Licari v. Ferruzzi

• Decision Date: 11 February 1994
• Docket Number: No. 93-2047,93-2047
• Citation: 22 F.3d 344
• Parties: Arthur J. LICARI, as he is Trustee of Colonial Drive Realty Trust, Plaintiff, Appellant, v. Joseph FERRUZZI, Patrick J. McNally, Stanley I. Bornstein, Kenneth J. Savoie, William E. Bingham, Catherine Lefebvre, Elizabeth Ware and the Town of Ipswich, Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 344

22 F.3d 344

28 Fed.R.Serv.3d 1472

Arthur J. LICARI, as he is Trustee of Colonial Drive Realty

Trust, Plaintiff, Appellant, v. Joseph FERRUZZI, Patrick J. McNally, Stanley I. Bornstein, Kenneth J. Savoie, William E. Bingham, Catherine

Lefebvre, Elizabeth Ware and the Town of

Ipswich, Defendants, Appellees.

No. 93-2047.

United States Court of Appeals, First Circuit.

Heard Feb. 11, 1994.

Decided April 22, 1994.

Paul F. Denver, with whom Rossman, Rossman & Eschelbacher, Boston, MA, were on brief, for appellant.

Patrick M. Hamilton, with whom Richard E. Brody and Morrison, Mahoney & Miller, Boston, MA, were on brief, for appellees Patrick J. McNally, Stanley I. Bornstein, Kenneth J. Savoie, William E. Bingham, Catherine Lefebvre, Elizabeth Ware and the Town of Ipswich.

Nancy Merrick, with whom Douglas I. Louison and Merrick & Louison, Boston, MA, were on brief, for appellee Joseph Ferruzzi.

Before SELYA, Circuit Judge, BOWNES, Senior Circuit Judge, and STAHL, Circuit Judge.

BOWNES, Senior Circuit Judge.

This appeal arises from an action for damages brought by a developer frustrated by town planning and permitting authorities. Plaintiff-appellant, Arthur J. Licari, as trustee of Colonial Drive Realty Trust (hereinafter "Colonial"), appeals from an order granting summary judgment for defendants-appellees, the Town of Ipswich, the town building inspector, the town planner, and members of the planning board. The complaint alleged due process violations under 42 U.S.C. Sec. 1983, as well as violations of Massachusetts civil rights laws and tortious interference with contract. We affirm the decision for defendants on the Sec. 1983 claims, but vacate the judgment on the pendent state claims and remand so that those claims will be adjudicated, or dismissed without prejudice.

I. BACKGROUND

In 1987, Colonial's predecessor in interest sought to develop property in Ipswich, Massachusetts At a hearing held on October 12, 1989, the planning board discussed whether the location of Building 3 conformed with the dimensions in the plans incorporated in the special permit. One week later, the town planner wrote to Colonial that Building 3 was seven feet closer to the road than the special permit allowed. The letter requested Colonial's confirmation or denial of those charges, in writing, before the next board meeting on October 26 and stated that any further work would be at the developer's risk. The record does not indicate whether Colonial attended that meeting or submitted any information to the board. During the October 26 meeting, the board issued and later recorded at the registry of deeds a "Notice of Noncompliance," based on the discrepancy between the special permit and the location of Building 3.

                and obtained a "special permit" from the planning board to comply with town zoning laws. 1  One part of the project included three buildings.  The building plans incorporated into the special permit stated that Building 3 would be set back "approximately forty-five (45) feet" from the road.  Colonial acquired three building permits and began construction in 1988
                

Building 3's proximity to the road was discussed in planning board meetings over the following months. Members of the board informed Colonial at a hearing in November 1989 that Buildings 1 and 2 also contravened the special permit. In November 1989, Colonial sought an amendment to the special permit to cure the problems, but the board did not approve that application until April 2, 1990. Meanwhile, on February 1, 1990, Colonial once again argued to the board that there were no discrepancies between the special permit and the project as built.

On February 2, 1990, defendant Joseph Ferruzzi, the town building inspector, revoked all three building permits and ordered that further work cease. The reasons for the revocation were that the buildings did not conform with the special permit, and that Colonial had represented in applying for building permits that the project was in compliance with "project documents" and with zoning requirements. According to Colonial, the board ordered the permits revoked. Colonial initiated, but later abandoned, an appeal of Ferruzzi's action to the Massachusetts Building Code Appeals Board.

Until new building permits were issued, work on the project could not continue, and bank financing was suspended. In May 1990, Ferruzzi promised to issue new permits, but did not actually issue them until August. The bank's financing commitment also expired in August. Colonial failed to complete the project and defaulted on its loan.

