Preview
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COMMONWEALTH OF MASSACHUSETTS
BARNSTABLE, ss. : SUPERIOR COURT
NO. BACV2012-00687
JANICE SMYTH,
Plaintiff
Vv.
FALMOUTH CONSERVATION
COMMISSION AND THE TOWN
OF FALMOUTH,
Defendants
Swe rH SS WL
PLAINTIFF, JANICE SMYTH’S, MEMORANDUM OF LAW
' IN OPPOSITION TO THE DEFENDANTS’
MOTION FOR JUDGMENT NOTWITHSTANDING THE VERDICT
The Plaintiff, Janice Smyth (“Smyth”), hereby opposes the Town of Falmouth’s
Motion for Judgment Notwithstanding the Verdict “(JNOV”).
: PROCEDURAL BACKGROUND
Smyth asserted in her First Amended Complaint that the application of the
Falmouth Wetlands Protection Regulations (“FWR”) to her property, at 250 Alder Lane
(“property”), and the Conservation Commission’s (“Commission’s”) decision denying
her request for variances from the FWR, resulted in her being unable to develop or make
any beneficial use of the property. As a result, the Town has affected a regulatory taking
under the Fifth Amendment to the United States Constitution and Article 10 of the
Massachusetts Declaration of Rights entitling Smyth to compensation in the amount of
the fair market value of the property taken.The Town attempted to defeat Smyth’s claims before trial by moving for
Summary Judgment. In its motion, the Town asserted that Smyth could not establish a
regulatory taking because (1) she had no reasonable investment-backed expectation of
developing the property, (2) the economic impact of the wetlands’ regulations is not
sufficiently severe, and (3) the character of the governmental action is not a physical
invasion of the land or unfair singling out of the Plaintiff. After a full hearing, the Court
(Nickerson, J.), denied the Town’s motion on the grounds that the Town had failed to
“affirmatively demonstrate that there is no genuine issue of material fact on every issue
relevant to the takings claim.”
Thereafter, the case was tried to a jury for one week from December 5-9, 2016.
The Court (Moriarity, J.) denied the Town’s motion for a directed verdict at the close of
the evidence.
On December 9, 2016, the jury returned a verdict in favor of Smyth and awarded
her $640,000.00 in damages. A judgment on jury verdict in the amount of $648,050.53
was entered by the clerk on January 23, 2017.
Now, the Town moves for JNOV. The grounds of the Town’s motion are
essentially the same as in the Town’s Motion for Summary Judgment: that Smyth lacked
evidence to support her takings claim. For the reasons set forth herein, Smyth asserts that
the Town’s Motion should be denied.
STANDARD OF REVIEW.
A motion for judgment notwithstanding the verdict should be denied if, “anywhere
in the evidence, from whatever source derived, any combination of circumstances could
2be found from which a reasonable inference could be drawn in favor of the non-moving
party.” Boothby v. Texon, Inc., 414 Mass. 469, 470 (1993). A JNOV motion should
only be granted when “there can be but one conclusion as to the verdict that reasonable
men should have reached.” O’Shaughnessy v. Bess, 7 Mass.App.Ct. 727, 728 (1979).
ARGUMENT
L Smyth Presented Sufficient Evidence That She And Her Parents Had
Distinct Investment-Backed Expectations Of Developing The Property
’ And That The Expectations Were Reasonable.
A regulation action also may constitute a taking if it interferes too significantly
with one's property use on balance with the legitimate public purpose the interference
serves. Penn Cent. Transp. Co. v. City of N.Y., 438 U.S. 104 (1978). To determine if a
regulation goes “too far,” the Supreme Court set out the following three guideposts: (1)
the extent to which the regulation interferes with the owner's distinct investment-backed
- expectations; (2) the economic impact of the regulation; and (3) the character of the
government action. These three factors serve as the principle guidelines for determining
regulatory takings claims and are designed to measure the "severity of the burden that
government imposes upon private property rights." Id.
