High Rock Westminster Street, LLC v. Bank of America, N.A.

Filing 265

MEMORANDUM AND ORDER denying 257 Motion to Amend the Complaint; granting in part and denying in part 205 Motion for Summary Judgment. So Ordered by Chief Judge William E. Smith on 9/7/2016. (Jackson, Ryan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
)
)
)
Plaintiff,
)
)
v.
)
)
BANK OF AMERICA, N.A.,
)
)
Defendant.
)
___________________________________)
HIGH ROCK WESTMINSTER STREET LLC,

C.A. No. 13-500 S

MEMORANDUM AND ORDER
WILLIAM E. SMITH, Chief Judge.
Before the Court are Bank of America, N.A.’s (“BOA” or the
“Bank”)

Motion

Judgment”

or

Westminster

for

Summary

“BOA’s

Street

Motion”)

LLC’s

Judgment
(ECF

(“High

No.

Rock”)

(“Motion
205)
Motion

for

and
to

Summary

High
Amend

Rock
the

Complaint (“Motion to Amend” or “High Rock’s Motion”) (ECF No.
257).

For the reasons set forth below, BOA’s Motion is GRANTED

IN PART and DENIED IN PART; High Rock’s Motion is DENIED.
I.

Background
This dispute centers on BOA’s obligations under a ten-year,

so-called “triple net” lease (the “Lease”) between BOA and High
Rock1 for the building at 111 Westminster Street in Providence,

1

Subsequent to the lease, on April 1, 2004, BOA acquired
Fleet National Bank (the original lessee of the Building), took
over
occupancy
of
the
Building,
and
assumed
Fleet’s

Rhode Island (the “Building” or “Premises”).2

The interaction

between the Lease’s Repair and Termination Provisions form the
core

of

the

parties’

dispute.

Under

the

Lease’s

Repair

Provision, BOA agreed to
keep the Premises in good condition and repair and be
responsible
for
all
maintenance,
repairs
and
replacements
to
the
Premises,
structural
and
nonstructural, ordinary or extraordinary, foreseen or
unforeseen, including, but not limited to,
all
structural repairs and replacements to the foundation,
exterior and/or load bearing walls, interior and
exterior windows, roof, and mechanical, heating,
ventilation and air conditioning systems of the
Premises . . . .
(Lease § 6, Ex. H to BOA’s Statement of Undisputed Material
Facts (“SUF”), ECF No. 207-8.)

The provision goes on to specify

that BOA would
make all such repairs and replacements as may be
necessary to keep and
maintain the Premises in a
condition consistent with other Class B high rise
office buildings of similar age and construction
located in the greater Providence, Rhode Island
metropolitan area, and shall not defer any repairs,
maintenance or replacements in anticipation of the
expiration of the term.
(Id.)

BOA also agreed that

responsibilities under the Lease. Four years later, on January
24, 2008, High Rock bought the Building and took over the prior
owner’s rights and responsibilities under the Lease.
For
consistency and to avoid confusion, the Court will refer to
Fleet and BOA as “BOA,” and High Rock and its predecessor in
interest as “High Rock.”
2

The Building is often referred to as the “Superman
Building” because of its resemblance to the Daily Planet
building in Superman.
2

[n]otwithstanding the foregoing, (a) [BOA], at its
sole cost, shall replace the existing main electrical
switch gear (“Switch Gear”) in the basement of the
building located at the Premises, provided that if at
the end of the term [BOA] has not replaced the Switch
Gear and has not exercised its right pursuant to
Section 2.2 to extend the term of the this Lease, then
[BOA] shall pay the sum of $120,000.00 to [High Rock]
. . . .
(Id.)

And the Repair Provision concludes by requiring BOA to
keep the heating, ventilating and air conditioning,
plumbing, electrical and other mechanical systems in
good operating condition . . . [,] make any repairs,
replacements or improvements which may be required by
any laws, rules, regulations, ordinances or orders of
any federal, state, local, or other governmental
authority . . . [,] [and] use all reasonable
precaution to prevent deterioration, waste, damage or
injury to the Premises.

(Id.)

In a separate provision, BOA also agreed to indemnify

High Rock for costs, damages, and expenses of certain types of
asbestos in the Building.
As

detailed

below,

(See id. § 27.)
the

parties

hotly

dispute

how

these

maintenance and repair requirements interact with the Lease’s
Termination Provision.

There, BOA agreed to

surrender the Premises to [High Rock] in as good
condition and repair as when the Lease commenced,
excepting ordinary wear and tear, condemnation, damage
from any cause not required to be repaired or replaced
by [BOA] . . . .
(Id. § 18.)

BOA also agreed that

[a]ll movable furnishings, trade fixtures and other
equipment and personal property owned by [BOA] may be
removed from the Premises by [BOA], at [BOA]’s sole
expense, no later than the date of termination . . . .

3

(Id.)
In 2013, BOA decided not to renew the Lease and vacated the
Building.
suit.

Shortly thereafter, High Rock commenced the present

According

to

High

maintenance

and

Building’s

components

distribution

repair

system,

and

Rock,

BOA

(1)

obligations

for

including
heating

its
and

failed
a

to

its

of

the

number

façade,

cooling

meet

electrical

systems

(“HVAC”

systems) (Counts I and II); (2) breached the Lease’s implied
covenant of good faith and fair dealing and committed waste when
it failed to properly maintain the Building (Counts III and IV);
(3)

left

so

much

furniture

in

the

Building

that

BOA

was

effectively a holdover tenant liable for rental payments (Count
V); and (4) that as a result of BOA’s maintenance failures, BOA
has caused High Rock to lose rental income for the Building
(Count VI).3

(See Compl., ECF No. 1.)

