Court Opinion

ID: 4367380
Source: CourtListenerOpinion
Date Created: 2019-02-13 16:34:17.701478+00
Date Added: 2024-06-11T11:49:46.400192
License: Public Domain

Supreme Court

                                                        No. 2017-426-Appeal.
                                                        (PC 16-4079)

  John Rocchio Corporation           :

             v.                      :

Pare Engineering Corporation.        :

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

                                                                  No. 2017-426-Appeal.
                                                                  (PC 16-4079)

        John Rocchio Corporation              :

                     v.                       :

      Pare Engineering Corporation.           :

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

                                         OPINION

       Justice Indeglia, for the Court. The plaintiff, John Rocchio Corporation (Rocchio),

appeals from a final judgment of the Superior Court granting summary judgment in favor of the

defendant, Pare Engineering Corporation (Pare).        This matter came before the Court on

December 6, 2018, pursuant to an order directing the parties to appear and show cause why the

issues raised should not be summarily decided. After considering the arguments set forth in the

parties’ memoranda and at oral argument, we are convinced that cause has not been shown and

further argument or briefing is not required to decide this matter. Accordingly, we affirm the

judgment of the Superior Court.1

1
  We affirm the judgment of the Superior Court, albeit for different reasons from those set forth
in the hearing justice’s decision. In so doing, we follow “our precedent of affirming the orders
and judgments of a trial court when there are other valid reasons to support the order or judgment
appealed from.” McGovern v. Bank of America, N.A., 91 A.3d 853, 861 (R.I. 2014) (alteration
and deletion omitted) (quoting Levine v. Bess Eaton Donut Flour Co., Inc., 705 A.2d 980, 984
(R.I. 1998)).
                                              -1-
                                                I

                                       Facts and Travel

       On June 5, 2015, the Warwick Sewer Authority (the WSA) entered into an agreement

with Pare for consulting and engineering services relating to a sewer infrastructure expansion

project that the WSA planned to complete. That agreement required Pare to provide certain pre-

bid services, which included preparing requests for proposal (RFP) that would serve as the basis

for the state-law-mandated bidding process for potential general contractors.2 Pare completed

this task, and the WSA ultimately received bids from five companies: D’Ambra Construction

Corp., Inc., ET&L Corp., Hart Engineering Corp. (Hart), DiGregorio, Inc. (DiGregorio), and

Rocchio. The bids were opened and read aloud during a public ceremony at Warwick City Hall

on April 22, 2016.    Rocchio was the low bidder at $2,318,285, which was approximately

$147,000 less than the next-lowest bid, which was submitted by DiGregorio.

       On April 27, 2016, Pare prepared and delivered a memorandum to Janine Burke-Wells,

the executive director of the WSA, containing Pare’s review and recommendations regarding the

bidding process. In that memorandum, Pare provided a review of the submissions of the two

lowest bidders, Rocchio and DiGregorio, which included a notation regarding the failure of

Rocchio and Hart to include certain required EPA forms in their bids.3 Pare concluded its

recommendation by stating:

               “Based upon the review of the bids it appears that [Rocchio]
               should be disqualified, at the discretion of the WSA, for failing to
               include the required EPA forms 6100-3 and 6100-4 as required by

2
   At that time, the agreement between the WSA and Pare did not contain any provisions
regarding bid-phase services such as the recommendation letter at issue in this case, as discussed
infra. There is some dispute as to whether that provision was included later by verbal addendum
to the agreement in January 2016.
3
  It appears from the record that the EPA forms were necessary for the bid because the project
was receiving EPA financial assistance.
                                              -2-
               page 2 of Attachment F: Good Faith Efforts, in Section 00830 of
               the Project Specifications. Based on interviews with the
               Contractors and their references, and Pare’s understanding of the
               Contractor’s capabilities from previous experience, Pare is not
               aware of any reasons why the Contract should not be awarded to
               either [Rocchio] or [DiGregorio]. Pare is aware [Rocchio] has
               previously completed work for the WSA, which could be
               considered by the WSA when evaluating the Contractor’s
               qualifications.”

