County Superior Court
Plaintiff: Andrew Tugan, Esq.; David A. Wollin, Esq.
Defendant: Keith B. Kyle, Esq.; R. Kelly Sheridan, Esq.; Mark
W. Freel, Esq.; Frank A. Lombardi, Esq.
Carnegie at One Tower Drive, LLC (Plaintiff) has filed a
motion for summary judgment on its claims (1) that it is
entitled to use forty-three prepaid golf memberships
Plaintiff was assigned at the Carnegie Abbey Club (the Golf
Club) in connection with the sale of residential condominium
units at the Tower at Carnegie Abbey (the Tower), and (2)
that an October 9, 2009 Agreement (the 2009 Agreement), to
which Plaintiff claims it was not a party, does not restrict
the use of such memberships or otherwise require any
additional payments to the Golf Club from Plaintiff or the
Tower unit purchasers. Defendants and Counterclaim Plaintiffs
Carnegie Heights Condominium Association (the Heights),
Carnegie Harbor Residence Condominium Association (the
Harbor), and The Cottages at Carnegie Abbey Condominium
Associations (the Cottages) (collectively, the Associations)
have timely objected to Plaintiff's motion and have filed
a cross-motion for summary judgment which requests that the
2009 Agreement is an enforceable contract and that all
parties to the 2009 Agreement- including their respective
successors and assigns such as Plaintiff-are bound by it.
Jurisdiction is pursuant to Super. R. Civ. P. 56(c) and G.L.
1956 §§ 9-30-1, et seq.
Facts and Travel
is the closest game to the game we call life. You get bad
breaks from good shots; you get good breaks from bad
shots-but you have to play the ball where it lies." -
Robert Tyre (Bobby) Jones, Jr.
Carnegie Abbey complex is a residential condominium located
in Portsmouth, Rhode Island with several separate
sub-condominiums. The complex includes the Golf Club, which
is an eighteen-hole golf course comprised of members who pay
dues and other fees for access to the facilities. Deposition
of J. Brian O'Neill (O'Neill Dep.) 11:15-21. Peter
deSavary (deSavary) was the original owner and developer of
Carnegie Abbey and the Golf Club. Id. at 12:1-4. He
created the Carnegie Harbor Condominium (the Master
Condominium), which contains "Master Units" or
sub-condominiums. A sub-condominium declaration was recorded
which created the Carnegie Tower at Carnegie Abbey
Condominium, consisting of a seventy-nine unit residential
tower structure and appurtenant common elements. O'Neill
Dep. 142:9-143:1; Pl.'s Mot., Ex. 19. Three other
sub-condominium associations are the Heights, the Harbor, and
in 2003, deSavary sold various residential properties in the
Carnegie Abbey complex-including those associated with the
Heights, the Harbor, the Cottages, and the Golf Club-to J.
Brian O'Neill (O'Neill) through his various entities.
O'Neill Dep. 17:2-18, 141:14-18. The first relevant
transaction occurred pursuant to a September 5, 2003 Purchase
and Sale Agreement (the September 5, 2003 PSA) when deSavary,
through his company Carnegie Harbor Village, LP (LP), sold to
O'Neill's company, the O'Neill Properties Group
(OPG), the land where the Tower would eventually be built for
$17 million. O'Neill Dep. 142:2-145:2; Pl.'s Mot.,
Ex. 3 § 1.1; Carnegie Abbey Club Acquisition I, LP's
Responses to Pl.'s Am. First Set of Reqs. for Admis.
(O'Neill RFA) ¶ 13. The property consisted of
approximately 5.4 acres in the Carnegie Abbey complex and a
certain percentage of the common areas in the Master
Condominium. Pl.'s Mot., Ex. 3 § 1.1.
of the transaction, OPG purchased twenty-three Golf Club
memberships for $100, 000 each, or $2.3 million
total. O'Neill Dep. 142:2-145:2; Pl.'s
Mot., Ex. 3 §§ 10.1-10.2; O'Neill RFA ¶
14. Section 10.1 of the September 5, 2003 PSA provides that
all of the Golf Club memberships "have all of the
privileges of full memberships in the Golf Club and shall be
subject to the rules and regulations adopted from time to
time for the Golf Club." Pl.'s Mot., Ex. 3 §
10.1. In addition, all the memberships were "fully
assignable to the subsequent owner(s) from time to time"
of the Tower units to be developed. Id. Separately,
pursuant to a September 17, 2003 Purchase and Sale Agreement
(the September 17, 2003 PSA), OPG purchased the land known as
the Harbor, which consisted in part of approximately 9.5
acres, along with ten Golf Club memberships for $100, 000
each with the right to purchase six more at $100, 000 and
five more at ninety percent of the then-market value.
