Clean Harbors Environmental Services, Inc. v.96-108 Pine Street LLC v. J.R. Vinagro Corporation J.R. Vinagro Corporation v. 96-108 Pine Street LLC ( 2023 )

January 5, 2023
Supreme Court
Clean Harbors Environmental Services, :
Inc.
v. : No. 2019-164-Appeal.
(PM 12-1322)
96-108 Pine Street LLC :
v. :
J.R. Vinagro Corporation. :
J.R. Vinagro Corporation : No. 2019-165 Appeal.
(PM 12-1719)
v. :
96-108 Pine Street LLC. :
NOTICE: This opinion is subject to formal revision
before publication in the Rhode Island Reporter. Readers
are requested to notify the Opinion Analyst, Supreme
Court of Rhode Island, 250 Benefit Street, Providence,
Rhode Island 02903, at Telephone 222-3258 or Email
opinionanalyst@courts.ri.gov of any typographical or
other formal errors in order that corrections may be made
before the opinion is published.
Supreme Court
Clean Harbors Environmental Services, :
Inc.
v. : No. 2019-164-Appeal.
(PM 12-1322)
96-108 Pine Street LLC :
v. :
J.R. Vinagro Corporation. :
J.R. Vinagro Corporation :
No. 2019-165-Appeal.
v. : (PM 12-1719)
96-108 Pine Street LLC. :
Present: Suttell, C.J., Goldberg, Robinson, Lynch Prata, and Long, JJ.
OPINION
Justice Lynch Prata, for the Court. In these consolidated cases, the
plaintiff/third-party defendant, J.R. Vinagro Corporation (Vinagro), appeals from
a final judgment of the Superior Court following a nonjury trial, denying
Vinagro’s motion for attorneys’ fees and costs against the defendant/third-party
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plaintiff, 96-108 Pine Street LLC (Pine Street).1 Vinagro argues that the trial justice
abused his discretion by not awarding Vinagro attorneys’ fees and costs under the
parties’ demolition contract based on the trial justice’s determination that neither
Vinagro nor Pine Street was the prevailing party. For the reasons stated herein,
we vacate the judgment of the Superior Court.
Facts and Travel
On July 7, 2011, Vinagro and Pine Street executed a demolition contract for
a fixed fee of $297,000 (the contract). The contract required Vinagro to demolish a
parking garage owned by Pine Street located at 100 Pine Street in Providence (the
garage); to conduct dewatering operations, as necessary; and to apply for, obtain,
and pay for all permits as necessary for the completion of the work. The contract
also contained a time-is-of-the-essence clause requiring Vinagro to complete the
project within eight weeks. After commencing the demolition work, however,
Vinagro observed six feet of oil-contaminated water in the basement of the garage.
Consequently, Vinagro consulted and hired plaintiff Clean Harbors Environmental
Services, Inc. (Clean Harbors), to remediate the contamination. Work, however,
was disrupted, and litigation ensued.
1
Pine Street also filed a motion for attorneys’ fees and costs that was similarly
denied.
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The parties, including Clean Harbors, filed three separate cases in Providence
County Superior Court, which were subsequently consolidated on July 27, 2012.2
Thereafter, summary judgment was granted in favor of Clean Harbors on its breach-
of-contract and bond claims, leaving the following claims for trial: (1) Vinagro’s
direct claims against Pine Street for breach of contract and unjust enrichment; (2)
Pine Street’s amended third-party complaint against Vinagro for breach of contract;
and (3) Vinagro’s third-party counterclaim against Pine Street for breach of contract
and unjust enrichment.
On February 16, 2018, following a nonjury trial, the trial justice issued a
written decision in favor of Vinagro on its breach-of-contract and unjust-enrichment
claims, and in favor of Pine Street on its breach-of-contract claim.3 As a result of
these findings, the trial justice awarded Vinagro $145,500 on the base contract and
$284,245.92 for the extracontractual work, plus prejudgment interest from May 12,
2012. 4 The trial justice also awarded Pine Street $62,000 in liquidated damages,
2
The three actions are J.R. Vinagro Corporation v. 96-108 Pine Street LLC (PM 12-
1719); Clean Harbors Environmental Services, Inc. v. 96-108 Pine Street LLC v.
J.R. Vinagro Corporation (PM 12-1322); and Clean Harbors Environmental
Services, Inc. v. J.R. Vinagro Corporation et al. (PC 12-2141).
