Cranston/BVT Associates Limited Partnership v. Sleepy's, LLC.

Filing 34

ORDER adopting 28 Report and Recommendations; denying 18 Motion for Summary Judgment and denying 22 CROSS MOTION AND RESPONSE in Opposition. So Ordered by Chief Judge William E. Smith on 9/30/2015. (Jackson, Ryan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
)
)
)
)
Plaintiff,
)
)
v.
)
)
SLEEPY’S, LLC,
)
)
Defendant.
)
___________________________________)
CRANSTON/BVT ASSOCIATES,
LIMITED PARTNERSHIP,

C.A. No. 13-594 S

ORDER
WILLIAM E. SMITH, Chief Judge.
This

case

landlord,
Partnership

involves

Plaintiff
(“BVT”)

a

contract

Cranston/BVT
and

Sleepy’s LLC (“Sleepy’s”).

its

dispute
Associates

former

tenant,

between

a

Limited
Defendant

Magistrate Judge Patricia A.

Sullivan issued a Report & Recommendation (“R&R”) (ECF No.
28)

on

the

parties’

cross-motions

for

summary

judgment,

recommending that both motions be denied.

The parties each

timely objected to portions of the R&R.

For the reasons

that follow, the Court OVERRULES the objections and ACCEPTS
the R&R pursuant to 28 U.S.C. § 636(b)(1).
I.

Background
The R&R thoroughly recounts the underlying facts, and

they need not be reproduced in detail here.

In brief, the

parties dispute whether two emails between Sleepy’s and Jay
A. Shaw (“Shaw”), Senior Vice President/Director of Leasing
for First Hartford Reality Corp., BVT’s partial owner and
the manager for the property at issue, amended a commercial
lease.

The

first

Sleepy’s

request

email,

to

dated

extend

May

the

30,

2013,

involved

for

providing

deadline

notice of non-renewal of the lease; the second email, dated
June 28, 2013, involved Sleepy’s request to convert the
lease to a month-to-month tenancy.
At

the

center

interpretation

of

of

the

the

lease’s

dispute
amendment

is

the

proper

provision.

It

states in relevant part that:
No subsequent alteration, amendment, change or
addition to this lease shall be binding upon
landlord or tenant unless reduced to writing and
signed by them.
(Pl.’s Objection 2, ECF No. 31-1.)
parties’

prior

dealings

make

this

BVT argues that the
provision

unambiguous.

According to BVT, amendments to the lease in 2007, 2009 and
2011

clearly

typewritten

establish

documents,

that
and

the

that

term

“signed

“writing”

meant

by

meant

them”

handwritten signatures between BVT’s president, Neil Ellis
(“Ellis”) and Sleepy’s president, David Acker (“Acker”). 1

1

BVT also points to the parties’ course of dealing
with regard to other lease agreements between the parties
on other properties.
As Magistrate Judge Sullivan noted,
2

Since the emails did not conform with BVT’s interpretation
of the amendment provision, BVT contends that the lease
automatically renewed for an additional five year term on
November 30, 2013.
Sleepy’s presents a vastly different interpretation of
the

lease’s

dealings.
with

amendment

provision

and

the

parties’

prior

It first argues that the emails actually conform

the

lease’s

amendment

provision

since

they

were

a

writing signed by Shaw, an individual who had previously
approved a lease amendment.

In the alternative, Sleepy’s

asserts that its prior dealings with Shaw made its reliance
on his emails reasonable and binding on BVT.
When Sleepy’s notified BVT in July 2013 of its intent
to terminate the lease, BVT commenced this lawsuit.

It

alleged that Sleepy’s breached its contract with BVT and
sought

a

declaration

lease were correct.
BVT’s
alleged

complaint
that

agreement;

the

and

BVT,
other

that

BVT’s

(ECF No. 3.)
asserted
not

interpretations

two

that

the

Sleepy’s timely answered

Sleepy’s,

alleged

of

counter-claims
breached
Sleepy’s

the

–

one
lease

detrimentally

relied on Shaw’s emails and was entitled to damages under

the ambiguity surrounding the course of dealings relating
to the Cranston lease negates the need to determine which,
if any, of these leases are relevant to this case at the
summary judgment stage. (R&R 5 n.4, ECF No. 28.)
3

the doctrine of promissory estoppel.

(ECF No. 7.)

After

considering the parties’ cross-motions for summary judgment
(ECF Nos. 18 and 22), Magistrate Judge Sullivan issued her
R&R

recommending

denial

of

both

parties’

motions.

The

parties objected and this Court considers each objection in
turn.
II.

BVT’s Objections to the R&R 2
BVT first objects to the R&R’s finding that “there is

an issue of fact which precludes summary judgment as to the
meaning of [the amendment provision] of the Lease.”
Objection 1, ECF No. 31-1.)

(Pl.’s

In support of its objection,

BVT argues that the parties’ prior dealings demonstrate the
only way to amend the lease was with typewritten documents
that were hand-signed by the parties’ presidents.

(Id. at

9.)
As Magistrate Judge Sullivan aptly noted, BVT’s prior
course of dealing argument is “somewhat illogical.”

