Union Station Associates v. Rossi

• Decision Date: 08 December 2004
• Docket Number: No. 2002-454-Appeal.,2002-454-Appeal.
• Citation: 862 A.2d 185
• Parties: UNION STATION ASSOCIATES et al. v. Thomas ROSSI, in his capacity as Tax Assessor for the City of Providence et al.
• Court: Rhode Island Supreme Court

862 A.2d 185

UNION STATION ASSOCIATES et al. v. Thomas ROSSI, in his capacity as Tax Assessor for the City of Providence et al.

No. 2002-454-Appeal.

Supreme Court of Rhode Island.

December 8, 2004.

James W. Ryan, Providence, for Plaintiffs.

Caroline Cornwell, Providence, for Defendants.

Present: WILLIAMS, C.J., GOLDBERG, FLAHERTY, SUTTELL, and ROBINSON, JJ.

OPINION

FLAHERTY, Justice.

"[The] power to tax involves, necessarily, [the] power to destroy" — John Marshall¹

Before us is the latest chapter in a protracted dispute between the City of Providence and several landowners and taxpayers with respect to property within parcel 1 of the Capital Center's Special Development District in the heart of downtown Providence. The mythical and legendary law firm of Hinder, Stall, and Delay could not hold a candle to the efforts of the City of Providence to retard the wheels of justice from grinding to their inevitable destination in this and kindred matters. At times, the actions of the city during this saga could aptly be described as municipal thuggery.

Indeed, this appeal marks the fourth time that this matter and the related case of Capital Properties, Inc. v. City of Providence, have come before this Court for consideration. The defendants, Thomas Rossi and Anthony Annarino (collectively defendant or city), in their capacities as Tax Assessor and Tax Collector for the City of Providence, appeal from a judgment in favor of the plaintiffs, Union Station Associates, East Office Building Associates, L.P., and Parcel One Development Associates, Inc. (collectively plaintiff or Union Station), on their petition for a writ of mandamus and attorneys' fees. The city argues that because the plaintiffs were not entitled to mandamus, the trial justice erred in granting attorneys' fees for that petition. For the reasons stated herein, we affirm the judgment of the Superior Court.

Facts and Procedural History

Due to the complex nature and travel of this case, a detailed review of the facts and brief history of this litigation is crucial to our disposition of this appeal. In April 1997, Capital Properties, Inc. (CPI), filed an action in Superior Court seeking a determination of the fair market value of ten parcels of land that had been condemned by the State of Rhode Island under the Providence River Relocation-Memorial Boulevard Extension Project.² The Superior Court entered final judgment, awarding CPI condemnation damages of $10,653,328.03, or $110 per square foot. Following that judgment, the state filed a complaint seeking a declaration of the contractual rights and obligations of the landowners, the city, and the state with respect to the payment of the final condemnation award. This action resulted in a determination that the state and City of Providence were individually obligated to pay one-half the total condemnation award to CPI.

After that decision, the mayor of Providence publicly vowed to recoup the condemnation judgment through a retroactive tax based on the Superior Court's $110 condemnation valuation of the property.³ True to its word, the city thereafter reassessed the ten CPI parcels based solely upon the $110 per square foot condemnation value assigned by the Superior Court and, moreover, assessed six years of back taxes on those parcels based on that value. With further disregard for the law, the city also assessed additional taxes on other CPI properties in the Capital Center District that had not been subject to the original condemnation proceedings. In response to the retaliatory tax assessments, CPI filed two complaints against the city alleging that its property was revalued in a selective and discriminatory manner and that the levy of approximately $7.9 million in taxes was improper.⁴

The city did not restrict its tax reassessments to parcels owned by CPI. In fact, the city went so far as to increase the taxes on four additional parcels in the Capital Center District. The landowners of these parcels are the plaintiffs in this case: Union Station Associates, East Office Building Associates, Parcel One Development Associates, Inc., and Commerce Center Associates, LLC. Like CPI, these landowners were assessed at the rate of $110 per square foot, with the tax applied retroactively for the years 1991 through 1996. Ultimately, their properties in the Capital Center District were burdened with liens for back taxes in aggregate totaling $3,565,971.72. As a result, on November 14, 1997, these plaintiffs filed a Superior Court action seeking legal and equitable relief from the excessive, illegal, and/or unconstitutional tax assessment imposed by the city.⁵

