Paolino v. Ferreira

• Decision Date: 16 February 2017
• Docket Number: No. 2014–334–Appeal.,No. 2014–335–Appeal. (PC 06–5973),2014–334–Appeal.,2014–335–Appeal. (PC 06–5973)
• Citation: 153 A.3d 505
• Parties: Louis PAOLINO, et al. v. Joseph FERREIRA, et al.
• Court: Rhode Island Supreme Court

153 A.3d 505

Louis PAOLINO, et al.

v.Joseph FERREIRA, et al.

No. 2014–334–Appeal.

No. 2014–335–Appeal. (PC 06–5973)

Supreme Court of Rhode Island.

February 16, 2017

Brian A. Wagner, Esq., Ronald L. Bonin, Esq., for Plaintiffs.

Robert Clark Corrente, Esq., for Defendants.

Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

OPINION

Justice Flaherty, for the Court.

This dispute has generated two separate appeals. The first is the appeal of the prevailing plaintiffs, Louis Paolino and Marie Issa (collectively plaintiffs), from adverse rulings made by the trial justice in favor of the defendants, Joseph I. Ferreira, LKQ Corporation, the Joseph I. Ferreira Trust, and J.F. Realty, LLC (collectively defendants). The second is the appeal of Attorney Brian Wagner, who appeals sanctions that were imposed against him by the trial justice.

In the first appeal, plaintiffs contend that the trial justice erred when she (1) failed to order injunctive relief sought by plaintiffs; (2) refused to allow plaintiffs to amend their pleadings to conform to the trial evidence regarding a punitive damages claim against defendant, J.F. Realty, LLC; (3) did not permit plaintiffs' expert to testify that storm water runoff from defendants' property caused the seepage of oil along a man-made ditch located on plaintiffs' property; and (4) failed to grant a new trial based upon plaintiffs' newly discovered evidence. After careful consideration of the record, and for the reasons set forth in this opinion, we conclude that the trial justice impermissibly limited the testimony of plaintiffs' expert. Consequently, we affirm in part, and vacate in part, the judgment of the Superior Court and remand for a new trial on all issues with the exception of the prayer for injunctive relief.

IBackground

This dispute arises from the use of a thirty-five acre parcel of land in Cumberland. Since the 1940s, the property has hosted, from time to time, a pig farm, a gravel pit, a dump, and a salvage yard for motor vehicles.

In October 1983, Joseph Ferreira purchased approximately thirty acres of the property for use as an auto salvage yard.¹ Advanced Auto Recycling (AAR), which was an auto salvage company that Ferreira owned, began to operate on the property about five to six months after Ferreira purchased it. The Ferreira property included a stream and two large ponds, one of them man-made, that bordered the land that Paolino would later purchase.

When Ferreira purchased the property, it was vacant with the exception of a small trailer, and the property was littered with considerable debris, tires, and scrap metal. Despite the condition of the land, Ferreira did not have any environmental firms inspect the property before he purchased it. He did, however, clean it up right after acquiring it by removing the metal and tires from the property; indeed, he claimed that he removed thousands of tires. Ferreira testified that it took him three to five years to finally get the property to look clean.

Soon after Ferreira took ownership, he began to fill in wetlands. He said that, as a result of those alterations, the larger pond was filling with water at a rapid rate; therefore, he needed to enlarge the stream.

Those alterations did not escape notice. In November 1983, the Rhode Island Department of Environmental Management (DEM) inspected Ferreira's property in response to a complaint that he was filling a pond. DEM sent Ferreira a notice of violation, ordering him to stop filling in the pond. He did, however, continue to enlarge the stream. At a later date, a DEM employee spoke to Ferreira about alternative ways to alleviate the problems that he had observed on the property. Eventually, Ferreira entered into a consent agreement with DEM that required him to employ erosion controls and to address the ongoing environmental violations.

Soon after he purchased the property, Ferreira constructed a building that was used for dismantling cars and as an office. The building was approximately two hundred feet away from the stream. When construction of the building was complete, he began to bring vehicles onto the property. In 1991 he constructed a second building along the border of Paolino's property. At trial, Ferreira testified that he did not conduct a survey before he built that structure, but that he was told it would be seven to ten feet away from the property line. An addition to the building was completed in 2001; again, no survey was performed.² By 2001, the Joseph I. Ferreira Trust (the trust) owned the property. Ferreira was the sole trustee of the trust.

