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When does a lease take precedent over mortgage?

The Rhode Island Supreme Court has ordered that the matter of CFS 9115, LLC v. Unetixs Vascular, Inc., et al. be briefed in full.  The facts of the matter seem straight-forward enough.

The tenants were parties to written but unrecorded leases.  The property was sold while the tenants remained in the property.  The mortgagors, whom had recorded the mortgage, started eviction proceedings when the tenants would not surrender the premises.  The tenants objected and the matter was temporarily settled with the exception for a narrow appeal.  On appeal the Rhode Island Supreme Court asked that the matter be fully briefed to answer two narrow questions: Whether the recorded mortgage upon which CFS had foreclosed had priority as a matter of law over the tenants’ unrecorded leases?  Stay tuned for the solution on this one as it may have ripple effect throughout how leases are handled going forward, especially in the commercial space.  See the Court’s Order at: CFS 9115, LLC v. Unetix Vascular, Inc.

 

 

 

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Categories: Business, Civil, Contracts, Property Law, Recent Decisions.

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By Paul Sullivan
— May 6, 2019 at 7:34 am

Ancient Mortgage Windfall

By statute, Rhode Island legislation governs when a mortgage will be considered discharged.  Of particular interest is  Section § 34-26-7, which reads:

On and after January 1, 1989, no power of sale in any mortgage of real estate, except mortgages made by public utilities and non-amortizing mortgages made by Rhode Island housing and mortgage finance corporation now or hereafter of record, shall be exercised and no entry shall be made, nor possession taken, nor proceeding begun for foreclosure of any such mortgage after the expiration of a period which shall be thirty-five (35) years from the date of recording of the mortgage, or in the case of a mortgage in which the term or maturity date is stated, five (5) years from the expiration of the term or maturity date, unless an extension of the mortgage, or an acknowledgment by affidavit of the mortgagee that the mortgage is not satisfied, is recorded before the expiration of the applicable time period. In case an extension of the mortgage or such an acknowledgment by affidavit is so recorded, the period shall continue until five (5) years shall have elapsed during which there is not recorded any further extension of the mortgage nor acknowledgment nor affidavit that the mortgage is not satisfied. The period shall not be extended by nonresidence nor disability of any person interested in the mortgage or the real estate, or by any partial payment, agreement, extension, acknowledgment, affidavit, or other action not meeting the requirements of this section. All extensions, agreements, affidavits and acknowledgments shall be indexed in the land evidence records under the name of the present landowner. Upon the expiration of the applicable period provided herein, the mortgage shall be treated for title purposes as if it had been properly discharged by the record holder thereof.”

The Plaintiff, Bayview Loan Servicing, LLC, successfully defended on appeal the lower court’s decision granting summary judgment.  The original owners of the property Norris Waldron granted a mortgage to the Providence Business Loan Fund, f/k/a Providence Economic Development Corporation in exchange for $70,660.00 in 1992.  In 1996, Waldron entered into a modification with the Defendant reducing the security amount from $70,660.00 to $4,061.75 with a payment period of 108 months or 9 years.  The modification was not recorded which included all the details of the modification, instead what was recorded in the Lands Evidence Records was an amendment to the original 1992 mortgage.  This amendment did not include the 108 month terms and did not specify a maturity date.  Waldron would later quit claim deed the property to Jocelyn who in turn granted a mortgage to MERS.  This mortgage was satisfied with proceeds from another entity which secured its own mortgage.  Eventually, Bayview.  Eventually, Bayview recorded it owns mortgage which was recorded in the Land Evidence Records.

The court after reviewing the documents determined that the amendment did not conform to the statute’s strict requirements.  The Plaintiff was absolved of obligation to pay the outstanding mortgage to Providence, a windfall for the Plaintiff.  See entire opinion Bayview Loan Servicing, LLC v. Providence Business Loan Fund, Inc., f/k/a Providence Economic Development Corporation.

