*1 Court. The record of case shall
remanded to the Court. VASQUEZ
Gilberto INN, INC. et al.
SPORTSMAN’S 2011-26-Appeal.
No.
Supreme Court of Rhode Island.
Dec. *2 C.J., SUTTELL,
Present: FLAHERTY, ROBINSON, GOLDBERG, INDEGLIA, JJ. OPINION FLAHERTY, for Justice Court. appeal by the Before this Court is an Inn, DLM, Inc., defendants, Sportsman’s LLC, Inc., an or- and DLM from plain- der that the motion tiff, Vasquez, preliminary for a Gilberto injunction enjoining the from defendants encumbering, alienating, conveying or at Fountain property located Street This Providence. case came before Supreme argument Sep- for Court oral pursuant tember to an order directing parties appear and show why appeal cause the issues raised Aftеr summarily should not be decided. parties’ arguments and after considering memoranda submitted counsel, are has not we satisfied cause shown, proceed to de- been we shall cide the at further appeal this time without briefing argument. For reasons set opinion, forth in vacate we plain- granting injunction. tiffs motion for I Facts and Travel p.m., at 10 or 11 November Inn, Inc. arrived Inn) (Sportsman’s That es- in Providence. lounge tablishment hotel and ser- features vices, premises it leases at 122 DLM, It is note- Fountain Strеet Inc. Fontaine, Esq., P. Plaintiff. Michael worthy that before he arrived at Providence, in- Mahoney, Esq., evening, plaintiff John R. for man’s Inn that had ecstasy.1 socializing during While gested Defendants. drug chemically Methylenedioxymethamphetamine, psychoactive similar also "ecstasy,” synthetic, methamphetamine and the known MDMA to the stimulant "is said he drank about five Inc. night, plaintiff office, beverages, both including alcoholic mixed shared the same building, phone *3 number, left plaintiff Sports- supplies, drinks and beer. The pоli- office and insurance a.m., Inn said that cy. man’s at around He that testified both entities were hearing next was thing remembers engaged in the same business of ho- gunshot, falling ground, and wak- services, tel/lounge and and that the com- inup hospital. also panies had common officers. Michael Deluca, Deluca nephew, A. and his David 2, 2009, plaintiff On or about June filed a daily oversaw all operations of both Inn against Sportsman’s civil action corporations. David Deluca also testified DLM, his complaint, alleged Inc. In that he did “know any corporate of that he as a of the failure was shot result followed,” formalities that have been provide adequate of both defendants 1995, that since neither Inn Sportsman’s security at the business.2 DLM, any nor Inc. had conducted annual 22, 2009, plaintiff On December learned meetings of the board of directors or property that the at Fountain Street shareholders, and no had minutes been alacrity was for sale. He moved with for a kept. He explainеd also whatever temporary restraining order on next DLM, business needs Inc. and DLM Real- day. A Superior Court had ty were met efforts the mat- request assigned man’s employees, Inn’s because neither hearing preliminary injunc- ter for a on a DLM, Inc. nor DLM Realty any had em- tion. At hearing, place which took ployees. 8, 2010, January Sgt. Raymond Hull of the Department, testifying Providence Police Deluca also was corpo- examined about records, as a subpoena keeper DLM, rate assets. testified He documented the number of service police $30,000 had about in capital; Realty, DLM calls to Imi its imme- Sportsman’s (DLM Realty), LLC merely which was vicinity. diate The records dated from holding company owned all stock January hearing. to the time DLM, Inc., assets; had no other Sgt. his testimony, In Hull estimated that Sportsman’s capital, Inn lacked substantial the total number of service calls to that equip- but he added that it did own bar location was 800.3 about vehicles, ment and Rov- two motor a Land Deluca, president Sportsman’s David er and a He Honda. said that he was not Inn, Inc. sure whether rent paid also testified Inn preliminary injunction. explained He Inc. David Deluca also testified that hallucinogen produces actually mescaline. MDMA 3. record that there were revealed feelings energy, euphoria, of increased emo- January ap- 667 calls between warmth, time, per- tional and distortions in proximately 2 a.m. November ception, experiences.” and tactile Nationаl impres- This wounded. Health, Institutes of National Institute on includes, to, sive number but is not limited Abuse, Drug http://www.drugabuse.gov/ disturbances, seventy-three public fourteen (last publications/drugfacts/mdma-ecstasy vis- assaults, assaults, twenty aggravated five rob- 2012). ited Dec. beries, fired, assaults, one shot three sexual threats, larcenies, twenty twenty-two one ab- In March his com- amended duction/kidnapping, breaking and plaint four enter- to add DLM LLC as defendant among ap- other entities not relevant to this ings, exposures. and four indecent peal. Realty DLM the stock of owned all DLM, Inc. $25,427, man’s taxable ren- income were to be judgment if a substantial Those included expenses. expenses