       At a WSA board meeting on April 28, 2016, pursuant to Burke-Wells’s request, the board

tabled the bid selection until the May 2016 meeting. However, prior to that April 28, 2016 board

meeting, Burke-Wells had met with the president of Rocchio, “as a professional courtesy[.]” In a

letter dated May 2, 2016, the president thanked Burke-Wells for meeting with him and provided

the two required EPA forms that had been previously omitted from Rocchio’s bid.

       The next WSA board meeting was held on May 19, 2016. The minutes of that meeting

reflect that the board discussed and reviewed the reports of Pare and Burke-Wells. Moreover,

the minutes also indicate that Burke-Wells “asked that the Board reject [Rocchio’s] low bid and

award a contract to DiGregorio, Inc. * * *.” In her memorandum to the board dated May 19,

2016, Burke-Wells explained the reasoning for her recommendation. She noted that Rocchio

and Hart originally failed to submit the required EPA forms; however, she went on to explain

that Rocchio eventually provided the WSA with the EPA forms but that there were “several

irregularities” in that submission. Burke-Wells also referenced prior projects that Rocchio had

performed for the WSA, which involved conflicts regarding change orders and increased project

costs above Rocchio’s original bid on those projects. In her deposition, Burke-Wells testified

that her recommendation to the board was based on “[m]ainly performance and [her] concern * *

* with some attention to detail, but that was not the ultimate reason. The ultimate reason was the

research [she] had been doing with past experience on projects with the [WSA].”

                                              -3-
       Also at the board meeting on May 19, one of the board members stated that he

understood Burke-Wells’s recommendation as being based on the WSA’s experience with prior

work performed by Rocchio. According to the meeting minutes, Burke-Wells “concurred” and

further added that “the EPA forms are important as well, and (failure to submit) disqualifies the

bidder.” Another board member moved to award the contract to DiGregorio and explained that

his recommendation was “based entirely on the submission of qualifying documents” and that, if

the board was “going to have qualifications for bid submittal, WSA should abide by those

qualifications.” The board then unanimously approved the motion to award the contract to

DiGregorio.

       On August 29, 2016, Rocchio filed the instant action in Providence County Superior

Court, asserting claims against Pare for interference with prospective contractual relations

(Count I); negligence (Count II); and breach of contractual obligations due to Rocchio as a third-

party beneficiary of the contract between the WSA and Pare (Count III).4 Pare ultimately moved

for summary judgment on all counts, arguing that the project award to DiGregorio was based on

the recommendation of Burke-Wells and the vote of the WSA board. Pare maintained that it did

not act in a way as to intentionally interfere with Rocchio’s prospective contractual relations,

pointing out that it had no interest whatsoever in which company was ultimately awarded the bid.

Pare further averred that Rocchio could not produce evidence demonstrating that Pare’s

recommendation to Burke-Wells was the proximate cause of the rejection of Rocchio’s bid by

the WSA, and it further argued that the economic loss doctrine barred Rocchio’s claim. Finally,

Pare posited that Rocchio was an incidental beneficiary of Pare’s contract with the WSA, rather

4
  We take a moment to note that, at the hearing on Pare’s motion for summary judgment,
Rocchio acknowledged that it had “made a business determination” and elected to file its claims
solely against Pare and did not include the WSA as a party to this lawsuit.
                                              -4-
than an intended beneficiary, and, as such, was not entitled to bring a claim for breach of contract

against Pare.

       In opposition, Rocchio argued that the economic loss doctrine would not bar a negligence

claim concerning professional services. Moreover, Rocchio claimed that Pare was negligent in

failing to specify the required EPA forms when it prepared the RFP and that Pare was further

negligent in recommending that the WSA board reject Rocchio’s bid. Rocchio additionally

contended that it was an intended beneficiary of the agreement between Pare and the WSA and

that holding otherwise “would require the erroneous conclusion that no third parties can be

intended beneficiaries of such a contract.”

       In its reply, Pare asserted that Rocchio’s negligence claim fails because Rocchio did not

retain an expert to support its assertion that Pare’s preparation of the RFP fell below the standard

of care applicable to engineers.

