One Barberry Real Estate Holding, LLC v. Maturo

698 F.Supp.3d 252

ONE BARBERRY REAL ESTATE HOLDING, LLC; Farm River Rock, LLC; and John Patton, Plaintiffs, v. Joseph MATURO, Jr.; Christopher Soto; Michael Milici; and Town of East Haven, Defendants.

3:17-CV-985 (SVN)

United States District Court, D. Connecticut

Signed October 3, 2023

Glenn William Dowd, Hannah Fay Kalichman, Day Pitney LLP, Hartford, CT, Kirk D. Tavtigian, Jr., Avon, CT, Walter Joseph Hope, Alter & Pearson, LLC, Glastonbury, CT, for Plaintiffs.

Claire M. McNamara, Milano & Wanat LLC, Branford, CT, Garrett A. Denniston, Hugh F. Keefe, Steven J. Errante, Lynch, Traub, Keefe & Errante, P.C., New Haven, CT, Michael Schulz, Connecticut Office of the Attorney General, Hartford, CT, for Defendants Joseph Maturo, Jr., Christopher Soto, Michael Milici.

MEMORANDUM OF DECISION

Sarala V. Nagala, United States District Judge.

TABLE OF CONTENTS

LIABILITY . . . 266

I. FINDINGS OF FACT . . . 266

A. The Parties . . . 266

B. The Subject Property . . . 267

C. Events from 2007 through 2013 . . . 267

1. Formation of FRR . . . 267

2. Correspondence Between Joe Zullo and Nicholas Mingione . . . 268

D. 2014 and 2015 . . . 269

1. Milici's 2014 Correspondence . . . 269

2. Biancur's 2014 Decision . . . 270

3. Code Enforcement Committee Meeting in June of 2015 . . . 272

4. Denial of Blasting Permits in the Fall of 2015 . . . 273

E. 2016 . . . 275

F. 2017 . . . 276

1. February of 2017 . . . 276

a. Carfora's First Complaint . . . 276

b. The First Cease-and-Desist Order . . . 277

2. March of 2017 . . . 278

a. The Meeting on March 21, 2017 . . . 278

b. Site Visit on March 31, 2017 . . . 282

c. Carfora's Second Complaint . . . 282

3. April of 2017 . . . 282

a. April 20 and 21, 2017 . . . 282

b. The Second Cease-and-Desist Order . . . 284

c. Inspection on April 25, 2017 . . . 285

d. Community Complaints . . . 286

4. May of 2017 . . . 286

a. Early May Generally . . . 286

b. Early May: DiLungo's Conversation with Maturo . . . 287

c. Early May: Conferral Among Town Officials . . . 288

d. May 8, 2017: Soto's Site Visit . . . 288

e. May 9, 2017: Code Enforcement Committee Meeting . . . 289

f. May 9, 2017: Joe Zullo's Phone Call with Alter . . . 291

g. May 9, 2017: The Third Cease-and-Desist Order . . . 292

h. May 9, 2017: Quarry Opposition Group Meeting . . . 293

i. The Court's Findings of Who, When, and Why . . . 293

G. Zoning Board of Appeal Proceedings . . . 296

1. Al Zullo's Conflict of Interest . . . 296

2. Parties' Arguments Regarding Biancur's 2014 Decision . . . 298

3. Parties' Arguments Regarding Nonconforming Use . . . 300

4. Parties' Arguments Regarding Section 31 . . . 301

5. Parties' Arguments Regarding Safety . . . 303

a. Rocks Rolling Down the Hill . . . 303

b. Phone Messages . . . 303

c. Engineering Issues . . . 304

d. DEEP Permit . . . 304

6. Patton's Final Comments to the ZBA . . . 305

7. Public Comment . . . 305

8. Al Zullo's Advice to the ZBA . . . 306

9. The ZBA's Deliberation and the Court's Findings . . . 309

H. Plaintiffs' Appeal to the Connecticut Superior Court . . . 310

I. Procedural History in the Present Consolidated Actions . . . 311

II. SUMMARY OF HOLDINGS . . . 311

III. SECTION 1983 CLAIM AGAINST MATURO AND SOTO . . . 312

A. Section 1983 Legal Standard . . . 312

B. Substantive Due Process . . . 312

1. Legal Standard . . . 312

2. Property Interest . . . 314

3. Arbitrary Action . . . 314

a. Soto . . . 314

i. Lack of Authority . . . 314

ii. Failure to Review Section 31 . . . 316

iii. Pretext . . . 317

b. Maturo . . . 318

C. Personal Involvement of Soto and Maturo . . . 318

D. Causation . . . 319

1. Stay of Enforcement . . . 320

2. Superseding Cause . . . 321

E. Qualified Immunity . . . 323

1. Legal Standard . . . 323

2. Discussion . . . 324

IV. SECTION 1983 CLAIM AGAINST THE TOWN . . . 326

A. Legal Standard . . . 326

B. Discussion . . . 327

V. TAKING AND INVERSE CONDEMNATION . . . 328

VI. MUNICIPAL ESTOPPEL . . . 329

VII. SLANDER OF TITLE . . . 330

A. Additional Findings of Fact . . . 330

1. Farmland Designation Application . . . 330

2. Farmland Designation Certificate . . . 332

B. Legal Standard . . . 332

C. Discussion . . . 333 DAMAGES . . . 334

VIII. COMPENSATORY DAMAGES . . . 334

A. Legal Standard . . . 334

B. Additional Factual Findings . . . 335

C. Which Plaintiffs Are Entitled to Compensatory Damages . . . 337

D. Overview of Expert Accounting Opinions . . . 338

E. Forecast of What Would Have Happened . . . 340

1. FRR's Sources of Revenue . . . 340

a. Mining Revenue . . . 341

i. Amount of Earth Materials Mined Annually . . . 341

ii. Unit Price for Mined Earth Materials . . . 343

b. Reuse Revenue . . . 345

i. Whether to Consider Reuse Revenue At All . . . 346

ii. New York Market . . . 347

iii. Other Regional Markets . . . 348

2. Projection Period . . . 349

a. Different Opinions on Tonnage of Saleable Earth Materials . . . 350

b. The Court's Findings . . . 354

3. Cost of Sales Percentage . . . 358