O'Neill Dep. 145:6-146:13; Pl.'s Mot., Ex. 4
§§ 1.1(a), 10.1-10.2; O'Neill RFA ¶ 15.
accordance with and "in consideration of the payments
made" pursuant to the September 5, 2003 PSA and
September 17, 2003 PSA, on February 12, 2004, Carnegie Abbey
Club, LLC-a deSavary affiliate owning the Golf Club-executed
a "Golf Membership Transfer Agreement" which
transferred and assigned "all right, title and interest
in and to" thirty-six Golf Club memberships "with
the privileges of full membership in the Club" to OC
Tower Associates, L.P., an O'Neill entity then owning the
Tower property, and three other O'Neill entities owning
other properties in the complex. O'Neill Dep. 149:1-24;
Pl.'s Mot., Ex. 14; O'Neill RFA ¶¶ 6-12,
16. The Golf Membership Transfer Agreement stated that
"[a]ll of the Memberships are hereby transferred
together with the right to transfer, pledge and assign such
Memberships to buyers of units in the Tower, Village and
Carnegie Harbor Residence Condominium, and to the
Transferees' lenders, successors and assigns."
Pl.'s Mot., Ex. 14. On the same date, in a document
entitled "Allocation of Golf Membership Interests,"
the four O'Neill entities allocated the thirty-six Golf
Club memberships among themselves. O'Neill Dep.
150:2-151:1; Pl.'s Mot., Ex. 15; O'Neill RFA ¶
18. Of the thirty-six Golf Club memberships, OC Tower
Associates was assigned twenty-six Golf Club memberships.
O'Neill Dep. 150:2-151:1; Pl.'s Mot., Ex. 15;
O'Neill RFA ¶ 19.
early 2005, Defendant Carnegie Abbey Club Acquisition I, LP
(Carnegie Club Acquisition)-an O'Neill entity-acquired
the Golf Club from deSavary. O'Neill Dep. 8:11-14;
140:23-141:5; Answer of Carnegie Club Acquisition, et al. to
Compl. (O'Neill Entities' Answer) ¶ 4. Then, on
April 14, 2005, OPG entered into an agreement with Peter
Koch, Chairman of the Carnegie Abbey Acquisition Committee,
which represented then-existing Golf Club members (the Koch
Agreement). O'Neill Dep. 17:2-20:8; Associations'
Mem. Supp. Cross-Motion Summ. J. and Opp'n to Pl.'s
Mot. Summ. J. (Associations' Mot.), Ex. B. In the Koch
Agreement, OPG agreed, in return for the resolution of
certain objections that existing members had to aspects of
the acquisition, that "[t]he deposit or fee to become a
member [of the Golf Club] shall be not less than $150,
000." O'Neill Dep. 17:2-20:8; Associations'
Mot., Ex. B. According to the Associations, the Golf Club
considers the Koch Agreement to remain in effect as of today.
Associations' Mot., Ex. C.
12, 2005, in addition to its twenty-six Golf Club
memberships, OC Tower Associates purchased from Carnegie Club
Acquisition, pursuant to a "Golf Membership Transfer
Agreement," all "right, title and interest in and
to" an additional twenty-seven Golf Club memberships
"with the privileges of full membership" in the
Golf Club at a price of $3, 225, 000.O'Neill Dep. at
151:2-152:7; Pl.'s Mot., Ex. 16; O'Neill RFA
¶¶ 21-27. Like the prior Golf Club Transfer
Agreement, this agreement provided: "All of the Golf
Memberships are hereby transferred together with the right to
transfer, pledge and assign such Golf Memberships to buyers
of units in the Tower and Village," and to the
purchasers' "lenders, successors and assigns."
Pl.'s Mot., Ex. 16. Thus, as of that date, OC Tower
Associates owned fifty-three Golf Club memberships in the
Golf Club. Pl.'s Mot., Ex. 27.
