Palazzolo v. State ex rel. Tavares

• Decision Date: 25 February 2000
• Docket Number: No. 98-333-Appeal.,98-333-Appeal.
• Citation: 746 A.2d 707
• Parties: Anthony PALAZZOLO v. STATE of Rhode Island, by and through its General Treasurer, Paul J. TAVARES, et al.
• Court: Rhode Island Supreme Court

746 A.2d 707

Anthony PALAZZOLO v. STATE of Rhode Island, by and through its General Treasurer, Paul J. TAVARES, et al.

No. 98-333-Appeal.

Supreme Court of Rhode Island.

February 25, 2000.

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

John B. Webster, Warwick, for Plaintiff.

Michael L. Rubin, Brian A. Goldman, Providence, for Defendant.

OPINION

LEDERBERG, Justice.

Anthony Palazzolo (Palazzolo) brought an inverse condemnation action against the Coastal Resources Management Council (CRMC), alleging that the CRMC's denial of his application to fill eighteen acres of coastal wetlands constituted a taking of his property for which he was entitled to compensation pursuant to the United States and Rhode Island Constitutions. After a trial justice found that the denial of Palazzolo's application was not a taking for which compensation was owed, judgment was entered for the CRMC, and Palazzolo timely appealed to this Court. It is our conclusion that this case is not ripe for judicial review and that the trial justice did not err in granting judgment to the CRMC.

Facts and Procedural History

Palazzolo has been president of Shore Gardens, Incorporated (SGI), a Rhode Island corporation, from the time of its incorporation on July 29, 1959. On December 2, 1959, Palazzolo, Natale Urso (Urso), and Elizabeth Urso transferred three adjoining parcels of land in the Town of Westerly, Rhode Island, (town) to SGI. The parcels are located between the northern side of Atlantic Avenue and the southern shore of Winnipaug Pond. In 1936, an earlier owner had subdivided that portion of the land lying along Atlantic Avenue, leaving the remainder as an undivided lot. In 1959, SGI submitted to the town a new plat subdividing the entire property into eighty lots. At the time, Palazzolo and Urso were the sole shareholders in SGI. Between 1959 and 1961, SGI transferred for consideration eleven of the lots to various grantees. These lots were apparently in the upland area of the parcel and could be built upon with little alteration to the land. In 1960, Urso transferred his interest in SGI to Palazzolo, and Palazzolo became the sole shareholder. In 1969, five of the previously sold lots were reacquired by SGI. After this transaction, SGI was the record owner of seventy-four of the original eighty lots. Although SGI's corporate charter was revoked by the Rhode Island Secretary of State on February 27, 1978, SGI remains the record owner, and all taxes on the property are assessed to SGI.

The property consists primarily of coastal wetlands and marshlands.¹ Some of the lots laid out in the subdivision plat include a substantial amount of land that is under the waters of Winnipaug Pond. Additional land that is not permanently under water is subject to daily tidal inundation, and "ponding" in small pools occurs throughout the wetlands. The area serves as a refuge and feeding ground for fish, shellfish, and birds, provides a buffer for flooding, and absorbs and filters run-off into the pond.

Between 1962 and 1985, Palazzolo filed several applications with state agencies seeking permission to substantially alter the property. During the same period, state regulations governing alterations to coastal wetlands changed substantially. On March 29, 1962, Palazzolo submitted an application to the Division of Harbors and Rivers (DHR) of the Department of Natural Resources (DNR)² to dredge the pond and use the dredge to fill the subject property. This application was returned to Palazzolo by DHR because it lacked essential information. On May 16, 1963, Palazzolo filed an application seeking approval to build a bulkhead, to dredge the pond, and to fill the property. At the time of these two applications, there was no statutory requirement that any state agency approve the filling of coastal wetlands, but a party wishing to dredge a river or pond was required to gain approval of DHR.³

In 1965, the Legislature adopted an act on inter-tidal wetlands protection that gave DNR⁴ the authority to restrict filling in coastal wetlands. P.L.1965, ch. 140, § 1, codified as G.L. 1956 §§ 2-1-13 through 2-1-17.⁵ On April 29, 1966, Palazzolo applied for DHR approval to dredge the pond and fill the tidal marshlands so he could construct a recreational beach facility, and on April 1, 1971, DHR issued a decision approving the applications and giving Palazzolo the option of either constructing a bulkhead and filling the marsh or constructing a beach facility. On November 17, 1971, DHR revoked its assent, and this revocation was not appealed.

