Tidewater Realty, LLC v. State

• Court: Rhode Island Superior Court
• Writing for the Court: SILVERSTEIN, J.
• Decision Date: 02 February 2010
• Docket Number: C.A. PB 05-3316
• Citation: Tidewater Realty, LLC v. State, C.A. PB 05-3316 (R.I. Super. Feb 02, 2010)
• Parties: TIDEWATER REALTY, LLC v. STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS, STATE OF RHODE ISLAND DEPARTMENT OF ENVIRONMENTAL MANAGEMENT, AND RHODE ISLAND STATE PROPERTIES COMMITTEE

TIDEWATER REALTY, LLC v. STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS, STATE OF RHODE ISLAND DEPARTMENT OF ENVIRONMENTAL MANAGEMENT, AND RHODE ISLAND STATE PROPERTIES COMMITTEE

C.A. No. PB 05-3316

Superior Court of Rhode Island

February 2, 2010

DECISION

SILVERSTEIN, J.

Before this Court is a Super. R. Civ. P. Rule 12(b)(6) motion to dismiss, or, in the alternative, a motion for summary judgment pursuant to Super. R. Civ. P. Rule 56, brought by the State of Rhode Island ("the State"), the State of Rhode Island Department of Environmental Management ("DEM"), and the State Properties Committee ("SPC"), (collectively, "Defendants") against Plaintiff Tidewater Realty, LLC ("Tidewater"). Following our Supreme Court opinion in Tidewater Realty, LLC v. State of Rhode Island 942 A.2d 986 (R.I. 2000), Plaintiff filed a second amended complaint seeking damages from Defendants alleging breach of contract and breach of the implied covenant of good faith and fair dealing pertaining to a purchase and sale contract entered into between Plaintiff and the State, acting by and through the DEM. Defendants claim they are entitled to dismissal, or in the alternative, summary judgment based on the doctrine of sovereign immunity.

I Facts and Travel

In 1911, the State, acting by and through its former State Harbor Improvement Commission, condemned waterfront commercial property located at 242 Allens Avenue in the City of Providence ("the Property"). In 2004, the State by and through the DEM— successor in interest to the State Harbor Improvement Commission—decided to sell the Property which it deemed surplus to its needs. The Property consisted of over five acres of land and in 2004 was subject to a long-term lease ("Lease") with Promet Marine Services Corporation ("Promet") lasting until 2011 with an option to renew through 2021. Promet operated a deep water terminal on the Property which serviced large commercial vessels. After determining that the Property was surplus to its needs, the State, acting by and through the Department of Administration's Division of Purchasing, issued Requests for Proposals ("RFP") for the sale of the Property. Plaintiff, an entity formed by Promet for the purpose of acquiring title to the Property, was the successful bidder.

As land acquired by condemnation, the sale of the Property was subject to G.L. 1956 § 37-7-3. Pursuant to that statute, the City of Providence ("the City") enjoyed a statutory right, subject to a prior right in the person or persons from whom the Property was obtained, or their heirs, successors, or assigns, to purchase the Property upon the same terms and conditions as the State was willing to sell the Property to the Plaintiff. After receiving notification of the State's intention to sell the Property, the director of planning and development for the City responded, "If the property is sold to the present tenant for continuation of its use for boat repair, the city has no interest. If Promet decides it is not interested in the property, the city is interested."

Thereafter, on May 25, 2005, the Plaintiff entered into a purchase and sale contract ("P&S") with the State, by and through the DEM, for the sale of the Property. The terms of the P&S included a purchase price of $1,026,780, a closing date of no later than June 30, 2005, and a "[t]ime is of the essence" clause. Additionally, the P&S contained a "Right to Terminate" paragraph declaring

Not withstanding anything contained herein to the contrary, this Contract is conditional upon the City of Providence waiving its right to purchase this property under the same terms and conditions contained herein in accordance with R.I. General Laws Section 37-7-3. Said required notice to City was made by certified mail on May 18, 2005. If the City of Providence chooses to exercise its rights as provided in R.I. General Laws Section 37-7-3, then this contract will terminate and be deemed null and void.

The SPC, which unanimously approved the P&S in accordance with G.L. 1956 § 37-2-49, noted that the City had 30 days to respond to the letter officially notifying them of its statutory right to purchase the Property.

