ADDISON F. RUSSELL vs. CITY OF NEW BEDFORD.

FECTEAU, J. The defendant, the city of New Bedford (city), appeals from a judgment in favor of the plaintiff on his claims, brought under the provisions of G. L. c. 258, § 2, and 42 U.S.C. § 1983 (1994 & Supp. III 1997), that the city unlawfully demolished two buildings he owned. [Note 1] In particular, the city claims that there was insufficient evidence to support verdicts of negligence and civil rights violations. The city next claims that the trial judge abused his discretion by allowing opinion testimony about the future value of the property. The city also claims error in the calculation of prejudgment interest. [Note 2] For the reasons that follow, we affirm the judgment as to liability on the negligence claims, vacate the judgment as to damages on the negligence claims, and order a remand for the reassessment of damages on those claims, and we reverse the judgment as to the civil rights claims.

Background. At the time the buildings were demolished in December, 1998, Mark Andrews was the record owner at the registry of deeds and on the city tax rolls. Andrews bought the property at 9-11 Penniman Street in 1996 with financing secured by a mortgage to the plaintiff. In 1997, Andrews delivered a deed in lieu of foreclosure to the plaintiff, but the plaintiff did not record the deed. The city targeted the buildings for demolition [Note 3] and, on April 13, 1998, sent a notice, by certified mail, to Andrews at the address on file at the city assessor's office, stating

Page 717

that the buildings were a hazard and could be removed if he did not make the structures safe by noon the day following receipt of the letter. [Note 4] The letter was returned stamped, "attempted, not known." On June 30, 1998, notice was given by the city to the New Bedford Historical Commission (historical commission) that one of the two buildings was slated for demolition. [Note 5] Another notice from the city's survey board was sent to Andrews regarding the potential demolition of both buildings on July 28, 1998. [Note 6] On a list of several buildings proposed for demolition, one of the buildings in question, number nine, appeared; this list was first approved by the historical commission, then approved by the city council and mayor in August and September, 1998, respectively. [Note 7]

In October, 1998, Judith McMullen, a real estate broker and the plaintiff's daughter, gave to the city's building commissioner (commissioner) a letter, signed by Andrews and the plaintiff, authorizing the city to communicate with McMullen about the properties and stating that she was acting on their behalf. McMullen sent a letter to the commissioner describing the plaintiff's intent to rehabilitate the buildings and requesting that they not be demolished. The commissioner informed McMullen that her submission was insufficient and that a report from a structural engineer was required. McMullen obtained such a report and hand-delivered it to the building department on December 8, 1998. The buildings were demolished on December 31, 1998.

The plaintiff filed a two-count complaint against the city alleging negligence and due process violations under 42 U.S.C. § 1983. On special questions, the jury found for the plaintiff on both counts.

Page 718

Discussion. a. Negligence. There was sufficient evidence that the city negligently demolished the plaintiff's two buildings [Note 8]; the city all but conceded this at oral argument here. [Note 9] Even apart from rather glaring omissions in the demolition approval process, [Note 10] the city's negligence can be inferred from the facts that it had actual notice of the plaintiff's interest as true owner prior to demolition and of efforts being taken to satisfy the commissioner's requirements in order to delay or remove the property from the demolition list until the owner had a chance to rehabilitate it. In addition, the statutory provision giving the city the right to demolish a building after notice and the completion of the survey board's report [Note 11] provides, "[i]f such report declares such structure to be dangerous . . . and if the owner . . . continues such refusal or neglect, the local inspector shall cause it to be made safe or taken down." G. L. c. 143, § 9, as amended through St. 1972, c. 802, § 25. There is ample evidence in the record that the commissioner had actual notice that the owner was not continuing to refuse to repair the property, but was in the repair process when the buildings were demolished. Lastly, it is worth noting that the commissioner conceded in his testimony that the plaintiff's authorized agent, McMullen, submitted the report from a structural engineer that the commissioner had requested. He also conceded that this report was likely sufficient to take the buildings off the demolition list and he could not explain why they were demolished just weeks later.