The Town argues that Smyth failed to present sufficient evidence that she and her
parents had distinct investment-backed expectations in developing the subject property.
Smyth disagrees. .
The evidence that was presented by Smyth at trial on this issue includes, but is not
limited to, the following:e The property is situated within a residential subdivision with approximately
200 lots which were intended for development with single-family homes.
e Nearly all the other lots in the subdivision have been built upon.
e The Property consists of approximately 16,500 square feet, which is more
than adequate for construction of a single-family dwelling.
¢ The lot has a level area by the road and then gently slopes down towards a
salt marsh. The entire lot, including the gently sloping bank, is well
vegetated and stable.
¢ Smyth’s parents invested $49,000.00 in the property in 1975 when they
purchased it.
e Smyth’s parents bought the property with the specific intent of building
their retirement home on it when they were ready to retire.
e Thereafter, for the 40+ ensuing years, Smyth’s parents and Smyth paid the
HOA assessments and the real estate taxes to preserve and protect the initial
$49,000.00 investment, as well as the capital appreciation in the form of the
steadily increasing property value.’
e The Town’s tax assessments were predicated upon the land being buildable.
Indeed, the Director of Assessing (Patricia A. Favulli) testified that the
Town classified the land as “buildable” and as “premium” because of the
water view. This gave Smyth’s parents and Smyth indicia that the land was
buildable.
e While they were holding the property for their eventual retirement, Smyth’s
parents observed the other vacant lots in the surrounding area developed
with homes, including the lots on both sides of their property.
e Smyth’s family received unsolicited offers from developers providing,
further confirmation that the land was desirable and buildable.
e Smyth is an only child and her father’s sole heir. She knew that, when her
father died, she would inherit the property.
e When Smyth inherited the land, she paid the taxes and the HOA fees.
' The Town’s 2011 assessment was $710,000.00 and the annual tax was $5,265.36
4Smyth preserved and protected the investment while she was preoccupied
with handling her father’s estate.
In 2006, Smyth had a perc test done on the lot and her husband began to
sketch out a house design.
When she was able to turn her full attention to the property, she marketed it
for sale by putting a for sale sign on it and putting it on a’website.
When her efforts did not yield a sale, Smyth turned to a broker who
suggested that she obtain permits for a house in order to make the property
more marketable.
In 2007, before the Regulations changed and while the lot was still
buildable without variances, Smyth hired a lawyer and an engineer and
other professionals to help her obtain permits.
After the regulations changed, the permitting effort that Smyth initiated
changed to include a request for variances.
Smyth proposed a modest home and applied for wetlands permits and
variances, but was denied.
Smyth invested substantial sums in the payment of taxes, HOA fees, and in
the permitting effort.
“A property owner’s investment-backed expectations must be reasonable and
predicated on existing conditions.” Leonard v. Town of Brimfield, 423 Mass. 152, 155
(1996). An expectation of developing land may also be “based on its similarity to the
surrounding lots on which homes had already been built, or based on the availability of
special permits for preexisting nonconforming lots.” Giovanella v. Conservation Comm.
of Ashland, 447 Mass. 720, 733 (2006).
The Court in Gove v. Zoning Board of Appeals of Chatham, 444 Mass. 754
(2005), held that the fact that a takings claimant inherited the property at issue does not
5affect the takings claim. In so ruling, the Gove Court cited Palazzolo v. Rhode Island,
533 U.S. 606 (2001), as follows: “We ... have never held that a takings claim is defeated
simply on account of the lack of personal financial investment by a ... donee, heir or
devisee.”
Smyth contends that the evidence that she introduced is more than adequate to
support a finding by the jury that she and her parents had reasonable and distinct
investment-backed expectations of developing the property.
