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Lagondola, Inc. v. City of Providence

Superior Court of Rhode Island

August 12, 2016

LAGONDOLA, INC.
v.
CITY OF PROVIDENCE, by and through its Treasurer, JAMES J. LOMBARDI; ROBERT F. MCMAHON, in his capacity as Superintendent, City of Providence Department of Parks & Recreation; WENDY NILSSON, in her capacity as Superintendent, City of Providence Department of Parks & Recreation; MAYOR JORGE O. ELORZA, in his capacity as Chairman, City of Providence Board of Contract and Supply; RHODE ISLAND ZOOLOGICAL SOCIETY and P.G.S., INC.

         Providence County Superior Court

          For Plaintiff: Carl S. Levin, Esq.; Gabriella G. Gaal, Esq.

          For Defendant: Harris K. Weiner, Esq.; Jillian H. Barker, Esq.

          DECISION

          SILVERSTEIN, JUSTICE/MAGISTRATE

         Following a bench trial, this matter is before the Court for decision. The parties herein are Plaintiff, Lagondola, Inc., referred to as "Lagondola" or "Plaintiff, " which has been the concessionaire (operator) of the Boathouse boating concession at Roger Williams Park since 2008. The concession contract term was subject to two possible five-year extensions. The contract presently runs through May 16, 2021. The concession contract inter alia provides that Lagondola is ". . . the exclusive provider of all boating including amphibious, gondola, paddle boat, canoe, kayak and bumper boat concessions in Roger Williams Park and Zoo." Lagondola, prior to its acquisition of the Boathouse concession, had established a relationship with the City of Providence (Defendant herein) through its Department of Parks & Recreation when Lagondola began operating a gondola concession at Waterplace Park in Downtown Providence, also within the purview of the City Department of Parks & Recreation.

         The City owns Roger Williams Park and the individual Defendants sued in their capacities set forth in the caption of this case are various officials of the City involved in the management, operation, direction and contracting with respect to operations of and at the park as well as at its various amenities such as the boating concession, Carousel Village and the Roger Williams Zoo. Collectively, City and individual Defendants are referred to as "City."

         In 2005, Rhode Island Zoological Society (referred to as "RIZS" or "Zoo") (also a Defendant herein) entered into a zoo lease and operating agreement with the City which by its terms inter alia provided for payments by the City to RIZS of substantial sums for salaries, benefits, utility costs, etc. The zoo lease and operating agreement also provided that its term would expire on the last day of June 2015. Further, it contained a provision for automatic five-year extensions unless either party gave the other written notice as to non-renewal not less than six months before the expiry of the initial or any renewal term.

         In 2012, Lagondola began operating the so-called Carousel Village concession which had been theretofore operated by Lagondola's predecessor, CLM Parks, Inc. The concession contract by its terms terminated on April 30, 2015; however, the term was subject to extension for an additional five-year term upon mutual agreement between the City and Lagondola including mutual agreement as to the payments to be made by Lagondola to the City during such extended period. The Carousel Village concession primarily contains or consists of a carousel, assorted vending and gaming machines, and space where parties or groups can be accommodated for birthday parties and like occasions. The Carousel Village also includes a food concession called the Depot.

         The instant litigation stems from alleged bad faith solicitation by the City of new bids for the operation of Carousel Village and the award of the concession by the City to the RIZS; the circumstances underlying the solicitation of bids and the propriety of the City's seeking such bids; the actions of RIZS in allegedly interfering with Plaintiff's economic opportunities and the propriety and meaning of a certain amendment purportedly granting Lagondola an exclusive right to operate a train ride and amusement rides in the park and the zoo so long as the Carousel concession contract and/or any other contract Lagondola then had with the City continued in existence.

         Plaintiff seeks relief under six separate counts as set forth in its Third Amended Complaint as follows: Count I - Declaratory Judgment as to Selection of the Zoological Society as the Successful Bidder; Count II - A Writ of Mandamus; Count III - Declaratory Judgment With Respect to Train Rides in Roger Williams Park; Count IV - Declaratory Judgment With Respect to Lagondola's Boathouse Concession; Count V - Breach of Contract/Breach of the Duty of Good Faith and Fair Dealing; and Count VI - Intentional Interference with Prospective Contractual Relations.

