Mathew M. Cote v. John Aiello
148 A.3d 537
| R.I. | 2016Background
- Cote worked for Aiello-related companies beginning in 1986, became president/CEO of Richmond Ready-Mix (RRM) in 1997, and was repeatedly told by John Aiello he might be able to purchase RRM in the future.
- Ownership of RRM was actually held by Anna‑Maria Aiello (Mrs. Aiello), a fact concealed from Cote and other employees.
- Cote made numerous interest-free loans to RRM (about $400,000 total, later repaid) and refrained from pursuing other opportunities, believing he would be sold the business when Aiello retired.
- In June 2005 Aiello sold RRM to a third party (Peter Calcagni); Cote was informed after the sale and remained employed briefly, later working for subsequent owners.
- Cote sued (promissory estoppel; breach of oral/implied contract; fraud; negligent misrepresentation; unjust enrichment). After a 10‑day bench trial the Superior Court found for defendants on all claims except unjust enrichment (liability found but damages not awarded). Cote appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Implied‑in‑fact contract to sell RRM | Cote argued repeated promises and conduct created mutual assent / right of first refusal | Aiellos argued statements were indefinite future talk, no essential terms agreed | No implied contract; essential terms (price, financing, triggers) and mutual assent lacking |
| Promissory estoppel | Cote argued he reasonably relied to his detriment on clear promises | Aiellos argued promises were vague, preliminary, and not reasonably relied upon | Claim fails: promises not clear/unambiguous; reliance not reasonable or sufficiently detrimental |
| Fraud and negligent misrepresentation | Cote argued deceit and concealment justified fraud/negligent misrepresentation | Aiellos argued statements were promissory (future) not factual misrepresentations; no scienter | Claims fail: unfulfilled future promises not actionable as fraud; no evidence Aiello intended deceit when statements made |
| Unjust enrichment — measure of damages | Cote sought recovery beyond interest, linking loans to company’s increased value | Aiellos argued plaintiff failed to prove damages or causal link; loans repaid | Liability on unjust enrichment found but damages limited to reasonable interest; Cote failed to prove a rate or link to profits, so no award was entered |
Key Cases Cited
- Marshall Contractors, Inc. v. Brown University, 692 A.2d 665 (R.I. 1997) (elements and proof sources for implied‑in‑fact contracts)
- Bailey v. West, 249 A.2d 414 (R.I. 1969) (implied‑in‑fact contract requires all elements of an express contract)
- Filippi v. Filippi, 818 A.2d 608 (R.I. 2003) (adopting elements and limits of promissory estoppel)
- Centerville Builders, Inc. v. Wynne, 683 A.2d 1340 (R.I. 1996) (no mutual assent when performance depends on promisor’s unilateral future action)
- Smith v. Boyd, 553 A.2d 131 (R.I. 1989) (subjective intent can negate intent to be legally bound)
- Alix v. Alix, 497 A.2d 18 (R.I. 1985) (Restatement approach to promissory estoppel)
- McNulty v. Chip, 116 A.3d 173 (R.I. 2015) (elements of fraud: false representation, intent to induce reliance, justifiable reliance causing damage)
- Zarrella v. Minnesota Mutual Life Insurance Co., 824 A.2d 1249 (R.I. 2003) (negligent misrepresentation requires misrepresentation of present or past fact)