Lares Group, II v. Tobin

• Decision Date: 19 April 1999
• Docket Number: C.A. No. 95-463L.
• Citation: 47 F.Supp.2d 223
• Parties: The LARES GROUP, II, John G. Laramee, individually and as General Partner, and Sharon Laramee, Plaintiffs, v. Bentley TOBIN, Matthew J. Marcello, III, Michael B. Nulman, a Rhode Island law partnership known as Hinckley, Allen & Snyder, Joseph Mollicone, Jr., Joseph DiBattista, Matthew T. Marcello, III, all individually and as trustees of Pine Street Realty Trust under a Declaration of Trust dated January 8, 1988, and as the General Partners of Pine Street Trust Limited Partnership and individually, and Rodney M. Brusini, Edward D. Diprete, Henry W. Fazzano, Edward F. Ricci, and John S. Renza, Sr., Defendants,
• Court: U.S. District Court — District of Rhode Island

Page 223

47 F.Supp.2d 223

The LARES GROUP, II, John G. Laramee, individually and as General Partner, and Sharon Laramee, Plaintiffs, v. Bentley TOBIN, Matthew J. Marcello, III, Michael B. Nulman, a Rhode Island law partnership known as Hinckley, Allen & Snyder, Joseph Mollicone, Jr., Joseph DiBattista, Matthew T. Marcello, III, all individually and as trustees of Pine Street Realty Trust under a Declaration of Trust dated January 8, 1988, and as the General Partners of Pine Street Trust Limited Partnership and individually, and Rodney M. Brusini, Edward D. Diprete, Henry W. Fazzano, Edward F. Ricci, and John S. Renza, Sr., Defendants,

C.A. No. 95-463L.

United States District Court, D. Rhode Island.

April 19, 1999.

COPYRIGHT MATERIAL OMITTED

Robert A. D'Amico, II, D'Amico Birchfield & Ferrucci, Providence, RI, Evans J. Carter, Hargraves, Krab, Wilcox & Galvani, Framingham, MA, for plaintiffs.

Robert Clark Corrente, Hinckley Allen & Snyder, Providence, RI, (Tobin, Marcello, Nulman, Hinckley Allen), Joseph V. Cavanagh, Jr., Karen Ann Pelczarski, Blish & Cavanagh, Providence, RI, (Marcello, DiBattista, Weisberg), Richard A. Gonnella, Providence, RI, (Brusini), Peter J. McGinn, Tillinghast Licht & Semonoff, Providence, RI, (DiPrete), Richard A. Boren, Visconti & Boren Limited, Providence, RI, (Fazzano), Herbert F. DeSimone, Providence, RI, (Ricci), John F. Dolan, Rice Dolan & Kershaw, Providence, RI, (Renza), Joseph Mollicone, Jr. (pro se), for defendants.

DECISION AND ORDER

LAGUEUX, Chief Judge.

Plaintiffs, owners of an office building, sought to lease their building to a department of the State of Rhode Island in the late 1980s. The State eventually chose another building, owned by several of the named defendants. In the wake of public revelations of official corruption reaching into the highest levels of state government, plaintiffs brought this action for civil damages resulting from the failed attempt to lease property to the State. This suit takes aim at the rival building owners, officials of the State, as well as attorneys and bankers involved in the lease. The plaintiffs' weapon of choice is the federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-68. ("RICO"). Riding the coattails of that sole federal claim are sundry state causes of action based upon statutory provisions and common law. At the heart of the RICO claim is the allegation that plaintiffs were denied State business because defendants were participants in a complex scheme of rigging the building selection process through bribery and extortion. This matter is now before the Court on Motions for Summary Judgment offered by several defendants. For the reasons stated below, the Motions are granted.

BACKGROUND

The context within which this dispute evolved represents a sordid chapter in recent Rhode Island history, one that is well-known to citizens who have witnessed the conviction of a former governor for his violations of the public's trust. Revealed by this shameful episode was a government that often was for sale to the highest bidder. Although plaintiffs have produced volumes of evidence describing in sorrowful detail the particulars of this culture of bribery and corruption, given the current procedural posture of this case the facts essential to resolving these Motions may be summarized briefly.

In early 1988, the Rhode Island Department of Employment and Training¹ ("DET") sought to acquire new office space for its headquarters to make way for the planned construction of the Rhode Island Convention Center on the site of the old DET offices in Providence, Rhode Island. At that time, plaintiff John G. Laramee ("Laramee"), a Connecticut businessman, was the General Partner of The Lares Group II ("Lares"), a Rhode Island limited partnership that owned the Leesona Building in Warwick, Rhode Island.

DET officials expressed some interest in the Leesona Building to Laramee and soon thereafter conducted several views of the site in February and March 1988. According to Laramee, after reviewing the building, DET officials indicated that the Leesona Building met the Department's needs. However, at no time did representatives of the State commit in any way to lease the Leesona Building. Furthermore, these discussions took place even before the State had prepared official public bid specifications. In May, DET's Finance Director prepared a draft public bid announcement, one that was never released, limiting bid proposals to buildings within the City of Warwick.