         Pursuant to the provisions of Rule 52 of the Rules of Civil Procedure, the Court hereinafter will set forth a) findings of fact with respect to the matters tried to it; b) findings with respect to the law applicable to the facts; and, c) its conclusions in connection therewith. The Court only will articulate those facts which are necessary to its final conclusion

         General Facts

         For the purposes of this Decision, the Court finds by a preponderance of the evidence the following facts:

         1. Roger Williams Park is located in the City of Providence.

         2. The Roger Williams Park and Zoo includes several lakes, walkways, roadways, historic buildings, ball fields, a boathouse, and a Carousel Village.

         3. A road separates the Carousel Village from the Boathouse grounds and the two facilities are visible to each other.

         4. The Boathouse consists of two stories of offices and rooms, the " Warming Room, " an open space on the first floor historically used for public gatherings, back patio, east and west wings where boats are stored and rented, a dock, and ramps all located along Pleasure Lake. The Providence Parks Department's offices are in the Boathouse.

         5. Trial witnesses included:

a. For the Plaintiff: Robert McMahon, a 29-year City employee scheduled for retirement, who was the Superintendent of Parks; Alan Sepe, another long-term employee who was Mr. McMahon's supervisor as Director of Operations, La Gondola President and owner Cynthia Days, her husband and employee Allen Days, and Executive Director of the Zoo, Dr. Jeremy Goodman.
b. For the Municipal Defendants: Current Superintendent of Parks Wendy Nilsson.
c. For RIZS: Wendy Nilsson and Dr. Goodman.

         6. Mr. McMahon urged La Gondola to assume the Boating Concession in 2008 and recommended it to the Board of Park Commissioners.

         7. Because La Gondola purchased an amphibious boat, per the Boating Concession contract, the term is for ten years, with two five-year options having been extended through action of the Board of Contract and Review through at least 2021.

         8. Pursuant to the Boating Concession contract, La Gondola is leased "the concession facility" which is described in the RFP as follows:

"Behind the Dalrymple Boathouse has an existing concrete dock area with approx. 1, 370 sq. ft. of dock space located on Pleasure lake. The west wing is used for storage of the existing paddleboats, canoes, life vests, and paddles during the winter months. The east wing of the Dalrymple Boathouse is used as the ticket purchasing area, office space and additional paddleboat slip storage. There is also a small concession stand area and access to public restrooms." See Ex. 15 at 584.

         9. La Gondola rents paddleboats, swan boats, canoes and kayaks from the boathouse and from another dock on Willow Lake located at the opposite side of its premises across from the Carousel Village.

         10. La Gondola also sells snacks and drinks from the Boathouse and from a mobile cart.

         11. Mr. McMahon recommended La Gondola to the Board of Park Commissioners to assume the Carousel Village concession upon the retirement of the previous concessionaire.

         12. At that time, the Board of Park Commissioners also approved La Gondola's use of a trackless train along with the Carousel Village concession.

         13.Mr. McMahon, who had some discretion over such routes in the Park and Zoo, approved the train route that operates outside of the Carousel Village.

         14. La Gondola began operations at Carousel Village on November 5, 2012.

         15. Paragraph 15 of La Gondola's Carousel Village Agreement states "La Gondola, Inc. and the City may amend, modify, and supplement or waive any provisions of the Agreement in such a manner as may be agreed upon by the Parties in a written instrument executed by both parties." Ex. 19.

         16. La Gondola purchased a train engine and five (5) passenger cars in 2012 for delivery in April 2013 at a price of $58, 000.

         17. La Gondola began operating the train in April 2013 and it grossed more than $58, 000 in 2013.

         18. In 2014, the train grossed approximately $100, 000 and was on the same pace in 2015 until La Gondola vacated the premises on May 12, 2015. ...


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