3
Throughout this litigation, Vinagro’s unjust-enrichment claim has been referred to
as quantum meruit by both the parties and the trial justice. For purposes of clarity
and consistency, we will refer to this claim as unjust enrichment.
4
The parties stipulated at trial that Vinagro was entitled to $145,500 on the base
contract.
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plus prejudgment interest from November 1, 2012. The trial justice reserved
decision on the issue of attorneys’ fees.
Subsequently, Vinagro and Pine Street each moved for attorneys’ fees and
costs based on Section 10 of the contract, which provides:
“If any party to this Contract brings a cause of action
against the other party arising from or relating to the
Contract, the prevailing party in such proceeding shall be
entitled to recover its reasonable attorney fees and court
costs.”
In ruling on the parties’ cross-motions for attorneys’ fees, the trial justice
concluded: (1) that Vinagro’s unjust-enrichment claim did not fall within the
contract’s fee-shifting provision because it was an equitable claim that did not arise
out of the contract; and (2) that “this was a split decision” in which “both sides won
and both sides lost” because each party had prevailed on certain aspects of the
underlying case. Significantly, the trial justice declined to consider the monetary
awards for each cause of action, explaining that he was not interested in
mathematical calculations because, “[w]hile the award of money is an important
factor to consider * * * it is not the sole focus of the inquiry.”
Additionally, the trial justice noted a lack of precedent in this jurisdiction
concerning discretion to award attorneys’ fees in split decisions where a contractual
fee-shifting provision is present. Because of this, he relied on caselaw from other
jurisdictions supporting the proposition that, where the trial court finds that both
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parties prevailed on significant issues, the trial justice has discretion to determine
that no party prevailed in the litigation and may decline to award attorneys’
fees under a prevailing-party provision. See Empire Development Co. v. Johnson,
770 P.2d 525, 530 (Mont. 1989) (explaining that, although the “award of money is
an important factor to consider * * * it is not the sole focus of the inquiry * * * where
the parties have mutually breached the same contract,” and thus, holding that the
lower court did not err by refusing to grant either party attorneys’ fees); Anderson &
Karrenberg v. Warnick, 289 P.3d 600, 604 (Utah Ct. App. 2012) (finding that trial
court did not exceed its discretion by concluding that neither party was entitled to an
award of attorneys’ fees because there was no prevailing party); Browning-Ferris
Industries, Inc. v. Casella Waste Management of Massachusetts, Inc., 945 N.E.2d
964, 975-76 (Mass. App. Ct. 2011) (affirming trial judge’s finding that, because
neither party was a “prevailing party” within the meaning of the contract, the
litigation produced a split decision, and holding that such a “divided outcome
precludes either side from the usual status of ‘prevailing party’”); Brevard County
Fair Association, Inc. v. Cocoa Expo, Inc., 832 So. 2d 147, 151 (Fla. Dist. Ct. App.
2002) (explaining that in instances where the trial court finds that both parties
prevailed on significant issues, “the trial judge has discretion to determine no party
prevailed in the litigation and it is proper to deny an award of attorney’s fees under
a prevailing party contract or statute”). Based on this caselaw, the trial justice
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declined to award either party attorneys’ fees and costs and directed Vinagro and
Pine Street to each bear its own expenses incurred as a result of the litigation.
Thereafter, final judgment entered on January 11, 2019, in the consolidated matters,
and Vinagro timely appealed the denial of its attorneys’ fees and costs in both PM
12-1322 and PM 12-1719.
Standard of Review
“We have repeatedly stated that, in conducting a review of a trial justice’s
award of attorneys’ fees, ‘the issue of whether there exists a basis for
awarding attorneys’ fees generally is legal in nature, and therefore our review of
such a ruling is de novo.’” America Condominium Association, Inc. v. Mardo, 140
A.3d 106, 115 (R.I. 2016) (brackets omitted) (quoting Dauray v. Mee, 109 A.3d 832,
845 (R.I. 2015)). “Accordingly, we have further stated that ‘only if it is determined
that there is such a legal basis, then this Court will review a motion justice’s
actual award of attorneys’ fees for an abuse of discretion.’” Id. (brackets omitted)
(quoting Dauray, 109 A.3d at 845). “This Court has long adhered to the
‘American rule’ that ‘requires each litigant to pay its own attorney’s fees
absent statutory authority or contractual liability.’” Id. (quoting Moore v. Ballard,
