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Warfel v. Town of New Shoreham

Supreme Court of Rhode Island

March 2, 2018

Christopher Warfel et al.
v.
Town of New Shoreham.

         Washington County Superior Court (WC 16-550), Associate Justice Bennett R. Gallo

          For Plaintiffs: Lauren Balkcom, Esq.

          For Defendant: Katherine A. Merolla, Esq.

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

          OPINION

          GILBERT V. INDEGLIA ASSOCIATE JUSTICE.

         The plaintiffs-certain New Shoreham residents, taxpayers, and Block Island Power Company (BIPCO) ratepayers-appeal a Washington County Superior Court hearing justice's decision to grant the motion to dismiss of the defendant, the Town of New Shoreham (the town). This matter came before the Supreme Court on February 15, 2018, pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not be summarily decided. After considering the arguments set forth in the parties' memoranda and at oral argument, we are convinced that cause has not been shown. Thus, further argument or briefing is not required to decide this matter. For the reasons outlined below, the Superior Court's judgment is affirmed.

         I

         Facts and Travel

         This case derives from a dispute between the New Shoreham town council and plaintiffs.[1]On June 6, 2016, the town council held a meeting to consider the prospective purchase of two-thirds of the shares of BIPCO for $1.8 million. Three members of the town council voted in favor of authorizing the execution of the Stock Purchase Agreement (the agreement). However, two members dissented.

         Nevertheless, in early July 2016, [2] the town executed the agreement memorializing the sale. Thereafter, on July 16, 2016, counsel for the town wrote to the Division of Public Utilities and Carriers (the division) requesting an opinion from the division as to whether any approvals were required by the division before the town could purchase a majority share of stock in BIPCO. The division responded on July 22, 2016, informing counsel that the division's approval was not required because the transaction was not between public utilities and, further, the division declined to exercise its discretionary authority to review the transaction. Three months later, during a September 26, 2016 financial town meeting, voters authorized the town treasurer to issue the funds in consideration of the stock.

         Discontented with the outcome of the financial meeting, especially as it pertained to environmental concerns, on October 18, 2016, plaintiffs filed a motion in the Superior Court seeking to enjoin the closing of the stock sale. Subsequent to that filing, on October 24, 2016, plaintiffs filed a complaint in which they enumerated three grievances against the town: (1) the town's actions were ultra vires; (2) the agreement was voidable by operation of law; and (3) equitable estoppel should be applied. In their complaint, plaintiffs requested that the Superior Court "enjoin[] the closing of the transaction, " as well as "any other such relief [the court saw] fit to grant, until such time as a full, independent, public hearing can be conducted by the Public Utilities Commission pursuant to RIGL 39-1-38[.]"

         Shortly after plaintiffs filed their complaint, the town moved to dismiss. The town presented myriad reasons to support its contention that plaintiffs' claims should be dismissed: (1) under Rule 12(b)(1) of the Superior Court Rules of Civil Procedure, the Superior Court did not have subject-matter jurisdiction; (2) the controversy was moot; (3) plaintiffs did not have standing to sue; (4) plaintiffs' complaint failed under Rule 12(b)(6) of the Superior Court Rules of Civil Procedure to state a claim upon which relief could be granted; (5) plaintiffs' complaint violated Rule 8 of the Superior Court Rules of Civil Procedure; and (6) plaintiffs violated Rule 19 of the Superior Court Rules of Civil Procedure by failing to join indispensable parties.

         On November 1, 2016, a Washington County Superior Court justice heard, and granted, the town's motion to dismiss, agreeing that plaintiffs violated Rules 8 and 19 of the Superior Court Rules of Civil Procedure, and also ruling that the Superior Court did not have subject-matter jurisdiction to hear the dispute. The hearing justice did not decide the case's potential mootness, plaintiffs' questionable standing to file suit, or their alleged failure to state a claim upon which relief could be granted. Following that decision, the stock sale closed on November 7, 2016.

         On November 22, 2016, a final judgment was entered in the Superior Court in favor of the town. The plaintiffs filed a notice of appeal on November ...


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