       After a hearing on October 30, 2017, the hearing justice granted Pare’s motion for

summary judgment. The hearing justice agreed with Pare that Rocchio had failed to submit

sufficient evidence on the element of causation and granted Pare’s motion for summary

judgment on all counts. Specifically, the hearing justice stated that he was “satisfied that an

element that must be established is lacking from the papers that are before the [c]ourt. There is

nothing that demonstrates causation as has here been argued by [Pare].” An order and final

judgment entered in favor of Pare on all counts of Rocchio’s complaint.            Rocchio timely

appealed to this Court on the grounds that causation is a question for the trier of fact and that

there are several remaining questions of fact to be decided, precluding summary judgment.

                                               -5-
                                                II

                                      Standard of Review

       We review a grant of summary judgment de novo. Jessup & Conroy, P.C. v. Seguin, 46

A.3d 835, 838 (R.I. 2012). This Court views “the evidence in a light most favorable to the

nonmoving party, and we will affirm the judgment if we conclude that there are no genuine

issues of material fact and that the moving party is entitled to judgment as a matter of law.”

Berman v. Sitrin, 991 A.2d 1038, 1043 (R.I. 2010) (quoting Ouch v. Khea, 963 A.2d 630, 632

(R.I. 2009)). “We have long recognized that summary judgment is a drastic remedy, and should

be dealt with cautiously.” Behroozi v. Kirshenbaum, 128 A.3d 869, 872 (R.I. 2016) (alteration

and deletion omitted) (quoting Laplante v. Rhode Island Hospital, 110 A.3d 261, 264 (R.I.

2015)). However, we have also concluded “that ‘we will not hesitate to affirm a grant of

summary judgment if the nonmoving party fails to make a showing sufficient to establish the

existence of an element essential to that party’s case.’” Laplante, 110 A.3d at 264 (emphasis in

original) (deletion omitted) (quoting Beauregard v. Gouin, 66 A.3d 489, 493 (R.I. 2013)).

                                               III

                                           Discussion

                                                A

                                           Negligence

       As set out above, the hearing justice determined that Rocchio had failed to submit

sufficient evidence of causation; and, on that ground, he summarily dismissed all three counts of

Rocchio’s complaint. In light of the hearing justice’s ruling, we begin our analysis with Count II

of Rocchio’s complaint, which alleges that Pare was negligent in performing its duties under the

                                              -6-
contract between Pare and the WSA.5 “To maintain a cause of action for negligence, the plaintiff

must establish four elements: (1) a legally cognizable duty owed by defendant to plaintiff; (2)

breach of that duty; (3) that the conduct proximately caused the injury; and (4) actual loss or

damage.” Medeiros v. Sitrin, 984 A.2d 620, 625 (R.I. 2009). While the hearing justice granted

Pare’s motion for summary judgment based on the lack of evidence regarding the causation

element of Rocchio’s negligence claim, we instead focus our attention on the duty element.

       “It is well settled that ‘issues of negligence are ordinarily not susceptible of summary

adjudication, but should be resolved by trial in the ordinary manner.’” Holley v. Argonaut

Holdings, Inc., 968 A.2d 271, 274 (R.I. 2009) (quoting Gliottone v. Ethier, 870 A.2d 1022, 1028

(R.I. 2005)). “However, in the absence of a duty, ‘the trier of fact has nothing to consider and a

motion for summary judgment must be granted.’” Id. (quoting Banks v. Bowen’s Landing Corp.,

522 A.2d 1222, 1225 (R.I. 1987)). “Whether a defendant is under a legal duty in a given case is

a question of law.” Id. “Only when a party properly overcomes the duty hurdle in a negligence

action is he or she entitled to a factual determination on each of the remaining elements: breach,

causation, and damages.” Id. (quoting Ouch, 963 A.2d at 633).

