KAROUSOS v. Pardee

• Decision Date: 23 April 2010
• Docket Number: No. 2008-174-Appeal,2008-188-Appeal.,2008-174-Appeal
• Citation: 992 A.2d 263
• Parties: George KAROUSOS et al. v. Jonathan PARDEE et al.
• Court: Rhode Island Supreme Court

992 A.2d 263

George KAROUSOS et al. v. Jonathan PARDEE et al.

Nos. 2008-174-Appeal, 2008-188-Appeal.

Supreme Court of Rhode Island.

April 23, 2010.

Joseph R. Palumbo, Esq., Middletown, for Plaintiff.

Gerald J. Petros, Esq., Providence, for Defendant.

Present: SUTTELL, C.J., GOLDBERG, FLAHERTY, and ROBINSON, JJ.

OPINION

Justice FLAHERTY, for the Court.

A Superior Court judgment arising from the filing of an abuse-of-process claim and the affirmative defense provided by the anti-SLAPP (strategic litigation against public participation) statute, G.L. 1956 chapter 33 of title 9, has precipitated appeals both from the plaintiffs and the defendants. The Superior Court granted summary judgment in favor of Jonathan Pardee and the remaining defendants¹ (defendants or Pardee)² holding that they were immune from civil liability on an abuse-of-process action brought against them because their actions were not subjectively baseless and, therefore, they were cloaked with immunity by the anti-SLAPP statute. In accordance with the statute, the Superior Court awarded Pardee what it deemed to be reasonable attorneys' fees and costs. George and Anna Karousos (collectively Karousos) appeal from the entry of summary judgment and the award of costs and attorneys' fees to Pardee.³ Pardee cross-appeals the amount of the attorneys' fees awarded to his counsel. We carefully have reviewed the record and considered the arguments raised by the parties. After doing so, we affirm the judgment of the Superior Court.

I Facts and Travel

Bellevue Avenue in Newport traverses a genteel section of that city. It is the address of the so-called "mansions" that served as summer homes for those who were this country's financial elite during the gilded age. Bellevue Avenue has become one of the city's showpieces, and is a major tourist attraction. The central dispute in this case is about how a building, known as Fairlawn, at 518 Bellevue Avenue, may be used. In the 1950s, 1960s, and 1970s, Fairlawn was used as a preparatory school and, for part of that time, as Vernon Court Junior College. In 1972, Fairlawn's school use ceased and the building was used exclusively as a residence. The zoning ordinance of the City of Newport permits the use of the building for residential purposes, but considers its use for educational purposes to be nonconforming.

In 1991, Karousos leased the property, with an option to purchase, with the expectation that he could use the building as a culinary school. Karousos based his expectation on a 1989 letter from Newport Zoning Enforcement Officer Guy Weston (Weston) to Fairlawn's then owners, George and Rosalyn Rosner. In that correspondence, Weston indicated that the use of Fairlawn as a school had not been abandoned, even though it had not been used as such since 1972. In Weston's opinion, because the school use was never abandoned, the use of the property as a school remained a legal nonconforming use.

As soon as they leased Fairlawn, Karousos began making substantial improvements to the property, and at one point approached Salve Regina University about a possible affiliation with the school. In 1993, Karousos also began to advertise his intention to open an International Institute for Culinary Arts at Fairlawn. However, the City of Newport objected to the use of Fairlawn as a culinary school, and it initiated a zoning enforcement action against Karousos. In September 1994, Weston sent Karousos a letter, in which he detailed the actions that were necessary before the City of Newport would approve of the use of Fairlawn as a culinary school, including affiliating with Salve Regina.⁴ After Karousos complied, Weston further corresponded with Karousos, informing him that the City of Newport now approved of the use of Fairlawn as a culinary school; the enforcement action was dismissed, as well. Subsequently, Karousos exercised his option to purchase Fairlawn.

In December 1994, Jonathan Pardee purchased a lot at the corner of Bellevue Avenue and Marine Avenue, adjacent to Fairlawn. In early 1996, Roger King, a former owner of Fairlawn, informed Pardee that Karousos intended to operate a culinary school there. In March 1996, Pardee, through his attorney Alexander Walsh, inquired of Weston about whether Fairlawn's use as a culinary school was a permissible use under the city's zoning ordinance. In correspondence dated March 19, 1996, Weston wrote that such a use was permitted, and he reiterated his opinion from his 1989 letter and attached a copy of it. On March 28, 1996, Pardee appealed to the Newport Zoning Board (the board), asking that it determine that the use of Fairlawn as a culinary school was not permissible under the zoning ordinance.

