189 A.3d 539
R.I.2018Background
- Rhode Island Resource Recovery Corporation (Resource Recovery), a quasi‑governmental entity operating the Central Landfill, sued its 2006–2007 auditor Restivo Monacelli LLP (Restivo) for professional malpractice and breach of contract after a later forensic audit revealed mismanagement (improper charitable contributions, improper trust investments, and overpaid real‑estate purchases).
- Resource Recovery also sued earlier auditor LGCD and trustee Van Liew; those defendants settled, leaving Restivo as the remaining defendant at trial.
- Resource Recovery presented fact testimony (Executive Director Michael OConnell) and two experts: an accounting/auditing expert (Joseph Centofanti) on standard of care and improper charitable contributions, and an investment‑loss expert (Jerry DeNigris) on trust investment damages.
- The jury found Restivo liable on malpractice and breach of contract and awarded multiple damage components (charitable contributions, contract/fee recoveries, successor auditor fees, and investment losses totaling over $5.7 million).
- Restivo moved (Rule 50) for judgment as a matter of law, arguing that Resource Recovery failed to present expert proof of proximate causation; the trial court denied the motion and entered final judgment for Resource Recovery.
- The Supreme Court vacated the judgment, holding that expert testimony on proximate cause was required and was not provided; because causation is an element of both negligence and breach of contract claims, the plaintiff failed to meet its burden.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether expert testimony was required to prove proximate causation for accounting/auditing malpractice and contract claims | Resource Recovery: causation was straightforward — a properly performed audit would have exposed wrongdoing sooner and prevented losses; lay jurors could infer causation from the evidence | Restivo: causal link between alleged audit breaches and the specific damages (timing, actions by Auditor General/Governor, intervening actors LGCD/Van Liew, and Resource Recovery’s own misconduct) is beyond lay knowledge and required expert proof | Held: Expert testimony on proximate cause was required and was not supplied; judgment reversed and remanded |
| Whether experts presented (Centofanti, DeNigris) supplied the necessary causation opinion | Resource Recovery: its experts established standard of care, breaches, and quantified damages allowing a jury to infer causation | Restivo: experts addressed standard of care and damages but did not opine that Restivo’s breaches most probably caused the damages | Held: Experts did not opine that the injuries most probably resulted from Restivo’s conduct; testimony insufficient on causation |
| Whether liability allocation among multiple allegedly negligent actors precluded jury inference without expert proof | Resource Recovery: jury could apportion based on evidence; settlements by others do not eliminate causation inference | Restivo: presence of other professionals (LGCD, Van Liew) and Resource Recovery’s own wrongdoing made causal attribution technical and not within common knowledge | Held: Multiplicity of actors increased the technical complexity; supports requirement for expert causation evidence |
| Whether any other trial errors (instructions, in pari delicto, setoff) warranted relief | Resource Recovery: trial rulings and instructions were correct or harmless; other defenses inapt | Restivo: raised numerous additional errors on appeal | Held: Court did not address these remaining contentions because the failure to prove proximate cause was dispositive |
Key Cases Cited
- Barenbaum v. Richardson, 328 A.2d 731 (R.I. 1974) (expert testimony required when subject matter lies beyond common knowledge)
- Jessup & Conroy, P.C. v. Seguin, 46 A.3d 835 (R.I. 2012) (matters beyond common knowledge require expert proof)
- Almonte v. Kurl, 46 A.3d 1 (R.I. 2012) (expert testimony required on proximate cause in complex medical/contextual scenarios)
- Giron v. Bailey, 985 A.2d 1003 (R.I. 2009) (contrast: proximate cause may be within lay comprehension where facts are commonsensical)
- Salk v. Alpine Ski Shop, 342 A.2d 622 (R.I. 1975) (expert must testify that injury most probably resulted from the alleged cause)