High Rock also moves to

amend its Complaint to add allegations that BOA failed to remove
asbestos as required under the Lease.

(See Pl.’s Mot. to Am.,

ECF No. 257.)

3

In its Complaint, High Rock also alleges BOA failed to
adequately maintain the Building’s fire protection system, and
failed to make the Building’s bathrooms ADA compliant. At oral
argument on BOA’s Motion, High Rock conceded that it was
abandoning these claims.
(Summ. J. Hr’g Tr. 3:1-15, ECF No.
251.)
4

BOA now seeks summary judgment on five of High Rock’s six
claims and opposes High Rock’s Motion to Amend.4
argues

that

provisions

it

satisfied

because

it

the

Lease’s

returned

the

maintenance
Building

condition as when it started the Lease in 2003.

BOA first
and

in

repair

the

same

BOA then argues

that High Rock’s remaining claims fail as a matter of law and,
that in any event, High Rock’s damages are too speculative to
afford it any relief.

BOA also opposes High Rock’s Motion,

arguing that High Rock has not presented any justification for
its long delay in attempting to add the asbestos claim.
II.

Legal Standards
Summary judgment is appropriate “if the movant shows that

there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Civ. P. 56(a).

Fed. R.

An issue of fact is only considered “‘genuine’

if it ‘may reasonably be resolved in favor of either party.’”
Cadle Co. v. Hayes, 116 F.3d 957, 960 (1st Cir. 1997) (quoting
Maldonado-Denis
Cir. 1994)).
court

must

v.

Castillo-Rodriguez,

23

F.3d

576,

581

(1st

When deciding a motion for summary judgment, the
“examine[]

the

entire

4

record

‘in

the

light

most

BOA concedes that High Rock is entitled to summary
judgment on Count I. There, High Rock alleges BOA breached the
Lease’s express provision that BOA would replace the Building’s
main switch gear during the Lease term.
The Lease provided
liquidated damages for such a breach:
$120,000.
BOA admits
that it is liable for these damages.
(BOA’s Mem. 18 n.18, ECF
No. 205-1.)
5

flattering

to

the

nonmovant

inferences

in

that

party’s

and

indulg[e]

favor.’”

Id.

all
at

reasonable

959

(quoting

Maldonado-Denis, 23 F.3d at 581).
Under Federal Rule of Civil Procedure 15(a), a party may
amend its complaint once as a matter of course within 21 days of
serving

it

or

21

days

after

the

service

of

a

responsive

pleading.

When this one-time right to amend is exhausted, “a

party may

amend its pleading

written

consent

15(a)(2).

or

the

only with the opposing party’s

court’s

leave.”

Fed.

R.

Civ.

P.

And, while under Rule 15, courts should “freely give

leave” to amend “when justice so requires,” this dictate is not
without limits.

Id.

Even under Rule 15’s “amendment-friendly

regime,” U.S. ex rel. D’Agostino v. EV3, Inc., 802 F.3d 188, 192
(1st

Cir.

2015),

courts

can

“deny

leave

to

amend

when

the

request is characterized by ‘undue delay, bad faith, futility,
[or]

the

absence

of

due

diligence

on

the

movant’s

part.’”

Nikitine v. Wilmington Trust Co., 715 F.3d 388, 390 (1st Cir.
2013) (quoting Palmer v. Champion Mortg., 465 F.3d 24, 30 (1st
Cir. 2006)).

Indeed, this Court’s Local Rules specify that

“[a]ny motion to amend a pleading shall be made promptly after
the party seeking to amend first learns the facts that form the
basis for the proposed amendment.”
added).

6

D.R.I. LR Cv 15 (emphasis

III. Discussion
A.

High Rock’s Breach of Contract Claims

The parties largely agree on the principles of contract
interpretation

the

Court

should

employ

to

determine

maintenance and repair obligations under the Lease.

BOA’s

Generally,

“[i]f a contract is clear and unambiguous, the meaning of its
terms presents a question of law for the court.”

Rotelli v.

Catanzaro, 686 A.2d 91, 94 (R.I. 1996) (citing Hodor v. United
Servs.

Auto.

Ass’n,

637

A.2d

357,

359

(R.I.

1994)).

And

“whether the terms of a contract are clear and unambiguous is
itself a question of law, and the court may consider all the
evidence properly before it in reaching its conclusion.”

Id.

(citing Westinghouse Broad. Co. v. Dial Media, Inc., 410 A.2d
986, 991 (R.I. 1980)).
To determine if a contract is unambiguous, the court must
review the document “in its entirety and [give] its language
.

.

.

its

plain,

ordinary

and

usual

meaning.”

Paradis

v.

Greater Providence Deposit Corp., 651 A.2d 738, 741 (R.I. 1994).
This means that the court must give every word of the contract
“meaning

and

effect;

an

interpretation

that

reduces

certain

words to the status of surplusage should be rejected.”

IDC

Prop., Inc. v. Chicago Title Ins. Co., 974 F. Supp. 2d 87, 99
(D.R.I. 2013) (quoting Andrukiewicz v. Andrukiewicz, 860 A.2d
235, 239 (R.I. 2004)).