It is noteworthy that the Superior Court ruled on summary judgment that “[i]f it
was reasonable to expect a permit under the 1998 regulations, then the 2006 soil samples
and sketches by the plaintiff's husband could constitute ‘substantial personal financial
investment’ in the lot above and beyond the payment of taxes and association dues, thus
supporting a finding.of reasonable investment-backed expectations before the 2008
regularity amendments removed FWR 10.18(7).” Smyth established through the
testimony of her expert, Michael Borselli, PE, that the lot was buildable under the 1998
Regulations. Thus, the evidence of the 2006 perce test and house sketches singularly is
enough to defeat the motion for JNOV. Smyth introduced substantially more evidence
than that. Consequently, the JNOV motion should be denied.
The Town argues that “[t]he only investment made by the Plaintiff or her parents
prior to 2006 was the payment of property taxes and homeowners’ association dues” and
that “this evidence is insufficient to establish the existence of ‘investment-backed
expectations’ for purposes of the Penn Central analysis.” This argument ignores four key
pieces of evidence: (1) Smyth’s parents invested $49,000.00 in the property in 1975
6when they bought it; (2) Smyth’s parents intended to build their retirement home on the
land; (3) Smyth’s parents, and then Smyth, paid the property taxes and HOA fees to
preserve and protect the initial capital investment and all the capital appreciation in the
asset that occurred over the years; and (4) Smyth invested “sweat equity” and tens of
thousands of dollars trying to permit and sell the lot.
Furthermore, the Town’s argument ignores the precept that the law recognizes the
difficulty of demonstrating that “mere enactment” of regulations restricting land use
results in a taking. Suitum v. Tahoe Regional Planning Agency, 520 U.S. 725, 736
(1997). Takings law takes into account “the high degree of discretion characteristically
possessed by land-use boards in softening the strictures of the general regulations they
administer.” Id. at 738. Before a takings calm becomes ripe, a landowner is required to
give a land-use authority an opportunity to exercise its discretion and “may not establish
a taking before a land-use authority has the opportunity, using its own reasonable
procedures, to decide and explain the reach of a challenged regulation” Palazzolo at
620. “As a general rule, until these ordinary processes have been followed the extent of
the restriction on property is not known and a regulatory taking has not been established.”
Id. at 621, citing Suitum, supra, at 726. Thus, even after the 2008 Regulations prohibited
development without a variance, Smyth could still have reasonable expectation to
develop the land because she was eligible to apply for a variance. The taking did not
occur until Smyth applied for the variance and allowed the Commission to exercise its
discretion. When the Commission denied the variance, and rendered her land
unbuildable, the taking occurred.Il. The Town’s Argument That Smyth’s Expectations Were Not Reasonable
Is Contrary To The Evidence.
The Town argues that “Plaintiff's expectation that she could develop her property
with a single family home was not reasonable because at the time Plaintiff took
ownership of the Property in 2001 development was already prohibited by the plain
language of the 1998 Regulations.” This argument is squarely contradicted by the
testimony of Michael J. Borselli, PE. Mr. Borselli testified that, in his professional
opinion, the property (1) could have been developed with a house like the others in the
neighborhood until 1998; (2) that, after the 1998 regulatory changes, the property could
have been developed with a smaller house; and (3) that, after 2008, the property could not
be developed without variances.
On cross-examination, the Town attempted to get Mr. Borselli to concede that the
1998 Regulations prohibited development. But Mr. Borselli did not waiver and
maintained his opinion that the property was developable under the 1998 Regulations.
The Town did not present any contrary expert opinion. Thus, the jury could have
credited Mr. Borselli’s testimony and concluded that the property was developable under
the 1998 Regulations.
It is noteworthy that the Town made the same arguments about the 1998
Regulations in its summary judgment motion. The Town supported its summary
judgment arguments with an Affidavit of the Conservation Administrator, Jennifer
McKay. Smyth supported her opposition with an Affidavit from Mr. Borselli. The Court
ruled that “the parties’ dueling affidavits create material issues of fact.” At trial, Ms.Mckay was precluded from testifying as an expert. Thus, at trial, the jury heard expert
testimony from Smyth’s experts that the land was buildable under the 1998 Regulations
and no countervailing expert testimony from the Town. If there was a material issue of
fact on summary judgment, then there was undoubtedly sufficient evidence at trial for the
jury to find that the 1998 Regulations did not preclude development.