 

 

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Categories: Property Law, Recent Decisions, Uncategorized.

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By Paul Sullivan
— February 6, 2019 at 8:42 am

Want to See a Frog Leap

At a four day trial, Defendant was quoted as asking another driver through his open window if he wanted to see a frog leap.  Not understanding the Defendant’s intention of the meaning of same, the other driver replied, “Whatever, Buddy.”  From here we derive the meaning, or at least the Defendant’s meaning of watching a frog leap in the context of what two vehicles do after the light turns green.  As both vehicles left upon control signal turning green, Defendant proceeded to drive his vehicle into the other lane of travel forcing that driver to swerve continuously onto portions of the breakdown lane or further right portion of the road.  Needless to say, that this behavior continued eventually ending with Defendant’s vehicle having struck the other vehicle several times.

Defendant was charged with five counts of criminal conduct including reckless driving.  His case was tried before a jury which returned a guilty verdict on the reckless driving.  Defendant then leapt to the RI Supreme Court, briefing the court on the lower court’s failure to grant a motion for a new trial.  The Supreme Court placed a hurdle before Defendant to see if the frog could leap over, to wit: Show Cause why the matter should not be summarily dismissed.  On Show Cause briefing, the Defendant failed to leap over the hurdle and the court denied Defendant’s appeal killing any chance for Defendant to leap out of his conviction.  See the Court’s Order summarily dismissing appeal at State v. Joseph Silva, No. 17-288.

 

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Categories: Criminal, Recent Decisions, Uncategorized.

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By Paul Sullivan
— January 17, 2019 at 9:38 am

That Time of Year–Thank You from SWD

For years I have been posting occasional legal stories that have human elements to them on my firm’s site.  This year I have been silent on these pages.  However, as I drove in today I realized that it is that time of year and how truly thankful I am for the success of my practice and the many clients that have supported us over the last decade, confiding their problems, searching for us to lead them out of whatever moment of despair they may have or even helping them get closure to situations that otherwise have been unattended.  So I will take exception to posting about a legal story and just reach out to our clients, friends, family and colleagues and wish everyone happy holiday season, and truly Merry Christmas.

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By Paul Sullivan
— December 13, 2018 at 9:11 am

Brown University, Providence, Field Hockey, Key, Trust and Mitchell

For more than seven years, Brown University has had its sights on improving its athletic field it has owned since the late 50’s.  It followed several protocols and included in its process an outreach to the community to inform them of its intended project.  Absent from these forums and all public hearings on these project was Mr. Key and his wife Mrs. Mitchell.  After the project was underway and had gone through several revisions, Mr. Key, representing himself and the Trust owning the property he lives in and which is in proximity to the athletic field to be renovated asked for several meetings with Brown officials.  Not happy with the renovation plans, and alleging changes from those approved by the city, Mr. Key and others sent a letter of cease and desist.  From there Mr. Key and others would file suit and alleged several claims including requesting declaratory judgement.  This has now dragged on for over seven years and it looks like another 5 years are in the works since the Supreme Court reversed the lower court’s dismissal of the action.

The lower court had ruled that the Plaintiffs, in this case Mr. Key, his wife and the Trust, had no standing.  The Supreme Court reversed finding that “…the plaintiffs allege that Brown omitted material elements of its construction project from its IMP, thereby depriving the CPC of an opportunity to review “the true project.” As a consequence, the plaintiffs further contend, “[n]o public forums were held with respect to the [field] hockey field location, design and amenities prior to the submission or approval of the [IMP], as required.” As abutting property owners, the plaintiffs have clearly established an injury in fact.”

Accordingly, the Rhode Island Supreme Court vacated the lower court’s finding and remanded as to Count 1 of the Amended Complaint.  See full opinion at: Key, et. als v. Brown University, et. als.

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By Paul Sullivan
— July 27, 2017 at 10:10 am

Whose Dog Is It? (or, I’m a dog, not just another piece of furniture!)

