Belliveau Bldg. Corp. v. O'COIN
| Decision Date | 18 December 2000 |
| Docket Number | No. 98-445-Appeal.,98-445-Appeal. |
| Citation | 763 A.2d 622 |
| Parties | BELLIVEAU BUILDING CORPORATION v. William J. O'COIN, Jr., et al. |
| Court | Rhode Island Supreme Court |
Present: WEISBERGER, C.J., LEDERBERG, BOURCIER, FLANDERS, and GOLDBERG, JJ.
George M. Prescott, Lincoln, George M. Prescott, Jr., for Plaintiff.
Lauren E. Jones, Providence, for Defendant.
Did claims for tortious interference with contract arise from the filing of two notices in the land-evidence records pertaining to a right of first refusal (RFR) to purchase real estate? Not in this case, we hold, for the reasons recorded below.
The defendants, William J. O'Coin, Jr. and Claire H. O'Coin (O'Coins), appeal from a Superior Court judgment for the plaintiff Belliveau Building Corporation (BBC). After a nonjury trial, the court found the O'Coins liable for tortious interference with BBC's contract to sell real estate to a third party. The court then awarded BBC compensatory damages plus costs. BBC also cross-appeals, challenging the trial court's refusal to award punitive damages and its preclusion on res judicata grounds of BBC's attack on the propriety of the O'Coins' filing of a first notice in the land-evidence records concerning their RFR.
This is the second time we have addressed the legal issues arising out of this controversy. See Belliveau v. O'Coin, 557 A.2d 75 (R.I.1989) (Belliveau I). Because our opinion in Belliveau I provides a comprehensive summary of the underlying facts in this case, we will not repeat them all here except to sketch the essential particulars as they bear on the issues now before us.
In 1979 the O'Coins purchased a parcel of land in Cumberland and subdivided it into five lots. Between 1982 and 1985, a married couple, Sandra and Ron Belliveau (Belliveaus) purchased four of these lots from the O'Coins, including lot No. 3, which Sandra bought in 1985. Before the O'Coins conveyed lot No. 3 to Sandra, the O'Coins recorded (with Sandra's approval) a declaration of twenty-one restrictive covenants applicable to lot No. 3. One of these restrictions gave the O'Coins a preemptive RFR in the event that Sandra later sought to sell or lease lot No. 3 to another prospective purchaser or tenant.1 The Belliveaus served as the sole officers and shareholders of BBC, their wholly owned construction business. In December 1986, in an effort to take advantage of certain favorable federal income tax laws that were about to expire, Sandra conveyed lot No. 3 to BBC for $60,000 (the Sandra-BBC conveyance) without first notifying the O'Coins or giving them any opportunity to exercise their RFR. Approximately four months later, however, in May 1997, Sandra wrote to the O'Coins. In her letter, she disclosed that, for tax purposes, she had conveyed the property to BBC the previousDecember. She then requested the O'Coins to waive their preemptive right with respect to the BBC conveyance, assuring them that BBC would honor the RFR in any later sale of the property to a third party. The O'Coins, however, believing that the sale of lot No. 3 from Sandra to BBC had triggered their RFR — thereby entitling them to purchase lot No. 3 for $60,000 — refused to execute the requested waiver. Instead, on May 13, 1987, they recorded a "Notice of Intent to Exercise Pre-Emptive Right" (first notice) in the Cumberland land-evidence records, stating that they were thereby exercising their right to purchase lot No. 3 pursuant to the terms of the RFR; that is, "for the same consideration [$60,000] and upon the same terms" as Sandra had conveyed lot No. 3 to BBC. In response, the Belliveaus commenced a declaratory judgment action in Superior Court to determine the validity and effect of the O'Coins' purported exercise of their RFR. Eventually, in 1988, the Superior Court ruled in favor of the O'Coins, granting them specific performance of the RFR with respect to Sandra's transfer of lot No. 3 to BBC for $60,000. On appeal, however, this Court reversed, holding that the tax-motivated conveyance from Sandra to BBC, the Belliveaus' wholly owned corporation, did not trigger the O'Coins' RFR. Belliveau I, 557 A.2d at 79. Thus, the Court allowed BBC to take title to lot No. 3 — subject to the recorded rights of the O'Coins concerning this property, including their valid RFR. Id. at 80.
