Kenlin Properties, LLC v. City of East Providence

         Providence County Superior Court (PC 11-7249) Associate Justice Sarah Taft-Carter

          For Petitioners: Lauren E. Jones, Esq., Robert S. Thurston, Esq., Timothy J. Chapman, Esq.

          For Respondents: Thomas M. Dickinson, Esq. James P. Howe, Esq.

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

          OPINION

          PAUL A. SUTTELL, CHIEF JUSTICE

         This Court granted a petition for writ of certiorari filed by the City of East Providence and the East Providence Zoning Board of Review (zoning board) (collectively, the city) seeking review of a judgment of the Superior Court. The zoning board had affirmed a notice of violation issued by the East Providence zoning officer finding several violations of a use variance that had been granted in 1998 to the owner and operator of a facility known as Pond View Recycling (Pond View). Kenlin Properties, LLC (Kenlin) and TLA-Providence, LLC (TLA), as the owner and operator of Pond View, appealed to the Superior Court from the zoning board's decision upholding the notice of violation.^[1] A trial justice of the Superior Court reversed the zoning board, concluding that the zoning board's decision was clearly erroneous and made upon unlawful procedure. For the reasons set forth in this opinion, we quash the judgment of the Superior Court.

         I. Facts and Procedural History

         The property at issue in this appeal is located at One Dexter Road in East Providence (the property) and at present is owned by Kenlin. At the time of the notice of violation, the property was operated as a construction and demolition (C&D) debris processing facility known as Pond View.

         When the application for a use variance was originally filed in January 1998, Pond View was registered with the Rhode Island Department of Environmental Management (DEM) as a processing facility. The then owner and the proposed lessee of the property applied to the zoning board for a use variance to operate Pond View as a facility for "primarily the recycling of natural and processed wood materials into mulch products." The application described the property as covering 15.614 acres containing three buildings: a 67, 578-square-foot brick and block industrial warehouse, a 24, 583-square-foot metal warehouse, and a 24, 990-square-foot metal warehouse. The list of "proposed construction and uses" requested permission to "allow incidental metal separation as an accessory use." The application sought a variance under which "[l]imited metal reclamation [would be] permitted, if it [was] carried on in an enclosed building, " and other special conditions "which would permit immediate [outside] operation of the wood recycling operation" for eighteen months, at which time "an enclosure designed specifically for the C&D and wood processing or recycling machine" would have been built.

         Prior to voting on the application, members of the zoning board questioned Kenneth Foley, the proposed lessee of the property, regarding the storage of product, an enclosure for the grinder, and a sound-absorbing berm. Foley responded that there would be an open-ended building that "looks like a greenhouse, " and an earth berm to absorb the sound, plus a tree buffer zone at the property line. The zoning board unanimously granted the application but imposed four conditions on the use variance: (1) limiting the grinding of materials to 150 tons per day; (2) restricting the grinding hours from 8 a.m. to 4 p.m. daily Monday through Friday and 8 a.m. to noon on Saturday; (3) constructing a berm before grinding operations commence; and (4) completing the grinder enclosure within eighteen months.

         In February 2003, DEM granted Pond View a license, pursuant to G.L. 1956 § 23-18.9-8(a)(1), ^[2] to increase the processing capacity to 500^[3] tons per day. In 2005, the city sought both a declaratory judgment declaring that Pond View was violating its use variance by receiving more than 150 tons per day of C&D debris and an injunction precluding Pond View from operating its facility. A justice of the Superior Court issued a declaratory ruling holding that: the original use variance remained "valid and intact, " that the "principal regulatory authority" was the state, that "only those zoning regulations that [did] not inhibit the state regulatory scheme [could] be utilized, " and that the city was not prohibited from pursuing "any putative violation of a local zoning ordinance" through normal administrative procedures.

         Subsequently, on May 27, 2011 the city zoning officer issued a notice of violation to Pond View alleging violations of the use variance granted in 1998. The zoning officer reviewed Pond View's 1998 variance application and site plan, the transcripts from the 1998 hearings, and the 2011 DEM-approved site plan. After reviewing the documents, the zoning officer found that it was "abundantly clear that the approved 'open storage' area was constrained to the pad illustrated on the site plan submitted in conjunction with the '[a]pproved [v]ariance, '" and that "[t]he present/proposed operation [had] well exceeded the 'approved' pad-site." The zoning officer further found that it was "abundantly clear that the '[a]pproved [v]ariance' was limited to 150-tons, and not simply the grinding of 150-tons [because] 'Pond [V]iew' repeatedly testified as to the exact quantity * * *." After further review of the hearing transcripts, the zoning officer also found that it was "abundantly clear that wood products would be the predominant material handled, and for which a variance [had been] granted." However, the zoning officer found, wood products comprised less than half of the incoming C&D materials at Pond View. Additionally, the zoning officer stated that "Pond View has continuously argued that there is a unique distinction between the hours of operation and hours allocated to the 'grinding' component of the operation. However, no such distinction was offered during testimony." The zoning officer also found that there was no longer an "earthen berm with natural vegetation atop, " which had been "a specified condition of approval [of the variance]." The zoning officer further noted that Pond View testified to having "one grinder" on the property but, in its 2011 DEM submission, it added a second machine, which the zoning officer concluded was "outside the scope of the '[a]pproved [v]ariance.'"

