Luongo v. Thornton Auto Sales, 2001-1321 (2002)

DECISION Before the Court for determination is the issue of whether municipal licensing is necessary for the lawful operation of an auto body repair business and an auto sales business in the Town of Johnston (Town), or whether the State of Rhode Island (State) has exclusive authority to license the businesses. FACTS AND TRAVEL Thornton Auto Sales (Thornton) is an auto body repair shop and auto sales business operating in the Town of Johnston since 1981. Thornton went into Receivership in April, 2001. The Receiver entered into a Purchase and Sale Agreement (Agreement) with Ciara Auto Sales (Ciara) for the sale of the real estate and assets of Thornton, including all the auto body and auto sales licenses belonging to Thornton. This sale was contingent on Ciara receiving from the Town of Johnston and from the State all the necessary approvals to operate a business of this type.

The Town of Johnston contends that no business may operate in the Town without a municipal license to do so. The Town refuses to grant operating approval to Ciara, claiming that the municipal license Ciara received from Thornton expired in May.