But where a contract sets forth both
7

general and specific provisions, the more specific provisions
control.

See Sch. Comm. of Town of N. Kingstown v. Crouch, 808

A.2d 1074, 1079 (R.I. 2002) (applying the rule that specific
terms in a contract limit general terms); Elliot Leases Cars,
Inc. v. Quigley, 373 A.2d 810, 813 (R.I. 1977) (same); see also
Kolbe v. BAC Home Loans Servicing, L.P., 738 F.3d 432, 445 n.13
(1st

Cir.

2013);

Restatement

(Second)

of

Contracts

§

203(c)

(noting that “specific terms and exact terms are given greater
weight than general language”).5
1.

Defining “Good Condition and Repair”

Guided by these principles, the first question the Court
must

answer

under

the

maintenance

is

what

Lease.
and

constitutes

This

repair

phrase

“good
sets

obligations,

condition

the
and

and

baseline

the

repair”

for

parties

BOA’s

strongly

disagree over how the phrase should be defined here.
Citing
Datacom,
opinion

Principal

Inc.,

233

interpreting

Mutual

F.3d

1

Life

(1st

Cir.

Massachusetts

5

Insurance
2000),

law,

BOA

Co.
a

v.

First

argues

RacalCircuit

that

the

As Comment (e) to Section 203 of the Restatement
explained, “[a]ttention and understanding are likely to be in
better focus when language is specific or exact, and in case of
conflict the specific or exact term is more likely to express
the meaning of the parties with respect to the situation than
the general language.” Restatement (Second) of Contracts § 203
cmt. (e).
And, particularly relevant to this action, the
Comment goes on to explain that “[i]f the specific or exact can
be read as . . . [a] qualification of the general, both are
given some effect, in accordance with the rule stated in
Subsection (a) [of Section 203].” Id.
8

phrase

means

“in

the

same

condition

excepting ordinary wear and tear.”
205-1.)

According

to

BOA,

it

was

in

as

of

2003,

(Def.’s Mem. 21-23, ECF No.

this

sets

the

Building’s

2003

condition as its baseline and the Bank only had to keep it in
that same condition over the course of the Lease.
disagrees.

High Rock

Relying on the Rhode Island Supreme Court’s decision

in Miller v. McCardell, 33 A. 445 (1895), it asserts that, under
Rhode

Island

law,

the

phrase

required

BOA

to

maintain

the

building in good condition, which, if necessary, meant restoring
the Building to that condition before the end of the lease.
(Pl.’s Opp’n 27-28, ECF No. 228.)
Despite

the

parties’

arguments,

neither

Principal

nor

Miller control the definition of “good condition and repair” in
this

case.

Both

considered

leases

phrase “good condition and repair.”

that

did

Lease

provides

the

definition

6

define

the

Consequently, the courts in

both Principal and Miller needed to do so.6
the

not

of

Here, by contrast,

“good

condition

and

In Principal Mut. Life Ins. Co. v. Racal-Datacom, Inc.,
233 F.3d 1, 2 (1st Cir. 2000), the court considered the scope of
a commercial lease’s requirement to return property “in good
condition” at the end of the lease. Applying Massachusetts law,
the court held that “unless the lease indicates otherwise, good
or tenantable condition means as of the start of the lease.”
Id. at 5 (emphasis added).
Here, assuming that Rhode Island
courts would even follow Principal, the Lease does “indicate
otherwise.”
Similarly, Miller v. McCardell, 33 A. 445, 446
(1895) considered a lease that only contained a general “good
condition” provision.
Unlike here, the lease did not include
more specific standards to which a tenant had to maintain a
building.
9

repair.”

Although

the

Repair

Provision

does

not

expressly

define the phrase, the Termination Provision does.
states

that

Landlord

BOA

in

as

was

required

good

to

condition

and

“surrender
repair

as

commenced, excepting ordinary wear and tear.”
H

to

BOA’s

specific

SUF,

and

ECF

No.

207-8.)

unambiguous

repair obligations:

baseline

This
for

the

It clearly
Premises

when

the

to

Lease

(Lease § 18, Ex.

language

BOA’s

provides

maintenance

a

and

BOA had to maintain and return the Building

to High Rock in as good a condition as it was in in 2003,
excepting

ordinary

wear

and

tear.

Under

the

rules

of

construction cited above, this specific provision controls.
2.

BOA’s Maintenance and Repair Obligations

This brings the Court to the second issue it must resolve –
whether questions of fact exist regarding BOA’s discharge of its
maintenance and repair obligations.

BOA principally argues that

it is entitled to summary judgment because High Rock has not
presented

any

Consequently,

evidence

of

the

according

to

BOA,

Building’s
High

Rock

condition
cannot

in

2003.

demonstrate

that the Building’s façade, electrical, and HVAC systems were in
worse condition, except for ordinary wear and tear, when BOA
surrendered

the

Building

to

High

argument, BOA overplays its hand.

10

Rock

in

2013.

With

this

i.

Class B Office Space

For starters, under the express terms of the Lease, BOA was
obligated to “make all such repairs and replacements as may be
necessary

to

keep

and

consistent with other

maintain

the

Premises

in

a

condition

Class B high rise office buildings of

similar age and construction located in the greater Providence,
Rhode Island metropolitan area.”

(Id. § 6.)

The parties do not

dispute that the Building had a Class B rating when the Lease
commenced.