December 22, 2006, in two separate documents entitled
"Assignment and Assumption of Golf Membership
Interests," OC Tower Associates-an O'Neill
entity-transferred all of its "right, title and
interest" in the fifty-three prepaid Golf Club
memberships, including the "right to transfer, pledge
and assign such Golf Memberships to buyers of the Tower
units" to be developed, to Carnegie Tower Development
Company, Inc. (Carnegie Tower Development), another
O'Neill entity that acquired title to the Tower, together
with its "lenders, successors, and assigns."
O'Neill Dep. 152:8-154:5; Pl.'s Mot., Exs. 17-18;
O'Neill RFA ¶¶ 29-38.
from 2005 through 2009, O'Neill began developing the
Tower and other properties within the Carnegie Abbey complex.
Deposition of Edward T. Lopes (Lopes Dep.) 76:25-77:5. In
connection with the Tower development, Carnegie Tower
Development recorded the Declaration of Condominium for the
Tower on July 13, 2009 (the Tower Declaration). O'Neill
Dep. 59:5-11, 97:15-18; Pl.'s Mot., Ex. 19. The Tower
Declaration requires each initial unit owner to be a member
of the Golf Club. Pl.'s Mot., Ex. 19 § 8:18. As part
of the development, O'Neill's entities obtained
various loans to finance the project. O'Neill Dep.
in 2009, O'Neill contemplated expanding the Carnegie
Abbey complex, and was interested in constructing thirty-six
new townhouses and ensuring the number of allowable units at
the Tower was as high as eighty. Lopes Dep. 22:6-18,
26:11-27:5, 35:12-36:4. At the time, O'Neill controlled
the condominium associations for both the Tower and the
Cottages. Id. at 42:23-43:22, 77:21-78:11;
O'Neill Dep. 181:8-182:2; Deposition of Michael Collins
(Collins Dep.) 61:16-19; Deposition of Kathryn Luckett
(Luckett Dep.) 7:6-10, 50:12-14. In particular, O'Neill
needed to obtain zoning relief from the Town of Portsmouth,
Rhode Island in connection with the development of the
townhouses, and approval by the sub-condominium associations
for an amendment to the Master Condominium to ensure he could
construct a tower with at least eighty units. O'Neill
Dep. 41:7-43:6; Lopes Dep. 22:6-18, 26:11-27:5, 35:12-36:4.
Residential owners of the Associations became concerned about
O'Neill's intentions, raised a series of objections
and grievances, and planned to object to the zoning variances
that O'Neill needed to build the townhouses before the
Zoning Board of Review for the Town of Portsmouth, Rhode
Island. O'Neill Dep. 24:9-13; Lopes Dep. 22:6-18; Collins
Dep. 85:15-87:13; Barone Dep. 68:7-9. Among other things,
they expressed concern about any relaxation of rental rules
or policies, the influx of golf play by non-owners, and the
impact, if any, of additional development on the value of
their investments in their homes and in the Golf Club. Barone
Dep. 46:17-48:22; Lopes Dep. 29:25-30:25. After negotiations,
O'Neill, through various entities at the complex and as
the Golf Club owner-specifically, Defendants Carnegie Tower
Development, Carnegie Club Acquisition, Carnegie Village
Development Company, OC Residences, LP, Buttonwood
Acquisition, LP, and OPG (collectively, the
Applicants)-reached an agreement with the Associations and
the condominium association for the Tower (the Tower
Association), culminating in the 2009 Agreement.
Pl.'s Mot., Ex. 21.
exchange for the Harbor and the Heights' withdrawal of
objections to the townhouses and assent to amending the
Master Condominium, O'Neill and his entities agreed to a
number of restrictions or provisions governing development of
the townhouses, an entrance location for non-residents, and
limitations on rental periods for various townhouse and other
residential units. Pl.'s Mot., Ex. 21 at 1-3. The
O'Neill entities also promised that anyone renting a unit
in the complex that was not a Golf Club member would be
deemed a guest and would not have golf-playing privileges
except on very limited conditions. Id. ¶ 7.