Ill. The Character Of The Government Action Supports A Taking Claim.
The “character of the governmental action” is germane to cases involving a
physical invasion of property. Zanghi v. Board of Appeals of Bedford, 61 Mass. App. Ct.
82 (2003). Smyth never argued that the Regulations resulted in a physical invasion.
Smyth did argue that the “no disturbance zones” prevented any and all activity on
her property, except for a 115 square foot triangle at the front property boundary. These
“no disturbance zones” precluded all development and all use of the property without a
variance. The jury could have reasonably concluded that this restriction on Smyth’s
property was of the character that supported her taking claim.
IV. The Evidence Of Economic Impact Was Sufficient To Support Smyth’s
Takings Claim.
In evaluating economic impact, the Court compares the value of the property
before and after the alleged taking. Giovanella v. Conservation Commission of Ashland,
444 Mass. 754, 766 (2005). To constitute a compensable regulatory taking, the economic
impact on the property owner must be “severe.” Daddario v. Cape Cod Commission, 425
Mass. 411, 416, cert denied, 522 U.S. 1036 (1997). Leonard v. Town of Brimfield, 423
Mass. 152, 156 (1996).Smyth introduced evidence that the economic impact of the Regulations was
severe. Mr. Clancy, a licensed appraiser, testified that value of the lot as a developable
was $700,000.00 and the value of the lot as an undevelopable parcel was $60,000.00.
This represents a diminution of value of 91.5% and an economic loss of $640,000.00.
Furthermore, the Regulations at issue deprive Smyth of practically all use of the
property. The “no disturbance zones” prohibit all activity on the property, except for the
aforementioned 115 square foot triangle. Consequently, there is simply no practical
ability to use the land. The Town argues that Mr. Borselli testified that Smyth could use
her property for gardening or recreational uses. This was on cross. The reasonable
inference from this testimony is that Mr. Borselli was referring to the 115 square feet by
the road that was outside of the no disturbance zone. .Mr. Borselli clearly testified that
the no disturbance zones barred all activities.
Thus, the wetlands regulations have caused a significant deprivation of value that
the jury could have found to be characterized as “severe.” Similarly, the effect of the no
disturbance zones stripped Smyth’s property of all practical value and left her with only
the burden of paying taxes on the property. Thus, Smyth introduced sufficient evidence
of severe economic impact and deprivation of beneficial use to support her takings claim.
Although Mr. Clancy testified that the property had a residual value of $60,000.00,
the jury could have found that, in relation to the buildable value of $700,000, the
economic impact was, under the circumstances, severe, and that, under the circumstances,
all practical value had been taken away.
10SF
The Town has cited several cases for the proposition that a significant diminution
in value does not necessarily rise to the level of a taking. However, the cases cited are
not applicable to Smyth’s taking claim under Penn Central. The cases of Appolo Fuels,
Inc. v. United States, 381 F.3d 1338 (Fed. Cir. 2004) and Giovanelli, supra, were both
decided on the grounds of investment-backed expectations, not economic impact. The
case of Loveladies Harbore, Inc. v. United States, 28 F.3d 1171 (Fed. Cir. 1994) was
decided on economic impact, but it was a categorical taking claim under Lucas which
requires a showing of deprivation of all economically beneficial value. Smyth bases her
takings claim on the Penn Central factors and must therefore make a showing that the
impact of the Regulations is “severe.” The evidence she has presented was certainly
sufficient to support a conclusion that the economic impact warranted a verdict that a
taking occurred.
V. The Town’s Motion for JNOV Is Fundamentally Flawed Because It
Erroneously Attempts To Elevate The Three Penn Central Guideposts To
Dispositive Status.
