Opinion
C.A. No. PC-2018-7634
07-23-2020
GREGORY F. ALOISIO, Plaintiff, v. HILLVIEW REALTY, LLC, Defendant.
ATTORNEYS: For Plaintiff: Michael L. Mineau, Esq. Thomas P. Carter, Esq. For Defendant: Nicole M. Labonte, Esq. Richard E. Palumbo, Jr., Esq.
DECISION STERN , J. This matter comes before the Court for decision after a three-day bench trial on Gregory F. Aloisio's (Aloisio) action against Hillview Realty, LLC (Hillview). Aloisio asserts a breach of contract claim against Hillview and requests specific performance based on a purchase and sale agreement (the P&S) executed by the parties for the sale of property located at 1208 Atwood Avenue, Johnston, Rhode Island (the Property). Hillview has filed a counterclaim and asserts slander of title, trespass, and tortious interference with contractual relationships. Hillview also seeks a declaratory judgment to quiet title to the Property, injunctive relief enjoining Aloisio from trespassing on the Property, and a judgment that Aloisio bear attorney's fees. A bench trial occurred on November 6, 7, and 18, 2019. The instant decision follows.
I
Facts and Travel
The dispute arises out of Aloisio's attempt to purchase the Property from Hillview. Trial Ex. Q. Through the instant action, Aloisio alleges that Hillview breached the P&S by failing to close on the sale of the Property. Compl. ¶ 14. Hillview maintains that it is not bound by the P&S because the P&S was executed by a party that lacked the authority to bind Hillview and advances several counterclaims. Answer at 6; Countercl. ¶¶ 53-88. During a three-day bench trial, this Court heard testimony from Arthur Parise (Parise)—the attorney that represented Hillview during most of the period of these events—Tr. 27:7-126:22; Aloisio, Tr. 130:22-268:19; Lorraine Russo (Lorraine)—the member of Hillview that signed the P&S—Tr. 269:16-298:15, 300:17-319:16; Lorraine's daughter and other member of Hillview, Michele Russo-Grieco (Michele), Tr. 319:19-410:21; and Michele's boyfriend and the Property's manager, Donald Parrillo, Tr. 412:4-442:19.
A
Hillview and the Listing of the Property
Hillview was formed on or about March 19, 2008 with three members: Lorraine's husband—Laber Russo, Jr. (Laber), Lorraine, and Michele. Trial Ex. 1; Trial Ex. 2; Tr. 322:2-11. Each member made an equal contribution and was granted an equal interest in Hillview. See Trial Ex. 2; Tr. 326:9-17. Hillview—by its operating agreement—elected to be a manager-managed LLC. See Trial Ex. 2. Laber was named as the initial manager and subsequently was elected as manager by the members. Trial Ex. 1; Trial Ex. A; Tr. 323:10-324:7. Shortly thereafter, Laber and Lorraine transferred the Property to Hillview via Quitclaim deeds. Trial Ex. G; Trial Ex. H; Tr. 327:20-24. No evidence was introduced of any changes in the membership interests in Hillview. Michele kept the official book of Hillview's corporate actions and declarations. See Tr. 389:15-21.
It is not clear from the record why corresponding corrective deeds were needed. Trial Ex. I; Trial Ex. J.
On February 22, 2018, Hillview listed the Property for sale by signing a listing agreement with Bismarc Properties, LLC, and Joseph W. Accetta & Associates, Inc. (the Listing Agreement). Trial Ex. 4. Of note, Lorraine signed the Listing Agreement in addition to, and in the presence of, Laber, who was signing as manager of Hillview. Trial Ex. 4; Tr. 287:3-17. Through Lorraine's signature on the Listing Agreement she declared and warranted that she was "the owner of the Property or [has] the authority to execute this contract." Trial Ex. 4. As offers came in on the Property, Hillview—through Laber as its manager—included Lorraine in the process of deciding which offer to accept. Tr. 287:22-288:23. Hillview ultimately selected the offer by Aloisio. Tr. 288:14-23. Michele testified that from the day she learned that the Property was for sale—which was shortly after the Listing Agreement was signed—she was against selling the property. Tr. 329:25-330:14; see Tr. 362:10-14 (testifying that she discussed the sale of the Property with Laber shortly after seeing a "for sale" sign on the Property, and therefore shortly after the Listing Agreement was signed because Laber passed away shortly thereafter).
From the time Laber first considered selling the Property through mid-August 2018, Hillview was represented by Parise. Tr. 29:3-19, 84:25-85:14. When Parise received the first draft of the P&S—sometime between March 28 and April 4, 2018—he met with Laber and Lorraine and made changes based on both of their suggestions. Tr. 34:12-35:12; see Trial Ex. 5. Throughout Parise's representation of Hillview during the sale of the Property, Parise believed that both Laber and Lorraine made decisions regarding the Property, and that he was representing Hillview, as well as Laber and Lorraine as the principals of Hillview. Tr. 31:17-18; 32:23-33:4.