Additionally, the 2009 Agreement stated that it was governed
by Rhode Island law and was "binding upon the parties,
their heirs, representatives, successors, affiliates, and
assigns." Id. ¶ 11.
five of the 2009 Agreement, which concerns membership in and
payments to the Golf Club, states the following:
"Applicant agrees that all initial owners and subsequent
owners of Townhouses must be Carnegie Abbey members which
will be changed from the current policy which only requires
initial owners to be members. All buyers of townhouses must
purchase an equity/refundable membership. All initial buyers
of properties owned by Applicant, (Tower Units, Suites,
Townhouses, Cottages or O'Neill Units in Residences),
must purchase equity/refundable memberships, ($150, 000
minimum Golf Membership; $75, 000 minimum Social Membership).
It is understood and agreed that sales agreement for all
Townhouse Units and other aforementioned O'Neill
properties must separately state the membership
price."Id. ¶ 5.
provision of the 2009 Agreement is also consistent with the
Tower Declaration which, as mentioned above, requires each
initial Tower unit owner to be a member of the Golf Club.
Pl.'s Mot., Ex. 19 § 8.18.
2012, O'Neill, through his entities, sought to refinance
the Tower. As part of refinancing, in March 2012, he
transferred the Tower's ownership from Carnegie Tower
Development to Carnegie Holdings, LLC (Carnegie Holdings),
another O'Neill entity. Pl.'s Mot., Ex. 32. As part
of the refinancing, on March 16, 2012, Carnegie Tower
Development transferred forty-seven of the fifty-three
prepaid Golf Club memberships to Carnegie Holdings.
O'Neill Dep. 155:14-156:5; Pl.'s Mot., Ex. 28;
O'Neill RFA ¶¶ 45-48. Specifically, in the
"Assignment and Assumption of Golf Membership
Interests," Carnegie Tower Development assigned and
conveyed all "right, title and interest in, to and under
the Golf Memberships, including the right to transfer, pledge
and assign such Golf Memberships to buyers of condominium
units in Carnegie Tower," and to Carnegie Holdings'
"lenders, successors, and assigns." O'Neill
Dep. 155:14-156:11; Pl.'s Mot., Ex. 28; O'Neill RFA
addition, the Golf Club, through a series of consents,
confirmed the validity and authorization to transfer the
forty-seven prepaid Golf Club memberships to Carnegie
Holdings. O'Neill Dep. 157:12-159:14; Pl.'s Exs.
29-31; O'Neill RFA ¶¶ 49-58. On March 16, 2012,
the Chairman of the Golf Club also executed a Chairman's
Certificate stating in part:
"F. Carnegie Holdings, LLC, a Delaware limited liability
company ('CH'), is the owner of forty seven (47) full
Golf Memberships (refundable) in the Club and of
seventy-three (73) condominium units in the Tower ('Tower
"G. The Club has granted CH the right to convert one (1)
full Golf Membership (refundable) in the Club into two (2)
Social Memberships in the Club (refundable)
('Conversion') and the Club recognizes CH's
Conversion right and will continue to allow CH to exercise
its Conversion right until all the initial purchasers of the
seventy-three (73) Tower Units owned by CH have applied for
membership in the Club." Pl.'s Mot., Ex. 29;
O'Neill RFA ¶¶ 56-58.
express purpose of the transfer of the prepaid Club
memberships was the "Club's desire to facilitate
each resident of the Tower ('Tower Resident')
becoming a member of the Club." Pl.'s Mot., Ex. 29
¶ D. The Chairman's Certificate was also consistent
with the Golf Club's March 5, 2012 letter to "To
Whom It May Concern," confirming that Carnegie Tower
Development had purchased a number of refundable Golf Club
memberships, and that these memberships "may be divided
into refundable social memberships and the ratio is 2 social
refundable memberships is equivalent to one golf refundable
membership." Pl.'s Mot., Ex. 26; O'Neill RFA
¶¶ 40-44. The letter further provided: "[a]
membership is assigned upon closing of real estate and at
that time the assigned member is responsible for all dues and
associated fees as outlined in the Membership Plan."
O'Neill Dep. 154:17-155:12; Pl.'s Mot., Ex. 26.
According to Plaintiff, the President/General Manager of the
Golf Club was authorized to send such a letter. O'Neill
Dep. 154:17-155:12; O'Neill RFA ¶¶ 40-44;
Collins Dep. 149:10-12; Luckett Dep. 40:11-16.
March 20, 2012, O'Neill, through Carnegie Tower
Development, Carnegie Holdings and a third company of his
(collectively, the O'Neill Borrowers), refinanced the
existing construction loans with a new lender, The Union
Labor Life Insurance Company (ULLICO), a life insurance
company that through its Separate Account J, acts as a lender
and investor in real estate financing and development.
