Michael F. Rose, Jr. v. Stephen M. Brusini
149 A.3d 135
| R.I. | 2016Background
- Michael Rose (49% owner) negotiated to buy David Egan’s 51% interest in RC&D, a closely held construction corporation; Egan controlled the company books and initially refused full financial disclosure.
- Rose hired Attorney Stephen Brusini; Brusini repeatedly advised Rose not to sign the purchase-and-sale agreement (P&S) without complete financials and drafted a "True-up Clause" and a marked-up P&S. Brusini did not advise Rose about statutory shareholder inspection rights under Rhode Island’s Disclosure Act.
- Rose signed the P&S and the closing occurred January 6, 2009; RC&D paid Egan approximately $1,204,695.75 as a distribution. After closing Rose obtained company books and discovered Egan had been overpaid by about $584,695.70.
- Rose and RC&D litigated with Egan; the Superior Court found ambiguity in the P&S and granted partial summary judgment to Egan; after substantial fees the parties settled in 2011.
- Plaintiffs sued Brusini and his firm for legal malpractice and breach of contract, alleging failure to advise Rose to use the Disclosure Act and negligent drafting of the True-up Clause. Defendants moved for summary judgment arguing Rose ignored explicit advice not to close, so his conduct was the proximate cause of his damages.
- The Superior Court granted summary judgment for defendants, finding no competent evidence of proximate cause; the Rhode Island Supreme Court vacated and remanded, holding Rose’s affidavit created a genuine issue of material fact as to causation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants’ failure to advise Rose of statutory inspection rights caused Rose’s damages | Rose: but for defendants’ failure to advise him of the Disclosure Act, he would have inspected records pre-closing and avoided the overpayment and litigation | Brusini: Rose ignored repeated advice not to sign without records; Rose’s voluntary decision to close was the proximate cause | Held for plaintiff on causation issue at summary judgment stage: Rose’s affidavit raised a triable issue of fact about proximate cause; summary judgment inappropriate |
| Whether negligent drafting of the True-up Clause was proximate cause of damages | Rose: True-up Clause was negligently drafted and prevented recovery | Brusini: Clause ambiguity was not legal malpractice and efficacy was unresolved because parties settled | Court: Ambiguity alone is not malpractice; but because causation disputed, issues remain for trial |
| Whether proximate cause may be established by inference/circumstantial evidence | Rose: Circumstantial evidence and his affidavit suffice to infer causation | Brusini: Plaintiff’s theory requires speculation about what would have occurred | Court: Proximate cause may be shown circumstantially; here reasonable inferences from Rose’s affidavit preclude summary judgment |
| Whether summary judgment was proper on negligence claim | Rose: Factual disputes (duty, breach, causation) should go to jury | Brusini: Undisputed facts show single inference that Rose’s conduct caused his harm | Court: Summary judgment improper because material factual dispute exists on causation and must be resolved by trier of fact |
Key Cases Cited
- Ciambrone v. Coia & Lepore, Ltd., 819 A.2d 207 (R.I. 2003) (elements required for legal malpractice: duty, breach, and proximate cause)
- Contois v. Town of West Warwick, 865 A.2d 1019 (R.I. 2004) ("but for" test for proximate cause)
- McLaughlin v. Moura, 754 A.2d 95 (R.I. 2000) (causal link must not be based on conjecture or speculation)
- Seide v. State, 875 A.2d 1259 (R.I. 2005) (proximate cause can be established by circumstantial evidence)
- Munroe v. Cheaters Holding Corp., 808 A.2d 645 (R.I. 2002) (proximate-cause usually a question for the factfinder)
- Splendorio v. Bilray Demolition Co., 682 A.2d 461 (R.I. 1996) (plaintiff resisting summary judgment must present sufficient facts to satisfy negligence elements)
- Geloso v. Kenny, 812 A.2d 814 (R.I. 2002) (when facts admit only one inference, question becomes one of law)
- Hall v. City of Newport, 138 A.3d 814 (R.I. 2016) (negligence claims typically not appropriate for summary judgment)
- Vallinoto v. DiSandro, 688 A.2d 830 (R.I. 1997) (failure to prove all malpractice elements bars recovery)