after it would against Sportsman’s dered $247,000 DLM, Inc.5 a rent payment bankruptcy. likely declare DLM, Inc. Lattinville also clarified that further testified David Deluca for a few report had failed to file its annual longer parking had a Inn no oversight, resulting in the years because that, also of its own. He area in 2008. charter revocation of security nо bouncers4 while completed Lattinville said that she then establishment, three outside the personnel *4 necessary and the charter procedure the on generally were inside: bouncers was reinstated. entrance, one the Street one at Fountain 19, 2010, May the entrance, and one the Martha Street Motion to (Regarding issued an “Order However, night on the the back room. Identities),” Corporate Attach and in the complaint, incident the described over- justice which trial found that the only one bouncer just manager one DLM, Sportsman’s all finances of Inc. and metal duty. detecting were on He said The trial closely Inn were intertwined.6 prevent people wand was used to justice corporations that: both reasoned dangerous objects Sports- into bringing offices, owners, building, shared the same Inn. man’s DLM, officers; Sportsman’s Inc. and Carlino, hearing, a later Gene an At they Inn hold keep did not minutes nor did attorney, testified about formation bylaws; elections in accordancе with He that on Decem- corporations. said DLM, Inc.’s charter had been revoked on 20, 2001, established, Realty was DLM ber Deluca, 20, 2008; and David October DLM, Inc., the two shareholders officer, chief was unaware of operating Deluca, Michael A. and Michael Deluca Inn rent or filed Sportsman’s paid whether interests DLM transferred their stock tax The trial determined justice returns. creating parent-subsid- thereby sufficiently capi- the businesses DLM iary Realty and relationship between talized, expressеd but he a concern that DLM, Attorney Carlino only Sportsman’s Inc.’s income was Realty DLM was established take ad- Finally, payments. rent vantage of certain tax benefits. justice though he concluded even Lattinville, corpora- Finally, pub- specifically could not find that one Jane certified accountant, other, testimony. ex- tion dominated the affairs of the lic offered She princi- that it who inferred that the same plained prepared was she nonetheless finances, pals policies, tax for all three entities: dominated the return Inc., Inn, DLM, entity. practices DLM of each Based on these Sportsman’s justice Realty. findings, She that in concluded that testified agree Heritage Dictionary parties that a motion to attach 4. The American 6.The English Language the term defines “bouncer” estate was an issue before the real meaning employed expel person However, "[a] justice justice. when the disorderly persons public place, espe- from a mаde the determination that cially Heritage a bar.” Dictio- The American disregarded pur- would be for entities (5 nary Language English of the th poses Vasquez’s pending motion ed.2011). injunction, he di- preliminary issuance of attach- parties to whether rected the address witness, DLM, According tax Inc.’s remedy. appropriate ment was an provided activity” returns the tax "no because Realty. reported returns were under DLM ecstasy a likelihood of consumed “Vasquez entering has demonstrated before the club “probably success on the merits that about five” beers [had] disregarded.”7 formalities will mixed drinks when was at Sportsman’s Significantly, Vasquez Inn. not ques- The trial also issued “Order testify tioned and did not about whether in a (Regarding Motion Attach Tort he had been engaged any arguments or Action)” July in which he altercations inside Inn on that denied motion to attach the as- Vasquez’s night. sets The trial corporations. prejudgment reasoned that the attachment Finally, Marques, John property not authorized tort aс- manager night Inn worked who result, tions.8 he rescheduled a hear- As a incident, He explained testified. motion for Vasquez’s security posted there was no outside the to further parties to allow building, patron but if a became loud and brief the issue. club, disorderly inside the the practice was *5 “[g]o gentleman, up to to the what see the 2010, 29, July justice
On the trial held a [was], problem obviously try put it to un- hearing prelimi- motion for plaintiffs * ** can’t[,] control you you [and] der [i]f nary injunction. Campbell, Derek V. them If you ask to leave. can’t ask them rescue technician for the Providence Fire leave, you police.” call the He also said Department, during hearing. testified years during the seven was a It was who had the Campbell drafted “Run manager, “about five little ar- Report” response the summarized there, guments maybe, that remem- [he] 12, call on emergency November 2006. bered].” The Run indicated that a male Report was club”; ground Camp-
