United Lending Corp. v. City of Providence

• Decision Date: 01 July 2003
• Docket Number: No. 2000-499-Appeal.,2000-499-Appeal.
• Citation: 827 A.2d 626
• Parties: UNITED LENDING CORPORATION v. CITY OF PROVIDENCE, et al.
• Court: Rhode Island Supreme Court

827 A.2d 626

UNITED LENDING CORPORATION v. CITY OF PROVIDENCE, et al.

No. 2000-499-Appeal.

Supreme Court of Rhode Island.

July 1, 2003.

Gregory Sorbello, Esq., Providence, for Plaintiff.

Richard Riendeau, Esq., for Defendant.

Present: WILLIAMS, C.J., FLANDERS, and GOLDBERG, JJ.

OPINION

GOLDBERG, Justice.

This case came before the Supreme Court on April 1, 2003, on appeal by the defendant, City of Providence (the city or defendant), from a judgment granting summary judgment in favor of the plaintiff, United Lending Corporation (United or plaintiff)¹ and denying its cross-motion for summary judgment. A justice of the Superior Court ordered the city to reimburse the plaintiff for real estate taxes that it paid to the city as a result of incorrect information supplied by the tax collector. The plaintiff alleged that because it was erroneously informed by the tax collector that property taxes were in arrears and that a tax sale was imminent unless the outstanding liens were satisfied, it paid taxes that were wrongfully assessed. The manner in which the city addressed its statutory obligations and failed to protect its pecuniary interests is the subject of this appeal. This saga began in 1980 after the owners, Adolf J. Eunis and Shirley M. Eunis, failed to satisfy outstanding tax liens and the property, located at 34-36 Woodman Street was sold by the city at tax sale. No bids equivalent to the outstanding taxes were received and, pursuant to G.L.1956 § 44-9-14, the city took tax title to the real estate. Property taxes continued to accrue until 1991, when a Superior Court judgment foreclosing all rights of redemption entered in favor of the city. Pursuant to § 44-9-34,² this property no longer was subject to municipal taxes.

However, the city failed to protect its ownership interest in the parcel and, in 1992, the property was sold again, this time by the Providence Water Supply Board (board), for outstanding water liens from 1979 to 1989. The defendant, Fernando Cunha (Cunha), purchased the property and acquired by tax deed the city's entire interest in the parcel. Cunha conveyed the property by quitclaim deed to Phoenix Realty and Olivia Realty (collectively as Realty). In June 1993, Realty petitioned the Superior Court to foreclose all rights of redemption to the property. Although provided with notice of the petition, the city failed to respond. As a result, pursuant to § 44-9-31, its right to contest the validity of the sale by the board and its right to redeem the property were forever barred. Judgment was entered in favor of Realty, foreclosing the city's right of redemption and granting Realty absolute title.³ A series of subsequent conveyances and a mortgage to United have culminated in this proceeding.

Realty conveyed the property to Larry King, who conveyed the property to Marco T. Giron and Ana R. Giron (Giron), United's mortgagor. At this point, the city's negligent attention to its responsibilities respecting the assessment and collection of property taxes becomes acute. The record discloses that United requested and received from the city a municipal lien certificate that erroneously reflected outstanding taxes, from 1977 through 1996, amounting to $28,963.97, including interest. The certificate also contained a declaration that the property was slated for auction for nonpayment of taxes at the city's tax sale on June 26, 1997. United promptly paid the taxes and interest charges in full.

Shortly thereafter, United discovered that the municipal lien certificate that the city prepared was incorrect, that tax liens dating to 1977 were not valid and taxes were not owed. United sought reimbursement for these payments. In a letter dated October 16, 1997, plaintiff requested a refund from the city.⁴ In its first demand, made to the tax collector, United contended that, pursuant to § 44-9-1,⁵ the city's tax lien terminated after three years had expired because the property had been alienated and the deed was recorded.

United next made a demand to the city solicitor, again receiving no response. The plaintiff then turned to the Superior Court and filed a four-count complaint against the city, the Eunises and Cunha. The plaintiffs complaint sought reimbursement for the taxes illegally collected and retained and alternatively, United alleged unjust enrichment by the Eunises, Cunha and the city and negligent misrepresentation by the city. United filed a motion for summary judgment, and the city and Cunha filed separate cross-motions for summary judgment.

