CATHAY CATHAY, INC. and SURF & TURF GRILLE, INC.
VINDALU, LLC d/b/a GOURMET INDIA, and ROUSE PROVIDENCE, LLC Tenant Date of Lease Date Opened Date Vacated Exclusive Prohibition
Superior Court Providence County
Plaintiff: John J. DeSimone, Esq.
Defendant: Rachelle R. Green, Esq.; Stacey P. Nakasian, Esq.
this Court is the sticky question of which competing
food-court vendors had the right to sell certain oriental
foods-primarily various types of rice-at the Providence Place
Mall (Providence Place or the Mall). Two vendors, Cathay
Cathay, Inc. (Cathay Cathay) and Surf & Turf Grille, Inc.
(Surf & Turf) (collectively Plaintiffs), brought the
instant action against fellow food-court competitors Vindalu,
LLC d/b/a Gourmet India (Gourmet India) and Japan Café
of Providence Place (Japan Café), as well as their
landlord Rouse Providence, LLC (Rouse) (collectively
and Travel 
facts of this case have already been recounted ad
nauseam over the course of two prior trips to the Rhode
Island Supreme Court. Accordingly, for a more complete review
of the history of this prolonged dispute, this Court directs
those who are new to this matter to Cathay Cathay, Inc.
v. Vindalu, LLC, 962 A.2d 740 (R.I. 2009) (Cathay
Cathay I) and Cathay Cathay, Inc. v. Vindalu,
LLC, 136 A.3d 1113 (R.I. 2016) (Cathay Cathay
core facts of this litigation center around four leases
entered into by Providence Place Group, LP (PPG), the
original owner of the Mall, or Rouse, and the vendors of four
food-court restaurants. Terms of each lease relevant to this
case are summarized on Exhibit 1 of this Decision.
begin, we must travel back in time to December 29, 1995,
nearly four years before Providence Place opened its doors
for business. On that date, David Chu (Mr. Chu) signed a
lease agreement (Cathay Cathay Lease) with PPG. (Pls.'
Ex. 1; Stipulated Fact 2.) Pursuant to Section 1.03 of the
Cathay Cathay Lease, Mr. Chu agreed to operate under the
trade name Cathay Cathay for the purpose of conducting
business as a Chinese restaurant in the Mall. (Pls.' Ex.
1.) Among the terms of the Cathay Cathay Lease was Section
1.04(a), which provides for the exclusive right of Cathay
Cathay to serve a number of menu items, including
"[w]hite rice- boiled or steamed" served either
"alone or in combination with any other foods."
(Pls.' Ex. 1, Ex. F thereto.) The Cathay Cathay Lease provided that
if the Landlord violated this provision the Tenant could
elect to reduce its rent by forty percent as its exclusive
remedy. Id. at Section 1.04(b). Cathay Cathay began
operating in January 2000. Cathay Cathay II at 1115.
Cathay Cathay ceased operations and vacated the Mall when its
lease expired on August 31, 2009. (Stipulated Fact 4.)
1999, prior to Cathay Cathay beginning operations in the
Mall, PPG entered into a lease with Japan Café (Japan
Café Lease). Cathay Cathay II at 1115. The
Japan Café Lease provided that Japan Café would
sell Japanese food and contained the following language:
"Notwithstanding anything contained in this Lease to the
contrary * * *, in no event shall Tenant sell any of the
items listed on [E]xhibit I, whether by name or the same or
substantially similar in content or form and under any other
name." Id. The list of foods provided in
Exhibit I of the Japan Café Lease was nearly identical
to the list of foods that Cathay Cathay had contracted for
the exclusive rights to sell. Id. Japan Café
opened for business on November 24, 1999, prior to Cathay
Cathay. (Stipulated Fact 11.) Japan Café vacated its
restaurant on May 29, 2007. (Stipulated Fact 12.)
& Turf Lease
November 10, 2000, Mr. Chu, the owner of Cathay Cathay,
entered into a second lease agreement (Surf & Turf Lease)
with PPG. (Pls.' Ex. 2; Stipulated Fact 5.) That lease
provided for the operation of a second oriental restaurant,
Surf & Turf, in the Providence Place food-court.