In 1971, the Legislature enacted the Coastal Resources Management Council enabling act, P.L. 1971, ch. 279, § 1, codified as G.L. 1956 chapter 23 of title 46, which created the CRMC and gave the CRMC authority to regulate coastal wetlands. In 1977, the CRMC promulgated a set of regulations — the Coastal Resources Management Program — that prohibited the filling of coastal wetlands without a special exception from the CRMC.

In March 1983, Palazzolo filed an application with the CRMC seeking approval to construct a bulkhead on the shore of the pond and fill approximately eighteen acres of salt marsh. That application, nearly identical to the application submitted in 1963, was rejected by the CRMC. Palazzolo did not appeal that decision. In January 1985, Palazzolo filed an application to fill wetlands on the property, again so he could create a recreational beach facility. This application, nearly identical to the 1966 application, was denied by the CRMC on February 18, 1986. Palazzolo appealed this denial pursuant to G.L. 1956 § 42-35-15, and that appeal was denied by a justice of the Superior Court. Palazzolo v. Coastal Resources Management Council, 1995 WL 941370 (R.I.Super., Jan.5, 1995) (C.A. No. 86-1496) (Israel, J.).

While Palazzolo's appeal of the 1986 CRMC decision was proceeding, he filed the instant action alleging that the CRMC's denial of his application constituted a taking of his property without just compensation, in violation of the Fifth Amendment to the United States Constitution and article 1, section 16, of the Rhode Island Constitution. Palazzolo sought damages in the amount of $3,150,000, based on the profits he claimed he would receive from filling the wetlands and developing the property as seventy-four lots for single-family homes. A jury-waived trial was held in June 1997, and on October 24, 1997, the trial justice issued a thirteen-page decision that made findings of fact and law. The trial justice concluded that Palazzolo's property had not been taken for public use and that no compensation was required under the United States or Rhode Island Constitutions. Palazzolo timely appealed, asking this Court to review the trial justice's findings of fact and law.

Additional facts will be discussed as required by analysis of the legal issues presented.

Standard of Review

Palazzolo's appeal seeks review of the findings of law and the findings of fact made by the trial justice in his decision. A trial justice's findings on questions of law are reviewed de novo by this Court. See, e.g., Nonnenmacher v. City of Warwick, 722 A.2d 1199, 1202 (R.I.1999)

(the existence of a contract is a question of law reviewed de novo by the Court); Levine v. Bess Eaton Donut Flour Co., 705 A.2d 980, 982 (R.I.1998) (statutory interpretation is a question of law that the Court reviews de novo).

Findings of fact by a trial justice sitting without a jury, however, are accorded great weight upon review by this Court, and those factual determinations "will not be disturbed unless the justice has overlooked or misconceived material evidence or was otherwise clearly wrong." State v. Collins, 679 A.2d 862, 865 (R.I.1996).

A trial justice's findings on mixed questions of law and fact are generally entitled to the same deference as the justice's findings of fact. Hawkins v. Town of Foster, 708 A.2d 178, 182 (R.I.1998). But, when those mixed questions of law and fact impact constitutional matters, we shall review the findings de novo, pursuant to Ornelas v. United States, 517 U.S. 690, 116 S.Ct. 1657, 134 L.Ed.2d 911 (1996). See Foley v. Osborne Court Condominium, 724 A.2d 436, 439 (R.I.1999)

(applying the Ornelas standard to a civil case); State v. Campbell, 691 A.2d 564, 569 (R.I.1997) (applying the Ornelas standard to a criminal case).

Takings Analysis

Palazzolo's claim for damages is grounded in the Fifth Amendment to the United States Constitution, which bars the taking of private property for public use, without just compensation. This prohibition on uncompensated taking has been applied to the states through the Fourteenth Amendment. San Diego Gas & Electric Co. v. City of San Diego, 450 U.S. 621, 623 n. 1, 101 S.Ct. 1287, 1289 n. 1, 67 L.Ed.2d 551, 555 n. 1 (1981). Similarly, article 1, section 16, of the Rhode Island Constitution provides that "[p]rivate property shall not be taken for public uses, without just compensation." The United States Supreme Court has recognized that this constitutional injunction is "designed to bar [g]overnment from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." Armstrong v. United States, 364 U.S. 40, 49, 80 S.Ct. 1563, 1569, 4 L.Ed.2d 1554, 1561 (1960).

Historically, a taking was recognized when the government confiscated a piece of real property for some public purpose, such as constructing a road. See, e.g., Central Land Co. v. City of Providence, 15 R.I. 246, 250, 2 A. 553, 556 (1886) (city required to give compensation for land taken to widen road). The United States Supreme Court has also recognized, however, "that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking." Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415, 43 S.Ct. 158, 160, 67 L.Ed. 322, 326 (1922). The question of whether a specific governmental...