4. Net Cash Flow . . . 360

5. Discount Rate and Present Value of Future Cash Flows . . . 361

F. Findings of What Happened . . . 362

1. Mitigation from Shutdown to Restart . . . 362

2. Mitigation Since EHTRQ Formation . . . 363

a. Defendants' Arguments . . . 363

b. Present Value of EHTRQ's Forecasted Cash Flows . . . 365

c. Special Distribution to EHTRQ . . . 367

G. Total Compensatory Damages Calculation . . . 368

IX. EMOTIONAL DISTRESS DAMAGES . . . 368

X. PUNITIVE DAMAGES . . . 369

XI. ATTORNEYS' FEES . . . 371 CONCLUSION . . . 371

Attachments: Exhibits 10-16 (Court's Versions) . . . 372

This case centers on the conduct of the Town of East Haven (the "Town") and its officials—Joseph Maturo, Jr., then-mayor of the Town; Christopher Soto, then employed as the Town's Zoning Enforcement Officer; and Michael Milici, then employed as the Town's tax assessor (together with the Town, "Defendants")—when shutting down a quarry owned and operated by Plaintiffs One Barberry Real Estate Holding, LLC ("One Barberry"), Farm River Rock, LLC ("FRR"), and John Patton. Defendants contended that the quarry did not comply with the Town's zoning regulations, whereas Plaintiffs maintained that the quarry was a legal, pre-existing, non-conforming use exempt from the Town's zoning regulations. The Town's Zoning Board of Appeals ("ZBA") agreed with Defendants. In a state law zoning appeal following the ZBA's decision, however, the Connecticut Superior Court found that the Town's cease-and-desist orders to the quarry were improper and ruled in Plaintiffs' favor.

The present consolidated actions concern whether Defendants' conduct in shutting down the quarry violated Plaintiffs' federal constitutional rights and Connecticut common law rights. A thirteen-day bench trial was held, followed by post-trial briefing and oral argument.

Having considered all the admissible testimony of the witnesses and all the admissible documentary evidence, the Court finds that Maturo, Soto, and the Town infringed on Plaintiffs' constitutionally protected property right in an arbitrary and irrational manner, in violation of the Fourteenth Amendment's substantive due process protections, and that these Defendants are liable for their conduct under 28 U.S.C. § 1983. In light of this holding, the Court declines to reach Plaintiffs' Takings Clause and municipal estoppel claims. As to the substantive due process violation, the Court awards $9,465,832 in compensatory damages to Plaintiff Farm River Rock. The Court further finds that Milici is not liable for slander of title under Connecticut common law.

In support of these determinations, the following constitutes the Court's findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a).¹ The distinction between a finding of fact and a conclusion of law "is anything but clear-cut." March v. United States, No. 3:17-CV-2028 (VAB), 2021 WL 848723, at *6 (D. Conn. Mar. 5, 2021) (internal quotation marks omitted) (quoting Cliffstar Corp. v. Alpine Foods, LLC, No. 09-CV-690 (JJM), 2016 WL 2640342, at *1 (W.D.N.Y. May 10, 2016)). Accordingly, "the labels of fact and law assigned should not be considered controlling." Id.

Moreover, the Court bears in mind that, to prevail in a civil trial, Plaintiffs must prove each element of a claim by a preponderance of the evidence. Barr Rubber Prods. Co. v. Sun Rubber Co., 425 F.2d 1114, 1120 (2d Cir. 1970); Velasquez v. U.S. Postal Serv., 155 F. Supp. 3d 218, 227 (E.D.N.Y. 2016); Moses v. St. Vincent's Special Needs Ctr., No. 3:17-cv-1936 (SRU), 2022 WL 972439, at *5 (D. Conn. Mar. 31, 2022). "To establish a fact by a preponderance of the evidence means to prove that the fact is more likely true than not true." Fischl v. Armitage, 128 F.3d 50, 55 (2d Cir. 1997) (citation and internal quotation marks omitted); accord Velasquez, 155 F. Supp. 3d at 227. This standard "is no more than a tie-breaker dictating that when the evidence on an issue if evenly balanced, the party with the burden of proof loses." United States v. Gigante, 94 F.3d 53, 55 (2d Cir. 1996); accord Moses, 2022 WL 972439, at *5. In considering whether the evidence proffered satisfies this standard, the Court, as the trier of fact, is entitled to assess the credibility of the witnesses, to believe some parts and disbelieve other parts of a witness' testimony, and to draw permissible inferences from the admissible evidence. Krist v. Kolombos Rest. Inc., 688 F.3d 89, 95 (2d Cir. 2012); Clayton Servs. LLC v. Sun West Mortg. Co., No. 3:17-CV-172 (KAD), 2021 WL 2376619, at *1 (D. Conn. June 10, 2021).

LIABILITY

I. FINDINGS OF FACT

A. The Parties

Plaintiff John Patton formed the corporate Plaintiffs in this action, FRR and One Barberry. He holds a B.S. degree and an MBA degree. 1/30/23 Tr. at 27:20-22.² Patton was the First Selectman of Willington—the chief elected official of that municipality—from 1995 to 2003, and remained active in the municipal government of Willington from 2003 until 2017. 1/30/23 Tr. at 29:21, 30:11-13, 15-17. He entered the quarry business in 1996, when he...