Consequently, in order to return the Building in “as

good condition and repair as when the Lease commenced,” BOA had
an affirmative duty to make “repairs and replacements” necessary
to maintain the Building’s Class B classification and to return
the Building to High Rock in a condition warranting a Class B
rating.
BOA tries to lessen this obligation by arguing that the
Lease

only

required

it

to

maintain

the

Building

in

Class

B

condition by 2003 standards, not one warranting such a rating in
2013.

This argument is without merit.

The Lease is clear - BOA

agreed to make “repairs and replacements” necessary to tender
the Building to High Rock in Class B condition, not in 2003
Class B condition.

That BOA agreed to surrender the Building to

High Rock in “as good condition and repair as when the Lease
commenced” does not change this fact.

It merely means that BOA

did not have to upgrade the Building to a Class A building, but
11

it could also not allow the Building to slip into the condition
of a Class C or D building.

It had to do enough maintenance to

preserve the Building’s Class B rating.

And questions of fact

exist as to whether BOA met this obligation.
The parties agree that experts must (1) define the phrase
“Class

B

office

space,”

and

(2)

opine

as

to

whether

BOA’s

maintenance efforts met this definition.

To this end, they have

submitted

both

competing

expert

opinions

on

points,

what amounts to a classic battle of the experts.

creating

To overcome

the questions of fact inherent in this battle, BOA attacks High
Rock’s expert, Peter M. Scotti, a longtime certified appraiser
in Providence.
opinions

According to BOA, the Court should strike his

because

Scotti

(1)

did

not

identify

whether

he

undertook any effort to determine the condition of the Building
in 2013; (2) did not identify the methodology he applied in
arriving

at

meaningful
Building.

his

conclusion;

investigation

into

and

(3)

BOA’s

failed

to

carry

out

efforts

to

maintain

a

the

(Def.’s Mot. to Strike High Rock’s Expert Disclosures

9-10, ECF No. 214-1.)
Only one of BOA’s arguments warrants discussion:

Scotti’s

admission that his report is silent on his efforts to determine
the condition of the Building in 2013.7

7

his

BOA argues that this

Based on the record before the Court, Scotti identified
methodology and carried out an investigation into BOA’s
12

demonstrates Scotti did not determine whether the Building was
in Class B condition when BOA tendered the Building to High
Rock, a key component of High Rock’s Class B argument.

BOA,

however, misstates Scotti’s testimony.
First,

Scotti’s

expert

report

expressly

states

that

he

relied on information he gathered in 2012, prior to the end of
the Lease.

(See Scotti Rep. ¶¶ 11 & 36, Ex. C to Def.’s Mot. to

Strike, ECF No. 215-3.)

Scotti also testified that he walked

through the Building in conjunction with his work for High Rock
as

early

as

October

vacated the Building.

22,

2013,

only

months

after

BOA

And Scotti considered other

evidence of the Building’s condition
For

few

(Scotti Dep. Tr 19:1-18, Ex. D to Def.’s

Mot. to Strike, ECF No. 215-4.)

Lease.

a

example,

during

his

over the course of the
inspections,

he

spoke

extensively with Paul Almeida, an individual who had worked in
the

Building

for

twenty

years

about,

among

other

things,

upgrades the Bank had made to the Building (id. at 23:15-22;
29:23-30:10),

and

considered

a

number

of

BOA’s

building

efforts to maintain the Building.
For his methodology, Scotti
relied on the standards set forth by 111 Westminster Owners and
Managers Association (“BOMA”), a purportedly well-known real
estate industry group, to compare the Building’s condition with
that of other comparable buildings in Providence.
(See Scotti
Rep. ¶¶ 13-26, Ex. C to Def.’s Mot. to Strike, ECF No. 215-3.)
And, as detailed below, his investigation consisted of a number
of inspections of the Building – before and after BOA vacated it
- interviews with former property managers, a review of building
reports, and reviews of other properties in Providence.
13

inspection reports (id. at 13:14-20; Scotti Rep. ¶ 31, Ex. C to
Def.’s Mot. to Strike, ECF No. 215-3).

Based on the information

gathered from these efforts, Scotti opined that the Building’s
façade, electrical, and HVAC systems were not consistent with
Class B condition.

(Scotti Rep. ¶ 37, Ex. C to Def.’s Mot. to

Strike, ECF No. 215-3.)

And Scotti noted that “[a]ll of the

building conditions described in [his] report were present when
[he] inspected [the Building] in connection with preparing [his]
2012

appraisal

report.”

(Id.

¶

36.)

While

BOA

vehemently

disagrees with Scotti’s opinions, the evidence does not support
BOA’s contention that Scotti failed to consider the condition of
the building at or near the time BOA tendered it to High Rock in
2013.
BOA

also

contradicts

takes

other

Lease’s term.

issue

with

appraisals

Scotti’s

conducted

opinion

during

and

because

it

after

the

BOA principally relies on its own expert, Darian

L. Buchalter, who strongly disagreed with Scotti’s techniques
and conclusions.

And BOA points to a number of other appraisals

conducted during the course of the Lease that classified the
Building as Class B office space.

These competing opinions

merely demonstrate the existence of a question of fact as to
whether BOA maintained and delivered the Building as Class B
office space.

At trial, they would certainly be fodder for

BOA’s argument that Scotti’s testimony should not be given much
14

weight by the jury, but they do not render Scotti’s opinions
inadmissible and unworthy of consideration at summary judgment.8
All of this is to say that questions of fact abound as to
whether BOA maintained and tendered the Building to High Rock in
Class B condition.
ii.

