Rhode Island State Pier Properties, LLC et al v. Cargill, Inc.

Filing 30

MEMORANDUM AND ORDER adopting in part 23 Report and Recommendations; granting 13 Motion for Summary Judgment; granting 15 Motion for Summary Judgment. So Ordered by Judge William E. Smith on 9/13/13. (Jackson, Ryan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
______________________________
)
)
)
)
Plaintiff,
)
)
v.
)
)
CARGILL, INC.,
)
)
Defendant.
)
______________________________)
RHODE ISLAND STATE PIER
PROPERTIES, LLC,

C.A. No. 12-198 S

MEMORANDUM AND ORDER
WILLIAM E. SMITH, United States District Judge.
This matter is before the Court on Plaintiff’s objection to
the

Report

and

Recommendation

(“R&R”)

of

United

States

Magistrate Judge Patricia A. Sullivan, dated May 31, 2013.
No. 23.)

(ECF

The R&R recommended granting a motion for summary

judgment of Defendant Cargill, Inc. (“Cargill”) on all counts
against

it,

and

denying

the

motion

for

summary

judgment

of

Plaintiff Rhode Island State Pier Properties, LLC (“RISPP”) on
all

of

Cargill’s

counterclaims.

For

the

reasons

set

forth

below, pursuant to 28 U.S.C. § 636(b)(1), Plaintiff’s objection
is

overruled

with

respect

to

Defendant’s

motion

for

summary

judgment (ECF No. 13) and sustained with respect to Plaintiff’s
motion

(ECF

No.

15).

Accordingly

summary judgment is GRANTED.

each

party’s

motion

for

As explained more fully in the R&R, this case began as a
contract dispute after RISPP performed major construction work
on

its

waterfront

property

in

Providence,

Rhode

Island.

Plaintiff’s property was located adjacent to the property of
Defendant Cargill, Inc. (“Cargill”), and Plaintiff argues that
Defendant benefited from this construction.

Therefore, RISPP

filed a complaint against Defendant (1) claiming entitlement to
equitable indemnification and (2) suing Defendant for (i) breach
of contract and (ii) unjust enrichment.
During

RISPP’s

construction

on

its

lots,

Cargill

was

performing ongoing environmental remediation on its lots and on
RISPP’s

lots.

After

Plaintiff

filed

its

Complaint,

Cargill

filed counterclaims seeking indemnification and contribution and
alleging breach of contract and unjust enrichment, all related
to

the

environmental

remediation

that

Cargill

performed

on

RISPP’s property.
Both

Plaintiff

and

Defendant

filed

motions

judgment on the claims asserted against them.
recommended
denying

granting

Plaintiff’s

recommendation

to

Defendant’s
motion.

grant

motion

on

Plaintiff

Defendant’s

motion

for

summary

Judge Sullivan
all

counts

objects
with

to

respect

and
the
to

Plaintiff’s unjust enrichment claim and to the recommendation to
deny Plaintiff’s motion, but Plaintiff poses no objection to the
recommendation as to the claims for equitable indemnification

2

and breach of contract.

A district court reviews de novo any

portion of a report and recommendation that has been properly
objected to.

Fed. R. Civ. P. 72(b)(3).

All other portions of a

report and recommendation the court need only review for clear
error.

Aljammi v. Wall, C.A. No. 09-375, 2009 WL 3615977, at *1

(D.R.I. Oct. 30, 2009).
The

reasoning

Defendant’s

behind

motion

for

the

summary

recommendation
judgment

to

with

grant

respect

to

Plaintiff’s claims for equitable indemnification and breach of
contract contains no clear error.

Therefore, the Court adopts

the R&R with respect to those claims pursuant to 28 U.S.C. §
636(b)(1).
The

Court

further

adopts

the

recommendation

to

grant

Defendant’s motion with respect to Plaintiff’s claim for unjust
enrichment.
claim

for

conferred

As set out in the R&R, in order to prevail on a
unjust
a

enrichment,

benefit

upon

RISPP

must

Cargill,

(2)

prove

that:

Defendant

(1)

it

Cargill

appreciated the benefit, and (3) it would be inequitable for
Cargill

to

retain

the

(See R&R at 11-12.)

benefit

without

paying

for

its

value.

The Magistrate Judge found that RISPP’s

theory of unjust enrichment “fails because it assumes that a
property owner may be liable for unjust enrichment whenever a
neighbor, acting for his own benefit, improves his own property,
and, without permission, that of his neighbor.”

3

(R&R at 12.)

As

a

matter

of

law,

RISPP’s

unjust

enrichment

claim

fails

because the undisputed facts establish that RISPP did in fact
perform the work unilaterally for its own benefit.

Cargill did

not request that RISPP perform the work and, thus, equity does
not require that Cargill contribute to the costs of the work.
Restatement (Third) of Restitution and Unjust Enrichment § 2
(2011) (“Improvements to A’s property increase the market value
of

B’s

adjoining

land.

B

sells

and

realizes

substantial

additional proceeds as the result of A’s expenditure.

B is not

liable to A in restitution.”)
Plaintiff argues that the Magistrate Judge under-estimated
the expense that Plaintiff incurred in renovating its property.
Therefore, according to Plaintiff, the “balance of the equities”
favors Plaintiff, which may recoup from Defendant a portion of
its

substantial

Magistrate

costs.

