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JHRW, LLC v. Seaport Studios, Inc.

Supreme Court of Rhode Island

June 18, 2019

Seaport Studios, Inc. et al.

          Washington County (WC 16-303) Superior Court Bennett R. Gallo, Associate Justice

          For Plaintiff: Kelly M. Fracassa, Esq.

          For Defendants: Matthew L. Fabisch, Esq.

          Present: Suttell, C.J., Flaherty, Robinson, and Indeglia, JJ.


          Paul A. Suttell, Chief Justice.

         A long-simmering dispute over parking spaces in the Watch Hill section of Westerly is the genesis of this appeal. The defendants, Seaport Studios, Inc. (Seaport) and an officer of Seaport, Randall Saunders (Saunders) (collectively, defendants), appeal from a Superior Court order granting summary judgment in favor of the plaintiff, JHRW, LLC (JHRW or plaintiff), as to count I of its amended complaint. On appeal, the defendants argue that the hearing justice erred in not referring the dispute to arbitration and in finding that the defendants were precluded from asserting Seaport's right to park on JHRW's property. For the reasons set forth in this opinion, we affirm the order of the Superior Court.


         Facts and Travel



         In 1985, Russell Waldo (Waldo) and James Hennessey (Hennessey), the principals of JHRW, conveyed title to two small buildings in Westerly to Seaport. Contemporaneously, Waldo and Hennessey entered into an agreement with Seaport to lease the land under those buildings for ninety-nine years (the lease agreement). The lease agreement contained three provisions particularly relevant to this appeal. First, the lease agreement required the lessors (Waldo and Hennessey) to provide one parking space to Seaport at a location and at an annual rental price to be determined by the lessors. Second, the lease agreement provided that: "In the event said premises are submitted to the Rhode Island Condominium Act at any time in the future, Lessor[s] shall furnish a condominium unit deed for the demised premises to [Seaport]." Third, the lease agreement stated that: "[t]he demised premises are subject to building, building line, and zoning restrictions as are or may be imposed by governmental authorities * * *." Waldo and Hennessey also owned the land surrounding Seaport's leased property.

         In the mid-2000s, Waldo and Hennessey sought to develop the part of their land defined as "Parcel B," which included the land leased to Seaport. Initially, Waldo and Hennessey tried to include Seaport in their plans to remodel the buildings on their property and Seaport's buildings on the leased land. Seaport, however, declined to participate.

         In 2008, a development company holding title to the property declared Parcel B a master condominium named "The Napatree Point Master Condominium."[1] The Napatree Point Master Condominium was divided into three units: Unit A, which, at that time, included an existing building adjacent to the leased land; Unit B, which included the leased land and Seaport's two buildings; and Unit C, an open lot with no existing structures, located behind Units A and B. Significantly, one section of the "Amended and Restated Declaration of Condominium of The Napatree Point Master Condominium" (the Declaration) provided that:

"Any dispute under this Declaration shall be submitted to binding arbitration under the rules of the American Arbitration Association and the decision of the arbitrator shall be final and conclusive as to all matters, including imposition of cost and expenses against either party. The venue of such action shall be in Westerly, Rhode Island, or at a point closest to Westerly, Rhode Island and the decision shall not be subject to judicial review."

         Unit C was subsequently developed into a parking lot. An early site plan indicated an allocation of nine parking spaces in Unit C to the two existing buildings owned by Seaport on the leased land. However, this specific allocation of nine parking spaces for Seaport's buildings was not included in the plan eventually approved by the town. In 2014, Unit C was declared a parking condominium, with each parking space defined as a sub-condominium unit. According to Waldo, since 2014, at least twenty-three of the parking spaces in Unit C have sold for "up to $33, 000 per unit." As of the date of the amended complaint in the instant action, JHRW remained the title owner of thirteen parking units in Unit C. Seaport has not been conveyed any parking units in Unit C.


         The First Superior Court Case

         In 2009, Seaport filed a complaint in Superior Court (No. WC-2009-871) against JHRW, the development company, and Waldo and Hennessey, individually, [2] alleging, inter alia, that JHRW breached the lease agreement by: (1) failing to comply with Westerly zoning ordinances in refusing to transfer nine parking spaces on its property to Seaport; (2) "denying [Seaport] peaceful enjoyment of the leased premise[s]"; and (3) refusing to furnish a condominium deed after declaring Parcel B a condominium.[3] JHRW filed an answer and counterclaim to Seaport's complaint and also filed a third-party complaint against Randall Saunders, Jean Saunders, and one other third-party defendant.[4] JHRW alleged, in part, that Jean and Randall Saunders "refuse[d] to park their vehicles within the space designated by Waldo and Hennessey[, ]" as set forth in the lease agreement, and also refused to pay the annual parking fee for several years.[5]

         In 2014, a justice of the Superior Court heard arguments on a motion for summary judgment filed by JHRW as to all of Seaport's claims, and, in a written decision filed on May 28, 2014, the hearing justice granted JHRW's motion, in part. Specifically, the hearing justice determined that JHRW was entitled to summary judgment as to Seaport's claims relating to transfer of the condominium deed and compliance with Westerly zoning ordinances.[6] The hearing justice denied summary judgment for JHRW as to Seaport's claim that an implied easement granted it entitlement to nine parking spaces in Unit C.[7] An order reflecting the hearing justice's decision entered on June 3, 2014.

         Following the hearing justice's decision on JHRW's motion for summary judgment, the following claims remained active in the case: (1) Seaport's claim to nine parking spaces by an implied easement; (2) JHRW's counterclaim for damages due to Seaport's failure to pay parking fees; and (3) JHRW's counterclaim for injunctive relief barring Seaport and the Saunders from parking on JHRW property. Seaport amended and supplemented its complaint a second time in July 2014 to add the Town of Westerly (Westerly) as a defendant, alleging that Westerly had failed to comply with town zoning ordinances by approving a site plan for Unit C "without an official zoning review[.]" Seaport's amended and supplemental complaint also reiterated its allegations that, in breach of the lease, JHRW had refused to furnish a condominium deed and had not complied with Westerly zoning ordinances in failing to identify Seaport's nine commercial parking spaces. The claim against Westerly was dismissed shortly thereafter.

         In its pretrial memorandum filed on May 3, 2016, Seaport indicated that it "w[ould] not be pursuing" claims raised in its second amended complaint filed in 2014, and it further represented that "all claims raised by Seaport will be dismissed with prejudice." Two weeks later, on the day trial was set to begin, the parties filed a stipulation, agreeing to dismiss all outstanding claims. Specifically, the stipulation read, in pertinent part, that "[t]here are no remaining claims by plaintiffs, defendants and counterclaim defendants Randall & Jean Saunders and this case is closed." Final judgment pursuant to Rule 54(b) of the Superior Court Rules of Civil Procedure entered on May 27, 2016.[8]


         The Current Dispute

         Just weeks after entry of final judgment in the first action, Waldo and Hennessey noticed that an officer and an employee of Seaport each had parked in the Unit C parking lot. The plaintiff filed the instant action against Seaport on June 15, 2016, alleging trespass, slander of title, unjust enrichment, and contempt. In count I of its complaint, plaintiff sought injunctive relief for Seaport's alleged trespass that would bar Seaport and its "officers, agents, customers, and employees, from parking anywhere on land within the ...

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