In a case involving animal rights, the Kent County (Rhode Island) Superior Court recently addressed a matter of “Whose Dog Is It?” (Alexander M . Champagne v. Kelley F. Higgins). In that case, Mr. Champagne and Ms. Higgins traveled to China, where they lived together for about two years. While in China, they “mutually decided to acquire a dog for companionship.”  As the court observed, the dog – Hector – was a loyal companion to both Higgins and Champagne while in China.  In April 2012, Higgins’ visa expired and she returned to the United States with Hector. Champagne remained in China to finish his studies, and in June 2012, returned to the United States. In June 2015, Champagne and Higgins broke up, and  Hector stayed with Higgins.  Champagne eventually sued to get possession of Hector.

As the Kent County Superior Court’s Judge Rubine observed:

  • “In Rhode Island as in most jurisdictions, domestic animals and pets are considered personal property or chattels and ownership and possession are determined by property law. In other words, the majority view finds pet animals to be no different than a piece of furniture or a painting.”

Judge Rubine then cited to a “good summary of the evolving law of companion pets,” referencing Sabrina DeFabritiis’ Barking Up the Wrong Tree: Companion Animals, Emotional Damages, and the Judiciary’s Failure To Keep Pace, 32 N. Ill. U. L. Rev. 237 (2012), and  noted that the  premise of that article is summarized as follows:

  • “An increasing number of American households regard their companion animals as being as much a part of their family as they do their human family members; however, companion animals have not always held this status. The role companion animals serve has evolved from chattel property—whose function was to derive economic benefit—to family members who share a unique emotional bond with their human companions. The judiciary has failed to keep pace with this societal change . . .”

The Rhode Island court, Judge Rubine,  then noted that “a pure property analysis looks principally to the party who paid the purchase price, to determine right to possession,” but also observed that there were problems with treating a companion animal such as Hector like a simple piece of furniture. The Rhode Island court then favorably referenced a “more enlightened approach in keeping with modern societal views” that a recent New York Supreme Court  had taken in the case of Travis v. Murray, 42 Misc. 3d 447 (N.Y. Sup. Ct. 2013), also involving a companion animal.

The Rhode Island court noted the less understanding, historical approach of treating a dog (or other animal) as a simple piece of property involved looking at who has the “superior possessory right in the chattel [property] and thus, it is the property rights of the litigants, rather than their respective abilities to care for the dog or their emotional ties to it, that are ultimately determinative.” The court compared that approach with the New York Travis case standard that, in resolving the issues of ownership and possession of a companion dog, allows “the court to look to factors not considered in order to determine property rights of ownership or possession of other chattels, but recognizes companion animals as sui generis, and right of possession should consider a standard based upon the ‘best for all concerned.’”

The Rhode Island judge then determined that, without proof of clear ownership one way or the other, that the court would apply the “best for all concerned” standard. In doing so, and in “weighing the best for all concerned with respect to ownership or rights to possession of a companion animal,” the judge concluded that Ms. Higgins was entitled to exclusive possession of Hector.  In other words, Hector – and other companion animals – are not just another piece of furniture!

For more detailed facts of the case, please see Alexander M . Champagne v. Kelley F. Higgins, decision dated December 16, 2016, Kent County Superior Court, (Warwick, Rhode Island), Judge Rubine presiding).

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Categories: Animal Rights, Civil, Property Law, Recent Decisions.