914 A.2d 487, 489 (R.I. 2007)).
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Discussion
On appeal, Vinagro contends that the trial justice erred in denying Vinagro’s
motion for attorneys’ fees and costs, arguing that while discretion may be exercised
by the trial justice in determining whether a particular party prevailed in a given
matter, the trial justice is “divested of discretion when it comes to determining the
prevailing party’s contractual entitlement to attorneys’ fee[s] and costs” when
faced with a fee-shifting provision. More specifically, Vinagro asserts
that the “phrases ‘shall be entitled’ and ‘shall be awarded’ in the context of
a contractual fee-shifting provision are indistinguishable and mandate that
attorneys’ fees be awarded to the prevailing party as a matter of right.” Moreover,
Vinagro avers that not only is Vinagro the prevailing party in this matter but that it
is entitled to an attorneys’ fees award as a matter of right pursuant to the clear and
unambiguous terms of the contract’s fee-shifting provision and that, therefore,
the trial justice’s refusal to award such fees constitutes reversible error.
Additionally, Vinagro argues that public policy favors enforcing the
contract’s fee-shifting provision as written because two sophisticated parties—here,
Vinagro and Pine Street—specifically bargained for such a provision. According to
Vinagro, the contract’s fee-shifting provision clearly demonstrates that the parties
“wished to ensure that a prevailing party in any ensuing litigation would be
reimbursed for its attorneys’ fees.” Consequently, construing this provision in such
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a way as to afford the trial court discretion to award attorneys’ fees to the prevailing
party “would render the clear terms of the agreement a mere nullity” and would
“incentivize the frivolous lawsuits which attorneys’ fee-shifting provisions are
intended to discourage[.]” Thus, Vinagro maintains that public policy favors
enforcing the attorneys’-fee provision in the contract as written, and that the trial
justice abused his discretion in determining that Vinagro was not a prevailing party
and by declining to award Vinagro attorneys’ fees and costs.
In response, Pine Street argues that the trial justice did not abuse his discretion
in declining to award Vinagro attorneys’ fees because an award of attorneys’ fees is
mandatory only if there is a prevailing party on the contractual claims. As such, an
award of fees is not appropriate in this case because, according to Pine Street,
Vinagro did not prevail on the significant issues related to its breach-of-contract
claim, as the trial justice determined. Moreover, Pine Street maintains that this Court
should afford the trial justice discretion in determining who is the prevailing party.
Thus, Pine Street urges this Court to deny and dismiss Vinagro’s appeal and hold
that the trial justice did not abuse his discretion in declining to award Vinagro
attorneys’ fees and costs.
It is well settled that “the issue of whether there exists a basis for awarding
attorneys’ fees generally is legal in nature,” and therefore such a ruling is reviewed
de novo. America Condominium Association, Inc., 140 A.3d at 115 (brackets and
-8-
emphasis omitted) (quoting Dauray, 109 A.3d at 845). This Court will review a trial
justice’s actual award for attorneys’ fees for an abuse of discretion only if it is first
determined that such a legal basis exists. Id. Consequently, we begin our analysis
by looking to the contract to determine whether a legal basis exists for Vinagro’s
claim for attorneys’ fees and costs. See id. at 115-16.
As noted, Section 10 of the contract provides that “[i]f any party to this
Contract brings a cause of action against the other party arising from or relating to
the Contract, the prevailing party * * * shall be entitled to recover its reasonable
attorney fees and court costs.” (Emphasis added.) A plain reading of Section 10
leads to the inescapable conclusion that the contract provides a legal basis for an
award of attorneys’ fees and costs. See America Condominium Association, Inc., 140
A.3d at 116; see also Rivera v. Gagnon, 847 A.2d 280, 284 (R.I. 2004) (stating that
a contract “must be viewed in its entirety, and the contract terms must be assigned
their plain and ordinary meanings”). The words “shall be” and “entitled to” mandate
an award of attorneys’ fees and costs where a party prevails on a claim (or claims)
arising from or relating to the contract. Section 10’s fee-shifting mandate, however,
is predicated on the existence of: (1) a prevailing party; and (2) a claim or claims
arising from or relating to the contract.
