Cappalli v. BJ's Wholesale Club, Inc.
Filing
74
ORDER granting in part and denying in part 43 Motion for Summary Judgment; granting in part and denying in part 48 Motion for Summary Judgment; granting in part and denying in part 48 Motion for Partial Summary Judgment. So Ordered by Judge William E. Smith on 11/9/12. (Jackson, Ryan)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
)
)
)
)
)
Plaintiff,
)
)
v.
)
)
BJ’S WHOLESALE CLUB,INC.,
)
)
Defendant.
)
___________________________________)
IRENE CAPPALLI, individually and
on behalf of all others similarly
situated,
C.A. No. 10-407 S
ORDER
WILLIAM E. SMITH, United States District Judge.
Plaintiff Irene Cappalli filed this putative class action
against Defendant BJ’s Wholesale Club, Inc. (“BJ’s”), alleging
breach of contract and, in the alternative, an equitable claim
of money had and received.
I.
Facts
The following facts are undisputed unless otherwise noted.
BJ’s is a corporation that owns and operates warehouse club
stores.
BJ’s offers twelve-month memberships for a fee.1
In
exchange for payment of the membership fee, members are provided
the
opportunity
to
purchase
merchandise
from
BJ’s
stores
at
1
Between 2006 and 2010, the annual membership fee was $45
for “Inner Circle” members, like Cappalli. (Def.’s Statement of
Undisputed Facts (“Def.’s SUF”) ¶ 4, ECF No. 47.)
ostensibly low prices.
While non-members are permitted to shop
at BJ’s stores, their purchases are generally subject to a 15%
surcharge.
(Def.’s Statement of Undisputed Facts (“Def.’s SUF”)
¶¶ 32-33, ECF No. 47.)
At the expiration of their memberships,
members are given a fifteen-day “grace period” during which they
may make purchases at BJ’s stores without paying any surcharge.
(Atkinson
Aff.
¶
13,
ECF
No.
45.)
BJ’s
policy
concerning
renewal memberships is the basis of this suit.
Cappalli became a BJ’s member on November 11, 2005 through
a free sixty-day trial membership.
(Def.’s SUF ¶ 12C.)2
Because
BJ’s extends membership expiration dates until the last day of
the
month
in
which
membership
expires,
membership expired on January 31, 2006.
Cappalli’s
trial
(Id. at ¶¶ 13C-14C.)
Cappalli purchased renewal memberships at the membership desk of
the BJ’s store in Coventry, Rhode Island on March 26, 2006,
February 15, 2007, February 2, 2008, and February 12, 2009.
(Ex. D to Atkinson Aff., ECF No. 45-4.)
Each of these renewal
memberships expired the following January 31.
Cappalli renewed
her BJ’s membership for the final time on February 27, 2010.
(Id.)
This time, Cappalli made her purchase online.
SUF ¶ 25.)
(Def.’s
Cappalli received a printed confirmation indicating
2
In its Statement of Undisputed Facts, BJ’s used paragraph
numbers twelve through fourteen in section B and repeated those
same paragraph numbers in section C.
For this reason, when
referring to the paragraphs in section C with duplicated
numbers, this Court has included a “C.”
2
that
her
membership
would
expire
Renshaw Aff., ECF No. 46-3.)
“01/2011.”3
in
(Ex.
B
to
Cappalli never made any purchases
between the expiration of her prior membership and her purchase
of a renewal membership, and, thus, she never paid a surcharge
at BJ’s.
(Def.’s SUF ¶ 36.)
When Cappalli joined BJ’s in 2005, BJ’s “Core Membership
Privileges and Conditions” (“P&C’s”) provided, “[m]embers who
renew their Memberships during their expiration month, or within
three (3) months after the expiration month, will retain their
current
expiration
renewed
more
month
than
three
for
the
(3)
renewed
months
year.
after
Memberships
their
original
expiration date are subject to new Membership expiration dates
at BJ’s discretion” (“renewal policy”).
Aff., ECF No. 45-1.)
(Ex. A to Atkinson
Because Cappalli renewed her membership in
March 2006, less than three months after the expiration of her
prior
membership,
she
retained
her
prior
expiration
date
of
3
BJ’s contends that Cappalli “consulted” with an attorney
concerning her BJ’s membership in August 2009, before she
purchased her last renewal membership. (Def.’s SUF ¶¶ 24, 30.)
Cappalli
counters
that,
in
her
response
to
Defendant’s
interrogatories, she merely stated that she “spoke” to an
attorney who she was working for at the time. (Pl.’s Statement
of Disputed Facts (“Pl.’s SDF”) ¶ 30, ECF No. 56; Ex. B to
Renshaw Aff., ECF No. 46-7.)
There is a genuine dispute
concerning the extent of Cappalli’s interactions with the
attorney and, thus, whether those interactions indicate her
knowledge of BJ’s renewal policy.
For this reason, the Court
will not consider Cappalli’s meeting with the attorney in ruling
on the parties’ motions.
See Taylor v. Am. Chemistry Council,
576 F.3d 16, 24 (1st Cir. 2009).
3
January 31.
In April 2008, BJ’s shortened its renewal policy
from three months to one month.
(Def.’s SUF ¶ 10.)
Also at
this time, BJ’s revised its P&C’s to omit the description of its
renewal policy.
September
2010,
(Ex. B to Atkinson Aff., ECF No. 45-2.)
BJ’s
adopted
a
two-month
renewal
policy
revised its P&C’s to include a description of that policy.
C to Atkinson Aff., ECF No. 45-3.)
P&C’s,
in
initial
a
and
separate
renewal
section
and
(Ex.
All three iterations of the
drawing
memberships,
no
distinction
provided,
effective for one year from enrollment.”
Aff.)
