Rhode Island Resource Recovery Corporation v. LLP
| Decision Date | 13 May 2011 |
| Docket Number | C.A. No. PB 10-4502 |
| Parties | RHODE ISLAND RESOURCE RECOVERY CORPORATION v. RESTIVO MONACELLI LLP |
| Court | Rhode Island Superior Court |
DECISION
The matter before the Court is Defendant Restivo Monacelli, LLP's (Restivo) Super. R. Civ. P. 12(b)(6) Motion to Dismiss, or in the alternative, Super. R. Civ. P. 12(e) Motion for More Definite Statement, as to Counts III, IV, and V of Plaintiff Rhode Island Resource Recovery Corporation's (RIRRC) Complaint. RIRRC's Complaint alleges: (1) professional malpractice (Count I); (2) breach of contract (Count II); (3) aiding and abetting breaches of fiduciary duty (Count III); (4) civil liability pursuant to G.L. 1956 § 9-1-2 for giving false documents to an agent, employee, or public official in violation of G.L. 1956 § 11-18-1 (Count IV); and (5) civil conspiracy (Count V).
RIRRC is a quasi-public corporation established by legislative enactment in 1974 to own and operate the Central Landfill in Johnston, Rhode Island (Central Landfill). See Complaint ¶ 1. Restivo is a certified public accounting and business advising firm duly organized and existing under the laws of the State of Rhode Island. Id. ¶ 2.
On May 3, 2006, RIRRC issued an Invitation for Bids for Accounting and Auditing Services (IFB No. 741). Id. ¶ 5. Following a review of the bid submissions, Restivo wasawarded the contract and entered into a contractual agreement (Agreement) to provide accounting and audit services. Id. ¶¶ 6-7. Under the terms of the Agreement, Restivo was to provide services for the term of August 1, 2006 through June 30, 2009, inclusive of fiscal years 2006 and 2007, with an option for fiscal year 2008 at RIRRC's discretion.1 Id. ¶ 7. The Agreement incorporated by reference various correspondence and documents exchanged throughout the procurement process, including the terms of IFB No. 741. Id.
According to RIRRC, Restivo: (1) audited the financial statements and prepared reports for the fiscal years ending June 30, 2006 and June 30, 2007; (2) conducted semiannual reviews and prepared reports for the six months ending December 31, 2006 and December 31, 2007; (3) audited financial statements and prepared reports in connection with RIRRC's Money Purchase Pension Plan for the years ending December 31, 2006 and December 31, 2007; and (4) provided advice, direction, and encouragement to RIRRC's Board of Commissioners and other RIRRC managers and employees with respect to all aspects of RIRRC's finances, internal control, fund and asset management, and business directions. Id. ¶ 9.
The instant matter follows a 2008-2009 investigation conducted by the Rhode Island Bureau of Audits (Bureau). Id. ¶ 16. On March 13, 2008, following a preliminary forty-five-day investigation, the Bureau released a Summary of Findings which revealed evidence of corruption, mismanagement, and other wrongdoing at RIRRC. Id On September 22, 2009, the Bureau issued an audit report (Audit Report) further highlighting numerous violations, breaches, and wrongful acts that allegedly occurred at RIRRC during the relevant period. Id. ¶ 17. In light of the Bureau's findings, RIRRC alleges that Restivo breached its professional and contractualduties by failing to: (1) report alleged inaccuracies or discrepancies in financial statements; (2) properly perform audits and other financial services in accordance with generally accepted auditing and/or accounting principles and standards; (3) provide a true portrayal of RIRRC's financial position during the relevant time periods; and (4) notify State authorities after becoming aware of the alleged inappropriate and unlawful acts highlighted in the Audit Report. Id. ¶ 18.