Turning first to the question of who was the prevailing party, the trial justice
declined to award either party attorneys’ fees and costs, reasoning that each
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party prevailed on certain aspects of the underlying case and that, therefore,
there was no one prevailing party. On appeal, however, Vinagro argues that
such a finding constitutes an abuse of discretion because “the fee-shifting
provision * * * is an inviolable command that requires the trial justice to award the
prevailing party * * * its reasonable fees and costs[.]” Vinagro maintains that “shall
be entitled” is a clear mandate requiring the trial justice to identify the
prevailing party in the instant litigation and award that party their reasonable
attorneys’ fees and costs. Thus, according to Vinagro, by failing to adhere to the
clear terms of the fee-shifting provision contained in the contract, the trial justice
committed reversible error.
In attempting to identify the prevailing party in this matter, the trial justice
relied on the framework adopted by this Court in Keystone Elevator Company, Inc.
v. Johnson & Wales University, 850 A.2d 912 (R.I. 2004). In Keystone Elevator
Company, Inc., we contemplated the meaning of the phrase “prevailing party” in the
context of G.L. 1956 § 34-28-19, Rhode Island’s mechanics’ lien statute.
Keystone Elevator Company, Inc., 850 A.2d at 917-18. In doing so, this Court
embraced the significant-issues test endorsed by the Supreme Court of Florida,
which provides that “the fairest test to determine who is the prevailing party is to
allow the trial judge to determine from the record which party has in fact prevailed
on the significant issues tried before the court.” Id. at 918 (quoting Prosperi v. Code,
- 10 -
Inc., 626 So. 2d 1360, 1363 (Fla. 1993)). Importantly, this Court made clear that
“[s]uch a standard places the determination of which party is the ‘prevailing party’
precisely where it ought to be, within the sound discretion of the trial justice.” Id. at
919. As we have previously explained, “a trial justice is in the best position to assess
the merit of each party’s claims or defenses, and to determine which party fairly may
be said to have prevailed on the significant issues.” Id. Consequently, the question
of which party is the prevailing party is a factual one that will be reviewed for an
abuse of discretion. See id.
Applying the significant-issues test as adopted in Keystone Elevator
Company, Inc., the trial justice explained that Vinagro prevailed in recovering
$145,500 on the base contract and on Vinagro’s unjust-enrichment claim, and that
Pine Street had prevailed on its liquidated-damages claim. The trial justice
determined, however, that Vinagro’s unjust-enrichment claim did not fall within the
scope of Section 10 because the claim was equitable in nature and therefore did not
arise out of the contract. The trial justice further explained that the two significant
issues in this case were dewatering and the contaminated soils; Pine Street prevailed
on the former and Vinagro prevailed on the latter. The trial justice also noted that,
although the amounts recovered on these respective claims were different, he did not
believe that a mathematical calculation was useful in determining which party
prevailed on the significant issues of the case. For these reasons, the trial justice
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determined that this case was a split decision and, thus, it was fair and equitable to
require each side to bear its own attorneys’ fees and court costs.
Although the trial justice’s reliance on Keystone Elevator Company, Inc. was
understandable in attempting to identify the prevailing party, the trial justice’s
subsequent finding that no party had prevailed, without a more fact-intensive, case-
specific analysis, was erroneous. Keystone Elevator Company, Inc. involved an
award of attorneys’ fees in the context of Rhode Island’s mechanics’ lien statute,
which explicitly provides the trial court with discretion to award fees to the
prevailing party. See Keystone Elevator Company, Inc., 850 A.2d at 917. Indeed,
the statute expressly states that “[t]he court, in its discretion, may also allow
for the award of attorneys’ fees to the prevailing party.” Section 34-28-19
(emphasis added). In the instant case, however, the trial justice was faced with a
contract containing a mandatory fee-shifting provision that required a determination
of, among other things, a prevailing party. This Court “staunchly adheres to the
American rule that requires each litigant to pay its own attorney’s
fees absent statutory authority or contractual liability.” Arnold v. Arnold, 187
A.3d 299, 315 (R.I. 2018) (emphasis added) (brackets omitted) (quoting Danforth v.
More, 129 A.3d 63, 72 (R.I. 2016)). These two sophisticated parties freely and fairly
bargained for Section 10’s fee-shifting mandate and intended for the prevailing party
to any proceeding arising from or relating to the contract to be reimbursed for its
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attorneys’ fees. Consequently, the trial justice was divested of discretion with
respect to determining an entitlement to attorneys’ fees; the trial justice was required
to resolve the question of which party was the prevailing party.
