Tidewater Realty v. State, Prov. Plant.

942 A.2d 986, 2008 R.I. LEXIS 24, 2008 WL 680969
CourtSupreme Court of Rhode Island
DecidedMarch 14, 2008
Docket2006-197-Appeal
StatusPublished
Cited by19 cases

This text of 942 A.2d 986 (Tidewater Realty v. State, Prov. Plant.) 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
Tidewater Realty v. State, Prov. Plant., 942 A.2d 986, 2008 R.I. LEXIS 24, 2008 WL 680969 (R.I. 2008).

Opinion

*989 OPINION

Justice FLAHERTY,

for the Court.

A clash over the right to purchase commercial waterfront property in the City of Providence gives rise to this dispute. The plaintiff, Tidewater Realty, LLC (Tidewater), appeals from a summary judgment of the Superior Court that was granted in favor of the defendants, the State of Rhode Island, Rhode Island Department of Environmental Management, Rhode Island State Properties Committee (SPC), City of Providence, and Providence Redevelopment Agency (PRA). For the reasons set forth in this opinion, we affirm in part and reverse in part the judgment of the Superior Court.

Facts and Procedural History

In 2004, the state determined that its ownership of commercial waterfront property (the Shipyard or the property) at 242 Allens Avenue in Providence was surplus to its needs, and it decided to sell the property. The Shipyard consists of more than five acres of land, currently subject to a long-term lease to Promet Marine Services Corporation (Promet). Promet operates a shipyard, ship repair facility, and deep-water terminal on the property, and has done so for over thirty years. The lease with Promet encumbers the land until 2011. 1

The state originally had acquired the prop erty by condemnation, and it therefore was bound to follow the procedures set forth in G.L.1956 § 37-7-3. 2 This procedure includes (1) granting a right of first refusal to the owner at the time of condemnation, his heirs, and assigns, and, (2) if the right of first refusal is not exercised, granting a second option to purchase to *990 the “city or town wherein the land or property is situated.” Id.

In August 2004, the state issued “Requests for Proposals” to begin a public bidding campaign for the sale of the property. Promet expressed interest in purchasing the property, and it formed plaintiff, Tidewater Realty, LLC, specifically for this purpose. After the state conducted a protracted bidding process, Tidewater emerged as the winner. In February 2004, the state sent a standard printed notification to a wide variety of public agencies of its intent to sell the property. 3 It announced the state’s intention to convey the property and inquired if each agency (1) had any objection to the transaction or (2) had any use for the property.

According to § 37-7-3, a second statutory right of purchase arose on behalf of the City of Providence. The city’s right of purchase was conditional on its acceptance of the same terms and conditions that already had been agreed upon by Tidewater. Only if the city waived its statutory rights could the property be then conveyed to Tidewater.

On February 17, 2004, the director of planning and development for the City of Providence, Thomas Deller, received one of the above-referenced printed notifications, and he penned a handwritten response at the bottom of the form that simply said:

“If the property is sold to the present tenant for continuation of its use for boat repair, the city has no interest. If Promet decides it is not interested in the property, the city is interested.”

The SPC voted unanimously to approve the purchase and sales agreement with Tidewater on May 25, 2005. In its May 25, 2005 meeting notes, the SPC noted that,

“[tjhere is one matter still open and that is the notice sent to the City of Providence, officially notifying them of the terms and conditions of the contract and the Department is now within the 30 day window that the City has to respond. The Department has been told that they are not interested in entertaining this same purchase under the terms and conditions, but the Department will let that 30 day window expire.”

The terms and conditions of the state’s contract with Tidewater included a purchase price of $1,026,780, a closing date no later than June 30, 2005, and a clause declaring that “[t]ime is of the essence.” In its final clause, the purchase and sales agreement said:

“21. Right to Terminate. Not withstanding anything contained herein to the contrary, this Contract is conditional upon the City of Providence waiving its right to purchase this property under the same terms and conditions contained herein in accordance with R.I. General Laws Section 37-7-3. Said required notice to City was made by certified mail on May 18, 2005. If the City of Providence chooses to exercise its rights as provided in R.I. General Laws Section 37-7-3, then this contract will terminate and be deemed null and void.”

On June 14, 2005, Providence Mayor David N. Cicilline informed the state that the city intended to exercise its right to purchase the property. Soon after, on June 17, 2005, the City Council passed Resolution No. 280, authorizing the PRA to acquire the property, as the city’s agent *991 and on its behalf. 4 Because of the communication from the city, the SPC, relying upon clause 21 of the purchase and sales agreement with Tidewater, terminated the contract after it determined that the agreement was void. Tidewater objected, contending that it was ready, able, and willing to complete the transaction. Nevertheless, the state conveyed the property to the PRA. Tidewater, which had recorded a lis pendens in the Land Evidence Records with respect to the transaction, then filed suit in the Superior Court.

In the first count of its first amended complaint, Tidewater alleged that the State of Rhode Island had breached the purchase and sales agreement (the agreement or contract) of May 25, 2005 because it deeded the property to the PRA rather than to the “City of Providence,” which is the entity specified in clause 21 of the agreement. The plaintiff also sought a declaratory judgment that the conveyance to the PRA was null and void because (1) it was not in accordance with § 37-7-8, (2) the city had no authority to create an agency relationship to exercise its statutory right to purchase the property, and (3) the PRA’s purchase of the property exceeded its statutory powers under G.L. 1956 § 45-32-5. The plaintiff argued that the statute does not permit the purchase of property outside of a redevelopment area by the PRA absent a redevelopment purpose and without following specific statutory procedures. The plaintiff contended that the PRA’s actions exceeded its authority and the conveyance of the property to the PRA was null and void. Therefore, plaintiff alleged that the state breached its agreement with Tidewater.

The plaintiff also asserted that the city waived its statutory right to purchase under § 37-7-3 because of Deller’s February 2004 letter and the city’s subsequent sixteen months of inaction before its acceptance on June 14, 2005. The plaintiff, in the second count of its first amended complaint, sued the City of Providence and the PRA for tortious interference with contractual relations, contending that they had purchased the property out from under plaintiff.

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942 A.2d 986, 2008 R.I. LEXIS 24, 2008 WL 680969, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tidewater-realty-v-state-prov-plant-ri-2008.