In
between
“[m]embership
is
(Exs. A-C to Atkinson
Throughout Cappalli’s membership, BJ’s membership desk
personnel were instructed to provide a copy of the P&C’s to
anyone who purchased a membership.
(Def.’s SUF ¶ 8.)
BJ’s members are not required to sign any form indicating
their agreement to the P&C’s.
(Pl.’s Separate Statement of
Undisputed Facts (“Pl.’s SSUF”) ¶ 60, ECF No. 55.)
In fact,
BJ’s does not require its members to assent to BJ’s membership
renewal policy in any written agreement.
Separate
Statement
of
Additional
(Def.’s Resp. to Pl.’s
Undisputed
Facts
(“Def.’s
Resp.”) ¶ 61, ECF No. 63.)
Between
April
2008
and
August
2010,
when
BJ’s
renewal
policy was not reflected in its P&C’s, BJ’s provided information
about its renewal policy in the “Frequently Asked Questions”
section of its website.
(Ex. E to Atkinson Aff., ECF No. 45-5.)
4
The website stated that “[a]ll new BJ’s Memberships are valid
for 12 months from the date of activation, unless otherwise
indicated.”
(Id. (emphasis added).)
It went on to explain BJ’s
renewal policy in a manner similar to the P&C’s.
There is,
however, no evidence in the record that BJ’s directed renewing
members to this portion of its website to find the terms of
their membership agreements.
It is BJ’s stated practice to provide every member who
renews at the membership desk of a BJ’s store a printed receipt
showing the expiration date of the renewal membership.
SUF ¶ 17.)
February
When Cappalli purchased her renewal membership on
15,
2007,
she
received
“MEMBERSHIP EXPIRES ON 01/08.”
46-4.)
(Def.’s
Similarly,
when
a
receipt
that
stated,
(Ex. B. to Renshaw Aff., ECF No.
Cappalli
purchased
her
renewal
membership on February 12, 2009, she received a receipt that
stated, “MEMBERSHIP EXPIRES ON 01/10.”
(Ex. B. to Renshaw Aff.,
ECF No. 46-5.)
It is also BJ’s practice to provide members with a receipt
showing their membership expiration date whenever they make a
purchase in a BJ’s store.
(Def.’s SUF ¶ 18.)
Cappalli shopped
at BJ’s stores on 46 occasions between November 2005 and January
2011.4
(Id. at ¶ 34.)
4
In her deposition testimony, Cappalli acknowledged that
she received a receipt every time she shopped at BJ’s, but she
5
Additionally, it is BJ’s practice to send a renewal notice
to members during the month that their memberships are due to
expire and to send a second notice after their memberships have
expired.
(Id. at ¶ 22.)
Cappalli received a renewal notice
from BJ’s in early 2007.
This notice stated that Cappalli’s
“Membership
Expired”
in
January
“[r]enew for a year right now.”
ECF No. 54-1.)
January 2007.
2007
and
encouraged
her
to
(Ex. A to Woodward Aff. 49-50,
The notice listed Cappalli’s “Renewal Date” as
(Id.)
It also stated, “Inner Circle and Business
Membership Privileges and Conditions are available at any BJ’s
Member Services Desk or online at www.bjs.com.”
(Id.)
Cappalli testified at her deposition that, when she renewed
her
BJ’s
membership,
she
expected
the
renewal
membership
expire twelve months from the date of purchase.
to
(Ex. B to
Renshaw Aff. (Cappalli Dep. 128:15-18), ECF No. 46-2.)
However,
Cappalli also testified that she could not recall the basis of
this belief and referred to it as “an assumption.”
(Id. at
128:3-12, 128:23-129:2.)
BJ’s was aware of the fact that its renewal policy was not
member-friendly.
One
BJ’s
employee,
in
a
2007
internal
communication, referred to the policy as the “punish the member
rule.”
(Ex.
C
to
Woodward
Aff.,
ECF
No.
54-3.)
During
could not recall whether the receipts she received showed her
expiration date.
(Ex. B to Renshaw Aff. (Cappalli Dep. 106:16), ECF No. 46-2.)
6
Cappalli’s membership, BJ’s received over 2,000 contacts from
members regarding its membership renewal policy.
maintains a “ticket” of each customer contact.
¶ 55.)
some
(Id.)
BJ’s
(Def.’s Resp.
Excerpts of tickets from 2007 indicated that at least
BJ’s
policy.
Reset
members
were
surprised
(Ex. C to Woodward Aff.)
FAQs”
providing
and
upset
by
BJ’s
renewal
BJ’s has specific “Renewal
pre-scripted
answers
questions concerning BJ’s renewal policy.5
to
customers’
(Ex. A to Woodward
Aff. 58.)
Moreover,
least
some
BJ’s
BJ’s
internal
employees
communications
understood
BJ’s
indicate
renewal
provide members with less than what they paid for.
when
a
group
recommend
a
of
BJ’s
change
to
employees
BJ’s
were
renewal
discussing
policy,
a
that
at
policy
to
In 2010,
whether
to
PowerPoint
5
For “Irate Members or cancellation threats only – after
explaining the policy,” BJ’s instructs its employees to offer to
extend the member’s expiration date and explain that this is a
“one-time exception” to BJ’s policy.
(Ex. A to Woodward Aff.,
ECF No. 54-1.)
Employees are instructed not to “suggest” this
resolution to members. (Ex. C to Woodward Aff., ECF No. 54-3.)
Indeed, BJ’s did not advertise its willingness to extend
expiration dates to its customers.
(Ex. B to Woodward Aff.
(Bowles Dep. 80:7-10, 81:3-5), ECF No. 54-2.)
BJ’s contends
that members’ requests for extension of their expiration dates
are “considered on a case-by-case basis.”
(Def.’s Resp. to
Pl.’s Separate Statement of Additional Undisputed Facts (“Def.’s
Resp.”) ¶ 80, ECF No. 63.)
