Harrington v. Cardono

CourtSuperior Court of Rhode Island
DecidedJanuary 8, 2010
DocketC.A. No. PC-05-0891
StatusPublished

This text of Harrington v. Cardono (Harrington v. Cardono) is published on Counsel Stack Legal Research, covering Superior Court of Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harrington v. Cardono, (R.I. Ct. App. 2010).

Opinion

DECISION
This matter was tried to the Court, without a jury, and relates to a real estate purchase and sale agreement (the "P S") for property located in Cumberland, Rhode Island, and identified as Plat 52l, Lot 262. The Plaintiff, Timothy C. Harrington ("Buyer"), signed a written P S to buy the property from Defendant, James Cardono ("Seller"). The Buyer now seeks an order of specific performance to require the seller to perform under that P S agreement (Count I of the Complaint). In the alternative, Buyer seeks damages for breach of contract and unjust enrichment. (Counts II and III of the Complaint.) In his counterclaim, Seller asserts that Buyer breached the contract and seeks to retain the deposit that Buyer made under the agreement. Jurisdiction is pursuant to G.L. 1956 § 8-2-13.

I
Facts and Travel
The material facts and documents as to this dispute have been agreed to, and set forth in, an Agreed Statement of Facts (introduced as a joint exhibit at trial). It is attached hereto and incorporated herein by reference. Accordingly, the Court need not make specific findings of fact *Page 2 but will rely on the parties' stipulation. Insofar as the Court relies on findings of fact not set forth in the stipulation, it will state them in this Decision.

The property was undeveloped. In order for it to be "buildable," an individual sewage disposal system permit ("ISDS") had to be obtained from the Rhode Island Department of Environmental Management ("DEM"). The P S was entered into by the parties on March 17, 2001. The significant issue giving rise to this dispute is the Buyer's contingency contained in Section 22 of the P S. Said contingency stated that the sale was "subject to a successful percolation test, [and] subject to ISDS approval. . . ." No specific time limit was agreed upon concerning the time within which Buyer had to obtain the ISDS permit or exercise his contingency. Successful application for an ISDS permit would require a successful percolation test (perc test), and a time frame of sixty days from the signing was set forth as the time for Buyer to obtain the perc test. The Buyer, however, if he chose to "waive the contingency[,]" could accept the property "as is." The parties chose June 30, 2001, as the closing date. The P S did not contain a "time is of the essence clause."

The property is situated above a significant amount of ledge, a fact of which the seller was aware because a prior sale was not completed due to the inability of that buyer to obtain ISDS approval. Although several perc tests came back indicating a problem with the ledge under the property, Buyer never exercised his option to cancel the agreement due to negative results pursuant to the contingency clause. However, Buyer was unable to obtain a successful perc test within sixty days, and he did not obtain ISDS approval from DEM until September 28, 2004, at which time DEM sent notice of approval to Buyer. That approval followed several demands by DEM, and several amended applications and requests for variances, which were filed by Buyer based on revised design and engineering. *Page 3

The Buyer did not formally notify Seller of these demands, but Seller followed the applicant's ISDS journey through contacts with the broker, Mr. Thomas J. Bousquet (Mr. Bousquet or "broker"). Furthermore, the status of the ISDS process was available online through the DEM website. The Buyer did not learn of the approval until on or about October 4, 2004, at which time Seller's lawyer, Mr. George M. Prescott (Mr. Prescott), advised Seller that approval from DEM had been received, and that Buyer wanted to schedule a closing on the property in accordance with a letter from Mr. Prescott to the broker dated July 24, 2001. It is clear from this chronology that the closing on the property did not occur on or before June 30, 2001, the date stipulated in the P S. Apparently, due to the fact that the closing did not occur at the scheduled date, Seller was obligated to pay municipal taxes from that date forward amounting to $4,385.42.

After Seller learned of the DEM approval and Buyer's desire to schedule a closing after the September 28, 2004 ISDS approval, Seller did not agree to schedule the closing at that time because he deemed Buyer to be in default of the P S, and deemed the P S of no further force and effect. However, Seller never notified Buyer or Mr. Bousquet that he considered the P S to be terminated, nor did he instruct Mr. Bousquet to return the Buyer's $1,000 deposit. In fact, Buyer's attorney, Mr. K. Joseph Shekarski, wrote to Seller about scheduling a closing by letter dated October 14, 2004. Despite this demand for closing, Seller refused to close

Meanwhile, Seller did not stand by idly awaiting notice of the ISDS approval or the exercise by Buyer of termination due to failure of the contingency. The property is contiguous to the site of the CVS corporate headquarters in Cumberland, and a (non-residential) sale to CVS would not require ISDS approval. In August 2004, Seller was contacted by a representative of CVS expressing interest in the property. In response to that inquiry, Seller sent a letter to the CVS representative on August 23, 2004, offering to sell the property to CVS for $150,000 *Page 4 ($110,000 more than the amount stipulated in the P S with Plaintiff), even though the original P S had not been terminated and Buyer's deposit had not been returned. CVS did not respond to the proposal, and the inquiry never resulted in a P S with CVS.

On January 4, 2005, Buyer filed the instant action in Kent County Superior Court seeking to enforce the P S through specific performance. In the alternative, he seeks damages for breach of contract and unjust enrichment. In response, Seller filed a counterclaim for breach of contract and he seeks to retain the $1000 deposit as liquidated damages. On February 28, 2005, an order was entered granting Buyer's "Motion to Change Venue and Transfer the Case to Providence County Superior Court."

II
Analysis
The question for this Court to determine is whether Buyer is entitled to relief by way of specific performance, and whether the P S remains in full force and effect — despite the passage of more than three years beyond the stipulated closing date. The answer to that question depends in part on whether the delay in Buyer's obtaining ISDS approval excused Seller's performance, or whether, after ISDS approval was obtained in September 2004, Buyer could require the Seller to complete the transaction by scheduling a closing. The Seller's position is that the P S had expired by its terms and that he, as Seller, is no longer obligated to sell the property to Buyer. While it is clear the stipulated closing date of June 30, 2001, has not been met, the question is whether the demand for closing, by letter dated October 14, 2004 — more than three years beyond the agreed closing date — is reasonable under the circumstances. See Lajaya v. Fafiyebi,860 A.2d 680, 688 (R.I. 2004) (stating "that in the absence of an enforceable `time is of the essence' *Page 5 provision, a party has a reasonable time to perform") (citingSafeway System, Inc., v. Manuel Bros., Inc.,

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Bluebook (online)
Harrington v. Cardono, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harrington-v-cardono-risuperct-2010.