Court Rejects Lessor’s Claim in Recent Rhode Island Property Dispute, Finding Issues Were Previously Litigated

Rhode Island real estate disputes can become extremely complicated when multiple parties dispute multiple claims over a single piece of property. If several parties own a property and a dispute arises, all parties to the action must be diligent in bringing their claims properly and at the right time, in order to prevent the issues from being finally decided before a party can make their case. The Rhode Island Supreme Court recently ruled that the leaseholder of a marina was not able to pursue a claim against the owner of the marina, who had terminated their lease after the property was sold.

The plaintiff in the recently decided case was a company that leased a marina from the owners, who were defendants in the case. According to the facts discussed in the judicial opinion, the property was divided between several heirs in a previously adjudicated estate case. It was to be sold to liquefy the heirs’ interest in the property as part of the estate partition proceeding. Because of this condition, the plaintiff’s lease was contingent upon the property not being sold to a good-faith buyer, and the lease could be terminated if the property was, in fact, sold.

When the property was put up for sale, the plaintiffs attempted to purchase the marina outright, but were eventually outbid by family members of the owners, who are also named as defendants in the case. Before the sale went through, the plaintiffs challenged the new purchaser’s bid in court, arguing that their bid should be considered as better for the sellers. Ultimately, the plaintiff’s claim to reconsider the bidding process was rejected and the property was transferred to the new owners, and the plaintiff’s lease was terminated.

After the termination of their lease, the plaintiff sued the defendants in a new case, alleging that the purchasers of the marina were not a “good faith buyer” as defined by the law and demanded the termination clause of the lease agreement. The defendants responded by arguing that the issue at hand had already been litigated in the partition proceeding, and that the plaintiff’s chance to bring up their new arguments had already passed, as there was a final judgment in the prior proceeding. The Superior Court accepted the defendant’s arguments and ruled for the defendants. The plaintiff appealed the ruling to the Rhode Island Supreme Court, which agreed with the lower court, holding that the legal doctrine of res judicata, or claim preclusion, bars the re-litigation of issues that were argued or could have been argued in a previous action. Because the plaintiff could have brought their “good faith buyer” argument in the prior partition action, they were not permitted to bring it up in a new lawsuit.

Obtain Qualified Legal Advice Before Filing a Legal Claim

If you or a loved one is anticipating a Rhode Island real estate dispute, whether between family members, tenants, neighbors, or co-owners of real estate, it is essential to have an experienced real estate attorney to advise and represent you as to the best strategy to pursue a claim that can address all of the issues that you may have. The skilled Rhode Island real estate attorneys with Bilodeau Capalbo are here to help. Our qualified real estate lawyers have years of experience handling complex real estate disputes. Call our offices today at 401-300-4055 and schedule a consultation to discuss your case.