Krupinski v. Deyesso
| Decision Date | 10 April 2013 |
| Docket Number | C.A. PB-07-3484 |
| Parties | RONALD A. KRUPINSKI, Individually and Derivatively on Behalf of SCHARNHORST, INC. v. WILLIAM A. DEYESSO, SCHARNHORST, INC., and RICHARD P. MCCABE |
| Court | Rhode Island Superior Court |
Providence County Superior Court
For Plaintiff: Andrew J. Tine, Esq.
For Defendant: Carl S. Levin, Esq., Christopher A. Murphy, Esq.
DECISION
Before the Court is Plaintiff Ronald A. Krupinski's (Krupinski) Renewed Motion for Reconsideration of this Court's Orders of February 3, 2012 and April 12, 2012. Krupinski asks the Court to reconsider its rulings that dismiss all but one of his claims against Defendants William A. Deyesso (Deyesso) Richard P. McCabe (McCabe), and Scharnhorst, Inc. (Scharnhorst) (collectively, "Defendants").
The Court detailed the facts alleged in its written Decision on the Defendants' Motion to Dismiss the Plaintiff's Verified Third Amended Complaint and Jury Demand (the "Complaint"). See Krupinski v. Deyesso, et al., No. PB-07-3484, filed Apr. 12, 2012, Silverstein J., at 2-6. For context, however, the Court will recount the essential elements of the controversy.
In 1995, Krupinski joined with Defendant Deyesso and non-party Frank Viola to open the Providence Centerfolds, an adult entertainment club. As part of this arrangement, Viola purchased Scharnhorst, [1] a corporation that owned a liquor license. Krupinski alleges that he was to be a thirty-three percent owner of the club and also work as manager. A permitting issue— apparently the fault of a friend of Krupinski—caused the Providence Centerfolds to close down a day or two after opening, delaying the more permanent establishment of the business by about six months. As a result of this initial snafu, Krupinski agreed to reduce his ownership interest to twenty-five percent. At no time however, did Krupinski receive a stock certificate, and Scharnhorst's 1996 annual report did not list Krupinski as a director or officer.
In 1997, Viola left the business, conveying his interest to Deyesso, and McCabe became a Scharnhorst shareholder. Seeking to expand the business, Deyesso identified a Worcester, Massachusetts club named "Pudgy's" as a potential new Centerfolds location. "Pudgy's" was ultimately purchased in McCabe's name. Krupinski had acted as the Providence Centerfolds's manager for about a year, but was fired by Deyesso in July 1997. The former owner of "Pudgy's" replaced Krupinski. Deyesso allegedly assured Krupinski that another job in the business would be found for Krupinski, but that promise never came to fruition. Later, however, Krupinski signed a promissory note that contained a provision purporting to take away Krupinski's voting rights in Scharnhorst.[2]
Krupinski did not receive disbursements[3] from Scharnhorst in 1996 or 1997, despite its profitability; however, he received disbursements from 1998 to 2004. Still, Krupinski points to allegedly improper actions taken by Deyesso and McCabe between 1997 and 2005. For example, Deyesso and McCabe started a company that provided bookkeeping services to Centerfolds in exchange for payments of costs, plus seven percent of the Providence Centerfolds's gross monthly revenues, which Plaintiff contends constituted an alleged breach of the duty of loyalty to Scharnhorst. Additionally, Deyesso and McCabe opened additional clubs in Massachusetts using the name Centerfolds but without providing Krupinski or Scharnhorst with the opportunity to participate. When the Providence Centerfolds location was taken by eminent domain in 2001—and subsequently, Deyesso and McCabe did not timely find a new Providence location—Deyesso and McCabe allegedly used the remaining money in Scharnhorst for themselves. Additionally, they used tangible property left over from the Providence facility—e.g., coolers, chairs, signs—in their new locations.
