Group v. Atlantic Mortg. Co. 

• Decision Date: 09 January 2012
• Docket Number: No. 2010–66–Appeal.,2010–66–Appeal.
• Parties: EMPIRE ACQUISITION GROUP, LLC v. ATLANTIC MORTGAGE COMPANY, INC.
• Court: Rhode Island Supreme Court

35 A.3d 878

EMPIRE ACQUISITION GROUP, LLC

v.ATLANTIC MORTGAGE COMPANY, INC.

No. 2010–66–Appeal.

Supreme Court of Rhode Island.

Jan. 9, 2012.

William R. Landry, Esq., Providence, for Plaintiff.

Ronald M. LaRocca, Esq., Providence, for Defendant.

Present: SUTTELL, C.J., GOLDBERG, FLAHERTY, ROBINSON, and INDEGLIA, JJ.

OPINION

Chief Justice SUTTELL, for the Court.

The plaintiff, Empire Acquisition Group, LLC, appeals from a grant of summary judgment in favor of the defendant, Atlantic Mortgage Company, Inc. The plaintiff contends that summary judgment was improperly granted in favor of the defendant because genuine issues of material fact are in dispute. This case came before the Supreme Court pursuant to an order directing the parties to show cause why the issues raised in this appeal should not summarily be decided. After considering the parties' written and oral submissions and reviewing the record, we conclude that cause has not been shown and that this case may be decided without further briefing or argument. For the reasons set forth in this opinion, we affirm the judgment of the Superior Court.

IFacts and Procedural History

On September 29, 2004, plaintiff and defendant executed an agreement, entitled “Sales Agreement and Deposit Receipt,” for the purchase and sale of an unimproved parcel of real property. In this agreement, plaintiff agreed to purchase from defendant a vacant lot located off South County Trail in Charlestown, Rhode Island, designated as Assessor's Plat No. 22, lot No. 7, for a total purchase price of $80,000, with $3,000 to be paid as a deposit. The agreement included a “Physical Inspection and Due Diligence” clause, which provided plaintiff with a ninety-day due-diligence period in which to perform all desired “inspections and inquiries.” The clause also afforded plaintiff the unilateral right to terminate the agreement if “the results of such inspections [were] unsatisfactory” to plaintiff.

The termination clause was particularly pertinent to this agreement because plaintiff wished to make the vacant, land-locked property at issue a “viable lot.” The plaintiff faced several obstacles to his being able to do so, including establishing the validity of a right-of-way, surveying the land to satisfy setback regulations, resolving possible abutting property-owner claims, ¹ and researching “soil conditions, [Individual Sewage Disposal System (ISDS) ] considerations, [and] utility availability.” This process included applying to the Rhode Island Department of Environmental Management (DEM) and the Rhode Island Department of Transportation (DOT) for permits and approvals. The agreement, however, was not conditioned upon plaintiff's obtaining such permits and approvals; instead, it provided that the property was being sold “[a]s [i]s.”

The agreement stated that the closing date was to be one hundred business days from the date of the agreement's execution “or at any such time and place as may be agreed upon by the parties.” The agreement did not include a “time is of the essence” provision. On January 25, 2005, before reaching the slated closing date, plaintiff submitted a written request to extend the due-diligence period for an additional 120 business days from the date of correspondence. The request delineated the following reason for the additional time:

“[W]e have incurred delays with the soil evaluations and are still attempting to schedule them with DEM. After they are complete, our engineers [will] design the ISDS system, then submit back to DEM for approval. We will work as quickly as possible to make this happen but unfortunately the timing of the necessary steps [is] not always within our control.”

The defendant granted this extension. On July 9, 2005, plaintiff again made a request for an extension of the due-diligence period. At this time, plaintiff requested an additional ninety business days from the date of the correspondence, stating: “we have successfully performed soil evaluations on this site and are now in the process of completing the survey and ISDS design for DEM approval.” On July 12, 2005, defendant granted this second extension. Thereafter, on November 15, 2005, plaintiff requested a third extension. This request was for an additional ninety business days. The request provided:

“As per our last correspondence, our engineers are still working on the survey. This has been an extremely difficult and time-consuming process as there are conflicting deed descriptions of the property and many of the reference points that the deeds refer to are no longer present. Furthermore, we've had to work with the Bureau of Land Management to further research the land and work out all of the issues.

“With all of this said, I'm told that we should [be] wrapping up survey in the next few weeks. We'll then design the ISDS and submit to DEM for approval.