CPI's four civil actions were heard on cross-motions for summary judgment. On July 13, 1999, Superior Court Justice Thomas Needham issued a decision in Capital Properties, Inc. v. State, 1999 WL 551319 (R.I.Super.), granting summary judgment on all issues in favor of CPI. In his written decision, Justice Needham made the following findings:

"[T]his Court finds the tax assessments made by the City against CPI to be selective, arbitrary, and illegal. From the factual proffers provided by the parties, the Court concludes that the City intended to revalue only CPI's property in the Capital Center District. The tax assessments and reassessments were not made by the tax assessor as part of a `definite and logical plan for all properties in the' City, but rather were based upon the fair market value of different real property in the Capital Center District as determined by the Superior Court in a condemnation proceeding.

The City's real property valuation method of utilizing the fair market value of real property as determined by the Superior Court in a condemnation proceeding to determine the fair market value of other real property for tax assessment and reassessment purposes is selective, arbitrary, and illegal. Therefore, this Court grants the motion for summary judgment filed by CPI against the City. This Court hereby orders the City to expunge all real property tax assessments and reassessments based upon the $110.00 per square foot fair market value as determined in the condemnation proceeding above and permanently enjoins the City from collecting taxes and accrued interest based upon this assessment and reassessment valuation method." Id. at *12. (Emphases added.)

In a footnote, Justice Needham referred to the possibility of additional illegal tax assessments against other landowners in the Capital Center District, stating

"The Court notes that other landowners of real property located in the Capital Center District also may have been assessed real estate taxes solely based upon the $110.00 per square foot fair market value determination of the Superior Court; however, the parties do not present sufficient facts to support such a conclusion. This Court concludes that such factual proffers would not change the legal determinations contained herein." Id. at *12 n. 6.

The city appealed Justice Needham's decision to this Court.

After Justice Needham's ruling and while that appeal was pending, the Union Station plaintiffs sought to amend their civil actions. They now sought to include a writ of mandamus ordering the city to issue municipal lien certificates free and clear of any reference to the disputed taxes, or, in the alternative, to adjudge the City of Providence in contempt.⁶ The plaintiffs argued that Justice Needham's decision, though on appeal, specifically and purposefully applied to all property that had become subject to the illegal retroactive tax. Thus, Union Station argued that the city could be compelled by writ of mandamus to issue "clean" municipal lien certificates pursuant to the order.⁷ The plaintiff's motion to amend was granted on September 29, 1999.

On November 24, 1999, the Superior Court held a hearing on plaintiff's petition for a writ of mandamus. Justice Needham presided, noting on the record that he had been assigned the case by the Presiding Justice of the Superior Court in light of his familiarity with the issues raised in the petitions. Relying heavily on his decision in Capital Properties, Justice Needham reiterated that the tax assessments made by the city against the taxpayers were "selective, arbitrary and illegal." He made clear that he had ordered the city to expunge the reassessments and permanently enjoined the city from collecting taxes based upon the reassessments, which he had previously found to be illegal. He further noted that he had ruled that the assessments were arbitrary and not part of a logical plan. Justice Needham also stated that although he did not know at the time of his decision in Capital Properties of any other landowners similarly situated as CPI, he had purposefully phrased his order and his decision in that case to benefit any taxpayer victimized by the city's scheme: "I think I made it awfully clear in the CPI case that I didn't want anybody in the City of Providence paying taxes based upon that illegal assessment, and * * * all I'm trying to [do is] make sure nobody has to."

In light of his previous decision, Justice Needham granted plaintiff's petition for mandamus, ordering the city to issue municipal lien certificates "free and clear of any illegal tax," refund any overpayment of taxes, issue new tax bills based on the last city wide valuation, and provide a full accounting. Justice Needham also awarded attorneys' fees occasioned by litigation related to the illegal tax. On November 26, 1999, the court issued an order reflecting its decision and directing the city to otherwise comply with Justice Needham's original Capital Properties decision. That order further directed plaintiffs to submit a demand for attorneys' fees so that the court could schedule a hearing to award a sum certain to the plaintiffs. The city filed a notice of appeal on November 29, 1999, along with a motion to stay the Superior Court ruling pending appeal.

Just days later, on December 2, 1999, this...