United States District Court, D. Rhode Island
OPINION AND ORDER
WILLIAM E. SMITH, Chief Judge.
Bank of America, N.A. ("BOA") has filed a Motion to Amend its Counterclaim against High Rock Westminster Street LLC ("High Rock"). (ECF No. 65.) For the reasons set forth below, the motion is DENIED.
This case involves a dispute over a commercial real estate lease. According to the Complaint, Fleet Bank, N.A. ("Fleet") owned and occupied the so-called "Superman Building" at 111 Westminster Street in Providence, Rhode Island ("111 Westminster"), until April 7, 2003. On that date, Fleet and Westminster Office 1031, LLC ("Westminster") entered into a sale-leaseback agreement whereby Westminster acquired ownership of 111 Westminster and simultaneously agreed to let Fleet continue to occupy the premises pursuant to a ten-year lease ("the Lease"). Subsequent to the leaseback-sale, on April 1, 2004, BOA acquired Fleet, took over occupancy of 111 Westminster, and assumed Fleet's responsibilities under the Lease. Four years later, on January 24, 2008, High Rock bought 111 Westminster and took over Westminster's rights and responsibilities under the Lease. Thus, until the Lease expired, by its own terms, on April 30, 2003, High Rock was the landlord and BOA the tenant at 111 Westminster.
A few months after the expiration of the Lease, on July 2, 2013, High Rock sued BOA alleging that BOA breached the Lease by failing to properly repair and maintain the building, that BOA violated the implied covenant of good faith, and that BOA committed waste. High Rock seeks monetary damages to pay for the necessary repairs and to compensate for lost rental income. High Rock also alleges that BOA is liable for several months' rent as a hold-over tenant because it failed to remove certain moveable furnishings, trade fixtures, equipment, and other personal property (the "Personalty") from 111 Westminster following the expiration of the Lease.
On September 10, 2013, BOA filed an answer denying all liability, as well as two counterclaims, both of which pertain to High Rock's claim for hold-over rent. In its first counterclaim, BOA sought a declaratory judgment to the effect that BOA was not required under the Lease to remove the Personalty and thus was never a hold-over tenant. The second counterclaim alleged that High Rock breached the Lease by seeking hold-over rent. High Rock filed a motion to dismiss the counterclaims, arguing first that the counterclaim for declaratory judgment should be dismissed because it is simply the inverse of High Rock's claim for hold-over rent, and second that the counterclaim for breach of the Lease should be dismissed because the Lease expired before High Rock sought hold-over rent and, regardless, nothing in the Lease says that High Rock cannot seek hold-over rent from a hold-over tenant.
The parties then entered into an agreement, on October 29, 2013, concerning the removal of the Personalty from 111 Westminster (the "Personalty Agreement"). Under the Personalty Agreement, BOA agreed to pay High Rock $350, 000 and to waive all its claims to title of the Personalty. In exchange, High Rock agreed to arrange for the removal of the Personalty and to waive any claims for hold-over rent for the period beginning 45 days after High Rock received the $350, 000 payment from BOA. The parties explicitly agreed that the Personalty Agreement would not affect the parties' respective claims and counterclaims with respect to hold-over rent for any period prior to 45 days after the date on which High Rock received the $350, 000 payment.
On June 17, 2014, BOA filed the instant Motion to Amend its Counterclaim. Acknowledging that the counterclaim for declaratory judgment is, in fact, the flip side of High Rock's claim, BOA seeks to drop that counterclaim. BOA also seeks to re-characterize its breach of contract counterclaim as a claim for unjust enrichment. BOA argues that it conferred a benefit upon High Rock by paying $350, 000 under the terms of the Personalty Agreement for the removal of the Personalty, and that it would be inequitable for High Rock to retain that benefit without paying for it, as BOA was never legally obliged to pay for the removal of the Personalty.
A. Standard of Review
Courts should freely give leave to amend a pleading when justice so requires. Fed.R.Civ.P. 15(a)(2). However, a court may refuse leave to amend if the amendment is futile. Hatch v. Dep't for Children, Youth and Their Families, 274 F.3d 12, 19 (1st Cir. 2001). When a motion to amend is filed before the conclusion of discovery and before any motions for summary judgment, a court's futility analysis is identical to the analysis under a Rule 12(b)(6) motion to dismiss. Juarez v. Select Portfolio Servicing, Inc., 708 F.3d 269, 276 (1st Cir. 2013).
Under Rule 12(b)(6), "the combined allegations, taken as true, must state a plausible, not a merely conceivable, case for relief." Sepulveda-Villarini v. Dep't of Educ. of P.R., 628 F.3d 25, 29 (1st Cir. 2010) (Souter, J.) (discussing Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)). When evaluating the plausibility of the claims, courts "accept the well-pleaded facts as true and indulge all reasonable inferences therefrom in the [non-moving party]'s favor." Jorge v. Rumsfeld, 404 F.3d 556, 559 (1st Cir. 2005). In addition, a court "may consider the whole of a document integral to or explicitly relied upon in a [pleading], even if that document is not annexed to [that pleading]." Id. (citing Clorox Co. P.R. v. Proctor & Gamble Commercial Co., 228 F.3d 24, 32 (1st Cir. 2000)). Therefore, this Court will consider both the proposed amended counterclaim and the Personalty Agreement explicitly referred to in the proposed amendment.
B. Plausibility of the Unjust Enrichment Claim
To succeed on a claim for unjust enrichment, BOA must prove that BOA conferred a benefit upon High Rock, that High Rock appreciated the benefit, and that it would be inequitable under the circumstances for High Rock to retain the benefit without paying for its value. See W. Reserve Life Assurance Co. of Ohio v. Caramadre, 847 F.Supp.2d 329, 348 (D.R.I. 2012) (citing Narragansett Elec. Co. v. Carbone, 898 A.2d 87, 99 (R.I. 2006)). Normally, unjust enrichment claims are precluded "where a valid contract governs the subject matter." Tantara Co. v. Bay St. Neighborhood Ass'n, LLC, C.A. No. NC-11-55, 2012 R.I. Super. LEXIS 155, at *15 (R.I. Super. Ct. Oct. 4, 2012) (citing Restatement (Third) of Restitution and Unjust Enrichment § 2(2) (2011)). However, a party to a contract may recover under an unjust enrichment theory if the contract is "breached, rescinded, or otherwise made invalid, or [if] the benefit received was outside the scope of the contract." Id. at *16 (quoting Clapp v. Goffstown Sch. Dist., 977 A.2d 1021, 1025 (N.H. 2009)); see also Restatement (Third) of Restitution and Unjust Enrichment § 2 cmt. c. But ...