In January 1993, Colonial filed suit in the United States District Court for the District of Massachusetts. The complaint alleged that Ferruzzi and the town failed to provide due process by revoking the building permits without a proper inquiry, notice, or hearing. The complaint included claims that the arbitrary acts of defendants other than Ferruzzi violated Colonial's due process rights. Finally, the complaint alleged that defendants interfered with Colonial's contractual relations, and that defendants violated Massachusetts civil rights laws. Defendants filed a motion for summary judgment, which the district court granted.

II. ISSUES

Colonial argues on appeal that the district court erred in granting summary judgment on the Sec. 1983 claims; that the court erred in denying Colonial's motion for leave to engage in discovery under Fed.R.Civ.P. 56(f); and that the court erred in granting summary judgment for defendants on the state law claims. We consider those arguments seriatim.

The first issue is whether the district court erred in granting summary judgment on the federal due process claims. Our review of the district court's order is de novo. Nestor Colon Medina & Sucesores, Inc. v Defendants argue that summary judgment was proper because this case is analogous to our line of cases upholding pretrial orders disposing of Sec. 1983 due process claims brought by frustrated applicants against local permitting officials. See, e.g., Nestor Colon, 964 F.2d 32; PFZ Properties, Inc. v. Rodriguez, 928 F.2d 28 (1st Cir.1991), cert. dismissed, --- U.S. ----, 112 S.Ct. 1151, 117 L.Ed.2d 400 (1992); Creative Env'ts, Inc. v. Estabrook, 680 F.2d 822 (1st Cir.), cert. denied, 459 U.S. 989, 103 S.Ct. 345, 74 L.Ed.2d 385 (1982). We agree. In this case, as in those cases, the procedural and substantive due process claims were not actionable under Sec. 1983.

Custodio, 964 F.2d 32, 39 (1st Cir.1992). Summary judgment is proper where no material facts are in dispute, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).

III. DUE PROCESS CLAIMS

To avoid summary judgment on a procedural due process claim, Colonial must show that it had a property interest defined by state law; and that defendants, acting under color of state law, deprived it of that interest without adequate process. PFZ Properties, 928 F.2d at 30. A viable substantive due process claim requires proof that the state action was "in and of itself ... egregiously unacceptable, outrageous, or conscience-shocking." Amsden v. Moran, 904 F.2d 748, 754 (1st Cir.1990) (emphasis in original), cert. denied, 498 U.S. 1041, 111 S.Ct. 713, 112 L.Ed.2d 702 (1991). Procedural due process guarantees that a state proceeding which results in a deprivation of property is fair, while substantive due process ensures that such state action is not arbitrary and capricious. Id. at 753-54.

A. Revocation of Building Permits

Colonial argues that its right to procedural due process was violated when defendant Ferruzzi, at the planning board's behest, revoked the building permits in violation of state law without prior notice and a hearing. Ferruzzi acted under color of state law; the letter revoking the permits cited the discrepancies between the special permit and the project as built and stated that he could "revoke a permit ... in case of any false statement or misrepresentation of fact in the application or the plans on which the permit ... was based." 22 Mass.Regs.Code tit. 780, Sec. 114.7. Because we assume for the purposes of this opinion that Colonial held a property interest in the permits, see PFZ Properties, 928 F.2d at 30-31, the key issue is whether Colonial was afforded adequate process.

To determine whether a procedural due process violation has occurred, "it is necessary to ask what process the State provided, and whether it was constitutionally adequate. This inquiry would examine the procedural safeguards built into the statutory or administrative procedure ... effecting the deprivation, and any remedies for erroneous deprivations provided by statute or tort law." Zinermon v. Burch, 494 U.S. 113, 126, 110 S.Ct. 975, 983, 108 L.Ed.2d 100 (1990). We assess the adequacy of procedures by balancing the government's interest against the private interest affected by the action, the risk of an erroneous deprivation, and the value of additional safeguards. Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 903, 47 L.Ed.2d 18 (1976).

We begin our analysis by describing the procedural protections afforded Colonial. Prior to the deprivation, Colonial was notified of the board's allegations and had an opportunity to rebut them. We take as true Colonial's claim that the planning board was the ultimate decisionmaker because it ordered the permits revoked. Colonial was notified at planning board meetings in October and November 1989, by a letter from the town planner in October, and by the "Notice of Noncompliance" filed at the registry of deeds in November that there were alleged discrepancies between the plans incorporated in the special permit and the project as built. Those allegations underlay the finding that there were false statements in the building permit application. Colonial had an opportunity to contest those allegations with respect to Building 3 during the October 12 hearing and in the two weeks preceding the planning ...