(R&R

18,

most

ECF

No.

28.)

Taking

the

facts

in

the

light

favorable to Sleepy’s, the parties did not execute lease
amendments

to

the

unambiguous manner.

Cranston

property

in

a

consistent,

The parties’ first amendment in 2007

followed BVT’s interpretation of the lease; both Acker and
2

The Court reviews de novo those portions of the R&R
to which both Sleepy’s and BVT object.
28 U.S.C. §
636(b)(1).
4

Ellis hand-signed a typewritten document.
28.)

(R&R 5, ECF No.

The next amendment, in 2009, however, was signed by

Shaw,

not

Ellis,

on

behalf

electronically via fax.

of

BVT

and

(Id. at 5-6.)

transmitted

Then, in a 2011

amendment, the parties reverted to having Acker and Ellis
sign the amendment but transmitted the amendment via email
as an electronic attachment.

(Id. at 6.)

Further, the

2011 amendment stated that “electronic signatures shall be
deemed original signatures,” a statement whose meaning and
application to future lease amendments the parties dispute.
(Id.)

Based

assertions,

on

the

these

only

facts,

and

consistency

contrary

to

BVT’s

clarity

in

these

or

amendments is their lack of consistency and clarity.
jury

could

provision;

accept
or

it

BVT’s
could

interpretation
credit

Sleepy’s

of

the

A

amendment

interpretation

—

that the emails were valid lease amendments because they
were

a

signed
relating

writing
the

signed

2009

to

by

Shaw,

amendment.

whether

the

the

same

Questions
emails

individual
of

amended

who

fact

abound

the

lease,

precluding summary judgment.
BVT next argues that, even if the emails could amend
the lease, they did not in this case because they lacked
consideration.

(Pl.’s Objection 16, ECF No. 31-1.)

BVT’s

argument, however, is premised on resolving this matter’s
5

key factual dispute in its favor — that the emails did not
amend the lease.

(See id. at 17-18.)

If a jury were to

resolve this dispute in Sleepy’s favor, the consideration
for the alleged email amendments would, at the very least,
present another question of fact for the jury.

(See Def.’s

Reply to Pl.’s Cross Mot. for Summ. J. 10-11, ECF No. 25.)
BVT’s consideration argument does not entitle it to summary
judgment.
Finally, BVT argues that the emails could not have
amended the lease as a matter of law because they lacked
valid electronic signatures.
No. 31-1.)

(Pl.’s Objection 19-22, ECF

BVT claims that Shaw’s name at the end of the

emails did not constitute an “electronic sound, symbol, or
process attached to or logically associated with a record
and executed or adopted by a person with the intent to sign
the

record”

as

required

under

Electronic Transaction Act.
2(8).

This

otherwise,

argument

“[t]he

law

Rhode

Island’s

Uniform

R.I. Gen. Laws § 42-127.1-

fails.
demands

Whether
only

electronic

demonstration

of

or
a

person’s intent to authenticate a document as [his or her]
own in order for the document to be signed.”

Hamdi Halal

Mkt. LLC v. United States, 947 F. Supp. 2d 159, 164 (D.
Mass.

2013)

(considering

a

definition

of

electronic

signature in federal statute that is identical to R.I. Gen.
6

Laws § 42-127.1-2(8)).

Accordingly, so long as a party

intends to sign an email with his or her signature, “a
typed

name

on

signature.”

an

electronic

document

suffices

Hamdi, 947 F. Supp. 2d at 164.

as

a

Magistrate

Judge Sullivan correctly noted that whether Shaw intended
to sign the emails is a disputed fact to be resolved by the
fact finder.

(R&R 15, ECF No. 28.)

BVT is not entitled to

summary judgment on this alternative basis.
III. Sleepy’s Objections to the R&R
Sleepy’s only objects to Magistrate Judge Sullivan’s
denial of summary judgment as to its promissory estoppel
claim.

It does not object to the recommendation relating

to its contract claim.
The

Court,

thus,

recommendations
further

adopts

relating

comment.

promissory

(Def.’s Objection 1, ECF No. 29.)

See

estoppel

Magistrate

to

LR

claim,

the

Cv

Judge

contract

72(d)(1).

this

Court

Sullivan’s

claim
As

adopts

to

without
Sleepy’s

Magistrate

Judge Sullivan’s recommendation as clarified below.
Magistrate Judge Sullivan bases her recommendation on
the significant disputes between the parties relating to
their prior course of dealing.

(R&R 18, ECF No. 28.)

She

held that these past practices created a question of fact
as

to

at

least

one

element

7

—

whether

Shaw’s

emails

constituted

a

clear,

Magistrate

Judge

promise. 3

unambiguous

Sullivan’s

conclusion

is

(Id.)

correct;

the

parties’ prior course of dealings creates questions of fact
as to the clarity of the emails.

(See id. at 16.)

