Supreme Court
N o. 2 013

- 274

- Appeal. ( PM 13

- 1644)

Torrado Architects :

v. : Rhode Island Department of Human Services. :

NOTICE : This opinion is subject to formal revision before publication in the Rhode Island Reporter. Readers are requested to notify the Opinion Analyst, Sup reme Court of Rhode Island, 250 Benefit Street, Providence, Rhode Island 02903, at Telephone 2 22

- 3258 of any typographical or other formal errors in order that corrections may be made before the opinion is published.- 1

- Supreme Court
N o. 2 013

- 274

- Appeal. ( PM 13

- 1644)

Torrado Architects :

v. : Rhode Island Department of Human Services. :

Pre sent: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia , JJ.

O P I N I O N
Justice Goldberg , for th e Court. This case came before t he Supreme Court on
October 30 , 2014, pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not su mmarily be decided. The plaintiff , Torrado Architects (Torrado) , a ppeal s from a Superior Court judgment in favor of the defendant, Rhode Island Department of Human Services (DHS) , denying the plaintiff’s successive petition to compel
arbitration filed after the first arbitration proceeding in this matter was concluded an d confirmed

. After considering the arguments advanced by counsel, we are satisfied that cause has not been shown and that the appeal may be decided at this time. For the reasons set forth below, we affirm the judgment of the Superior Court.
Facts and T ravel On July 1, 2008, T orrado signed an agreement to perform architectural, engineering , and design services , for a fee of $61,500 , for renovations at a stat e
- owned property located at
480 Metacom Avenue in Bristol, Rhode Island

— commonly known as the Rho de Island Veterans
Home. A document referred to as a Blanket Purchase Agreement (BP A) was issued to Torrado- 2

- on April 17, 2009 , and signed by the state purchasing agent. The BPA referenced the agreement dated July 1, 2008. The BPA explicitly stated that the compensation was “NOT TO EXCEED” $61,500. This fee was calculated as a percentage of the overall expected construction costs. Torrado claims that the administrator of the home, General Richard Baccus (Baccus),
assured its representatives that additio nal services , outside the scope of the BPA , needed to be performed and that Torrado would be compensated for those services . By letter dated April 27, 2010, Torrado communicated with Baccus the need for additional compensation based on the design changes

. Specifically, Torrado asserted that the anticipated construction costs for the project had nearly doubled and that , therefore, their fee

— which was based on a percentage of the
total construction costs

— had also increased significantly

. On January 24, 20 12, Baccus submitted an “EOHHS Critical Expense Request Form” and a “Single Source Justification Form” to the Division of Purchases, seeking the funds necessary to pay Torrado’s increased fees. This request was denied on March 30, 2012. On
June 11, 2012, Torrado submitted a contract dispute claim to State Purchasing Agent Lorraine Hynes (Hynes) , pursuant to the State of Rhode Island Procurement Regulation s section 1.5.2. 1 Hynes denied the claim on July 16, 2012. Torrado appealed Hynes’ determination to the Chief Purchasing Officer (CPO) pursuant to Procurement Regulation s sections 1. 5. 6 2 and 1.6 . The CPO denied Torrado’s appeal by memorandum dated September 10, 2012. Torrado then filed a

1 Section 1.5. 2 of the State of Rhode Island Procurement Regulations provi des: “The Purchasing Agent is authorized to resolve contract disputes between contractors and user agencies upon the submission of a request in writing from either party * * * .”

2 Section 1.5.6 provides that “[a]ny appeal from the Purchasing Agent’s dete rmination of a contract dispute * * * must be filed with the Chief Purchasing Officer within fourteen (14) calendar days and in accordance with the ‘bid protest’ procedures set forth in Section 1.6 of these regulations entitled ‘Resolution of Protest.’”- 3

- complaint 3 in the Superior Court seeking relief pursuant to an A dministra tive Appeals Procedure
and the Administrative Procedures Act. In the prayer for relief, Torrado asked the court to (1) reverse the decision of the CPO; (2) award Torrado a revised contract amount of $156,000; and (3) award “[a]ny other relief as this [c]o urt deems just.” The parties, on October 15, 2012, stipulated that the matter would be held in abeyance
while a statutory arbitration procedure was under way
. 4 The arbitrator issued a “ Decision and
Award ” on December 17, 2012. The arbitrator indicated in his decision that , although he sympathized with Torrado because he believed that plaintiff render ed additional services to
DHS , he concluded that the additional work was not authorized under the procurement regulations. Accordingly, the arbitrator conc luded that Torrado was entitled to recover only the outstanding amount owed pursuant to the B P A. Finally, after previously denying a request by Torrado to expand the scope of the arbitration by considering claims that were equitable in nature, and not set forth in the Superior Court complaint, the arbitrator declared that he: “makes no determination as to what, if any, other remedies Torrado may have, including but not limited to the pleading causes of action against the State sounding in quantum meruit, unjust enrichment, promissory estoppel and/or negligence in allowing Administrator Baccus to wrongfully procure additional work, thereby leading to potential recover y of the monies sought.”
Torrado the n filed a motion requesting that the arbitrator reco nsider his decision. The basis of
the motion to reconsider was Torrado’s position that the arbitrator refused to consider Torrado’s
alternative remedies. Torrado later withdrew its motion. By agreement of the parties, the
arbitrator’s award was confirme d on January 7, 2013. No appeal from this award was taken.