It is well settled in Rhode Island that the role of a Rule 12(e) motion is limited.3 See 1 Robert B. Kent, et al., Rhode Island Civil and Appellate Procedure § 12:15 (West 2006). However, in those instances where a court determines that a pleading is too vague and ambiguous, the court may, in its discretion, grant a motion for more definite statement under Rule 12(e). Id?; see also Mitchell v. E-Z Way Towers, Inc., 269 F.2d 126, 130 (5th Cir. 1959) (); Hodgsonv. Virginia Baptist Hosp., Inc., 482 F.2d 821, 824 (4th Cir. 1973) (). When determining a motion for more definite statement, a court must review the pleading to ensure it is drafted in a manner that allows a defendant to "understand the nature and extent of the charges against him and to enable him to prepare generally for trial." Buck v. Keenan, 1 F.R.D. 558, 559 (D.R.I. 1941). A court should grant a motion for more definite statement when the complaint, as framed, denies the defendant the ability to properly respond. Oresman v. G.D. Searle & Co., 321 F. Supp. 449, 458 (D.R.I. 1971) (citing Schadler v. Reading Eagle Publ'ns, Inc., 370 F.2d 795 (3d Cir. 1967)); Mitchell, 269 F.2d at 130 (). However, in those instances in which "a party wishes to secure more detailed information as to how the pleading party intends to prove his allegations[, a party] should not be permitted to utilize [Rule 12(e)]... but should be compelled to look to the procedures for discovery... which provide for obtaining such details." Id.; see also Town of Hooksett Sch. Dist. v. W.R. Grace & Co., 617 F. Supp. 126, 135 (D.N.H. 1984) ().
Furthermore, while motions for more definite statement are often disfavored by courts and granted sparingly, they are potentially useful in assisting a court in "'the cumbersome task of sifting through the myriad of claims, many of which may be foreclosed by various defenses,' in a complaint that is 'overly prolix or complex.'" Guilbeault v. R.J. Reynolds Tobacco Co., No. 98-035L, 1998 WL 919117, at *2 (D.R.I. 1998) (quoting 2 James Wm. Moore, et al., Moore's Federal Practice ¶ 12.36[1] (3d ed. 1998)). For this reason, "courts will occasionally order amore definite statement sua sponte, which they have the freedom to do." Id. ().
In its Complaint, RIRRC alleges claims of professional malpractice (Count I), breach of contract (Count II), aiding and abetting breach of fiduciary duty (Count III), civil liability pursuant to § 9-1-2 for giving false documents to an agent, employee, or public official in violation of § 11-18-1 (Count IV), and civil conspiracy (Count V). In their motion, however, Restivo asserts that Counts III, IV, and V are too vague, ambiguous, and conclusory. Specifically, Restivo argues that it is unable to understand the nature and extent of the allegations, and cannot reasonably be expected to file a responsive pleading.
Generally, a complaint, as a precursor to discovery, need not state all the possible facts or legal theories to be proven at trial. Haley v. Town of Lincoln, 611 A.2d 845, 848 (R.I. 1992). It does not necessarily follow, however, "that the drafter of a complaint has no responsibilities with respect to providing some degree of clarity as to what is alleged." Hyatt v. Village House Convalescent Home, Inc., 880 A.2d 821, 824 (R.I. 2005); see also Arruda v. Sears, Roebuck & Co., 273 B.R. 332, 339-40 (D.R.I. 2002). Indeed, at this early stage of a litigation, due process considerations are implicated; and for that reason, courts require that "'the complaint give the opposing party fair and adequate notice of the type of claim being asserted.'" Hyatt, 880 A.2d at 824 (quoting Butera v. Boucher, 798 A.2d 340, 353 (R.I. 2002)). Therefore, the Plaintiff cannot rely solely on "subjective characterizations or conclusory descriptions," and the Court need notaccept unsupported conclusions or interpretations of law. See Arruda, 273 B.R. at 340; see also Washington Legal Found. v. Massachusetts Bar Found., 993 F.2d 962, 971 (1st Cir. 1993).
Mindful of Rhode Island's liberal pleading standards, the Court nevertheless finds that Counts III, IV, and V are too general to reasonably expect Restivo to understand the nature and extent of the allegations against it. Indeed, in Count III, RIRRC alleges that Restivo aided and abetted RIRRC's commissioners and employees in breaching their fiduciary duties. However, RIRRC fails to specify for which breaches Restivo provided substantial assistance or encouragement. Instead, RIRRC generally refers to a summary of the Bureau's finding. See Complaint ¶ 17 (). Therefore, without more, the Court believes it would be unreasonable to expect Restivo to file a responsive pleading when it is unclear which breaches it aided and abetted.
Furthermore, in Count III, RIRRC alleges:
"Restivo provided substantial assistance and encouragement in such breaches of fiduciary duty due, in part, to its provision of advice to and participation in business decisions of the Board of Commissioners and its failure to promptly identify and appropriately address such issues pursuant to the terms of the Agreement." Id. ¶ 35.
Plaintiff's bald allegation, however, fails to provide any factual support from which either Restivo or the...
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