Premier Land Dev. v. Kishfy

• Court: Rhode Island Supreme Court
• Writing for the Court: Justice Goldberg, for the Court.
• Citation: Premier Land Dev. v. Kishfy, 287 A.3d 19 (R.I. 2023)
• Decision Date: 11 January 2023
• Docket Number: 2021-72-Appeal.,PC 12-341,2021-73-Appeal.,PM 12-1218
• Parties: PREMIER LAND DEVELOPMENT v. Joseph KISHFY et al. Bel Air Tile Company, Inc., et al. v. Joseph Kishfy.

287 A.3d 19

PREMIER LAND DEVELOPMENT

v.Joseph KISHFY et al.

Bel Air Tile Company, Inc., et al.

v.Joseph Kishfy.

No. 2021-72-Appeal.

PC 12-341

No. 2021-73-Appeal.

PM 12-1218

Supreme Court of Rhode Island.

January 11, 2023

John O. Mancini, Esq., Providence, for Plaintiff.

Barry J. Kusinitz, Esq., for Defendant.

Present: Suttell, C.J., Goldberg, Robinson, Lynch Prata, and Long, JJ.

Justice Goldberg, for the Court.

This case came before the Supreme Court on October 4, 2022, pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not be summarily decided. The defendant, Joseph Kishfy (defendant), appeals from a final judgment¹ entered in favor of Premier Land Development (plaintiff), arising from a construction contract.² After considering the parties’ written and oral submissions and reviewing the record, we are satisfied that cause has not been shown and that this case may be decided without further briefing or argument. For the reasons stated herein, we affirm the judgment of the Superior Court.

Facts and Travel

In August 2011, defendant entered into a purchase-and-sales agreement with Robert Lanni (Lanni) for property located at 15 Paddock Drive, Lincoln, Rhode Island, for $630,000.00. The defendant agreed to purchase the property "as is," and waived all inspections and contingencies, except for radon gas testing. The defendant himself inspected the property prior to executing the purchase-and-sales agreement. The defendant testified that the property was structurally complete on the exterior, with the exception of a rear deck, while the interior of the property was lacking a kitchen and most flooring, apart from some flooring in the family room.³

A real estate closing was held on August 17, 2011. On the date of the closing, defendant also entered into a separate contract, designated as an "Amendment to Purchase and Sales/Construction Agreement" (construction contract) with Lanni and plaintiff, which Lanni signed as the owner of the property, and David Corsetti signed as the contractor.⁴ This transaction terminated Lanni's connection to this case. In the construction contract, defendant agreed to pay plaintiff the sum of $150,000.00 for improvements to the residence at 15 Paddock Drive. Payment was to occur in three installments, to be mutually agreed upon by the parties, with a project completion date of no later than October 28, 2011. A time-is-of-the-essence clause was included in the agreement.

The construction contract contained an itemized list of improvements to be made to the property, for a total project cost of $150,000.00. The work performed by plaintiff was to be guaranteed for one year from the date of completion and the construction contract outlined the allowances for the improvements to be made on the home. If the amount spent was lower than the allowance granted to defendant, he would receive a credit; and he would pay the difference if the amount paid was greater than the allowance.⁵

Work commenced in August 2011; defendant paid plaintiff $40,000.00 as an initial deposit. A handwritten note on the check indicated that it was a "1st draw to David Corsetti." A second check in the amount of $11,000.00 was tendered to plaintiff on November 11, 2011. The defendant made no further payments to plaintiff.

As work progressed, there were numerous change orders to the originally agreed-upon design of the home, all at defendant's behest. According to plaintiff, defendant changed the entire layout of the kitchen, which required its subcontractors to install a new gas line and rewire the electrical lines in the kitchen. The plaintiff informed defendant that changing the layout of the kitchen would be an extra cost under the construction contract. Included in the changes to the kitchen layout, defendant added a room, which required a subcontractor to "build it, frame it, board, plaster, [and] electric" the space, all of which was an extra cost. The defendant also requested an elaborate, small, mosaic-like tile back-splash that required extensive labor, and led to a delay in procuring the tile because defendant purchased tile from a store different than the one set forth in the construction contract. The plaintiff again informed defendant that these requested changes were above and beyond the scope of the construction contract and would constitute additional charges.

The defendant additionally requested a change in the design of the floor in rooms on the second floor, deviating from the original pattern. The plaintiff authorized subcontractors to perform this additional labor, which represented an extra cost. The defendant also sought changes to certain lighting, replacement of existing plugs and switches, and construction of framing for a chandelier.