On April 4, 2018, Laber passed away. Tr. 271:15-19. In his will, Laber left all of his assets to Lorraine and made her executrix of his estate. Trial Ex. 3 § 3, § 7. According to Hillview's operating agreement, a member's interest in Hillview "shall cease" upon that member's death. Trial Ex. 2 § 30. While a member's estate is entitled to the economic benefits of its ownership interest, the estate is not considered a member and does not retain any voting rights. Id. at §§ 30-31. Thus, immediately after the passing of Laber, Lorraine and Michele each held a 50% voting interest and a one-third economic interest in Hillview, and Laber's estate held the remaining one-third economic interest in Hillview. See id.; Trial Ex. 1. In addition, upon Laber's passing, Hillview no longer had a manager. See Tr. Ex. 2 §§ 10-11.
B
The Purchase & Sale Agreement
On or about April 18, 2018, Aloisio and Hillview entered into the P&S for the sale of the Property. Trial Ex. 10. As stated in the P&S, the purchase price was to be $450,000, with a $5500 deposit paid by Aloisio and the remaining purchase price to be paid within seventy-five days of signing the P&S. Id. In negotiating the P&S, Parise confirmed that time was not of the essence, and there was no "time is of the essence" clause in the P&S. Id.; Tr. 58:24-59:3, 70:19-71:4, 79:22-80:8.
Parise testified that on April 18, 2018, Lorraine made it clear she was prepared to sign the P&S, and he witnessed her execute the P&S and sign as manager of Hillview. Tr. 36:12-37:4. Although Lorraine admitted to signing the P&S, she maintained at trial that she believed it was a document giving Parise broker responsibilities and was not aware it was a purchase and sale agreement. Tr. 273:1-20. Michele testified that although she interacted with Parise and Lorraine at the time of the signing, she was also not aware that her mother was signing a purchase and sale agreement for the Property. Tr. 332:13-333:18, 334:8-10. Overall, this Court found Lorraine to have difficulty remembering many accounts, all the while working to answer in a way to please her daughter Michele and keep peace within the family. Based on the evidence presented at trial, this Court finds that Lorraine was aware she was signing a purchase and sale agreement as the manager of Hillview for the sale of the Property.
At the time that the P&S was signed, Parise was aware of the need to elect a new manager for Hillview. See Trial Ex. 7; Trial Ex. 8; Trial Ex. 9; Tr. 52:10-15, 58:1-14. Parise testified that both Lorraine and Michele signed (a) a waiver of notice and (b) a notice of special meeting to elect a new manager when the P&S was signed. Tr. 46:7-48:11, 93:9-17, 48:16-23. However, no executed copies of either the waiver or the notice have been introduced into evidence, and Lorraine testified that Michele was not present for the actual signing of the P&S. Tr. 274:12-14. Furthermore, Michele testified that she did not sign anything at the time of the signing of the P&S and maintained there was no election of a new manager. Tr. 334:15-335:20, 359:6-12. While Lorraine denied being elected manager, she conceded she may have assumed she was manager when Laber passed because of the interest in Hillview that he had left her. Tr. 275:4-18, 284:14-285:10. Based on the evidence presented at trial, this Court found that there was no evidence that a new manager had been elected for Hillview at the time the P&S was signed.
Michele testified that she learned Lorraine had signed the P&S, as manager of Hillview, on or about June 11, 2018 when she obtained a copy of the P&S from Parise. Tr. 336:10-15, 337:20-338:4. At that point, both Michele and Lorraine—the two remaining members of Hillview—were aware of the action taken by Lorraine, representing herself as the Hillview manager. However, neither Hillview—nor either of its two members—objected to Lorraine's act. See Tr. 371:25-375:9. While listening to Michele recount how she learned of the sale and the resulting issues, this Court found her to be evasive, controlling of her mother, and lacking credibility.
In preparation for the impending purchase of the Property, Aloisio went to a car wash convention, made a $10,000 deposit on equipment, bore legal expenses to acquire business licenses from the Town of Johnston, and had plumbers and electricians on the Property. Tr. 142:9-143:15, 145:7-8. Aloisio also arranged for equipment, plumbing, electrical, and HVAC to be installed rapidly in order to open a business within ten days after the closing. Tr. 148:10-16. Aloisio entered the Property using keys given to him by the listing broker, Brenda Marchwicki, in order to assess the condition of the Property and estimate the work needed in order to launch his business. Tr. 144:12-147:22. As part of his assessment, Aloisio drew on the wall and cut the carpeting. Id. In total, Aloisio estimated he spent $50,000 in anticipation of the closing. Tr. 161:19-162:3, 163:16-24.