However, in ruling on BJ’s motion
for summary judgment, this Court must view the facts in the
light most favorable to Cappalli, the non-moving party.
See
Taylor, 576 F.3d at 24. Here, the record supports the inference
that BJ’s adjusted members’ expiration dates only in rare
circumstances and did not advertise this possibility to its
customers.
7
presentation was prepared.
(Def.’s Resp. ¶ 68.)
The PowerPoint
stated that BJ’s “had members who were only getting 9 or 10
months of membership but paying for 12 months.”
(Ex. C to
Woodward Aff.)
Cappalli filed her Complaint against BJ’s on October 1,
2010.
(ECF No. 1.)
motion
to
On June 30, 2011, this Court denied BJ’s
dismiss
Cappalli’s
claims.
(ECF
No.
21.)
Subsequently, BJ’s filed a motion asking this Court to grant
summary judgment in its favor on all counts.
Cappalli
responded
judgment
on
claims
are
agreements;”
BJ’s
filing
affirmative
barred
(2)
by
by
the
“statutes
a
defenses
terms
of
motion
of
for
of:
the
limitations
(ECF No. 43.)
partial
(1)
parties’
and/or
summary
“Plaintiff’s
contractual
statutes
of
fraud;” (3) failure to mitigate damages; (4) right of setoff;
(5) voluntary payment; (6) laches; (7) waiver; (8) estoppel; (9)
account stated; and (10) “Plaintiff’s claims are not properly
maintainable as a class action.”
II.
(ECF Nos. 22 and 48.)
Discussion
Summary judgment is appropriate when, viewing the record in
the light most favorable to the non-moving party, there is no
genuine issue of material fact and the moving party is entitled
to judgment as a matter of law.
See Fed. R. Civ. P. 56; Taylor
v. Am. Chemistry Council, 576 F.3d 16, 24 (1st Cir. 2009).
“A
genuine issue of fact exists where the evidence is such that a
8
reasonable jury could return a verdict for the nonmoving party.”
Taylor, 576 F.3d at 24 (internal citation and quotation marks
omitted).
“[T]he standards are the same where, as here, both parties
have moved for summary judgment.”
Pac. Ins. Co. v. Eaton Vance
Mgmt., 369 F.3d 584, 588 (1st Cir. 2004) (quoting Bienkowski v.
Northeastern Univ., 285 F.3d 138, 140 (1st Cir. 2002) (citing
10A
Charles
Alan
Wright,
Arthur
R.
Miller
&
Mary
Kay
Kane,
Federal Practice and Procedure § 2720, at 335-36 (3d ed. 1998)
(“The court must rule on each party’s motion on an individual
and
separate
judgment
basis,
may
be
determining,
entered
in
for
each
accordance
side,
with
whether
a
Rule
56
the
standard.”))); see also Specialty Nat'l Ins. Co. v. OneBeacon
Ins. Co., 486 F.3d 727, 732 (1st Cir. 2007) (“The presence of
cross-motions for summary judgment neither dilutes nor distorts
this standard of review.” (quoting Mandel v. Boston Phoenix,
Inc., 456 F.3d 198, 205 (1st Cir. 2006))).
A defendant moving for summary judgment on the basis of an
affirmative defense “has the burden of proving the defense.”
Emory v. Miller, 790 F. Supp. 368, 371 (D.R.I. 1992).
A.
It
several
disagree,
Breach of Contract
is
undisputed
contracts
however,
for
that
Cappalli
renewal
concerning
BJ’s
memberships.
whether
9
and
they
entered
The
contracted
into
parties
for
a
renewal term of twelve months from the date of purchase or a
renewal term of lesser duration.
question of law.”
Supp.
2d
197,
212
“Contract interpretation is a
ADP Marshall, Inc. v. Noresco, LLC, 710 F.
(D.R.I.
2010)
(quoting
Clark–Fitzpatrick,
Inc./Franki Found. v. Gill, 652 A.2d 440, 443 (R.I. 1994)).
Thus,
whether
the
parties
contracted
for
a
renewal
term
of
twelve months from the date of purchase is an issue that may be
properly decided by this Court at the summary judgment stage.
“In order to establish an express or implied contract a
litigant must prove mutual assent or a meeting of the minds
between the parties.”
Mills v. R.I. Hosp., 828 A.2d 526, 528
(R.I. 2003) (internal citation and quotation marks omitted).
assessing
whether
such
mutual
assent
In
has been given, courts
“look to the parties’ words and actions to determine whether
they
have
bound.”
manifested
the
objective
intent
to
promise
or
be
Bourque v. FDIC, 42 F.3d 704, 708 (1st Cir. 1994).
The
parties’
terms
of
objective
secret intentions.
a
contract
are
manifestations,
thus
not
dependent
their
upon
undisclosed
the
or
See Ret. Bd. of the Emps.’ Ret. Sys. v.
DiPrete, 845 A.2d 270, 284 (R.I. 2004) (“The secret intent of
one party to a contract is not binding on the other party.”).
While contract interpretation is generally a question of
law, it “becomes a question of fact” when the contract terms are
ambiguous.
ADP Marshall, 710 F. Supp. 2d at 212 (quoting Gill,
10
652 A.2d at 443); see also Demirs v. Plexicraft, Inc., 781 F.
Supp. 860, 863 (D.R.I. 1991) (denying the defendant’s motion for
summary judgment because interpretation of an ambiguous contract
term “is a factual issue which can only be resolved at trial”).
The preliminary question of whether a contractual term is
ambiguous is, however, a question of law.
45 A.3d 1246, 1258 (R.I. 2012).
Haviland v. Simmons,
“Contract ambiguity arises only
when [a contract] is reasonably and clearly susceptible of more
than one interpretation.”
