La Gondola, Inc. v. City of Providence by and through Lombardi

• Decision Date: 17 June 2019
• Docket Number: No. 2016-282-Appeal.,PC 15-1779,2016-282-Appeal.
• Citation: 210 A.3d 1205
• Parties: LA GONDOLA, INC. v. CITY OF PROVIDENCE, BY AND THROUGH its Treasurer James J. LOMBARDI, et al.
• Court: Rhode Island Supreme Court

210 A.3d 1205

LA GONDOLA, INC.

v.CITY OF PROVIDENCE, BY AND THROUGH its Treasurer James J. LOMBARDI, et al.

No. 2016-282-Appeal.

PC 15-1779

Supreme Court of Rhode Island.

June 17, 2019

Justice Robinson, for the Court.

The plaintiff, La Gondola, Inc. (La Gondola), appeals from a September 14, 2016 judgment entered after a bench trial in Providence County Superior Court, which judgment was in favor of the defendants, the City of Providence (the City), the Rhode Island Zoological Society (the Zoo), P.G.S., Inc., and various municipal officials.¹ The case concerns the awarding of a concessions contract for concessions at Carousel Village in Roger Williams Park, which is located in the City of Providence. On appeal, La Gondola contends that the trial justice erred in: (1) "concluding that the [bidding] process was free of corruption, bad faith, and/or an abuse of discretion;" (2) holding that a certain amendment to the contract at issue, which dealt with the operation of a trackless train, was not enforceable; and (3) denying La Gondola's "contractual interference claim." (Internal quotation marks omitted.)

For the reasons set forth in this opinion, we affirm the judgment of the Superior Court.

IFacts and Travel

Roger Williams Park is a spacious and inviting public space owned by the City of Providence. Situated on four hundred and thirty-five acres, it contains numerous public attractions such as the Roger Williams Park Zoo, Carousel Village, and the Dalrymple Boathouse (the Boathouse).² This case involves a dispute over the concessions contract for Carousel Village, which contract the City ultimately awarded to the Zoo, rather than to La Gondola. We begin by addressing what La Gondola alleged in its March 1, 2016 third amended complaint (the complaint), and we will then proceed to relate the testimony presented at trial.

In its complaint, La Gondola stated that it operated concessions at the Boathouse in Roger Williams Park pursuant to a concessions contract, the initial term of which will expire on May 16, 2021. The complaint further stated that La Gondola also operated concessions at Carousel Village pursuant to a concessions contract with the City, the initial term of which ended on April 30, 2015, "with an additional five year term that was to expire on April 30, 2020 if the rent was mutually agreed upon by the City and LaGondola prior to April 30, 2015."

At some point during the pendency of the latter contract, La Gondola purchased a trackless train, which would serve as an attraction at Carousel Village. The complaint alleged that, on January 30, 2014, after the train was purchased, La Gondola and the City entered into an "Amendment to the Carousel Village Lease" (the Train Amendment), which stated that La Gondola would "remain exclusive provider of all train rides within Roger Williams Park and Zoo under this or any other current contract with the City of Providence within Roger Williams Park and Zoo."

The complaint went on to relate that, at the time period at issue, a contract which existed between the Zoo and the City for the operation of the Zoo was set to expire on June 30, 2015. It was further stated in the complaint that Robert McMahon, the Superintendent of the City of Providence Department of Parks & Recreation, who recommended that the City award the Carousel Village concessions contract to the Zoo, was also an ex-officio member of the Zoo's Board of Trustees, which Board was involved in negotiating a new contract between the City and the Zoo.³ (La Gondola gives great weight to that uncontested fact in its argument before this Court.) The complaint proceeded to state that the City informed the Zoo that it was going to reduce its annual payments to the Zoo by $ 300,000 beginning in fiscal year 2015. It then alleged that the Zoo agreed to the reduction "so long as the City provided the [Zoo] with other sources of revenue" and that the parties discussed the Zoo operating the concessions at Carousel Village and the Boathouse. The complaint pointed to specific communications from Doctor Jeremy Goodman, the Executive Director of the Zoo, to Mr. McMahon and Alan Sepe, the Director of Operations for the City, indicating that the City had "verbally committed" to granting the Zoo the Carousel Village concessions contract. See Part III.A.2, infra .