C
The Phase II Environmental Assessment and Readiness to Close
Pursuant to the P&S, Aloisio's purchasing obligations were contingent upon, inter alia, Aloisio's satisfaction with: (1) the results of researching land records for any past or present environmental issues; and (2) should it be necessary, the results of a Phase II Environmental Site Assessment (Phase II Inspection), to be provided by Hillview. Trial Ex. 10 § 17(c). Enviro Assessment, PC, an independent environmental firm, conducted a Phase I Environmental Site Assessment of the Property and prepared a report dated May 30, 2018, along with a subsequent letter on October 4, 2018 recommending a Phase II Inspection of the Property. Trial Ex. 18. Hillview, however, maintained that a Phase II Inspection was not necessary and refused to pay for one. Tr. 60:9-61:11, 152:11-153:8.
The parties attempted to resolve the Phase II Inspection issue through negotiation and the retention of another environmental specialist. Tr. 64:3-18; Trial Ex. 19. During this time, Aloisio called Lorraine directly to discuss the issue and her willingness to sell the Property if a Phase II Inspection was required. Tr. 315:23-316:22. As part of this process, the parties agreed to an extension of the closing date to August 15, 2018 (the Extended Closing Date), which was documented through the execution of an addendum to the P&S (Addendum) that was executed on or about July 15, 2018. Trial Ex. 24; Tr. 158:13-159:5, 341:19-22. Lorraine signed the Addendum on behalf of Hillview and in the presence of Michele. Trial Ex. 24; Tr. 344:1-7. As before, neither Hillview nor Lorraine or Michele—the two members of Hillview—objected to Lorraine's act on behalf of Hillview. See Tr. 371:25-375:9
As the Extended Closing Date approached, Aloisio agreed to pay for the Phase II Inspection, Tr. 155:4-11, and arranged for it to be conducted. Tr. 155:16-156:5. Hillview, however, refused to allow the Phase II Inspection to be conducted, even at Aloisio's cost. Tr. 156:1-5, 279:10-16. On August 15, 2018, Aloisio ultimately waived the requirement for a Phase II Inspection altogether. Trial Ex. 28; Tr. 160:20-161:11. Aloisio's attorney, Ronald Markoff (Markoff), requested a closing date be scheduled for the following week and that Hillview confirm it was ready, willing and able to close. Trial Ex. 28. Parise testified that, while he represented Hillview, Hillview never replied to Markoff's request for confirmation nor did he prepare any materials for closing. Tr. 83:24-84:4, 84:16-24.
Hillview retained new counsel, Richard Palumbo (Palumbo), on or about August 20, 2018. Tr. 84:25-85:14. Markoff contacted Palumbo and requested that they schedule a closing for August 29, 2018. Trial Ex. 30. Aloisio had arranged for financing from Clay Shackleton (Shackleton), a lender from whom Aloisio had received funding on approximately fifteen to twenty other occasions. Tr. 140:9-11. In past dealings, Shackleton would wire the funds to Markoff without the need for a commitment letter. Tr. 140:14-141:13. Throughout their prior business transactions, the pair had not drafted or signed promissory notes. Tr. 174:24-175:8. This Court found that, based on the evidence presented at trial, Aloisio's financing arrangements were sufficient to allow him to close on the purchase of the Property.
The evidence presented at trial showed that Markoff made numerous attempts to get the parties to closing. Tr. 163:11-24. Parise testified that throughout his representation of Hillview, Aloisio never implied he was walking away from the P&S. Tr. 82:21-83:6, 84:16-24. Parise further testified that he did not communicate to Markoff any reasons why the closing was not being scheduled. Tr. 79:18-21. There is no evidence that Hillview, or either of its members, ever informed Markoff or Aloisio that Lorraine was not authorized to act on Hillview's behalf. The first objection by either Hillview or its members that Lorraine lacked the authority to bind Hillview was raised only after litigation began. Tr. 374:24-375:9.
II
Standard of Review
Rule 52(a) of the Superior Court Rules of Civil Procedure provides that
"[i]n all actions tried upon the facts without a jury . . . the court shall find the facts specially and state separately its conclusions of law thereon[.]" Super. R. Civ. P. 52(a). In a non-jury trial, "'[t]he trial justice sits as a trier of fact as well as of law.'" Parella v. Montalbano, 899 A.2d 1226, 1239 (R.I. 2006) (quoting Hood v. Hawkins, 478 A.2d 181, 184 (R.I. 1984))."Consequently, [the trial justice] weighs and considers the evidence, passes upon the credibility of the witnesses, and draws proper inferences." Id. (internal quotation omitted). The factual determinations and credibility assessments of a trial justice traditionally are accorded a great deal of respect because it is "the judicial officer who . . . actually observe[s] the human drama that is part and parcel of every trial and who has had an opportunity to appraise witness demeanor and to take into account other realities that cannot be grasped from a reading of a cold record." In re Dissolution of Anderson, Zangari & Bossian, 888 A.2d 973, 975 (R.I. 2006).
