Pilot's Point Marina, Inc. v. Cazzani Power Boat Manufacturing, Inc.

745 A.2d 782, 2000 R.I. LEXIS 34, 2000 WL 195074
CourtSupreme Court of Rhode Island
DecidedFebruary 15, 2000
Docket98-214-Appeal
StatusPublished
Cited by2 cases

This text of 745 A.2d 782 (Pilot's Point Marina, Inc. v. Cazzani Power Boat Manufacturing, Inc.) is published on Counsel Stack Legal Research, covering Supreme 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
Pilot's Point Marina, Inc. v. Cazzani Power Boat Manufacturing, Inc., 745 A.2d 782, 2000 R.I. LEXIS 34, 2000 WL 195074 (R.I. 2000).

Opinion

*783 OPINION

LEDERBERG, Justice.

This case arose from a boat manufacturing company’s dissatisfaction with custom-made boat molds 1 it ordered from an experienced boat maker. The company, Caz-zani Power Boat Manufacturing, Inc., (Cazzani) appealed the entry of a judgment in favor of the mold-maker, Pilot’s Point Marina, Inc. (Pilot’s Point); Cazzani also challenged the dismissal of its counterclaim. Cazzani alleged three errors, namely, that the trial justice erred (1) by allowing Pilot’s Point to amend its response to Cazzani’s counterclaim by pleading lack of Cazzani’s corporate capacity as a defense, (2) by denying Cazzani’s motion for a continuance to enable it to reinstate its corporate charter, and (3) by overlooking and misconstruing material evidence in granting judgment to Pilot’s Point. Because the counterclaim was dismissed without prejudice to Cazzani and because we have concluded that the trial justice neither overlooked nor misconstrued material evidence, the appeal is denied.

Facts and Procedural History

On or about November 22, 1992, Pilot’s Point and Cazzani entered into a contract under which Pilot’s Point was to manufacture a deck mold and a hull mold using a prototype supplied by Cazzani. Cazzani intended to use the completed molds to manufacture additional boats.

Several months later, Cazzani took delivery of the hull mold after having made partial payment on the contract. Cazzani apparently encountered difficulty in using the hull mold to manufacture additional boats and, after retrieving the prototype, refused to accept delivery of the deck mold or make further payments on the contract. On July 5, 1994, Pilot’s Point filed an action for breach of contract against Caz-zani. A month later, Cazzani filed a counterclaim, seeking damages for Pilot’s Point’s alleged breach of express and implied warranties and for its failure to perform the contract in a satisfactory and workmanlike manner.

A non-jury trial was held in February and March 1998, during which both parties presented lay and expert testimony on the quality and suitability of the prototype supplied by Cazzani and the molds produced by Pilot’s Point. At some time during the trial, Pilot’s Point became aware that Cazzani’s certificate of incorporation had been revoked by the Rhode Island Secretary of State on August 11, 1995. The issue was first raised on cross-examination of one of Cazzani’s witnesses, and the trial justice took judicial notice of the revocation.

During closing arguments, counsel for Pilot’s Point orally moved to amend its response to Cazzani’s counterclaim, seeking permission to add the affirmative defense of lack of corporate capacity. Over Cazzani’s objection, the trial justice granted the motion. Counsel for Cazzani immediately moved for a continuance to allow Cazzani to take the steps necessary to vacate the revocation of the company’s certificate of incorporation. After brief argument on the issue, the trial justice denied the continuance. At the close of the trial, the justice reviewed the evidence that had been presented, made findings of fact, dismissed Cazzani’s counterclaim after finding that Cazzani lacked capacity to sue, and entered judgment for Pilot’s Point on its breach of contract claim.

Additional facts will be discussed as required in the legal analysis of the issues raised.

Dismissal of Cazzani’s Counterclaim

First, Cazzani alleged that the trial justice erred in permitting Pilot’s Point to *784 amend its response to the counterclaim to plead as an affirmative defense Cazzani’s lack of corporate capacity to bring suit. Cazzani argued that such a ruling was contrary to our holding in World-Wide Computer Resources, Inc. v. Arthur Kaufman Sales Co., 615 A.2d 122 (R.I.1992) (World-Wide Computer). In that case, we held that the trial justice erred in permitting — four years after commencement of the action — a defendant to amend an answer in order to plead the plaintiffs lack of corporate capacity as a defense. Id. at 124-25. We explained that the defendant could have discovered the plaintiffs lack of capacity at the time the suit was filed. Id. at 125. Cazzani made this argument to the trial justice, who determined that the holding in World-Wide Computer was inapplicable to this ease. Specifically, the trial justice found that Pilot’s Point could not have raised Cazzani’s lack of corporate status at the inception of the action because at that time Cazzani was a valid corporation, whereas the defendant in World-Wide Computer could easily have discovered the plaintiff corporation’s lack of capacity to maintain suit in Rhode Island courts. Id. at 125. Further, the trial justice determined that there was no inequity in permitting the issue to be raised during the trial because Cazzani’s trial counsel was also counsel for service of process, had received notice of the revocation, and had taken no steps to have the corporate charter reinstated during the preceding two years.

Second, Cazzani asserted that the trial justice committed further error by denying Cazzani’s motion for a continuance during which it could reinstate its corporate charter. Cazzani’s certificate of incorporation was administratively revoked by the Secretary of State pursuant to G.L.1956 § 7-1.1-87. Under § 7-1.1-88.1, a revoked certificate of incorporation may be reinstated retroactively under certain conditions. Cazzani argued before the trial justice that a one-month continuance would suffice to reinstate its certificate of incorporation, and it asserted to this Court that had the continuance been granted, its counterclaim would not have been dismissed. Thus, Cazzani claimed, the trial justice erred by not granting the continuance.

Cazzani, however, “has failed to point out how its rights were in any way prejudiced” by the trial justice’s grant of Pilot’s Point’s motion to amend the response and his denial of Cazzani’s motion for a continuance. Walmac Co. v. Zurich Insurance Co., 114 R.I. 410, 415, 383 A.2d 686, 689 (1975). The trial justice here dismissed Cazzani’s counterclaim because Cazzani lacked the capacity to sue. This dismissal did not constitute a final judgment on the merits, however, and does not preclude Cazzani from proceeding on its claim in a separate action after taking the necessary steps to regain its corporate capacity. Lombardi v. Sciacca, 707 A.2d 698, 700 n. 1 (R.I.1998). Under the provisions of G.L.1956 § 9-1-22, when an action is terminated without prejudice, as it was in this case, a party may commence a new action within one year of the termination. We have previously held that a dismissal without prejudice is a final judgment that may be appealed to this Court, Jackson v. Medical Coaches, 734 A.2d 502, 504 (R.I.1999), and when such an appeal is taken, the action is not finally terminated until this Court renders a decision on the appeal. Thus, there remains one year from the date of this' opinion during which Cazzani may initiate an action against Pilot’s Point.

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Bluebook (online)
745 A.2d 782, 2000 R.I. LEXIS 34, 2000 WL 195074, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pilots-point-marina-inc-v-cazzani-power-boat-manufacturing-inc-ri-2000.