5
  Although we hold herein that Rocchio’s negligence claim fails, we note that, in its filings to
this Court, Pare contends that the economic loss doctrine acts as a bar to Rocchio’s recovery on
its claim of negligence for purely economic injuries. We disagree with this contention. “The
economic loss doctrine provides that ‘a plaintiff is precluded from recovering purely economic
losses in a negligence cause of action.’” Franklin Grove Corp. v. Drexel, 936 A.2d 1272, 1275
(R.I. 2007) (quoting Boston Investment Property # 1 State v. E.W. Burman, Inc., 658 A.2d 515,
517 (R.I. 1995)). “When parties have contracted to protect against potential economic liability,
as is the case in the construction industry, contract principles override tort principles and, thus,
purely economic damages are not recoverable.” Id. (deletion omitted) (quoting E.W. Burman,
Inc., 658 A.2d at 517). As we have stated, “it is appropriate for sophisticated commercial
entities to utilize contract law to protect themselves from economic damages.” Id. (quoting E.W.
Burman, Inc., 658 A.2d at 517). However, because Rocchio never entered into a contract with
either the WSA or Pare, in this context a commercial entity could bring a claim, sounding in
negligence, for pure economic loss. Therefore, we hold that the economic loss doctrine does not
apply in this case to preclude Rocchio’s negligence claim, and we therefore proceed to review
that claim.
                                               -7-
       Here, Rocchio alleges in its complaint that “Pare in the performance of its contract with

the WSA, was required to exercise the ability, skill and care customarily exercised by engineers

in similar circumstances.” In support of its position, Rocchio relies on our opinion in Forte

Brothers, Inc. v. National Amusements, Inc., 525 A.2d 1301 (R.I. 1987). In Forte, a general

contractor had contracted with a project owner to perform excavation and grading work for a

construction project. Forte, 525 A.2d at 1302. The project owner also retained a site engineer for

the project to determine the amount and nature of the excavation that the general contractor was

hired to perform and to report that information back to the project owner. Id. There was no

contract between the site engineer and the general contractor. Id. Subsequently, the general

contractor brought an action against the project owner and the site engineer, alleging that the site

engineer had negligently performed its duties, resulting in the project owner refusing to pay the

general contractor and thereby causing injury to the general contractor. Id.

       The site engineer in Forte moved for summary judgment, arguing that it was acting as an

agent of the project owner and, therefore, it could not be personally liable to the general

contractor. Forte, 525 A.2d at 1302. The trial justice granted the site engineer’s motion for

summary judgment, and the general contractor appealed. Id. The novel issue before the Court in

Forte was “whether a third-party general contractor who may foreseeably be injured or suffer an

economic loss proximately caused by the negligent performance of a contractual duty by a[]

* * * site engineer has a cause of action in negligence against the * * * site engineer

notwithstanding an absence of privity.” Id. The Court answered in the affirmative and concluded

that the general contractor had “directly and reasonably relied” on the site engineer’s

performance and that the site engineer had a duty to the general contractor to “render its services

professionally.” Id. at 1303.    In so holding, the Court “join[ed] ‘an emerging majority of

                                               -8-
jurisdictions [which] have taken the position that a contractor can maintain a negligence action

against an architect without direct privity of contract between the parties.’” Id. (quoting

Detweiler Bros., Inc. v. John Graham & Co., 412 F. Supp. 416, 419 (E.D. Wash. 1976)).

       We opine, however, that the case now before the Court is distinguishable from Forte.

We similarly distinguished Forte in our opinion in Boston Investment Property # 1 State v. E.W.

Burman, Inc., 658 A.2d 515 (R.I. 1995).         There, we explained that in Forte, the alleged

negligence by the site engineer occurred after all three parties—the project owner, the site

engineer, and the general contractor—were already in place, and that the three parties “were

collaborators on the same project[.]” E.W. Burman, Inc., 658 A.2d at 516. Moreover, we

emphasized that each of the three parties “were aware of each other’s presence, and each had an

interrelated contract with the property owner.” Id. at 516-17.

       Here, only two parties were in place—the WSA and Pare—and Rocchio was one of five

bidders that responded to the RFP. In situations involving public requests for bids, it may be

impossible to determine how many and which general contractors will submit bids for the

project. See E.W. Burman, Inc., 658 A.2d at 517 (holding that the plaintiff-purchaser of property

“was neither known to nor identifiable to [the] defendant contractor” and that “[t]heir individual

relationships with the original owner were wholly independent of each other * * * [so t]here was

no foreseeable harm to a subsequent owner”). Here, a determination that Pare owed a duty to

Rocchio under the circumstances present in this case would effectively be a determination that

all engineers contracted by project owners owe a duty to all general contractors that could

possibly submit a bid on any given request for proposal. We believe that would be an absurd

result; and, accordingly, it is our view that there is a distinct difference between situations like

                                               -9-
Forte and situations like the one before us, where a third party is unidentifiable and

unforeseeable at the time of the alleged negligence.