Consequently, this issue will go to a jury.
Façade, Electrical, and HVAC Systems

BOA also argues that High Rock’s breach of contract claim
fails as to the façade, electrical, and HVAC systems because
High Rock has not presented any evidence that they were in worse
condition in 2013, when the Lease ended, than in 2003, when the
Lease began.

With this argument, BOA again understates its

Lease obligations.

In addition to its general obligation to

maintain the Building “in good condition and repair,” BOA had to

8

The Court pauses to clarify the scope of its holding on
Scotti’s expert opinion.
As the parties are aware, under the
regime
first
set
forth
in
Daubert
v.
Merrell
Dow
Pharmaceuticals, Inc., 509 U.S. 579, 597 (1993), district courts
perform a gatekeeping function to gauge the reliability and
relevance of potential expert testimony. See Cortes-Irizarry v.
Corporacion Insular De Seguros, 111 F.3d 184, 188-89 (1st Cir.
1997).
While Daubert is “accessible” to district courts at
summary judgment, “given the complex factual inquiry required by
Daubert, courts will be hard-pressed in all but the most
clearcut cases to gauge the reliability of expert proof on a
truncated [summary judgment] record.” Id. at 188. Here, based
on the record currently before the Court, High Rock has
presented enough evidence to survive summary judgment. But the
Court expressly reserves its ruling on the scope of Scotti’s
testimony and admissibility of his various opinions at trial
until after a pre-trial Daubert hearing.
As the First Circuit
has noted, “[a] trial setting normally will provide the best
operating environment for the triage which Daubert demands.”
Id.
15

(1)

“keep

plumbing,

the

heating,

electrical,

ventilating

and

other

and

air

mechanical

conditioning,

systems

in

good

operating condition”; and (2) “use all reasonable precaution to
prevent

deterioration”

of

the

façade

and

mechanical

(Lease § 6, Ex. H to BOA’s SUF, ECF No. 207-8.)
the

Termination

obligations.

Provision

defines

the

systems.

As noted above,

scope

of

these

“Good operating condition” means BOA had to ensure

that the electrical, ventilation, and air conditioning systems
performed at the same level of operation as they did at the
start of the Lease, excepting ordinary wear and tear.
reasonable

precaution

precautions

necessary

to
to

prevent

prevent

the

deterioration”
Building’s

“All
means

façade

and

mechanical systems from deteriorating below the conditions they
were in at the start of the Lease, excepting ordinary wear and
tear.

(See id. § 18.)

And, again, questions of fact remain as

to whether BOA met these obligations as to each system.
BOA’s weakest argument involves the Building’s façade.

It

argues that because High Rock’s expert did not opine as to the
precise condition of the façade in 2003, BOA is entitled to
summary judgment.
before

the

Court.

This argument, however, overlooks the record
Most

notably,

the

record

contains

two

property condition assessments for the Building, one completed
in March of 2003, the other in April 2003 - both just prior to
the commencement of the Lease on April 17, 2003 - that detail
16

the condition of the façade.

(See Ex. I to BOA’s SUF, ECF No.

207-9; Ex. J to BOA’s SUF, ECF No. 207-10.)
some

issues,

such

as

spalling

spalling as “minor”),

concrete

(one

both concluded that

overall good to fair condition.

While they noted

the

described

the

façade was in

(See Ex. I to BOA’s SUF §

3.3.3, ECF No. 207-9; Ex. J to BOA’s SUF § 3.3, ECF No. 207-10.)
This is in stark contrast to later reports describing the façade
as suffering from “accelerated deterioration” and warning that
BOA

needed

“potentially

to

initiate

large-scale

a

permanent

failures.”

repair
(Ex.

plan
LL

to

to

prevent

BOA’s

SUF

WJE003784, ECF No. 209-21.)
Further, BOA’s argument overlooks the fact that the façade
consultants it hired during the course of the Lease recommended
numerous repairs to the façade to prevent it from deteriorating.
(See id. at WJE003785.)

BOA chose not to implement a number of

these recommendations, and, according to BOA’s own consultants,
the

façade

Lease.

continued

to

deteriorate

over

the

course

of

the

(See id.; Waterston Dep. 61:16-23, 94:20-100:24, Ex. R

to BOA’s SUF, ECF No. 208-4.)

Based on this evidence, questions

of fact exist as to whether BOA took “all reasonable precaution
to

prevent

deterioration”

of

the

façade,

and

whether

BOA

surrendered the Building with the façade “in as good condition
and repair as when the Lease commenced, excepting ordinary wear
and tear.”
17

Though a closer call, questions of fact also persist as to
whether BOA maintained the electrical and HVAC systems in “good
operating condition” and took reasonable precautions to prevent
their deterioration.

Although the parties seem to agree that

many of the systems’ components had served beyond their expected
life cycle at the start of the Lease, they hotly dispute whether
(1) evidence exists as to the components’ conditions in 2003,
and (2) whether BOA adequately maintained the components during
the course of the Lease.
façade,
conducted

both

of

just

the

before

As to the first dispute, like with the
property

the

condition

Lease’s

assessment

commencement

systems as in relatively good condition.

reports

describe

both

(Ex. I to BOA’s SUF §§

3.4.2, 3.4.3, ECF No. 207-9; Ex. J to BOA’s SUF §§ 4.2, 4.3, ECF
No.

207-10.)

