Rhode Island Construction Services, Inc. v. Harris Mill, LLC
68 A.3d 450
R.I.2013Background
- RICS bought property in Oct 2006 and gave a mortgage to Zurich; Zurich assigned the mortgage to ARE the same day but ARE did not record the assignment until Feb 4, 2008.
- Thomas Lonardo & Associates (TLA) contracted to provide architectural services, recorded a notice of intention and a lis pendens in Sept 2007, and filed a mechanics’ lien petition claiming $778,112.67 in Sept 2007.
- Mechanics’ lien citation set a return date of Oct 26, 2007; mortgagees had 20 days after that date to appear or else their mortgages would be subordinated under G.L. 34-28-16(a). Neither Zurich nor ARE appeared within the 20-day period.
- Petra Finance purchased the note and mortgage from ARE on Feb 14, 2008 (after the 20-day deadline) and recorded the assignment on Mar 20, 2008; Petra did not learn of TLA’s lien until receivership hearings in May 2008.
- Petra moved on July 30, 2008 to file an answer and statement of claim out of time; the Superior Court granted the motion on Nov 7, 2008, finding Petra’s delay constituted "excusable neglect." Petra later acquired the property at receivership sale.
- On certiorari, the Supreme Court reviewed whether the motion justice abused his discretion in allowing Petra’s untimely claim under Rule 60(b) and § 34-28-16(a).
Issues
| Issue | Plaintiff's Argument (TLA) | Defendant's Argument (Petra) | Held |
|---|---|---|---|
| Whether allowing Petra to file a mechanics’ lien claim 278 days late was justified by "excusable neglect" under Rule 60(b) and § 34-28-16(a) | Petra failed to show excusable neglect because it acquired the mortgage after the deadline and did not perform title due diligence; assignee takes no greater rights than assignor | Petra acted diligently once it learned of the lien and should be relieved because its delay was not due to carelessness after acquisition | Reversed: Petra did not prove excusable neglect; motion justice abused discretion; TLA's mechanics’ lien priority restored |
Key Cases Cited
- Keystone Elevator Co. v. Johnson & Wales Univ., 850 A.2d 912 (R.I. 2004) (standard that granting relief under § 34-28-16 is discretionary and reviewed for abuse of discretion)
- Reyes v. Providence Place Group, L.L.C., 853 A.2d 1242 (R.I. 2004) (burden of proving excusable neglect rests on moving party)
- Iddings v. McBurney, 657 A.2d 550 (R.I. 1995) (unexplained neglect alone insufficient for Rule 60(b) relief)
- The Astors' Beechwood v. People Coal Co., 659 A.2d 1109 (R.I. 1995) (definition of excusable neglect as unexpected or unavoidable hindrance rather than carelessness)
- Boranian v. Richer, 983 A.2d 834 (R.I. 2009) (excusable neglect generally requires circumstances beyond party or counsel's control)
- Pleasant Management LLC v. Carrasco, 960 A.2d 216 (R.I. 2008) (equitable, totality-of-the-circumstances inquiry for excusable neglect)
- In re Rider, 15 A. 72 (R.I. 1888) (assignee takes no greater rights than assignor — relevant to mortgage priority)
- Montecalvo v. Mandarelli, 682 A.2d 918 (R.I. 1996) (function of lis pendens is to warn subsequent purchasers that title is subject to pending litigation)