Epic Enterprises LLC v. The Bard Group, LLC

June 20, 2018

Supreme Court

No. 2017-334-Appeal.
(NC 16-487)

Epic Enterprises LLC et al. :

v. :

The Bard Group, LLC. :

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. 2017-334-Appeal.
(NC 16-487)

Epic Enterprises LLC et al. :

v. :

The Bard Group, LLC. :

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

OPINION

Justice Goldberg, for the Court. This case came before the Supreme Court on May 9,

2018, pursuant to an order directing the parties to appear and show cause why the issues raised in

this appeal should not be summarily decided. The defendant, The Bard Group, LLC (defendant),

appeals from a final judgment granting summary judgment in favor of the plaintiffs, Epic

Enterprises LLC, Donna R. Morvillo, Kurt Rauschenbach, and Kristin Rauschenbach

(collectively plaintiffs). After hearing the arguments of counsel and examining the memoranda

submitted by the parties, we are of the opinion that cause has not been shown and that this case

should be decided without further briefing or argument. We affirm the judgment of the Superior

Court.

Facts and Travel

This dispute concerns a thirteen-unit condominium complex known as “10 Brown &

Howard Wharf Condominium” (the condominium) located near Thames Street in Newport,

Rhode Island. The condominium was created by declaration dated August 12, 2014, and

recorded on August 29, 2014, in the Newport land evidence records. The defendant owns nine

of the thirteen condominium units and is therefore the majority owner with 70.8 percent of the

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voting share. The plaintiffs own the remaining four units and have 29.2 percent of the voting

share. The original declaration permitted only “Retail/Office,” “Office,” or “Residential” uses in

the condominium. Specifically, Article 2.2(ff) expressly prohibited a restaurant use: “NO

commercial kitchens or the preparation of or the service of food for consumption onsite shall be

allowed.”

However, on December 23, 2016, defendant, as the majority-interest holder, unilaterally

adopted and recorded a “second amendment” to the declaration that removed the language in

Article 2.2(ff) that prohibited commercial kitchens and food service. In doing so, the second

amendment expressly included “Restaurant Use” as a new permitted use relative to the units

owned by defendant. The second amendment, in relevant part, stated: “Notwithstanding

anything to the contrary contained herein or in this Declaration, Units 103, 104, 105, 106 and

107 may have commercial kitchens and be used for the purpose of Restaurant Use.” The

defendant also applied to the Newport City Council for a victualing license and to transfer a

Class BV alcoholic beverage license for a restaurant that it intended to establish in its units.

The plaintiffs, in opposition to the second amendment, filed this declaratory judgment

action in the Superior Court seeking a declaration that the second amendment was invalid and

that to be valid, the adoption of the second amendment required unanimous consent of all the

owners pursuant to G.L. 1956 § 34-36.1-2.17(d). The parties filed cross-motions for summary

judgment. The defendant argued that, because § 34-36.1-2.17(d) deals only with the restriction

of uses, and because the second amendment in this case did not restrict the use or occupancy of

any unit, the second amendment was valid.

On May 1, 2017, a hearing was held on the motions; the hearing justice ruled that there

were no genuine issues of material fact in the case. The hearing justice acknowledged that the

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original declaration expressly prohibited the use of restaurants and that the second amendment

changed that use to specifically allow for restaurant service. The hearing justice reviewed

§ 34-36.1-2.17(d) and concluded that the statute was clear and unambiguous. The hearing justice

held that the statute required a change in use to be approved by the unanimous consent of all unit

owners. Accordingly, the hearing justice granted plaintiffs’ motion for summary judgment and

declared that the second amendment was invalid because unanimous consent from all unit

owners was required to adopt the amendment and that no condominium units could be converted

into a restaurant and bar without the unanimous consent of all unit owners. The defendant filed a

timely notice of appeal.

Standard of Review

This Court “review[s] a ruling on a motion for summary judgment de novo.” Pimentel v.

Deutsche Bank National Trust Co., 174 A.3d 740, 743 (R.I. 2017). “We will affirm a [trial]

court’s [summary judgment] decision only if, after reviewing the admissible evidence in the light

most favorable to the nonmoving party, we conclude that no genuine issue of material fact exists

and that the moving party is entitled to judgment as a matter of law.” Newstone Development,

LLC v. East Pacific, LLC, 140 A.3d 100, 103 (R.I. 2016). A matter that hinges on statutory

interpretation is ripe for summary judgment. Progressive Casualty Insurance Co. v. Dias, 151

A.3d 308, 312 n.6 (R.I. 2017). Furthermore, when reviewing the applicability of a statute, this

Court interprets the statute de novo. Id. at 311.