3 Torr ado Architects v. Richard A. Li ch t , Director of the Department of Administration, in his official capacity as the Chief Purchasing Officer for the State of Rhode Island an d Providence Plantations , C.A. No. PB 12

- 4922.

4 See G.L. 1956 § 37

- 2

- 48 and G. L. 1956 chapter 16 of title 37.- 4

- Thereafter, on April 5, 2013, Torrado filed a p etition to c ompel a rbitration in the Superior
Court against DHS. Torrado had previously demanded, and DHS had refused, to arbitrate equitable clai ms that the arbitrator declined to consider in the first arbitration. Torrado’s motion to compel was heard on May 7, 2013. The trial justice rendered a bench decision on June 24, 2013, declaring that Torrado’s claims were barred by the doctrine of res ju dicata

. In denying the requested relief, the tri al justice expressed surprise that the arbitrator did not stay the arbitration and encourage Torrado to amend it s complaint. T he trial justice suggested that Torrado could have amended its complaint , even a fter arbitration concluded , and that its failure to do so was
fatal . Judgment entered on June 25, 2013, in favor of DHS on Torrado’s p etition to c ompel

a rbitration. Torrado filed a n otice of a ppeal from this judgment on June 26, 2013.
Standard of Review “[W]hether a dispute is arbitrable is a question of law that this Court reviews de novo .” Weeks v. 735 Putnam Pike Operations, LLC , 85 A.3d 1147, 1151 (R.I. 2014) (quoting State Department of Correction s v. Rhode Island Brotherhood of Correctional Officers , 866 A.2d 1241, 1247 (R.I. 2005)). “ [ A ] duty to arbitrate a dispute arises only when a party agrees to arbitration in clear and unequivocal language; and, even then, the party is only obligated to arbitrate issues that it explicitly agreed to arb itrate.” Id. at 1152 (quoting State Department of
Corrections , 866 A.2d at 1247 ).
Issue Presented There is no dispute that questions related to Torrado’s perfor mance of its contract with
DHS are arbitrable under the Public Works Arbitration Act. See G.L. 1956 § 37

- 16

- 2. The sole issue before the Court is whether the original arbitration award

— which ripened into a judgment- 5

- when it was confirmed by the Superior Court

— has res judicata effect on Torrado’ s p etition to

c ompel a rbitration. Analysis
“The doctrine of res judicata bars the relitigation of all issues that ‘were tried or might
have been tried ’ in an earlier action.” Huntley v. State , 63 A.3d 526, 531 (R.I. 2013) (quoting
Bossian v. Anderson , 991 A.2d 1025, 1027 (R.I. 2010)). The doctrine serves as a bar to a second cause of action where there exists: (1) “ identit y of parties ” ; (2) “ identity of issues ” ; and (3)

“ finality of judgment in an earlier action. ” Id. (quoting Bossian , 991 A.2d at 1027). There is no dispute that both identity of parties and finality of judgment exist. Rather, Torrado challenges the existence of the second element

— identity of issues . Torrado argues that the trial justice erred with respect to identity of issues for two reasons. First , Torrado asserts that
its e quitable claims could not have been asserted in the first complaint because they were not part of the administrative appeal that was referred to arbitration

. Torrado argues that once the arbitration commenced, the arbitrator was vested with the authority to decide procedural matters, including whether Torrado could add counts to be arbitrated. Torrado contends that , because the arbitrator refused to allow the amendment, an identity of issues is not present . Second, Torrado

argues that , by objecting to th e motion to amend the scope of the arbitration proceeding, DHS acquiesced to split the issues such that the arbitrator later “ carved out ” the claims from the
arbitration award.
In determining whether a claim is barred because of identity of issues, this Co urt has adopted the transactional rule set forth in § 24 of the Restatement (Second) Judgments

. See
Plunkett v. State , 869 A.2d 1185, 1188

- 89 (R.I. 2005) (citing ElGabri v. Lekas , 681 A.2d 271,
276 (R.I. 1996)). Section 24(1) of the Restatement (Second) Judgments at 196 (1982) provides- 6

- that a claim that is extinguished by a final judgment “includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of w hich the action arose.” In order to determine whether a claim arose out of the same transaction, the Court will look to “whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their

trea tment as a unit conforms to the parties’ expectations or business understanding or usage. ”
Id