On July 13, 1987, while Belliveau I was pending, but before either the Superior Court or this Court on appeal had ruled on whether the Sandra-BBC conveyance had triggered the O'Coins' RFR, BBC entered into an agreement to sell lot No. 3 to Stephen and Patricia Butler (Butlers) for $349,000. By letter dated July 20, 1987, BBC notified the O'Coins of this transaction and requested them to respond thereto within fifteen days or else they would be deemed to have waived their RFR. Within this time frame, (and still before the Superior Court had issued its decision in Belliveau I), the O'Coinsrecorded a second "Notice of Intent to Exercise Pre-Emptive Right" (second notice) in the Cumberland land-evidence records. The second notice expressly referred to the first notice, reiterated the contents thereof verbatim, and specifically asserted that the O'Coins still intended to purchase lot No. 3 for $60,000, notwithstanding the proposed BBC-Butler transaction selling lot No. 3 for $349,000.2 After the Superior Court ruled in favor of the O'Coins in January 1988 and declared that they had the right to purchase lot No. 3 for $60,000, the Butlers withdrew from the purchase and sale contract with BBC.
On appeal, however, this Court in 1989 reversed the judgment of the Superior Court in Belliveau I. The Belliveaus then recorded that decision in the land-evidence records to clear BBC's title to the property. Shortly thereafter, BBC sold lot No. 3 to Alan and Patricia Riendeau for $345,000 without the O'Coins attempting to exercise their RFR. BBC ultimately filed this damages action in Superior Court, asserting that, by filing their notices in the land-evidence records, the O'Coins had tortiously interfered with the Butler contract and that, as a result, BBC had been damaged, mostly by incurring holding costs for lot No. 3 that it otherwise would have avoided if the O'Coins had not filed their notices and disrupted the Butler sale. After a nonjury trial, the Superior Court ruled that res judicata barred BBC from challenging the O'Coins' filing of the first RFR notice, but that, with regard tothe second RFR notice, the O'Coins had tortiously interfered with the BBC-Butler contract, entitling BBC to recover compensatory damages from the O'Coins.
On their respective appeals, one or both sides contend that the trial justice erred in how she resolved issues of claim preclusion, tortious interference with contract, proximate causation, and punitive damages. The O'Coins first argue that the trial justice erred by not applying the doctrine of res judicata to bar BBC's tortious-inference-with-contract claim concerning their second recorded notice, thereby allowing BBC to proceed to judgment on this cause of action. In its cross-appeal, BBC counters that the trial justice erred by applying res judicata to that portion of the O'Coins' tortious-interference claim that was based upon the first recorded RFR notice. But because our resolution of the merits of BBC's tortious interference claim disposes of this entire controversy, we shall assume, without deciding, that claim-preclusion doctrines like res judicata did not foreclose BBC's tortious interference claims with respect to either the first or second notices filed by the O'Coins. Thus, for the purposes of resolving these appeals, we shall assume arguendo that BBC was not barred by res judicata from bringing a so-called coercive action for damages as "supplemental" to the initial declaratory judgment of Belliveau I. See generally G.L.1956 § 9-30-8 (); see also ElGabri v. Lekas, 681 A.2d 271, 275-76 (R.I. 1996) ().
The standard of review we apply in this case is well settled: "This Court will not disturb the findings of a trial justice sitting without a jury in a civil matter `unless such findings are clearly erroneous or unless the trial justice misconceived or overlooked material evidence or unless the decision fails to do substantial justice between the parties.'" Paradis v. Heritage Loan and Investment Co., 701 A.2d 812, 813 (R.I.1997) (). With these assumptions and legal principles in mind, we proceed to consider whether the O'Coins were legally justified in recording the notices at issue.
I
The trial justice found that BBC had established the required elements of tortious interference with contract and that the O'Coins had failed to show that the intentional interference complained of — their recording of the second notice — was justified. The O'Coins argue that they were justified in recording both notices based upon their holding of a valid RFR and their colorable right to exercise that RFR in connection with Sandra's sale of lot No. 3 to BBC. Therefore, they suggest, the trial justice erred in finding them liable on the tortious interference claim. Specifically, the O'Coins contend that they were privileged to record not only the first notice, in May 1987, but also the second notice, in August 1987, to protect the enforceability of their RFR concerning lot No. 3 after they received notice of the proposed BBC-Butler sale.
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