Newport Yacht Management, Inc. v. Clark

• Citation: 567 A.2d 364
• Decision Date: 19 December 1989
• Docket Number: Nos. 88-321-M,s. 88-321-M
• Parties: NEWPORT YACHT MANAGEMENT, INC. and Sargent Investors, Inc. v. R. Gary CLARK, Tax Administrator. NEWPORT YACHT MANAGEMENT, INC. v. R. Gary CLARK, Tax Administrator. P., 88-324-M.P.
• Court: Rhode Island Supreme Court

Page 364

567 A.2d 364

NEWPORT YACHT MANAGEMENT, INC. and Sargent Investors, Inc. v. R. Gary CLARK, Tax Administrator.

NEWPORT YACHT MANAGEMENT, INC. v. R. Gary CLARK, Tax Administrator.

Nos. 88-321-M.P., 88-324-M.P.

Supreme Court of Rhode Island.

Dec. 19, 1989.

Christophe C. Whitney, Adler, Pollock & Sheehan, Inc., Providence, for plaintiff.

Marcia McGair Ippolito, Chief Legal Officer, Bernard J. Lemos, Div. of Tax., for defendant.

Before FAY, C.J., and KELLEHER, WEISBERGER, MURRAY and SHEA, JJ.

OPINION

FAY, Chief Justice.

This matter is before the Supreme Court on two separate petitions for certiorari, both of which seek review of a decision of the Sixth Division District Court awarding the plaintiff, Newport Yacht Management, Inc. (taxpayer), attorney's fees under the Rhode Island Equal Access to Justice for Small Businesses and Individuals Act. G.L.1956 (1984 Reenactment) chapter 92 of title 42, as enacted by P.L.1985, ch. 215, § 1. The petitions have been consolidated for purposes of this review. The facts relevant to this case are as follows.

In January 1985 the Rhode Island Division of Taxation (tax division) issued a sales-tax assessment against the taxpayer in the amount of $63,940.41. The taxpayer requested an administrative review of the assessment, and a hearing was held at the tax division in May 1985.

On June 25, 1985, while the administrative decision was pending, the General Assembly enacted P.L.1985, ch. 215, the Equal Access to Justice for Small Businesses and Individuals Act (Equal Access to Justice Act). The act was made effective upon the date of its passage.

Thereafter, on July 22, 1985, the hearing officer issued his final decision whereby he revised the sales-tax assessment against taxpayer to $256.67. Pursuant to the Equal Access to Justice Act, the taxpayer subsequently filed a claim with the tax administrator seeking $17,630.33 in litigation expenses. ¹ The hearing officer denied this claim in its entirety.

In October 1985, pursuant to § 42-92-5, the taxpayer filed an appeal in the District Court, seeking judicial review of the hearing officer's decision to deny its litigation-expense claim. In February 1986 the taxpayer filed a motion to amend its complaint to include an additional $6,106.25 in legal fees and costs incurred while pursuing the appeal.

On June 29, 1988, the District Court issued its decision. The court held that the Equal Access to Justice Act is a remedial statute affecting procedural rights only and as such could be applied to administrative matters pending at the time of its passage. Consequently the court applied the act to the taxpayer's litigation-expense claim and awarded the taxpayer $16,087.50 in attorney's fees. However, no mention was made in the decision concerning the additional litigation-expense claim contained in the taxpayer's amended complaint. Both parties petitioned this court for certiorari to review the District Court's decision.

Before this court the tax administrator claims that the District Court erred in ruling that the Equal Access to Justice Act is a remedial statute that could be applied to matters pending at the time of its enactment in the absence of express legislative indication that it was to be applied retroactively. The taxpayer claims that the District Court was correct in applying the Equal Access to Justice Act retroactively. However, the taxpayer challenges the court's failure to include in the award of attorney's fees the litigation expenses it incurred in pursuing its appeal to the District Court.

It has long been established as a general rule of statutory construction that statutes and their amendments are applied prospectively. Emmett v. Town of Coventry, 478 A.2d 571, 572 (R.I.1984); Murphy v. Murphy, 471 A.2d 619, 623 (R.I.1984). An exception to this rule occurs if it appears by strong language or necessary implication that the Legislature intended that the statute be given retrospective application. Spagnoulo v. Bisceglio, 473 A.2d 285, 287 (R.I.1984). An examination of the Equal Access to Justice Act shows neither direct expression of retroactivity nor the presence of any language that mandates the drawing of such an inference. However, a statute lacking the requisite specificity or the necessary implication may still be applied retroactively if it qualifies as a remedial or procedural statute. Wayland Health Center v. Lowe, 475 A.2d 1037, 1041 (R.I.1984); Fox v. Fox, 115 R.I. 593, 597, 350 A.2d 602, 603 (1976).

Relying upon this principle of statutory construction, the District Court ruled that the Equal Access to Justice Act could be applied retroactively because it is a "remedial statute affecting procedural rights only." We disagree. The Equal Access to Justice Act is not a remedial statute but rather a substantive statute, and as such it must be applied prospectively in the absence of clear legislative intent to the contrary.

Black's Law Dictionary defines a substantive law as

"[t]hat part of law which creates, defines, and regulates rights, as opposed to 'adjective or remedial law,' which prescribes method of enforcing the...