O'Neill Dep. 156:12-15, 159:16-22; Pl.'s Mot., Ex.
34. The O'Neill Borrowers and ULLICO executed an Amended
and Restated Loan Agreement (Amended Loan Agreement), under
which ULLICO agreed to refinance the existing loans in excess
of $60, 000, 000, including additional loan proceeds not to
exceed $16, 000, 000, with O'Neill agreeing to personally
guarantee the loans. O'Neill Dep. 156:12-15, 159:16-22;
Pl.'s Mot., Exs. 24, 34.
to Section 5.4 of the Amended Loan Agreement, the O'Neill
Borrowers, as "additional security" for the payment
of the debt, transferred and assigned to ULLICO all of the
O'Neill Borrowers' right, title and interest, but not
its obligations, in, under and to the forty-seven prepaid
Golf Club memberships, including "the right to convert
each such golf membership into two (2) social memberships,
all of which are available for assignment as Mortgagor may
designate to purchasers of Units . . . ." O'Neill
Dep. 93:22-94:1, 159:15-160:23; Pl.'s Mot., Ex. 34
§§ 1.1(ll), 5.4; Deposition of Herbert Kolben
(Kolben Dep.) 37:16-39:17, 40:13-19, 41:9-12. At the time,
Plaintiff maintains that O'Neill represented to ULLICO
that the prepaid Golf Club memberships were valid and binding
on the Golf Club. Kolben Dep. 42:19-43:17, 45:16-22.
same day, March 20, 2012, O'Neill and the O'Neill
Borrowers' attorney provided an opinion letter to ULLICO
on behalf of Carnegie Tower Development, Carnegie Holdings
and Carnegie Club Acquisition (the Opinion Letter).
O'Neill Dep. 66:4-12, 83:19-84:13; 156:12-157:1;
Pl.'s Mot., Ex. 33. The Opinion Letter stated the
following, in part:
"1. CTDC [Carnegie Tower Development] has duly and
validly transferred forty-seven (47) full Golf Memberships
(refundable) in the Club to CH [Carnegie Holdings], free and
clear of liens and encumbrances other than the lien and
security interest of The Union Labor Life Insurance Company,
a Maryland corporation, on behalf of its Separate Account J
(also referred to as 'Ullico').
"2. CH [Carnegie Holdings] [has] the right to convert
each one (1) of the forty-seven (47) full Golf Memberships
(refundable) in the Club assigned and transferred to CH
[Carnegie Holdings] by CTDC [Carnegie Tower Development] into
two (2) non-golf (refundable) Social Memberships in the Club
. . . .
"6. The execution and delivery by CTDC [Carnegie Tower
Development], CACAILP [Carnegie Club Acquisition], and the
Club of the Club Membership Documents does not constitute a
breach or default under any other written agreements known to
us to which CTDC [Carnegie Tower Development], CACAILP
[Carnegie Club Acquisition], or the Club each are
bound." Pl.'s Mot., Ex. 33.
March 23, 2012, Edward T. Lopes, Senior Vice President of
Development at O'Neill Properties, on O'Neill's
behalf, wrote to Barone as President of the Heights and
Collins as the President of the Harbor, requesting that they
consider amending the 2009 Agreement-and particularly the
provisions on golf membership prices-to assist with the
marketability of the Tower units (the Lopes Letter). Lopes
Dep. 50:13-23; Associations' Mot., Ex. K. The Lopes
Letter also stated that the O'Neill Entities were
required to seek an amendment to the 2009 Agreement as part
of the refinancing with ULLICO, and that a discussion was
needed between the parties to lower the membership price
points highlighted in the 2009 Agreement to "make the
[T]ower more viable in the current market."
Associations' Mot., Ex. K; see also Lopes Dep.
50:13-53:10, 54:5-56:1, 60:5-14. According to the
Associations, the Heights and the Harbor subsequently engaged
in such discussions, independently and through counsel, and
offered at times in such discussions to entertain lower
prices for Golf Club memberships as required under the 2009
Agreement. Lopes Dep. 55:10-60:14; O'Neill Dep.
72:8-73:7; Collins Dep. 107:4-108:9. However, the parties
never amended the 2009 Agreement. Lopes Dep. 56:16-20.