Mall at Coventry Joint Venture v. McLeod

• Decision Date: 09 December 1998
• Docket Number: No. 97-64-Appeal.,97-64-Appeal.
• Citation: 721 A.2d 865
• Parties: MALL AT COVENTRY JOINT VENTURE v. Andrew H. McLEOD, in his capacity as Director of the Rhode Island Department of Environmental Management. MALL AT COVENTRY JOINT VENTURE v. Nancy MAYER in her capacity as Treasurer of the State of Rhode lIsland.
• Court: Rhode Island Supreme Court

721 A.2d 865

MALL AT COVENTRY JOINT VENTURE v. Andrew H. McLEOD, in his capacity as Director of the Rhode Island Department of Environmental Management.¹

MALL AT COVENTRY JOINT VENTURE v. Nancy MAYER in her capacity as Treasurer of the State of Rhode lIsland.²

No. 97-64-Appeal.

Supreme Court of Rhode Island.

December 9, 1998.

James Vincent Paolino, Warwick, for Plaintiff.

Jametta O. Alston, Catherine Robinson Hall, Providence, for Defendant.

Present: WEISBERGER, C.J., and LEDERBERG, BOURCIER, FLANDERS and GOLDBERG, JJ.

OPINION

WEISBERGER, Chief Justice.

These consolidated cases come before the Court on the appeal of the plaintiffs, Coveco, Inc., Wasserman Realty, Inc., both Rhode Island corporations, and Cranwick Associates Limited Partnership, a Massachusetts limited partnership, collectively doing business as "The Mall at Coventry Joint Venture" (Mall Venture). Mall Venture challenges a judgment entered in the Superior Court in favor of the defendants, pursuant to the granting by the trial justice of a motion for judgment as a matter of law, in accordance with Rule 50(a) of the Superior Court Rules of Civil Procedure, and from judgments denying a complaint for mandamus and declaratory judgment. We affirm the judgments of the Superior Court. The facts and travel of these cases insofar as pertinent to this appeal are as follows.

In early 1988, Mall Venture purchased a parcel of land in the Town of Coventry for development purposes. The size of the parcel was 8.988 acres. Mall Venture desired to erect a retail facility on the tract. Since the principal officer of Mall Venture, David Wasserman, was aware that the tract contained freshwater wetlands, he engaged an engineer to identify the location of the wetlands and to file an application for preliminary determination from the Department of Environmental Management (DEM) concerning the nature and extent of such wetlands. The engineer, John Caito, prepared the application for preliminary determination and had fourteen orange flags placed on the tract. These flags purported to mark the boundaries of the wetlands. The principal officer, David Wasserman, was the formal applicant and sought verification of the flagged wetland sites. The date of the application was August 24, 1988. It should be noted that this application for preliminary determination did not include any plan or drawing setting forth the building that was proposed to be constructed, or the location thereof.

By letter dated October 28, 1988, DEM responded that it had reviewed the application and found that the wetlands did fall under the protection of DEM and consisted of swamp. The letter further indicated that thirteen flags accurately depicted the wooded swamp edge, but that one flag, flag 9, was required to be moved ten feet in a direction of 320 degrees. The letter also indicated that DEM's approval would be required for any alteration proposed within said wetland.

During this time, Mall Venture, by its representatives, engaged in discussions with the owners of a grocery chain known as "Stop & Shop" to erect a single-story retail store on this tract. Pursuant to these negotiations, Mall Venture drew and completed site plans depicting a building of approximately 60,000 square feet in area.

On June 7, 1989, Mall Venture filed an updated preliminary determination application along with explanatory correspondence. This application informed DEM for the first time of the nature and scope of the proposed project. The covering letter described the size of the building. The letter also stated that the building would have associated amenities, and it would be served by three detention basins, which would control the storm water runoff and mitigate the environmental impact of the development. The application suggested that this proposed development would come under the insignificant alteration guidelines for construction near wetlands. In response to this letter and application, DEM replied on July 20, 1989, stating that its staff inspection led the agency to conclude that this proposal represented a significant alteration of freshwater wetlands and that, therefore, a formal application would be required.