. at § 24(2); see also Plunkett , 869 A.2d at 1189. However, even if the transactional test is satisfied, there are several exceptions that could preclude the app lication of the doctrine. One such exception exists when “ ‘ formal barriers in fact exist[] and [are] operative against a plaintiff in the first action,’ preventing full presentation
of his or her claim.” Plunkett , 869 A.2d at 1190 (quoting Restatement (Se cond) Judgments § 26

at cmt. c ). This Court has recognized another exception, stating that the rule a gainst splitting
claims is “not applicable where the defendant consents , in express words or otherwise, to the splitting of the claim.” ElGabri , 681 A.2d at 277 ( quo ting Restatement (Second) Judgment s § 26

at cmt. a ). Additionally, the Restatement provides that , when “[t]he court in the first action has expressly reserved the plaintiff’s right to maintain the second action[ , ]” the rule against splitting
cl aims will not apply. Restatement (Second) Judgments § 26(1)(b) at 233

. “The principle underlying the rule of [ res judicata ] * * * is that a party who once has had a chance to litigate a claim before an appropriate tribunal usually ought not to have another
chance to do so.” Huntley , 63 A.3d at 532 (quoting Restateme nt (Second) Judgments ch. 1 at 6 )

. Here, Torrado had ample opportunity to bring its equitable claims but failed to do so. The equitable claims that Torrado seeks to assert arise out of t he same set of facts that were the basis of the administrative appeal

— that Baccus induced Torrado to perform additional work that was- 7

- not part of the original contract. When claims arise from the same set of factual circumstances, the identity

- of

- issues p rong is satisfied. See Plunkett , 869 A.2d at 1189. Additionally , there are no exceptions to the res judicata doctrine present in this case that
would serve to negate the finality of the judgment confirming the arbitration award. First, formal
barriers we re not present that would have prevented Torrado from asserting its equitable claims in the original complaint or by way of an amended complaint filed before the arbitrator’s award ripened into a final judgment . In fact, it appears that Torrado was aware of this possibility when it argued in its m otion to r econsider the decision of the arbitrator: “Torrado’s further position is
that in the sake of ‘judicial economy,’ this Arbitrator should hear Torrado’s further actions against the State rather than Torrad o amending its complaint and alleging those causes of action against the State.” Nonetheless, the parties stipulated to an order confirming the arbitrator’s
decision

. Similarly, we cannot agree with Torrado’s contention that the arbitrator “ carved out ” th e equitable claims in his decision

— thereby creating an exception to the prohibition against splitting claims

— when he declared that he : “makes no determination as to what, if any, other remedies Torrado may have, including but not limited to the pleading c auses of action against the State sounding in quantum meruit, unjust enrichment, promissory estoppel and/or negligence in allowing Administrator Baccus to wrongfully procure additional work, thereby leading to potential recovery of monies sought. * * * Suc h causes of action that might be pled, if any, are outside of the purview of this Arbitration[.]” (Emphases added.)
The arbitrator did not “carve out” the equitable claims as Torrado contends, but simply decided not to make any determination about them as they were outside the scope of the arbitration. Although the arbitrator mentioned the possibility of pleading these claims in the future, the
award did not provide the right to do so after judgment entered. R ather , his decision was- 8

- tempered by the hyp othetical verbs of “may” and “might.” The arbitrator recognized the possibility of Torrado bringing additional equitable claims, but certainly his decision did not guarantee that possibility or “carve out” the equitable claims for a future complaint. The availability of an avenue to litigate additional equitable claims was extinguished when the arbitrator’s decision was confirmed by the parties on January 7, 2013. 5 After that, the res judicata effect of the judgment defeats any future claims arising out of the same transaction.
Conclusion For the reasons set forth above, we affirm the judgment of the Superior Court

. The papers in this case may be returned to the Superior Court.

5 There is no evidence that DHS acquiesced to the splitting of the claims “in express words or otherwise

. ” ElGabri v. Lekas , 681 A.2d 271, 277 (R.I. 1996) . Certainly, DHS did not consent by objecting to the arbitrato r hearing the equitable claims, as Torrado argues. Without any evidence of DHS giving its explicit consent to the splitting of the claims, Torrado’s assertion of this exception applying is without merit. Accordingly, we decline to address it substantivel y.

### R HODE 

### I SLAND 

### S UPREME 

### C OURT 

### C LERK 

### ’ S 

### O FFICE


### Clerk’s Office Order/O pinion Cover Sheet

TITLE OF CASE: Torrado Architects v. Rhode Island Department of Human Services.
CASE NO : No. 20 1 3

- 2 74

- Appeal. ( P M 13

- 1644 )
COURT: Supreme Court
DATE OPINION FILED: November 2 5 , 2014
JUSTICES: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia , JJ.
WRITTEN BY: Associate Justice Maureen McKenna Goldberg
SOURCE OF APPEAL: Providence County Su perior Court
JUDGE FROM LOWER COURT :
Associate Justice Daniel A. Procaccini
ATTORNEYS ON APPEAL :
For Plaintiff : Girard R. Visconti , Esq.
For Defendant : Michael D. Mitchell , Esq.