The appropriate standard for determining who is the prevailing party in the
context of a contract containing a mandatory fee-shifting provision, for which the
contract provides no specific definition, is a matter of first impression for this Court.
In breach-of-contract actions such as the present case, some courts have
held that the trial justice must designate one party as the prevailing party.
See, e.g., Green Companies, Inc. v. Kendall Racquetball Investment, Ltd., 658 So.
2d 1119, 1121 (Fla. Dist. Ct. App. 1995); Lucite Center, Inc. v. Mercede, 606 So. 2d
492, 493 (Fla. Dist. Ct. App. 1992) (“In a breach of contract action, one party must
prevail.”); Reinhart v. Miller, 548 So. 2d 1176, 1177 (Fla. Dist. Ct. App. 1989).
Others, however, have endorsed a more flexible approach that affords the trial justice
greater discretion in determining who the prevailing party is when faced with a
situation in which both or neither party may be considered to have prevailed.
See, e.g., R.T. Nielson Company v. Cook, 40 P.3d 1119, 1127 (Utah 2002);
Empire Development Co., 770 P.2d at 530; Skylink Jets, Inc. v. Klukan, 308 So.
3d 1048, 1052-54 (Fla. Dist. Ct. App. 2020); Anderson & Karrenberg, 289 P.3d at
603-04; Browning-Ferris Industries, Inc., 945 N.E.2d at 976; Brevard County Fair
Association, Inc., 832 So. 2d at 151.
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For instance, in R.T. Nielson Company, the Utah Supreme Court was faced
with a similar contractual fee-shifting provision which provided that “the prevailing
party to any litigation brought to enforce any provision of this Agreement shall
be awarded its costs and attorneys fees.” R.T. Nielson Company, 40 P.3d at 1122
(brackets omitted). The Utah Supreme Court explained that determining which
party is the prevailing party is an appropriate question for the trial court—one which
depends largely on “the context of each case, and, therefore, it is appropriate to leave
this determination to the sound discretion of the trial court.” Id. at 1126-27.
The Utah Supreme Court stated that, in determining which party is the prevailing
party, appropriate considerations for the trial court include, but are not limited to:
“(1) contractual language, (2) the number of claims,
counterclaims, cross-claims, etc., brought by the parties,
(3) the importance of the claims relative to each other and
their significance in the context of the lawsuit considered
as a whole, and (4) the dollar amounts attached to and
awarded in connection with the various claims.” Id. at
1127.
Importantly, the Utah Supreme Court explained that “[i]n most cases involving
language similar to the contractual language before us here, there can generally be
only one prevailing party.” Id. However, the court also noted that the above-
mentioned standard may permit a case-by-case evaluation and affords the trial court
flexibility to handle unique circumstances “where both, or neither, parties may be
considered to have prevailed.” Id.
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Similar to Utah, Florida has also endorsed a flexible approach to determining
the prevailing party in the context of breach-of-contract cases to afford the trial
justice greater discretion when faced with a situation in which both parties or neither
party may be considered to have prevailed. See Skylink Jets, Inc., 308 So. 3d at 1052-
54; Newton v. Tenney, 122 So. 3d 390, 392 (Fla. Dist. Ct. App. 2013); Hutchinson
v. Hutchinson, 687 So. 2d 912, 913 (Fla. Dist. Ct. App. 1997). More specifically,
Florida courts have recently stated that while there generally is only one prevailing
party in a breach-of-contract action, “there may be compelling circumstances in
which a trial court determines that neither party prevailed in a breach of contract
action.” Newton, 122 So. 3d at 392; see also Hutchinson, 687 So. 2d at 913.
Although Florida courts have not expressly defined what constitutes compelling
circumstances, a review of relevant Florida caselaw suggests that compelling
circumstances may exist when the parties battle to a draw such that neither party
prevailed in the litigation. See, e.g., M.A. Hajianpour, M.D., P.A. v. Khosrow Maleki,
P.A., 975 So. 2d 1288, 1289-90 (Fla. Dist. Ct. App. 2008) (explaining that
compelling circumstances existed for the trial justice to decline to award fees
because neither party prevailed on the significant issues in the litigation); Newton,
122 So. 3d at 392 (reversing trial justice’s decision not to award fees because one
party prevailed on the significant issue in the litigation, and, thus, no compelling
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circumstances existed to justify a denial of attorneys’ fees); Skylink Jets, Inc., 308
So. 3d at 1054.