Our Supreme Court has recognized that a trial justice's analysis of the evidence and findings in the bench trial context need "'not be exhaustive, [and] if the decision reasonably indicates that [he or she] exercised [his or her] independent judgment in passing on the weight of the testimony and the credibility of the witnesses it will not be disturbed on appeal unless it is clearly wrong or otherwise incorrect as a matter of law.'" Notarantonio v. Notarantonio, 941 A.2d 138, 144-45 (R.I. 2008) (quoting McBurney v. Roszkowski, 875 A.2d 428, 436 (R.I. 2005)). "'Even brief findings and conclusions are sufficient if they address and resolve the controlling and essential factual issues in the case.'" Hilley v. Lawrence, 972 A.2d 643, 651 (R.I. 2009) (quoting Donnelly v. Cowsill, 716 A.2d 742, 747 (R.I. 1998) (internal citation omitted)).
III
Analysis
A
Breach of the Purchase and Sale Agreement
Aloisio claims that Hillview is in breach of the P&S because Hillview failed to close on the sale of the Property and to perform a Phase II Inspection. Compl. ¶ 20. Hillview counters that the P&S is not a valid and binding contract because Lorraine did not have the authority to execute it on behalf of Hillview. Answer at 6. In addition, Hillview asserts that if the Court finds the P&S is valid and binding, Hillview was not required to perform a Phase II Inspection under the terms of the P&S. Id. ¶ 11. Accordingly, Hillview contends that it is Aloisio, not Hillview, that is in breach of the P&S because he was not ready to close on the Extended Closing Date. Countercl. ¶ 45.
1
Authority
Aloisio argues that Lorraine had the apparent authority to bind Hillview based on her management of all aspects of Hillview, including dealing with attorneys, agents, brokers and counterparties following Laber's death. Hillview counters that Aloisio and Markoff had no reason to believe Lorraine had the authority to bind Hillview because neither Aloisio nor Markoff had personally met Lorraine prior to Laber's passing, and the corporate records of Hillview at the time indicated that Laber was the only one authorized to act unilaterally to bind Hillview.
Apparent authority is the authority vested in an agent to contract on behalf of a principal that: (1) "'arises from the principal's manifestation of such authority"' to a third party, 731 Airport Associates v. H & M Realty Associates, LLC ex rel. Leef, 799 A.2d 279, 283 (R.I. 2002) (quoting Menard & Co. Masonry Building Contractors v. Marshall Building Systems, Inc., 539 A.2d 523, 526 (R.I. 1988)); or (2) arises when the principal "'knowingly permitted the agent to assume the exercise of such authority."' Calenda v. Allstate Insurance Co., 518 A.2d 624, 628 (R.I. 1986) (quoting Soar v. National Football League Players Association, 438 F. Supp. 337, 342 (D.R.I. 1975), aff'd, 550 F.2d 1287 (1st Cir. 1977)). In addition, regardless of how the apparent authority arises, the third party with whom the agent is dealing must "believe that the agent has the authority to bind its principal to the contract." Menard & Co., 539 A.2d at 526.
a
Authority Prior to Laber's Passing
Apparent authority arises from the conduct of a principal, rather than that of an agent, that manifests authority in the agent. Parrillo v. Chalk, 681 A.2d 916, 919 (R.I. 1996). Such manifestations need not be a direct communication to the third party, but can "come from other indicia of authority given by the principal," such as authorizing the agent to attend meetings or negotiate and execute important documents. See Menard & Co., 539 A.2d at 526 (finding that a project manager's presence at a meeting as the principal's authorized representative, along with his role as the negotiator and executor of the original subcontract, demonstrated that the principal had manifested authority in him). In contrast, where the principal has clearly retained the authority for itself, no such manifestation is found. See 731 Airport Associates, 799 A.2d at 283 (finding no apparent authority where the seller reserved the right to approve the agreement).
Here, the Court finds that, prior to Laber's passing, Hillview manifested authority in Lorraine through the conduct of its manager, Laber. Laber specifically included Lorraine in decisions and actions for which only an agent of Hillview needed to be included. Lorraine and Laber signed the Listing Agreement together even though Laber, as manager, had the authority to sign alone. Tr. 287:3-11; Trial Ex. 4; Trial Ex. 2 § 10. Moreover, the Listing Agreement required that the signers warranted that they were the owners of the Property or "ha[d] the authority to execute th[e] contract". Trial Ex. 4. In addition, both Lorraine and Laber reviewed the offers received on the Property and discussed which offer to accept with the broker. Tr. 287:22-288:13. Similarly, both Lorriane and Laber discussed with Parise the draft of the P&S received from Aloisio, and Parise made changes based on both of their suggestions. Tr. 35:2-4, 7-9. Based on these "indicia of authority," Parise—and through Parise's representation, buyers—understood that he was representing both Lorraine and Laber as the principals of Hillview. Tr. 32:23-33:2; see 731 Airport Associates, 799 A.2d at 283 (requiring a mere indicium of authority without amounting to direct communication).
