DiLibero v. Swenson

• Decision Date: 10 June 1991
• Docket Number: No. 90-233-A,90-233-A
• Citation: 593 A.2d 42
• Parties: Gail DILIBERO et al. v. Norma Ann SWENSON et al. ppeal.
• Court: Rhode Island Supreme Court

Page 42

593 A.2d 42

Gail DILIBERO et al. v. Norma Ann SWENSON et al.

No. 90-233-Appeal.

Supreme Court of Rhode Island.

June 10, 1991.

Charles Garganese, Jr., Rice, Dolan & Kershaw, Providence, for plaintiffs.

John M. Roney, Roney & Labinger, Providence, for defendants.

OPINION

SHEA, Justice.

This matter comes before the Supreme Court on the defendants' appeal from a decision of the Superior Court granting the plaintiffs' motion for a preliminary injunction. We reverse.

The facts of the matter before the court are integrally related to prior litigation between virtually identical parties. Thus it is essential that we set out a fairly complete narration of the facts in order to create a historical perspective so that our resolution of the issue now before the court will be fully understood.

In 1983 Norma DiLibero (Norma) and her husband, Joseph DiLibero (Joseph), and their daughter, Norma Ann Swenson (Norma Ann), opened an optical business on Mineral Spring Avenue in North Providence, Rhode Island, known as Optical Care. Norma, Joseph, Norma Ann, and Optical Care are defendants in the present matter.

In 1984 Steven DiLibero (Steven), a nephew of Norma and Joseph's was hired by Optical Care as an optician. Steven and his wife, Gail DiLibero (Gail), are plaintiffs in the present matter. Thereafter, sometime during 1986, Steven entered into an oral agreement with Norma and Joseph whereby Steven purchased an ownership interest in Optical Care for the sum of $8,000. ¹ Steven was also named president of Optical Care pursuant to the oral agreement.

In 1989 a business dispute arose between Steven and Norma and Joseph concerning the percentage of Optical Care stock to which Steven was entitled and other business-related matters. That dispute resulted in a court action filed by Steven against Norma, Joseph, and Optical Care. We shall refer to this first lawsuit as DiLibero I for purposes of clarity.

In his complaint in DiLibero I Steven made several allegations concerning Norma and Joseph's intent to deprive Steven of his benefits of ownership and of a just return on his investment. It is significant to note that in establishing the factual predicate for his allegations, Steven stated in his complaint that "[p]laintiff [Steven] and the individual defendants [Norma and Joseph] together own all of the outstanding stock in the defendant corporation." (Emphasis added.)

DiLibero I concluded with the agreement of Steven and Norma and Joseph to a negotiated settlement prior to trial. In accordance with a general release, Steven was paid $45,000 for his ownership interest in Optical Care. In return he resigned from the business and released Optical Care, Norma, Joseph, their family members, several named corporations, and "all other persons, firms and corporations" from the claims raised in DiLibero I. It is significant to note that Steven's wife, Gail, was present during the negotiations that resulted in the settlement.

Unfortunately the settlement in DiLibero I did not end the family dispute. On September 18, 1989, Norma, Joseph, and Optical Care filed a civil action against Steven and Gail, alleging that they removed Optical Care records and property and were unlawfully soliciting its customers. This case, to which we shall refer as DiLibero II, is awaiting trial before the Superior Court.

On October 13, 1989, after answering DiLibero II, Gail and Steven filed the present action against Optical Care, Norma, Joseph, their eight children and two family corporations (Atlantis Eyewear, Inc., and JAD & D, Ltd.). We shall refer to the present matter as DiLibero III. The allegations made by Gail in the complaint in DiLibero III arise from the same transactions that were the subject matter of DiLibero I. It is significant that these allegations are now made by Gail in DiLibero III whereas they were previously made by Steven in DiLibero I. Similarly, Steven's allegations in DiLibero III also draw their essence from the same transactions that were the subject matter of DiLibero I, except this time his allegations are made against Atlantis Eyewear, a corporation owned by Norma and Joseph that was not expressly named as a defendant in DiLibero I.

The defendant's answer in DiLibero III denied the allegations in the complaint and asserted as their primary affirmative defenses the doctrines of unclean hands, laches, and estoppel.

Thereafter Gail and Steven moved for a preliminary injunction to prevent defendants from destroying, removing, and/or transferring any corporate assets held by defendant entities for less than adequate consideration. The trial court decided the motion for preliminary injunction on the basis of affidavits and memoranda. Gail's affidavit claimed that she, along with Steven, had been involved in the discussions resulting in the creation of Optical Care. Moreover, Gail claimed, the $8,000 investment that Steven had earlier claimed came only from him was in reality an investment of money belonging to both of them. In support of this claim she produced four checks in the total amount of $5,400 that were drawn on their joint account. She also relied upon Steven's affidavit, which essentially stated that although he had intended to add his wife as a plaintiff in DiLibero I since the $8,000 had been a joint investment, he never in fact did so because the case was settled shortly thereafter.

The defendants filed several affidavits in opposition to the motion for a preliminary injunction. In short, defendants claimed that there was never any mention of Gail's entering into the ownership of Optical Care along with Steven. Moreover, they emphasized that the settlement...