Kottis v. Cerilli

• Decision Date: 07 July 1992
• Docket Number: No. 90-502-A,90-502-A
• Citation: 612 A.2d 661
• Parties: 18 UCC Rep.Serv.2d 701 John G. KOTTIS et al. v. Benedetto A. CERILLI, Jr., et al. ppeal.
• Court: Rhode Island Supreme Court

Page 661

612 A.2d 661

18 UCC Rep.Serv.2d 701

John G. KOTTIS et al. v. Benedetto A. CERILLI, Jr., et al.

No. 90-502-Appeal.

Supreme Court of Rhode Island.

July 7, 1992.

Robert Fine, Licht & Semonoff, Providence, for plaintiff.

Milton Stanzler, Lauren E. Jones, Providence, for defendant.

OPINION

SHEA, Justice.

This case comes before the Supreme Court on the defendant's appeal from a judgment in Superior Court awarding the plaintiffs $1,872,999.42 plus additional interest, costs, and attorney fees for a claim of breach of contract. We affirm.

The plaintiffs are John G. Kottis (Kottis), William J. McManus (McManus), Harry B. Casey (Casey), and Paul E. Burke (Burke). These four individuals own half the shares of Camelot Gardens, Inc. (Camelot). Camelot was formed to own real estate known as the Hammersmith Farm in Newport, Rhode Island. ¹ Camelot operated a museum on this property. Benedetto A. Cerilli, Jr. (Cerilli), represented the interest of Thomas DeFelice (DeFelice), the defendant and prospective purchaser of the property. DeFelice negotiated with plaintiffs and eventually signed a purchase-and-sale agreement on December 11, 1979, to buy their stock in Camelot for the total sum of $1,360,000 or $340,000 per shareholder. The defendant paid plaintiffs a $12,000 deposit upon the signing of the purchase-and-sale agreement. A closing was scheduled for December 28, 1979. On that date the closing did not occur.

The plaintiffs eventually filed suit, alleging that defendant breached the December 11, 1979 purchase-and-sale agreement. At trial the trial justice granted defendant's motion for a directed verdict. That judgment was appealed to this court, and in Kottis v. Cerilli, 526 A.2d 506 (R.I.1987), we determined that the motion for directed verdict was improperly granted on one of the counts alleged and we therefore granted a new trial. The present case comes before us on an appeal from the judgment rendered in that new trial.

The defendant raises seven issues on appeal. Pertinent facts will be added as is necessary for a discussion of these issues.

I

The first issue that defendant raises is whether plaintiffs' tender of performance at the December 28, 1979 closing was sufficient to support an award for breach of contract against defendant. Specifically defendant asserts that plaintiffs did not have the actual ability to perform their end of the bargain because plaintiffs could not transfer all the shares of stock they had agreed to deliver, the Camelot corporate records were incomplete, and Camelot's financial statements were improperly prepared. Moreover, defendant argues, plaintiffs actually could not perform their part of the bargain because Camelot did not have marketable title to Hammersmith Farm because of a lis pendens that was recorded against the real estate, Camelot could not establish that they had met the requirements of the corporation's preemptive right to purchase the stock, and plaintiffs did not produce copies of schedules that they were required to deliver at the closing.

It has long been established that when concurrent acts are to be performed by the parties to a contract, the party bringing suit for breach need only aver that he or she was ready and willing to perform and that the alleged breacher was requested to perform but refused. Kottis, 526 A.2d at 509; Nowell v. Waterman, 53 R.I. 16, 19, 163 A. 402, 404 (1932); Guilford v. Mason, 22 R.I. 422, 430, 48 A. 386, 389 (1901). When the party alleging the breach demands the other's performance of the concurrent act, an offer to perform on the part of the alleging party is implied and understood. Kottis, 526 A.2d at 509; Guilford, 22 R.I. at 430, 48 A. at 389. Actual performance by the party alleging the breach is not necessary; rather, notice of his or her readiness to perform constitutes and implies tender. Kottis, 526 A.2d at 509; Guilford, 22 R.I. at 428, 48 A. at 388; see Safeway System, Inc. v. Manuel Bros., Inc., 102 R.I. 136, 143, 228 A.2d 851, 855 (1967); Fournier v. Cass, 49 R.I. 35, 39, 139 A. 655, 656 (1927).

