Lisi v. Marra

• Decision Date: 20 January 1981
• Docket Number: No. 78-255-A,78-255-A
• Citation: 424 A.2d 1052
• Parties: Umberto LISI et al. v. Michael MARRA. J. R. C. REALTY CORP. v. Michael MARRA. ppeal.
• Court: Rhode Island Supreme Court

Page 1052

424 A.2d 1052

Umberto LISI et al. v. Michael MARRA.

J. R. C. REALTY CORP. v. Michael MARRA.

No. 78-255-Appeal.

Supreme Court of Rhode Island.

Jan. 20, 1981.

Ciullo & Rampino, Albert R. Ciullo, Kenneth J. Rampino and Richard A. Ciccone, Providence, for plaintiffs.

W. Slater Allen, Jr., Providence, for defendant.

OPINION

BEVILACQUA, Chief Justice.

This is an appeal by the defendant, Michael Marra (Marra), from judgments of the Superior Court in favor of the plaintiffs Umberto Lisi (Lisi) and Anthony Carcieri (Carcieri) for rent due and possession of real property situated at 158 Gentian Avenue, Providence, Rhode Island; and a judgment in favor of the plaintiff, J.R.C. Realty Corp. (J.R.C.) in a consolidated action that upheld a 1966 foreclosure judgment for J.R.C. The hearing was held before a trial justice sitting without a jury.

In 1962, defendant entered into a purchase-and-sales agreement with J.R.C., then owner of the subject real estate. Citizens Savings Bank held a mortgage on this property that secured an amount below the sales price. The defendant agreed to assume the mortgage and procure the balance of the purchase price by October 30, 1962, the closing date. At the time of the closing, defendant did not have sufficient money to complete the transaction, whereupon J.R.C. agreed to accept a promissory note for the balance of the price secured by a second mortgage executed in favor of J.R.C. On its face, the note was payable within six months at a rate of 6 percent per annum, and the note indicated clearly that it was secured by a mortgage on the real estate. Present at the October 1962 closing were Ronald Picerne, representing J.R.C. Realty Corp.; Anthony DelGiudice, representing defendant; and defendant himself. When the note became due, defendant failed to make payment. After commencing and withdrawing foreclosure proceedings on several occasions, J.R.C. foreclosed on the mortgage, purchased the property at a foreclosure sale and recorded the deed on December 5, 1966.

Thereafter, J.R.C. brought a trespass-and-ejectment action in the District Court (No. 67-2706) and a separate suit for the deficiency on the note in the Superior Court (No. 66-5143). Both actions were later consolidated for trial. Meanwhile, defendant counterclaimed that the foreclosure was invalid because plaintiff J.R.C. had allegedly agreed to wait for payment until defendant settled a claim he had against the State of Rhode Island. At a hearing in June of 1969, prior to the trial on the merits, a trial justice of the Superior Court ordered defendant to pay J.R.C. $125 per month as a fair rental value. ¹ The defendant apparently settled his claim against the state sometime after 1966, but the litigation between plaintiff J.R.C. and defendant remained pending.

Except for the fact that defendant continued to make rental payments pursuant to the court order, nothing of substance occurred after 1969 until September 1975. At that time plaintiffs Lisi and Carcieri purchased the real estate from J.R.C. After purchase, Lisi and Carcieri began to receive the $125 per month rental through J.R.C. In May 1977, these plaintiffs gave notice to defendant to quit and vacate the premises. The defendant refused to comply with the notice and ceased paying rent. Lisi and Carcieri then brought a trespass-and-ejectment action in District Court, where judgment was entered for defendant. The plaintiffs appealed the judgment to the Superior Court (No. 78-937), and this case was consolidated with J.R.C.'s claim for a deficiency on the note and defendant's counterclaim to invalidate the foreclosure.

At trial, the defendant alleged that there was an oral agreement between the parties, which agreement was reached at the October closing, conditioning payment of the note on funds defendant expected to receive in his suit against the state. Ronald Picerne, who represented J.R.C. at the closing, stated that he had no recollection of such an agreement and that there never was any understanding that the note was conditioned on the happening of that event. Mr. Picerne did acknowledge allowing certain extensions in regard to payment of the note and the occurrence of several delays before he finally foreclosed on the property.

Anthony DelGiudice testified that the note and mortgage were the only agreements signed by defendants at the closing and that they contained no conditions. Mr. DelGiudice could not say definitely whether, in the process of negotiating, the parties resolved that payment of the note would be conditioned on certain monies becoming available or whether payment was dependent on these funds materializing within the six-month period. Although Mr. DelGiudice had no recollection concerning whether he was asked to reduce to writing the agreement alleged by defendant, he admitted that normally all agreements regarding payment are included in the note or are separately written and executed at the time the note is made.

