JAMES C. COURNOYER, SHAUN R. COURNOYER, MARC A. COTE, ROLAND M. MICHAUD, AND ROGER G. JALETTE, SR., ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED
CITY OF WOONSOCKET BUDGET COMMISSION, THE CITY OF WOONSOCKET, THE TAX ASSESSOR OF THE CITY OF WOONSOCKET, AND THE TREASURER OF THE CITY OF WOONSOCKET
Providence County Superior Court
For Plaintiff: Robert G. Senville, Esq.
For Defendant Edmund L. Alves, Jr., Esq.; Joseph V. Cavanagh, III, Esq.; Lynne Barry Dolan, Esq.; Marc DeSisto, Esq.
A group of taxpayers, residents, and owners of motor vehicles and real estate in the City of Woonsocket (collectively, Plaintiffs) have brought this action against the City of Woonsocket Budget Commission (Budget Commission), the Tax Assessor of the City of Woonsocket, and the Treasurer of the City of Woonsocket (collectively, Defendants). Plaintiffs challenge the legality of a supplemental tax issued by the City of Woonsocket on certain motor vehicles and real estate. They bring this lawsuit as a putative class action on behalf of themselves and all other similarly situated taxpayers in the City of Woonsocket.
The parties have filed cross-motions for summary judgment, and Plaintiffs filed a "Rule 12(b)(6) Motion to Dismiss Defendants' Counterclaim." Plaintiffs contend that the supplemental tax is illegal and that they are entitled to judgment as a matter of law as to six of the eight counts in their Third Amended Complaint (hereinafter, Complaint). For their part, Defendants argue that the tax is legal and that they are entitled to judgment as a matter of law as to all eight counts in the Complaint.
For the reasons addressed in this Decision, the Court grants, in part, Plaintiffs' Motion for Partial Summary Judgment and denies, in part, Defendants' cross-motion for summary judgment with respect to Count 8 relating to the Open Meetings Act. The Court denies Plaintiffs' Motion for Partial Summary Judgment and grants Defendants' cross-motion for summary judgment with respect to all other counts. The Court also dismisses Defendants' counterclaim for counsel fees. In so ruling, the Court relies on the pleadings, the Partial Agreed Statement of Facts (hereinafter, Facts), affidavits, the wording of the Enabling Act and Ordinance, and the applicable law. This Court exercises jurisdiction over this case pursuant to G.L 1956 § 44-5-27 and G.L. 1956 § 8-2-13.
Facts and Travel
In 2012, the City of Woonsocket faced a severe economic crisis. In response, the State's Director of Revenue established a Budget Commission under G.L. 1956 §§ 45-9-1, et seq., entitled "Rhode Island Fiscal Stability Act" (the Act) to initiate and assure the implementation of appropriate measures to secure the financial stability of the city. (Facts ¶ 12.)
The Budget Commission then developed a Five Year Plan entitled the "Woonsocket Deficit Reduction Package, " which included both increases in revenue and measures to realize reductions in expenditures. (Facts ¶ 17, Ex. E.) On April 2, 2013, the Budget Commission presented the Five Year Plan to the City's local legislative delegation. (Facts ¶ 16.) To effectuate the Plan, the Budget Commission sought a legislative enactment to enable it to impose a supplemental tax in the amount of $2, 500, 000 for Woonsocket fiscal year 2012-2013. (Facts ¶ 19.)
Thereafter, on April 4, 2013, the Senate introduced legislation relating to the 2012-2013 $2.5 million Woonsocket Supplemental Tax (2013 – S 820). (Facts ¶ 20, Ex. F.) Pursuant to the Legislative Status Report, on May 9, 2013, the Senate "read and passed" the bill. (Facts ¶ 21, Ex. G.) Also on May 9, 2013, the House introduced legislation on the same issue (2013 – H-6103). (Facts ¶ 22, Ex. H.) Like the Senate, the House "read and passed" the bill. (Facts ¶ 23, Ex. I.)
On July 2, 2013, Senator Picard moved to amend 2013 – H-6103. (Facts ¶ 24, Ex. J.) This amendment added the following language: "Such supplemental tax shall be contingent upon the city of Woonsocket's realization of a total amount of no less than three million seven hundred fifty thousand dollars ($3, 750, 000) in savings resulting from municipal enactment or concessions from collective bargaining agreements with applicable Woonsocket unions and retirees." Id. The Senate then "read and passed, by unanimous consent, as amended, " the bill, 2013 – H-6103, on the same day. Id. On the following day, July 3, 2013, the House also passed the bill, "as amended in concurrence." (Facts ¶ 25, Ex. K.)