        We therefore hold that Pare did not owe a duty to Rocchio in light of the facts of this

case.   Consequently, we affirm the hearing justice’s decision granting Pare’s motion for

summary judgment on Rocchio’s negligence claim; but we do so on the ground that there was an

absence of a duty, rather than on the ground that there was an absence of causation.

                                                B

                                    Third-Party Beneficiary

        Although the hearing justice did not address the parties’ argument regarding Rocchio’s

third-party beneficiary claim—Count III of the complaint—we will nevertheless examine this

claim in light of our duty to conduct a de novo review. In its papers to this Court, Rocchio

contends that there exists a question of fact as to whether Rocchio was an intended or incidental

beneficiary of the contract between Pare and the WSA. Specifically, Rocchio argues that Pare

breached its obligations to Rocchio as a third-party beneficiary when Pare formulated the RFP

and failed to specify that EPA forms were required for the bid. We disagree.

        This Court has held that “[i]t is well settled that ‘when one party for valuable

consideration, engages another by contract to do some act for the benefit of a third party, the

latter who would enjoy the benefits, may maintain an action for breach of contract.’” Glassie v.

Doucette, 157 A.3d 1092, 1097 (R.I. 2017) (alteration omitted) (quoting Davis v. New England

Pest Control Co., 576 A.2d 1240, 1242 (R.I. 1990)). “In order to prevail on a contract claim as a

third-party beneficiary, the claimant must prove that he or she is an intended beneficiary of the

contract.” Id. “An intended beneficiary of a contract ‘stands in the shoes’ of the promisee.” Id.

(quoting Cathay Cathay, Inc. v. Vindalu, LLC, 962 A.2d 740, 746 (R.I. 2009)).

                                              - 10 -
       Rhode Island courts follow the Restatement (Second) Contracts § 302 (1981) for

guidance in distinguishing between intended and incidental beneficiaries of a contract. See

Glassie, 157 A.3d at 1097; Cathay Cathay, Inc., 962 A.2d at 745. This section reads, in part:

               “(1) Unless otherwise agreed between promisor and promisee, a
               beneficiary of a promise is an intended beneficiary if recognition
               of a right to performance in the beneficiary is appropriate to
               effectuate the intention of the parties and either
                       “(a) the performance of the promise will satisfy an
                       obligation of the promisee to pay money to the beneficiary;
                       or
                       “(b) the circumstances indicate that the promisee intends to
                       give the beneficiary the benefit of the promised
                       performance.” Restatement (Second) Contracts § 302.

       In this case, the contract at issue—between Pare and the WSA—is in the record. As we

have stated, “[t]he language employed by the parties to a contract is the best expression of their

contractual intent, and when that language is ‘clear and unambiguous, words contained therein

will be given their usual and ordinary meaning and the parties will be bound by such meaning.’”

Cathay Cathay, Inc., 962 A.2d at 746 (quoting Singer v. Singer, 692 A.2d 691, 692 (R.I. 1997)

(mem.)). “Whether a contract’s terms are ambiguous is a question of law.” Id. “A contract may

be deemed ambiguous only if ‘it is reasonably and clearly susceptible of more than one

interpretation.’” Id. (quoting Rotelli v. Catanzaro, 686 A.2d 91, 94 (R.I. 1996)). “In determining

whether a contract is clear and unambiguous, the document must be viewed in its entirety and its

language be given its plain, ordinary and usual meaning.” Id. (alteration omitted) (quoting

Rubery v. Downing Corp., 760 A.2d 945, 947 (R.I. 2000)). “Additionally, we have consistently

held that ‘[i]n situations in which the language of a contractual agreement is plain and

unambiguous, its meaning should be determined without reference to extrinsic facts or aids.’” Id.