Scharnhorst's corporate charter was revoked by the Secretary of State on October 7, 2005, for failure to file an annual report. Krupinski filed his original complaint on July 10, 2007. On February 3, 2012, the Court granted without prejudice Defendants' Rule 12(b)(6) Motion to Dismiss all counts of the Second Amended Complaint—except the breach of contract claim brought individually against Deyesso—for its failure to comply with the requirements of Super. R. Civ. P. 23.1. On February 8, 2012, Krupinski filed the Verified Third Amended Complaint, which contained both direct and derivative allegations. On April 12, 2012, the Court granted the Defendants' Motion to Dismiss the Verified Third Amended Complaint. The Court granted the Motion on Counts III, V, VI, VII, and VIII on the basis that the claims were brought beyond the two-year period provided in G.L. 1956 § 7-1.2-1324, and as to Counts II and IV in the Court's discretion, because the Court did not authorize Krupinski to bring new direct claims.
The Rhode Island Superior Court Rules of Civil Procedure, similar to the Federal Rules of Civil Procedure, do not specifically provide for motions to reconsider. School Comm. of City of Cranston v. Bergin-Andrews, 984 A.2d 629, 649 (R.I. 2009). However, our Supreme Court applies a liberal interpretation of the rules, and "look[s] to substance, not labels." Sarni v. Melocarro, 113 R.I. 630, 636, 324 A.2d 648, 651 (1974). Accordingly, courts should treat a motion to reconsider as a motion to vacate under Super. R. Civ. P. 60(b). Bergin-Andrews, 984 A.2d at 649 (citing Keystone Elevator Co. v. Johnson & Wales Univ., 850 A.2d 912, 916 (R.I. 2004)).
Rule 60(b) provides that "[o]n motion and upon such terms as are just, the court may relieve a party or a party's legal representative from final judgment, order, or proceeding . . . ." Super. R. Civ. P. 60(b). It is well settled that a Rule 60(b) motion to vacate "is addressed to the trial justice's sound judicial discretion and 'will not be disturbed on appeal, absent a showing of abuse of discretion.'" Keystone Elevator Co., 850 A.2d at 916 (quoting Crystal Rest. Mgmt. Corp. v. Calcagni, 732 A.2d 706, 710 (R.I. 1999)). However, our Supreme Court has cautioned that Rule 60(b) is not "a vehicle for the motion judge to reconsider the previous judgments in light of later-discovered legal authority that could have and should have been presented to the court before the original judgment entered." Jackson v. Medical Coaches, 734 A.2d 502, 505 (R.I. 1999) (citations omitted). Similarly, a party should not use Rule 60(b) merely to seek reconsideration of a legal issue or as a request that the trial court change its mind. See id., 734 A.2d at 508 n.8 (citing United States v. Williams, 674 F.2d 310, 312-13 (4th Cir. 1982)); see also Cashner v. Freedom Stores, Inc., 98 F.3d 572, 577 (10th Cir. 1996) ().
The Plaintiff's Renewed Motion for Reconsideration attacks two Orders of this Court. First, it attacks the "April 12, 2012 Order, " which dismissed Counts II-VIII of the Verified Third Amended Complaint and Jury Demand.[4] Second, it attacks the "February 3 2012 Order, " which dismissed without prejudice Counts II-VI of the Plaintiff's Second Amended Complaint, but permitted twenty days leave to file an Amended Complaint.[5]
The Court's April 12, 2012 Decision on the Motion to Dismiss the Verified Third Amended Complaint (the "Decision") was based on an interpretation and application of § 7-1.2-1324. Section 7-1.2-1324 provides:
The Court held that § 7-1.2-1324 is a statute of repose; thus, the two-year bar was absolute. See Krupinski, No. PB-07-3484, at 9-11. Additionally, the Court held that the derivative claims in the Verified Third Amended Complaint do not relate back to the original complaint. Id. at 11-13. The Court's Decision was based on the representation that Scharnhorst was "dissolved." Now, however, the Plaintiff alleges that the "loose" use of the word "dissolution" has caused legal error. Scharnhorst was not, in fact, "dissolved, " but rather, the Secretary of State merely issued a "Certificate of Revocation of Certificate of Incorporation/Authority"; "revocation" is a term not employed in § 7-1.2-1324.
As a preliminary matter, the issue of...
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