In Re Idc Clambakes, Inc.

431 B.R. 51, 2010 Bankr. LEXIS 1712, 2010 WL 2308247
CourtUnited States Bankruptcy Court, D. Rhode Island
DecidedJune 9, 2010
DocketBK 05-12267
StatusPublished
Cited by4 cases

This text of 431 B.R. 51 (In Re Idc Clambakes, Inc.) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Idc Clambakes, Inc., 431 B.R. 51, 2010 Bankr. LEXIS 1712, 2010 WL 2308247 (R.I. 2010).

Opinion

DECISION AND ORDER ON REMAND

ARTHUR N. VOTOLATO, Bankruptcy Judge.

This matter is before the Court on remand from the United States District Court, with instructions to: (1) “ensure that any disposition of the issue of whether [IDC Clambakes, Inc.] trespassed on Association property comport with due process requirements”; (2) “carefully adhere to the elements of trespass under Rhode Island law”; and if a trespass is found (3) “reconsider whether the Association’s claim for trespass damages is precluded by either Am. Condo. Ass’n, Inc. v. IDC, Inc., 844 A.2d 117 (R.I.2004) (‘America I’) or Am. Condo. Ass’n, Inc. v. IDC, Inc., 870 A.2d 434 (R.I.2005) (‘America II’).” Goat Island S. Condo. Ass’n, Inc. v. IDC Clambakes, Inc., 382 B.R. 178, 179 (D.R.I.2008).

Following the remand, this Court held a nine day trial on the merits of the proofs of claim litigation, which included the testimony of 7 witnesses, 765 transcript pages, and 137 exhibits. Both parties submitted detailed post-trial memoranda, as well as reply and sur-reply briefs. This Court is satisfied that all due process requirements have been met.

PROCEDURAL BACKGROUND

This particular litigation arises out of the Debtor Clambakes’ objection to proofs of claim filed by America Condominium Association Inc., Capella South Condominium Association, Inc., Harbor Houses Condominium Association, Inc., and Goat Island South Condominium Association, Inc. (collectively, the “Associations”) [Claim Nos. 16, 17, 18 and 19], in the aggregate amount of $3,507,290, for damages arising out of Clambakes’ alleged seven year trespass on a specific parcel of condominium property, the Reserved Area. Thomas R. Roos (“Roos”), Clambakes’ sole shareholder, joined in the Debtor’s objection.

This dispute was first presented in this Court on Clambake’s Motion for Summary Judgment on September 27, 2006. While the matter was under advisement, both sides filed numerous additional memoran-da, and on January 24, 2007, I issued my initial ruling(s) disallowing the Associations’ claims for damages for trespass. That decision was appealed to the U.S. District Court, and on February 8, 2008, Judge William E. Smith issued his rulings and remand order as described above.

FACTUAL BACKGROUND

The trespass claim discussed herein involves a number of disputes between the Associations, and Thomas Roos and several of his wholly owned enterprises, IDC, Inc., 1 and IDC Properties, Inc. (“Properties”) dating back to the early 1990’s, which have been litigated in various actions and appeals in the Rhode Island state courts. All of that litigation was finally concluded in April 2005. See Am. Condo. Ass’n, Inc. v. IDC, Inc., 844 A.2d 117 (R.I.2004) (“America I”) and Am. Condo. Ass’n, Inc. v. IDC, Inc., 870 A.2d 434 (R.I.2005) (“America II”). Clambakes was not a party to any of the Roos/Associations litigation.

*55 This decision will not attempt to rehash the troubled history between the Associations, IDC, Inc., Properties, and Roos, which is set forth in detail in America I and II, 844 A.2d 117 and 870 A.2d 484, but will concentrate on the facts central to the Associations’ trespass claim against Clambakes.

IDC, Inc. and Properties are the successors in interest to Globe Manufacturing Co., the declarant of a Newport, Rhode Island, condominium complex situated on Goat Island, consisting of approximately twenty-three acres. The master declaration reserved to the declarant the right to convert, inter alia, the Reserved Area (also referred to as the North Unit) to a master unit and to construct improvements thereon, until December 31, 1994. For reasons not known to the Court, nor relevant at this time, Properties failed to timely exercise said development rights, but instead attempted to extend the development rights deadline through a series of amendments to the master declaration.

Between 1996 and 1998, meetings, discussions, and negotiations took place between IDC, Inc., Properties, Roos, and the Associations and their attorneys concerning, inter alia, the validity of the amendments, fee assessments and voting schemes. On January 5, 1998, the Associations, Properties, IDC, Inc., and Roos, entered into a Tolling Agreement which preserved the Associations’ claims relative to the amendments, development rights, the Rhode Island Condominium Act, construction, repair and improvements, and the allocation of common element expenses. This agreement was extended several times and remained in effect through May 31, 1999. Clambakes was not a party to the original Tolling Agreement, nor to any of its extensions.

Clambakes did not come into existence until April 18,1996, as a new Rhode Island corporation, IDC Clambakes, Inc., for the purpose of “engaging] in the business of conducting social events, receptions, weddings, clambakes, cookouts, parties.” 2 It is agreed that Clambakes is a separate and distinct corporation with separate assets and liabilities, and that Roos is the sole shareholder and President of both Clambakes and Properties.

In late 1997 and throughout 1998, while the Tolling Agreement was in effect, Properties made plans and preparations to construct an opulent banquet facility on the Reserved Area. Prior to the start of construction, in October 1997, the America Condominium Association raised concerns with the City of Newport Zoning Officer about the issue of parking on Goat Island to handle the proposed Clambakes operation. The Zoning Officer’s response was “that the proposal is allowed under the zoning code of the City of Newport.” See Debtor’s Exhibit 21. Approximately four months later, upon the filing of the building permit for the construction of the facility, the America Condominium Association again raised the parking issue with the Newport Building Inspector. “It’s our understanding that a permit application has been filed with your Office for the purpose of constructing a bldg, [sic] that would, among other uses, be used for clambakes. While we don’t have a particular objection as to the land use with respect to the building itself, we do have a substantial problem with the parking requirements for *56 that bldg., [sic ] as well as for other commercial parking on and around that site.” Debtor’s Exhibit 63 (emphasis added).

On March 1, 1998, while the facility was still under construction, Properties entered into a twenty year lease with Clambakes, doing business as The Newport Regatta Club (“Regatta Club”), for the period May 1, 1998 through May 1, 2018, with a base annual rent of $180,000.00 plus six (6) percent of the lessee’s gross annual revenue.

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Related

In re IDC Clambakes, Inc.
510 B.R. 678 (D. Rhode Island, 2014)
In re IDC Clambakes, Inc.
484 B.R. 540 (D. Rhode Island, 2012)

Cite This Page — Counsel Stack

Bluebook (online)
431 B.R. 51, 2010 Bankr. LEXIS 1712, 2010 WL 2308247, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-idc-clambakes-inc-rib-2010.