By October 2005, Ferreira, as trustee of the trust, had sold his business to LKQ Corporation (LKQ), a national auto-recycling company. The trust then conveyed the land to J.F. Realty, LLC (J.F. Realty), of which Ferreira was the sole member. That entity then leased the property to LKQ. In response to another DEM inspection in 2005, requiring AAR to install temporary drainage controls, a plan was submitted and approved. Pursuant to that plan, Ferreira hired Commonwealth Engineers to design and install a storm water pollution prevention plan on his property, which was completed by 2008.

AAR Operations

During his testimony at trial, Ferreira described the activities conducted on the AAR site, testifying that automotive fluids would be drained and captured inside the building before a car was placed in the yard. The fluids would be deposited into barrels and recycled. Ferreira testified that oil was stored outside next to the addition to the first building, which was about 100 to 150 feet away from Paolino's property. During his testimony, Ferreira further acknowledged that he had noticed turbid water running off the site even after the installation of the storm water pollution prevention plan, and that he had occasionally seen oil drip from engines on his property. He also testified that he never deposited any scraps of metal, auto parts, tires, or fluids onto Paolino's property or in any of the ponds.

Paolino Purchases

In December 1985 LM Nursing Services Inc. (LM Nursing), Paolino's company, purchased six acres on Curran Road that abutted Ferreira's property. In 1987 Paolino received a letter from DEM about the potential release of contaminants in the area, notifying him that his land was on the CERCLIS³ list. Paolino promptly hired Environmental Resource Associates, Inc. (ERA), a company specializing in investigations of environmental contamination, to conduct tests on his land. After ERA's site assessment was complete, LM Nursing conveyed the property to Paolino and his wife, Marie Issa. Additionally, after all the testing was completed, Paolino's attorney wrote to the EPA requesting that his property be removed from the CERCLIS list because no contamination had been revealed by ERA's testing. As a result, the Paolino property was removed from the CERCLIS list. Paolino claimed that he did not have any further problems with contamination on his property throughout the 1990s. Indeed, he said that the Division of Air and Hazardous Materials of DEM sent a letter indicating that the stream was sampled two times, once in 1987 and once in 1990, and that neither sample found contamination.

Despite Paolino's claims and the DEM letter, contaminants were found in the soil after a potential buyer retained a company called GZA GeoEnvironmental, Inc. (GZA) to evaluate the land. Paolino received a letter of responsibility from DEM asking him to submit a site investigation report as well as naming him as the person "responsible for properly investigating and, if necessary, remediating hazardous materials at the site." GZA did some remediation, but that process was never completed. In December 2004 DEM sent Paolino a letter of noncompliance representing that he, as the owner of the property, was responsible for the investigation and remediation of hazardous material at the site.

On November 16, 2006, plaintiffs filed an action in the Superior Court, asserting that defendants had caused contaminants to flow onto their property.⁴ Thereafter, plaintiffs filed a first amended complaint to add a claim for continuing trespass. Subsequently, plaintiffs filed a second amended complaint that contained thirty-five counts, including the addition of claims for public and private nuisance and federal and state environmental violations. The second amended complaint added two new defendants: Joseph I. Ferreira Trust and J.F. Realty, LLC. Eventually, an eleven day trial was held before a jury.⁵ After judgment entered on behalf of plaintiffs, plaintiffs, nonetheless, timely appealed.

IIIssues on Appeal

Before this Court, Paolino and Issa argue that the trial justice erred by failing to order injunctive relief against defendants because of a continuing trespass. The plaintiffs further argue that the trial justice erred when she precluded plaintiffs' expert from offering his opinion that storm water runoff from defendants' property was the source of the oil located along the man-made ditch on plaintiffs' property. The plaintiffs also maintain that the trial justice erred when she denied their motion to amend their complaint to conform to the evidence and when she denied their motion for a new trial based on the discovery of new evidence.

Because we are of the opinion that the trial justice erred when she restricted the expert's trial testimony, and because that is dispositive of this appeal, we need not address the other issues raised in the appeal, with the exception of the denial of injunctive relief.

IIIFailure to Order Injunctive Relief

AFacts and Travel

At the conclusion of trial testimony, a jury verdict summary sheet was submitted to the jury. The jury found that there had been a continuing trespass on Paolino's property and it awarded plaintiffs nominal damages of $1,400. The continuing trespasses identified were: a corner of defendants' metal building, the headwall and riprap for defendants' storm water remediation system, and the discharge...