McKenna v. Fed. Props. of R.I., Inc., C.A. No. PC-2013-4415
| Decision Date | 16 May 2018 |
| Docket Number | C.A. No. PC-2013-4415 |
| Parties | SHEILA A. B. McKENNA, Plaintiff, v. FEDERAL PROPERTIES OF R.I., INC., Defendant. |
| Court | Rhode Island Superior Court |
DECISION
Following a four-day non-jury trial in December 2017, this matter is before the Court on Sheila A. B. McKenna's (Plaintiff) complaint against Federal Properties of R.I., Inc. (Federal Properties) for constructive trust, breach of contract, specific performance, and unjust enrichment. Federal Properties asserts the statute of limitations; laches; waiver and/or abandonment; impossibility, impracticability and/or frustration of purpose; and mutual mistake as affirmative defenses against Plaintiff's claims. Federal Properties also counterclaims for slander of title, trespass, use and occupancy, unjust enrichment, and declaratory relief. At the conclusion of Plaintiff's and its own case, Federal Properties moved for judgment as a matter of law pursuant to Super. R. Civ. P. 52(a). This Court reserved its decision and at the conclusion of testimony instructed the parties to file post-trial memoranda. Jurisdiction is pursuant to G.L. 1956 § 8-2-14 and Super. R. Civ. P. 52(a).
The parties have agreed to the following facts. On October 21, 1980, Raymond DeLeo (DeLeo), the president of Federal Properties, obtained an option to purchase a 4.2 acre parcel, located at Lot 10, Plat 33 in Lincoln, Rhode Island (the Lincoln Property) in exchange for the payment of $1000 to Emile H. Palardy (Palardy). DeLeo later assigned the option to Federal Properties. The Lincoln Property contained a multi-family residential building, a two-family house, and a six-bay garage building. On October 21, 1981, the option to purchase the Lincoln Property with Palardy was renewed, and on March 16, 1983, Federal Properties closed on the Lincoln Property.1
In 1992, Federal Properties obtained relief from the Lincoln Zoning Board to divide the Lincoln Property into three separate lots: 172 School Street (Lot 96 or Parcel A), 178 School Street (Lot 95 or Parcel B), and the remaining undeveloped 3.61 acres under the original name as Lot 10, Plat 33 (Parcel C or 182 School Street). Parcel A consists of the multi-family residential building, and Parcel B includes the two-family house. Since 1983, Federal Properties has rented units in the multi-family residential building and the two-family house to tenants.
On April 15, 1992, Plaintiff and DeLeo—on behalf of Federal Properties—signed a document called the "Real Estate Agreement" (the 1992 Agreement). The 1992 Agreement recognized a portion of Parcel C (Parcel C(1)) on which a house was to be built by Federal Properties for Plaintiff. Def.'s Trial Ex. DD. It also stated that Federal Properties was to "continue paying all assessments for real estate taxes as may be imposed by the Town of Lincoln from time to time excepting for the pro-ration [sic] of real estate taxes and such water services charges as they may apply to the residential structure upon completion." Id. According to the 1992 Agreement, upon its execution, Plaintiff was to pay the sum of $75,000 as the full purchase price. Id. Plaintiff and Federal Properties further agreed to the following:
The parties agree to the following facts with respect to the 1992 Agreement: (1) Federal Properties did not incorporate a corporation called "Golfside Estates" within ninety days of April 15, 1992, or ever; (2) Federal Properties did not convey Parcel C to a new corporation called "Golfside Estates" within ninety days of April 15, 1992, or ever; (3) Federal Properties did not convey the ownership of a new corporation called "Golfside Estates" into escrow within ninety days of April 15, 1992, or ever; (4) Federal Properties did not grant Plaintiff a warranty deed conveying any right, title or interest in Parcel C, C(1) or any part thereof; (5) no specifications were attached to the 1992 Agreement for a house to be built by Federal Properties on Parcel C(1); (6) no "Standard AIA construction contract" for the construction of a house was executed; (7) Federal Properties executed a promissory note, guaranteed by DeLeo, in the amount of $100,000 payable to Plaintiff which "secured, pursuant to the escrow agreement, by stock in Golfside Estates, a corporation to be incorporated" (the Promissory Note) (see Def.'s Trial Ex. EE); (8) the house, as actually built, cost more than $100,000 to build; (9) the house took more than eighteen months from April 15, 1992 to complete; and (10) Parcel C was not further subdivided within two years of April 15, 1992.
Plaintiff has lived in the house on Parcel C(1) since its completion in November 1994. After signing the 1992 Agreement, Plaintiff paid Federal Properties $169,800, which is broken down into the following transactions: on April 24, 1992, Plaintiff paid Federal Properties $100,000 less $5200 in legal fees paid to Plaintiff's attorney; on November 19, 1993, Plaintiffpaid Federal Properties $30,000; on December 16, 1993, Plaintiff paid Federal Properties $30,000; and in August 1994, Plaintiff paid Federal Properties $15,000.
On July 16, 2006, Plaintiff, through her then-attorney Keven A. McKenna, demanded in writing that Federal Properties convey Parcel C to her. Nearly four months later, on November 9, 2006, Plaintiff recorded a "Notice of Adverse Possession and Notice of Equitable Interest" in the Lincoln Land Evidence Records. See Def.'s Trial Ex. MM. Federal Properties contends that it did not receive notice of the same from Plaintiff until 2013. DeLeo then passed away on February 5, 2013, and in September of that year, Plaintiff filed this lawsuit and a notice of lis pendens on the Lincoln Property. See Def.'s Trial Ex. VV. On July 31, 2014, Plaintiff recorded a Quitclaim Deed in the Lincoln Land Evidence Records; she subsequently recorded a Corrective Quitclaim Deed in the Lincoln Land Evidence Records on August 7, 2014 (collectively, the Quitclaim Deeds).
From 1993 through October 2014, Federal Properties has paid electricity bills, water bills, sewer use, natural gas, real estate taxes, sewer taxes, and fire taxes for the house. Additionally, it has paid to mow the lawn and plow the driveway of snow at the house on Parcel C and has performed other maintenance and site improvements on Parcel C. Federal Properties has also exclusively managed and maintained the properties at 172 and 178 School Street. On July 17, 2014, Federal Properties sent a notice to quit to Plaintiff, which stated that Plaintiff was "to vacate and remove [her] property and personal possessions from the premises[.]" Def.'s Trial Ex. YY.
On October 23, 2014, this Court ordered that the Quitclaim Deeds had no legal effect at the time and would not be used as indicia of ownership; their legal status would be held in abeyance until a final resolution of this case. See Def.'s Trial Ex. AAA. This Court also ruledthat Plaintiff was permitted to live in the house located on Parcel C and would be responsible for taxes and utilities for Parcel C pending this matter's resolution. See id. The Order was recorded in the Lincoln Land Evidence Records on October 27, 2014. Additionally, on September 9, 2015, this Court (1) denied Plaintiff's motion for partial summary judgment seeking to quiet Parcel C's title under G.L. 1956 § 34-7-1; (2) granted Federal Properties' motion to dismiss as to Plaintiff's request for quieting the Lincoln Property's title under § 34-11-1; (3) denied...
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