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Hebb v. 36 Cliff Avenue LLC

Superior Court of Rhode Island

March 11, 2016

STUART MACINTOSH HEBB and ELIZABETH DOUGHERTY HEBB, as Trustee, Plaintiffs,
v.
36 CLIFF AVENUE LLC, TRADEMARK PROPERTIES, INC., GREG COE, Individually, and GREG COE as Agent of 36 CLIFF AVENUE LLC, MICHAEL C. KENT, PETER SANTILLI and THOMAS SANTILLI, Individually Defendants.

Newport County Superior Court

For Plaintiff: Brian R. Cunha, Esq.

For Defendant: J. Russell Jackson, Esq.

DECISION

STONE, J.

On December 11, 2015, Defendants 36 Cliff Avenue LLC (Cliff LLC), Trademark Properties, Inc. (Trademark), Greg Coe (Coe), individually, and Greg Coe as an agent of Cliff LLC, Michael C. Kent (Kent), Peter Santilli (P. Santilli) and Thomas Santilli (T. Santilli) (collectively, Defendants) jointly moved for summary judgment against Plaintiffs Stuart Macintosh Hebb and Elizabeth Dougherty Hebb, as trustee of the subject property, (jointly, Plaintiffs or the Hebbs) on their claims for breach of contract, fraud and deceit, breach of the duty of good faith and fair dealing, slander of title, and violation of Rhode Island's Deceptive Trade Practices Act (DTPA). Plaintiffs filed a timely objection, and, on March 7, 2016, the Court heard oral arguments from the parties. Jurisdiction in this Court is pursuant to G.L. 1956 § 8-2-14 and Rule 56 of the Rhode Island Superior Court Rules of Civil Procedure. After reviewing the parties' submissions and considering their arguments at the hearing, the Defendants' motion is granted in part and denied in part, as set forth below in further detail.

I Facts and Travel

The Plaintiffs are a married couple with a primary residence in Coral Gables, Florida. Mrs. Hebb is the trustee of the property that is the subject of this lawsuit. Cliff LLC is a Rhode Island Limited Liability Company engaged in real estate development and operating out of Narragansett, Rhode Island. Coe, Kent, T. Santilli, and P. Santilli are all members of Cliff LLC. Additionally, Coe is the owner and principal of Trademark, which is a real estate brokerage firm. Here, Trademark represented Cliff LLC as the real estate sales agent and broker in the sale of the subject property.

On July 27, 2012, Cliff LLC purchased the property located at 36 Cliff Avenue, Newport, Rhode Island, further designated as Tax Assessor's Plat 34, Lot 1.4 for $1, 350, 000. Sometime thereafter, Cliff LLC received approval from the City of Newport to subdivide that lot into three smaller lots. Of those three new parcels, which the City of Newport designated one as "Lot 2, " was given the address of 4 Faxon Green, Newport, Rhode Island (the Property).

Cliff LLC listed the Property for sale-through Landmark-with an asking price of $589, 900. The Plaintiffs were interested in purchasing property to build a summer home in Newport, and they showed interest in the Property. They came to Newport on multiple occasions to view the Property. On October 14, 2013, the Hebbs had their real estate agent, Pila Pexton (Pexton) reach out to Coe, in his capacity as the listing real estate sales broker. Coe indicated that he had another potential buyer for all three of the lots, which spurred the Hebbs to make an offer of $500, 000 on the Property. After some negotiations, the parties agreed to the purchase and sale of the Property for the sum of $525, 000. On October 23, 2013, the parties entered into a Purchase and Sales Agreement for the Property, with a closing scheduled for November 22, 2013.

On the following day, Coe met with Pexton. Coe apparently believed he was only collecting the initial $3000 deposit and receiving a copy of the fully executed Purchase and Sales Agreement. However-as she believed she had communicated to Coe- Pexton gave Coe three "clean" copies of the Purchase and Sales Agreement for him to execute, in his capacity as a general member of Cliff LLC. Coe indicated that he needed the signature of a second member of Cliff LCC to make the contract binding.[1] Coe assured Pexton that he would get the signature and send the clean copies to Hebb by overnight courier for him to sign.

After leaving Pexton's office, [2] Coe proceeded to accept a competing offer for the Property-and the other two lots associated with it-later that same day from Mr. John H. Manice (Manice). Coe claimed that because he was not in possession of the $3000 deposit, he believed that the Purchase and Sales Agreement with Plaintiffs was not binding. He did not inform Pexton or the Plaintiffs of the meetings he had with Manice or his real estate agent about the parcels, including the Property.

The following day, October 25, 2013, Coe informed Pexton that he had accepted an offer on the Property. As a result, Hebb retained counsel to ascertain and protect his rights under the Purchase and Sales Agreement. Thereafter, through Pexton, Plaintiffs represented to Coe that they believed him to be in breach of their October 23, 2013 Purchase and Sales Agreement, and, on November 4, 2013, they filed a lis pendens against the Property. In the meantime, Defendants attempted to negotiate with Manice to facilitate an agreement that would provide for the Plaintiffs and Manice to receive Lot 2 and lots one and three, respectively.

On November 15, 2013, the Defendants sent Plaintiffs a letter entitled "Notice of Intent to Perform" indicating that the Defendants, as seller, intended to perform, consistent with the terms and conditions of the disputed October 23, 2013 Purchase and Sales Agreement. Three days later, Plaintiffs wired the full deposit-of $26, 250-to the Defendants.[3] The parties were unable to complete the closing on November 22, 2013, as provided for in the October 23, 2013 Purchase and Sales Agreement, and rescheduled the closing for December 6 of that year. Although on December 6 the Property still needed to undergo certain inspections, the parties negotiated and agreed to the terms and conditions of an Escrow Agreement so that the sale of the Property could close and the remaining inspections could be completed post-closing.[4] For its part, Cliff LLC delivered good, clear, marketable, and insurable title to the Property.

On November 4, 2013, Plaintiffs filed the instant action in Newport County Superior Court. Thereafter, on December 11, 2015, Defendants moved for summary judgment. Interestingly, on December 28, 2015, the Plaintiffs filed their Third Further Amended Complaint in the matter to overcome a procedural defect. In their Reply Memorandum, filed after the then-latest[5] version of the Complaint was filed, Defendants allege that: 1) Plaintiffs' breach of contract claim is barred by the merger of deed doctrine; 2) any alleged claim for fraud or deceit fails as Plaintiffs never relied on any such statements from Defendants; 3) their count for breach of the duty of good faith and fair dealing fails as a matter of law and the Plaintiffs have waived it; 4) the Plaintiffs have insufficient evidence to maintain their action for slander of title or it is barred by the merger of deed doctrine; 5) as it relates to the DTPA ...


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