The Town has attempted to argue that Smyth failed to introduce sufficient
evidence on one or more of the three Penn Central guideposts and, as a result, the jury
verdict should be vacated. In doing so, the Town treats the three guideposts as if they
were elements of a cause of action and that failure to prove each element is fatal to
Smyth’s claim. This approach is flawed because the guideposts do not have dispositive
status. The guideposts are part of a balancing test that seeks to find fairness. Smyth
contends that she has submitted sufficient evidence on each and every guidepost. But
11even if she did not do so, a failure to prove one or more guideposts would not be fatal to
her takings claim.
The Fifth Amendment forbids the taking of private property for public use without
just compensation. This constitutional guarantee is “designed to bar the government
from forcing some people alone to bear public burdens which, in all fairness and justice,
should be borne by the public as a whole. Penn Central, 438 U.S. at 123-124. (Emphasis
added).
The concepts of “fairness and justice” are not susceptible to empirical analysis and
the Supreme Court has “eschewed any ‘set formula’ for determining when ‘justice and
fairness’ require that economic injuries caused by public action be compensated by the
government, rather than remain disproportionately concentrated on a few persons.”
Palazzolo_v. Rhode Island, 533 606, 633 (2001) (O’Connor concurring) citing Penn
Central, supra at 124. The outcome of a takings claim depends largely upon the
particular circumstances of each case. Id.
In reversing the Rhode Island Supreme Court’s decision that Palazzolo lacked
reasonable investment-backed expectations, and hence lacked a takings claim, because
the wetlands regulations predated Palazzolo’s acquisition of the property at issue, the
Justice O’ Connor wrote in her concurring opinion:
Penn Central does not supply mathematically precise variables, but instead
provides important guideposts that lead to the ultimate determination
whether just compensation is required. ... The [Rhode Island Supreme
Court] erred in elevating what it believed to be “[petitioner’s] lack of
reasonable investment-backed expectations” to “dispositive” status.
Investment-backed expectations, though important, are not talismanic
under Penn Central. Evaluation of the degree of the interference with
12investment-backed expectations instead is on one factor that points.
toward the answer to the question whether the application of a
particular regulation to particular property “goes too far.” (Emphasis
added).
Since no single factor in the Penn Central analysis is outcome dispositive, a lack
of evidence on one or more of the guideposts would not mean that the jury verdict must
be reversed. The jury was entitled to consider all of the evidence with the Penn Central
balancing test in mind in order to determine whether the regulations at issue went “too
far.” The jury in the Smyth case found that Falmouth’s regulations, when applied to
Smyth’s land, did indeed go too far and properly awarded just compensation.
CONCLUSION
Smith introduced ‘sufficient evidence at trial to sustain the jury verdict.
Accordingly, Smyth requests that the Court deny the Town’s Motion for Judgment
Notwithstanding the Verdict.
Dated: February 15, 2017 Respectfully submitted,
For the Plaintiff,
Janice Smyth,
By her Attorney,
Brian J. 1
BBO # 560063
Troy Wall Associates
90 Route 6A.
Sandwich, MA 02563
(508) 888-5700
bjw@troywallassociates.com
13Sth 8 Remon
Seth G. Roman (RRAJ)
14
BBO#638700 |
Carter DeYoung
270 Winter Street
Hyannis, MA 02601
(508) 771-4210CERTIFICATE OF SERVICE
I, Brian J. Wall, do hereby certify that I have served an original
and one copy of the within Plaintiffs Opposition to Defendants’ Motion
for Judgment Notwithstanding the Verdict by mailing same, first class
mail, postage prepaid to:
Nicholas P. Brown, Esq.
Michelle N. O’Brien, Esq.
Pierce Atwood LLP
100 Summer Street #2250
Boston, MA 02110
Patricia A. Harris, Esquire
Associate Town Counsel
Office of Town Counsel
157 Locust Street
Falmouth, MA 02540
DATED: February 15, 2017
Brian J. 1