“found on outside of hearing, After justice grant- explained bell that it was his rеcollection plaintiffs to enjoin ed motion the sale of Vasquez was “outside of the doors in property. He concluded that close He proximity the club.” cau- had established a likelihood of success that tioned, however, that he could remem- corporate formalities should be disre- incident, specific ber of the details nor garded and that Inn had exactly could he the injured recall where breached its of reasonable care to plaintiff found. him. Specifically, order concluded that enjoined “[d]efendants [were] court next heard from him- re- alienating, conveying[,] self. He testified that he strained from or “remember[ed] hearing encumbering down real gunshot falling their estate on Fountain [a] floor,” but specific he said had no mem- Street Providence until further order of ory of justice who shot him. He that he this Court.” The attached two piercing 7. This prejudgment may, is otherwise known as We note 8. attachment circumstances, See veil. National Hotel Associаtes in certain be available in tort Sons, Inc., 646, Ahlborg v. O. actions, & 827 A.2d 652 although remedy "the of attachment (R.I.2003) (when corporation an individual or generally shall not be available corporation so controls as to make it another provisions § [G.L.1956] 10-5-2 instrumentality, pierc a mere conduit sounding cause of action is one in tort." permits of the veil doctrine Bar, Inc., 464, Martin v. Lincoln 622 A.2d 466 corporation creditors of that to reach the as (R.I.1993) (quoting J. United States v. Tirocchi corporation sets of thе individual or that con Sons, Inc., 645, (D.R.I. F.Supp. & 180 650 it); Gelineau, 43, trols Doe 1960)). (R.I.1999). first, Prata, Ltd. v. injunction. nent See J.B. defendants to his order: conditions (R.I.1983). n. 2 Bichay, for modification approval could seek Court Rather, change determining in the event our role limited of the order second, circumstances, the order considered and whether the only until Novem- appropriate prelimi would effect remain resolved each nary injunction abusing On November ber factors without to an Iggy’s Dough decision reduced her Id. In discrеtion. Inc., 729 A.2d we set forth boys, order. those factors that this Court must consider timely January defendants grant when it reviews trial court’s justice.9 of the trial appealed the decision preliminary injunction, which include maintain that appeal, In their defendants (1) party has a moving “whether his discretion in abused on the reasonable likelihood success plaintiff had demonstrated finding that (2) merits, irreparable will harm suffer was a reasonable likelihood that there relief, requested injunctive negligence without the on the merits success (3) the equities, has the balance of in- claim that the veil should hardships cluding possible to each pierced. interest, public party tip and to its (4) favor, II issu- shown that the pre- ance of a will *6 preliminary of Review Standard quo.” serve status Id. 9-24-7, § an order G.L.1956 Under This Court will find an abuse of discre may preliminary injunction a granting if party requesting prelimi tion directly this Court.10 appealed “[B]e- nary injunction at a least has made out * * * grant prelim cause the decision to a case. DiLiberо Swen prima See v. facie inary within the sound injunction ‘rests son, 42, (R.I.1991). 593 A.2d 44 hearing justice,’ re discretion of we view decision an abuse-of-dis Ill cretion of review.” Town Cov standard LLC, entry v. Baird 13 A.3d Properties, Analysis (R.I.2011) 614, Dough (quoting Iggy’s 620 The defendants contend that Giroux, 701, boys, Inc. v. 729 A.2d 705 his justice abused discretion when (R.I.1999)). injunction because granted a scope a limited no evidence to establish a nexus
Under such review, re gunshot this Court need not reach nor between Inn and the Vasquez solve issues wound suffered. The defendants underlying substantive perma- Vasquez it would after the also maintain that failed to dem- imposition continued, appointed, appeal pending, or a or a 9. While this has been receiver ordered, property, personal sold the after authorization property or sale of real deposited justice, approxi- from the trial by interlocutory judgment, an order or or mately in 1.4 million dollars new is denied a trial ordered or after Registry. by appeal may jury, an be taken from such [Cjourt [Sjupreme judgment or рrovides, § Laws General 1956 9-24-7 judgment, manner as a final like from pertinent part: precedence appeal take in the shall "Whenever, upon hearing [Sjuperi- in the [Cjourt.” [Sjupreme [Cjourt, or or shall be