In addition to an increase in costs, the changes to the design of the home impeded delivery of materials, resulting in delays in the progress of the work. The owner of Bel-Air Tile Company, Inc., a subcontractor, testified that he was required to return to the project on multiple occasions because the necessary tiles were not on site. He further testified that he did not receive certain tiles from defendant until November 30, 2011, well after the scheduled completion date of October 30, 2011.

The defendant e-mailed Corsetti on December 5, 2011, regarding the delay in the completion of the work and questioned when the renovations would be completed. Mr. Corsetti responded that same day reminding defendant that he had assumed the role of quasi-contractor, had completely retrofitted the original design of the house, and that his delay in obtaining and delivering the tile had led to the delay in completion. Mr. Corsetti also informed defendant that plaintiff was owed a substantial amount of money, the balance of which needed to be addressed. He e-mailed defendant on December 11, 2011, with an itemized account of the work that had been completed at that point. There was no response. In the face of defendant's silence and his failure to satisfy the outstanding invoice, plaintiff and its subcontractors ceased work at the property. These consolidated actions ensued.

In PC 12-341, plaintiff filed an action against defendant and his wife, Paula Kishfy, alleging one count of breach of contract, one count of unjust enrichment, and one count of breach of the implied covenant of good faith and fair dealing. The defendants’ answer denied the allegations of the complaint, and included counterclaims for breach of contract, negligence, and fraud.

In the second case, PM 12-1218, plaintiff's subcontractors, Bel-Air Tile Company, Inc., Continental Engineering & Service Company, Inc., Desimone Electric, Inc., Moran Home Improvement, and Valley Plumbing & Heating, LLC, filed a complaint against defendant, each seeking enforcement of a mechanics’ lien, and collectively alleging a count of unjust enrichment. By order entered on January 5, 2018, these actions were consolidated for trial.

After a jury-waived trial in October 2018, judgment was entered for plaintiff in the amount of $58,618.00 plus interest.⁶ The trial justice found that Paula Kishfy was not a party to the construction contract and had no liability for the breach of contract. The defendant's counterclaims were dismissed. The defendant timely appealed to this Court and asserts that the trial justice erred in her decision, specifically: (1) in applying the doctrine of merger by deed; (2) in calculating damages; (3) in allocating responsibility for the bearing wall; (4) in finding that the implied warranty of habitability did not apply; and (5) in finding that the subcontractors’ mechanics’ liens were assignable to plaintiff.

Standard of Review

"It is well established that the factual findings of a trial justice sitting without a jury are accorded great weight and will not be disturbed unless the record shows that the findings clearly are wrong or the trial justice overlooked or misconceived material evidence." Wellington Condominium Association v. Wellington Cove Condominium Association , 68 A.3d 594, 599 (R.I. 2013) (quoting Hernandez v. JS Pallet Co. , 41 A.3d 978, 982 (R.I. 2012) ). "If, as we review the record, it becomes clear to us that the record indicates that competent evidence supports the trial justice's findings, we shall not substitute our view of the evidence for [that of the trial justice] even though a contrary conclusion could have been reached." Id. (quoting Hernandez , 41 A.3d at 982 ).

Analysis

Merger by Deed

First, defendant asserts that the trial justice was mistaken in applying the doctrine of merger by deed because he was contracting with two separate parties, as the purchase-and-sales agreement governed the transfer of property from Lanni to defendant, and the construction contract outlined the scope of work to be performed by plaintiff for defendant.

"The doctrine of merger by deed provides that once a warranty deed is accepted it becomes the final statement of the agreement between the parties and nullifies all provisions of the purchase-and-sale agreement." Lizotte v. Mitchell , 771 A.2d 884, 887 (R.I. 2001) (quoting Haronian v. Quattrocchi, 653 A.2d 729, 730 (R.I. 1995) ). In Lizotte , this Court held that plaintiffs waived all conditions of the sale when they closed on a property knowing that the lot had not been surveyed and that they had not obtained a building permit. Id . The warranty deed "became the final statement of the agreement between the parties, and any purported contract claims were barred by the doctrine of merger by deed." Id . at 887-88. In the case at bar, defendant purchased the home "as is" when he accepted the warranty deed and waived all contract claims based on the purchase-and-sales agreement.

Although we agree with defendant that there are two separate contracts in this case, any error by the trial justice in applying the doctrine of merger was harmless because the trial justice found that defendant materially breached the construction...