Multi–State Restoration, Inc. v. DWS Props., LLC.

• Citation: 61 A.3d 414
• Decision Date: 10 January 2013
• Docket Number: No. 2011–350–Appeal.,2011–350–Appeal.
• Parties: MULTI–STATE RESTORATION, INC., et al. v. DWS PROPERTIES, LLC.
• Court: United States State Supreme Court of Rhode Island

61 A.3d 414

MULTI–STATE RESTORATION, INC., et al.

v.DWS PROPERTIES, LLC.

No. 2011–350–Appeal.

Supreme Court of Rhode Island.

Jan. 10, 2013.

William A. Quattrucci, Jr., Esq., for Plaintiffs.

Joel S. Chase, Esq., Warwick, for Defendant.

Present: SUTTELL, C.J., GOLDBERG, FLAHERTY, ROBINSON, and INDEGLIA, JJ.

OPINION

Justice FLAHERTY, for the Court.

Multi–State Restoration, Inc. (Multi–State) and Performance Adjusting Public Insurance Adjusters, LLC (Performance) (collectively the plaintiffs) appeal from a judgment of the Superior Court that dismissed their claims against DWS Properties, LLC (DWS or defendant).¹ This case came before the Supreme Court for oral argument on October 31, 2012, pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not summarily be decided. After hearing the arguments and examining the memoranda filed by the parties, we are of the opinion that cause has not been shown, and we proceed to decide the appeal at this time without further briefing or argument. For the reasons set forth in this opinion, we vacate the judgment of the Superior Court.

IFacts and Travel

DWS is a Rhode Island limited liability company (LLC) that is in the business of owning real estate. The sole member of the company is Dustin Shore. DWS owns rental property at 25 Andem Street in Providence, which property, at the times relevant to this appeal, was insured by the Rhode Island Joint Reinsurance Association (RIJRA). Performance is a public insurance adjusting company that represents homeowners and businesses with regard to insurance claims. Multi–State, according to the affidavit of William R. D'Amico, II, is an insurance remediation company that provides restoration and construction services to damaged properties. D'Amico is the sole member and manager of Performance as well as the president of Multi–State.

On December 23, 2009, a sewer pipe burst at 25 Andem Street, causing substantial damage to the basement and foundation of the property. Shore subsequently executed contracts with Performance and Multi–State, in which Performance agreed to provide public adjusting services relative to the loss resulting from the ruptured pipe and subsequent vandalism, and Multi–State agreed to perform emergency clean-up work at the property. Performance adjusted the insurance claims with RIJRA and achieved a settlement of $5,852 for loss of rent and $62,311.66 for cleanup and restoration. Additionally, pursuant to a separately written contract, Multi–State provided cleanup services at the property, including the rental of safety fencing and equipment used to temporarily secure the foundation. The plaintiffs alleged that they never were paid for the services that they provided.

Shore and his wife then filed for personal bankruptcy; in his filing with the bankruptcy court, he claimed that the debts owed to plaintiffs were personal to him. In the course of the bankruptcy proceeding these debts were discharged under 11 U.S.C. § 727 of the Bankruptcy Code. The plaintiffs filed suit in the Superior Court against DWS, the LLC that owns 25 Andem Street. In their complaint, plaintiffs sought damages for book account, breach of contract, quasi-contract and unjust enrichment.

DWS moved to dismiss the complaint under Rule 12(b)(6) of the Superior Court Rules of Civil Procedure, arguing that plaintiffs failed to state a claim upon which relief could be granted. In its motion, DWS maintained that it was not a party to any contract with plaintiffs and, therefore, that plaintiffs were not entitled to relief. The plaintiffs then filed an objection to DWS's motion, and they also countered with a motion for summary judgment. At a hearing held on May 10, 2011, the hearing justice said that she was inclined to grant DWS's motion to dismiss based on plaintiffs' invoices that were attached to the complaint. Those invoices refer only to Shore as the customer, and not to DWS. The trial justice then went on to consider the contracts that Shore executed with plaintiffs that were not attached to their complaint. At the conclusion of the hearing, the hearing justice granted DWS's motion to dismiss, reasoning that Shore had signed the contracts in an individual capacity, without making any reference to DWS.

The plaintiffs then filed a motion for relief and/or for clarification, in which they asked the hearing justice to vacate her order or to clarify whether she had treated DWS's motion to dismiss as a motion for summary judgment, because materials outside the four corners of the complaint had been considered. The plaintiffs also requested that the hearing justice specifically state her reasoning for dismissing the equitable claims of quasi-contract and unjust enrichment. The hearing justice denied plaintiffs' motion for relief and entered a final judgment for DWS. The plaintiffs timely appealed to this Court.