Id. Specifically, the Surf & Turf Lease granted
Surf & Turf the exclusive right to sell "oriental
style foods," which were enumerated in an accompanying
list, Exhibit I, which paralleled the list of foods
identified in the Cathay Cathay lease. (Pls.' Ex. 2.) The
sole distinction between the list in the Cathay Cathay Lease
and the list in the Surf & Turf Lease is that Surf &
Turf was granted the exclusive right to sell
"rice-boiled or steamed," while Cathay Cathay's
exclusive right was over the less restrictive "[w]hite
rice-boiled or steamed." (Pls.' Exs. 1 and 2.) In
addition to the items specifically enumerated within Exhibit
I, Section 1.04(a) of the Surf & Turf Lease also gave
Surf & Turf exclusive domain over the following:
"any other foods that are distinctively part of Oriental
cuisine served in Oriental (i.e., Chinese, Japanese,
Malaysian, Thai, Korean, Filipino, Vietnamese, etc.)
restaurants and any foods or dishes substantially similar
thereto in taste, appearance, style and/or ingredients,
whether or not styled or denominated as an Oriental food
dish. However, notwithstanding the foregoing, the incidental
sale or use of rice as a side dish or ingredient shall not
constitute a violation of Tenant's exclusive, unless it
is part of a [sic] oriental style food." (Pls.' Ex.
Surf & Turf Lease also provided that if the Landlord
violated this provision, the Tenant could elect to reduce its
rent by forty percent as its exclusive remedy. Id.
at Section 1.04(b). Surf & Turf opened for business on
October 28, 2001. (Stipulated Fact 6.) Although the Surf
& Turf Lease was scheduled to expire on October 28, 2016,
Surf & Turf ceased operating and vacated the Mall on
January 30, 2011. (Stipulated Facts 7 and 8.)
fourth and final lease at issue in this case was entered into
between Gourmet India and Rouse on January 7, 2005 (Gourmet
India Lease), allowing Gourmet India to operate an Indian
food restaurant in the Mall food-court. Cathay Cathay
II at 1115. Section 1.1(F.) of the Gourmet India Lease
contained the following provision:
"Tenant is expressly prohibited from offering for sale
at the Premises white rice or fried rice. In addition, Tenant
is expressly prohibited from selling Oriental style foods,
including but not limited to those items listed on Exhibit
'I' attached to this Lease and incorporated herein by
reference and any other foods that are distinctly part of
Oriental cuisine served in Oriental (i.e., Chinese,
Japanese, Malaysian, Thai, Korean, [F]ilipino, Vietnamese,
etc.) restaurants and any foods or dishes substantially
similar thereto to [sic] in taste, appearance[, ] style
and/or ingredients, whether or not styled or denominated as
an Oriental food dish." Id. at 1115-16.
I of the Gourmet India Lease sets out a list of items that
Gourmet India was prohibited from selling. Id. at
1116. That list closely mirrored the food items which Cathay
Cathy and Surf & Turf had an exclusive right to sell.
Id. However, as a caveat, the Gourmet India Lease
also provided that: "[n]otwithstanding anything to the
contrary contained in Exhibit 'I'[, ] Landlord
warrants that Tenant's incidental sale or use of Basmati
Rice as a side dish or ingredient shall not be deemed a
violation of the prohibition of the sale of rice."
Id. Gourmet India began operating in the Mall
food-court on June 18, 2005. (Stipulated Fact 15.) Gourmet
India vacated its food-court restaurant on October 31, 2014.
(Stipulated Fact 16.)
as of Halloween 2014, all of the vendors at issue in this
case had ceased their operation in the Mall food-court.
specifics will be discussed in greater detail in the
analysis, an overview of the testimony presented at trial is
outset, the Court can state that the fact witnesses were all
credible. This saga is over twenty years old with the most
crucial time period being twelve to eighteen years ago. The
Court attributes any disparity in facts among the witnesses
to fading memories and not to a lack of candor or
testified at the hearing in this case that he has worked in
the Chinese restaurant industry for over forty years. In
total, Mr. Chu testified that he had owned four Chinese
restaurants in mall food-courts prior to opening his two
restaurants at Providence Place. Mr. Chu testified that in
1987 he negotiated leases for two restaurants in the
food-court of the Kingston Mall in Massachusetts. Mr. Chu
indicated that his restaurants at the Kingston Mall performed
adequately at first, but eventually a Cajun restaurant, owned
by people of Chinese descent, entered the Kingston Mall and
began serving the same menu items as Mr. Chu's
restaurants, specifically, white rice. At the time, John
Charters (Mr. Charters) was the General Manager of the
Kingston Mall. According to Mr. Chu's testimony, he was
unable to take action against the Cajun restaurant because
his lease said that he would be the only Chinese food
restaurant in the food-court and Cajun food is not
technically Chinese food.