These rules clearly delineate that parties alleging breach are not required to perform their part of the bargain before suing other parties for breach. The party alleging breach is only required to tender performance. Tender of performance occurs by providing notice to the other party that one is ready to perform. Williston succinctly summarized the preceding rules by stating that:

"what is essential is that it shall appear to the court and shall have been made clear to the other party to the contract that the exchange agreed upon would be carried out immediately if the latter would do his part. This requirement involves both ability on the part of the plaintiff to perform and an indication of that ability to the other party. The actual production of the money or other thing which the plaintiff is to give is said to be unnecessary." 6 S. Williston, Contracts § 833 at 104 (3d ed. Jaegar 1962).

In the present case, plaintiffs properly pleaded in their complaint that they were ready and willing to perform and that defendant refused to perform. Moreover, a review of the trial record indicates that plaintiffs attended the closing, intending to sell their stock. McManus testified that he and Kottis arrived promptly for the closing and brought a briefcase containing documents they were required to supply for the closing. Thus plaintiffs represented to defendant that they were ready to close and, most importantly, that they had the ability to close. Indeed, the trial justice found that "plaintiffs met their obligations for tender, they were ready to perform." We agree with the trial justice, and moreover, we find that plaintiffs' act constitutes a sufficient tender of performance and therefore can support plaintiffs' claim for contract damages.

Since we have determined that plaintiffs were ready to close on the date of the closing, defendant's fact-specific arguments asserting actual inability to close are unavailing and therefore do not merit further discussion.

II

The second issue that defendant argues is whether the trial justice erroneously failed to consider DeFelice's claim that the December 11, 1979 contract was unenforceable. The defendant asserts that plaintiffs had reached an accord and satisfaction with DeFelice or that plaintiffs had abandoned the contract. Moreover, defendant contends that the trial justice's failure to comment on these issues when issuing her decision violated Rule 52(a) of the Superior Court Rules of Civil Procedure.

After the closing did not occur on December 28, 1979, the parties continued to negotiate, hoping that the deal could be restructured. A meeting on February 27, 1980, produced another agreement. One issue the parties haggled over at that time was whether the $12,000 deposit should be returned. The defendant contends that he permitted plaintiffs to keep the deposit in exchange for plaintiffs' agreement that the December 11, 1979 agreement was no longer effective.

An accord and satisfaction is "[a]n agreement between two parties to give and accept something in satisfaction of a right of action which one has against the other, which when performed is a bar to all actions." Cavanagh v. Bostitch, Inc., 92 R.I. 12, 14, 165 A.2d 728, 729 (1960)(quoting Bouvier's Law Dictionary 103 (1914)). Thus, in order for the doctrine of accord and satisfaction to operate as a defense, the party asserting the defense must show that an agreement exists and that the agreement was accepted in exchange for refusal to press a right of action.

In the present case, the parties did agree that plaintiffs could keep the $12,000 deposit defendant gave them as a deposit for the December 11, 1979 agreement. Nevertheless, the record does not reveal any evidence that would support the contention that defendant allowed plaintiffs to keep the deposit in exchange for plaintiffs' relinquishment of their right to enforce the December 11, 1979 agreement. Rather the testimony presented at trial indicates that defendant permitted plaintiffs to keep the money because he did not want this dispute to impair the possibility of reaching a new agreement. The plaintiffs did not keep the money in exchange for refusing to sue defendant on the December 11, 1979 agreement. Thus, the requirements for an accord and satisfaction are not met.

The rules for the doctrine of abandonment are well established. Generally abandonment is the voluntary relinquishment of a known right. Jakober v. E.M. Loew's Capitol Theatre, Inc., 107 R.I. 104, 110, 265 A.2d 429, 433 (1970). Abandonment of an executory contract for the sale of land requires an intent to abandon and some act or failure to act that shows that vendee no longer claims or retains any interest in the subject matter. Id. Moreover, abandonment is unilateral, requiring action only by the possessor of the right that is to be abandoned. Id. at 110-11, 265 A.2d at 433.

We are of the opinion that plaintiffs did not abandon the contract in the present case. The defendant relinquished his right to the return of the $12,000 because he feared that if he pressed his claim for the money, a new deal would not be consummated. Thus, he did not have an intent to abandon the December 11, 1979 contract but rather merely intended to do everything in his power to keep the negotiations going. Moreover, defendant's continued negotiation with plaintiffs supports the contention that defendant retained an interest in Hammersmith Farm pursuant to the December 11, 1979 contract. Therefore, the requirements for an abandonment are not met.

Finally defendant's contention that the trial justice violated Rule 52(a) by not specifically addressing defendant's assertions about accord and satisfaction and abandonment in her decision is without merit. Rule 52(a) provides, "In all actions tried upon the facts without a jury or with an advisory jury, the court shall find the facts specially and state separately...