The board held multiple hearings between June 1996 and January 1997. After first ruling that Pardee's appeal was timely, the board decided that the school use had been abandoned and that Karousos's use of Fairlawn as a culinary school was an illegal nonconforming use.⁵ Karousos appealed the board's decision to the Superior Court. A Superior Court justice reversed the board, ruling that the board had erred when it determined that Pardee's appeal was timely. The hearing justice concluded that the only appealable action was Weston's 1989 letter, and that the time to appeal from that letter had long passed.

On December 12, 1996, while the hearings before the board were still ongoing, Karousos filed an abuse-of-process complaint in the Superior Court against Pardee and eleven other defendants. In his complaint, Karousos alleged that defendants used the March 19, 1996 letter from Weston as a pretext to "appeal" the 1989 and 1994 letters detailing Weston's opinion that the use of Fairlawn as a school was permissible. The defendants, the complaint alleged, long since had waived any right to object to the use of Fairlawn as a school, and their appeal to the board "constitutes a gross misuse of the administration appellate process" for a "wrongful purpose." Pardee and four other defendants answered the complaint; they asserted an affirmative defense that their actions in seeking review of the 1996 letter from Weston to Walsh (Walsh was acting on Pardee's behalf) entitled them to immunity from civil liability, based upon § 9-33-2, the anti-SLAPP statute.

In the spring of 1997, Pardee, along with the same four codefendants, moved for summary judgment, arguing that the anti-SLAPP statute's grant of immunity applied to them because their seeking review of Weston's 1996 letter was not objectively baseless. The motion justice denied the motion, ruling that because Pardee's appeal was deemed untimely by the Superior Court, a question of fact remained about whether Pardee's appeal was objectively baseless. Pardee petitioned this Court for a writ of certiorari, which we denied.

After we denied certiorari, the parties conducted discovery and the case languished for six more years. Jonathan Pardee and Alexander Walsh were deposed, and, at least based in part on their deposition testimony, Pardee filed a renewed motion for summary judgment in March 2003.⁶ He again argued that his appeal to the board entitled him to immunity under the anti-SLAPP statute because his actions were neither objectively nor subjectively baseless. In the motion, Pardee's primary arguments were that (1) his appeal was not objectively baseless because he was successful before the board and (2) his appeal was not subjectively baseless because he pressed the appeal in an effort to prevent Fairlawn's use as a culinary school, with no ulterior motive. Karousos opposed Pardee's motion for summary judgment. Karousos argued that Pardee's appeal to the board was objectively baseless because it was untimely, and the gross untimeliness of the appeal demonstrated that Pardee tried to use the administrative appeal process for a wrongful purpose in an effort to cause unjust delays to Karousos.

This time, a different hearing justice granted summary judgment to Pardee. In a written decision, the motion justice determined that Pardee's appeal was objectively baseless because, in her opinion, Pardee had no right to appeal any of the letters from Weston. The motion justice ruled that zoning enforcement officers derive their authority to provide advisory information from G.L. 1956 § 45-24-54, but that such information is only for "guidance or clarification." The motion justice reasoned that because such a letter is not binding, it does not aggrieve anyone, and therefore it cannot be appealed. Consequently, she determined that there was no enforceable right to appeal Weston's letter to the board; and the motion justice ruled that Pardee's attempt to be objectively baseless.

Nonetheless, the motion justice granted Pardee's summary-judgment motion because she concluded that Pardee's appeal was not subjectively baseless. She reasoned that the stated basis for the appeal, namely, to halt the use of Fairlawn as a culinary school, was the only motive behind Pardee's actions. Finally, the motion justice further found that even if Pardee was not entitled to immunity under the anti-SLAPP statute, the abuse-of-process claim would be unsuccessful because Karousos had failed to offer any ulterior motives for Pardee pursuing the zoning appeal, and thus he could not satisfy the elements of the claim.⁷

In 2007, the parties appeared before yet another Superior Court justice to determine whether Pardee was entitled to costs and reasonable attorneys' fees as provided for in the anti-SLAPP statute. The motion justice determined that the award of costs and attorneys' fees is mandatory with respect to a defendant who prevails at trial or by motion in successfully asserting immunity under the statute. But, she also ruled that the reasonableness of the attorneys' fees and the costs were within the court's equitable discretion. The motion justice ruled that Pardee was entitled only to those costs and attorneys' fees related to their successful motions,...