Green Dev. v. Exeter Real Estate Holdings, LLC

• Decision Date: 14 January 2022
• Docket Number: WC-2020-0471,WD-2021-0065,WC-2020-0346
• Parties: GREEN DEVELOPMENT, LLC, d/b/a WIND ENERGY DEVELOPMENT, LLC v. EXETER REAL ESTATE HOLDINGS, LLC, d/b/a EREH, LLC; KEVIN CASEY, individually and as Manager of EREH, LLC; REVITY ENERGY LLC; and RALPH A. PALUMBO, individually and as Manager of REVITY ENERGY LLC GREEN DEVELOPMENT, LLC, d/b/a WIND ENERGY DEVELOPMENT, LLC v. EXETER REAL ESTATE HOLDINGS, LLC, d/b/a EREH, LLC KEVIN CASEY, individually and as Manager of EREH, LLC; REVITY ENERGY LLC; and RALPH A. PALUMBO, individually and as Manager of REVITY ENERGY, LLC, EXETER REAL ESTATE HOLDINGS, LLC d/b/a EREH, LLC; v. GREEN DEVELOPMENT, LLC d/b/a WIND ENERGY DEVELOPMENT, LLC
• Court: Rhode Island Superior Court

GREEN DEVELOPMENT, LLC, d/b/a WIND ENERGY DEVELOPMENT, LLC v. EXETER REAL ESTATE HOLDINGS, LLC, d/b/a EREH, LLC;

KEVIN CASEY, individually and as Manager of EREH, LLC; REVITY ENERGY LLC; and RALPH A. PALUMBO, individually and as Manager of REVITY ENERGY LLC GREEN DEVELOPMENT, LLC, d/b/a WIND ENERGY DEVELOPMENT, LLC v. EXETER REAL ESTATE HOLDINGS, LLC, d/b/a EREH, LLC

KEVIN CASEY, individually and as Manager of EREH, LLC; REVITY ENERGY LLC; and RALPH A. PALUMBO, individually and as Manager of REVITY ENERGY, LLC, EXETER REAL ESTATE HOLDINGS, LLC d/b/a EREH, LLC; v. GREEN DEVELOPMENT, LLC d/b/a WIND ENERGY DEVELOPMENT, LLC

Nos. WC-2020-0346, WC-2020-0471, WD-2021-0065

Superior Court of Rhode Island, Washington

January 14, 2022

Washington County Superior Court

For Plaintiffs: John O. Mancini, Esq.; Michael L. Mineau, Esq. Thomas E. Carlotto, Esq.

For Defendants: James G. Atchinson, Esq.; Joelle C. Rocha, Esq. Thomas E. Carlotto, Esq.; Michael L. Mineau, Esq.; John O Mancini, Esq.

DECISION

LICHT J.

This Decision in these consolidated cases is rendered following a three-day bench trial which occurred on November 22-24, 2021.

I DEFINED TERMS

Defined terms are used throughout this Decision, and the short form of each term is contained in parentheses after the first time the term appears in the Decision. Because so many different terms are used in this opinion on multiple occasions, the Court provides the following list of defined terms in order to better enable the reader to find a definition without having to search the entire document.

. The Parties, Key Individuals and Witnesses

"Brusini" refers to Stephen M Brusini, Esq., general legal counsel to Green Development, LLC.

"Casey" refers to Kevin Casey, the managing member of EREH.

"Darrow" refers to Zachary Darrow, Esq., a partner at DarrowEverett, LLC and licensed real estate broker in the State of Rhode Island.

"DarrowEverett" refers to the law firm DarrowEverett, LLC, which, at various times, represented the interests of EREH, Casey and Revity. "DePasquale" refers to Mark DePasquale, the managing member of Green Development, LLC.

"DiPrete" refers to DiPrete Engineering, a Providence-based, civil engineering firm with expertise in utility-grade solar development projects.

"EREH" refers to Defendant Exeter Real Estate Holdings, LLC, a Delaware limited liability company registered with the Rhode Island Secretary of State as a foreign limited liability company.

"Everett" refers to Eric Everett, Esq., a partner at DarrowEverett, LLC.

"Green" refers to Plaintiff Green Development, LLC, a Delaware limited liability company registered with the Rhode Island Secretary of State as a foreign limited liability company.

"Palumbo" refers to Ralph Palumbo, one of the principals of Revity Energy, LLC.

"Revity" refers to Defendant Revity Energy, LLC, a Delaware limited liability company registered with the Rhode Island Secretary of State as a foreign limited liability company.

"Town" refers to the Town of Exeter, Rhode Island.

2. Key Assets or Properties

"Large Parcel" refers to EREH's 118-acre parcel less the Small Parcel as contemplated by the Green Option and subsequent amendments.

"Property" means a 118-acre parcel of vacant land in Exeter, Rhode Island, held by EREH.

"Small Parcel" refers to four to six acres of EREH's 118-acre parcel as contemplated by the Solar Lease and subsequent amendment.

3. Key Projects

"Replacement Combined Project" refers to Green's resubmission of the WED Ridge Project, along with three additional property applications, to the Town of Exeter's Planning Board on November 19, 2018.

"Revity Solar Project" refers to Revity and EREH's application for a solar project to the Town of Exeter.

"WED Ridge Project" refers to the 20+ MW solar project (inclusive of both the Small Parcel and Large Parcel) originally submitted by Green to the Town of Exeter's Planning Board on August 9, 2017.