319 harm irreparable dangerous because harm caused onstrate illegal acts of a third money damages, party,” except that reme- “when seeks plaintiff and a special available to him. defendant dy [have] is relationship each other.” [with] Martin v. hand, Vasquez argues other Mаrciano, (R.I.2005) 871 A.2d 915 that he properly concluded Berube, Luoni v. (citing 431 Mass. 729 fact, had, established likelihood 1108, 1111(2000)). “A special N.E.2d rela Inn breached its success law, tionship, derived from common provide adequate security, predicated plaintiffs reasonable damages suffered as a he had result expectations and reliance that a defendant Further, argues that breach. anticipate will per harmful acts third justice properly exercised sons that appropriate mеasures to irreparable be- discretion harm protect plaintiff from harm.” Id. potential for an enormous cause Luoni, 1111). (quoting 729 N.E.2d at damages juxtaposed award with Sports- However, such relationship “[o]ne exists man’s limited assets.11 provide between those who intoxicants and prevail negli “To on a claim of they those whom Id. (citing serve.” gence, legally ‘a must establish a al., Speiser Stuart M. et The American cognizable duty by a to a owed defendant Torts, (1985) § Law 9:20 at 1125 plaintiff, duty, a breach of that proximate Q. quoting Long Grisham John V.F.W. causation between the conduct and the re 4057, Inc., Post No. 519 So.2d sulting injury, and the actual loss dam (Miss.1988) (“[T]he keeper of a bar or ” Khea, age.’ Ouch v. 633 tavern, though not guests’ an insurer of his (R.I.2009) Ward, Selwyn v. (quoting safety, a duty to exercise reasonable (R.I.2005)). As a prelimi care to protect reasonably them from fore matter, nary we first must determine injury seeable the hands other pa *7 Sportsman’s whether Inn owed a Vasquez trons.”)). care, duty of the existence of is which a cаse, In this justice con id. question law. See To determine cluded that a preliminary was case, duty a in a specific
whether exists appropriate because a landowner has a “ particular the Court ‘the considers facts “duty use to reasonable care to keep the ** * a given and circumstances of case’ ],” premises in a safe and “Vas condition! taking into ‘all consideration relative fac shown, quez at this stage, tors, including relationship the between injured that he wаs near the door.” In the the parties, scope burden of the however, our is opinion, not enough this to obligation imposed upon to be the defen merits, show a likelihood of on success the * * * dant, considerations,’ public policy because there is a lack of evidence that ‘foreseeability the of harm the to any duty such was breached. We have plaintiff” (quoting Id. Benaski v. Wein a held that link to a drinking causational (R.I.2006) berg, and Sel may establishment reasonably be inferred 887). 879 A.2d at wyn, from evidеnce that the incidents occurred have “a previously
We held that in the proximity particular establish duty protect has no to origins landowner another ment “and had their within.” insured, pause injuries We to note that the suffered dants were the terms of their insur- by Vasquez catastrophic policy arising ance nature. excluded claims from as- Also, although battery. the record that reveals defen- sault and/or Pastore, evening. Similarly, that 473 A.2d events of Enterprises A.J.C. added). during the that (R.I.1984) was no evidence (emрhasis any while Vasquez engaged in altercations Here, con- justice supported his Sportsman’s Inn or that the patronized some point” that by “[a]t clusion Sportsman’s Inn patron shooter in an argu- had been night, Vasquez that Therefore, we that the night. that hold of the inn” and patron with “another ment his justice trial abused discretion “[wjithin front yards he was shot that clearly wrong found However, cited to trial door.” likelihood Vasquez had shown reasonable support to this in the record no evidence on merits in his сlaim success and, review the finding, after a careful against defendants. record, there is evi- no we discern it.12 support dence point, must At this we believe we turn our attention to the comments of Accordingly, we record as hold disregarding corpo about demonstrate adequately it stands does Sportsman’s formalities rate between Sportsman’s prima showing facie Inc., Realty. and DLM careful We any Vasquez. Inn breached ly have read decision testimony before us fall evidence mаke a have concluded that he did not shooting linking far short with Vas- issue; con ruling definitive he did any Inn or quez’s Sportsman’s with visit analysis of in sider it within his whether during person premises who was junctive cer appropriate, relief was but There is evening question. no evi- of the tainly not to extent the law Inn dence the record that case has been established on that issue.13 to, any of, knowledge had connection gunman “piercing control over the conduct of In our opinion, possibly predicted analysis unnecessary that it could have veil” is only potential support 12. The for the trial went Inn and [he] justice's finding argu- Vasquez Inn[,][he] was in got an Sportsman's while inside the patron ment with another of the bar and that argument with a male. [He] into black person it was same who shot was shot male know[s] [he] black evening Vasquez’s later in affidavit while leave the [he friends] tried to support temporary motion of his restrain- Sportsman's Inn.” *8 relief, ing injunctive order and Similarly, this document not submitted affidavit, dated In December 2005. during hearings. into evidence at swore that while he was got man's into a loud verbal alter- "[He] discretionary a doc "Law case is guests cation of with other unknown inside prefers rulings