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Heneault v. Lantini

Supreme Court of Rhode Island

June 27, 2019

Daryl Heneault
Kenneth Lantini et al.

          Providence County Superior Court (PC 14-2370). William E. Carnes, Jr. judge.

          For Plaintiff: Kenneth Kando, Esq.

          For Defendants: Gregory J. Acciardo, Esq.

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



         The defendants, Kenneth Lantini and 1200 Hartford LLC, appeal from an order of the Superior Court denying their motion for a new trial after a jury found in favor of the plaintiff, Daryl Heneault. The defendants argue that the economic loss doctrine bars the plaintiff from recovering damages for the tort of conversion and that the trial justice erred in awarding attorneys' fees to the plaintiff. This case came before this Court for oral argument pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not summarily be decided. After hearing the arguments of counsel and examining the memoranda filed on behalf of the parties, we are of the opinion that cause has not been shown, and we proceed to decide the appeal at this time without further briefing or argument. For the reasons set forth in this opinion, we affirm in part and vacate in part the judgment of the Superior Court.

         I Facts and Travel

         This case was born of a lease agreement gone bad. The plaintiff entered into a lease with defendants to rent commercial property owned by defendants in the Town of Johnston. On or about October 31, 2013, plaintiff paid defendants the sum of $18, 600, which represented $9, 300 for a security deposit and $9, 300 for the first month's rent. A document, referred to by the parties as a "receipt agreement," and dated that same day, was signed by the parties; it contained the following language: "IF FOR ANY REASON, MR KENNETH LANTINI IS UNABLE TO PROVIDE OCCUPANCY, ON OR BEFORE, NOVEMBER 14, 2013, ALL DEPOSITS ARE FULLY REFUNDABLE." Thereafter, on November 5, 2013, the parties entered into the lease agreement.[1] The term of the lease was scheduled to begin on November 14, 2013. Before the lease period could begin, however, and for reasons further discussed infra, plaintiff was unable to occupy the commercial premises. As a result, plaintiff requested the return of the $18, 600 payment he made to defendants. Although a sum of $9, 300, representing the first month's rent, was eventually returned to plaintiff, defendants refused to return the $9, 300 security deposit. Consequently, plaintiff filed an action in the Superior Court against defendants, alleging that the refusal to return the security deposit constituted a conversion of plaintiff's property as well as a breach of contract.[2]

         In November 2017, one day before trial was to commence, the Superior Court heard motions in limine. However, defendants also filed a motion to dismiss and/or strike, scheduled to be heard that day, arguing that plaintiff's claim for conversion was barred by the economic loss doctrine.[3] In response, plaintiff contended that the motion was not timely filed; indeed, plaintiff's counsel stressed that he did not receive a copy of defendants' motion until the previous afternoon, while he was preparing for trial. The trial justice denied the motion, ruling that it was not timely.

         Over the following two days, a jury trial was conducted, and both plaintiff and Mr. Lantini testified. The plaintiff testified that he and his associates intended to grow medical marijuana in the building and that they were certified by the state to do so.[4] The plaintiff said that, prior to the November 14, 2013 start date on the lease, Mr. Lantini permitted plaintiff and his associates to move some equipment into the building. However, plaintiff testified, on November 2 or November 3, an official from the Town of Johnston posted a condemnation notice on the door of the building. According to plaintiff, he and his associates were then allowed to remove their equipment and belongings from the building.

         The plaintiff testified that, according to Mr. Lantini, a meeting was later held with the mayor of Johnston, and, although Mr. Lantini attended that meeting, plaintiff did not. According to plaintiff, Mr. Lantini told him that the mayor was adamant that the marijuana operation was illegal, that he did not want such an operation in the proximity of town hall, and that plaintiff and his associates should leave the building. The plaintiff further testified that Mr. Lantini told him to "just forget about it." The plaintiff recounted that he then asked Mr. Lantini for the return of the $18, 600 payment he had made, but Mr. Lantini informed him that plaintiff should contact the real estate broker involved with the lease agreement to retrieve the $9, 300 for the first month's rent. As for the $9, 300 security deposit, however, plaintiff testified that Mr. Lantini told him that he was keeping it "for his aggravation." The plaintiff testified that he never received notice from Mr. Lantini that there was any damage to the property, or any assertion that he was in default under the lease.

         Mr. Lantini testified that, before October 31, 2013, he agreed to lease the commercial premises to plaintiff for the purpose of growing medical marijuana. Mr. Lantini further testified that he gave the first month's rent of $9, 300 to a real estate broker involved in the transaction as a means of paying the broker's commission, but that he retained the $9, 300 security deposit. Mr. Lantini also agreed that it was the town's actions that prevented plaintiff from occupying the premises, and that, according to Mr. Lantini, the mayor was dead set against a marijuana operation in town. Mr. Lantini conceded that plaintiff had indeed made a demand for the return of his $18, 600 payment. According to Mr. Lantini, he informed plaintiff that he should contact the broker for the $9, 300 payment for the first month's rent, and he added that the broker did in fact return the $9, 300 payment for the first month's rent to plaintiff. However, Mr. Lantini testified that he refused to return the $9, 300 security deposit because plaintiff walked away from the lease "without even trying to do anything."

         Mr. Lantini also testified that he did not interfere with plaintiff's right to possess the property in any way, that it was plaintiff's responsibility, and not his, to obtain the necessary permits for his operation, and that he believed that plaintiff was in default of the lease agreement because he had not paid any rent. However, Mr. Lantini was impeached with his deposition testimony, in which he said that he and the real estate broker gave back the $9, 300 payment to plaintiff for the first month's rent. Mr. Lantini also testified at trial that he never executed a termination of the lease agreement and he acknowledged that there was no damage to the building.

         After the parties rested, [5] the trial justice instructed the jury. Although the trial justice's instructions included the elements that were necessary to prove plaintiff's claim for conversion and defendants' counterclaim for breach of contract, they did not contain the elements with regard to ...

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