Id. at 1258 (internal citation and
quotation marks omitted).
Under Rhode Island law, ambiguities in a contract must be
construed against the drafter.
contract
should
also
be
Id. at 1259-60.
interpreted
in
An ambiguous
accordance
with
one
party’s understanding where “that party does not know of any
different meaning attached by the other, and the other knows the
meaning attached by the first party.” See Restatement (Second)
of
Contracts
§
20
(1981).
Additionally,
ambiguity
in
the
parties’ objective manifestations may negate the mutual assent
required to create an enforceable contract.
Here,
the
parties
never
particular term of renewal.
expressly
See id.
agreed
upon
any
Thus, in order to determine what
renewal term they agreed upon, this Court must consider their
objective manifestations.
Viewing the evidence in the light
most favorable to Cappalli, this Court finds the renewal term to
11
be ambiguous.
Two versions of the P&C’s accurately described
BJ’s renewal policy in one section, but, in a separate section,
those same documents also stated that membership was effective
“for one year from enrollment.”
notice
did
indicate
that
Similarly, while the renewal
Cappalli’s
“Renewal
Date”
would
be
January 2007, it also stated that the duration of the renewal
membership would be “a year.”
Because Cappalli received the
notice after her membership had expired, this language suggested
a renewal term of one year from the date of her purchase of a
renewal
membership.
Even
assuming
that,
because
the
notice
referred to the P&C’s, it incorporated the description of BJ’s
renewal policy included therein, see Schofield v. French, 36 F.
Supp. 2d 481, 485-86 (D.R.I. 1999) (“[U]nder Rhode Island law,
documents may be incorporated into a written contract merely by
reference.” (citing Rotelli v. Catanzaro, 686 A.2d 91, 94 (R.I.
1996))),
this
description
manifestations.
with
respect
was
inconsistent
with
BJ’s
other
These inconsistent provisions created ambiguity
to
the
term
of
the
renewal
membership.
See
Haviland, 45 A.3d at 1259-60 (finding ambiguity concerning the
standard of review to be applied to a professor’s reappointment
where
different
university
set
communications
forth
between
different
the
professor
standards).
The
and
the
receipts
provided by BJ’s to Cappalli did nothing to cure this ambiguity.
The
Rhode
Island
Supreme
Court
12
has
held
that
a
receipt
memorializing
reflect
a
the
contractual
terms
of
the
agreement
underlying
does
not
agreement
necessarily
itself.
See
Preble v. Higgins, 109 A. 707, 709 (R.I. 1920) (“The memorandum
is not the agreement on which the complainant brings suit.
is only a memorandum of the agreement.”).
It
Because the agreement
between the parties was ambiguous, the interpretation of that
agreement is a question of fact which cannot be decided by this
Court at the summary judgment stage.
See ADP Marshall, 710 F.
Supp. 2d at 212.
BJ’s
also
contends
that,
because
Cappalli
was
a
BJ’s
member, she was bound by BJ’s rules of membership, including
those contained in the P&C’s, regardless of her knowledge of
those
rules.
The
cases
cited
by
BJ’s
in
support
of
this
argument, however, all involve associations very different from
the one at issue in the present case.
See Post v. Belmont
Country Club, Inc., 805 N.E. 2d 63, 67 (Mass. App. Ct. 2004)
(holding that a member of a golf club was charged with knowledge
of
an
indemnity
clause
in
the
club’s
membership
handbook);
Miller v. Supreme Tent of Knights of Maccabees of the World, 185
P.
593,
593
association”
(Wash.
that
1919)
offered
(involving
death
a
“fraternal
benefits
to
benefit
members);
Pharmacists & Retail Drug Store Emps. Union, Local 330 v. Lake
Hills
Drug
Co.,
255
F.
Supp.
910,
912
(W.D.
Wash.
1964)
(involving a “multi-employer bargaining unit” that represented
13
members in labor matters).
that
the
indemnity
In Post, the court explicitly noted
clause
at
issue
“was
adopted
by
the
membership for their mutual benefit” and was subject to change
by the membership.
Post, 805 N.E. 2d at 68-69; see also Martin
v. Metro. Yacht Club, Inc., 388 F. App’x 6, *8 (1st Cir. 2010)
(charging the plaintiff with knowledge of a yacht club bylaw and
emphasizing that the rule at issue was “one of several terms of
a compact of the members with each other to limit the cost of
membership” (citing Post, 805 N.E.2d at 68-69)).
In the present case, unlike in Post and Martin, there is no
indication that BJ’s renewal policy was subject to change by
BJ’s members.
Additionally, while BJ’s does point out that the
collection of membership fees allows it to offer low prices to
members, it does not contend that the renewal policy itself
benefits those members.
Unless the word “member” is treated as
a talisman, BJ’s is distinct from the organizations at issue in
the cases it cites, and, in any event, those cases are not
controlling here.6
Moreover, in the cases cited by BJ’s, unlike
in the present case, there was no indication that the membership
rules at issue were ambiguous or contradicted by other documents
from
the
organization.
See,
e.g.,
Miller,
185
P.
at
595
6
Even if BJ’s could establish that Cappalli was bound by
the terms of the P&C’s, the P&C’s did not describe BJ’s renewal
policy when Cappalli purchased two of her renewal memberships.
Also, as previously discussed, the P&C’s are internally
inconsistent concerning the duration of renewal memberships.
14
(referring to the relevant rule as “so plain as to not admit of
argument as to its meaning”).
B.
Damages
BJ’s contends that, even if this Court finds that genuine
issues of fact exist concerning whether the parties contracted
for a renewal term of twelve months from the date of purchase,
its
motion
for
summary
judgment
should
be
granted
because
Cappalli suffered no damages as a result of BJ’s renewal policy.
