245 A.3d 745
R.I.2021Background
- Premier Home Restoration (plaintiff) successfully bid $115,000 at a foreclosure sale for 36 Stevens Road (Cranston), paid a $5,000 deposit, and signed a Memorandum of Terms and Conditions providing the mortgagee would convey title and plaintiff would pay the balance within 30 days.
- The sale contract stated conveyance would be subject to unpaid taxes/assessments, reserved the mortgagee’s right to void the transaction (returning only the deposit if voided), allowed a 30-day extension, and stated that "time is of the essence."
- FNMA (with U.S. Bank) granted multiple extensions; the parties ultimately extended performance for about 20 months (to October 13, 2017). Taxes, fees, and assessments accrued during the delay.
- In October 2017 defendants sent a forfeiture-of-bid letter, retained the $5,000 deposit, and refused to close; Premier filed suit alleging breach of contract (deposit and failure to timely perform), breach of the implied covenant of good faith and fair dealing, and a claim under the Rhode Island Unfair Trade Practices and Consumer Protection Act (RI UTPCPA).
- Defendants moved for judgment on the pleadings (Rule 12(c)); the Superior Court granted the motion. Premier appealed. The Supreme Court affirmed dismissal of the RI UTPCPA claim but vacated the judgment as to the contract and implied-covenant claims and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract — retention of deposit and responsibility for taxes/assessments accruing during extended delay | Defendants wrongfully retained deposit and should be liable for taxes/assessments that accrued while they delayed closing | The written agreement and extensions controlled; defendants were entitled to retain deposit and were not liable | There is an ambiguity as to who bore accruing costs during the long delay; contract-based claims cannot be resolved on a Rule 12(c) motion and survive remand |
| Breach of implied covenant of good faith and fair dealing | Defendants misrepresented ability to close in 30 days and sought repeated extensions in bad faith, causing plaintiff to incur costs | The covenant is not an independent cause of action and facts here do not show bad faith warranting relief | Because the contract claims survive, the related implied-covenant claim also survives as a factual question on remand |
| RI Unfair Trade Practices and Consumer Protection Act (standing) | Plaintiff alleged deceptive trade practices arising from defendants’ conduct | Defendants argued Premier is a business entity and lacks standing under the statute for private actions | Affirmed dismissal: a Rhode Island corporation/LLC lacks standing to bring a private claim under the Act |
| Judgment on the pleadings standard (procedural) | Factual disputes (timing, extensions, accrual of costs) preclude resolving claims on pleadings | Complaint’s admissions show defendants’ actions conformed to the contract, so judgment on the pleadings was appropriate | Applied Rule 12(c) standard; court concluded defendants were not entitled to judgment on pleadings as to contract and implied-covenant claims, so Superior Court judgment vacated in part and remanded |
Key Cases Cited
- Nugent v. State Public Defender’s Office, 184 A.3d 703 (R.I. 2018) (standard for reviewing Rule 12(c) motions mirrors Rule 12(b)(6))
- Chase v. Nationwide Mut. Fire Ins. Co., 160 A.3d 970 (R.I. 2017) (Rule 12(c) review confines court to pleadings and resolves doubts for plaintiff)
- Siena v. Microsoft Corp., 796 A.2d 461 (R.I. 2002) (court must assume complaint allegations true when testing legal sufficiency)
- Botelho v. City of Pawtucket School Dep’t, 130 A.3d 172 (R.I. 2016) (definition and treatment of contractual ambiguity)
- Ferreira v. Child and Family Servs., 222 A.3d 69 (R.I. 2019) (implied covenant of good faith and fair dealing is not an independent cause of action; must attach to contract claim)
- ERI Max Ent., Inc. v. Streisand, 690 A.2d 1351 (R.I. 1997) (business entities do not have standing to bring private actions under the RI consumer-protection statute)