Consequently,

evidence

exists

relating

to

the

whether

BOA

systems’ condition at the start of the Lease.
And,

again,

questions

of

fact

exist

as

to

properly maintained the systems over the course of the Lease.
BOA

points

to

the

significant

investments

it

made

in

the

electrical and HVAC systems over the Lease term and the fact
that

neither

system

failed

during

the

Lease

to

support

position that it adequately maintained both systems.
counters by

pointing

its

High Rock

to numerous documents from BOA and its

property manager highlighting concerns over certain components’
function and safety, BOA’s plans to repair and replace certain
18

components, along with expert opinions regarding the systems’
poor conditions at the end of the Lease.

To be sure, the record

is thin on whether these components’ condition resulted from
ordinary

wear

maintenance

and

duties

tear,
under

as

opposed

the

BOA

But,

Lease.

to

at

breaching
least

at

is
this

point, High Rock presents sufficient evidence to survive summary
judgment.
systems

Questions of fact exist as to whether BOA kept the
in

good

operating

condition

and

took

reasonable

precautions to prevent the systems’ deterioration.
3.

High Rock’s Breach of Contract Damages

BOA also argues that it is entitled to summary judgment on
High Rock’s contract claims because High Rock cannot establish
its

damages

argument,

with

BOA

sufficient

relies

certainty.

heavily

on

Ondine

In

support

Shipping

of
Corp.

this
v.

Cataldo, 24 F.3d 353 (1st Cir. 1994), for the proposition that
in breach of contract actions plaintiffs must present evidence
to support their claims for damages.
205-1.)

(Def.’s Mem. 39, ECF No.

There, the plaintiff “shot for the moon, seeking a

$3,000,000 award on a theory of damages that had no foundation
in Rhode Island law.”

Ondine, 24 F.3d at 357 n.1.

Even the

replacement cost of the item at issue, a racing ship, was valued
at half that amount.

Id. at 354.

that

not

plaintiff

had

presented

damages.
19

Consequently, the court held
any

cognizable

claim

to

Here, contrary to BOA’s assertions, High Rock’s damages do
not lack foundation in Rhode Island law.
among

other

things,

the

Lease

required

Building as Class B office space.

As detailed above,
BOA

to

maintain

the

High Rock’s expert opined

that new systems would bring the Building up to this level and
High Rock has submitted evidence outlining the costs of this
work.

Whether this accurately states BOA’s obligations under

the Lease is a question of fact for the jury, but High Rock has
evidence to support the cost of these damages claims.
BOA’s

own

internal

reports

during

the

course

of

Further,
the

Lease

evidence the cost of many of the repairs that High Rock now
argues

BOA

sufficient

should

have

evidence

to

specificity at trial.

carried
argue

out.
its

High
damages

Rock,

thus,

has

with

sufficient

BOA is not entitled to summary judgment

on Count II.
B.

Implied Covenant of Good Faith and Fair Dealing Claim

The Court need not linger on BOA’s arguments regarding High
Rock’s implied covenant of good faith and fair dealing claim.
The Bank argues it is entitled to summary judgment on this claim
for the same reasons BOA is entitled to summary judgment on High
Rock’s breach of contract claim.
205-1.)

(See Def.’s Mem. 18, ECF No.

As detailed above, High Rock’s breach of contract claim

will proceed to a jury.

Since BOA provides no independent basis

20

for dismissing High Rock’s implied covenant claim, it survives
as well.
C.

Waste Claim

High Rock concedes that its waste claim only applies to the
Building’s façade; it argues that BOA’s failure to implement the
longer-term façade repairs outlined by BOA’s façade consultants
in 2006 caused damage that “no amount of repair can ever undo.”
(Pl.’s Opp’n 40, ECF No. 228.)
efforts

to

preserve

the

BOA counters by pointing to its

façade

and

to

admissions

from

High

Rock’s experts that the façade can be restored to a condition
that is as good as new.

According to BOA, this means that it

did not intentionally commit waste and that any damage to the
façade is not permanent, both of which BOA argues are required
elements of a waste claim in Rhode Island.

At least at this

stage, BOA’s argument fails.
Rhode Island has long “defined waste as ‘the doing of those
acts which cause lasting damage to the freehold or inheritance,
or the neglect or omission to do those acts which are required
to

prevent

Reniere

v.

lasting
Gerlach,

damage
752

to

A.2d

the
480,

freehold
484

or

(R.I.

inheritance.’”
2000)

(quoting

Chapman v. Cooney, 57 A. 928, 929 (R.I. 1904) and noting that
“[a]lthough almost a century has passed since the concept of
waste was laid out in Chapman, we adhere to it today”).

In

determining whether “lasting damage” has occurred, courts must
21

consider “the particular facts and circumstances appearing in
[a] case.”

Chapman, 57 A. at 929.

This means courts must

consider things like the age and condition of the building and
the relation between the person charged to have committed the
waste and the building.

See id.

But even severe damage does

not amount to waste when it results from ordinary wear and tear.
Id.

Further,

Rhode

Island

recognizes

both

voluntary

and

permissive waste, which means that an estate holder can commit
waste through either intentional conduct or gross negligence.
See id. (considering whether defendant was responsible for both
voluntary and permissive waste and noting that no permissive
waste occurred because respondent “has not been guilty of gross
negligence”).
Although waste requires lasting damage, BOA points to no
authority suggesting that to sustain a waste claim, the damage
must place the building beyond repair.

