Gorham v. Public Bldg. Authority of City of Providence

• Decision Date: 14 July 1992
• Docket Number: No. 91-294-A,91-294-A
• Citation: 612 A.2d 708
• Parties: Bradford GORHAM, et al. v. PUBLIC BUILDING AUTHORITY OF THE CITY OF PROVIDENCE. ppeal
• Court: Rhode Island Supreme Court

Page 708

612 A.2d 708

Bradford GORHAM, et al. v. PUBLIC BUILDING AUTHORITY OF THE CITY OF PROVIDENCE.

No. 91-294-Appeal

Supreme Court of Rhode Island.

July 14, 1992.

Douglas R. DeSimone, Herbert F. DeSimone, DeSimone & Leach, Providence, for plaintiffs.

Thomas C. Angelone, Hodosh, Spinella & Angelone, Patrick T. Conley, City Sol., Bruce Sondler, Mal Salvadore, Providence, for defendant.

OPINION

FAY, Chief Justice.

The defendant, the Providence Public Building Authority (PPBA), appeals from a Superior Court condemnation proceeding whereby the plaintiffs, Bradford Gorham (Gorham) and Herbert DeSimone, coadministrators of the estate of Corrine E. Joslin (estate) were awarded $9,246,186.38 plus interest and costs. The defendant avers that the trial justice erred by (1) applying an incorrect date for purposes of establishing when a taking had occurred and (2) misconceiving and overlooking material evidence on a controlling issue. For the reasons stated herein, the Superior Court judgment is reversed and the case is remanded for a new evidentiary hearing.

Corrine E. Joslin (Joslin) died on March 23, 1984. Thereafter her will was admitted to probate, and on November 25, 1988, plaintiffs were appointed as coadministrators of the estate. Joslin's will left, inter alia, approximately 543 acres of land in the town of Scituate delineated as lot Nos. 45, 48, 49, 60, 61, 62, and 63 on tax assessor's plat No. 51, otherwise known as the Joslin Farm (Joslin Farm). The Joslin Farm is located on Field Hill Road and abuts the Scituate Reservoir watershed. The Scituate Reservoir provides a vast majority of Rhode Island citizens with drinking water.

In 1987 the General Assembly passed the Municipal Public Buildings Authorities Act that was thereafter codified as chapter 50 of title 45, of the General Laws. P.L.1987, ch. 475, § 1. Chapter 50 of title 45, empowered each city and town to establish a Public Building Authority (PBA), which would afford each community an alternative financing and administrative mechanism to effectuate certain enumerated types of public-improvement projects. In accordance with the foregoing statutory authorization, in 1988 the Providence City Council and the Public Finance Management Board of the State of Rhode Island authorized the creation of the PPBA.

Among the powers granted to a PBA by chapter 50 of title 45, was the authority contained in § 45-50-13, that empowers cities and towns with the authority to acquire by eminent domain land located within the boundaries of their respective cities and towns. In addition in 1989 the General Assembly passed P.L.1989, ch. 298, which amended G.L.1956 (1988 Reenactment) § 45-50-13 by expanding the powers given to a PBA so that it could acquire by eminent domain either the development rights to, or fee simple ownership of, certain properties, including but not limited to properties surrounding the Scituate Reservoir. Specifically, § 45-50-13 provided in pertinent part:

"(a) The authority shall have the right to acquire any land, or any interest therein, including development rights by the exercise of the power of eminent domain, whenever it shall be determined by the authority that the acquisition of the land, or interest, is necessary for the construction or the operation of any project.

"(1) The power of eminent domain shall be exercised only within the boundaries of the city or town whose council established the authority, except that any authority in existence on the effective date of this act shall have the power to acquire, by exercise of eminent domain, only the development rights, except as set forth in subsection (5), in the land described in the tax assessor's plats for the towns of Foster, Scituate, Johnston and Glocester as of February 14, 1989, for the purpose of protecting the water supply as follows:

* * * * * *

"(2) In addition to the powers previously granted, any authority in existence on the effective date of this act shall have the power to acquire by exercise of eminent domain the land, or any interest therein, described as that certain land situated in the town of Scituate * * * commonly known as the 'Joslin Farm ' for the purpose of protecting the water supply." P.L.1989, ch. 298, § 1. (Emphasis added.)

Over concerns for the safety of its water supply, on February 24, 1988, the Providence Water Supply Board of the City of Providence (city) published in the Providence Journal a notice of intention to acquire land in the Scituate watershed area. Thereafter, between 1988 and 1990, the city entered into negotiations with the estate in an attempt to reach an agreed- upon purchase price for the sale of the Joslin Farm.