On June 14, 2005, the Mayor of Providence informed the State that the City intended to exercise its right to purchase the Property. Thereafter, the City Council passed a resolution authorizing the Providence Redevelopment Agency ("PRA") to acquire the Property on behalf of the City. DEM requested that the City provide a legal opinion letter on whether the PRA had the authority to purchase the Property as agent for the City. The City complied with this request and presented a legal opinion letter to the DEM which concluded that the PRA was "properly empowered to exercise the City's right to purchase granted pursuant to § 37-7-3 to acquire the Property." At a special meeting of the SPC on June 28, 2005, an attorney for the Plaintiff disputed whether the PRA had the right to purchase the Property under § 37-7-3. He indicated that Plaintiff was ready, willing and able to proceed with the purchase and submitted a letter to that effect, as well as a copy of a check for the purchase price in the amount of $1,026,780. The SPC proceeded to authorize the sale of the Property to the PRA and title was conveyed from the State to the PRA on June 30, 2005.

Subsequent to the conveyance of the Property to the PRA, Plaintiff filed an action in Superior Court alleging that the State had breached the P&S and seeking a declaratory judgment that the conveyance to the PRA was null and void. The Superior Court granted the motion for summary judgment in favor of the Defendants and it denied Plaintiff's claim for declaratory relief. Tidewater Realty, LLC v. State of Rhode Island, 2000 WL 34601782. Plaintiff appealed the decision to the Rhode Island Supreme Court. On appeal our Supreme Court reversed the Superior Court judgment as to Count I of the first amended complaint for breach of contract. Tidewater Realty, LLC, 942 A.2d at 986. The Supreme Court held that the State breached its contract with the Plaintiff by transferring title to the PRA instead of to the City. Id. at 996. After the case was remanded to the Superior Court a Consent Order was entered requiring the PRA to transfer title to the Property to Plaintiff in exchange for the full purchase price.

Thereafter, Plaintiff filed a second amended complaint ("Complaint") against the State, DEM, and the SPC alleging breach of contract and breach of the implied covenant of fair dealing.^1[] Defendants proceeded to file the subject motion to dismiss, or, in the alternative, motion for summary judgment.

II Standard of Review

It is well-settled in Rhode Island that the role of a Rule 12(b)(6) motion is merely to test the sufficiency of the complaint. See Toste Farm Corp. v. Hadbury, Inc., 798 A.2d 901, 905 (R.I. 2002) (quoting R.I. Employment Sec. Alliance, Local 401, S.E.I.U., AFL-CIO v. State Dep't of Employment and Training, 788 A.2d 465, 467 (R.I. 2002)). "When ruling on a Rule 12(b)(6) motion, 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 [non-movant's] favor." Id. (quoting Rhode Island Affiliate, ACLU v. Bernasconi, 557 A.2d 1232, 1232 (R.I. 1989)). The court should grant such a motion "only when it is clear beyond a reasonable doubt that the [non-movant] would not be entitled to relief under any set of facts that could be proven in support of the claim." Siena v. Microsoft Corp., 796 A.2d 461, 463 (R.I. 2002).

However, a judge need not reject affidavits or other evidence presented in support of a motion to dismiss. Laurence v. Sollitto, 788 A.2d 455, 457 (R.I. 2002). Rather, when the court receives a dismissal motion which, as in the instant matter, relies on evidence outside the pleadings, "it must be treated as a motion for summary judgment under Rule 56 of the Superior Court Rules of Civil Procedure." Strynar v. Rahill, 793 A.2d 206, 209 (R.I. 2002). Since matters outside the pleading have been presented to and not excluded by this Court, the motion is treated as one for summary judgment and disposed of as provided in Rule 56. Super. R. Civ. P. Rule 12(b). All parties have been given reasonable opportunity to present all materials pertinent to a Rule 56 motion. Id.

Summary judgment is proper when, after reviewing the admissible evidence in the light most favorable to the non-moving party, "no genuine issue of material fact is evident from the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, and the motion justice finds that the moving party is entitled to prevail as a matter of law." Smiler v. Napolitano, 911 A.2d 1035, 1038 (R.I. 2006) (quoting Rule 56(c)). When considering a motion for summary judgment, "the court may not pass on the weight or credibility of the evidence but must consider the affidavits and other pleadings in a light most favorable to the party opposing the motion." Lennon v. MacGregor, 423 A.2d 820, 822 (R.I. 1980). During a summary judgment proceeding, "the justice's only function is to determine whether there are any issues involving material facts." Id. (quoting Steinberg v. State, 427 A.2d

338, 340 (R.I. 1981)). "Therefore, summary judgment should enter 'against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case * * *.'" Lavoie v. North East Knitting, Inc., 918 A.2d 225, 228 (R.I. 2007) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (construing the substantially similar federal rule)).

III Discussion

In the instant matter, Plaintiff claims it is entitled to damages for certain expenses incurred in its efforts to acquire...