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Bourgoin v. Gladstone

Superior Court of Rhode Island

July 21, 2014

PHILIP BOURGOIN, d/b/a G.R.I.D. CONSTRUCTION
v.
MARK J. GLADSTONE and ALAN H. ROTHMAN, d/b/a STONEMAN FINANCIAL ASSOCIATES

Kent County Superior Court.

For Plaintiff: Michael T. McGahan, Esq.

For Defendant: Katherine J. Duncanson, Esq.

DECISION

K. RODGERS, J.

This case came before the Court, sitting without a jury, on the Complaint by Plaintiff Philip Bourgoin, d/b/a G.R.I.D Construction (Bourgoin), for certain monies owed by Defendant Mark J. Gladstone (Gladstone) pursuant to an alleged contract.

Jurisdiction is pursuant to G.L. 1956 § 8-2-13. For the reasons set forth herein, judgment shall enter for Bourgoin.

I. Findings of Fact

Having reviewed the evidence presented by both parties, this Court makes the following findings of fact.

Bourgoin is a self-taught contractor engaged in the carpentry and construction business at the time of the events giving rise to this cause of action. Gladstone and Alan H. Rothman (Rothman) (collectively Defendants) were partners in a business known as Stoneman Financial Associates (Stoneman Financial) based in Massachusetts. The business of Stoneman Financial included secured lending.

On March 24, 1988, Gladstone and Rothman, doing business as Stoneman Financial, recorded a first mortgage in the amount of $300, 000 on commercial property owned by Alfred J. Gastonguay (Gastonguay) located at 95-99 Washington Street in West Warwick, Rhode Island (the Premises). In late 1988 and/or early 1989, Gastonguay hired Bourgoin to perform carpentry and construction work in two retail units in the Premises, which work generally included building interior walls, installing drop-ceilings, adding a display case, painting walls and installing flooring. On February 21, 1989, Bourgoin, through his then-attorney Linda S. MacDonald (now Linda MacDonald-Glenn and hereafter MacDonald-Glenn) recorded a Notice of Intention to Do Work or Furnish Materials, or Both (Notice of Intention) in the Land Evidence Records of the Town of West Warwick to secure the work performed at the Premises. (Joint Ex. 1.)

Sometime in 1989, Gastonguay failed to satisfy his mortgage obligation and it was expected that the Premises was headed toward a foreclosure sale. Indeed, MacDonald-Glenn became aware of the potential foreclosure in February 1989, while representing Bourgoin as well as the two tenants for which Bourgoin performed work in their respective retail units in the Premises. (Joint Ex. 4.)

Seeking to protect Bourgoin's rights, MacDonald-Glenn prepared both a Notice of Lis Pendens (Lis Pendens) and a Petition to Enforce Mechanics' Lien (Petition to Enforce) on Bourgoin's behalf. (Joint Exs. 2, 3.) On May 5, 1989, MacDonald-Glenn had a phone conversation with Gladstone in which she informed Gladstone that she was getting ready to file both. Gladstone, aware that such filings would result in suspending the foreclosure sale, indicated he would be willing to take care of the Mechanics' Lien. Five days later, MacDonald-Glenn sent a letter to Gladstone confirming their May 5, 1989 phone conversation and further advising Gladstone that Bourgoin's lien was $22, 000, $15, 000 of which was out-of-pocket costs, and that Bourgoin was willing to accept $15, 000 to forego court proceedings associated with the Lis Pendens and the Petition to Enforce. (Joint Ex. 5.) After some negotiations, including a face-to-face meeting in Stoneman Financial's Weymouth, Massachusetts office attended by Bourgoin, MacDonald-Glenn and Gladstone, the parties agreed that Gladstone would pay Bourgoin $12, 950 and Bourgoin would forego filing the Lis Pendens and Petition to Enforce. The agreement was memorialized in a May 18, 1989 letter from Gladstone to MacDonald-Glenn which read in part:

"In consideration of your foregoing the petition for enforcement of a mechanics' lien on behalf of your client referenced above on the Gastonguay property, please let this letter serve as representation to you that the sum of $12, 950.00 shall be paid to your client at the time of the realization of funds from the successful bidder at foreclosure of said property." (Joint Ex. 6.)

As a result of this agreement, MacDonald-Glenn never filed or recorded the Petition to Enforce or the Lis Pendens. Gladstone then directed his counsel to proceed with foreclosing upon the Premises. (Joint Ex. 7.)

On June 9, 1989, MacDonald-Glenn and Gladstone had a further telephone conversation in which they discussed Gastonguay's possible bankruptcy filing and agreed that if Gastonguay did file for bankruptcy, then Bourgoin would still be paid $12, 950. A June 13, 1989 letter from MacDonald-Glenn to Gladstone memorialized the June 9, 1989 conversation, noting in part:

"This is to confirm our telephone conversation of June 9, 1989. We discussed the possibility of Alfred Gastonguay filing bankruptcy and we agreed that if he files bankruptcy, my client will still be paid the amount agreed upon (referred to in your letter of May 18, 1989) at the time of realization of funds from the bankruptcy sale." (Joint Ex. 9.)

The foreclosure sale of the Premises took place as scheduled on December 28, 1989. Bourgoin and MacDonald-Glenn attended the foreclosure sale. Gladstone and Rothman, doing business as Stoneman Financial, were the successful bidders with a credit bid of $250, 000, outbidding a third party by $50, 000. At the sale, MacDonald-Glenn asked Gladstone for the $12, 950 check. Gladstone informed MacDonald-Glenn that he needed "four to five days" to make payment. While this was not what had been agreed upon, MacDonald-Glenn assented to the delayed payment but nonetheless provided Gladstone with an executed Discharge of Notice of Intent to Do Work or Furnish Materials, or Both (Discharge Notice). (Joint Ex. 11.) Also, while at the foreclosure sale and at Gladstone's request, Bourgoin agreed to winterize the Premises in exchange for $1000, which would not be credited toward the $12, 950 Gladstone had previously agreed to pay Bourgoin. That $1000 was tendered to Bourgoin, through his counsel, the following day. (Joint Ex. 12.)

At some point subsequent to the foreclosure sale, MacDonald-Glenn and Gladstone again spoke. Gladstone informed MacDonald-Glenn that he needed approximately forty-five days to make the payment. Believing that she may have misheard Gladstone's original request at the foreclosure sale as "four to five" rather than "forty-five" days, she again assented to the delayed payment. At no time during either of the discussions between ...


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