“[A]n
element
damages.”
of
a
breach
of
contract
claim
is
proof
of
Chrabaszcz v. Johnston Sch. Comm., 474 F. Supp. 2d
298, 309 (D.R.I. 2007).
In a breach of contract case, a damages
award should seek “to place the injured party in as good a
position
as
if
the
parties
fully
performed
the
contract.”
Nationwide Life Ins. Co. v. Steiner, 722 F. Supp. 2d 179, 187
(D.R.I. 2010) (quoting Guzman v. Jan-Pro Cleaning Sys., Inc.,
839 A.2d 504, 508 (R.I. 2003)).
Cappalli argues that, under the terms of her contract with
BJ’s, she was entitled to a renewal membership lasting twelve
months
renewal
from
the
date
memberships
on
of
purchase.
March
26,
Cappalli
2006,
purchased
February
15,
her
2007,
February 2, 2008, February 12, 2009, and February 27, 2010,
respectively.
Each of these memberships expired on January 31
of the following year.
It is undisputed that BJ’s provides
members a fifteen-day “grace period” after the expiration of
15
their prior memberships during which they may make purchases at
BJ’s
without
paying
the
15%
non-member
surcharge.
Thus,
Cappalli enjoyed the full benefits of her renewal memberships
through February 15.
For this reason, Cappalli suffered no
damages as a result of BJ’s renewal policy with respect to the
renewal memberships she purchased on February 15 or earlier,
namely her second, third, and fourth renewal memberships.
In a similar case, Kaymak v. AAA Mid-Atl., Inc., Civil
Action No. 10-6532, 2012 WL 3887040 (E.D. Pa. Sept. 7, 2012),
one
federal
lacked
policy.
district
standing
to
court
sue
recently
AAA
in
held
that
connection
a
with
AAA
its
member
renewal
Like Cappalli, the plaintiff in Kaymak alleged that AAA
“‘backdate[d]’
the
start
date
of
prior year’s expiration date.”
implemented
a
grace
period
renewal
memberships
Id. at *1.
policy
which
to
the
Like BJ’s, “AAA
extends
all
member
benefits for the first 30 days after a membership has lapsed.”
Id. at *3.
The Kaymak court explained that the plaintiff had
not suffered any injury in fact because, while she claimed to
have “lost” sixteen days of membership due to AAA’s renewal
policy, she “still received a full 12 months of AAA membership”
due to AAA’s thirty-day grace period.
Id.
Similarly, in this
case, when Cappalli renewed her membership on or before February
15, and she still enjoyed the benefits of membership through
16
February 15 of the following year, she got what she bargained
for, if not more.
Kaymak does not, however, dictate that this Court grant
BJ’s
motion
for
summary
judgment
with
first and fifth renewal memberships.
respect
to
Cappalli’s
Because Cappalli purchased
those memberships on March 26 and February 27, respectively, and
her
membership
benefits
terminated
on
February
15
of
the
following year, she did not receive a full twelve months of
membership in those years.
In Kaymak, the court explicitly
distinguished the case at hand from cases involving Costco and
Sam’s Club, BJ’s competitors with similar renewal policies.
The
court explained, “neither the Sam's Club member nor the Costco
member received any benefits of membership once the backdated
renewal membership expired.
Thus, when Sam's Club or Costco
backdated the start date of a renewed membership, the member in
fact received fewer than 12 months of benefits.”
Id. at *5.
While BJ’s renewal policy is different than Costco’s and Sam’s
Club’s in that BJ’s offers members a fifteen-day grace period,
BJ’s did not offer Cappalli any benefits after that fifteen-day
period
was
over,
irrespective
of
whether
twelve
months
had
passed since the date of purchase.
The fact that Cappalli never paid a surcharge at BJ’s does
not mean that she suffered no compensable damages as a result of
BJ’s renewal policy as a matter of law.
17
See Held v. AAA S. New
England, No. 3:11cv105 (SRU), 2012 WL 4023367, at *5 (D. Conn.
Sept.
12,
2012)
(explaining
that,
in
a
case
involving
the
backdating of AAA memberships, “the theory of injury and damages
is not based upon how many times a person was denied [benefits]
during the expired period, but rather is based on the alleged
prospective denial of a full 12–month membership at the time of
renewal of their annual membership” (quoting Dupler v. Costco
Wholesale
Corp.,
249
F.R.D.
29,
44
n.4
(E.D.N.Y.
2008))).
Plaintiff’s expert, Leo H. Kahane, in a report which is in the
record, concluded that “the renewal reset policy employed by
BJ’s
over
the
period
covered
by
this
case
clearly
led
to
economic harm to members renewing their membership after their
expiration
date,
but
before
qualifying
for
(Ex. D to Woodward Aff., ECF No. 54-4.)
a
renewal
reset”
Mr. Kahane based this
conclusion on the fact that such renewing members “would receive
less
service
than
someone
signing
up
as
receive after paying the same annual fee.”
a
new
(Id.)
member
would
According to
Kahane, the extent of this economic harm could be calculated by
dividing the annual membership fee by twelve to determine the
monthly membership rate and multiplying this monthly rate by the
number of months lost due to the renewal reset policy.
(Id.)
Mr. Kahane’s theory, at a minimum, creates a material issue of
fact for the jury.
18
For the reasons set forth above, the Court grants BJ’s
motion
for
summary
judgment
on
both
counts
with
respect
to
Cappalli’s second, third, and fourth renewal memberships, but
denies that motion with respect to her first and fifth renewal
memberships.
C.
BJ’s Affirmative Defenses7
BJ’s argues that Cappalli’s claims fail under the voluntary
payment doctrine, which “bars recovery of payments voluntarily
made with full knowledge of the facts.”
Solomon v. Bell Atl.
Corp., 9 A.D.3d 49, *55 (N.Y. App. Div. 2004) (internal citation
and quotation marks omitted).