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By Paul Sullivan
— February 7, 2017 at 9:57 am

What’s in a name? Tomato/Tomato

Sometimes, just sometimes, we do not stop to consider the little issues.  In this case, the plaintiff filed suit against a condo association as it neared the end of the statute of limitation within which to file suit.  However, the plaintiff did not think too much about the named defendant or perhaps thought too much and instead of filing against the condo association the plaintiff filed under “XYZ Company”.   This is equivalent to naming a defendant as John or Jane Doe.  The statute of limitations expired and a year later the plaintiff moved for leave to amend the complaint with the proper name of the defendant.  It turns out that the plaintiff had found several names during the research as to at-fault party prior to filing suit.  Instead of listing these names, and definitively naming the association as listed on with the Recorder of Deeds, the plaintiff waited until the answers on interrogatories and even longer.  XYZ Company cannot substitute for a name if parties have knowledge of the name.  The statute of limitations was not tolled by this strategy and plaintiff lost all rights to have her day in court.  In court proceedings, tomato is tomato.  See opinion Lisa Garant v. Michael E. Winchester et al.

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Categories: Uncategorized.

By Paul Sullivan
— January 18, 2017 at 9:00 am

Sometimes We Just Do Not Want To Accept Findings

Judgment for divorce was entered in 2008.  However, this does not mean the matter has ended.  Since then the parties have been back and forth to court on several additional petitions including a Motion for Contempt in which the Court found that John Tworog had violated the terms of the original judgment where he was permitted to stay in the marital home for a period of 2 1/2 years provided that he paid the mortgage and upkeep.  John failed to do so and also exhausted a dormant credit line that was issued to both parties.  The lower court found John in contempt and awarded attorney fees as well.  John filed a pro se appeal only to have the Rhode Island Supreme Court rule that his petition was basically unintelligible and upheld the lower court’s ruling of contempt.  John is ordered to pay $69,000 plus interest.  Is there another round to this marriage?  Let’s wait and see.  Entire text can be found at:  Tworog v. Tworog

 

 

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By Paul Sullivan
— July 12, 2016 at 12:05 pm

Five Remaining Candidates for Rhode Island District Court Judicial Vacancy

Five candidates are still in the running for retired Rhode Island District Court Judge Frank J. Cenerini’s seat.

The candidates for the District Court judicial vacancy are:

defense lawyer Thomas G. Briody;

Coastal Resources Management Council Hearing officer Brian A. Goldman;

Traffic Tribunal Magistrate Alan R. Goulart;

attorney Paul D. Ragosta; and,

former State Representative Timothy Williamson.

It is expected that one of these persons will be appointed to replace retired Judge Cenerini before the end of this year’s legislative session, which normally concludes in late June.

 

 

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Categories: News.

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By Paul Sullivan
— February 22, 2016 at 4:50 pm

Rhode Island – The basics – Contract Law & Breach of Contract

Rhode Island – The basics – Contract Law & Breach of Contract

Generally, any written agreement between two parties that meets certain criteria is a contract. Areas where you normally see contracts formed are between two businesses, a person and a business, in real estate transactions such as where you have a purchase and sale agreement, in a divorce where you likely have a property settlement agreement, and in many other everyday situations.

The starting point in all contract claims is that you must have valid contract with the other party. Then, the other party has to break the contract, or in more legal terms “breach” the contract. When the other side breaks the contract, you must either be performing as promised under the contract, or in some circumstances, you were ready, willing and able to perform when the other side broke the contract. As part of your breach of contract claim, you can ask the court to award you money damages for the other side’s breaking of the contract.

Whether you are in Woonsocket, Providence, Warwick, Newport, or anywhere in between, here are some Rhode Island specific things to keep in mind if you have a potential Rhode Island breach of contract claim:

 

Rhode Island – Contract – Statute of Limitations. A statute of limitations is the period in which the cause of action, or lawsuit, must be properly commenced. Generally, the Rhode Island contract statute of limitations for breach of contract actions is ten (10) years, with the ten-year period starting to run when the breach of contract occurs. R.I.G.L. § 9-1-13. There is a different statute of limitations for the very limited circumstances of “contracts or liabilities under seal,” and for actions for a court judgment. The contract statute statute of limitations for those very specific circumstances is twenty (20) years. R.I.G.L. § 9-1-17.