Page 719

b. Civil rights. The second count of the plaintiff's complaint against the city was brought, pursuant to the provisions of 42 U.S.C. § 1983, for deprivation of his civil rights. [Note 12] The plaintiff does not argue that it was wrong initially to have targeted these buildings for demolition. Rather, he contends that, once the city decided to tear down the buildings, the commissioner failed not only to follow State law in providing adequate notice, but that he failed also to provide and follow due process to allow a building to be removed from that list. [Note 13]

The city argues that the verdict cannot stand [Note 14] because there was insufficient evidence to support the plaintiff's civil rights count, specifically contending that the evidence was insufficient to support the judge's preliminary ruling that the commissioner was an official with final decision or policy-making authority for whose unconstitutional acts and decisions the city would be liable. This ruling, which the city claims as error, served as the linchpin to the judge's denial of the city's motion for directed verdict and the jury instruction on municipal civil rights liability.

In denying the city's motion for directed verdict, and then in his instructions to the jury, the judge relied on Pembaur v. Cincinnati, 475 U.S. 469 (1986), and St. Louis v. Praprotnik, 485 U.S. 112 (1988). The judge made a threshold ruling that, as matter of

Page 720

law, the commissioner is the final decision maker, for whose actions the city is responsible. It seems that the judge based his decision solely upon a letter from another city department. The city complains that the evidence upon which the judge made this ruling was inadequate, as matter of law. We agree.

The city relies upon Monell v. Department of Social Servs. of the City of N.Y., 436 U.S. 658, 691-692 (1978), for support. In Monell, the United States Supreme Court first held that, under § 1983, local government units were "persons" and that a municipality could be sued based on wrongs caused through "a policy statement, ordinance, regulation, or decision officially adopted and promulgated" by that municipality. Id. at 690. Monell, however, "unquestionably involve[d] official policy," id. at 694, and "the full contours of municipal liability" remained largely untouched. Id. at 695. The Monell Court did state, however, that a municipality could be held liable when its "lawmakers or . . . those whose edicts or acts may fairly be said to represent official policy" cause constitutional harm. Id. at 694.

To be clear, the plaintiff recognizes that municipal liability cannot be based upon a theory of respondeat superior, and he concedes that his case is not based upon an official policy, custom, or practice; rather, he contends that the commissioner was high enough in the city's administration to be considered a final decision or policy maker whose decisions and actions would bind the city under § 1983. [Note 15] The plaintiff relies, as did the trial judge in making his rulings, on this theory of liability, foreshadowed by Monell and as interpreted by Pembaur and St. Louis.

St. Louis further defined the contours of municipal liability stating, "an unconstitutional governmental policy could be inferred from a single decision taken by the highest officials responsible for setting policy in that area of the government's business." St. Louis, supra at 123. See Pembaur, supra at 480 ("municipal liability may be imposed for a single decision by municipal policymakers under appropriate circumstances"). One of the appropriate circumstances is where "the decisionmaker

Page 721

possesses final authority to establish municipal policy with respect to the action ordered," id. at 481, which "may be granted directly by a legislative enactment or may be delegated by an official who possesses such authority, and of course, whether an official had final policymaking authority is a question of state law." Id. at 483. However, as the Supreme Court identified the sources where a judge should look to determine the sufficiency of this theory of liability, it becomes clear that the plaintiff failed to produce adequate evidence for the judge to make this ruling.

First, according to St. Louis, State law could "include valid local ordinances and regulations" that "will always direct a court to some official or body that has the responsibility for making law or setting policy in any given area of a local government's business." St. Louis, 485 U.S. at 125. Critically, for the instant plaintiff, the Court said that "a federal court would not be justified in assuming that municipal policymaking authority lies somewhere other than where the applicable law purports to put it." Id. at 126.

This determination process was further defined in Jett v. Dallas Indep. Sch. Dist., 491 U.S. 701 (1989). There, the Court stated that "the identification of those officials whose decisions represent the official policy of the local governmental unit is itself a legal question to be resolved by the trial judge before the case is submitted to the jury. Reviewing the relevant legal materials, including state and local positive law, as well as ' "custom or usage" having the force of law,' [St. Louis], supra, at 124, n. 1, the trial judge must identify those officials or governmental bodies who speak with final policymaking authority for the local governmental actor concerning the action alleged to have caused the particular constitutional or statutory violation at issue." Jett, supra at 737.

Here, the plaintiff, having the burden of production, provided no evidence of local positive law, or custom or usage having the force of law, which indicated that the commissioner had final policy-making authority. In making his ruling, the judge was constricted in his fact finding, appearing to rely on only one letter from a lateral municipal department. However, neither the letter alone nor the letter considered together with the plaintiff's other evidence, including the commissioner's testimony, carried the required force.