Analysis

Before this Court, defendant contends that the second amendment to the declaration does

not require unanimous approval by all unit owners because it does not prohibit or materially

restrict the use, occupancy, or behavior within individually-owned units, nor does it deprive

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minority-interest unit owners of any property rights. The defendant further argues that the

declaration always allowed a restaurant use because “[t]he [d]eclaration plainly and

unambiguously provides that ‘uses as may be allowed by the Zoning Ordinance of the City of

Newport * * * shall also be allowed * * *.’”

In response, plaintiffs argue that § 34-36.1-2.17(d) unambiguously requires unanimous

approval of all condominium unit owners for an amendment to a declaration that changes a prior

restricted use of any unit. The plaintiffs argue that the second amendment changed the use of the

units and therefore required unanimous approval. Lastly, plaintiffs contend that the language in

the declaration under the definition of retail use, which permits retail uses that are allowed under

the Newport zoning ordinances, is only a general provision and does not prevail over the specific

language of the declaration that prohibits commercial kitchens and food services.

This Court reviews “questions of statutory interpretation de novo.” State v. Hazard, 68

A.3d 479, 485 (R.I. 2013) (quoting Campbell v. State, 56 A.3d 448, 454 (R.I. 2012)). “In

matters of statutory interpretation our ultimate goal is to give effect to the purpose of the act as

intended by the Legislature.” Webster v. Perrotta, 774 A.2d 68, 75 (R.I. 2001). “It is well

settled that when the language of a statute is clear and unambiguous, this Court must interpret the

statute literally and must give the words of the statute their plain and ordinary meanings.” Alessi

v. Bowen Court Condominium, 44 A.3d 736, 740 (R.I. 2012) (quoting Waterman v. Caprio, 983

A.2d 841, 844 (R.I. 2009)).

The disputed statute on appeal, § 34-36.1-2.17(d), titled “Amendment of declaration,”

provides that:

“Except to the extent expressly permitted or required by other
provisions of this chapter, no amendment may create or increase
special declarant rights, increase the number of units, change the
boundaries of any unit, the allocated interests of a unit, or the uses

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to which any unit is restricted, in the absence of unanimous
consent of the unit owners.” (Emphasis added.)

We deem this statute to be clear and unambiguous, and therefore we construe the language of the

statute in accordance with its plain and ordinary meaning. Alessi, 44 A.3d at 740. We conclude

that § 34-36.1-2.17(d) clearly states that no amendment to a declaration may change the use to

which a unit or units is restricted without the unanimous approval of all unit owners.

In the case at bar, the original declaration expressly prohibited a restaurant use.

Specifically, Article 2.2(ff) of the condominium declaration stated that “NO commercial kitchens

or the preparation of or the service of food for consumption onsite shall be allowed.” The

defendant, unilaterally and without the approval of all unit owners, adopted a second amendment

that deleted the language of Article 2.2(ff). The second amendment of the declaration indeed

changed what was previously a restricted use in the condominium to a permitted use. Therefore,

for this amendment to be valid, unanimous approval of all unit owners was required pursuant to

§ 34-36.1-2.17(d), but was never achieved. Thus, we conclude that the second amendment to the

declaration was invalid. Accordingly, we affirm the judgment of the Superior Court.

Conclusion

For the reasons set forth herein, we affirm the judgment of the Superior Court. The

papers in this case may be remanded to the Superior Court.

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STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS

SUPREME COURT – CLERK’S OFFICE

OPINION COVER SHEET

Title of Case Epic Enterprises LLC et al. v. The Bard Group, LLC.
No. 2017-334-Appeal.
Case Number
(NC 16-487)
Date Opinion Filed June 20, 2018
Suttell, C.J., Goldberg, Flaherty, Robinson, and
Justices
Indeglia, JJ.
Written By Associate Justice Maureen McKenna Goldberg

Source of Appeal Newport County Superior Court

Judicial Officer From Lower Court Associate Justice Brian Van Couyghen
For Plaintiffs:

Turner C. Scott, Esq.
Attorney(s) on Appeal Roland F. Chase, Esq.
For Defendant:

Michael J. Richards, Esq.

SU-CMS-02A (revised June 2016)