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Marcello v. RI Core Investments, LLC

Superior Court of Rhode Island

September 10, 2014

VINCENT MARCELLO
v.
RI CORE INVESTMENTS, LLC and 80 RHODE ISLAND AVENUE LLC

Newport County Superior Court

For Plaintiff: Joseph R. Palumbo, Jr., Esq.

For Defendant: John T. Precobb, Esq.

DECISION

STONE, J.

Before the Court is Defendant 80 Rhode Island Avenue LLC's (80 Rhode Island LLC) motion to dismiss Plaintiff Vincent Marcello's (Marcello) breach of contract cause of action pursuant to Super. R. Civ. P. 12(b)(6).

I Facts and Travel[1]

This case involves the management of property located at 80 Rhode Island Avenue in the City of Newport (the property) and owned by 80 Rhode Island LLC. The following facts are alleged in the Complaint. On March 24, 2006, 80 Rhode Island LLC entered into an agreement with Defendant RI Core Investments, LLC (RI Core) authorizing RI Core to hire professionals and consultants for the development of the property. Subsequently, on or about April 1, 2006, RI Core entered into a management contract with Bellevue Realestators, Inc.[2] (Bellevue Realtors). Marcello is a licensed real estate broker and sole principal of Bellevue Realtors. The management contract between Bellevue Realtors and RI Core included a provision making Bellevue Realtors the sole and exclusive agent to lease and manage the property and granted Bellevue Realtors the exclusive right to represent the owner of the property in connection with any future sale of the property. In reliance on RI Core's representation that it was the lawful owner of the property, and on the exclusivity provision, Bellevue Realtors spent considerable time and money in connection with the potential sale and/or development of the property. RI Core was continuously authorized by 80 Rhode Island LLC to hold itself out as owner of the property before planning and zoning boards, in tenant leases, and in legal proceedings pertaining to the eviction of tenants.

For a period of approximately three years, Marcello took orders from Marc Fantasia (Fantasia), the President of the managing member of 80 Rhode Island LLC, concerning sale and development matters affecting the property. On several occasions, Fantasia acknowledged and affirmed Bellevue Realtors' exclusive right of representation in connection with any sale of the property. However, in September 2013, Fantasia informed Marcello that the property was going to be listed for sale with another brokerage firm. Despite having been informed by Marcello that such action would constitute a breach of contract, Fantasia repudiated Bellevue Realtors' right to act as exclusive representative that next month. The remaining terms of their agreement are still in effect according to the Complaint. Marcello has recently learned that the property is in the process of being sold as a result of a listing with another brokerage firm.

Marcello filed a five-count Complaint against both RI Core and 80 Rhode Island LLC, primarily focused on his breach of contract cause of action. Marcello alleges 80 Rhode Island LLC was RI Core's undisclosed principal. He seeks compensatory damages in the reasonable amount he would have received as commission from the sale of the property—he estimates this figure to be approximately $250, 000.[3] Additionally, he seeks to recover the fair value of development-related consulting services he performed on the theory of quantum meruit. This Court granted Marcello's motion for the issuance of writ of attachment on the property following a hearing on the motion.

Subsequently, 80 Rhode Island LLC filed a motion to dismiss relying on two distinct arguments. First, it claims that because there was no written management or agency agreement between 80 Rhode Island LLC and Marcello, nor any mention that Marcello was an intended beneficiary of any agreement between 80 Rhode Island LLC and RI Core, Marcello cannot assert a breach of contract claim against 80 Rhode Island LLC because there was no privity of contract. Second, 80 Rhode Island LLC argues that any oral agreement between itself and Bellevue Realtors for commission based on the sale of the property is unenforceable because such an agreement violates the statute of frauds.

II Standard of Review

In ruling on a motion to dismiss pursuant to Rule 12(b)(6) of the Rhode Island Superior Court Rules of Civil Procedure, the Court looks to the allegations in the complaint in the light most favorable to plaintiff and assumes them to be true. Palazzo v. Alves, 944 A.2d 144, 149 (R.I. 2008) (citing Ellis v. R.I. Pub. Transit Auth., 586 A.2d 1055, 1057 (R.I. 1991)). "[T]he sole function of a motion to dismiss is to test the sufficiency of the complaint" and review is, therefore, confined to the four corners of that pleading. Id. (quoting R.I. Affiliate, ACLU, Inc. v. Bernasconi, 557 A.2d 1232, 1232 (R.I. 1989)). "The grant of a Rule 12(b)(6) motion to dismiss is appropriate 'when it is clear beyond a reasonable doubt that the plaintiff would not be entitled to relief from the defendant under any set of facts that could be proven in support of the plaintiff's claim.'" Id. (quoting Ellis, 586 A.2d at 1057).

Although the Supreme Court of the United States arguably raised the bar for sufficiency by requiring plaintiffs to allege a set of plausible, rather than possible, facts showing an entitlement to relief in Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009), our jurisdiction has not expressly adopted (or rejected) this new precedent. The Rhode Island Supreme Court continues to ascribe to the notice pleading standard. See Barrette v. Yakavonis, 966 A.2d 1231, 1234 (R.I. 2009) (avoiding Iqbal and Twombly by applying the standard that a "motion to dismiss is appropriate 'when it is clear beyond a reasonable doubt that the plaintiff would not be entitled to relief from the defendant under any set of facts that could be proven in support of the plaintiff's claim'"). Under Rhode Island's notice pleading ...


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