Rhode Island – Contract – Elements.  You will first have to establish you had a valid contract. The Rhode Island Supreme Court has said that the elements of a valid contract are “competent parties, subject matter, a legal consideration, mutuality of agreement, and mutuality of obligation.” R.I. Five v. Med. Assocs., 668 A.2d 1250, 1253 (R.I. 1996). The Rhode Island Supreme Court has further explained the requirement of a mutuality of obligation as “when both parties are ‘legally bound through the making of reciprocal promises.'” D’Oliveira v. Rare Hosp. Int’l, Inc., 840 A.2d 538, 540-41 (R.I. 2004).

Rhode Island – Contract – Breach.  When a party breaks a contract, legally its termed a breach of contract. To bring a Rhode Island claim that the other side broke the contract, or committed a breach of contract, you must show that you were performing as you had promised under the contract when the breach occurred. If you were supposed to perform your contract obligations under the contract at the same time (concurrently) as the party that you are saying broke the contract, the Rhode Island Supreme Court has said that when “concurrent acts are to be performed by the parties to a contract, the party bringing suit for breach need only aver that he or she was ready and willing to perform and that the alleged breacher was requested to perform but refused.” Kottis v. Cerilli, 612 A.2d 661, 663-64 (R.I. 1992). In those circumstances, “It is not necessary that the party alleging the breach actually perform; instead, notice of his or her readiness to perform constitutes and implies tender.” Danforth v. More, Rhode Island Supreme Court, (Jan. 14, 2016).

Rhode Island – Contract – Damages.  Under Rhode Island law, a court can award you damages for breach of contract to place you in as a good a position as if the parties fully performed the contract. This would include any lost profits.  You must, however, be able to prove your damages with a “reasonable degree of certainty,” based on “reasonably precise figures;” and the damages claimed cannot be based on speculation.

Rhode Island law also requires that you take “reasonable efforts and ordinary care” to lessen (mitigate) your damages. “This rule prevents the injured party from sitting silent while the damages accumulate.” Tomaino v. Concord Oil of Newport, Inc., 709 A.2d 1016, 1026-27 (R.I. 1998). Importantly, this “duty to mitigate does not create liability for failure to do so; however, [you are] prohibited from recovering the amount of damages [you] could have reasonably avoided.” Bibby’s Refrigeration, Heating & Air Conditioning, Inc. v. Salisbury, 603 A.2d 726, 729 (R.I. 1992).

Rhode Island – Implied Contract – Elements. If you don’t have an actual signed contract with the other party, then you still might be able to say that you had an implied contract. Under Rhode Island law, an implied contract “is a form of express contract wherein the elements of the contract are found in and determined from the relations of and the communications between the parties, rather than from a single clearly expressed written document.” Marshall Contractors, Inc. v. Brown Univ., 692 A.2d 665, 669 (R.I. 1997). If you do not have a written contract, but instead have several documents or exchanges with the other person or business, then you should consult with an attorney to see if what you do have adds up to an implied contract.

Rhode Island – Recovering attorney’s fees in certain breach of contract actions. Generally speaking, even if you win in your breach of contract lawsuit, you cannot make the losing party pay for the attorney’s fees that you have spent in your lawsuit.  There are certain circumstances, however, where you can make the losing party in your breach of contract claim pay your attorneys fees, as there is a Rhode Island statute that allows for the recovery of those fees. That statute, R.I.G.L. § 9-1-45, says:

The court may award a reasonable attorney’s fee to the prevailing party in any civil action arising from a breach of contract in which the court:

(1) Finds that there was a complete absence of a justiciable issue of either law or fact  raised by the losing party; or

(2) Renders a default judgment against the losing party.

 

If you have a question about a contract, or think someone has broken a contract they had with you, then please call us. We practice in all cities and towns in Rhode Island, from Woonsocket, to Providence, to Warwick, to Newport, and all places in between. Contact us, we can help.

 

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Categories: Business, Contracts.

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By Paul Sullivan
— February 21, 2016 at 3:46 pm