Providence County Superior Court, PC 15-5306, Associate
Justice Michael A. Silverstein.
For
Defendant: Daniel P. McKiernan, Esq.
For
Plaintiff: Paul V. Sullivan, Esq. Glen R. Whitehead, Esq.
Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and
Indeglia, JJ.
OPINION
GILBERT V. INDEGLIA ASSOCIATE JUSTICE.
The
defendant, David Paolo (defendant or Paolo), appeals from a
Providence County Superior Court judgment granting summary
judgment in favor of the plaintiff, West Davisville Realty
Co., LLC (plaintiff or West Davisville), holding Paolo liable
on a personal guaranty of a termination of lease agreement
between West Davisville and Alpha Nutrition, Inc. d/b/a
Doggiefood.com (Alpha).[1] This case came before the Supreme Court
on March 8, 2018, 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 the
parties' arguments and reviewing their 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
In
August 2012, Alpha entered into a lease agreement with West
Davisville to rent commercial space in North Kingstown for a
five-year term-from September 1, 2012 to August 31, 2017. In
2015, after suffering some financial setbacks, Alpha was past
due on its rent payments to West Davisville. In response to
this problem, Paolo, after developing a plan with Alpha's
sole shareholder, said that he "communicated with West
Davisville to determine whether [it] was willing to terminate
its lease with Alpha prior to the full term of the written
lease." Paolo explained that he was not a shareholder or
officer of Alpha at that time, but he was under the
impression that he might eventually hold such a position, and
so he participated in the negotiations.[2]
In
exchange for ending the lease agreement early, on June 25,
2015, Alpha entered a Termination and Release Agreement (the
termination agreement) with West Davisville, and issued a
promissory note, personally guaranteed by Paolo, for the sum
of $62, 362.50. The termination agreement provided, in
pertinent part, that:
"WHEREAS, the Landlord has agreed to terminate the Lease
at Tenant's request in exchange for the consideration set
forth below and upon the other terms hereof.
2. Consideration. As consideration for
Landlord's agreement to terminate the Lease at
Tenant's request, Tenant shall pay Landlord the sum of
Sixty Two Thousand Three Hundred Sixty-Two and 50/100 ($62,
362.50) Dollars. Tenant agrees to make payments to Landlord
over an 18 month term with interest accruing at the fixed
rate of 5% per annum. The deferred payments shall be set
forth in a Promissory Note to be executed contemporaneously
with this Agreement and shall be secured by the unlimited
personal guaranty of the Tenant's principal shareholder
David Paolo. The guaranty shall be executed and delivered by
Mr. Paolo contemporaneously with this Agreement."
Additionally,
the promissory note stated that:
"FOR VALUE RECEIVED, the undersigned, David
Paolo, individually and Alpha Nutrition, Inc., a
Rhode Island corporation (jointly and severally, the
"Borrower"), does hereby promise to pay to the
order of West Davisville Realty Co., LLC, a
Rhode Island limited liability company * * * the principal
sum of Sixty Two Thousand Three Hundred Sixty-Two and 50/100
($62, 362.50) Dollars, together with accrued interest on any
and all principal amounts remaining unpaid hereunder from
time to time from the date hereof until payment in full
hereof."
Paolo
signed the promissory note twice-on behalf of Alpha and
individually.
He also
executed a personal guaranty that stated, in relevant part,
as follows:
"1. Guaranty. Guarantor hereby absolutely and
unconditionally guarantees to the Landlord: (i) the punctual
payment, at the Landlord's address, as and when due under
the Note (whether by acceleration or otherwise) of any and
all obligations owed to the Landlord which require payment;
and (ii) performance by Tenant, as and when required by the
Note or the ...