Epic Enterprises LLC v. The Bard Group, LLC , 186 A.3d 587 ( 2018 )

June 20, 2018
Supreme Court
No. 2017-334-Appeal.
(NC 16-487)
Epic Enterprises LLC et al. :
v. :
The Bard Group, 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
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corrections may be made before the opinion is published.
Supreme Court
No. 2017-334-Appeal.
(NC 16-487)
Epic Enterprises LLC et al. :
v. :
The Bard Group, LLC. :
Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.
OPINION
Justice Goldberg, for the Court. This case came before the Supreme Court on May 9,
2018, pursuant to an order directing the parties to appear and show cause why the issues raised in
this appeal should not be summarily decided. The defendant, The Bard Group, LLC (defendant),
appeals from a final judgment granting summary judgment in favor of the plaintiffs, Epic
Enterprises LLC, Donna R. Morvillo, Kurt Rauschenbach, and Kristin Rauschenbach
(collectively plaintiffs). After hearing the arguments of counsel and examining the memoranda
submitted by the parties, we are of the opinion that cause has not been shown and that this case
should be decided without further briefing or argument. We affirm the judgment of the Superior
Court.
Facts and Travel
This dispute concerns a thirteen-unit condominium complex known as “10 Brown &
Howard Wharf Condominium” (the condominium) located near Thames Street in Newport,
Rhode Island. The condominium was created by declaration dated August 12, 2014, and
recorded on August 29, 2014, in the Newport land evidence records. The defendant owns nine
of the thirteen condominium units and is therefore the majority owner with 70.8 percent of the
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voting share. The plaintiffs own the remaining four units and have 29.2 percent of the voting
share. The original declaration permitted only “Retail/Office,” “Office,” or “Residential” uses in
the condominium. Specifically, Article 2.2(ff) expressly prohibited a restaurant use: “NO
commercial kitchens or the preparation of or the service of food for consumption onsite shall be
allowed.”
However, on December 23, 2016, defendant, as the majority-interest holder, unilaterally
adopted and recorded a “second amendment” to the declaration that removed the language in
Article 2.2(ff) that prohibited commercial kitchens and food service. In doing so, the second
amendment expressly included “Restaurant Use” as a new permitted use relative to the units
owned by defendant. The second amendment, in relevant part, stated: “Notwithstanding
anything to the contrary contained herein or in this Declaration, Units 103, 104, 105, 106 and
107 may have commercial kitchens and be used for the purpose of Restaurant Use.” The
defendant also applied to the Newport City Council for a victualing license and to transfer a
Class BV alcoholic beverage license for a restaurant that it intended to establish in its units.
The plaintiffs, in opposition to the second amendment, filed this declaratory judgment
action in the Superior Court seeking a declaration that the second amendment was invalid and
that to be valid, the adoption of the second amendment required unanimous consent of all the
owners pursuant to G.L. 1956 § 34-36.1-2.17(d). The parties filed cross-motions for summary
judgment. The defendant argued that, because § 34-36.1-2.17(d) deals only with the restriction
of uses, and because the second amendment in this case did not restrict the use or occupancy of
any unit, the second amendment was valid.
On May 1, 2017, a hearing was held on the motions; the hearing justice ruled that there
were no genuine issues of material fact in the case. The hearing justice acknowledged that the
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original declaration expressly prohibited the use of restaurants and that the second amendment
changed that use to specifically allow for restaurant service. The hearing justice reviewed
§ 34-36.1-2.17(d) and concluded that the statute was clear and unambiguous. The hearing justice
held that the statute required a change in use to be approved by the unanimous consent of all unit
owners. Accordingly, the hearing justice granted plaintiffs’ motion for summary judgment and
declared that the second amendment was invalid because unanimous consent from all unit
owners was required to adopt the amendment and that no condominium units could be converted
into a restaurant and bar without the unanimous consent of all unit owners. The defendant filed a
timely notice of appeal.
Standard of Review
This Court “review[s] a ruling on a motion for summary judgment de novo.” Pimentel v.
Deutsche Bank National Trust Co., 174 A.3d 740, 743 (R.I. 2017). “We will affirm a [trial]
court’s [summary judgment] decision only if, after reviewing the admissible evidence in the light
most favorable to the nonmoving party, we conclude that no genuine issue of material fact exists
and that the moving party is entitled to judgment as a matter of law.” Newstone Development,
LLC v. East Pacific, LLC, 140 A.3d 100, 103 (R.I. 2016). A matter that hinges on statutory
interpretation is ripe for summary judgment. Progressive Casualty Insurance Co. v. Dias, 151
A.3d 308, 312 n.6 (R.I. 2017). Furthermore, when reviewing the applicability of a statute, this
Court interprets the statute de novo. Id. at 311.