Section 45-50-13(a)(6) set forth the method by which to determine the fair-market value of the properties or development rights sought to be acquired by a PBA. The PBA and the landowner each appoint an appraiser to make an independent determination of the property's fair-market value. If the difference between the two appraisals is less than 10 percent of the lesser appraisal, the two appraisals will be averaged. If the difference exceeds 10 percent of the lesser appraisal, then the two appraisers will appoint a third appraiser to make an independent appraisal. The three appraisals are then compared, and the two closest appraisals will be averaged to determine the fair-market value. The remaining appraisal is dropped.

Pursuant to the requirement of § 45-50-13(a)(6), in 1988 the city hired an appraiser, Joseph Accetta (Accetta), to appraise the value of the Joslin Farm. Accetta valued the subject property at $4,400,000. Likewise, the estate hired an appraiser, J. Clifden O'Reilly, Jr. (O'Reilly), who determined the value of the Joslin Farm to be $9,725,000. Because of the disparity in the respective appraisals, in accordance with the provision of § 45-50-13(a)(6), a third appraiser, Peter Scotti (Scotti), was employed. He appraised the value of the Joslin Farm at $6,150,000. O'Reilly's appraisal was dropped and Accetta's and Scotti's appraisals were averaged for a fair-market value of $5,275,000. Thereafter, the PPBA submitted a written offer for this amount to the estate; however, the offer was rejected.

On December 12, 1990, following the failure of the PPBA and the estate to reach an agreed-upon purchase price for the Joslin Farm, the PPBA, pursuant to § 45-50-13(b), enacted a resolution declaring the necessity of acquiring the Joslin Farm by eminent domain. Thereafter, on December 27, 1990, the PPBA filed a copy of the resolution together with a plat of the Joslin Farm in the Scituate land evidence records. Further, on January 2, 1991, pursuant to § 45-50-13(b), the PPBA filed in the Superior Court a statement of the estimated sum of $5,275,000, an amount considered to be just compensation for the Joslin Farm. On January 4, 1991, the PPBA deposited $2,637,500 into the registry of the court, an amount representing one-half of the amount of the estimated value of just compensation.

Also on January 4, 1991, in order to contest the amount of compensation required, the estate filed a separate petition for an assessment of damages. The parties agreed to bifurcated nonjury trials: the first to determine the date of the taking and the second to make an assessment of the amount of damages based upon the determined date of taking. The trial was commenced on April 8, 1991.

At trial Gorham indicated that prior to the 1989 amendment to § 45-50-13 specifically authorizing the PPBA's acquisition of the Joslin Farm, he received weekly purchase inquiries from real-estate brokers, attorneys, and other interested parties. Furthermore, he argued, as soon as the city's plans to acquire the Joslin Farm became known, the property's value was substantially diminished and the number of purchase inquiries decreased dramatically.

Although the actual condemnation date was January 4, 1991, the trial justice, in relying on Gorham's testimony, noted:

"The court is well aware of the fact that in a usual condemnation case the fair market value is determined as of the date of the actual taking, I think this case is unusual for a number of reasons. Mr. Gorham testified that prior to the enactment of legislation controlling or authorizing the condemnation of certain properties to protect the watershed of the Scituate Reservoir * * * he received weekly inquiries from various people, attorneys, principals, real estate brokers, and so on once it became a known fact that * * * the Joslin Farm was going to be condemned. Now the inquiries ceased. I think fundamental fairness dictates that the day of taking as far as the Joslin Farm is concerned should be the date of the enactment of the legislation, July 7, 1989. I think to do otherwise would be unjustly unfair to the plaintiffs in this particular case. I therefore find as a fact that the actual date of the taking was July 7, 1989, the enactment of the Public Laws 1989, Chapter 298."

Thereafter, the court considered the value of the Joslin Farm as of July 7, 1989. O'Reilly, the appraiser hired by the estate, testified that he believed that the best use for the Joslin Farm would be to subdivide part of the property into lots for single-family residences and reserve the other parts for either gradual residential development or for passive recreational use such as a golf course. O'Reilly noted that a golf course would be permitted by way of a special exception to the Scituate zoning code. Further, in appraising the value of the property at $9,725,000, O'Reilly indicated that he used June 30, 1989, as the appraisal date and that he applied a comparable-sales methodology to determine the projected value of the property. Specifically, he appraised the portion of the property characterized as being appropriate for residential lots at a value of $5,225,000. The remaining property deemed appropriate for use as a golf course was appraised at $4,500,000.

Accetta, the appraiser hired by the city,...