Takian v. Rafaelian
53 A.3d 964
R.I.2012Background
- The plaintiffs, Charles and Marguerite Takian, and the defendants, Ralph and Lucia Rafaelian, formed Lumar Realty Corp. to manage a property with a hotel, restaurant, and trailer park in South Kingstown.
- The parties executed a joint and mutual release and indemnity agreement at closing in August 2002, in connection with the Rafaelians selling their interest to the Takians’ son Randolph, with release language absolving claims arising from ownership and operation of the business.
- After closing, new concerns about mismanagement and undisclosed conduct prompted the Rafaelians to later pursue counterclaims, while the Takians sought declaratory relief that the release barred further claims.
- A Superior Court judge granted summary judgment for the Takians, ruling the release valid as to both direct and derivative claims, and held the derivative claims failed Rule 23.1 requirements and Lumar’s standing.
- On appeal, the Rhode Island Supreme Court affirms in part and vacates in part, remanding several counts for further proceedings and addressing standing, release enforceability, and de novo review requirements.
- Justice Indeglia did not participate.
- Notes: Randolph Takian was not involved in the original purchase or formation of Lumar, and the later sale was funded by loans and a note from the Rafaelians’ children.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Derivative claims—standing under Rule 23.1 | Rafaelians contends Lumar’s derivative claims survive despite lack of contemporaneous stock. | Takianoppose derivative standing due to non-shareholder status at time of wrongdoing; charter revocation and reinstatement considered. | Rafaelians lack standing; derivative claims dismissed. |
| Enforceability of the release—set aside for fraud or other grounds | Release is valid on its face and bars claims. | Release should be set aside due to fraud/misrepresentation and undisclosed acts; disputes facts. | Release valid on its face; however, disputed facts require remand on counts challenging its enforceability. |
| Randolph Takian—direct claims against him (counts 3,4,6,8) | Randolph participated in negotiations and communications; may be liable for misrepresentation or breach. | No specific misrepresentations by Randolph; he was a conduit, and no reliance shown. | Summary judgment affirmed for Randolph on counts 3,4,6,8. |
| RICO and abuse-of-process counts | Counts 10 and 11 survive in some form despite the release. | RICO claims rely on a defunct enterprise (Lumar) and post-release conduct; need de novo review. | Counts 10 and 11 remanded for further consideration; some related counts vacated or remanded. |
Key Cases Cited
- Guglielmi v. Rhode Island Hospital Trust Financial Corp., 573 A.2d 687 (R.I.1990) (release validity analyzed via three-factor test: consideration, experience, counsel)
- Manchester v. Pereira, 926 A.2d 1005 (R.I.2007) (elements of negligent misrepresentation; parol evidence rules)
- Zanni v. Voccola, 13 A.3d 1068 (R.I.2011) (de novo review standard for summary judgment; favorable inferences to nonmoving party)
- Estate of Giuliano v. Giuliano, 949 A.2d 386 (R.I.2008) (summary judgment de novo review; standards for factual disputes)
- Classic Entertainment & Sports, Inc. v. Pemberton, 988 A.2d 847 (R.I.2010) (summary judgment standard; burden on nonmoving party to show genuine issues of material fact)