1112 Charles, L.P.
v.
Fornel Entertainment, Inc., et al.
Providence
County Superior Court PC 11-1620 Associate Justice Patricia
A. Hurst
For
Plaintiff: Robert D. Wieck, Esq. Attorney(s) on Appeal
Richard L. Gemma, Esq.
For
Defendants: Carl Levin, Esq.
Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and
Indeglia, JJ.
OPINION
GILBERT V. INDEGLIA, Associate Justice
The
plaintiff, 1112 Charles, L.P. (1112 Charles or plaintiff),
appeals the grant of summary judgment in favor of Fornel
Entertainment, Inc. and Anthony Lancellotta (Fornel,
Lancellotta, or defendants). This case came before the
Supreme Court on March 30, 2017, pursuant to an order
directing the parties to appear and show cause why the issues
raised in this appeal should not be summarily decided. After
hearing counsels' arguments and reviewing the
parties' memoranda, we are satisfied that cause has not
been shown. Accordingly, we shall decide this appeal at this
time without further briefing or argument. For the reasons
set forth herein, we affirm the judgment of the Superior
Court.
I
Facts
and Travel
This
case concerns a lease dispute between 1112 Charles, a Rhode
Island limited partnership that owns property at 1112 Charles
Street, North Providence, Rhode Island, and Fornel, a Rhode
Island corporation doing business under the name
Lancellotta's Banquet Restaurant, located across the
street at 1113 Charles Street, North Providence. On December
30, 1999, Fornel, through its president Lancellotta, entered
into a lease agreement (original lease) with Joseph Simone,
the then-owner of the property and a bakery located at 1112
Charles Street. Simone, lessor, agreed to lease a portion of
his property to Fornel "for use solely by Lessee as a
parking lot." The original lease stated that its term
was to run from January 1, 2000, through "December 31,
2114." Under the original lease's terms, Fornel
agreed to keep the premises in good condition, pay the cost
of repaving and improving the parking lot, and pay $1.00 per
month for the term of the lease.[1]
In
September 2002, Simone entered into an agreement with Karam
Properties, LLC (Karam) to sell the property. Prior to the
sale, however, errors in the original lease were discovered
wherein the building on the property was included in the
lease agreement and the lease term erroneously stated that it
expired on December 31, 2114. On September 24, 2002, Simone,
Lancellotta, and Karam executed an amended lease to clarify
that the lease term expired on December 31, 2014, not 2114,
and to exclude the building located on the premises from the
original lease.
Karam
subsequently fell into receivership. In September 2005, the
receiver agreed to sell the property to Eltahan Properties,
LLC (Eltahan). Prior to closing, however, Sovereign Bank,
Eltahan's lender, expressed concern with the original
lease and, among other things, questioned whether it provided
Eltahan with the right to park any cars on the property. To
address these concerns, on September 29, 2005, Eltahan and
Fornel entered into a "Second Lease Extension and
Modification Agreement" (second lease extension), which
extended the lease for another ten years, through December
31, 2024. It also clarified that the lessor could use five
parking spots in front of the bakery between the hours of 7
a.m. to 7 p.m.[2] The second lease
extension added the following provision (release provision)
to the original lease: "Lessor and Lessee acknowledge
the validity of the Lease and Amended Lease * * * . Lessor
and Lessee have no defenses, setoffs, or counterclaims
against the other in connection with the Lease and Amended
Lease."
Further,
as a part of the financing agreement with Sovereign Bank,
Eltahan and Fornel entered into a "Non-Disturbance,
Attornment and Subordination Agreement and Tenant's
Estoppel" (attornment agreement). Pursuant to the
attornment agreement's subordination clause, Fornel
subordinated its right as lessee under the original lease
"to the right, title and interest of [the] Lender under
the Security Deed * * * ." The nondisturbance clause
safeguarded the lessee by providing that the lease would not
be terminated as long as Fornel had not defaulted on any
payments, continued to perform its obligations under the
lease, and "attorn[ed]" as set forth in the
attornment clause. Under the attornment clause, if the
lessor's interests under the lease were transferred,
Fornel, as lessee, was bound to the purchaser under the lease
for the balance of its term, "with the same force and
effect as if the Purchaser or Lender were the lessor under
the Lease, and Tenant, as lessee under the Lease * * *
."[3]
After
Eltahan defaulted, the property was again sold at auction on
October 6, 2010 to Bennie Sisto. According to defendants,
Sisto knew about the lease agreement prior to the auction
because the receiver and Lancellotta had announced it at the
auction. Additionally, Sisto signed the "Terms of
Sale" agreement, which stated that the property was
"sold subject to prior mortgages and other encumbrances
of record, if any, including that certain Lease dated
December 30, 1999 * * * ." After the purchase, Sisto
then assigned his property interest to 1112 Charles.
On
March 24, 2011, 1112 Charles filed a four-count complaint
against defendants, alleging fraud and misrepresentation
(count 1), a breach of the implied duty of good faith and
fair dealing (count 2), and seeking a declaratory judgment
(count 3), and the quieting of title in the plaintiff (count
4). With respect to the declaratory-judgment count, plaintiff
sought declarations: (1) as to the parties' rights,
duties, and obligations; and (2) that the original lease was
void ab initio.
On
October 22, 2012, plaintiff moved for partial summary
judgment on its declaratory-judgment count pursuant to Rule
56 of the Superior Court Rules of Civil Procedure. In support
of its motion, plaintiff argued that the original lease did
"not reflect the agreement of the parties to the
Original Lease on three material points, to wit:" (1)
the original lease term was intended to end on December 31,
2014, not December 31, 2114, as the original lease stated;
(2) the term "premises" as used within the original
lease was not intended to include the building on the
property, although the original lease ...