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Paolino v. Ferreira

Superior Court of Rhode Island

August 21, 2014




The instant Super. R. Civ. P. 11 ("Rule 11") proceedings arose as a result of the plaintiffs, ' Louis Paolino and Marie Issa ("Plaintiffs"), attempts to spin the jury interrogatory responses in this case into facts that the jury may never have found. The case has a complicated travel and history.

Facts and Travel

Plaintiffs' property is known as Lot 362 in the Town of Cumberland, Rhode Island. Lot 362 is contaminated with various pollutants. Plaintiffs commenced the instant action to recover damages against multiple defendants in connection with that contamination. Plaintiffs' original complaint contained five counts brought against Mobil Oil Corporation, Mark Diamond, Phillip Diamond, Joseph Ferreira d/b/a Advanced Auto Recycling Inc. and LKQ Corporation. Plaintiffs variously alleged that these defendants negligently sold them a contaminated property or caused or contributed to the contamination of the subject property. Thereafter, Plaintiffs filed a First Amended Complaint to add a claim for continuing trespass. According to Plaintiffs, Defendant Joseph Ferreira ("Mr. Ferreria" or "Joseph Ferreira"), the owner of an adjacent automobile salvage yard property that Plaintiffs contend is the source of the contaminants found on their property, had intentionally redirected water from his property into an intermittent stream located on Plaintiffs' property. They further alleged that the stream was fed by pond water and water run off from Mr. Ferreira's property, with contaminated materials being carried into the stream and deposited into the stream bed by that water. In addition, they complained of structural and related encroachments that were extending over the property line. Both the original and First Amended Complaint sought damages at law only.

Plaintiffs then 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 A. Ferreira Trust and J.F. Realty LLC. Like Joseph Ferreira, Joseph A. Ferreira Trust was a previous owner of the adjacent salvage yard property. J.F. Realty LLC is the current owner. All but two of the thirty-five counts alleged damages at law, which included the cost of environmental remediation of the contaminants located on Plaintiffs' property. In two Counts, 34 and 35, of their Second Amended Complaint, Plaintiffs sought mandatory orders requiring J.F. Realty LLC to abate the continuing trespasses and nuisances caused by the encroaching structures, water discharges, and any contaminants that had been deposited on the property. (The structural encroachments ultimately identified at trial consisted of a metal and cinderblock building and a portion of the headwall and riprap that form a part of a storm water remediation system located on J.F. Realty LLC's property.) The Second Amended Complaint did not request injunctive relief, mandatory or otherwise, against any of the other defendants.

For various reasons, the claims against all but four of the various defendants were dismissed prior to trial. The remaining four defendants—Joseph Ferreira d/b/a Advanced Auto Recycling Inc., LKQ Corporation, the Joseph A. Ferreira Trust, and J.F. Realty LLC (collectively, "Ferreira Defendants" or "Defendants")—are the past and present owners and operators of the adjacent salvage yard property.

The case was tried before a jury in July 2012. During the trial, Plaintiffs went forward on their nuisance and trespass claims against each of the Ferreira Defendants. Consistent with their Second Amended Complaint, they sought damages at law including the estimated cost of remediating environmental contamination that the Defendants had allegedly deposited in two locations on Plaintiffs' property: an area upon which Joseph Ferreira had allegedly deposited contaminated fill—known as the "GZA" site— and the intermittent stream bed. They also sought orders requiring defendant J.F. Realty LLC to abate the structural encroachments and, also, any water discharge that was flowing onto their property from its storm water treatment system. Importantly, however, when it came to the contaminants that Plaintiffs claim the Ferreira Defendants had deposited on their property over the previous years, Plaintiffs elected to proceed only on their damage claims including costs of environmental remediation—as opposed to seeking orders of abatement requiring J.F. Realty LLC to accomplish the remediation.

The trial evidence included evidence that in 1982 or 1983, Joseph Ferreira used heavy equipment to deposit contaminated fill at the "GZA" site. Mr. Ferreira denied doing so, and it therefore was undisputed that if he, in fact, had deposited contaminants as alleged, he certainly did not remove them thereafter. Therefore the specific question of whether or not Mr. Ferreira deposited contaminants at the "GZA" site was put to the jury. Specifically, the jury was asked, "Have Plaintiffs proved by a preponderance of the evidence that in 1983 or 1984, Joseph Ferreira both (a) deposited contaminated fill on Lot 362 and (b) committed trespass when he thereafter failed to remove that fill?" (Emphasis in original.) If the jury answered "yes, " it would then assess damages for the cost of remediating the "GZA" site. There was sufficient evidence to put these questions to the jury, and the jury interrogatories were carefully crafted to respond to the trial evidence.