on the trine consistent club,” club, exited the it "[a]s [he] they same issues when occur at the same understanding that the men [was his] same level, judicial pro are not when issues argued ap- with whom had earlier [he] pounded reviewing a Review to court.” In re proached directly of outside the club [him] Project, Proposed Town New Shoreham of of again began a altercation.” It was verbal (R.I.2011) (citing A.3d 25 523-24 "[d]uring this second of [that] altercation one Solomon, quoting Taveira 528 A.2d handgun a men brandished [he] (R.I.1987)) ("The law of doc 1107 the case document, however, shot." That was not ordinarily, judge a trine ‘states that after during hearings. submitted into evidence interlocutory pending decided an matter in a plaintiff's The answers to suit, judge, later interrogatories, a second confronted at a August dated also provide stage question in the of the suit with the same mannеr, disturb shooting. identical should refrain from not "[He] remember do[es] ”). ing ruling.’ [He] that several of friends the first know[s] [his]
321 stage litigation. corporation. have It We is not itself an that, considering pierc- merely the criteria for action but a procedural is means veil, corporate allowing liability on a substantive claim.” Id. at 694-95. overriding omnipresent:
“one factor is entity be corporate ‘the should disre Because we have determined that garded treated as an association of has not estаblished reasonable likelihood particu persons only the facts of success on underlying the merits of his it unjust inequitable is, lar case render claim, negligence it opinion, pre- our the subject corporate entity to consider mature to discuss the relevance * * * separate entity.’ Such facts to doctrine this case. for ‘when may present, example, be Conclusion entity public is used to defeat For the convenience, opinion, reasons set forth in justify wrong, protect ” fraud, we vacate the order the Superior or defend crime.’ Doe v. Geli (R.I.1999) neau, granting a preliminary injunction. 732 A.2d 48-49 record shall & B be remanded to (quoting R Electric v. Amco Co. Co., Court.
Construction
(R.I.1984)). Justice GOLDBERG with whom Justice Doe, In approval this Court cited with joins, INDEGLIA dissenting. passages several William Meade disagree majority’s Because we with the Fletcher guidance pierce whether approach to the issues in this case and its Doe, at corporate veil. 48-49. consequences parties, respеctful- we Specifically, explains Fletcher dissent. ly opinion, In our the majority veil, pierce corporation “the fails to do to either side of this must first be assumed liable.” William controversy. Fletcher, Meade Fletcher Cyclopedia of Corporations § the Law 41.28 at 166 Inn, Inc., DLM, Inc., (2006). attempt This is because “[a]n DLM (collectively, LLC defen-
pierce veil not itself a dants) appealed cause of but action rather is means of enjoining preliminary injunction defen- imposing liability underlying on аn cause encumbering, alienating, dants from action, such as tort or breach of conveying property at 122 Fountain 166-67; contract.” Id. see Am. Street. This decision was reached based (2004) § Corporations Jur.2d 47 at 695 discretionary (“The corporate may pierced veil Vasquez (plaintiff) that Gilberto had dem- conduct.”). showing improper absent a onstrated a sufficient likelihood of success Indeed, subject liability defendants to *9 of a attempt party pierce negligence third traditionаl In principles. “[A]n veil corporate does not constitute a and on appeal Court Court, independent parties’ primary cause of action of that and central rather, against corporation; it is an has been corporate focus whether the veil recognized pierced assertion of facts and circumstances that should be such that persuade impose corporate protections will the court to a cor- shield —which obligation It porаtion liability on its owners. be disre- —should Indeed, assessing a means of for the oral liability garded. briefing acts ar- equity corporation against gument holder in this case were almost devoted concerns about these dicta are immaterial of whether the entirely question entities should be re- day. will for another various wait respond damages. quired to defend We would affirm so, bypasses these ar- majority Even preliminary injunction simply pre- for a in- guments and vacates prevent serve the assets and its that the junction based on conclusion encumbrance, alienation, convey- their to cite failing erred record In our ance until the case is resolved. findings on the support evidence to opinion; the interests of are not claim, and thus negligence underlying by majority’s opinion. served plain- abused his discretion a reasonable likeli- tiff had demonstrated reasons, we respectfully For above the merits of claim. hood of success on dissent. declining principal In to address
dispute, majority cited relied case of this prior
on dicta in a
authority; we issue with its conclu- take Gelineau,
sion. Doe v. See (R.I.1999). However,
48-49 based issue, our
majority’s failure to address