Johnston Equities Assocs., LP v. Town of Johnston
| Citation | 277 A.3d 716 |
| Decision Date | 01 July 2022 |
| Docket Number | 2020-150-Appeal., No. 2020-224-Appeal.,PC 11-3983 |
| Parties | JOHNSTON EQUITIES ASSOCIATES, LP, et al. v. TOWN OF JOHNSTON et al. |
| Court | United States State Supreme Court of Rhode Island |
Eric S. Brainsky, Esq., for Plaintiffs.
Kathleen M. Daniels, Esq., for Defendants.
Present: Suttell, C.J., Goldberg, Robinson, JJ.
These appeals concern a sewer line serving a federally subsidized affordable-housing apartment complex known as the "Park Plaza Apartments" in Johnston, Rhode Island. In Superior Court, the plaintiffs, Johnston Equities Associates, LP (JEA) and Stay Away From The Cans, LLC (SAC) (collectively plaintiffs),1 obtained a $1.2 million jury verdict in their favor for a trespass claim against the defendants, the Town of Johnston; Joseph Chiodo, in his capacity as Finance Director of the Town of Johnston; and Robert Parker,2 in his capacity as the Director of Public Works for the Town of Johnston (collectively the town or defendants), for allowing sewage from the town's sewer pipelines to be discharged into JEA's private sewer pipeline. Following the jury verdict, the trial justice ruled that the $100,000 statutory cap under G.L. 1956 § 9-31-3 was applicable because the plaintiffs’ claim focused on the design of the town sewer system and thus constituted a governmental function. Before this Court are both an appeal by the plaintiffs and a cross-appeal by the town from the resulting judgment.
The crux of plaintiffs’ argument on appeal is that the trial justice erred when he determined that the town was engaged in a governmental function, rather than a proprietary function. The plaintiffs therefore submit that the trial justice erred in (1) applying the statutory cap on liability to the jury's verdict; (2) determining that plaintiffs are precluded from collecting prejudgment interest; and (3) sua sponte finding that, even if plaintiffs were entitled to collect prejudgment interest, the interest should be calculated from the date of the jury's verdict.
On cross-appeal, the town submits that the trial justice erred in denying its requests for judgment as a matter of law. The town additionally contends that it is immunized from liability under the public duty doctrine. Further, the town argues that the trial justice erred in denying the town's motion for a new trial, because, the town maintains, the jury did not follow instructions in awarding damages; alternatively, the town asserts that the request for a remittitur should have been granted.
Subsequent to oral argument, we determined that these appeals should be consolidated for opinion. After thoroughly reviewing the record and considering the parties’ written and oral arguments, we affirm in part and vacate in part the judgment of the Superior Court.
In particular, we uphold the trial justice's denial of the town's motions for judgment as a matter of law. We further hold that the trial justice did not err in not applying the public duty doctrine; however, we also hold that the trial justice erred in applying the statutory cap on damages and in denying prejudgment interest. Finally, we uphold the trial justice's denial of the town's motion for a new trial and/or remittitur.
JEA filed its initial complaint in Providence County Superior Court on July 13, 2011, alleging that the town allowed the connection of an illegal sewer line to JEA's private sewer line; according to JEA, this resulted in a continuing trespass of sewage discharging into JEA's private sewer system. As noted supra , JEA filed a second-amended complaint on March 23, 2018, which added SAC as a party plaintiff. A five-day jury trial was held in Superior Court in February 2019. After dismissing three counts of plaintiffs’ second-amended complaint, only plaintiffs’ claims for continuing trespass (count three), negligence (count five), and unjust enrichment (count six) remained.
The plaintiffs’ first witness was H. Charles Tapalian, who was a general partner of JEA as well as a civil engineer with a special focus on soils and structures. Tapalian testified that, with respect to the construction of the Park Plaza Apartments at 20 Park Street in Johnston, Rhode Island, he "was brought in to be the guy that put the project together[.]" According to Tapalian, construction was completed at the end of 1973 or in early 1974. He testified that the sixty-two-unit building was a low-income apartment housing complex and that the mortgage was guaranteed by the United States Department of Housing and Urban Development (HUD).
