Justia Rhode Island Supreme Court Opinion SummariesArticles Posted in Business Law
Rhode Island Industrial-Recreational Building Authority v. Capco Endurance, LLC
In this negligence case, the Supreme Court affirmed the judgment of the superior court entering judgment for Feeley & Driscoll, P.C. (Feeley) on all claims by The Rhode Island Industrial-Recreational Building Authority (IRBA), holding that Feeley did not owe a duty of care to IRBA. The hearing justice concluded that, under the "Restatement Rule," Feeley, an accounting firm, did not owe a duty of care to IRBA as a third party with respect to what IRBA alleged was a negligently prepared report by Feeley that IRBA alleged it relied upon. The Supreme Court affirmed, holding (1) the Restatement Rule is the most sensible approach to the question of the extent of potential liability to third parties to which an accountant/auditor should be exposed for alleged negligence on his or her part, and thus the moderate approach provided for in the Restatement Rule is hereby adopted; and (2) when the Restatement Rule is applied to the instant case, the hearing justice did not err in holding that Feeley did not err in holding that Feeley owed no duty to IRBA. View "Rhode Island Industrial-Recreational Building Authority v. Capco Endurance, LLC" on Justia Law
Posted in: Business Law
Rein v. ESS Group, Inc.
The Supreme Court affirmed in part and reversed in part the order of the superior court granting a motion to dismiss brought by Defendants in this case alleging that Defendants, including ESS Group, Inc., violated the Rhode Island Whistleblowers’ Protection Act, R.I. Gen. Laws chapter 50 of title 28 (WPA), and the Rhode Island Business Corporation Act (BCA), R.I. Gen. Laws chapter 7-1.2. The hearing justice determined that Plaintiff’s complaint failed to state a claim upon which relief could be granted and dismissed the action. Specifically, the hearing justice found (1) Defendants’ conduct did not violate the BCA because Rhode Island has no authority to regulate the internal affairs of a foreign corporation, such as ESS, and the provisions that Defendants allegedly violated did not apply because the provisions use the term “corporation,” not “foreign corporation”; and (2) Plaintiff failed to assert a WPA claim premised on Defendants’ alleged BCA violations because ESS was not subject to the BCA. The Supreme Court held (1) Plaintiff was not entitled to relief under the BCA count; but (2) Plaintiff’s complaint sufficiently pled a WPA claim. View "Rein v. ESS Group, Inc." on Justia Law
Warfel v. Town of New Shoreham
Plaintiffs did not have standing to seek review of the Town of New Shoreham’s decision to purchase a majority of the shares of Block Island Power Company (BIPCO). Plaintiffs - certain residents and taxpayers of the Town and BIPCO ratepayers - filed a motion seeking to enjoin the closing of sale of two-thirds of the shares of BIPCO by the New Shoreham town council. The superior court granted the Town’s motion to dismiss, concluding that Plaintiffs violated Rules 8 and 19 of the Superior Court Rules of Civil Procedure and that the superior court did not have subject-matter jurisdiction to hear the dispute. The stock sale subsequently closed. Plaintiffs appealed. The Supreme Court dismissed the appeal, holding that Plaintiffs lacked standing to bring this action. View "Warfel v. Town of New Shoreham" on Justia Law
Joachim v. Straight Line Prods., LLC
Plaintiff filed a complaint against Defendants alleging breach of fiduciary duty resulting from oppressive conduct, breach of fiduciary duty resulting from self-dealing, fraud in the inducement, and negligent misrepresentation. During trial, Plaintiff produced 155 pages of documents that had not been produced to Defendants during discovery. Defendants argued that they were denied a fair trial because the information contained in the documents would have permitted them to properly cross-examine Plaintiff. The district court dismissed the case with prejudice pursuant to Sup. Ct. R. Civ. P. 37(b) as a sanction for the mid-trial production of documents. The court subsequently denied Plaintiff’s motion to vacate the order of dismissal under Sup. Ct. R. Civ. P. 60(b). The Supreme Court affirmed, holding (1) the trial justice did not err in dismissing Plaintiff’s claim with prejudice pursuant to Rule 37; and (2) the trial justice did not abuse his discretion in denying Rule 60(b) relief. View "Joachim v. Straight Line Prods., LLC" on Justia Law
Nuzzo v. Nuzzo Campion Stone Enters., Inc.
This case stemmed from a number of disputes that arose after the defendant corporation, Nuzzo Campion Stone Enterprises, Inc. (NCS), was purchased by its present owner. Plaintiff James Nuzzo alleged that he was owed $133,816 in unpaid commissions on orders that had been placed prior to his termination but not actually paid for by customers of NCS until after his termination. NCS filed a counterclaim for breach of contract, alleging that Plaintiff failed to indemnify NCS for certain amounts covered by the terms of an Asset Purchase Agreement signed by the parties. The trial justice concluded that Plaintiff was not entitled to the disputed commissions and that NCS was due nearly $17,000 for both “work in progress” and warranty work pursuant to the Agreement. The Supreme Court affirmed, holding (1) the trial justice did not err in determining that Plaintiff was not entitled to commissions for orders that had been placed, but not actually paid for, prior to Plaintiff’s termination; and (2) the trial justice did not make “fundamental mistakes regarding the contract and damages” relating to the counterclaim. View "Nuzzo v. Nuzzo Campion Stone Enters., Inc." on Justia Law
Heritage Healthcare Servs., Inc. v. Beacon Mut. Ins. Co.