The doctrine does not, however,
bar payments made under a mistake of fact.
See, e.g., Salling
v. Budget Rent-A-Car Sys., Inc., 672 F.3d 442, 444 (6th Cir.
2012) (stating that voluntary payment doctrine applies “[i]n the
absence
of
.
.
.
mistake
of
fact”
(internal
citation
and
7
As an initial matter, this Court grants Cappalli’s motion
for partial summary judgment with respect to BJ’s affirmative
defenses of:
(1) failure to state a claim; (2) “statutes of
limitations and/or statutes of fraud;” (3) failure to mitigate
damages; (4) laches; and (5) “Plaintiff’s claims are not
properly maintainable as a class action” because BJ’s failed to
present any argument concerning these affirmative defenses in
its summary judgment papers or at the summary judgment hearing
and thus waived its objection. “Issues are considered waived if
they are not accompanied by some attempt at developed
argumentation.” Am. States Ins. Co. v. LaFlam, 808 F. Supp. 2d
400, 405 n.9 (D.R.I. 2011) (granting the plaintiff’s motion for
judgment on the pleadings and refusing to consider affirmative
defenses raised in the defendant’s answer but not developed in
her motion papers).
19
quotation marks omitted)).
There is precedent suggesting that a
plaintiff who negligently fails to learn the facts underlying a
payment will not be able to take advantage of the mistake of
fact exception to the voluntary payment doctrine.
See Spivey v.
Adaptive Mktg. LLC, 622 F.3d 816, 823-24 (7th Cir. 2010) (“It is
no
exception
to
the
voluntary-payment
doctrine
when
the
plaintiff makes no effort to ascertain the factual basis of the
[charge] but pays it anyway.” (internal citation and quotation
marks omitted)); Chris Albritton Constr. Co. v. Pitney Bowes
Inc., 304 F.3d 527, 532 (5th Cir. 2002) (“Regarding excusable
ignorance, the voluntary payment doctrine precludes courts from
extending relief to those who have neglected to take care of
their
interests
would
have
omitted)).
and
avoided.”
are
in
predicaments
(internal
citation
which
and
ordinary
quotation
care
marks
Moreover, in some situations, courts have found it
proper to dispose of this issue at the summary judgment stage.
See Spivey, 622 F.3d at 824; Chris Albritton, 304 F.3d at 532.
Other federal courts, however, have held that the applicability
of
the
mistake
precluding
of
summary
fact
exception
judgment.
See
is
a
question
Rickenbach
v.
of
Wells
fact
Fargo
Bank, N.A., 635 F. Supp. 2d 389, 395 (D.N.J. 2009) (holding that
applicability of the voluntary payment doctrine and the mistake
of
fact
exception
“raises
questions
of
fact
that
cannot
be
resolved” on a motion to dismiss); Dynatec Drilling, Inc. v.
20
Duncan
Park
Holdings
Nev.,
Ltd.,
No.
03:05-CV-00266-LRH-VPC,
2007 WL 1063195, at *2 (D. Nev. Apr. 5, 2007) (“[T]he question
of whether [the non-movant] made a mistake of fact when it made
payments
to
[the
movant]
is
a
question
of
fact
precluding
summary judgment.”).
In
this
case,
there
is
a
genuine
dispute
of
fact
with
respect to whether Cappalli knew that her renewal memberships
would expire less than twelve months from the date of purchase.
While BJ’s explained its renewal policy in its P&C’s and on its
website,
there
is
no
evidence
description of the policy.
that
Cappalli
ever
read
a
Similarly, although BJ’s provided
Cappalli with receipts that stated the expiration date of her
membership, there is no evidence that Cappalli ever read those
receipts.
While Cappalli may have been negligent in her failure to
learn the expiration date of her BJ’s membership, it is not
clear that her negligence rises to the level of that at issue in
cases
where
federal
courts
have
granted
judgment on voluntary payment grounds.
motions
for
summary
See Spivey, 622 F.3d at
823 (plaintiff failed to inquire concerning the basis of an
unknown charge appearing on his credit card statements); Chris
Albritton,
304
F.3d
at
532
(plaintiffs
failed
to
inquire
concerning a charge appearing on their bill that was prohibited
by the terms of their lease).
Cappalli, unlike the plaintiffs
21
in those cases, did not pay a charge without ascertaining the
basis for that charge.
She knew that she was purchasing BJ’s
renewal
In
memberships.
manifestations
concerning
light
the
of
the
ambiguity
duration
of
of
those
BJ’s
renewal
memberships, there is a genuine issue of fact concerning whether
Cappalli’s
failure
to
exercise
ordinary
recovering for breach of contract.
care
bars
her
from
See Spagnola v. Chubb Corp.,
574 F.3d 64, 73 (2d Cir. 2009) (reversing the district court’s
dismissal
of
the
plaintiff’s
breach
of
contract
claim
on
voluntary payment grounds where the plaintiff alleged that “his
lack of full knowledge was not due to a lack of diligence, but
instead due to being misled by [the defendant]”).
The existence
of such a genuine dispute of material fact precludes this Court
from
granting
either
party’s
motion
for
summary
judgment
concerning the affirmative defense of voluntary payment.
In a brief footnote, BJ’s asserts that Cappalli’s claims
are also barred by the doctrines of waiver, equitable estoppel,
and account stated.
With respect to waiver, a grant of summary
judgment in favor of either party would be inappropriate for the
same
reasons
voluntary
that
payment
it
is
inappropriate
doctrine.
“Waiver
with
is
intentional relinquishment of a known right.”
respect
the
to
the
voluntary
1800 Smith St.
Assocs., LP v. Gencarelli, 888 A.2d 46, 54 (R.I. 2005) (internal
citation and quotation marks omitted).
