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Jeranian v. Dermenjian

United States District Court, D. Rhode Island

November 19, 2019

DAVID S. JERANIAN and FRANK NORTH, Plaintiffs,
v.
JOYCE A. DERMENJIAN, Defendant/Plaintiff in Counterclaim,
v.
DAVID S. JERANIAN, Individually and in his capacity as Executor of the Estate of Harry Jeranian, and FRANK NORTH, Individually, Defendants in Counterclaim.

          REPORT AND RECOMMENDATION

          PATRICIA A. SULLIVAN, UNITED STATES MAGISTRATE JUDGE.

         Having dealt with an array of preliminary motions[1] in this partition action, the Court next turns to the parties' dueling motions for summary judgment. First is the motion (ECF No. 32) of Plaintiffs David S. Jeranian and Frank North asking the Court to enter judgment pursuant to R.I. Gen. Laws § 34-15-16 ordering that the property in issue (commercial property located at 1221 Post Road, Warwick, Rhode Island (“the Real Estate”)) shall be partitioned by sale, following which a commissioner shall be appointed pursuant to R.I. Gen. Laws § 34-15-24 to sell the Real Estate either at public auction or by private contract under the direction of the Court.[2] Second is the cross-motion (ECF No. 34) for summary judgment of Defendant Joyce A. Dermenjian, filed while she was pro se.[3] Her motion appears to ask the Court to allow her to have a jury trial on her claims against her brother, David Jeranian, in his capacity as executor of the estate of their father, Harry Jeranian, arising from the filing of Jeranian v. Dermenjian, C.A. No. 17-340JJM-LDA (“Jeranian, 17-340”).[4] Dermenjian's motion for summary judgment seems to seek to relitigate the Court's denial of her motion to dismiss Jeranian, 17-340, with prejudice, as well as to argue that partition is not necessary because she has never opposed the sale of the Real Estate and that there are disputed issues in relation to whether the Real Estate can be sold to O'Reilly Automotive Stores, Inc. (“O'Reilly”), for terms and a price that are reasonable and appropriate.

         Both motions are referred to me pursuant to 28 U.S.C. § 636(b)(1)(B).

         I. BACKGROUND[5]

         It is undisputed that this is an action in equity for partition and sale of commercial real property with a building, located at 1221 Post Road, Warwick, Rhode Island. PSUF ¶ 1. No. party disputes that there are three owners, each with a possessory interest; as tenants-in-common, each holds a fee simple interest as follows: David Jeranian has an undivided one half (1/2) interest; Frank North has an undivided one-third (1/3) interest; and Joyce Dermenjian has an undivided one-sixth (1/6) interest. Id. ¶¶ 1-2 & ECF No. 32-7 (“Pls. Ex. F”). This distribution of ownership is confirmed in a Report on Title prepared for Joyce Dermenjian dated April 12, 2017, the authenticity and accuracy of which no party contests. PSUF ¶ 2.

         The parties do not dispute that the Real Estate was purchased in 1985 in three equal shares as tenants-in-common by David Jeranian, Frank North (who are the Plaintiffs in this partition action), and Harry Jeranian, [6] the father of David Jeranian and Dermenjian. Id. ¶ 3. Harry Jeranian, Frank North and David Jeranian ran an insurance business out of the Real Estate for twenty years until 2014 when they decided to begin to wind down the business and to sell the Real Estate. Id. ¶¶ 4, 6, 8. They hired Rodman Real Estate Inc. (“Rodman”), a commercial real estate broker, to market the Real Estate; all three owners signed an exclusive listing agreement with Rodman. Id. ¶ 7. Despite Rodman's ongoing efforts at actively marketing the Real Estate beginning in 2014, the Real Estate had not been sold when, on April 11, 2016, Harry Jeranian died. Id. ¶ 10.

         The parties do not dispute that, on March 18, 2016, a little over three weeks before her father died, acting as his agent pursuant to a power of attorney, Dermenjian quitclaimed Harry's one-third interest in the Real Estate to herself as trustee of the Harry Jeranian Irrevocable Real Estate Trust (“HJIRET”), which she created; for approximately five months, this deed was not recorded. Dermenjian Aff. ¶ 8; PSUF ¶ 2 & Pls. Ex. F. Ten months later, on January 19, 2017, Dermenjian, acting as the HJIRET trustee, quitclaimed what had been Harry Jeranian's portion of the Real Estate again, this time to herself and David Jeranian as tenants-in-common. Pls. Ex. F at 3-6. The record is devoid of any suggestion that Harry Jeranian informed his business associates (Frank North and David Jeranian) that he intended to alienate the Real Estate at the same time that it was being marketed by Rodman pursuant to an exclusive listing agreement that he had signed. Five days after she quitclaimed what had been her father's interest in the Real Estate to herself and her brother, on January 24, 2017, she sent her brother copies of the documents evidencing what she had done. DSUF ¶¶ 21-22.

         Meanwhile, it is undisputed that Rodman continued to market the Real Estate[7] and finally procured an offer in early 2017 from O'Reilly; and in June 2017, O'Reilly signed a Purchase Contract that accurately reflected the respective ownership interests of the three owners. PSUF ¶ 11 & Pls. Ex. E (“Purchase Contract”); DSDF ¶ 11. In the Purchase Contract, O'Reilly offered to pay cash in the amount of $795, 000. Purchase Contract § 2. The Purchase Contract was not signed by the three owners before it expired on June 28, 2017. PSUF ¶ 12. In reaction, Jeranian, acting as executor of his father's estate filed Jeranian, 17-340. At a hearing before the Court in that case, in direct response to the Court's question, Dermenjian's attorney represented that “his client was willing, along with the third party [North] and her brother, to sign the [Purchase Contract] for the sale.” Jeranian, 17-340, ECF No. 14 at 20. It is undisputed that no such document was ever signed. In her disputed and undisputed facts, Dermenjian describes various offers that she had made, but all of them involve payment to her of more than her one-sixth share, resolution of unrelated disputes with her brother or a waiver of her obligation to pay her share of the costs of sale. See DSDF ¶ 16; DSUF ¶¶ 26-29.