According to Tapalian, JEA owned a pneumatic pump station near the Park Plaza Apartments (the Park Plaza pump station), which pumped sewage up a private line on Park Street (the Park Street line) to the public sewer system on Atwood Avenue. He testified that problems with the Park Plaza pump station started in the 1980s. According to Tapalian, the pneumatic pump started breaking down, requiring excessive maintenance and having motor burnouts; such issues, he indicated, were occurring "once or twice a week." He testified that between twelve and fifteen motors were replaced for the pneumatic pump. Tapalian stated that JEA switched to a grinder pump for the Park Plaza pump station, which initially helped but ultimately began experiencing the same problems as the pneumatic pump.
Tapalian testified that JEA eventually discovered that nearby town pump stations from across the Pocasset River were pumping sewage into the Park Street line; he also noted that the River Drive area—where those nearby town pump stations were located—had expanded development in the 1980s. He indicated that the town's sewer line from the River Drive area was tied into the Park Street line sometime in the early 1980s; however, the town never paid JEA for use of the Park Street line.
Tapalian also testified that he was aware of the town's claim that it owned the Park Street line based on a contract executed on May 10, 1973, between the town and Donatelli Building Co., Inc. (Donatelli Building), the general contractor for all work on the Park Plaza Apartments (the agreement). The agreement was entered as a full exhibit at trial. According to the agreement, which was signed by "Robert Donatelli" on behalf of Donatelli Building, the town sewer district was to take over all sewer lines at the Park Plaza Apartments. However, Tapalian testified, Donatelli Building had no authority to transfer JEA property to the town because Donatelli Building was only a 1 percent limited partner, and only general partners were authorized to transfer any of JEA's property. He further testified that the general partners did not agree to transfer the Park Street line to the town, nor did they tell the town that Donatelli Building had the authority to transfer the line. Tapalian additionally indicated that the town did not maintain or repair the Park Street line and that the town never ordered JEA to stop working on the line when the town became aware of the problems prior to the lawsuit filed by JEA.
According to Tapalian, JEA incurred damages in maintaining and replacing equipment for the Park Plaza pump station and the Park Street line (collectively the Park Plaza sewer system) because the system was burdened by the additional sewage from the River Drive area. To that end, he identified invoices for work done on the Park Plaza sewer system and a summary of those invoices, dating from 1993 to 2017. Tapalian testified that JEA was claiming damages of 80 percent of the excess work JEA had performed on the Park Plaza sewer system; he stated that 80 percent of the invoices from University Industries for excess sewer work amounted to approximately $170,000.3 Tapalian further testified that 40 percent of David Iascone's work was on the sewer system, and he estimated that Iascone was paid an average of $25,000 per year for the excess sewer work over a period of approximately twenty-three years.
The plaintiffs then called Iascone, whose business, DICON Corporation (DICON), performed sewer maintenance and repair work. Iascone indicated that he worked on the pneumatic pump at Park Plaza in the early 1990s and that it "always" had problems because the system failed to work; such failure caused "severe backups" and, at times, flooding with respect to eight or nine apartments. He testified that, when JEA switched from the pneumatic pump to the grinder pump in the early 1990s, he and his company performed the work for the changeover and replaced the check valves for the Park Plaza pump station; while he did not have records for his work dating back to 1990, he remembered performing the work. Iascone recalled that he billed JEA between $40,000 and $45,000 for his work, and he estimated that 40 to 45 percent of that was for sewer work.
Iascone further testified that the grinder pump did not solve the problems with the Park Plaza sewer system; major backups continued to occur, and apartments were flooded with sewage. According to Iascone, DICON and JEA finally discovered the problem with the system in 2010 when DICON shut down the system and drained it of fluid. Iascone testified that, once the system was shut down, workers heard running water, which, according to Iascone, should have been impossible with a closed private system; nevertheless, water rushed into the tank.
According to Iascone, he began knocking on doors until he talked to one neighbor who "mentioned that there was another lift station across the Pocasset River on * * * River Drive." Iascone testified that he then drove to the town's River Drive pump station and tried to contact the emergency number provided—"the Town of Johnston's DPW number"—to no avail. He stated that he then shut off the River Drive pump station, which resulted in stopping the water flow into the Park Plaza pump station tank; he indicated that this was a "surefire thing that told [him] that the Town of Johnston had their line tied into [JEA's] private sewer force main." Iascone stated that he...
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