Mr. Chu testified that Mr. Charters approached him about
entering Providence Place. Mr. Chu indicated that he saw
Providence Place as a big opportunity, as the Mall was three
levels, was home to a number of large stores, as well as a
movie theatre, a Dave & Buster's, and was centrally
located in the downtown area with easy access to Route 95.
However, Mr. Chu testified that he was concerned about his
experience in the Kingston Mall and therefore told PPG that
he wanted a better lease, with more exclusive protections.
Mr. Chu stated that he was told he had to pay a higher price
for this exclusive and indicated that he was willing to do
so. As a result, a list of thirteen exclusive menu items was
created, and Mr. Chu testified that he then agreed to pay
double or triple the rent he would have paid without the
exclusives. In fact, both parties have stipulated that Cathay
Cathay agreed to pay a premium in order to secure the
exclusives in the Cathay Cathay Lease. (Stipulated Fact 10.)
Mr. Chu testified that Mr. Charters told him that the Mall
was going to put another Chinese food restaurant into the
food-court unless he opened a second restaurant. As such, Mr.
Chu indicated that he felt he had no choice but to open Surf
& Turf. Mr. Charters contradicted Mr. Chu's testimony
and indicated that he never gave Mr. Chu any such ultimatum.
While the memories of the credible witnesses may differ on
this fact, it is of no import, as Mr. Chu ultimately entered
into the second lease. Mr. Chu also testified he invested
approximately $1, 400, 000 to build and develop Cathay Cathay
and Surf & Turf.
the trial, Plaintiffs offered the prior testimony of N.
Irving Lemack (Mr. Lemack), an expert in food
Lemack testified that he organoleptically evaluated the foods at
issue in this case using his senses, namely, by examining the
foods' color, odor, flavor and texture. (Pls.' Ex.
64(1) at 241.) Mr. Lemack testified that there are only two
forms of rice, brown and white. Id. at 260. Mr. Lemack testified
that he purchased rice at Japan Café, examined it
organoleptically and under magnification, and found that
"[i]t was categorically white rice, it had no
bran." Id. at 264.
Lemack testified that he also purchased "Saffron
Rice" at Gourmet India and organoleptically tested that
dish in addition to examining it under magnification.
Id. at 285. According to Mr. Lemack, the
"Saffron Rice" was simply a "white rice that
had been colored." Id. Mr. Lemack testified
that there is no such thing as yellow rice, but he had seen
white rice with an artificial color called yellow rice sold
at the supermarket. Id. at 269. Mr. Lemack further
testified that basmati rice is an aromatic variety of rice,
and that, as is true of all rice, it may be either white or
brown. Id. at 287-89. Mr. Lemack also noted that
Cathay Cathay does not use basmati rice in any of its menu
items. (Pls.' Ex. 64(2) at 325.) Additionally, Mr. Lemack
testified that despite the presence of yellow coloring, the
rice he purchased from Gourmet India tasted like white rice.
(Pls.' Ex. 64(1) at 290). Also, Mr. Lemack testified that
the rice he ordered from Gourmet India did not stand out as
basmati rice and that he took no notice of the rice's
aromatic flavor because he was not evaluating it for that
purpose. (Pls.' Ex. 64(2) at 299.) Mr. Lemack did note
that the rice he purchased from Gourmet India was
"bland" and that he tasted no particular seasoning
or saffron. Id. Defendants offered no expert
testimony of their own to contradict Mr. Lemack's
Feldman (Mr. Feldman), an expert economist, testified on
behalf of the Plaintiffs. Mr. Feldman testified regarding the
monetary damages sustained by Plaintiffs. Mr. Feldman also
offered testimony regarding the set-up costs incurred by
Cathay Cathay and Surf & Turf. The Court rejected Mr.
Feldman's testimony on lost profits because it was purely
speculative and based upon Mr. Chu's anticipated sales
when he signed the leases. Mr. Feldman never tested the
accuracy of those predictions, nor did he make an independent
estimate of sales. Furthermore, the Court did not accept his
calculations of damages from the forty percent rent reduction
because he did not make appropriate calculations in
accordance with the lease terms.
Cohen (Mr. Cohen), Mr. Chu's attorney, provided testimony
regarding his representation of Mr. Chu and his numerous
correspondence with the Mall representatives. Those letters
are discussed in greater detail below; however, Mr. Cohen
testified that the Mall representatives urged Plaintiffs to
continue to pay its heightened rent and not exercise the
forty percent rent reduction. Mr. Cohen testified that, in
return, the Mall attorney promised to join Cathay Cathay in
any action taken to enjoin Japan Café from violating
the exclusivity provision set out in the Cathay Cathay Lease.