         Plaintiffs filed this partition action in Rhode Island Superior Court on October 17, 2018. After the action was filed, on November 6, 2018, Dermenjian acknowledged that “I have come to the necessary conclusion that proceeding together, as tenants in common, in a productive manner, will inevitably result in futility[;]” she also confirmed her willingness to sell her one-sixth interest, albeit for a guaranteed sum that is substantially more than one-sixth of the O'Reilly offer, and which included nothing regarding the apportionment of the costs of sale. PSUF ¶ 13 & Pls. Ex. H. Dermenjian removed the case to this Court on December 3, 2018.

         It is undisputed that, on December 14, 2018, at the request of Jeranian and North, Andolfo Appraisal Associates Inc. submitted an appraisal of the Real Estate opining that its “highest and best use” requires the “razing of the existing improvements.” PSUF ¶¶ 17-18 & Pls. Ex. O. With the building valued as a tear-down, the fair market value was assessed as $804, 000. PSUF ¶¶ 17-18 & Pls. Ex. O.[8] Meanwhile, the parties do not dispute that, in December 2018, Jeranian and North signed an extension to the Rodman exclusive listing agreement, but Dermenjian did not sign.[9] PSUF ¶ 14 & Pls. Ex. I. And it is undisputed that, after some back and forth, on December 31, 2018, O'Reilly sent an email stating: “[Rodman] can use our previous contract offer and let him know we are still interested.” PSUF ¶ 14 & Pls. Ex. I at 5-8. Counsel for Jeranian and North contacted Dermenjian on January 9, 2019, inquiring whether she would consent to sale of the Real Estate to O'Reilly for $795, 000, with costs of sale to be allocated by the Court. PSUF ¶ 14. As far as the record reveals, Dermenjian's only response is in her statement of disputed facts; she does not deny that she received this communication, but rather asserts that “Rodman had no right to market the Property . . . for sale without Dermenjian's signature on the real estate listing contract” and that the O'Reilly expression of continued interest is not a binding contract but is only an email. DSDF ¶¶ 14-15.

         During the hearing on the motions for summary judgment, Dermenjian advised the Court that she agrees that the Real Estate should be sold to O'Reilly for $795, 000. ECF No. 47 at 14, 16, 26-27, 36-40, 62. She represented that her only quibble with the terms of Purchase Contract related to the environmental clause (§ 5(c)), which she questioned because she said she does not know if it is the best that could be negotiated, although she also advised the Court that she had done nothing about this concern in that she has not consulted a real estate expert, as well as that she has no basis for questioning the clause except for her memory that, prior to 1985, a dental office had been operated on the Real Estate. ECF No. 47 at 22, 28-30, 36-38.[10] Otherwise, she emphasized that “my purpose would not be to have the O'Reilly go away.” Id. at 62.

         After the hearing on the motion for summary judgment, on November 4, 2019, Jeranian and North responded to the Court's Order directing them to make a supplemental filing regarding the precise contours of partial judgment ordering partition by sale based on what is not disputed, including their position on a commissioner, a proposal for an attorney to be appointed as commissioner pursuant to R.I. Gen. Laws § 34-15-24, and a statement of the assignments that the Court should give to the commissioner, tailored to limit the expense of a commissioner by restricting his tasks to what is strictly necessary to get the Real Estate sold. Jeranian and North complied, advancing a well-qualified attorney to be the commissioner and providing a specific proposal for an order that would authorize the commissioner to establish protocols to finalize the terms of sale, with O'Reilly if possible, and to report back to the Court for instructions. ECF No. 51. In her response, Dermenjian makes no objection to the attorney proposed to be appointed as commissioner. ECF No. 52. Instead, she emphasizes a fact that is not disputed - that the O'Reilly email expressing interest is not a binding purchase contract and that it remains to be seen whether it will ripen into one consistent with the interest of the three owners. Id. at 1-2. In a statement that echoes the representation of her prior counsel to this Court in 2017 (see ECF No. 53 at 8), she argues that the Court should not enter partial judgment because “the sellers can work out any issues or differences either directly amongst themselves, or through counsel.” ECF No. 52 at 2. She states that, despite her differences with Rodman in the past, she is prepared to agree that it can perform some of the tasks of a commissioner so that the appointment of a commissioner is unnecessary. Finally, she contends that the statutory scheme (R.I. Gen. Laws § 34-15-24) prohibits the Court from entertaining a motion to appoint a commissioner until after it has entered judgment ordering partition by sale. Inconsistent with her assertion that judgment of partition by sale is unnecessary, she acknowledges that the parties will not be able to agree on the apportionment of the costs of the sale. ECF No. 52 at 2.

         It is undisputed that the delay in the sale of the Real Estate has adversely affected the surrounding community in that the building has been deteriorating. It is also undisputed that the delay has adversely affected Plaintiff Frank North, who was one of the three original investors in the Real Estate and who worked on its premises for many years. The undisputed facts establish that North is now 83 years old and has been retired since 2016; since 2017, he has suffered from compromised health and has been living in Florida with his wife. ECF No. 32-3 ¶¶ 1, 5. North wants the Real Estate to be sold so that he can use the proceeds to support himself and his wife in their retirement. Id. ¶ 11.

         II. STANDARD OF REVIEW ...


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