Summary
The Rhode Island Supreme Court reviewed defendants’ appeal from a judgment following a jury verdict that they converted the plaintiff’s security deposit. The court held that the defendants waived their economic-loss-doctrine argument by failing to preserve it before the verdict. The court vacated the award of attorneys’ fees because the plaintiff prevailed only on conversion, not on a breach-of-contract claim, and affirmed the judgment in all other respects.
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Practice areas
Questions Presented
- Whether defendants preserved and could raise on appeal the argument that the economic loss doctrine barred plaintiff's conversion claim.
- Whether Rhode Island General Laws § 9-1-45 authorized an award of attorneys' fees when plaintiff pleaded breach of contract but did not pursue that claim at trial and the jury returned a verdict only on conversion.
Holdings
- Defendants waived the economic loss doctrine argument because they did not raise it during trial and raised it as an alleged error of law only after the jury had returned its verdict, during posttrial proceedings.
- Section 9-1-45 did not authorize an award of attorneys' fees because the action did not result in a judgment for plaintiff on a breach-of-contract claim; the jury found only conversion, and plaintiff did not pursue his pleaded breach-of-contract claim at trial.
Key quotations
“We are therefore of the opinion that, because defendants never raised the economic loss doctrine argument during trial, and because the alleged error of law was an entirely new issue raised at the hearing on the motion for a new trial, it has been waived by defendants.” (213 A.3d at 418)
“We conclude without hesitation that defendants have waived the economic loss doctrine argument and may not now revive the argument on appeal.” (213 A.3d at 419)
“Therefore, it is our opinion that § 9-1-45 cannot be the basis for an attorneys’ fees award in this case, and, consequently, that part of the judgment awarding attorneys’ fees to plaintiff under that statute must be vacated.” (213 A.3d at 420)
Factual background
The parties entered into a commercial lease for property in Johnston, Rhode Island, and plaintiff paid $9,300 as a security deposit and $9,300 as the first month's rent. A receipt agreement provided that all deposits would be fully refundable if defendants could not provide occupancy by the lease start date. Before occupancy began, the building was condemned and plaintiff was required to remove his equipment; the first month's rent was returned, but defendants retained the security deposit. A jury found that defendants converted the security deposit and awarded plaintiff $9,300.
Procedural history
Plaintiff sued defendants for conversion and breach of contract after defendants retained a $9,300 security deposit under a failed commercial lease. The jury found for plaintiff on conversion and awarded $9,300, while the breach-of-contract claim was not submitted to the jury. The Superior Court denied defendants' renewed motion for a new trial and awarded plaintiff $24,075 in attorneys' fees under Rhode Island General Laws § 9-1-45. Defendants timely appealed.
Remand instructions
The judgment was affirmed in part and vacated in part, and the papers were remanded to the Superior Court for entry of judgment consistent with the opinion. The attorneys' fees award under § 9-1-45 was to be vacated.