Professional Documents
Culture Documents
Debtor
Appellees, Cross-Appellants,
v.
Appellant, Cross-Appellee.
Before
2005, the Rhode Island Supreme Court found that the development
Ass'n v. IDC, Inc. ("America I"), 844 A.2d 117, 134 (R.I. 2004);
Am. Condo. Ass'n v. IDC, Inc. ("America II"), 870 A.2d 434, 443
("Clambakes"), the debtor here, was not a party before the Rhode
their property between 1998 and April 8, 2005, the date of the
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America II decision. In 2013, this court rejected that trespass
Clambakes pay the Associations for its use and occupancy of the
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the ownership of the Regatta Club. The district court held that
its use and occupancy of the Regatta Club during the claim period.
Id. at 851.
regarding the Regatta Club's ownership should bear on, much less
showing that inequity would result if Clambakes did not pay them
for the use and occupancy of the Regatta Club during the claim
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I.
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In late 1997 and early 1998, while negotiations over
operating the Club in late 1998 and began paying rent to Properties
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2005, "it ran a profitable business during the approximately seven
before the December 31, 1994 expiration date; that the 1994
date were invalid; and that "as a result, fee simple title to the
the amendments were invalid because they did not conform to the
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developed the Reserved Area at a time when they were on notice
constructed the parcel at their peril and cannot now contend that
to pay for the Reserved Area after December 31, 1994, the date on
"not include any profits that [Properties] may have earned from
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11011174; Clambakes, 510 B.R. at 684. In August 2005, a
of the dispute over the amount, if any, that Clambakes owed the
the Reserved Area from March 1, 1998 -- the date on which the
history that we need not recount, the bankruptcy court held that
occupancy of the Reserved Area and thus that Clambakes had not
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use and occupancy of the Reserved Area. See In re IDC Clambakes,
the bankruptcy court had not addressed it. Id. at 72. We thus
case also gives rise to an implied obligation to pay the fair value
before the bankruptcy court. First, they argued that "in the
Clambakes, 510 B.R. at 686. Second, they argued that there was an
first argument, noting that there was no Rhode Island case law to
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rise to a presumptive obligation to pay fair value absent a showing
of contrary intent." Id. at 687. The court also ruled that the
[between the parties] to enter into an agreement for the use and
(2) the defendant appreciated the benefit, and (3) under the
id. at 69296.
it to use and occupy the Reserved Area land" -- was worth between
inquiry did not end there, however. The court observed that the
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Associations had denied Roos permission to remove the Regatta Club
Morelli, 230 A.2d 860, 863 (R.I. 1967)). Accordingly, "since the
Associations chose to retain and profit from the Regatta Club, the
Regatta Club while the Associations had not invested any amount,2
that Clambakes had spent more than $550,000 to outfit and maintain
the Club, and that the Associations had been able to rent the Club
annual rent of $450,000 that the new tenant pays the Associations,
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"Clambakes is entitled to a 'credit' for at least
Island Supreme Court had ruled that the Associations owned the
are the established facts of this case, and this proceeding cannot
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court should not have considered the $550,000 that Clambakes had
$240,000 per year from the use and occupancy payment to account
for goodwill and the value of the Regatta Club" when there was
ordered Clambakes to pay the Associations $2.6 million for its use
and occupancy of the Regatta Club during the claim period.3 Id.
D. Arguments on Appeal
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The Associations argue that the bankruptcy and district
and occupancy.
II.
arguments that the bankruptcy court should not have reached the
principle exists under Rhode Island law, the inquiry should have
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unavailing Clambakes' argument that our remand was limited to a
determin[e] whether the facts in this case and the law of Rhode
(emphasis added).
week after the trial and 18 months before the bankruptcy court
B. Standard of Review
969 F.2d 1299, 1301 (1st Cir. 1992). We thus review the bankruptcy
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"[T]o the extent that the ultimate decision in a
Corp., 243 F.3d 57, 66 (1st Cir. 2001). This approach "reflect[s]
our view that the finder of fact 'who has had first-hand exposure
C. Implied-in-Fact Contract
under which Clambakes agreed to pay the Associations for its use
are found in and determined from the relations of, and the
v. Brown Univ., 692 A.2d 665, 669 (R.I. 1997). "[A] contract
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consent, and on the intention of the parties; and a meeting of the
minds is required." Bailey v. West, 249 A.2d 414, 416 (R.I. 1969)
(citation omitted); see also Goat Island, 533 B.R. at 847 n.2.
the facts to find that the Associations had failed to show evidence
There is no error.
D. Unjust Enrichment
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equitable remedies in bankruptcy proceedings." In re Trailer
Source, Inc., 555 F.3d 231, 242 (6th Cir. 2009) (citing Young v.
all future litigation related to the Club, let alone over a claim
IDC, Inc. or Properties) had title to the Regatta Club. The issues
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Reserved Area despite knowing that title to that land was in
Id. at 13435. But the fact that the America court declined to
the Regatta Club's ownership does not mean that the construction
rightful owners of the Regatta Club, the America court was careful
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in deciding whether the equities of this case weigh in favor of
did not err in its factual findings and did not abuse its
occupancy of only the Reserved Area land, rather than of both the
land and the Regatta Club facility built on it. The district court
849. The district court fairly read the bankruptcy court opinion
Clambakes indeed used both the building and the land, it paid over
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million to build and improve. In determining on this record the
the building.
did not bear the construction cost, and we must treat Properties
plaintiff would suffer a net loss. That is, defendant would have
Hosp., 272 A.2d 329, 332 (R.I. 1971)). Regardless of which IDC
inability to recover rent for the claim period thus does not result
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Regatta Club during the claim period. In Dellagrotta v.
Dellagrotta, 873 A.2d 101 (R.I. 2005), the Rhode Island Supreme
gifted to her and her former spouse. Id. at 11415. The former
house after the end of her marriage, even after receiving a notice
knew that title to the Regatta Club was in dispute, that knowledge
court concluded that although the bankruptcy court did not err in
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As an initial matter, it is not clear from the bankruptcy
business beyond what they could have charged for an unproven lot
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III.
disallow Claims 16, 17, 18, and 19 in their entirety. Nor was
there any legal or factual error. We also agree with the district
modification.
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