the following reasons.

"Proposed alteration, including filling, vegetative clearing, grading, building construction, tennis court and drainage installation will result in encroachment, significant loss, disturbance and alteration of the natural characteristics of a freshwater wetland, adversely impacting wildlife habitat value, recreational value, and ground water recharge and quality. Be advised that the public value of the wetland, its outstanding wildlife habitat value and its location within one of this State's primary ground water reservoirs, require that the wetland receive the highest level of protection. As proposed, this project has the highest probability of being denied by the Department's Freshwater Wetlands Section.

"Therefore, a FORMAL application must be made on the enclosed form before further action can be taken by this Department. Upon receipt of your application, this Department will proceed with its processing as required by law." (Emphasis added.)

Following the 1986 denial letter, the parties scheduled a series of meetings in an attempt to resolve the matter. Resolution efforts having failed, Mapleroot commenced this action on May 10, 1989, seeking declaratory judgment, injunctive relief, and damages. Specifically, Mapleroot alleged that "[t]o require the filing of [a] new application at this date is in contradiction to the terms of the approval of [1974] and would prejudice Mapleroot * * * inasmuch as DEM contends that the subject wetland is now unique and would result in the denial of the final phase of the construction as originally proposed and approved in [1974]." Mapleroot sought, inter alia, a declaration that DEM was equitably estopped from requiring the filing of a new application for phase 4 and claimed damages "for the DEM's arbitrary, capricious and unreasonable actions which have unnecessarily delayed [Mapleroot] and denied it beneficial use of its property for a time certain."

During the course of litigation, Mapleroot conveyed by warranty deed dated September 30, 1992, the approximately twenty acres on which phase 4 was to be constructed to Woodland Manor III Associates (Woodland), a limited partnership. Assalone was listed as one of five limited partners on Woodland's Certificate of Limited Partnership, which was filed with the Office of the Secretary of State on September 29, 1992--one day before the conveyance. On October 14, 1992, the parties filed a stipulation agreeing that Woodland would be substituted as plaintiff in this action pursuant to Rule 25(c) of the Superior Court Rules of Civil Procedure. Woodland partner Anthony L. Giordano's motion to substitute Woodland as plaintiff was subsequently granted.

The trial justice issued a decision on February 10, 1994, following a two-day trial without the intervention of a jury. Addressing DEM's claim that by failing to submit a formal application as requested in the 1986 denial letter, Woodland (and its predecessor in interest, Mapleroot) had not exhausted available administrative remedies, the trial justice ruled that "[b]y stating in the 1986 letter [that] 'this project has the highest probability of being denied by the Department's Freshwater Wetlands Section,' [DEM] established the futility of pursuing administrative procedures to resolve the dispute. Accordingly, the exhaustion requirement does not bar this action." The trial justice made several findings: "the design and construction of the entire project was predicated on the developer being able to build up to the 247.5 foot elevation"; plaintiff had completed substantial performance of the 1974 proposed project; such performance had been completed in good faith reliance on the 1974 letter; and DEM had "delimit[ed][its] jurisdiction" by establishing the 247.5 foot contour line in 1974. Judgment for Woodland was entered on March 29, 1994, whereby DEM was "equitably estopped from requiring a formal wetlands application on the basis of any disturbance above the 247.5 foot elevation that does not adversely impact areas below the elevation and otherwise within the [DEM's] jurisdiction," and was ordered to "process the final phase of construction and review the plans submitted with final grading and drainage for the final phase of construction in accordance with the terms of the June 17, 1974 permit [sic ]."

Following the 1994 decision, Woodland moved to amend its complaint to assert that the actions of DEM between the time of the 1986 denial letter and the 1994 decision constituted a temporary taking of Woodland's property. Specifically, Woodland sought to amend its complaint by seeking "damages as the Defendant has unjustifiably and unreasonably interfered with the use and enjoyment of the Plaintiff's property resulting in temporary inverse condemnation pursuant to the Fifth Amendment to the United States Constitution as provided for pursuant to 42 U.S.C. § 1983." ³ The DEM objected to Woodland's motion to amend, asserting...