(quoting Clark-Fitzpatrick, Inc./Franki Foundation Co. v. Gill, 652 A.2d 440, 443 (R.I. 1994)).

                                              - 11 -
       We perceive no ambiguity in the aforementioned contract. The contract does not suggest

any intent to benefit a third party, nor does it mention a third party to be benefited by the

contract. Notably, the only signatories to the contract are Burke-Wells and the senior vice

president of Pare. Additionally, the services that Pare provided pursuant to the contract, both

before and during the bidding process, did not evince a clear intent to “directly and

unequivocally” benefit anyone other than the WSA. See Hexagon Holdings, Inc. v. Carlisle

Syntec Incorporated, No. 2017-175-Appeal, 2019 WL 237937, at *2 (R.I. Jan. 17, 2019).

Therefore, we hold that Rocchio was not an intended beneficiary of the contract between Pare

and the WSA, and that summary judgment was appropriate as to Rocchio’s third-party

beneficiary claim.

                                                C

              Intentional Interference with Prospective Contractual Relations

       “To establish a prima facie claim for intentional interference with contractual relations,

the aggrieved party must demonstrate ‘(1) the existence of a contract; (2) the alleged

wrongdoer’s knowledge of the contract; (3) his [or her] intentional interference; and (4) damages

resulting therefrom.’” Lomastro v. Iacovelli, 126 A.3d 470, 474 (R.I. 2015) (italics deleted)

(quoting Belliveau Building Corp. v. O’Coin, 763 A.2d 622, 627 (R.I. 2000)). Although we

require that the interference be intentional, “we have not required that actual malice be shown;

rather, ‘legal malice—an intent to do harm without justification—will suffice.’” Id. (quoting

Belliveau Building Corp., 763 A.2d at 627). “Therefore, to establish a prima facie case of

intentional interference with contract, aggrieved parties must allege and prove not only that the

putative tortfeasor intended to do harm to the contract but that they did so without the benefit of

any legally recognized privilege or other justification.” Id. (quoting Belliveau Building Corp.,

                                              - 12 -
763 A.2d at 627). After a plaintiff has successfully established “these prima facie elements, the

burden then shifts to the defendant to prove that the contractual interference was indeed

justified.” Id. (italics deleted).

        The record before this Court lacks any indicia of Pare’s intent to harm Rocchio, and

Rocchio did not submit any evidence indicating that Pare was not acting in good faith. This

Court has regularly held that “[t]he party opposing ‘summary judgment has a duty to establish

that a genuine issue of material fact exists and may not rest solely upon allegations and denials in

the pleadings.’” CACH, LLC v. Potter, 154 A.3d 939, 943 (R.I. 2017) (quoting Urena v. Theta

Products, Inc., 899 A.2d 449, 452 (R.I. 2006)). Accordingly, we affirm the hearing justice’s

grant of summary judgment on this count.

                                                IV

                                           Conclusion

        For the reasons stated herein, we affirm the judgment of the Superior Court. We remand

the papers to that tribunal.

                                               - 13 -
STATE OF RHODE ISLAND AND                                  PROVIDENCE PLANTATIONS

                         SUPREME COURT – CLERK’S OFFICE

                                 OPINION COVER SHEET

                                     John Rocchio Corporation v. Pare Engineering
Title of Case
                                     Corporation.
                                     No. 2017-426-Appeal.
Case Number
                                     (PC 16-4079)
Date Opinion Filed                   February 13, 2019
                                     Suttell, C.J., Goldberg, Flaherty, Robinson, and
Justices
                                     Indeglia JJ.
Written By                           Associate Justice Gilbert V. Indeglia

Source of Appeal                     Providence County Superior Court

Judicial Officer From Lower Court    Associate Justice Michael A. Silverstein
                                     For Plaintiff:

                                     Gregory J.Acciardo, Esq.
                                     Mal A. Salvadore, Esq.
Attorney(s) on Appeal
                                     For Defendant:

                                     Brian C. Newberry, Esq.
                                     Adam Benevides, Esq.

SU-CMS-02A (revised June 2016)