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A. Ricci & Sons, Inc. v. Farina

Superior Court of Rhode Island

February 19, 2018

A. RICCI & SONS, INC.
v.
ANTHONY FARINA

          For Plaintiff: Joseph J. Reale, Jr., Esq.

          For Defendant: Michael J. Lepizzera, Jr., Esq.; Kevin B. Salvaggio, Esq.; Timothy P. Frawley, Esq.

          DECISION

          LANPHEAR, J.

         This case came on for trial before the Court, jury waived, on February 2, 2018. Counsel were given additional time to supply legal memoranda. Each side has now submitted post-trial memoranda and the case is before the Court for decision.

         FINDINGS OF FACTS

         In 2008, Dr. Anthony Farina was in the process of constructing a building on Mineral Spring Avenue in North Providence when disagreements with the contractor resulted in the contractor ceasing performance. Dr. Farina was an experienced professional and had some experience with construction contracts in the past. Dr. Farina contacted Joseph Ricci, a principal of the Plaintiff-corporation, to coordinate the completion. Mr. Ricci referred the matter to Mark Mercure, a vice president, who handled ongoing negotiations with the client.

         While there was some discussion of having Plaintiff-corporation (Ricci) serve as a general contractor, Dr. Farina had already enlisted certain subcontractors, and some work had already been performed. After negotiations between the parties and to minimize the charge to the client, Mr. Mercure suggested that Ricci serve only as the construction manager. He drafted a contract (Ex. 1) which each of the parties executed. Although Dr. Farina signed the contract, the contracted party is listed as Branting, LLC, [1] which the Court infers Dr. Farina controlled for his construction. The agreement is an American Institute of Architects form contract for Construction Management dated July 15, 2008 with various exhibits attached. The contract was reviewed completely by both parties and signed on July 15, 2008. Exhibits A, B and C of the contract were attached to it and initialed.

         The contract is entitled "Standard Form of Agreement Between Owner and Construction Manager where the Construction Manager is NOT a Constructor." It clearly delineates that the Construction Manager is to advise on the method of selecting subcontractors (§ 2.2.10), prepare a construction schedule (§ 2.2.11), expedite and coordinate delivery of materials (§ 2.2.12), work with the architect (§ 2.2.16), coordinate bids for subcontractors, (§ 2.2.17), keep the owner updated (§ 2.3.5), manage the subcontractors (§ 2.3.7), do financial forecasts (§ 2.3.9) and monitor payments to subcontractors (§ 2.3.11.1). Unlike a general contractor, the construction manager does not have control over the construction means or the work to be performed (§ 2.3.15), nor does he enlist the individual subcontracts. Unlike a general contractor, Ricci did not hire the subcontractors or take a percentage of the project as a markup. The subcontracts are with the owner. As Dr. Farina already had subcontractors, work in progress and design professionals, this agreement worked well for each of them.

         In Exhibit A, the total payment due Ricci is listed, as are the specific dates of payment. Only the final payment is dependent on a proviso that it will be paid on "November 15, 2008 or upon such extended date as it completes its services." (Ex. A at 3.) Exhibit B to the contract is an estimated budget, clearly indicating the general conditions and fixed fees. Exhibit C to the contract is a "Description of Project."

         In December 2008, Ricci had completed its work under the contract and Dr. Farina took occupancy of most of the building, to the extent it was built out. After adding the total amount of the contract, plus the change orders due to Ricci, less the payments made, Branting, LLC continued to owe $252, 707 in December 2008. Ricci continued to press for prompt payment, to no avail. Dr. Farina did not question the quality of Ricci's work; he only indicated he did not have the funds available to pay. By late spring, the parties were discussing a promissory note. The first draft of the promissory note was rejected by Dr. Farina, and the note was rewritten by Ricci. The second version was produced, and Dr. Farina modified it in the presence of Mr. Mecure and Joseph Ricci and then signed it freely and voluntarily. Dr. Farina removed an interest rate and extended a due date. The revised note was signed and given to Ricci on June 10, 2009 and is trial Exhibit 3.

         Although Dr. Farina was continuously apprised of the status of the construction during the construction phase, once the work of Ricci was done, efforts were made to obtain timely and additional payments from Dr. Farina, to no avail. Pursuant to the note, payments of $252, 707.08 were due on January 1, 2010. By January 1, 2010, payments of only $187, 000 had been made. The following payments were made by Dr. Farina thereafter:

March 2, 2010 - $10, 000.00
May 17, 2010 - $20, 000.00
July 21, 2010 - $15, ...

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