Cordeco Development Corp. v. Santiago Vasquez

Decision Date25 June 1976
Docket NumberNos. 75-1424,75-1457,s. 75-1424
Citation539 F.2d 256
PartiesCORDECO DEVELOPMENT CORPORATION, Plaintiff-Appellant, v. Antonio SANTIAGO VASQUEZ et al., Defendants-Appellees. CORDECO DEVELOPMENT CORPORATION, Plaintiff-Appellee, v. Antonio SANTIAGO VASQUEZ et al., Defendants-Appellees. Inez Acevedo Campos et al., Defendants-Appellants.
CourtU.S. Court of Appeals — First Circuit

John J. Bower, New York City, with whom Charles A. Cordero, San Juan, P. R., and Michael M. Futterman, White Plains, N. Y., were on brief, for Cordeco Development Corp.

Ronaldo Rodriguez Ossorio, Asst. Sol. Gen., with whom Miriam Naveira de Rodon, Sol. Gen., San Juan, P. R., was on brief, for Antonio Santiago Vasquez and Pedro Negron Ramos.

A. Santiago Villalonga, San Juan, P. R., with whom Hartzell, Ydrach Mellado, Santiago, Perez & Novas, San Juan, P. R., was on brief, for Inez Acevedo Campos and Zenon Mercado.

Before COFFIN, Chief Judge, McENTEE and CAMPBELL, Circuit Judges.

McENTEE, Circuit Judge.

The present appeals arise from a suit for damages and injunctive relief brought by plaintiff Cordeco Development Corporation ("Cordeco") against four officers of the Commonwealth of Puerto Rico, charging a violation of plaintiff's constitutional rights under 42 U.S.C. §§ 1983, 1984 and 1985. The court sua sponte empanelled an advisory jury, pursuant to Fed.R.Civ.P. 39(c), which rendered a verdict on May 14, 1975, in the form of answers to special interrogatories propounded by the court. The court accepted most of the jury's findings with respect to liability, but reduced the damages awarded Cordeco.

The district's court's findings are set forth in its unpublished opinion of October 22, 1975. Mr. Carlos Cordero purchased a parcel of land from Mrs. Antonia Abreu Diaz by deed dated December 30, 1956. This tract was part of a larger parcel which had been subdivided in 1948 into six tracts of approximately equal value. Mr. Cordero paid $6,400 for his parcel and used the land as a farm in subsequent years. The northern boundary of the tract was described as the "dunes of the maritime zone," and these dunes contained approximately 800,000 cubic meters of sand. As a result of a sharp increase in construction activity in Puerto Rico there was a greatly increased demand for sand, and by 1967 the dunes on Mr. Cordero's land became very valuable commercially. In 1970 he sold the land to the plaintiff Cordeco, a corporation established and controlled by his family for the purpose of mining sand. On June 10 of that year plaintiff petitioned the Department of Public Works 1 for the requisite permit to extract sand. No action was taken on plaintiff's petition despite the fact that Section 3.6 of the Regulations of the Public Works Department required that action be taken on such petitions within 60 days. Plaintiff's petition was initially referred to defendant Mercado, an official in the department, who did not act upon it; after numerous protestations by plaintiff, Mercado referred Cordeco's counsel to defendant Acevedo, the department's legal advisor. Acevedo "denied that plaintiff owned the land" in question, but took no definitive steps to resolve the matter. In the meantime, permits to extract sand had been granted to members of the Abreu family, the owners of the five tracts of land which surrounded plaintiff's parcel. 2

In December, 1973 Cruz Matos, then Secretary of the Department of Natural Resources of the Commonwealth, issued a permit to the plaintiff for extracting sand; however, the terms of this permit excluded the area of land containing most of the sand dunes on plaintiff's property. The permit was granted in this form pursuant to the recommendations of the defendants Acevedo and Mercado. 3 Defendant Negron Ramos became Secretary of the Department of Natural Resources in August, 1974 but took no action on Cordeco's petition for a sand extraction permit because the one issued in December, 1973 by his predecessor was still in force and no new application had been received.