This

same conduct, however, also creates a question of fact as
to the second element of Sleepy’s promissory estoppel claim
— the reasonableness of Sleepy’s reliance on Shaw’s emails.
On the one hand, BVT has presented evidence showing that
the

parties

often

typewritten,
email.

amended

hand-signed

their

lease

documents,

not

agreement
through

(See Pl.’s Objection 3, ECF No. 31-1.)

through
informal

If a jury

credited this evidence, it could find that Sleepy’s should
have known better than to rely on Shaw’s emails.
other

hand,

Sleepy’s

has

presented

evidence

On the
that

it

typically dealt with Shaw in negotiating lease amendments
(see

Def.’s

parties

had,

Objection
arguably,

2,

ECF

No.

authorized

documents (R&R 6, ECF No. 28).

29-1);

and

that

electronically

the

signed

A jury could side with

Sleepy’s and determine that Shaw’s emails were both clear
and

that

Sleepy’s

reliance

3

on

them

was

reasonable.

Filippi v. Filippi, 818 A.2d 608, 626 (R.I. 2003)
clarified the elements of promissory estoppel under Rhode
Island law: “To establish promissory estoppel, there must
be: 1. A clear and unambiguous promise; 2. Reasonable and
justifiable reliance upon the promise; and 3. Detriment to
the promisee, caused by his or her reliance on the
promise.”
8

Questions

of

fact

clearly

remain

relating

to

multiple

elements of Sleepy’s promissory estoppel claim, precluding
summary judgment.
Sleepy’s tries to avoid the factual disputes in its
promissory
Magistrate
objection

estoppel
Judge
seems

claim

with

Sullivan’s
to

be

three

objections

recommendation.

that

there

is

no

Its

to

primary

evidence

“to

indicate that Sleepy’s would have or should have known that
it could not rely on Shaw.” (Def.’s Objection 9, EFC No.
29-1.)

As detailed above, this assertion is incorrect.

There is ample evidence that the prior course of dealing
between

the

parties

is

anything

but

clear,

raising

questions of fact as to the clarity of Shaw’s emails and
the reasonableness of Sleepy’s reliance on the emails.
Sleepy’s next urges this Court to reject Magistrate
Judge

Sullivan’s

Sullivan
authority

recommendation

overlooked
to

bind

the

fact

BVT

and

because
that

ECF No. 29-1.)
Magistrate

Shaw

Sleepy’s,

reasonably relied on Shaw’s emails.

Magistrate

Judge

had

apparent

thus,

Sleepy’s

(Def.’s Objection 7,

Sleepy’s assertion, again, is incorrect.

Judge

Sullivan

considered

and

correctly

determined that questions of fact existed relating Shaw’s
apparent authority.

(R&R 14, ECF No. 28.)

9

Finally,

Sleepy’s

argues

Sullivan

erred

internal

inconsistencies

Shaw’s

because

testimony

and

that

Magistrate

she

based

her

in

Shaw’s

testimony

the

emails.

Judge

recommendation

To

be

and

on

between

sure,

clear

contradictions between prior sworn testimony and subsequent
affidavits

cannot

judgment.

But the allegedly contradictory testimony here

does

constitute

not

contemporaneous
surrounding

create

a

question

sworn

affidavits;

deposition

the

meaning

of

of

testimony
two

fact

at

it

comes

and

emails.

summary

from

disputes

Crediting

and

discrediting this type of evidence generally rests with the
jury.

See Secrest v Merck, Sharp & Dohme Corp. (In re

Fosamax Prods. Liab. Litig.), 707 F.3d 189, 194 n.4 (2d
Cir. 2013) (“In the ordinary case where a district court is
asked to consider the contradictory deposition testimony of
a fact witness, or where the contradictions presented are
not ‘real, unequivocal, and inescapable,’ the general rule
remains
witness’s

that

‘a

district

deposition

court

testimony

on

may
a

not
motion

discredit
for

a

summary

judgment, because the assessment of a witness’s credibility
is a function reserved for the jury.’” (quoting Fincher v.
Depository Trust & Clearing Corp., 604 F.3d 712, 725 (2d
Cir. 2010))).

And regardless, as detailed above, questions

of fact remain as to whether Sleepy’s reasonably relied on
10

Shaw’s

emails

Magistrate

based

Judge

on

the

Sullivan

parties’

did

not

past

err

in

practices. 4
recommending

denial of Sleepy’s motion for summary judgment.
III. Conclusion
For

the

foregoing

reasons,

both

BVT

and

Sleepy’s

objections are OVERRULED and the R&R is ACCEPTED pursuant
to

28

U.S.C.

§

636(b)(1).

Both

parties’

Motions

for

Summary Judgment are DENIED.

IT IS SO ORDERED.

William E. Smith
Chief Judge
Date: September 30, 2015

4

In its Objection, Sleepy’s highlights deposition
testimony in which Shaw appears to assert that he intended
Sleepy’s to rely on his emails.
(Def.’s Objection 9-10,
EFC No. 29-1.)
Sleepy’s emphasis on this deposition
testimony is misplaced.
The question is not what Shaw
intended; it is whether Shaw’s emails were clear and
whether Sleepy’s reasonably relied on them.
As detailed
above, the parties’ prior course of dealing creates
questions of fact as to both of these elements of Sleepy’s
promissory estoppel claim.
11