4. Key Documents

"Darrow Everett Trilogy" refers to letters from DarrowEverett to Green or its attorneys dated July 20, 2020, August 20, 2020, and October 30, 2020. (Tr. Exs. 4-6.)

"First Amendment to Option" refers to an amendment to the Green Option specifying Green's tax obligations dated August 31, 2018. (Tr. Ex. 18.)

"First Amendment to Solar Lease" refers to the lone amendment to the Solar Lease dated September 10, 2018. (Tr. Ex. 3.)

"Green Option" refers to an option agreement between EREH and Green to lease the Large Parcel dated May 10, 2017. (Tr. Ex. 17.)

"Revity Option" refers to an option to purchase the entirety of the Property, entered into by EREH and Revity, dated June 19, 2020. (Tr. Ex. 50.)

"Second Amendment to Option" refers to a contested, additional extension of the Green Option that existed in draft form from May 5, 2020 onward. (See Tr. Ex. 44.)

"Solar Lease" refers to the Small Parcel lease agreement between EREH and Green dated May 10, 2017. (Tr. Ex. 2.) "Tr. Ex." Refers to the 59 exhibits which the parties stipulated were admissible.

5. Miscellaneous

"Planning Board" refers to the Planning Board for the Town of Exeter.

"Zoning Board" refers to the Zoning Board for the Town of Exeter.

II INTRODUCTION

On May 10, 2017, Mark DePasquale (DePasquale), as managing member of Green Development, LLC (Green) and Kevin Casey (Casey), as managing member of Exeter Real Estate Holdings, LLC (EREH) executed the "SOLAR ENERGY LEASE" (Solar Lease) (Tr. Ex. 2). The leased premises in the Solar Lease is four to six acres (Small Parcel) of EREH's 118-acre parcel of vacant land (Property), ^[1] located off Ten Rod Road in the Town of Exeter (Town). The Solar Lease required the parties, within thirty days of its execution, to mutually identify the exact boundaries of the Small Parcel and it required Green to then identify the location of certain operation and access easements on the Property.^[2] The Solar Lease was for an initial term of twenty years, with three five-year renewal terms. On the leased premises, Green was to construct, operate, and manage a solar renewable energy project.

Green elected to exercise its 12-month extension on May 10, 2019, and the Option was to expire on May 10, 2020. (Tr. Ex. 17, Section 4).^[3] Commencing in August 2017, Green began the process of permitting a 20+ MW solar project to be situated on both the Small Parcel and Large Parcel ("Original Combined Project" or "WED Ridge Project") as well as permitting other solar projects in Exeter. While no one has disputed that Green diligently pursued obtaining permits, its efforts were unsuccessful because of various enactments by the Exeter Town Council. Green unsuccessfully challenged the actions of the Town in the Superior Court. See Green Development, LLC, a/k/a Wind Development, LLC v. Town of Exeter, WC-2018-0636. Green appealed this decision and the matter is now before the Supreme Court. The Stipulated Agreed Statement of Facts, which the Court adopts, is attached hereto as Exhibit A, and provides a detailed history of the actions of the Town and the litigation.

In April 2020, roughly one month before the Green Option was set to expire on May 10, 2020, DePasquale began negotiations with Casey and EREH's counsel for an additional extension of the Green Option. However, the parties did not reach an agreement by May 10 and Green did not exercise its option. Nevertheless, the parties continued to negotiate an extension. The nature and extent of these negotiations will be discussed in greater detail below.

On May 30, 2020, Casey emailed a draft of the Second Amendment to the Green Option to DePasquale. (Second Amendment to Option) (Tr. Ex. 44). The Second Amendment to Option featured a "DRAFT" watermark on each page and contained the following:

"The parties now agree and acknowledge that the Extended Term shall be extended for an additional Twenty-Four (24) months, and therefore shall expire on May 10, 2022. [Green] agrees to pay an additional Deposit of Twenty-Five Thousand Dollars ($25, 000.00), by wire transfer to [EREH], with the execution of this Second Amendment."

Id. Section 1. In response, DePasquale sent a text message to Casey informing him that he should deal directly with Green's Attorney, Stephen Brusini, Esq. (Brusini) (Tr. Ex. 49, Bates No. EREH-000046).

On Monday, June 1, 2020, Brusini emailed the Second Amendment to Option back to Casey, having changed the word "Deposit" to "payment." In the email, Brusini stated: "Please let me know if these two documents are good to go and If [sic] so I'll arrange to get Mark's signature later today or tomorrow morning. If you could also email me your wire transfer instructions for the $25, 000 payment, I'll have Green's accounting department prepare the wire." (Tr. Ex. 15.)

Casey never responded. On June 8, 2020, Brusini again emailed Casey regarding the wiring instructions. (Tr Ex. 16.) Casey replied later that day by email stating the following:

Atty Brusini,

"We are in the process of hiring new counsel and expect to have formalized that in the next few days. As soon as we do, we'll let you know and continue our correspondence accordingly. Thanks Kevin." (Tr. Ex. 59).

Sometime before May 10, 2020, Revity Energy, LLC (Revity), who expressed interest in the Property in 2016 but could not reach agreement with EREH, discovered through its attorneys DarrowEverett (who were also EREH's attorneys at the time), that the Property might be available. Revity soon began negotiations with Casey. On May 12, 2020, Revity and EREH signed a conflict waiver with the effect that DarrowEverett would represent Revity in the negotiations of an agreement with EREH. For its part, EREH would seek new counsel. On June 19, 2020, Revity and EREH executed an OPTION AGREEMENT to purchase...