On July 5, 2013, the Budget Commission published the Agenda for its July 8 meeting, "which included in its Open Session Item 8: 'Appropriation Ordinance: City of Woonsocket Supplemental Tax for Fiscal Year 2012 . . . .'" (Facts ¶ 26.) The Budget Commission published "Supporting Documents" on the City of Woonsocket's website, including a proposed draft of the ordinance at issue in this case-Ordinance No. 7 (the Ordinance). (Facts ¶ 27, Ex. M.)
On July 8, 2013, the Budget Commission met and enacted the Ordinance. (Facts ¶ 28.) The Ordinance provides for the implementation of the Supplemental Tax and states, in pertinent part, as follows:
"Such supplemental tax is ordered based upon the projected savings exceeding $3, 750, 000 from municipal and school department enactments and concessions, achieved from collective bargaining agreements with applicable City of Woonsocket and Woonsocket Education Department unions and retirees. . . . .
This Ordinance shall become effective upon its passage." (Emphasis added.) (Facts, Ex. O.)
The Budget Commission ultimately filed the minutes of the July 8, 2013 meeting with the Secretary of State on October 22, 2013. (Facts ¶ 29.)
On July 11, 2013, Governor Chafee signed H-6103, as amended, into law, and it was codified as G.L. 1956 § 44-5-74.4. (Facts ¶¶ 32, 33.) A few weeks later, on July 30, 2013, the City of Woonsocket sent out the 2012 supplemental tax bills to approximately 23, 691 City of Woonsocket taxpayers. (Facts ¶ 34.)
On August 15, 2013, Plaintiffs filed the instant action. Meanwhile, "Woonsocket included the $2.5 million Supplemental Tax in the certified tax levy for fiscal year 2013-2014 and it levied these increased taxes upon approximately 8, 997 Woonsocket taxpayers . . . ." (Facts ¶ 35.)
The parties now cross-move for summary judgment based upon Plaintiffs' Complaint. Specifically, Plaintiffs allege that (1) the Ordinance contravenes § 44-5-74.4 (Count 1); (2) the Ordinance is in violation of the presentment requirement in the Rhode Island Constitution because it was enacted prematurely (Count 2); (3) the supplemental tax is illegal (Count 3); (4) inclusion of the supplemental tax in the tax levy for fiscal year 2013-2014 was unlawful (Count 4); (5) inclusion of the supplemental tax in the tax levy for fiscal year 2014-2015 was unlawful (Count 5); (6) the enactment and assessment of the supplemental tax violated Plaintiffs' procedural due process rights (Count 6); (7) the supplemental tax amounted to an impermissible taking (Count 7); and (8) failure to file the minutes of the July 8, 2013 Budget Commission meeting within the statutory time period violated the Open Meetings Act (Count 8).
The Plaintiffs seek summary judgment as to Counts 1, 2, 4, 5, 7, and 8. The Defendants move for summary judgment on all Counts. Plaintiffs also move to dismiss Defendants' counterclaim for attorney's fees pursuant to § 45-9-23.
Standard of Review
Summary judgment is appropriate when, after reviewing the admissible evidence in the light most favorable to the non-moving party, "no genuine issue of material fact is evident from 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ' and the motion justice finds that the moving party is entitled to prevail as a matter of law." Smiler v. Napolitano, 911 A.2d 1035, 1038 (R.I. 2006) (quoting Super. R. Civ. P. 56(c)). When considering a motion for summary judgment, "the court may not pass on the weight or credibility of evidence, but must consider affidavits and pleadings in the light most favorable to the party opposing the motion." Westinghouse Broad. Co. v. Dial Media, Inc., 122 R.I. 571, 579, 410 A.2d 986, 990 (1980) (internal citations omitted).
During a summary judgment proceeding, "the justice's only function is to determine whether there are any issues involving material facts." Steinberg v. State, 427 A.2d 338, 340 (R.I. 1981) (citing Indus. Nat'l Bank v. Peloso, 121 R.I. 305, 307, 397 A.2d 1312, 1313 (1979)). Moreover, if no genuine issue of material fact exists, the trial justice may determine "'whether the moving party is entitled to judgment under the applicable law.'" Ludwig v. Kowal, 419 A.2d 297, 301 (R.I. 1980) (quoting Belanger v. Silva, 114 R.I. 266, 267, 331 A.2d 403, 404 (1975)). "When there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law, summary judgment is properly entered." Tangleridge Dev. Corp. v. Joslin, 570 A.2d 1109, 1111 (R.I. 1990); Holliston Mills, Inc. v. Citizens Trust Co., 604 A.2d 331, 334 (R.I. 1992) ("Summary judgment is proper when there is no ambiguity as a matter of law" (citing Lennon v. MacGregor, 423 A.2d 820, 821-22 (R.I. 1980))).