The Court finds that Lorraine did not sign the Listing Agreement as the owner of the Property because she did not own it. Hillview owned the Property.
b
Authority After Laber's Passing
Apparent authority can also arise when the principal has knowingly permitted an agent to assume the exercise of such authority. Calenda, 518 A.2d at 628 (citing Soar, 438 F. Supp. at 342). A principal knowingly permits the exercise of such authority when it is aware of, yet fails to act to prevent or object to, the agent's conduct. See Menard & Co., 539 A.2d at 526 (noting the absence of action by the principal to show that the project manager's authority had been reduced gave rise to apparent authority). Where the principal is a corporate entity, the principal's knowledge "must be the imputed knowledge of some corporate agent." Cantrell v. Putnam County Sheriff's Department, 894 N.E.2d 1081, 1086 (Ind. Ct. App. 2008) (imputing the knowledge of a sole shareholder to the corporation). In addition, our Supreme Court has recognized that shareholders in closely held corporations can have obligations, akin to those of a director or manager, that arise from their ownership stakes, based on the facts and circumstances taken as a whole. See A. Teixeira & Co. v. Teixeira, 699 A.2d 1838, 1386 (R.I. 1997) (finding that a shareholder of a closely held corporation who became aware of a corporate opportunity had an obligation to determine if the opportunity rightly belongs with the corporation).
After Laber passed away, Hillview knowingly permitted Lorraine to act on its behalf. First, on or about June 11, 2018, all of the members of Hillview knew that Lorraine had acted on behalf of Hillview when she signed the P&S as its manager, with Lorraine being aware of this from the time she signed it, see supra p. 4, and Michele discovering it on June 11, 2018 at the latest. See Tr. 336:10-15, 337:20-338:4. Since all the members of Hillview knew of the act, this knowledge can be imputed to Hillview. See Dawson Farmers' Elevator Co. v. Opp, 223 N.W. 350, 354 (N.D. 1928) (finding that, for a closely held corporation, "if all of the stockholders had knowledge of certain facts, such knowledge should be imputed to the corporation" (emphasis added)). Hillview, therefore, knowingly permitted Lorraine's act of executing the P&S to occur by taking no action to object. See Menard & Co., 539 A.2d at 526 (finding that the lack of action by the principal indicated that the agent was authorized to bind the principal to a contract modification). Similarly, on or about July 18, 2018, Lorraine signed the Addendum, extending the closing date to August 15, 2018, an action she took in the presence of Michele. Trial Ex. 24; Tr. 344:1-7. Once again, both members of Hillview—and therefore Hillview itself—knew of the action. See id. There is no evidence that Hillview took any action at the time to prevent or object to the signing of the Addendum. Tr. 344:1-7.
c
Aloisio's Belief of Authority
Finally, the third party must believe that the agent has the authority to bind the principal. This belief can be inferred from the third party's statements and actions. See Menard & Co., 539 A.2d at 526 (finding that the subcontractor's expectation of payment inferred his belief that the agent had authority). In contrast, where the third party cannot reasonably be found to believe that the agent had authority, no apparent authority is found. See 731 Airport Associates, 799 A.2d at 283 (finding that the buyer's stated belief that the agent had authority to bind the principal was not reasonable given the principal's reservation of a right of approval).
Here, Aloisio reasonably believed that Lorraine had the requisite authority to bind Hillview by entering into the P&S. On a number of occasions, Aloisio called Lorraine directly in an attempt to resolve the Phase II Inspection issue. Tr. 315:23-316:22. During those calls, Lorraine told Aloisio of her willingness to sell the Property first with, and then only without, a Phase II Inspection. Tr. 316:19-22. Her responses implied that she had the ability to control the sale process. See id. No evidence was presented that Lorraine ever told Aloisio that she did not have the authority to sell the Property or to make a decision regarding a Phase II Inspection. See id.
In addition, Aloisio was prepared to compromise, to his own detriment, in order to address Lorraine's concerns regarding the cost and performance of a Phase II Inspection and eliminate obstacles to closing. Tr. 152:17-153:8, 161:5-8. Furthermore, Aloisio acted in reliance of Lorraine's presumed authority by bearing costs, such as deposits on car-wash equipment and legal expenses to obtain business licenses, in anticipation of acquiring the Property. Tr. 142:5-143:15. These actions taken by Aloisio demonstrated he reasonably believed that Lorraine had the requisite authority to bind Hillview by entering into the P&S. See Menard & Co., 539 A.2d at 526 (finding that the third party's expectation of payment "patently gives rise to the inference that [the third party] believed that [agent] had the authority to bind his principal").
Based on the above, this Court finds that Lorraine had apparent authority to bind Hillview, and the P&S is therefore a valid and binding contract between the parties.
