Rhode Island Supreme Court Dismisses Appeal for Failure to Timely Make Argument

The Rhode Island Supreme Court recently decided a property case, demonstrating the importance of preserving arguments for appeal. In this case, the plaintiff entered into a lease with the defendants to rent commercial property owned by the defendants. The plaintiff paid the defendants $18,600, which was comprised of $9,300 for a security deposit and $9,300 for the first month’s rent. A “receipt agreement” signed by the parties stated that if the property was not ready on or before November 14, 2013, “all deposits are fully refundable.”

According to the plaintiff, after the city found out that the plaintiff planned to grow medical marijuana in the building, the defendant told the plaintiff to “forget about” the property and that he was keeping the security deposit “for his aggravation.” The defendant testified that he did not return the security deposit because the plaintiff left the lease “without even trying to do anything.” The plaintiff could not occupy the property, and the defendants refused to return the security deposit. The plaintiff claimed that the defendants breached the contract, and also that the refusal to return the security deposit constituted a conversion of his property. A jury agreed, finding the defendants converted the plaintiff’s security deposit to their own use.

On appeal, the defendants argued in part that the economic loss doctrine barred the plaintiff from recovering under the conversion claim. The defendants argued that the plaintiff should not have been able to receive a damages award for the conversion claim because the plaintiff did not suffer any injury, and thus should be barred under the economic loss doctrine.

However, the Rhode Island Supreme Court held that the defendants waived this argument and could not raise the issue on appeal. Apparently, the day before trial was set to begin, the defendant had filed a motion to dismiss, contending that the economic loss doctrine barred the conversion claim. The trial court denied the motion, finding that it was not timely filed. After trial, the defendants again argued that the economic loss doctrine should have barred the conversion claim, and the judge denied the motion. The Supreme Court found that the defendants filed the motion to dismiss just before trial, and the post-trial motion raised a new issue that was never raised during the trial. The court noted that the law is clear in Rhode Island that if an issue was not properly raised at the trial court level, an appeals court would not consider the issue on appeal. Therefore, the Supreme Court found the issue was waived.

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