These prevailing-party tests endorsed by Utah and Florida are the approaches
we deem most acceptable. As other courts have highlighted, utilizing a flexible and
reasoned approach affords the trial court sufficient discretion and places it in the best
position to properly ascertain which party prevailed, particularly in complicated
cases involving multiple claims and parties. See R.T. Nielson Company, 40 P.3d at
1127; Skylink Jets, Inc., 308 So. 3d at 1053-54 (noting that the Florida Supreme
Court has emphasized a flexible approach that gives the trial courts broad discretion
in determining which party is the prevailing party, including the discretion to make
a determination that neither party has prevailed if compelling circumstances are
present); KCIN, Inc. v. Canpro Investments, Ltd., 675 So. 2d 222, 223 (Fla. Dist. Ct.
App. 1996). As one court explained:
“Prevailing party attorney’s fees are just and proper
in the majority of contract litigation. We are concerned,
however, with contracts that fail as a result of
fault by both contracting parties. A rule which requires
an award of prevailing party attorney’s fees in all
cases may result in an unjust reward to a party
whose conduct caused the failure of the contract. The
rule is especially inequitable in the ever increasing
number of cases in which the attorney’s fees far
exceed the claims for damages arising from the contract.”
KCIN, Inc., 675 So. 2d at 223.
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We agree. While most cases containing language similar to that found in
Section 10 of the contract before us will result in the determination of one prevailing
party, there may be compelling circumstances which justify a finding that both, or
neither, of the parties may be considered to have prevailed. See Skylink Jets, Inc.,
308 So. 3d at 1053; Newton, 122 So. 3d at 392; Hutchinson, 687 So. 2d at 913(“In a breach of contract action, one party must prevail, absent compelling
circumstances.”). Such a finding, however, shall be left for those instances in which,
after considering the above-mentioned factors, it is clear to the trial justice that such
compelling circumstances exist to warrant a refusal to award fees.
Therefore, we hold that the trial justice erred in finding that neither
party prevailed in the litigation despite the existence of a mandatory fee-shifting
provision without a more comprehensive, fact-intensive, and case-specific analysis.
Accordingly, we vacate the trial justice’s findings in this regard and
remand the matter to the Superior Court for a determination of the prevailing
party by considering: “(1) [the] contractual language[;] (2) the number of claims,
counterclaims, cross-claims, etc., brought by the parties[;] (3) the importance of
the claims relative to each other and their significance in the context of the
lawsuit considered as a whole[;] and (4) the dollar amounts attached to and
awarded in connection with the various claims[,]” as well as whether compelling
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circumstances exist to justify a finding that both parties, or neither party may be
considered to have prevailed. R.T. Nielson Company, 40 P.3d at 1127.
Unjust Enrichment
In addition to taking issue with the trial justice’s determination that there was
no prevailing party, Vinagro also challenges the trial justice’s conclusion that its
unjust-enrichment claim did “not fall within the language of Paragraph 10 because
it’s an equitable remedy, and * * * not a cause of action that arises out of the
contract.” Vinagro argues that the expansive scope of the contract’s fee-shifting
provision entitles it to attorneys’ fees related to prosecuting both its breach-of-
contract and unjust-enrichment claims. Vinagro points out that the contract’s fee-
shifting provision specifically applies to causes of action “arising from or relating
to the Contract,” which, according to Vinagro, evidences the parties’ intent that for
claims arising from their obligations under the contract or relating to the work on the
subject project, the prevailing party is entitled to recoup its attorneys’ fees and costs.
According to Vinagro, its “extra costs and expenses incurred due to unforeseen work
on the project [we]re certainly costs and expenses ‘arising from or relating to’ the
[contract].” Thus, Vinagro avers that interpreting Section 10 as not encompassing
its unjust-enrichment claim would render the foregoing language mere surplusage.
Pine Street, however, argues that the trial justice correctly found that Vinagro’s
unjust-enrichment claim does not come within the scope of Section 10 because
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equitable claims such as unjust enrichment “only lie in the absence of a contractual
relationship.” Therefore, Pine Street contends that a claim “relating to the Contract”
is, by definition, not one that sounds in unjust enrichment, and thus, Vinagro may
not be awarded fees on this quasi-contractual claim.