Plaintiffs were a certified class of approximately 14,000 policyholders of Beacon Mutual Insurance Company, a state-chartered workers’ compensation insurance provider. Plaintiffs filed suit against Beacon, alleging that they were denied money that should have been equitably distributed to all policyholders as dividends, among other claims. The superior court dismissed the complaint and entered judgment in favor of Beacon, concluding that Plaintiffs’ claims were derivative in nature and that Plaintiffs failed file suit in accordance with R.I. Gen. Laws 7-1.2-711(c) and Rule 23.1 of the Superior Court Rules of Civil Procedure. Plaintiffs appealed, arguing that their claims met the requirements of a direct, and not a derivative, action and were therefore not subject to the procedural requirements of section 7-1.2-711(c) and Rule 23.1. The Supreme Court affirmed, holding that Plaintiffs’ claims were derivative in nature, and therefore, Plaintiffs were required to comply with the procedural requirements set forth in section 7-1.2-711(c) and Rule 23.1 before they commenced suit. Because Plaintiffs failed to comply with these requirements, the district court’s dismissal of the suit was proper. View "Heritage Healthcare Servs., Inc. v. Beacon Mut. Ins. Co." on Justia Law
Posted in: Business Law
Wilby v. Savoie
In 1997, Defendants formed a Vermont corporation called Green Mountain Park, Inc. to reconstruct, revive, and operate a defunct horseracing facility in the Town of Pownal, Vermont. Plaintiff agreed to invest $350,000 in the enterprise. Plaintiff subsequently became a member of the board of directors along with Defendants. A few years later, the project was abandoned due to issues surrounding Green Mountain’s ability to obtain a racetrack license. Defendants filed a complaint against Plaintiff in 2002, and Plaintiff counterclaimed for breach of fiduciary duty, fraud, and breach of contract. Defendants’ complaint was subsequently dismissed, and the case proceeded to trial on Plaintiff’s counterclaims. After a bench trial, the superior court entered judgment for Defendants on all counts. The Supreme Court affirmed, holding that the trial justice did not err in his factual findings and conclusions of law.View "Wilby v. Savoie" on Justia Law
LaBonte v. New England Dev. R.I., LLC
Lawrence LaBonte, the owner of New England Development RI, LLC (N.E. Development), filed a petition seeking the reorganization and/or the dissolution of N.E. Development. American Steel Coatings, LLC (American Steel) filed a motion to approve secured claim attempting to recover the funds it alleged were owed pursuant to a loan agreement between the parties. The LLC’s permanent receiver and LaBonte objected to American’s motion, asserting that the loan agreement was void because the amount of interest to be charged violated the state’s usury laws. The superior court sustained the objections and voided as usurious the loan agreement. The Supreme Court affirmed, holding that the loan agreement in this case was usurious and, therefore, void. View "LaBonte v. New England Dev. R.I., LLC" on Justia Law
Piccoli & Sons, Inc. v. E & C Constr. Co., Inc.
This litigation stemmed from a dispute over monies allegedly owed to a now-defunct corporation for work performed as part of a construction project that took place in 1990. Plaintiff corporation instituted suit about twenty-two years ago. Seventeen years later, the superior court dismissed the action, finding that Plaintiff could neither maintain the action in its own name nor substitute another entity as Plaintiff. The Supreme Court affirmed, holding that, as a defunct corporation, Plaintiff could no longer maintain this action in its own name, and because the receiver was discharged when Plaintiff was dissolved, the receiver could not maintain the action on its behalf. View "Piccoli & Sons, Inc. v. E & C Constr. Co., Inc." on Justia Law
Vogel v. Catala
After Defendant failed to repay a loan Plaintiff made to him in the amount of $8,500, Plaintiff filed a complaint against Defendant alleging breach of contract and breach of an implied-in-fact contract. Plaintiff later amended his complaint to include a claim for failure to repay based on book account. After a jury, the trial justice ordered Defendant to pay damages to Plaintiff in the amount of $8,500. Defendant appealed, contending that the trial justice erred in finding that Plaintiff was a credible witness and in failing to find that the transaction was void because Plaintiff had allegedly advanced the money to Defendant with the knowledge that it would be used for gambling. The Supreme Court affirmed, holding that the Court had no choice but to uphold the lower court's findings because the Court was not provided with a transcript of the trial below and therefore was unable to properly engage in a review of the trial justice's factual findings. View "Vogel v. Catala" on Justia Law