To be sure, the damage

must be severe; but as noted above, in deciding whether waste
has occurred, courts must consider the “particular facts and
circumstances” of a building.

These facts and circumstances

include the amount of repairs necessary to fix the alleged waste
– or whether it can be fixed at all – as well as things like the
condition of the building prior to a tenant assuming control of
the building, the level of normal deterioration expected over
time, and obligations a tenant assumes for a building during its
22

occupancy.

Here, as detailed above, questions of fact exist as

to the severity of the damage to the façade and the cause of the
damage – i.e. whether it resulted from BOA’s decisions not to
undertake certain maintenance suggested by its consultants or
due to ordinary wear and tear.

For these reasons, BOA is not

entitled to summary judgment on Count IV.
D. Holdover Tenancy Claim
High

Rock’s

“holdover

tenancy”

claim

stems

from

BOA’s

failure to remove a significant amount of furniture from the
Building at the end of the Lease.
Rock

relies

on

Section

18

of

In support of the claim, High
the

Lease,

which

provides

in

relevant part that
[a]ll moveable furnishings, trade fixtures and other
equipment and personal property owned by [BOA] may be
removed from the Premises by [BOA], at [BOA]’s sole
expense, no later than the date of termination . . . .
(Lease § 18, Ex. G to BOA’s SUF, ECF No. 207-8.)

High Rock

asserts that BOA violated this Lease provision and remained in
possession
because

of

it

the

left

Building
behind

after

the

“thousands

of

Lease
file

officially
cabinets,

ended
desks,

cubicles and other miscellaneous office furnishings,” enough to
fill 76 full-sized tractor trailers.
No. 1.)

(Compl. ¶¶ 120-122, ECF

According to High Rock, BOA’s failure to remove its

furnishings implicated the Lease’s holdover tenancy provision
allowing it to recover 150% of the last base rent for each day

23

BOA remained in the Building.

(Pl.’s Opp’n 23-24, ECF No. 228.)

High Rock’s argument is without merit.
The

plain

language

of

the

Lease

is

unambiguous.

It

provides that BOA may remove all moveable furnishings from the
Building

prior

to

the

require BOA to do so.

Lease’s

termination;

but

it

does

not

Under Rhode Island law, generally, “the

use of the word ‘may’ rather than the word ‘shall’ indicates a
discretionary rather than a mandatory provision.”

Quality Ct.

Condo Ass’n v. Quality Hill Dev. Corp., 641 A.2d 746, 751 (R.I.
1994); see also Downey v. Carcieri, 996 A.2d 1144, 1151 (R.I.
2010).

In

its

brief,

High

Rock

presented

no

authority

or

argument to suggest that the Court should digress from this
regular rule of construction.

The plain language of the Lease

gave BOA discretion to leave the furnishings in the Building and
in exercising this discretion, BOA did not become a holdover
tenant.

For this reason, BOA is entitled to summary judgment on

Count V.9

9

High Rock’s only reference to its holdover tenancy claim
in its summary judgment briefing came in its “Facts” section,
where it recounted the facts that give rise to the claim. High
Rock did not present any argument or cite to any authority that
demonstrate its facts are sufficient to allow the claim to
proceed. Thus, BOA is likely correct that High Rock waived this
claim.
Perhaps recognizing its error, at oral argument High Rock
advanced a new theory as to why the holdover tenancy claim
should survive:
because, as used in the Lease, the term “may”
indicates a mandatory, as opposed to a discretionary action. In
support, High Rock directed the Court to In re Ionosphere Clubs,
24

E.

Lost Rental Income Claim

At oral argument, High Rock conceded that it was abandoning
its lost rental income claim.

Consequently, BOA is entitled

summary judgment on Count VI.
F.

Asbestos Claim

Finally, High Rock has moved to amend its Complaint to add
a claim that BOA breached the Lease by not removing friable
asbestos
action

from

the

breached

Building.

Paragraph

27

According
of

the

to

High

Lease,

Rock,

which

BOA’s

High

Rock

claims obligated BOA to indemnify it for removing the substance
from the Building.

At oral argument, High Rock conceded that it

did not plead this claim in its Complaint.
9:13-16, ECF No. 251.)

(Summ. J. Hr’g Tr.

Nevertheless, High Rock argues it should

be allowed to amend its Complaint - even at this late stage –
because

its

discovery

requests

intended to raise such a claim.

put

BOA

on

notice

that

it

High Rock’s arguments fail.

111 B.R. 436 (S.D.N.Y. 1990).
The Court declines to consider
this case. First, it need not consider a new argument presented
for the first time at oral argument. See U.S. ex rel. Dyer v.
Raytheon Co., No. CIV.A. 08-10341-DPW, 2013 WL 5348571, at *25
(D. Mass. Sept. 23, 2013) (“As the First Circuit has held —
albeit in the criminal context — ‘except in extraordinary
circumstances, arguments not raised in a party’s initial brief
and instead raised for the first time at oral argument are
considered waived.’” (quoting United States v. Giggey, 551 F.3d
27, 36–37 (1st Cir. 2008)).
And, in any event, High Rock
provides nothing to suggest that an out-of-district decision
from a bankruptcy court should override the clear Rhode Island
precedent cited above.
25

As detailed in Section II, above, although Federal Rule of
Civil

Procedure

15(a)

states

that

leave

to

amend

“shall

be

freely given when justice so requires,” a District Court is
within its discretion to deny a motion to amend where there is
adequate reason, “e.g., undue delay, bad faith, dilatory motive
on the part of the movant, futility of the amendment.”