The State issued the official Invitation for Lease Proposal ("ILP") for the new DET headquarters in June 1988. The ILP specified that qualifying buildings needed to be located in the "periphery of the Central Business District of the City of Providence." Unlike its status under the draft ILP written by DET's Finance Director, under the terms of the official ILP, Laramee's Leesona Building in Warwick was not a qualified proposal.

On November 29, 1988, the Rhode Island Department of Administration, the agency charged with managing state government properties, selected the Metcalf Building in Providence as the location for the new DET offices. The Metcalf Building was owned by Pine Street Realty Trust and Pine Street Realty Associates Limited Partnership (collectively, "Pine Street"). Of the bidders qualified under the official ILP, Pine Street was the lowest bidder for the project. Defendants Joseph DiBattista, Matthew J. Marcello, III ("Marcello"), and Joseph Mollicone, Jr. ("Mollicone") were trustees of the Pine Street trust and general partners of the Pine Street limited partnership. Plaintiffs also allege that defendants Rodney M. Brusini ("Brusini"), Edward D. DiPrete ("DiPrete"), Henry W. Fazzano ("Fazzano"), and Edward F. Ricci owned equity interests in the Pine Street venture at relevant times. Defendant lawfirm Hinckley, Allen & Snyder represented Pine Street in its dealings with the State in the DET matter. The firm also represented at various times Laramee in several of his business ventures.

Plaintiffs allege that Pine Street partners engineered the change in the ILP specification from Warwick to Providence and obtained the State's award by bribing DiPrete, then the Governor of the State of Rhode Island. For the purposes of these Motions, the Court need not rehash plaintiffs' allegations in great detail. The essence of the story, according to the version proposed by plaintiffs, is as follows. In May 1988, Mollicone met with the Director of DET, defendant John S. Renza, Jr., and the governor's campaign finance director and Pine Street partner Brusini, to arrange the fix. In exchange for the selection of the Pine Street proposal, DiPrete would receive $50,000 in cash and a share in the Pine Street business. By April 1989 the transaction was largely complete: the State had executed a lease for the Metcalf Building and Pine Street partners had delivered bribes to Brusini, who forwarded the cash to DiPrete.

Laramee, suspicious of the circumstances surrounding the selection of the Metcalf Building, launched an aggressive publicity campaign questioning the award of the state lease. In addition to writing letters to several newspapers calling into doubt the propriety of the lease, Laramee contacted numerous public officials including representatives of the Governor's Office, the Rhode Island Department of the Attorney General, the United States Attorney for the District of Rhode Island, and Rhode Island's Congressional delegation. These pleas for investigation began in late 1988 and continued into 1989. Typical of Laramee's complaints were his declarations in September 1988 that there were "irregularities" in the selection process, a charge made to the Governor's Office. Laramee also charged that the process had been "rigged," a belief he expressed to the head of the Rhode Island Republican Party and an attorney who was the former mayor of Warwick and who, Laramee suspected, had political ties to DiPrete.

Laramee contends that he and his business paid a price for his probe into the validity of the DET lease. According to the Amended Complaint, Laramee was the target of reprisals for his attempt to shed sunlight on the allegedly corrupt selection process. He argues that defendants Fazzano, Marcello, and Bentley Tobin ("Tobin"), a partner in the Hinckley, Allen law firm and a director of Eastland Bank ("Eastland"), caused Eastland, the holder of the Leesona Building's mortgage, to sabotage Laramee's personal and business finances. According to plaintiffs, Fazzano, Marcello, and Tobin used unspecified means to force Eastland to declare the Leesona Building mortgage in default, to exercise an assignment of rents clause in the mortgage agreement, to close Laramee's personal line of credit, and to coerce Laramee and Lares to execute under economic duress a forbearance letter restructuring their debts with Eastland. Plaintiffs claim that these actions forced Lares into receivership. All of these actions occurred in 1989 and 1990.

Furthermore, plaintiffs allege that these three defendants, beginning in December 1992, maliciously interfered with the Lares receivership. Plaintiffs contend that these three defendants again used unidentified tactics to coerce the court-appointed receiver to deny plaintiffs surplus funds from the receivership. It is also alleged that Tobin, Fazzano, and Marcello caused Lares to be audited by Eastland and that the three "continued to harass, deal unfairly and damage [Laramee] and Lares because he would not stop trying to have various governmental officers look into and void the Pine Street Lease." Amended Complaint ¶ 58. According to the Amended Complaint, these three defendants also "refused to permit Eastland Bank to accept a reasonable plan presented by the receiver" to rescue Lares from financial disaster. Amended Complaint ¶ 61. In addition, Tobin is charged with opposing a loan to Laramee from a third party. The pleading...