         The zoning officer ultimately cited Pond View for: exceeding the approved open storage area; expanding beyond the 150-ton limit approved in the 1998 use variance; accepting products other than wood; operating beyond the permitted hours of operation; failing to maintain an earthen berm; and adding additional equipment to the site. In or about June 2011, Kenlin and TLA appealed the notice of violation to the zoning board.

         The zoning board held hearings in the fall of 2011 and issued a unanimous decision on October 19, 2011, denying Kenlin and TLA's appeal. In affirming the decision of the zoning officer, the zoning board made the following findings of fact:

"1. The [b]oard has considered the findings of the [z]oning [o]fficer;

"2. The [b]oard has considered the recommendation of the [p]lanning [b]oard;

"3. The use for which the variance was granted was primarily the recycling of natural and processed wood into mulch products;

"4. That the operation today is not primarily the recycling of natural and processed wood into mulch products;

"5. The types of materials being taken in and processed exceed what was applied for and granted in the variance;

"6. There are presently two grinding machines at the operation;

"7. The permitted use allows for one grinding machine;

"8. That material currently processed such as tires, concrete, vinyl siding exceed the use permitted by the variance;

"9. That * * * based upon testimony presented and the photos entered into evidence, the record shows that the petitioner has open storage on the premises that exceeds the limits of the permitted use;

"10. Based upon the testimony and the findings from the records, the petitioner is processing in excess of the tonnage that's allowed to be processed_[._]"

         Kenlin and TLA, on behalf of Pond View, appealed the zoning board's decision to the Superior Court on December 23, 2011. Before the Superior Court, Kenlin and TLA argued that the zoning officer and zoning board erred in considering documents and testimony outside of the recorded variance. Kenlin and TLA also argued that "the 2006 [d]eclaratory [j]udgment preclude[d] re-litigation of the issues of daily tonnage limits and the acceptance and processing of concrete because the [2006 declaratory judgment] considered the scope of the 1998 [use variance] as well as the actual use of the [p]roperty." Conversely, the city maintained that the zoning officer and zoning board "properly looked beyond the four corners of the [variance] to determine what was permitted, " and that the zoning board properly affirmed the zoning officer's decision.^[4]

         On August 2, 2013, the trial justice issued a written decision reversing the decision of the zoning board. The trial justice noted that the zoning officer and zoning board "relied on sources outside the [variance] to construe the conditions to include items not approved in 1998." Specifically, the trial justice determined that the variance "[did] not impose: site plan restrictions_[, _] open storage restrictions_[, _] limits on daily tonnage receipt or processing_[, _] limits on the types of materials that may be accepted or processed_[, _] limits on the [f]acility's hours of operation_[, _] a requirement for an earthen berm with trees atop_[, _] or a limit to one machine on the [p]roperty." The trial justice held that the zoning officer and zoning board "were without authority to revisit the prior^[] [zoning] [b]oard's work to create a violation." The trial justice concluded that "conditions must be clearly expressed to be effective, " thus, the zoning board "erred in upholding the [notice of violation] and in finding violations with respect to the scope of the use, materials, and the [s]ite [p]lan."

         On the issue of collateral estoppel, the trial justice was "satisfied that the requirements for collateral estoppel [were] met" in this case because, identical to the 2006 declaratory judgment action, the city was again a party, Kenlin and TLA were in privity with Pond View, "the tonnage and material receipt issues [were] 'identical' * * *_[, _] and the prior proceeding resulted in a final judgment." Thus, the trial justice held that "[t]he 2006 [d]eclaratory [j]udgment bar[red] re[-]litigation of the grinding and concrete processing issues." Ultimately, the trial justice held that Kenlin and TLA's "substantial rights were prejudiced because the [d]ecision of the [z]oning [b]oard, affirming the [z]oning [o]fficer's [n]otice of [v]iolation, was clearly erroneous and made upon unlawful procedure." Thus, the trial justice granted Kenlin and TLA's appeal, and final judgment entered on September 6, 2013.

         Subsequently, the city filed a petition for writ of certiorari with this Court, seeking review of the Superior Court's decision. We granted the city's petition and issued a writ on May 5, 2014. Before us, the city argues that the trial justice erred by: (1) "substituting her judgment for that of the * * * zoning officer and zoning board in determining the scope of the [1998 use variance]; (2) "holding that the [c]ity could not consider the application, site map, and testimony at the 1998 public hearing[s] in determining the scope of the use that was granted to Pond View in the 1998 [use] variance; (3) by analyzing the conditions of the 1998 use variance instead of the scope of the 1998 use variance; and (4) "in applying collateral estoppel to preclude the zoning officer from raising the 'tonnage' and 'concrete' issues regarding Pond View's use of the facility."

         II. Collateral Estoppel

         A threshold issue in this case is whether the zoning officer and zoning board were precluded by the doctrine of collateral estoppel from raising the "tonnage" and "concrete" issues when considering ...