As proof substantiating defendant's claim of an oral agreement, he pointed to J.R.C.'s conduct after the closing. The defendant argued that J.R.C. started two separate foreclosure proceedings but never prosecuted either to judgment. ² The defendant claimed these actions were withdrawn when he reminded Picerne of their oral agreement.

The trial justice denied J.R.C.'s claim for a deficiency on the note but held that the foreclosure was valid. Judgment for possession of the premises as well as $1,250 for rent due was entered for plaintiffs Lisi and Carcieri. The trial justice also found, as a fact, that any discussions concerning extensions of time for payment beyond the six-month due date did not reach the level of an agreement and that evidence of any such oral agreement was barred by the parol-evidence rule.

There are three questions presented: (1) whether the parties reached an oral prior or contemporaneous agreement varying the time of payment on the note; (2) whether, assuming such an agreement existed, the parol-evidence rule barred admission of testimony establishing the agreement's existence; and, (3) whether the parties modified their written agreement by a subsequent oral agreement.

I

The defendant argues that the trial justice made no findings of fact and that the record leads to the "inescapable conclusion" that there was an oral agreement. The defendant argues further that plaintiffs Lisi and Carcieri do not have good title because of J.R.C.'s allegedly improper foreclosure.

A factual finding made by a trial justice presiding in a jury-waived case in entitled to great weight and will not be set aside unless appellant can show that such findings are clearly wrong or that the trial justice misconceived or overlooked material evidence. Wickes v. Kofman, R.I., 402 A.2d 591, 593 (1979), or the decision fails to do substantial justice between the parties. Rogers v. Zielinski, 99 R.I. 599, 605, 209 A.2d 706, 709 (1965). A similar rule is applicable to inferences drawn by the trial justice sitting as a trier of fact. J. Koury Steel Erectors, Inc. of Mass. v. San-Vel Concrete Corp., R.I., 387 A.2d 694, 696-97 (1978). And the trial justice, sitting in such a case, is entitled to determine what weight to give the credibility of the witnesses. LaPorte v. Ramac Associates, Inc., R.I., 395 A.2d 719, 721 (1978); Raheb v. Lemenski, 115 R.I. 576, 579, 350 A.2d 397, 399 (1976). In the instant case, the trial justice found that defendant, DelGiudice, and Picerne did have discussions concerning defendant's claim against the state but that these discussions never made settlement of the claim a part of the contract or a condition affecting the obligation on the note.

The basis for these findings is amply supported in the record. At the October 1962 closing, each side assumed that defendant's claim with the state would be resolved in the very near future. At trial, Ronald Picerne stated that he did not recall agreeing to extend payment for longer than six months after the closing. In contrast to this testimony, Mr. DelGiudice stated that there was talk about the payment being dependent on defendant settling his claim with the state, but this condition was not made part of the note. These facts, however, coupled with whatever discussions occurred prior to execution of the note, are inadequate to support defendant's argument. The record does not lead to the conclusion defendant urges, and he has failed to demonstrate that the trial justice was clearly wrong, misconceived material evidence, or failed to do substantial justice.

II

The defendant contends that the trial justice was wrong when he rejected testimony tending to prove the existence of an oral agreement between the parties. Even if we assume such an agreement existed, we would be precluded from considering its impact on the written terms of the note because of the parol-evidence rule. In general, this rule prohibits introduction of extrinsic evidence to change, vary, or alter the written terms of an agreement, unless the evidence is offered to show fraud, mistake, or a condition precedent to the existence of the contract. Supreme Woodworking Co. v. Zuckerberg, 82 R.I. 247, 252, 107 A.2d 287, 290 (1954); Allen v. Marciano, 79 R.I. 98, 102, 84 A.2d 425, 427 (1951). Parol evidence may also be admitted to supplement an agreement that is incomplete or ambiguous on its face. Supreme Woodworking Co. v. Zuckerberg, supra.

Relying on Ferri v. Sylvia, 100 R.I. 270, 214 A.2d 470 (1965), the lower court ruled "that where payment terms in a promissory note are clear and unequivocal, evidence of a prior or contemporaneous oral agreement cannot be used to vary or contradict the provisions of the note regarding payment." Ferri involved an application of the parol-evidence rule to bar evidence altering the terms of a negotiable instrument. Although the facts in Ferri are distinguishable from those before ...