22
Here, there is a genuine
issue
of
fact
concerning
whether
Cappalli
knew
about
BJ’s
renewal policy, and, thus, it is unclear whether her continuing
relationship
with
BJ’s
may
fairly
be
characterized
as
“voluntary intentional relinquishment of a known right.”
a
See
Violet v. Travelers Express Co., 502 A.2d 347, 349 (R.I. 1985)
(“As
a
general
relinquished
a
rule,
known
whether
right
is
a
a
party
question
has
for
voluntarily
the
trier
of
fact.”).
The doctrines of equitable estoppel and account stated are
not directly applicable to the facts of this case, and, for this
reason, Cappalli’s motion for summary judgment is granted with
respect to these affirmative defenses.
Under Rhode Island law,
equitable estoppel requires:
an affirmative representation or equivalent conduct on
the part of the person against whom the estoppel is
claimed which is directed to another for the purpose
of inducing the other to act or fail to act in
reliance thereon; and . . . , that such representation
or conduct in fact did induce the other to act or fail
to act to his injury.
Sturbridge Home Builders, Inc. v. Downing Seaport, Inc., 890
A.2d 58, 67 (R.I. 2005) (internal citation omitted).
In the
instant case, BJ’s has not presented evidence that it relied
upon Cappalli’s alleged agreement to a renewal term of less than
twelve months.
In fact, to the contrary, the evidence indicates
that BJ’s was aware of the fact that many of its customers were
23
ignorant of its renewal policy and did not intend to enter into
an agreement for a term of less than twelve months.
The Rhode Island Supreme Court has described an “account
stated”
as
”a
computation
account
of
between
striking
of
a
balance
debits
and
credits
the
parties
and
by
an
resulting
followed
arithmetical
from
a
running
thereafter
by
an
expressed or tacit promise by one, found to be indebted to the
other, to pay the agreed balance determined to be owed.”
Mello
v. Coy Real Estate Co., 234 A.2d 667, 671-72 (R.I. 1967).
In
the present case, the dispute does not involve the payment of a
balance comprised of separate items.
Cappalli
by
Cappalli
BJ’s
and
reflected
BJ’s
never
single
entered
The receipts provided to
transactions.
into
a
Moreover,
debtor-creditor
relationship.
Finally,
Cappalli’s
motion
for
summary
judgment
on
BJ’s
affirmative defense that “Plaintiff’s claims are barred by the
terms of the parties’ contractual agreements” is denied.
previously
discussed,
concerning
whether
there
the
is
parties
a
genuine
contracted
issue
for
of
a
As
fact
renewal
membership term of twelve months from the date of purchase.
instead,
the
parties
contracted
for
a
renewal
lesser duration, Cappalli’s claims must fail.
24
membership
If,
of
D.
Atkinson Deposition
After
30(b)(6)
the
of
initiation
the
of
Federal
this
Rules
lawsuit,
of
pursuant
Civil
to
Procedure,
Rule
BJ’s
designated Michael Atkinson as its corporate representative to
testify
to
the
factual
bases
for
BJ’s
affirmative
defenses.
BJ’s also objected to this line of questioning to the extent it
sought “testimony concerning BJ’s legal theories, and therefore
s[ought] testimony concerning matters that are subject to the
attorney-client privilege and work product doctrine.”
(Def.’s
Separate Statement of Undisputed Facts ¶ 4, ECF No. 67.)
deposition,
on
the
advice
of
counsel,
Atkinson
At his
refused
to
respond to a question asking for the “factual basis” underlying
BJ’s affirmative defense that “Plaintiff’s claims are barred by
the terms of the parties’ contractual agreements.”
Woodward
Aff.
(Atkinson
Dep.
231:1-234:9),
ECF
(Ex. C to
No.
50-3.)
Atkinson subsequently agreed that he was refusing to provide the
“factual bases” for all of BJ’s affirmative defenses.
244:23-245:16.)
Atkinson
did,
however,
testify
(Id. at
concerning
Cappalli’s membership with BJ’s, BJ’s renewal policy, and the
P&C’s and their availability to members, among other things.
Cappalli contends that this Court should grant her motion
for partial summary judgment because of Atkinson’s refusal to
respond to these deposition questions.
two reasons.
First, the questions posed to Atkinson by BJ’s
25
This argument fails for
counsel were improper.
See Am. Nat’l Red Cross v. Travelers
Indem. Co., 896 F. Supp. 8, 14 (D.D.C. 1995) (denying a motion
for
summary
judgment
predicated
upon
a
30(b)(6)
witness’s
failure to respond to similar questions on the grounds that
those questions “intruded upon protected work product”).
BJ’s
could have obtained the information it sought by posing purely
factual questions.
Instead, it asked questions that required
Atkinson to relate the underlying facts to BJ’s legal theories.
Second, even assuming that Cappalli’s questions were proper and
should have been answered, discovery violations may be waived if
they are not raised in a timely manner.
See, e.g., JOM, Inc. v.
Adell Plastics, Inc., 193 F.3d 47, 51 (1st Cir. 1999) (affirming
the denial of a motion to exclude because the issue should have
been
raised
during
discovery).
Here,
after
Atkinson’s
deposition, held on November 22, 2011, Cappalli never filed a
motion to compel.
Rather, seven months later, she raised the
issue in a motion for summary judgment.
BJ’s should not be
allowed to use Atkinson’s deposition as a trap; if it really
wanted answers, it could have moved to compel.
With respect to the affirmative defense that “Plaintiff’s
claims
are
barred
agreements,”
indicating
by
Cappalli
that
there
the
terms
of
characterizes
is
no
the
Atkinson’s
agreement
customers concerning BJ’s renewal policy.
26
parties’
between
contractual
testimony
BJ’s
and
as
its
This characterization
is
inaccurate.