There also was evidence that in the late 1980s, Joseph Ferreira excavated the intermittent stream bed lying on Plaintiffs' property so as to divert water from a pond on his salvage yard property into the stream bed. In addition, there was evidence that because of the natural grade and elevations of the properties, surface water could flow from other areas of Defendants' property toward the stream bed. There was evidence that this pond and surface water could have carried contaminants to the stream bed. Importantly, however, because there was insufficient evidence presented at trial for the jury to consider awarding costs for environmental remediation of the stream bed, [1] different questions were put to the jury. In connection with trespass and nominal damages questions, the jury was only asked whether Plaintiffs had proved by a preponderance of the evidence that one or more of the Defendants had trespassed on Plaintiffs' property by "(a) diverting surface and pond water from [Defendants'] property into the stream bed or channel located on Lot 362 or (b) failing to remove from [Plaintiffs'] property contaminants deposited by that water." (Emphasis in original.) This question was responsive to the evidence such that the jury could find trespass by way of water discharge and award nominal damages even if Plaintiff failed to prove that one or more of the Defendants were responsible for the water borne contaminants found on Plaintiffs' property. Because environmental remediation and apportionment of damages were no longer at issue, the jury was neither asked nor given the opportunity to specify which type of trespass it found or whether one or more of the Defendants, in fact, were responsible for contaminating the stream bed. Accordingly, the questions on the jury verdict summary sheet relating to trespass and water borne contamination were drafted as an 'either/or' proposition: the inquiry simply did not require the jury to find both types of trespass in order for them to award nominal damages. And, because Plaintiffs were no longer seeking mandatory injunctive relief in the form of orders directing J.F. Realty LLC to perform environmental remediation, the jury was not given special interrogatories pursuant to Super. R. Civ. P. 49. The jury verdict summary sheet was carefully crafted and entirely consistent with the language of Plaintiffs' Second Amended Complaint and the verbal and written instructions to the jury.

Also in response to specific interrogatory questions and again in connection with past trespass and nominal damages, the jury found that until approximately 2008, when the storm water remediation system located on J.F. Realty LLC's property became operational, the Defendants had trespassed on Plaintiffs' property either by diverting surface and pond water into the intermittent stream bed or by failing to remove such contaminants as may have been deposited by that water. The jury also found a present and continuing trespass in that from 2008 up to the present, J.F. Realty LLC has been directing water from its storm water remediation system onto Plaintiffs' property. In keeping with the trial evidence, the jury was not asked whether J.F. Realty LLC was continuing to divert or discharge pond or surface water into the excavated stream bed in the years after 2008 when the storm water remediation system went operational. The jury awarded nominal damages in connection with these trespasses.

In short, except in connection with the "GZA" site and with respect to which the jury answered in the negative, the jury was not required to determine whether the Defendants, in fact, caused contaminants to be deposited on Plaintiffs' property.

Before the Court was able to conduct an evidentiary hearing in connection with Plaintiffs' Counts 34 and 35 requests for abatement of the encroachments, [2] Plaintiffs hired a new attorney, Mr. Brian A. Wagner, and their trial counsel was permitted to withdraw his appearance.

On May 22, 2013, Mr. Wagner filed a separate suit on Plaintiffs' behalf against the Rhode Island Department of Environmental Management ("DEM"): Louis P. Paolino and Marie E. Issa vs. Rhode Island Department of Environmental Management, PC 13-246. The complaint, styled as a request for Writ of Mandamus, sought orders compelling DEM to commence enforcement actions against the Ferreira Defendants—including rescinding the permit allowing the same storm water remediation system that is at issue in the instant case. Indeed, Plaintiffs claimed there were material errors in J.F. Realty LLC's application for the storm water remediation system and, further, that DEM lacked the authority to issue the permit for the system. It was their contention that the storm water remediation system's structures should be removed and J.F. Realty LLC's permit suspended, rescinded, or revoked. They also sought orders compelling DEM to force J.F. Realty LLC to environmentally remediate the contaminants on Plaintiffs' property. In connection with the latter, Mr. Wagner represented in his original complaint that the jury in the instant case made findings of fact that all of the Ferreira Defendants were responsible for having contaminated Plaintiffs' property. Specifically, he misrepresented the jury's interrogatory responses by stating at paragraph 64 of the complaint:

"On or about July 11, 2012, a jury verdict issued in a Rhode Island Superior Court civil action, Paolino et al. v. Ferreira et al., C.A. No. PC 06-5973 (see Exhibit "T, " attached hereto), finding as fact that the owner(s) and/or operators of the AAR Property trespassed on the Paolino Property by: . . .
"(e) Failing to remediate contamination deposited on the Paolino Property by pond, surface and storm waters diverted from the AAR Property and onto the Paolino Property."

On July 2, 2013, the Defendant DEM filed an answer to Plaintiffs' original complaint in which it admitted the truth of paragraph 64. The Ferreira Defendants did not have the opportunity to deny the allegation because they were not named as parties—despite their obvious interests. Eventually, on April 7, 2014, after the Ferreira Defendants had become aware of Plaintiffs' separate action against DEM and were preparing to intervene, Plaintiffs filed their First Amended Complaint in that action. This time, they named the Ferreira Defendants as parties and, at paragraph 89, included the identical misrepresentations concerning the jury verdict in the instant case. DEM then filed an amended answer in which it again admitted the truth of the jury's purported factual findings. For obvious reasons, the Ferreira Defendants denied them. Thus, Mr. Wagner's representations concerning the jury's verdict in the instant case became a contested fact in the separate case.

Meanwhile, on March 4, 2014, Mr. Wagner had submitted and signed a Motion for Entry of Final Judgment in the instant matter. Similar to the complaint filed in Louis P. Paolino and Marie E. Issa v. Rhode Island Department of Environmental Management, PC 13-246, Mr. Wagner stated that the jury found the Defendants were liable for "the disposition of pollutants on Plaintiffs' property by Defendants' water discharges." Further, paragraph 5 of the proposed final judgment attached to the Motion papers proposed findings of fact to include a finding by this Court that "each trespassed on Plaintiffs' property during the specified periods by diverting surface or pond water to a stream bed on Plaintiffs' property and by failing to remove contaminants carried onto Plaintiffs' property by the diverted waters." (Emphasis added.) In addition to using the word "and" instead of "or, " Mr. Wagner used the word "each"—thereby making every one of the Ferreira Defendants a party responsible for water borne contamination of Plaintiffs' property. Paragraph 6 of the proposed final judgment contained similar proposed ...

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