Mr. Cohen also testified that he was informed that if Mr. Chu
elected to exercise the forty percent rent reduction he would
be in default, and the Cathay Cathay Lease could be
Charters and Mark Dunbar (Mr. Dunbar), the current General
Manager of the Mall, also provided testimony on behalf of the
Defendants regarding their interactions with Mr. Chu. In
essence, both testified that Mr. Chu would complain to them
regarding his perceived violations of his exclusivity
provision, and they would then forward those concerns to the
Mall's legal counsel. Mr. Charters also testified that he
spoke on several occasions with Japan Café about Mr.
Chu's complaints in an effort to insure that Japan
Café was not violating the exclusivity provisions of
Mr. Chu's leases.
October 14, 2005, Plaintiffs filed this action against Japan
Café, Gourmet India, and Rouse. Cathay Cathay
II at 1116. Plaintiffs sought injunctive relief to
enjoin Japan Café and Gourmet India from selling menu
items over which they claimed to have exclusive rights to
sell. Id. Additionally, Plaintiffs requested that
Rouse be required to enforce its leases with Plaintiffs
against Japan Café and Gourmet India. Id.
Plaintiffs requested a jury trial seeking compensatory
damages. Id. Subsequently, Plaintiffs filed an
Amended Complaint. Id. The Amended Complaint
included counts for tortious interference against Japan
Café and Gourmet India. Id. Additionally,
Plaintiffs' Amended Complaint alleged a third-party
contractual interest in the Gourmet India Lease and sought an
injunction to enforce the provisions of that agreement.
November 30, 2005, a hearing on the preliminary judgment was
held in the Superior Court. Id. Following the first
full day of testimony, the trial justice indicated that he
was inclined to consolidate the hearing with the trial on the
merits under Rule 65 of the Superior Court Rules of Civil
Cathay Cathay I at 743. On the following day, the
trial justice consolidated the matter for a trial on the
merits without any objection from either party. Id.
After the conclusion of Plaintiffs' presentation of
evidence, Gourmet India moved for judgment on partial
findings under Rule 52(c) of the Superior Court Rules of
Civil Procedure (Rule 52(c)). Id. at 744. Gourmet India argued
that the plain language of the Gourmet India Lease explicitly
permitted the sale of basmati rice and that Plaintiffs had
failed to show any wrongful conduct necessary to sustain its
tortious interference with contractual relations claim.
to the conclusion of the proceeding, the trial justice
granted Gourmet India's motion for judgment on partial
findings in accordance with Rule 52(c) and, on January 27,
2006, entered a final judgment pursuant to Rule 54(b) of the
Superior Court Rules of Civil Procedure. Id. The
trial court opined that Plaintiffs real interest was to
ensure that no other vendors of oriental style cuisine would
enter the food-court. Id. Additionally, the trial
court found that Indian cuisine could not reasonably be
considered oriental style cuisine. Id. Further, the
trial court concluded that the parties to the contracts
between Mr. Chu and the Mall did not intend for basmati rice
to be encompassed within those agreements. Id.
the Plaintiffs timely appealed, setting the stage for the
Supreme Court's ruling in Cathay Cathay I.
Id. It is worth noting that neither Japan
Café nor Rouse were parties to that appeal and that
the claims against those two parties remained in the Superior
Court. Cathay Cathay II, 136 A.3d at 1117. On
January 9, 2009, the Supreme Court rendered its decision in
Cathay Cathay I. The Supreme Court affirmed the
judgment on Plaintiffs' contractual claim for injunctive
relief and damages against Gourmet India, but on different
grounds from those relied upon by the trial justice.
Cathay Cathay I, 962 A.2d at 747-48. Specifically,
the Supreme Court found that Section 1.1(F.) of the Gourmet
India Lease constituted a guaranty by Rouse that Gourmet
India could sell either white or brown basmati rice.
Id. at 746-47. The Supreme Court noted that because
Plaintiffs' rights as third-party beneficiaries were
confined to enforcing the terms of the lease, it was clear
that they would not be entitled to an injunction preventing
Gourmet India from selling white basmati rice. Id.
at 747. As such, the Supreme Court found that judgment was
entered appropriately in favor of Gourmet India on
Plaintiffs' third-party beneficiary claim. Id.
Secondly, the Supreme Court vacated the ruling on
Plaintiffs' claim of tortious interference and remanded
the matter to the Superior Court to conduct a new trial on
that Count. Id. at 748. In ruling on the tortious
interference claim, the trial justice simply stated that
"there is nothing in the contract between Gourmet India
and the [M]all to suggest that they were trying ...