2
Phase II Inspection
Aloisio contends that Hillview breached the P&S in failing to perform a "necessary" Phase II Inspection. Hillview counters that the Phase II Inspection was not necessary, and Hillview is therefore not in breach of the P&S.
When reviewing a purchase and sale agreement, this Court looks to contract interpretation law. See Danforth v. More, 129 A.3d 63, 68-69 (R.I. 2016); Sturbridge Home Builders, Inc. v. Downing Seaport, Inc., 890 A.2d 58, 62-63 (R.I. 2005). "'The determination of whether a contract's terms are ambiguous is a question of law . . . ."' High Steel Structures, Inc. v. Cardi Corp., 152 A.3d 429, 433-34 (R.I. 2017) (quoting JPL Livery Services, Inc. v. Rhode Island Department of Administration, 88 A.3d 1134, 1142 (R.I. 2014)). "When there is only one reasonable interpretation of a contract, the contract is deemed unambiguous." Roadepot, LLC v. Home Depot, U.S.A., Inc., 163 A.3d 513, 519 (R.I. 2017) (citing Botelho v. City of Pawtucket School Department, 130 A.3d 172, 176 (R.I. 2016)). "In determining whether language in a contract is ambiguous, '[the Court] give[s] words their plain, ordinary, and usual meaning'" Botelho, 130 A.3d at 176 (quoting DiPaola v. DiPaola, 16 A.3d 571, 576 (R.I. 2011)). "The court should consider 'whether the language has only one reasonable meaning when construed . . . in an ordinary, common sense manner.'" Roadepot, LLC, 163 A.2d at 519 (quoting Sturbridge Home Builders, Inc., 890 A.2d at 63).
According to Section 17(c) of the P&S, Aloisio's obligations under the contract are contingent upon obtaining results, satisfactory to him, from (a) research of environmental land records; and, if necessary, (b) a Phase II Inspection. See Trial Ex. 10 § 17(c). Should Aloisio determine that he is not satisfied with the results, his remedy under this provision is to be "released from this Purchase and Sales Agreement and have any deposits returned." Id. The determination of whether he is satisfied with the results of the environmental assessment, and therefore what is necessary for his satisfaction, is for Aloisio to make. See id.
Because the term "necessary" is not defined in the P&S, the Court will refer to recognized dictionaries to give the term its plain, ordinary and usual meaning. See Inland American Retail Management LLC v. Cinemaworld of Florida, Inc., 68 A.3d 457, 462 (R.I. 2013) (recognizing that the plain meaning of a word may be determined by applying the definition provided by a recognized dictionary). "Necessary" is defined as "[t]hat is needed for some purpose or reason; essential." Black's Law Dictionary (11th ed. 2019). When construed in an ordinary, common sense manner, the only reasonable interpretation of the term "necessary" is that which Aloisio requires in order to be satisfied with the results of the environmental assessment. See Sturbridge Home Builders, Inc., 890 A.2d at 63 (using common sense interpretation to find no ambiguity with respect to the dates by which various deadlines would or would not be extended). Therefore, this Court finds that the P&S is not ambiguous. See Roadepot, LLC, 163 A.3d at 521 (finding a lease to be unambiguous as to whether or not certain utility-related expenses were included in real estate taxes for which the tenant was responsible). When Aloisio determined that a Phase II Inspection was necessary in order for him to be satisfied with the results of an environmental assessment, the P&S makes it clear that Hillview was obligated to both pay for and conduct the Phase II Inspection. See Trial Ex. 10 § 17(c).
Notwithstanding that under the P&S Aloisio could determine whether a Phase II Inspection was necessary, the Court finds that Aloisio waived his rights to a Phase II Inspection, as well as his release from the P&S without satisfactory Phase II Inspection results, when he agreed to close without the Phase II Inspection being performed. See Trial Ex. 28. "[A] party may waive a condition precedent if the condition is for the benefit of the waiving party[.]" Lajayi v. Fafiyebi, 860 A.2d 680, 686 (R.I. 2004) (finding that a mortgage contingency was a condition precedent for the benefit of the purchaser in a purchase and sales agreement and could be waived without breaching the agreement). The provisions of Section 17(c) of the P&S are for Aloisio's benefit alone, allowing him to be released from his obligation to purchase the Property should he be dissatisfied with the results of an environmental examination of the Property. See Trial Ex. 10 § 17. Aloisio therefore has the right to waive a Phase II Inspection, and Hillview may not use the failure to meet this condition as a justification for failing to close. See Thompson v. McCann, 762 A.2d 432, 436 (R.I. 2000) (finding that a condition of a real estate sale on the transfer of a liquor license was for the benefit of the buyer and the buyer could therefore waive the condition precedent, precluding the seller from using the unmet condition to refuse to perform under the agreement).
Based on the foregoing, the Court finds that Aloisio waived his right to have a Phase II Inspection performed and to have it paid for by Hillview. Thus, Hillview was not in breach of this provision of the P&S.