N. Ins.

Co. of New York v. Albin Mfg., Inc., No. CIV.A. 06-190-S, 2008
WL 2019365, at *1 (D.R.I. May 9, 2008) (quoting Grant v. News
Group Boston, Inc., 55 F.3d 1, 5 (1st Cir. 1995)).

Further,

while as a general rule, delay by itself is insufficient to
justify denying an amendment under Rule 15, long delays put “the
burden

upon

the

movant

neglect and delay.’”

to

show

some

‘valid

reason

for

his

Tiernan v. Blyth, Eastman, Dillon & Co.,

719 F.2d 1, 4 (1st Cir. 1983) (quoting Hayes v. New England
Millwork Distributors, Inc., 602 F.2d 15, 20 (1st Cir.1979));
see also Nikitine, 715 F.3d at 390–91.

Absent a valid reason,

district courts are well within their discretion to deny an
amendment.

See id.

Here, High Rock’s delay in moving to amend

was both lengthy and without justification.
First, as High Rock admits, it “inten[ded] to assert an
asbestos claim since the beginning of discovery” (see Pl.’s Mot.
to Am. Mem. 2, ECF No. 257), which commenced on November 14,
2013.

(See Standard Pretrial Order, ECF No. 24.)

High Rock,

however, did not move to amend its Complaint until May 26, 2016.
26

This was over three years after BOA surrendered the Building to
High

Rock

(and

when

High

Rock

ostensibly

had

the

power

to

inspect the Building for asbestos) (see BOA SUF ¶ 114, ECF No.
206);

two

almost

two

and

half

years

years
after

after
BOA

the

start

produced

of

discovery,

documents

and

concerning

asbestos in the Building (see Pl.’s Mot. to Am. Mem. 3, ECF No.
257); nineteen months after High Rock requested Rule 30(b)(6)
testimony about asbestos (see id.); eight months after the Court
set the parties’ summary judgment briefing schedule (see Sept.
15, 2015 Text Briefing Schedule Order); four months after the
parties completed briefing summary judgment (see Def.’s Reply,
ECF No. 243); and two months after the Court expressly asked
High

Rock

why

it

had

not

amended

its

Complaint

during

oral

argument on BOA’s Motion (see Summ. J. Hr’g Tr. 10:15-11:10, ECF
No. 251).

From this it is clear that at nearly every stage in

this litigation, High Rock knew or should have known about the
facts underlying its asbestos claim, but, by its own admission,
waited at least two and half years to bring it.

This

is,

perhaps, the definition of “undue delay.”
Further, High Rock offers no justification for any of these
delays.

It does not, for example, argue that it uncovered the

asbestos for the first time during discovery, something that
could have “led to previously unknown facts which altered the
shape of [its] case.”

Tiernan, 719 F.2d at 4.
27

Instead, High

Rock merely argues that BOA will not be prejudiced by the tardy
amendment because BOA should have known High Rock intended to
bring an asbestos claim based on High Rock’s discovery requests.
As BOA points out in its Opposition, a number of courts have
rejected this assertion.

See, e.g., Media Sport & Arts s.r.l.

v. Kinney Shoe Corp, No. 95 CIV. 3901 (PKL), 1999 WL 946354, at
*4-5 (S.D.N.Y. Oct. 19, 1999) (noting that granting leave to
amend “would not be appropriate” even though issue had “been the
subject of considerable discovery”); Tiffany (NJ) Inc. v. eBay,
Inc., 576 F. Supp. 2d 460, 461-62 (S.D.N.Y. 2007) (noting that
“discovery was simply not adequate to put [the defendant] on
notice” of a claim, and denying leave to amend).

And in any

event, were the Court to grant High Rock’s motion, at a minimum
“both [BOA] and the [C]ourt would likely [require] additional
time to prepare for trial.

‘Given [High Rock’s] failure to

excuse in any way [its] delay in prosecuting [this] suit, [the
Court]

cannot

describe

this

prejudice

as

insignificant.’”

Tiernan, 719 F.2d at 5 (quoting Hayes, 602 F.2d at 20).

For

these reasons, High Rock’s Motion to Amend is denied.
IV.

Conclusion
For the foregoing reasons BOA’s Motion for Summary Judgment

is GRANTED IN PART and DENIED IN PART.


Specifically, the Court

DENIES BOA’s Motion as to Count II (Breach of Contract),
which shall proceed to a jury as to (1) whether BOA
maintained the Building as Class B office space; and (2)
28

whether BOA maintained the Building’s façade, electrical,
and HVAC systems “good operating condition” and took
reasonable precautions to prevent deterioration;


DENIES BOA’s Motion as to Count III (Implied Covenant of
Good Faith and Fair Dealing);



DENIES BOA’s Motion as to Count IV (Waste);



GRANTS BOA’s Motion as to Count V (Holdover Tenancy);



GRANTS BOA’s Motion as to Count VI (Lost Rental Income).

The Court sua sponte grants High Rock summary judgment on
Count I (Breach of Contract – Basement Switch Gear) because BOA
concedes its liability on the claim.
High Rock’s Motion to Amend the Complaint is DENIED.
The Court will schedule a conference in the near future to
establish a trial date for this case.

IT IS SO ORDERED.

William E. Smith
Chief Judge
Date: September 7, 2016

29