Opinion ID: 2553343
Heading Depth: 1
Heading Rank: 7

Heading: Appeal from Denial of the Campbells' Motion for Attorney's Fees

Text: The Campbells argue that the trial justice erred when she denied their motion for reasonable litigation expenses pursuant to chapter 92 of title 42. The first line of the act declares that state and municipal agencies possess a tremendous power in their ability to affect the individuals and businesses they regulate or otherwise affect directly. Section 42-92-1(a). This power tempts state agencies to proceed against individuals or small businesses which are least able to contest the agency's actions   . Id. Thus, the act was propounded to mitigate the burden placed upon individuals and small businesses by the arbitrary and capricious decisions of administrative agencies made during adjudicatory proceedings   . [5] Taft v. Pare, 536 A.2d 888, 892 (R.I.1988). However, a prevailing party will not receive an award of reasonable litigation expenses if the agency's adjudicatory officer finds that the agency was substantially justified in actions leading to the proceedings and in the proceeding itself. [6] Section 42-92-3(a). Under the act, `[s]ubstantial justification' means that the initial position of the agency, as well as the agency's position in the proceedings, has a reasonable basis in law and fact. Section 42-92-2(7). The trial justice denied the motion for reasonable litigation expenses because the Campbells' action [was] not an appeal from any adjudicatory proceeding of a municipal agency under the act, from which this Court could grant relief. Specifically, she found that the Tiverton building official was not an agency nor did he conduct an adjudicatory proceeding when he issued the underlying building permit to the TYC. Therefore, the trial justice held that the act was inapplicable. The Campbells argue before this Court that the act is applicable to the wrongful issuance of a building permit to a non-conforming use by a town building official compelling [plaintiffs] to seek a declaratory judgment in the [S]uperior [C]ourt and that their action meets the criteria for an award of reasonable litigation expenses under the act. They maintain that they are prevailing parties because of the declaratory judgment entered in their favor and the town's subsequent revocation of the issued building permit. The Campbells contend that the building official meets the definition of agency under the act because, inter alia, he has the authority to impose fines and seek injunctive relief in the form of cease and desist orders. Finally, they submit that both the issuance of the building permit and defense of the building permit in the declaratory judgment action must be deemed proceedings qualifying under the [a]ct. We review the trial justice's denial of the motion for reasonable litigation expenses under the act, as a question of law, de novo. State v. Fuller-Balletta, 996 A.2d 133, 140 (R.I.2010) (citing International Brotherhood of Police Officers, 989 A.2d at 108; Waterman v. Caprio, 983 A.2d 841, 844 (R.I.2009)). After considering the positions of both the Campbells and the town, we hold that the trial justice did not err when she denied the Campbells' motion. This is so because, in our view, the building official's issuance of the building permit simply was not an adjudicatory proceeding under the act. [7] The act defines adjudicatory proceedings as any proceeding conducted by or on behalf of the state administratively or quasi-judicially which may result in the loss of benefits, the imposition of a fine, the adjustment of a tax assessment, the denial, suspension, or revocation of a license or permit, or which may result in the compulsion or restriction of the activities of a party. Section 42-92-2(2) (emphases added). In administrative law, such a proceeding is one in which the rights and duties of a particular person are decided after notice and an opportunity to be heard. Black's Law Dictionary 725 (7th ed.1999). Here, the building official, assuming arguendo that he may be deemed to be an agency under the act, did not conduct a proceeding wherein the parties, the TYC and the town, were given an opportunity to be heard. Rather, he issued the permit after reviewing the application and accompanying documentation, a process that he testified took approximately three hours. Therefore, although his action could have resulted in the denial    of a permit, it simply was not an administrative or quasi-judicial proceeding that may precipitate a prevailing party's claim for reasonable litigation expenses. Section 42-92-2(2). Likewise, the Campbells' assertion that the Superior Court proceedings in the underlying declaratory judgment action may serve as the requisite adjudicatory proceeding is equally unavailing. The act clearly provides that the contemplated adjudicatory proceeding is one that occurs at the agency level either administratively or quasi-judicially, not an adjudicatory proceeding in Superior Court. See McHugh v. Harrington, 655 A.2d 690, 690 (R.I.1995) (mem.) (holding that the petitioner, who challenged the registry's delay of his license suspension in Administrative Adjudication Court and the appellate division of that court, was entitled to reasonable litigation expenses under the act); Krikorian v. Rhode Island Department of Human Services, 606 A.2d 671, 672, 676 (R.I.1992) (holding that the petitioners represented pro bono were entitled to reasonable litigation expenses for agency actions that were without substantial justification including the Department of Human Services's denial of medical-assistance benefits and the department's disqualification of a petitioner from a food-stamp program). Although the act provides that a court reviewing the underlying decision of the adversary adjudication may make an award for fees and other expenses, here, the Superior Court was not reviewing such a decision and correctly declined to grant the Campbells relief under the act. Section 42-92-3(b). Therefore, given that a key element to a claim for reasonable litigation expenses under the act is absent, the Campbells' appeal from the denial of their motion must fail.