3
Failure to Close on the Stated Closing Date
Hillview asserts that Aloisio is in breach of the P&S as he was not ready to close on the Extended Closing Date. Aloisio counters that time was not of the essence in the P&S and, therefore, he had a reasonable amount of time in which to close. Accordingly, Aloisio contends that Hillview is in breach of the P&S for failing to close.
It is well established that, absent explicit contractual language to the contrary, "parties to a contract for the sale of property have a reasonable amount of time after the scheduled closing date within which to complete the closing." Parker v. Byrne, 996 A.2d 627, 633 (R.I. 2010). "'Ordinarily contract provisions relating to time do not by their mere presence in an agreement make time of the essence thereof so that a breach of the time element will excuse nonperformance."' Lajayi, 860 A.2d at 688 (quoting Jakober v. E.M. Loew's Capitol Theatre, Inc., 107 R.I. 104, 114, 265 A.2d 429, 435 (1970) (ruling that the lack of a "time is of the essence" clause required the buyer only to consummate the transaction within a reasonable period)).
After agreeing to waive the Phase II Inspection entirely, Aloisio requested that the closing be scheduled within the next few days, Trial Ex. 28, and ultimately scheduled a closing for August 29, 2018. Trial Ex. 30. Here, the Court finds that Aloisio scheduled the closing within a reasonable amount of time after the Extended Closing Date. See Parker, 996 A.2d at 634 (finding that the time required to resolve a zoning issue would have been a reasonable delay in the closing of a real estate transaction). Neither the P&S nor the Addendum contained a "time is of the essence" clause. Trial Ex. 10; Trial Ex. 24. In addition, Parise testified credibly that, up until his termination, he never had any reason to believe that time was of the essence in the transaction. Tr. 70:7-71:4. The Court finds that Hillview has not offered credible testimony to support a finding that time was of the essence, and therefore Aloisio did not breach the P&S in failing to close by the Extended Closing Date.
While Aloisio was ready and willing to close, the Court finds that Hillview did breach the P&S because it made no effort to close in a reasonable amount of time. Prior to the Extended Closing Date, Markoff requested that he and Hillview agree upon a final closing date. See Trial Ex. 27. As the Extended Closing Date drew near, Markoff noted Hillview's lack of response. Id. On the Extended Closing Date, Markoff communicated the waiver of the Phase II Inspection and, once again, requested a final closing date. Trial Ex. 28; Tr. 83:7-19. Parise testified that Hillview had done no work to prepare for the closing. Tr. 83:24-84:4. After being informed that Hillview had retained Palumbo as new counsel, Markoff contacted Palumbo and indicated that they intended to close on August 29, 2018. Trial Ex. 30. While Aloisio was present and willing to close on August 29, 2018, no one appeared on behalf of Hillview for the closing. Tr. 160:1-13. No evidence has been presented that any work was done by Hillview in preparation to close.
Based on the above, this Court finds that Aloisio was not in breach of the P&S in failing to close by the Extended Closing Date, and that Hillview breached the P&S in its failure to close.
B
Specific Performance
Aloisio has argued that he is entitled to specific performance under the terms of the P&S because Hillview has unjustifiably refused to perform, and Aloisio has been ready, willing and able to close but for Hillview's refusal to cooperate. Hillview, however, contends that Aloisio was not ready and willing to perform because he did not close by the Extended Closing Date.
Specific performance of a real estate contract may only be granted when the essential contractual provisions are "'clear, definite, certain, and complete."' Keystone Properties & Development, LLC v. Campo, 989 A.2d 961, 964 (R.I. 2010) (quoting Fisher v. Applebaum, 947 A.2d 248, 251-52 (R.I. 2008)). If a purchaser of real estate can demonstrate that he or she was "at all times ready and willing to perform the contract, specific performance is available 'in the absence of a legitimate and articulable equitable defense."' Fracassa v. Doris, 814 A.2d 357, 362 (R.I. 2003) (quoting Thompson, 762 A.2d at 436). Furthermore, "a grant of specific performance is appropriate when 'a party to [the] real estate agreement unjustifiably refuses or fails to perform under the agreement.'" Keystone Properties, 989 A.2d at 962-63 (quoting Lajayi, 860 A.2d at 686). "The decision to grant or deny a request for specific performance falls within the sound discretion of a trial justice," Fracassa v. Doris, 876 A.2d 506, 509 (R.I. 2005), and will only be reversed upon a finding of abuse of discretion.
The Court finds specific performance warranted here. The essential provisions of the P&S were clear, definite, certain and complete. See Trial Ex. 10. The buyer and seller were clearly identified; their intentions to purchase and sell the Property, respectively, were clear; there was no ambiguity as to the property that was being sold; and the purchase price of $450,000 was agreed upon. Id.; see Caito v. Juarez, 795 A.2d 533, 536 (R.I. 2002) (finding that, for a real estate contract to be clear, definite, certain and complete, the parties, their intentions, the description of the property and the purchase price, at a minimum, must be unambiguous). The only term of the P&S that was in dispute related to the performance and cost of a Phase II Inspection, which this Court found to be unambiguous. See supra p. 15.