Sullivan’s

construction

work

in

This

conclusion
a

argument
that

Plaintiff

self-interested

developer to buy its lots.

has

attempt

(See R&R at 13.)

no

bearing

performed
to

on
the

attract

a

Any collateral

benefit that may have accrued to Cargill was not unjust.
Plaintiff also argues that the failure of Cargill or the
Rhode Island Department of Environmental Management to stop its
clearing and grading creates a factual dispute regarding whether
Cargill appreciated an unjust benefit.

However, Cargill did not

give RISPP permission to proceed, did not know about RISPP’s

4

intent

to

perform

actions.

As

Sullivan’s

the

such,

work

this

conclusion

and

Court

that

explicitly

agrees

Cargill

opposed

with

is

RISPP’s

Magistrate

entitled

to

Judge

summary

judgment on RISPP’s claim for unjust enrichment.
Plaintiff

also

objects

to

the

denial

of

summary judgment on Cargill’s counterclaim.

its

motion

for

Magistrate Judge

Sullivan denied RISPP’s motion for summary judgment because she
concluded that an open issue remained as to whether Cargill had
knowledge

of

RISPP’s

bankruptcy.

RISPP

argues

that

summary

judgment is appropriate on Cargill’s counterclaims because the
counterclaims

arose

prior

to

2010

when

RISPP

filed

for

bankruptcy and the discharge of its debts terminated the claims
because Cargill failed to file a claim or participate in RISPP’s
bankruptcy.
As

the

Magistrate

Judge

pointed

out,

a

Chapter

11

bankruptcy proceeding “discharges the debtor from any debt that
arose

before

1141(d)(1)(A).
includes

the

date
Under

“liability

on

of

such

the
a

confirmation.”

Bankruptcy
claim.”

11

Code,
U.S.C.

11

the
§

U.S.C.

term

“debt”

101(12).

“claim” includes, inter alia:
right to payment, whether or not such right is reduced
to
judgment,
liquidated,
unliquidated,
fixed,
contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured.
11 U.S.C. § 101(5).

5

§

A

The general rule is “that if the debtor fails to list a
supposed creditor’s claim — meaning that the creditor will not
be notified of the opportunity to participate in the proceeding
(and

the

creditor

does

not

otherwise

happen

bankruptcy), the debt is not discharged.”

to

know

of

the

Colonial Sur. Co. v.

Weizman, 564 F.3d 526, 530 (1st Cir. 2009). Further, “[o]nce a
debtor receives a discharge, it is up to the creditor to show
that he has not been duly scheduled, and the burden then shifts
to the debtor to come forward with evidence that the creditor
had notice or actual knowledge of the bankruptcy proceedings.”
In re Gray, 57 B.R. 927, 931-32 (Bankr. D.R.I. 1986).

If the

creditor did not receive timely notice or have actual knowledge
of

the

bankruptcy,

bankruptcy.

the

claim

remains

viable

despite

the

Reyes v. Standard Parking Corp, 461 B.R. 153, 160

(Bankr. D.R.I. 2011).
Neither

party

contends

that

Cargill

was

listed

as

a

creditor during the bankruptcy proceeding, so the burden shifts
to RISPP to prove that Cargill had notice or actual knowledge of
the bankruptcy to establish that Cargill should be barred from
bringing its claims.

Gray, 57 B.R. at 931-32.

The creditor

must have more than mere exposure to statements that a debtor is
seeking

bankruptcy

523(a)(3)(A).
sufficient

to

relief.

Id.

The

party

must

apprise

the

creditor

6

at

have
that

932;

11

“knowledge
a

case

was

U.S.C.
of

§

facts

actually

filed, and where that proceeding is pending.”
932.
be

Gray, 57 B.R. at

Magistrate Judge Sullivan found that summary judgment must
denied

because

material

factual

issues

remained

about

Cargill’s knowledge of RISPP’s bankruptcy.
After

the

supplement

the

R&R

was

record

filed,
with

the

email

Court

permitted

communications

RISPP
from

to

John

Boyajian, attorney for RISPP, to Joseph Baker of Cargill that
discuss RISPP’s bankruptcy petition.

(ECF No. 28.)

The first

email states, “I am counsel to [RISPP] which is presently in a
Chapter 11 proceeding in the United States Bankruptcy Court for
the District of Rhode Island.”
Esq., ECF No. 24-3.)

(Ex. to Aff. of John Boyajian,

This communication itself provides Cargill

with sufficient information to assert its claims against RISPP.
Therefore, it was incumbent upon Cargill to do so prior to the
resolution of RISPP’s bankruptcy proceedings.
it

from

asserting

its

claims

now

and

Its failure bars

summary

judgment

is

appropriate with respect to Cargill’s counterclaims.
Defendant argues that, even though it was notified of the
bankruptcy, it was not notified that it was a creditor to RISPP,
so

its

failure

to

assert

its

claim

during

the

bankruptcy

proceedings does not deprive it of its ability to do so now.
However, the knowledge whether Cargill was a creditor of RISPP
would be uniquely within the province of Cargill itself.

A

debtor need only provide to a creditor sufficient notice of a

7

bankruptcy proceeding to allow the creditor to assert its claim.
Reyes, 461 B.R. at 160.

The emails sent to Cargill clearly met

this standard.
For

the

Magistrate
motion

for

foregoing

Judge’s

reasons,

recommendations

summary

judgment

and

this

Court

accepts

the

with

respect

to

Cargill’s

the

motion

is

GRANTED.

Additionally, the supplements to the record remove any material
factual

issues

with

respect

to

Cargill’s

counterclaims,

Plaintiff’s motion for summary judgment is, likewise, GRANTED.

IT IS SO ORDERED:

/s/ William E. Smith
William E. Smith
United States District Judge
Date: September 13, 2013

8

and