Page 722

The plaintiff did not offer in evidence local city ordinances pertaining to the commissioner's position of authority within the city's hierarchy. "Neither a trial judge nor this court can consider such alleged ordinances [or by-laws] unless they are put in evidence." Fournier v. Central Taxi Cab, Inc., 331 Mass. 248 , 249 (1954), and cases cited. See Trustees of the Stigmatine Fathers, Inc. v. Secretary of Admn. & Fin., 369 Mass. 562 , 568 (1976). Nor are local ordinances and by-laws "an appropriate subject of judicial notice." Lawrence v. Falzarano, 380 Mass. 18 , 25 n.10 (1980). See Mass. G. Evid. § 202(c) (2008- 2009).

Therefore, without evidence of the pertinent ordinances, or other evidence of custom or usage having the force of law, the evidentiary record before the trial judge was not adequate to make a ruling. See Warren v. Zoning Bd. of Appeals of Amherst, 383 Mass. 1 , 8 (1981). Consequently, the judge's ruling that the commissioner was an official policy maker whose single decision was sufficient to bind the municipality was erroneous. This error then fatally infected the judge's denial of the city's motion for directed verdict on the civil rights counts which, for the foregoing reasons, should have been allowed; the judgment in favor of the plaintiff on his civil rights counts must, therefore, be reversed.

c. Expert testimony and damages. While the city challenges the testimony of McMullen, the plaintiff's real estate agent and daughter, as an expert and as to valuation method, the question critical to this issue is whether the proper measure of damages was used. [Note 16] Given our conclusion on the measure of damages, we need not decide whether the judge properly decided the threshold question of McMullen's qualification as an expert.

"Generally, the appropriate measure of damages in actions for negligent injury to property is the difference between the

Page 723

fair market value of the property prior to the loss and its fair market value after the loss caused by the tortfeasor." Massachusetts Port Authy. v. Sciaba Constr. Corp., 54 Mass. App. Ct. 509 , 513-514 (2002), citing Trinity Church in the City of Boston v. John Hancock Mut. Life Ins. Co., 399 Mass. 43 , 48 (1987), S.C., 405 Mass. 682 (1989). See Hopkins v. American Pneumatic Serv. Co., 194 Mass. 582 , 583 (1907). "[M]arket value does not in all cases afford a correct measure of indemnity, and is not therefore 'a universal test.' " Trinity Church, supra at 48, quoting from Wall v. Platt, 169 Mass. 398 , 405-406 (1897). Other evidence may be admissible but "the evidence must support the inference that diminution in fair market value is not a fair and adequate measure of damages." Sciaba, supra at 514. The general rule may not apply to a certain category of properties, termed "service-type property," id. at 515, or " 'special purpose property' (such as the property of nonprofit, charitable, or religious organizations), [where] there will not generally be an active market from which the diminution in market value may be determined." Trinity Church, supra at 49.

The plaintiff here argues that the general rule should not apply to his property, yet he neither argues nor shows why his demolished properties were special-purpose properties or service-type properties such that the exception should apply. [Note 17] Indeed, they were not, as the record amply supports the fact that they were uninhabitable residential properties. [Note 18] Consequently, this trial record does not support a deviation from the traditional tort measure of damages as to market value.

Page 724

Moreover, McMullen's testimony and the judge's instructions on the loss of future profits from the rental income that might be generated, to which the city objected, were improper, as both depended upon a likelihood that the buildings would have been rehabilitated and rented, prospects that were speculative. Lost rental income has been permitted as damages but only in cases in which the property had actual future income, as opposed to only a possibility of future income. See Guaranty-First Trust Co. v. Textron, Inc., 416 Mass. 332 , 336-337 (1993). Moreover, the judge instructed the jury that they must deduct from those values the costs of rehabilitation and vacancy, as well as the usual expenses of owning property, about which there was conclusory evidence without detail. Consequently, the judgment in favor of the plaintiff on negligence must be vacated with respect to damages and the case remanded for a new trial on that element.

Conclusion. We reverse those portions of the judgment that pertain to liability and damages on the civil rights claims. Although we affirm those portions of the judgment that pertain to liability on the negligence claims, we vacate the portions of the judgment that pertain to damages on those claims. We remand the case to the trial court for a new trial, limited to the issue of damages on the negligence claims.

So ordered.