The Court also finds that Aloisio was at all times ready and willing to purchase the Property. Aloisio provided credible testimony that he had arranged for financing with his investor, Shackleton. Tr 139:10-142:4. Specifically, Aloisio testified that he had conducted fifteen to twenty transactions with Shackleton where Shackleton would wire funds to Aloisio at his request without any prior written commitment. Tr. 140:3-141:13. This conclusion is further supported by Parise's testimony that there had never been any communications or indications that Aloisio was not at all times ready and willing to purchase the Property. Tr. 81:4-25, 82:21-83:6. Aloisio's willingness to perform was further demonstrated by his waiving of terms of the P&S that were for his benefit, first in agreeing to pay the cost of the Phase II Inspection, Tr. 155:4-6; Trial Ex. 10, and then in waiving the Phase II Inspection entirely and bearing the economic risk that environmental issues would be found on the Property. See Trial Ex. 28.
Hillview argues that, even if Aloisio had the necessary funds and waived the Phase II Inspection, Aloisio was still not ready and willing to perform because he did not proceed with the closing on the Extended Closing Date. Failure to close on a scheduled closing date, in and of itself, is insufficient to demonstrate that the buyer is not ready or willing to perform. See Lajayi, 860 A.2d at 688 (noting that failing to close on the closing date alone, in the absence of a "time is of the essence" clause, is insufficient to find the buyer breached the purchase and sales agreement). After agreeing to waive the Phase II Inspection entirely, Aloisio—through his attorney, Markoff—requested that the closing be scheduled within the next few days, Trial Ex. 28, and ultimately scheduled a closing for August 29, 2018. Trial Ex. 30. Accordingly, the Court finds that Aloisio scheduled the closing within a reasonable amount of time after the Extended Closing Date.
Based on the foregoing, the Court finds that the P&S was clear, definite, certain and complete, that Aloisio was ready and willing to perform his obligations under the contract, and that Hillview unjustifiably refused to perform. As such, this Court finds Aloisio is entitled to specific performance.
C
Hillviews's Counterclaims
Hillview argues that Aloisio is liable (1) for damages for trespass on, and damage to, the Property, (2) for slandering the title to the Property, and (3) for tortious interference with contractual relationships. As the Court finds that the P&S was valid and binding upon the parties and that Hillview was in breach of the agreement, the Court denies Hillview's counterclaims for slander of title and tortious interference with contractual relationships. While there was much conflicting testimony regarding Aloisio's presence on the Property, the Court finds that whether or not Aloisio trespassed upon the Property is of no matter because Hillview has failed to prove damages to a reasonable degree of certainty.
It is well settled that a claimant must prove damages to a reasonable degree of certainty. See Fogarty v. Palumbo, 163 A.3d 526, 537 (R.I. 2017). Speculative testimony as to damages, even if made by an expert, is not admissible. See Alterio v. Biltmore Construction Corp., 377 A.2d 237, 240 (R.I. 1977) (finding that an estimate to repair real estate, based on an expert's opinion but no other factual basis, was inadmissible). The burden is on the claimant to produce evidence "establishing that they incurred reasonably certain damages as a consequence of" the defendant's actions. Fogarty, 163 A.3d at 537.
Here, it is undisputed that Aloisio damaged the Property by cutting the carpet and drawing on the wall. Tr. 144:16-147:22. However, the only evidence of the value of damages provided by Hillview was an estimate made by the property manager, Donald Parrillo, that the cost to repair the carpet and markings on the wall would be approximately $2500.00. Tr. 428:8-15. The Court finds that Hillview has not met its burden of proving damages to a reasonable degree of certainty. See Alterio, 377 A.2d at 240 (finding that a contractor's estimate of the cost to repair construction defects had insufficient factual bases and therefore was inadmissible for the purpose of determining damages). Accordingly, the Court denies Hillview's counterclaim for damages from trespass.
IV
Conclusion
Based on the evidence presented at trial, this Court finds that Hillview breached a binding contract with Aloisio, and Aloisio is entitled to specific performance of the terms of the P&S. For the same reasons, this Court denies Hillview's counterclaims for slander of title and tortious interference with contractual relationships and denies its counterclaim of trespass due to the lack of showing damages with a reasonable degree of certainty. Consequently, the Court also denies Hillview's claims for relief. Counsel shall prepare and submit the appropriate order and judgment for entry.
ATTORNEYS:
For Plaintiff:
Michael L. Mineau, Esq.
Thomas P. Carter, Esq.
For Defendant:
Nicole M. Labonte, Esq. Richard E. Palumbo, Jr., Esq.