A partial summary judgment is proper where certain facts could be readily established while others should remain for determination at trial. Russo v. Cedrone, 118 R.I. 549, 558, 375 A.2d 906, 910 (1977). Pursuant to Super. R. Civ. P. 56(d), "[u]pon the trial of the action, the facts so specified [by the partial summary judgment] shall be deemed established and the trial shall be conducted accordingly." Additionally, Super. R. Civ. P. 56(c) provides that "[a] summary judgment, interlocutory in character, may be rendered on the issue of liability alone although there is a genuine issue as to the amount of damages."
Whether the Ordinance Contravenes § 44-5-74.4
First, Plaintiffs argue that the Ordinance contravened its enabling statute, § 44-5-74.4, because it authorized the supplemental tax based on projected savings rather than on the realization of savings, as provided by the General Assembly. Thus, it is the Plaintiffs' contention that the supplemental tax is illegal as a matter of law. In response, Defendants contend that Plaintiffs misconstrue the definitions of both realization and projected as used in the statute and ordinance, respectively. Therefore, the crux of the parties' dispute hinges on the proper definition of these two terms.
The Meaning of the Term "Realization" in § 44-5-74.4
Section 44-5-74.4(c) provides that the supplemental tax "shall be contingent upon the city of Woonsocket's realization of a total amount of no less than three million seven hundred fifty thousand dollars ($3, 750, 000) in savings resulting from municipal enactment or concessions from collective bargaining agreements with applicable Woonsocket unions and retirees." (Facts ¶¶ 32, 34). Plaintiffs argue that whether the requisite savings have been realized "requires a fact based determination substantially supported by actual financial statements and specific, accurate, and quantifiable cost accounting." (Pls.' Mem. in Supp. of Mot. for Summ. J. at 27.) (Hereinafter, Pls.' Mem.) According to Plaintiffs, it is not enough that Defendants enacted or implemented cost savings measures since the legality of some of those measures have been challenged in the Superior Court. In effect, Plaintiffs assert that savings are realized pursuant to § 44-5-74.4 when the savings are actually held within the City's coffers, free from any possible court challenge.
The Defendants counter that savings are realized at the time that an obligation is reduced. As indicated above, the statute states that the City of Woonsocket must realize the savings "from municipal enactment or concessions from collective bargaining agreements with applicable Woonsocket unions and retirees." Sec. 44-5-74.4(c). Therefore, Defendants argue that the City of Woonsocket complied with § 44-5-74.4 when it enacted and implemented measures such as suspending the cost of living adjustments for retirees, eliminating the obligation to fill fifteen police officer positions, and making changes to the healthcare plans for active and retired city workers. Accordingly, Defendants aver that the City of Woonsocket realized the resulting savings when those actions became effective on July 1, 2013. Moreover, Defendants assert that a requirement that the City of Woonsocket wait until it can show actual savings before being allowed to implement the supplemental tax would be inconsistent with the statutory scheme because the statute was intended to be implemented immediately as a part of a short-term Five Year Plan.
In Rhode Island, "taxing statutes are to be strictly construed against the taxing authority[, ]" and all doubts are to be resolved in the taxpayer's favor. Potowomut Golf Club, Inc. v. Norberg, 114 R.I. 589, 592, 337 A.2d 226, 227 (1975). Moreover, our Supreme Court has held that to protect individuals from the government abusing its authority to tax, the taxing authority must implement the tax by strictly adhering to the "unequivocal instructions" in the statute; "expeditious measures not in conformance with [the limitations provided in the statute], no matter how well intentioned, cannot be substituted for compliance." Cabana v. Littler, 612 A.2d 678, 684 (R.I. 1992).
Further, "[i]t is a fundamental principle that when confronted with a statute that is 'clear and unambiguous, this Court must interpret the statute literally and must give the words of the statute their plain and ordinary meanings.'" LaBonte v. New England Dev. R.I., 93 A.3d 537, 541 (R.I. 2014) (quoting Accent Store Design, Inc. v. Marathon House, Inc., 674 A.2d 1223, 1226 (R.I. 1996)). Here, since "realization" is not defined by the statute, the Court may look to dictionary definitions. See Defenders of Animals, Inc. v. Dep't of Envtl. Mgmt., 553 A.2d 541, 543 (R.I. 1989) ("In a situation in which a statute does not define a word, courts often apply the common meaning as given by a recognized dictionary."). The American Heritage Dictionary defines "realization" as follows:
"1. The act of realizing or the condition of being realized. 2. The result of realizing[, ]" where "realizing" is defined as "2. To bring into reality; make real . . . 4. To obtain or achieve, as gain or profit . . . 5. To bring in (a sum) as profit by sale." Am. Heritage Dictionary of the English Language 1464 (5th ed. 2011).
By its plain terms, therefore, the required savings would be realized when the Budget Commission enacted and implemented several cost-saving measures. When the Budget Commission enacted these changes, the funds that ordinarily would be reserved for former purposes were immediately available for other uses. ...