Analysis
Before this Court, defendant contends that the second amendment to the declaration does
not require unanimous approval by all unit owners because it does not prohibit or materially
restrict the use, occupancy, or behavior within individually-owned units, nor does it deprive
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minority-interest unit owners of any property rights. The defendant further argues that the
declaration always allowed a restaurant use because “[t]he [d]eclaration plainly and
unambiguously provides that ‘uses as may be allowed by the Zoning Ordinance of the City of
Newport * * * shall also be allowed * * *.’”
In response, plaintiffs argue that § 34-36.1-2.17(d) unambiguously requires unanimous
approval of all condominium unit owners for an amendment to a declaration that changes a prior
restricted use of any unit. The plaintiffs argue that the second amendment changed the use of the
units and therefore required unanimous approval. Lastly, plaintiffs contend that the language in
the declaration under the definition of retail use, which permits retail uses that are allowed under
the Newport zoning ordinances, is only a general provision and does not prevail over the specific
language of the declaration that prohibits commercial kitchens and food services.
This Court reviews “questions of statutory interpretation de novo.” State v. Hazard, 68
A.3d 479, 485 (R.I. 2013) (quoting Campbell v. State, 56 A.3d 448, 454 (R.I. 2012)). “In
matters of statutory interpretation our ultimate goal is to give effect to the purpose of the act as
intended by the Legislature.” Webster v. Perrotta, 774 A.2d 68, 75 (R.I. 2001). “It is well
settled that when the language of a statute is clear and unambiguous, this Court must interpret the
statute literally and must give the words of the statute their plain and ordinary meanings.” Alessi
v. Bowen Court Condominium, 44 A.3d 736, 740 (R.I. 2012) (quoting Waterman v. Caprio, 983
A.2d 841, 844 (R.I. 2009)).
The disputed statute on appeal, § 34-36.1-2.17(d), titled “Amendment of declaration,”
provides that:
“Except to the extent expressly permitted or required by other
provisions of this chapter, no amendment may create or increase
special declarant rights, increase the number of units, change the
boundaries of any unit, the allocated interests of a unit, or the uses
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to which any unit is restricted, in the absence of unanimous
consent of the unit owners.” (Emphasis added.)
We deem this statute to be clear and unambiguous, and therefore we construe the language of the
statute in accordance with its plain and ordinary meaning. Alessi, 44 A.3d at 740. We conclude
that § 34-36.1-2.17(d) clearly states that no amendment to a declaration may change the use to
which a unit or units is restricted without the unanimous approval of all unit owners.
In the case at bar, the original declaration expressly prohibited a restaurant use.
Specifically, Article 2.2(ff) of the condominium declaration stated that “NO commercial kitchens
or the preparation of or the service of food for consumption onsite shall be allowed.” The
defendant, unilaterally and without the approval of all unit owners, adopted a second amendment
that deleted the language of Article 2.2(ff). The second amendment of the declaration indeed
changed what was previously a restricted use in the condominium to a permitted use. Therefore,
for this amendment to be valid, unanimous approval of all unit owners was required pursuant to
§ 34-36.1-2.17(d), but was never achieved. Thus, we conclude that the second amendment to the
declaration was invalid. Accordingly, we affirm the judgment of the Superior Court.
Conclusion
For the reasons set forth herein, we affirm the judgment of the Superior Court. The
papers in this case may be remanded to the Superior Court.
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STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS
SUPREME COURT – CLERK’S OFFICE
OPINION COVER SHEET
Title of Case Epic Enterprises LLC et al. v. The Bard Group, LLC.
No. 2017-334-Appeal.
Case Number
(NC 16-487)
Date Opinion Filed June 20, 2018
Suttell, C.J., Goldberg, Flaherty, Robinson, and
Justices
Indeglia, JJ.
Written By Associate Justice Maureen McKenna Goldberg
Source of Appeal Newport County Superior Court
Judicial Officer From Lower Court Associate Justice Brian Van Couyghen
For Plaintiffs:
Turner C. Scott, Esq.
Attorney(s) on Appeal Roland F. Chase, Esq.
For Defendant:
Michael J. Richards, Esq.
SU-CMS-02A (revised June 2016)