“I appreciate your patience and [am] confident that we'll be able to close this deal early next year.”

This third extension was granted by defendant. As a result, the due-diligence period was set to end March 27, 2006. Before this date, however, plaintiff acquired its sought-after permits and approvals from both the DOT and the DEM.²

Nevertheless, no closing occurred on March 27, 2006, or on any date thereafter. Instead, the next communication between the parties occurred on June 5, 2006,³ at which time defendant sent plaintiff a letter indicating that the “agreements for extensions to close h[ad] expired” and offering a “renegotiated” sale price of $115,000 for the property at issue to more closely reflect the market rate of the property.⁴ On June 6, 2006, plaintiff responded to defendant explaining its intention to close “without further modification or amendment of the Agreement” and urging that the transaction be closed “as expeditiously as possible.” The plaintiff further notified defendant that it had recorded “a notice of the purchase and sale agreement in the land evidence records of the Town of Charlestown.” This communication was the first time that plaintiff had attempted to contact defendant since requesting its third extension on November 15, 2005.

On October 3, 2007, plaintiff filed a complaint in Superior Court seeking specific performance of its agreement with defendant, as well as “incidental and consequential damages.” On that same day, plaintiff also recorded a notice of lis pendens concerning the property at issue. On October 25, 2007, defendant filed an answer denying plaintiff's allegations; it also counterclaimed seeking declaratory relief that the agreement, notice of agreement, and lis pendens be declared null and void (count 1) and asserting a claim for breach of contract (count 2).⁵

The defendant filed a motion for summary judgment on April 9, 2009, on plaintiff's complaint and on counts 1 and 2 of defendant's counterclaim. To support its motion, defendant relied upon the deposition testimony of plaintiff's manager, an affidavit of defendant's president, plaintiff's lack of response to defendant's request for admissions, and various other supporting documents. On June 5, 2009, plaintiff filed an objection and a memorandum in opposition to defendant's motion for summary judgment. The plaintiff attached one document in support of its opposition and otherwise relied on defendant's evidence.

On June 15, 2009, the trial justice held a hearing on defendant's motion. After hearing arguments from both parties about the “reasonableness” of their actions after the due-diligence period had expired, the trial justice noted that it had been plaintiff's burden to contact defendant to close and that plaintiff had failed to do so without any explanation for its lack of “diligence.” Consequently, the trial justice granted defendant's motion. Partial final judgment was entered on August 3, 2009, pursuant to Rule 54(b) of the Superior Court Rules of Civil Procedure. Thereafter, plaintiff filed a notice of appeal.

IIStandard of Review

“This Court reviews a lower court's grant of a motion for summary judgment de novo, ‘employing the same standards and rules used by the hearing justice.’ ” Generation Realty, LLC v. Catanzaro, 21 A.3d 253, 258 (R.I.2011) (quoting Planned Environments Management Corp. v. Robert, 966 A.2d 117, 121 (R.I.2009)). We will affirm the grant of summary judgment only “[i]f we conclude, after viewing the evidence in the light most favorable to the nonmoving party, that there is no genuine issue of material fact to be decided and that the moving party is entitled to judgment as a matter of law * * *.” Pereira v. Fitzgerald, 21 A.3d 369, 372 (R.I.2011) (quoting Lacey v. Reitsma, 899 A.2d 455, 457 (R.I.2006)). “The party opposing a motion for summary judgment ‘carries the burden of proving by competent evidence the existence of a disputed material issue of fact and cannot rest on allegations or denials in the pleadings or on conclusions or legal opinions.’ ” Vaillancourt v. Motta, 986 A.2d 985, 987 (R.I.2009) (quoting Accent Store Design, Inc. v. Marathon House, Inc., 674 A.2d 1223, 1225 (R.I.1996)).

IIIDiscussion

The plaintiff argues that “this case is a particularly poor candidate for summary judgment inasmuch as it involves a fact- intensive dispute regarding how ‘reasonable’ or ‘unreasonable’ the parties were.” Further, plaintiff contends that defendant “used the parties' mutual disregard of the designated closing date as a ‘gotch-ya’ to take advantage of more than a year's worth of expensive permitting efforts by [plaintiff] regarding the property.” The plaintiff also maintains it was “at all relevant times ready, willing and able to close under the Agreement.”

In response, defendant argues that “[n]o genuine issues of material fact exist regarding the Agreement's expiration pursuant to its own terms.” In so doing, defendant points to plaintiff's failure to produce any evidence explaining why it did not timely close or to prove that it was acting in good faith. Additionally, defendant contends...