Opinion ID: 2061935
Heading Depth: 1
Heading Rank: 1

Heading: the kriter

Text: On May 19, 1988, Newport Offshore, Ltd. (NOL), purchased the sailing vessel Kriter at an auction from a U.S. Marshal. The sale had been ordered by a Federal District Court Judge to enforce a maritime lien for storage and repairs performed. The auction price was $5,000. Subsequent to the purchase, employees of NOL performed work to repair and restore the vessel. In the spring and summer of 1990 NOL experienced severe financial difficulties. The Internal Revenue Service had threatened to close down the yard for failure to pay taxes. Faced with this grave economic peril, Benedetto A. Cerilli, Jr. (Cerilli), and William A. Hustwit (Hustwit), who were principal officers of NOL, contacted Harold L. Schein (Schein). They sought to obtain a loan from Schein in order to stave off the closing of the shipyard. Schein responded that neither he nor his investment company would be willing to make any further loans to NOL. They then began to discuss the possibility of a sale to Schein of the Kriter, which was at the shipyard in the process of being restored. After inspecting the vessel, Schein offered to purchase the Kriter for $50,000. At this point the testimony of the participants differs concerning the agreement reached by the parties. In light of this testimony the trial justice found the following facts. Schein intended to enter into an agreement to buy the Kriter for $50,000 subject to a joint venture regarding the completion of repairs to the Kriter, the repurchase of it by NOL, Hustwit, and Cerilli; and the division of profits to be realized from the Kriter 's chartering or other commercial use and its eventual resale. The trial justice further found that the sale of the Kriter was conditioned upon the details of the joint-venture arrangement's being finalized through a written agreement to be duly executed by the parties. The joint-venture agreement as drafted provided in part as follows: 1. At Schein's sole option, Cerilli and/or Hustwit and/or Newport agree to purchase the Kriter from Schein for the sum of Seventy-five Thousand Dollars ($75,000.00), plus any expenses incurred by Schein, within twelve (12) months from July 3, 1990. After said date, the purchase price will increase by sixteen percent (16%) per annum. 2. Cerilli, Hustwit and Newport agree to expeditiously bring the Kriter to first class condition including, but not limited to, performing the work described in the survey dated June 6, 1988 performed by Atlantic Marine Surveyors. It is agreed that the cost of the work to be performed shall not exceed Thirty Thousand Dollars ($30,000.00). 3. Upon completion of the said work, the parties hereto agree to make the Kriter available for chartering or other commercial use. All proceeds from said use will be paid as follows: all sums will be paid to Schein until the payment of Seventy-five Thousand Dollars ($75,000.00) (plus interest and expenses as set forth in paragraph 1 above); next, funds will be applied to reduce the Thirty Thousand Dollar ($30,000) cost for the work performed by Cerilli, Hustwit and Newport; next, any remaining funds will be divided one-third (1/3) to Schein, one-third (1/3) to Hustwit and one-third (1/3) to Cerilli. 4. Simultaneously with the Kriter being available for chartering, the parties agree that the boat will be offered for sale. At such time that the Kriter is sold, the proceeds will be divided as per paragraph 3 above. The foregoing agreement was signed by Cerilli and Schein but was never executed by Hustwit or by NOL. The trial justice found that Schein had intended to purchase the vessel but only with the further provisions to be established under the joint-venture agreement. He stated in his written decision that [a]lthough NOL was desperate for cash, Hustwit and Cerilli would not have agreed to a sale of the Kriter without finalizing the terms of the joint venture agreement which would preserve NOL's, Hustwit's and/or Cerilli's participation in a further financial return on the Kriter. The trial justice further found that a purported bill of sale that was given to Schein by Cerilli was not approved by Hustwit or the corporation and that corporate ratification of the transaction did not occur. In evaluating the credibility of the testimony given by Schein and Cerilli, the trial justice took particular note of the fact that Schein did not inform the receivers or PC & J (the successful bidder for the corporate assets) that he claimed ownership of the Kriter until after the auction was completed. Schein had been present at the shipyard along with the receivers on September 17, 1990, but did not claim any interest in the vessel. The trial justice was not impressed by Schein's explanation that he wanted to avoid embarrassment in the eyes of his accountant for having embarked upon such a transaction. The trial justice specifically found that the claim of ownership was intentionally withheld by Schein and his agents, and although presented with opportunities, they did nothing prior to or on October 19, 1990, to assert any claim of ownership of the vessel either to the receivers or to PC & J. The trial justice determined that a transfer of title to the vessel never occurred and that NOL did in fact own the Kriter and that said property was properly transferred to PC & J when it closed on the purchase of NOL's assets. Consequently he denied the motion to reclaim the vessel as the property of Schein. The standard of review of the findings of fact of a trial justice sitting without the intervention of a jury is extremely deferential in this jurisdiction. We shall not disturb the findings of the trial justice unless it is established that he or she misconceived or overlooked relevant and material evidence or was otherwise clearly wrong. Pereira v. Tellier, 583 A.2d 523 (R.I. 1990); Green v. Green, 559 A.2d 1047 (R.I. 1989); Smith v. Boyd, 553 A.2d 131 (R.I. 1989); Lavey v. Lavey, 551 A.2d 692 (R.I. 1988). The determination by a trial justice of mixed questions of law and fact is entitled to the same deference as his or her factual findings. Morgan v. City of Warwick, 510 A.2d 1297 (R.I. 1986). Applying this well-settled doctrine to the findings and conclusions of the trial justice in the case at bar  and after reviewing the testimony and documentary evidence presented to the trial justice  we are of the opinion that he did not overlook or misconceive material and relevant evidence, nor was he otherwise clearly wrong. Indeed, we believe that the evidence in the case overwhelmingly supports the trial justice's findings of fact and determination of mixed questions of fact and law. For the reasons stated, the appeals of PC & J Contracting Co., Inc., and Harold L. Schein are denied and dismissed. The orders of the trial justice concerning the purchase of assets and the motion to reclaim are hereby affirmed. The papers in the case may be remanded to the Superior Court for the County of Newport for further proceedings. SHEA, J., did not participate.