IIStandard of Review

This Court has held that the “sole function of a motion to dismiss is to test the sufficiency of the complaint.” Laurence v. Sollitto, 788 A.2d 455, 456 (R.I.2002) (quoting Rhode Island Affiliate, ACLU, Inc. v. Bernasconi, 557 A.2d 1232, 1232 (R.I.1989)). “When ruling on a Rule 12(b)(6) motion [to dismiss], the trial justice must look no further than the complaint, assume that all allegations in the complaint are true, and resolve any doubts in a plaintiff's favor.” Laurence, 788 A.2d at 456 (quoting Bernasconi, 557 A.2d at 1232). “The motion may then only be granted if it ‘appears beyond a reasonable doubt that a plaintiff would not be entitled to relief under any conceivable set of facts * * *.’ ” Id. (quoting Bernasconi, 557 A.2d at 1232).

However, when ruling on a motion to dismiss, if “matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56 * * *.” Rule 12(b)(6). Furthermore, this Court has held that “when the motion justice receives evidentiary matters outside the complaint and does not expressly exclude them in passing on the motion, then Rule 12(b)(6) specifically requires the motion to be considered as one for summary judgment.” Martin v. Howard, 784 A.2d 291, 298 (R.I.2001).

When a Rule 12(b)(6) motion to dismiss is converted to a motion for summary judgment, this Court shall review plaintiffs' appeal de novo. See DeSantis v. Prelle, 891 A.2d 873, 876–77 (R.I.2006). Additionally, we “will affirm [a grant of summary] judgment only if, after reviewing the evidence in the light most favorable to the nonmoving party, we conclude that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law.” Id. at 877 (quoting Tanner v. Town Council of East Greenwich, 880 A.2d 784, 791 (R.I.2005)).

IIIAnalysis

AMotion to Dismiss

Under Rule 12(b)(6), when “matters outside the pleading are presented to and not excluded by the” hearing justice, a motion to dismiss will automatically be converted to a motion for summary judgment. See DeSantis, 891 A.2d at 876. Here, defendant presented materials to the hearing justice that were not contained within the four corners of plaintiffs' complaint. These extraneous materials included a copy of the notice of Chapter 7 bankruptcy and the schedule of creditors, in which plaintiffs were listed. The documents were attached as exhibit A to DWS's memorandum in support of its motion to dismiss, but were neither mentioned in, nor attached to, plaintiffs' complaint.²

In addition, at the hearing DWS submitted copies of the contracts that Shore had executed with plaintiffs to the hearing justice. These documents also were not attached to the complaint.³ The record reveals that the hearing justice failed to expressly exclude these contracts from her consideration and then specifically relied on them when she rendered her decision. When she granted DWS's motion to dismiss, the hearing justice told plaintiffs' counsel: “I've reviewed your answer,the attachments, and everything that I see in that contract.” ⁴ She then explained that she was dismissing plaintiffs' claims because only Shore, and not DWS, was designated as the customer in the contracts. Thus, because materials outside the four corners of the complaint were considered by the hearing justice, the motion to dismiss under Rule 12(b)(6) was converted to a motion for summary judgment under Rule 56 of the Superior Court Rules of Civil Procedure.

When “ruling on a motion for summary judgment the [hearing] justice must consider affidavits and pleadings in the light most favorable to the opposing party, and only when it appears that no genuine issue of material fact is asserted can summary judgment be ordered.” O'Connor v. McKanna, 116 R.I. 627, 633, 359 A.2d 350, 353 (1976) (citing Marandola v. Hillcrest Builders, Inc., 102 R.I. 46, 227 A.2d 785 (1967)). In this case, an affidavit of William D'Amico appears in the record and must be considered in our de novo review of the motion for summary judgment. That affidavit, and the contracts attached to it, raises genuine issues of material fact.

The contracts entered into with Multi–State provide that the company was to perform “emergency services ONLY,” including “[b]oard-up, winterization, water extraction and any and all work ordered by the State and or Municipality and/or as required by Customer's Insurance policy.” In D'Amico's affidavit, he asserted that Multi–State performed “emergency foundation construction” and other emergency work in accordance with those contracts. However, DWS asserts that Multi–State performed much of this work several months after the pipe ruptured “and not under emergency circumstances.” There is no question that these are issues of material fact that will require a fact-finder to determine exactly what work was performed, when such work was performed, under what circumstances it was performed, and whether there was a breach of the contract. Because...