Cordeco's contention at trial was essentially that the failure of the defendants to act on its sand excavation application and the subsequent issuance of a useless permit were the product of political pressure exerted by the powerful Abreu family (whose members owned the five surrounding tracts of land) and that by responding to such pressure the defendants denied plaintiff equal protection of the laws in violation of the fourteenth amendment of the United States Constitution. The advisory jury found that each of the four defendants acting singly sought to deprive plaintiff of its rights to equal protection by denying the requested permit to extract sand. However, the jury found that only defendants Acevedo and Mercado acted beyond the limits of their lawful authority or discretion. 4 On the issue of damages the advisory jury held Cordeco was entitled to $500,000 in actual damages and $250,000 in punitive damages. The jury also responded affirmatively to the question of whether plaintiff was entitled to a permit to extract sand. The court's opinion and judgment followed.

Initially we examine the liability of defendants Santiago Vasquez and Negron Ramos. The district court agreed with the advisory jury that these defendants were acting within the limits of their lawful authority in respect to Cordeco's application for a sand extraction permit, and plaintiff has appealed from that aspect of its judgment. We find no error. Defendant Vasquez, as Secretary of the Department of Public Works of Puerto Rico from 1969 to 1973, was empowered to act upon requests for said extraction permits. However, defendant Acevedo, the department's legal advisor, was responsible for the analysis of such petitions from a legal perspective and defendant Mercado was responsible for technical analysis inter alia. There is ample evidence to show that for all essential purposes Acevedo and Mercado were the parties in position to control the granting or denial of permits and that, with respect to plaintiff's application, all actions taken were in response to the recommendations of Acevedo and Mercado. When defendant Negron Ramos became Secretary of the Department of Natural Resources in August, 1974 this earlier permit was still in force and Cordeco had not filed a new petition for sand extraction; accordingly Negron Ramos did not have occasion to grant or deny plaintiff's permit application.

As the evidence supports the conclusion that defendants Vasquez and Negron Ramos acted within the bounds of their lawful authority and discretion, the district court properly ruled that they enjoy a qualified immunity as a matter of law and are not subject to liability for their actions with respect to Cordeco's sand extraction permit. Scheuer v. Rhodes, 416 U.S. 232, 247-48, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); see Wood v. Strickland, 420 U.S. 308, 95 S.Ct. 992, 43 L.Ed.2d 214 (1975).

With regard to the liability of defendants Mercado and Acevedo, the district court agreed with the advisory jury that these two defendants were not acting within the scope of their lawful discretion or authority in refusing to process Cordeco's application. The court characterized the failure of these two defendants to act on Cordeco's application as "based on illegitimate political considerations," and found them both to have acted "wantonly and with actual malice." The evidence at trial fully supported the inference that the failure of these two defendants to act on Cordeco's permit requests stemmed from improper considerations, viz. the fact that plaintiff's application was opposed by the politically influential Abreu family which owned the five adjacent parcels and Mr. Cordero's own lack of political influence. On appeal, Acevedo and Mercado insist that they acted properly in delaying action on plaintiff's permit request and in recommending the grant of a sand extraction permit not covering the dunes on Cordeco's land because there were inconsistencies in the deeds related to the original subdivision of the Abreu land into six parcels. They point out that the undivided original farm land had an acreage of 179 "cuerdas" whereas the deeds for the six constituent parcels amounted to only about 125 "cuerdas" and that the difference in acreage was possibly due to the exclusion from the deeds of the dunes "in the maritime zone." The two defendants claim that these differences and inconsistencies, together with the fact that a former owner of plaintiff's parcel had given notice of a dispute over title, created "legitimate doubt" about plaintiff's application for the sand permit which they were required by their positions to investigate with care. However, the district court found that although plaintiff's title to the sand dunes was not totally beyond doubt, defendants Mercado and Acevedo did not fairly raise and present this issue as a basis for not acting on plaintiff's application. Had they done so, the question of the title which was eventually resolved in plaintiff's favor, see n.2 supra, could have been resolved at an earlier stage and a permit either granted or denied. We think there was ample evidence to justify the court's conclusion that Acevedo and Mercado acted maliciously and wantonly, and with illegitimate " political" or, at least, personal motives, in holding up and seeking to defeat the granting of a license. Accordingly, we affirm the district court's ruling that defendants Acevedo and Mercado, both of whom it found to be acting under color of their official authority, had denied Cordeco's constitutional right to equal protection of the laws and were liable to plaintiff under 42 U.S.C. § 1983. 5

We next examine the issue of damages. The advisory jury awarded plaintiff $500,000 compensatory damages for losses sustained from the withholding of the permit to excavate sand. 6 The court disregarded this finding and awarded only nominal damages in the sum of one dollar to...

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