While
Atkinson
testified
that
there
is
no
“written contract” in which BJ’s members agree to the renewal
policy reflected in the P&C’s, he did not testify that BJ’s
members never agree to the renewal policy in some other manner.
(Ex. C to Woodward Aff. (Atkinson Dep. 159:21), ECF No. 50-3.)
E.
Money had and Received
In
addition
to
her
breach
of
contract
claim,
brings an equitable claim of money had and received.
is essentially one of unjust enrichment.
Cappalli
This claim
See 66 Am. Jur. 2d
Restitution and Implied Contracts § 156 (2011) (“An action for
‘money had and received,’ or the more modern action for ‘unjust
enrichment,’ is said to be a remedy equitable in nature . . . .”
(footnotes omitted)).
As this Court recognized in its denial of
BJ’s motion to dismiss, “it is permissible under Rhode Island
law to plead an equitable cause of action in the alternative
where an express contract exists.” Cappalli v. BJ's Wholesale
Club, Inc., CA 10-407 S, 2011 WL 2606912, at *3 (D.R.I. June 30,
2011) (citing Hasbro, Inc. v. Mikohn Gaming Corp., No. Civ. A.
05–106
S,
2006
WL
2035501,
at
*8
(D.R.I.
July
18,
2006)).
However, this Court has also held that “[u]njust enrichment,
like
other
quasi-contractual
remedies,
is
a
vehicle
for
equitable recovery where no rights on an enforceable contract
exist.”
256,
264
Hasbro, Inc. v. Mikohn Gaming Corp., 491 F. Supp. 2d
(D.R.I.
2007).
In
Hasbro,
27
this
Court
granted
the
defendant’s
motion
for
summary
judgment
on
the
plaintiff’s
unjust enrichment claim, explaining that the plaintiff’s “claim
is based on a disputed term in the contract, and not on an
allegation
or
evidence
that
the
contract
is
in
some
way
unenforceable (a claim that could support recovery under unjust
enrichment).”
Id.
In the present case, by contrast, there is a
genuine issue of fact material to the enforceability of the
agreement
between
Cappalli
and
BJ’s.
The
fact-finder
may
determine that there was no meeting of the minds because the
parties
each
attached
manifestations.
different
meanings
to
their
See Restatement (Second) of Contracts § 20.
Thus, Cappalli’s breach of contract claim does not preclude her
from
proceeding
to
trial
with
for
money
had
her
claim
of
money
had
and
received.
“An
whenever
action
one
person
has
and
money
received
which
in
‘is
maintainable
equity
and
good
conscience belongs to another.’” Cappalli, 2011 WL 2606912, at
*3 (quoting Fuscellaro v. Indus. Nat'l Corp., 117 R.I. 558, 564
(1977)); see also Williams v. Smith, 72 A. 1093, 1101 (R.I.
1909) (“An action for money had and received will lie where one
has
obtained
money
from
another
by
oppression,
imposition,
extortion, or deceit; and the law implies a promise from such
person to return it to the lawful owner.”
and quotation marks omitted)).
However, “[s]imply conferring a
28
(internal citation
benefit . . . is not sufficient to establish a claim for unjust
enrichment. The most significant requirement . . . is that the
enrichment to the defendant be unjust.”
Ciampi v. Zuczek, 598
F. Supp. 2d 257, 263 (D.R.I. 2009) (quoting R & B Elec. Co. v.
Amco Constr. Co., 471 A.2d 1351, 1356 (R.I. 1984)).
BJ’s motion for summary judgment is denied with respect to
Cappalli’s
first
and
fifth
renewal
memberships.
There
is
evidence in the record indicating that BJ’s was aware of the
fact that its customers were being misled concerning its renewal
policy and continued the policy nonetheless.
sufficient
to
create
a
genuine
issue
This evidence is
of
fact
material
to
Cappalli’s equitable claim.
BJ’s
argument
that,
even
if
Plaintiff
can
successfully
establish the elements of her claim of money had and received,
any damages must be offset by the benefit she gained from her
BJ’s membership, namely waiver of the 15% non-member surcharge,
is baseless.
Contrary to BJ’s contentions, equitable relief is
not an all or nothing proposition.
This Court can grant relief
without placing the parties in the position they would have been
in
had
the
transaction
between
them
never
occurred.
See
Dellagrotta v. Dellagrotta, 873 A.2d 101, 114-15 (R.I. 2005)
(upholding
improvements
the
defendant’s
made
to
a
award
house
as
for
well
unjust
as
the
enrichment
trial
for
judge’s
refusal “to offset the award to account for the defendant’s use
29
and occupancy of the property”).
Thus, Cappalli’s motion for
summary judgment on BJ’s affirmative defense of “right of setoff
for discounts Plaintiff received to which she was not entitled,”
is granted.
III. Conclusion
For
summary
the
reasons
judgment
Cappalli’s
is
second,
stated
GRANTED
third,
above,
on
and
both
Defendant’s
motion
counts
respect
fourth
with
renewal
for
to
memberships.
Defendant’s motion for summary judgment is DENIED on both counts
with respect to Cappalli’s other two renewal memberships.
Plaintiff’s motion for partial summary judgment is GRANTED
with respect to BJ’s affirmative defenses of failure to state a
claim,
“statutes
of
limitations
and/or
statutes
of
fraud,”
failure to mitigate damages, right of setoff, laches, estoppel,
account
stated,
and
“Plaintiff’s
maintainable as a class action.”
judgment
is
DENIED
with
claims
are
not
properly
Plaintiff’s motion for summary
respect
to
BJ’s
three
remaining
affirmative defenses, namely “Plaintiff’s claims are barred by
the
terms
of
the
parties’
contractual
payment, and waiver.
IT IS SO ORDERED.
/s/ William E. Smith
William E. Smith
United States District Judge
Date: November 7, 2012
30
agreements,”
voluntary
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