In determining whether Vinagro’s unjust-enrichment claim falls within
the scope of the contract’s fee-shifting provision, we deem it “appropriate
to apply the laws of contract construction.” America Condominium Association,
Inc., 140 A.3d at 113 (quoting Sisto v. America Condominium Association, Inc., 68
A.3d 603, 611 (R.I. 2013)). “The determination of whether a contract’s terms are
ambiguous is a question of law to be decided by the court.” Botelho v. City of
Pawtucket School Department, 130 A.3d 172, 176 (R.I. 2016) (quoting JPL
Livery Services, Inc. v. Rhode Island Department of Administration, 88 A.3d 1134,
1142 (R.I. 2014)); see also Beacon Mutual Insurance Company v. Spino
Brothers, Inc., 11 A.3d 645, 648 (R.I. 2011) (“[W]hether a contract is clear and
unambiguous is a question of law.”) It is well settled that this Court reviews
questions of law de novo. Botelho, 130 A.3d at 176.
“We have often stated that, when we review a contract on appeal, the contract
‘must be viewed in its entirety, and the contract terms must be assigned their plain
and ordinary meanings.’” America Condominium Association, Inc., 140 A.3d at 113
(quoting Rivera, 847 A.2d at 284). “Consequently, ‘if the contract terms are clear
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and unambiguous, judicial construction is at an end for the terms will be applied as
written.’” Id. (brackets omitted) (quoting Rivera, 847 A.2d at 284). The Court will
“refrain from engaging in mental gymnastics or from stretching the imagination to
read ambiguity into a contract where none is present.” Id. (brackets omitted)
(quoting Bliss Mine Road Condominium Association v. Nationwide Property and
Casualty Insurance Co., 11 A.3d 1078, 1083 (R.I. 2010)). “A term in a contract is
ambiguous when it is ‘reasonably and clearly susceptible to more than one rational
interpretation.’” Botelho, 130 A.3d at 176 (quoting Miller v. Saunders, 80 A.3d 44,
49 (R.I. 2013)); see also America Condominium Association, Inc., 140 A.3d at 113
(“A contract is ambiguous only if it is ‘reasonably and clearly susceptible of more
than one interpretation.’”) (quoting Rivera, 847 A.2d at 284).
In the instant matter, viewing the contract, and in particular Section 10, in its
entirety and giving the terms thereof their plain, ordinary, and usual meanings,
Vinagro’s unjust-enrichment claim clearly and unambiguously falls within the scope
of Section 10. While the trial justice was correct in concluding that equitable
remedies are not causes of action that generally arise out of contract, the trial justice
overlooked the words, “or relating to the Contract.” These words cannot be ignored.
As Vinagro correctly notes, Vinagro’s extra costs and expenses incurred due to the
unforeseen work on the project unquestionably relate to the contract for the obvious
reason that but for the existence of the contract, Vinagro would not have been
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obligated to perform the unforeseen work. Thus, while we agree with the trial justice
that Vinagro’s unjust-enrichment claim does not arise from the contract,
it nevertheless is inextricably related to the contract. Therefore, the trial justice erred
in concluding that Vinagro’s unjust-enrichment claim does not fall within the scope
of the contract’s fee-shifting provision, and, consequently, we reverse the trial
justice’s determination in this regard.
Conclusion
For the foregoing reasons, we vacate the judgment of the Superior Court.
This matter shall be remanded to the Superior Court for a determination of who is
the prevailing party through application of the standard adopted herein on the basis
of the existing record.
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STATE OF RHODE ISLAND
SUPREME COURT – CLERK’S OFFICE
Licht Judicial Complex
250 Benefit Street
Providence, RI 02903
OPINION COVER SHEET
Clean Harbors Environmental Services, Inc. v. 96-
108 Pine Street LLC v. J. R. Vinagro Corporation.
Title of Case
J.R. Vinagro Corporation v. 96-108 Pine Street LLC.
No. 2019-164-Appeal.
(PM 12-1322)
Case Number
No. 2019-165-Appeal.
(PM 12-1719)
Date Opinion Filed January 5, 2023
Suttell, C.J., Goldberg, Robinson, Lynch Prata, and
Justices
Long, JJ.
Written By Associate Justice Erin Lynch Prata
Source of Appeal Providence County Superior Court
Judicial Officer from Lower Court Associate Justice Richard A. Licht
For Plaintiff:
Jackson C. Parmenter, Esq.
Attorney(s) on Appeal
For Defendant:
Armando E. Batastini, Esq.
SU-CMS-02A (revised November 2022)