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Seaport Studios, Inc. v. Waldo

Superior Court of Rhode Island

May 28, 2014

SEAPORT STUDIOS, INC., Plaintiff,
v.
RUSSELL W. WALDO; JAMES D. HENNESSEY; JHRW, LLC; and 118 BAY STREET CORPORATION, Defendants,
v.
RANDALL S. SAUNDERS and JEAN C. SAUNDERS, Third-Party Defendants.

Washington County Superior Court

For Plaintiff Gregory P. Massad, Esq. and Third-Party Defendants:

For Defendant Kelly M. Fracassa, Esq.

DECISION

LANPHEAR, J.

This matter is before the Court on Defendants Russell W. Waldo (Waldo), James D. Hennessey (Hennessey), JHRW, LLC (JHRW), and 118 Bay Street Corporation's (BSC) (collectively, Defendants) Motion for Partial Summary Judgment (Motion) on several property-related claims brought by Plaintiff Seaport Studios, Inc. (Seaport). In particular, Defendants seek summary disposition of Seaport's request for a declaratory judgment of its rights to a condominium deed, Seaport's assertion of rights to nine parking spaces on Defendants' property, and Seaport's allegations that Defendants interfered with its easement rights and engaged in a fraudulent transfer. Defendants also request this Court to lift the preliminary injunction prohibiting Defendants from selling, transferring or otherwise encumbering the contested parking spaces. Seaport objects to Defendants' Motion. For the reasons stated herein, Defendants' Motion is granted in part and denied in part. Because this action has not yet reached a final disposition, the preliminary injunction remains in effect.

I

Facts and Travel

In the early 1980s, Waldo and Hennessey took title to various adjacent parcels of land in the Watch Hill area of Westerly, Rhode Island. On October 3, 1985, Seaport, which runs a seasonal retail clothing business, entered into a ninety-nine-year land lease agreement (the Lease) with Waldo and Hennessey for one of these parcels, located on Bay Street in Watch Hill (the Seaport Property). The Seaport Property is surrounded on three sides by the parcels retained by Waldo and Hennessey. In pertinent part, the Lease provided that, should the Seaport Property ever become subject to the Rhode Island Condominium Act, G.L. 1956 §§ 34-36.1-1.01 to 34-36.1-4.20, Defendants would "furnish a condominium unit deed for the [Seaport Property] to [Seaport]" at no further cost to Seaport. The Lease also stated that the Seaport Property is subject to all applicable zoning restrictions. Lastly, the Lease stipulated that Defendants retained a right-of-way providing Defendants access to their property across the Seaport Property and that Seaport retained the right to move this right-of-way, either to a location designated in the Lease or to another location, with Defendants' approval.

In 2005, Defendants began to formulate a tentative development plan for their land in Watch Hill, which they submitted for approval to the Town of Westerly. Waldo and Hennessey then subdivided their land, including the Seaport Property, creating several land condominium units in 2008. One of these units was Unit C, on which Defendants constructed a parking lot. As part of their development plan, Defendants hoped to buy Seaport out of the remainder of the Lease and to further develop the Seaport Property. Accordingly, Defendants' 2005 development plan indicated that the Unit C parking lot would contain nine off-street parking spaces for commercial use, a sufficient number of spaces for Waldo and Hennessey's development plan— which at that time included the Seaport Property—to comply with the off-street parking regulations of the Town of Westerly Zoning Ordinance (the Ordinance). Seaport, however, declined to sell its lease interest in the Seaport Property, and Defendants conveyed the Seaport Property to Seaport via a condominium deed on July 18, 2013. Defendants have since submitted revised development plans for town approval, the latest of which indicates no off-street parking for commercial use.

During the pendency of this litigation, Defendants subdivided Unit C into sub-condominium units, consisting of individual parking spaces, most of which Defendants have sold. On Seaport's motion, this Court entered a preliminary injunction on January 9, 2013, prohibiting Defendants from selling, transferring, or otherwise encumbering thirteen parking spaces in the Unit C lot until the final disposition of this case.

After Defendants had completed construction of the Unit C parking lot, they removed a stairway at the end of the right-of-way, which they had retained in the Lease, in order to install industrial air conditioning units. At the time, this stairway provided access to the Seaport Property from the Unit C parking lot, and Defendants' removal of the stairway cut off the direct access between the two. Seaport requested permission from Defendants to reconstruct the right-of-way in a different location, but the parties have been unable to agree on a new location.

Seaport brought the instant action in September of 2009, seeking declaratory and injunctive relief and damages for several alleged offenses. Specifically, Seaport's latest amended complaint asserts a breach of contract claim based on Defendants' alleged breach of the Lease by failing to provide Seaport with a condominium deed to the Seaport Property after converting the property into a condominium. Seaport also asserts that it had a property interest in the right-of-way between the parties' parcels and that Defendants' removal of the stairway and refusal to permit Seaport to reconstruct the right-of-way in a different location encroached on that property interest and breached the Lease. Lastly, Seaport claims that it has a right to nine parking spaces in the Unit C parking lot, pursuant to either the Lease or to an implied easement that arose when Defendants subdivided their property into condominiums. [1]

In 2010, Defendants counterclaimed, seeking injunctive relief to bar Seaport from parking vehicles in the Unit C parking lot and damages for unpaid parking fees. At the same time, BSC also filed a third-party complaint against Randall and Jean Saunders, the owners of Seaport, seeking the same relief.

Defendants now move for summary judgment on all of the claims Seaport raised in its latest amended complaint. Seaport has objected to Defendants' Motion, and both sides have submitted supporting memoranda and exhibits. Additionally, Seaport and Defendants presented ...


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