In relating the factual background of this case, the complaint went on to state that, in November of 2014, Mr. McMahon met with Cynthia and Allen Days (Cynthia Days being the President of La Gondola and Allen Days being both her husband and also a person affiliated with the corporation) to discuss the possible five-year extension of the concessions contract for Carousel Village and the need for capital improvements to Carousel Village. The Days wanted a contractual extension for a period greater than five years if they were to agree to pay for the needed capital improvements. The complaint stated that Mr. McMahon told the Days that such an extension would have to be the subject of a request for proposal. Accordingly, the complaint indicated that, on December 15, 2014, the Board of Contract and Supply approved a "Request For Proposals For Operation Of Carousel Village At Roger Williams Park" (the RFP).

The RFP provided for a ten-year contract with a minimum rent bid of $ 95,000. It also included required capital improvements totaling $ 156,000; those improvements included a restroom renovation to, among other things, convert the conventional toilet system into a waterless Clivus Multrum System, which is a composting toilet system. Two addenda were ultimately added to the RFP. The first addendum made certain changes to the scope of needed capital improvements, the cost of which then totaled $ 241,000. The second addendum made the contract be one of twenty, rather than ten, years in duration; and it extended the time period for completion of the capital improvements from two years to three and a half years.

Importantly, the RFP also stated that "[t]he Parks Department reserves the right to accept or reject any or all proposals received as a result of this request, or to cancel in part or in its entirety this proposal if it is in the Parks Department best interest to do so." Section 6.7 of the RFP further provided that "[t]he City reserves the right to accept other than the highest value proposals, to reject any or all proposals, and to waive any of the requirements of the bid selection procedures explained in this document."

According to the complaint, P.G.S., Inc. submitted a proposal for $ 292,435, which was an amount less than the required minimum bid (viz. , the minimum rent of $ 95,000 plus capital improvements of $ 241,000). La Gondola submitted a bid of $ 525,569, which committed it to performing all of the required capital improvements. The Zoo submitted a bid of $ 591,000, which bid met the $ 241,000 required for capital improvements that were listed in the RFP but did not include the capital improvement relative to the installation of the Clivus Multrum System.⁴ For that reason, La Gondola alleges that the Zoo's bid was unresponsive to the RFP. The complaint proceeded to state that Mr. McMahon recommended that the City accept the Zoo's bid and that the Board of Contract and Supply so voted. Ultimately, on August 21, 2015, the City and the Zoo entered into a concessions contract for Carousel Village, which will expire in 2035.

The complaint contained six counts. We relate in detail only those counts with which we are concerned in this appeal. Count One requested a declaratory judgment to the effect that: (1) the Zoo's bid was not responsive to the RFP; (2) the Zoo's bid materially deviated from the specifications of the RFP; (3) the City engaged in favoritism in selecting the Zoo's bid; (4) the City colluded with the Zoo in selecting the Zoo's bid; (5) the City predetermined that it was going to select the Zoo's bid; (6) "the City acted corruptly or in bad faith, or so unreasonably or arbitrarily as to be guilty of a palpable abuse of discretion;" (7) the concessions contract between the City and the Zoo was void; (8) La Gondola's bid was responsive; (9) La Gondola's bid "should be selected as the successful bid for the RFP;" (10) the Zoo should be ordered to vacate Carousel Village; and (11) La Gondola should be awarded the operation of the concessions at Carousel Village. Count Two sought a writ of mandamus "directing the City to award the RFP to LaGondola and * * * to enter into a contract with LaGondola for the Carousel Village" concessions. Count Three sought a declaratory judgment with respect to the fact that the contract eventually entered into between the Zoo and the City for the Carousel Village concessions provided the Zoo the exclusive right to operate rides and concessions at Carousel Village, allegedly in contravention of the Train Amendment (see supra ). Specifically, La Gondola requested a declaration that: (1) the Train Amendment was valid and enforceable; (2) the concessions contract between the Zoo and the City was void and unenforceable "to the extent that it conflicts with LaGondola's rights under [the Train Amendment] and the Boathouse [concessions contract];" (3) the concessions contract between the City and the Zoo exceeded the geographical limitations set forth in the RFP; (4) La Gondola can operate its train within two hundred feet of Carousel Village; and (5) the Zoo may not operate a trackless train in Roger Williams Park and Zoo. Count Six alleged intentional interference with prospective contractual relations.⁵

A trial ensued on all counts in the complaint over eight days in March and April of 2016. We relate below the salient details of what transpired at the trial.

AThe Testimony of Robert McMahon

Robert McMahon testified that he had been the Deputy Superintendent of the City of Providence Parks & Recreation Department from 1986 to 2008 and then Superintendent from 2008 until his retirement in 2015. He stated in the course of his...