Kent County Superior Court
For Plaintiff: Mark. A Pogue, Esq.
For Defendant: Jeffrey S. Brenner, Esq.
This matter came on for trial, Justice Bennett R. Gallo presiding, on March 30, 2015. Previously, this Court granted summary judgment in favor of the Defendant, Home Depot U.S.A., Inc. (Home Depot) as to the claims of the Plaintiffs, Roadepot, LLC and Keyserton, LLC (collectively, Roadepot), leaving only Home Depot's counterclaim for reimbursement and Roadepot's affirmative defenses for trial on March 30, 2015. Specifically, Home Depot seeks reimbursement from Roadepot for all payments it made toward the sewer Fast Track Assessment, so called, from 2005 through 2014. After consideration of the evidence presented at trial, this Court makes the following findings.
Home Depot entered into a lease agreement with Commerce Park Associates 3, LLC (Commerce Park) to lease some twelve acres of improved property in the Town of Coventry, Rhode Island (the Town). The lease between Home Depot and Commerce Park was executed in 2004; Commerce Park served as the landlord, and Home Depot was its tenant. In 2005, Commerce Park sold the property to Roadepot. Accordingly, Roadepot became Home Depot's landlord in 2005.
From October 29, 2005 through 2009, Home Depot paid to the Town all Fast Track Assessments owed on the property. In 2010, the parties filed mutual declaratory judgment actions, each seeking a declaration that the other is obligated to pay the Fast Track Assessment under the lease agreement. During the pendency of this litigation, Home Depot has continued to pay all Fast Track Assessments imposed in an amount totaling $388, 657.21. (Stipulation 1.) Additionally, penalties for late payments have been incurred from 2006 through 2013 in an amount of $16, 847.27. Id.
John Tascione, Home Depot's Director of Real Estate (Tascione), was the only witness to testify at trial. He testified that in October of 2005, Nicholas Cambio-principal of Commerce Park-wrote a letter to Home Depot explaining that he believed the Fast Track Assessment to be an excessive charge and that he intended to challenge its legality. (Ex. 2.) In the meantime, he instructed Home Depot not to pay the Fast Track Assessment as charged. Id. at 1-2. His letter attached a copy of the 2005 Fast Track Assessment bill from the Town, labeled "2005 Sewer Assessment Bill." Id. at 3. Consequently, Home Depot did make payments toward the Fast Track Assessment, but indicated to the Town that its payments were being made "under protest and as a measure of good faith, " specifically because "the property owner . . . notified [Home Depot] that the assessment is being challenged due to [its] excessiveness." (Ex. 4.)
Home Depot continued to pay the Fast Track Assessment without objection and without contacting Roadepot in 2005, 2006, 2007, and 2008. Tascione testified that a third party vendor made the payments to the Town on Home Depot's behalf and that the vendor mistakenly believed the Fast Track Assessment bills were bills for sewer usage, an expense Home Depot is obligated to pay under the lease. On September 17, 2009, shortly before the 2009 Fast Track Assessment payment became due, Home Depot's property tax accountant, Janet Murray (Murray), faxed a copy of the 2009 Sewer Assessment Bill to Roadepot. (Ex. 6.) The fax cover sheet stated that based on Murray's understanding of the lease, "this bill is [Roadepot's] responsibility to pay." Id. at 1. Tascione verified that Murray's September 17, 2009 fax was the first time that Home Depot gave written notice to Roadepot of its objection to paying the Fast Track Assessment. In response to Murray's fax, counsel for Roadepot wrote a letter to Home Depot on October 20, 2009, in essence asserting that Home Depot, as the tenant, is liable for the Fast Track Assessment. (Ex. 7.) The parties failed to come to an agreement regarding liability, and ultimately, this suit was commenced.
Nevertheless, Home Depot proceeded to make Fast Track Assessment payments in 2009 and in each subsequent year through 2014. (Stipulation 1.) When asked why Home Depot continued to pay the Fast Track Assessment, despite believing it was Roadepot's responsibility and after having communicated that belief to Roadepot directly, Tascione explained that nonpayment could result in liens being placed on the property, could be considered a breach of the lease agreement with Roadepot, or both. Given the adverse potential consequences of nonpayment, Home Depot chose to pay the Fast Track Assessment and to seek reimbursement by way of litigation (as opposed to simply refusing to pay).
Standard of Review