The city's defense to this claim is grounded in G.L.1956 § 45-15-5;⁶ the city contends that by failing to make a presentment to the city council, plaintiffs complaint was not properly before the court. The city raised this issue as an affirmative defense in its answer to plaintiffs complaint.⁷ The hearing justice rejected the city's argument and concluded that § 45-15-5 did not apply based on the equitable nature of the claim. A bench decision on the summary judgment motions subsequently was issued by the hearing justice.

In her decision, the motion justice noted that, pursuant to § 44-9-31,⁸ the city failed to answer Realty's Superior Court petition to foreclose its rights of redemption to the property and therefore waived its right to contest the title that initially was acquired by Cunha and transferred by quitclaim deed to Realty. The motion justice also concluded that no viable tax liens existed at the time the city supplied the incorrect municipal tax lien certificate to United, no taxes were owed and United was entitled to a return of its payments. She denied the city's motion for summary judgment and granted summary judgment in favor of United and Cunha. The city was ordered to reimburse United for the $26,540.98, plus interest and costs that were paid erroneously and that the city wrongly withheld. Subsequently, the city appealed.⁹ On appeal, the city has raised several issues that we shall address seriatim.

Standard of Review

In passing on a grant of summary judgment by a justice of the Superior Court, this court conducts a de novo review. "Only when a review of the admissible evidence viewed in the light most favorable to the nonmoving party reveals no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law, will this Court uphold the trial justice's grant of summary judgment." Carlson v. Town of Smithfield, 723 A.2d 1129, 1131 (R.I.1999) (per curiam). "[A] party who opposes a motion for summary judgment carries the burden of proving by competent evidence the existence of a disputed material issue of fact and cannot rest on allegations or denials in the pleadings or on conclusions or legal opinions." Accent Store Design, Inc. v. Marathon House, Inc., 674 A.2d 1223, 1225 (R.I.1996). Accordingly, in deciding whether the trial justice erred in granting summary judgment for United and denying the city's motion, we shall conduct a de novo review of the record to determine whether issues of fact existed as the city alleged and, additionally, whether United was entitled to judgment as a matter of law.

Section 415-45-5 Notice Requirement

The city reasserts on appeal that the suit against it should have been abated and dismissed and its motion for summary judgment granted because United failed to comply with the provisions of § 45-15-5; no written demand for reimbursement was filed with the city council before the suit was initiated. As noted, the record discloses that United notified the city treasurer and the city solicitor and received no response from either official.

The plaintiff responds that it was in technical compliance with the notice statute because it filed a presentment to "the [c]ity of Providence" on October 16, 1997, and again on February 2, 1998, well in advance of the forty-day waiting period set forth in § 45-15-5. Further, some five months after suit was commenced, plaintiff did submit a claim to the city council seeking "immediate reimbursement of $26,540.98 from the [city] * * * for the erroneous collection of taxes." Having apparently ignored this demand, as well as the two previous requests for reimbursement, the city now contends that the demand was inadequate and failed to fulfill the statutory purpose of § 45-15-5. United argues that in addition to its technical compliance, blind allegiance to § 45-15-5 is not appropriate under the circumstances. Further, United contends that because it was partially seeking declaratory relief, § 45-15-5 was inapplicable.

In count 1 of its complaint, United sought recovery of tax payments that the city wrongfully assessed. Count 2 was a claim for unjust enrichment against the city and the previous owners for taxes assessed before Giron purchased the parcel, and count 3 claimed damages for misrepresentation by the city and reliance by plaintiff to its detriment.¹⁰ According to United, because the claim for unjust enrichment necessarily includes elements of declaratory relief, § 45-15-5 is not applicable. However, the trial justice found in favor of plaintiff on count 1, the demand for recovery of the illegally assessed taxes, and made no findings with respect to the claim for unjust enrichment. Thus, the fact that unjust enrichment is a claim for equitable relief is irrelevant to our analysis.

On its face, the provisions of § 45-15-5 are broad in scope and specific in procedural requirements:

"Every person who has any money due him or her from any town or city, or any claim or demand against any town or city, for any matter, cause, or thing whatsoever, shall * * * present to the * * * city council of the city, a particular account of that person's claim, debt, damages, or demand, and how incurred or contracted; * * * in case just and due satisfaction is not made to him or her * * * within forty (40) days[,] * * * the person may commence his or her action against the treasurer * * *."

This Court has had occasion to pass upon the...