Mall Venture's engineer then requested a meeting with representatives of DEM to discuss alternatives in an attempt to avoid the lengthy formal application review process. Following this request, a meeting was held on August 28, 1989. In attendance were Mall Venture representatives, John Caito, George Gifford, and Bernard Wasserman; and DEM representatives, principal environmental scientist Brian Tefft and biologist Susan Cabeceiras, who initially had examined the flagged wetland location. At this meeting, Mall Venture representatives sought to persuade DEM to treat the proposed project as an insignificant rather than a significant alteration of freshwater wetlands. However, Tefft, a DEM supervisor, disclosed that he had reexamined the parcel of land four days prior to the meeting and had determined that there was a contiguous unflagged wetland. This wetland was later referred to in the litigation as "the bowling pin." Tefft testified before the Superior Court that if the bowling pin was not a contiguous wetland, it would not have come within DEM's jurisdiction because of its small size. It was later disclosed to the Superior Court that Mall Venture representatives George Gifford, an environmental planner, and engineer John Caito, had become aware of the bowling pin in 1988, but did not consider it to meet the jurisdictional requirements in respect to size.

On September 20, 1989, Mall Venture submitted a formal application to alter a wetland, together with a covering letter, the required fee, and various plans. The covering letter described a 60,000 + square foot retail building with associated amenities and stated that the utilities serving the site would tie into existing utilities on Tiogue Avenue. It further pointed out that three detention basins would control the storm-water runoff and mitigate the effect of the development on the environment. The letter also proposed that dense plantings would be installed in the buffer area adjacent to the swamp and further stated that there would be no proposed encroachment within the wetland proper. Supervisor Tefft testified before the Superior Court that the site plan submitted with the formal application was exactly the same as that earlier submitted in its request for preliminary determination. This site plan did not indicate the location of the bowling pin, nor did it contain alterations that had been required in DEM's July 20, 1989 letter, unrelated to the bowling pin.

In response to the formal application DEM pointed out that this application failed to include the bowling pin, which had earlier been determined to form an integral part of the swamp. DEM reiterated that corrections in the wetland edge had not been included. In conclusion, DEM required that the corrections in the application and site plan be made as a condition precedent to the processing of the application.

On December 22, 1989, Mall Venture by its attorney notified DEM that it was bound by its preliminary determination, which indicated that the wetland had been delineated appropriately with one exception with respect to the flag number 9. In essence, Mall Venture declined to make the corrections mandated by DEM and suggested that unless DEM proceeded in accordance with its preliminary determination, court action would result.

At some point during the interval following the first formal application, Mall Venture terminated its tentative agreement with Stop & Shop. The grocery chain chose an alternate site owned by an entity other than Mall Venture. The loss of this opportunity later formed a basis for the damage claim brought against the General Treasurer.

On January 12, 1990, Mall Venture brought an action against DEM seeking declaratory relief and a writ of mandamus. The petition for declaratory relief sought a declaration that DEM should proceed according to its preliminary determination set forth in its letter of October 28, 1988. DEM answered the complaint by asserting a number of affirmative defenses including the failure to state a claim upon which relief could be granted, estoppel, waiver, and unclean hands. It should be noted that DEM did not raise the issue of failure to exhaust administrative remedies.

Two years later, on June 22, 1992, Mall Venture moved to amend its complaint to add money damages and to demand a jury trial. This motion was denied. Thereafter, Mall Venture filed a separate action against the General Treasurer seeking money damages arising out of DEM's negligence in not identifying and flagging the wetland properly. Mall Venture further alleged that DEM's negligence had caused Mall Venture to incur substantial costs in engineering, surveying, and legal fees based on the original letter of October 28, 1988. In count 2 of the damage action, Mall Venture sought damages for lost opportunities, costs, and profits in an amount in excess of $500,000.

The Damage Claim

On August 31, 1993, Mall Venture filed a motion to consolidate both actions. This motion was granted on October 22, 1993. The consolidated cases were tried before a justice of the Superior Court and a jury beginning March 2, 1995. The plaintiff requested that the issue of damages be presented to the jury and that the trial justice determine the issues raised in the declaratory judgment action. After Mall Venture rested, defendants moved for judgment as a matter of law in both cases. After hearing arguments, the trial justice denied both motions and defendants presented their evidence. After the close of all evidence, defendants renewed their motion for judgment as a matter of law pursuant to Rule 50(b). The trial justice reserved decision on the motion and submitted the damage issue to the jury. The jury returned a verdict in favor of Mall Venture in the amount of $ 1,696,000.

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