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STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS
PROVIDENCE, SC.                                                                                          Filed 1-7-2011                 SUPERIOR COURT
INLAND AMERICAN RETAIL                                                                                   :
MANAGEMENT LLC                                                                                           :
:
V.                                                                                                       :                              C.A. No. PB 08-5051
:
CINEMAWORLD OF FLORIDA, INC.                                                                             :
DECISION
SILVERSTEIN, J.   Before the Court are Super. R. Civ. P. 56 cross motions for summary
judgment  filed  by  Inland  American  Retail  Management,  LLC                                          (Inland  or  Plaintiff)  and
Cinemaworld of Florida, Inc. (Cinemaworld or Defendant).   This matter arises out of a dispute
over the terms of a twenty-year Ground Lease (Lease) between the parties.   Plaintiff moved for
summary judgment on its one-count Complaint for breach of contract, seeking the total amount
of rent in arrears, plus interest, costs, and attorneys’ fees.  Plaintiff also seeks summary judgment
on all counts of Defendant’s Amended Counterclaim which seeks (1) a judgment declaring that
all sums due under the Lease have been paid; (2) a judgment declaring that there presently exists
no default under the Lease; (3) an order for an accounting of all calculations used by Plaintiff
with respect to the Lease and Defendant’s obligations thereunder; (4) an injunction prohibiting
Plaintiff from proceeding with an eviction action; and (5) a judgment for all damages sustained
as  a  result  of  Plaintiff’s  alleged  negligence  in  installing  and  maintaining  adequate  surge
protection.   Defendant objects to Plaintiff’s request for summary judgment and has moved for
partial summary judgment on Count II of its Amended Counterclaim, seeking an accounting.
1




I
Facts and Travel1
On December  16,  2003, Inland’s predecessor-in-interest, LB Lincoln Mall Holdings,
LLC (LB), entered into a Lease with Cinemaworld’s predecessor-in-interest, Cinema World,
Inc., of certain Premises located at the Lincoln Mall Shopping Center (Shopping Center) for the
purposes of operating a movie theater.2   According to the Lease, the Premises included the Land,
the Building, and the Improvements.3
Under the Lease, Cinemaworld agreed to accept the Premises “as is” and acknowledged
“that it ha[d] inspected the Premises and the Building and . . .   found [them] to be satisfactory.”
(Lease  §  2.04.)   In addition, Cinemaworld was required to  “perform the necessary work to
construct upon the Land, a theater Building, [to] be constructed in conformity with the terms and
conditions set forth” in the Lease.   Id. § 6.01.   The Lease specified that the Building was to
“contain approximately 60,000 gross square feet of floor area[,]” and “built so as to be fully
located within the area shown cross-hatched on Exhibit B.”  Id.
In connection therewith, Cinemaworld acknowledged that it bore the sole cost and
expense of  “construct[ing] on the Land such site work, utilities, sewer, curbing, walkways,
parking area, lighting, drives and landscaping . . .” as well as “providing to the Premises all
utility lines required for the operation of the Premises and the Improvements thereon.”   Id.   The
1 Capitalized terms, unless otherwise defined herein, have the meaning assigned to them in the
Lease, as amended.
2 On or about December 10, 2004, Cinema World, Inc. assigned all of its right, title, and interest
as Tenant under the Lease to Cinemaworld.
3 “Land” is defined as the area “shown cross-hatched on the Preliminary Site Plan attached as
Exhibit B to the Lease.”   (Lease § 1.01.)   “Building” is defined as the “building to be constructed
on the Land by Tenant as described in Section 6.01.”   Id.                                              “Improvements” is defined as “the
improvements to be constructed thereon by Tenant pursuant to the terms of the Lease . . . and
such other improvements as Tenant may from time to time construct.”  Id. § 2.02.
2




Lease  specified  that  Cinemaworld  was  required  to  pay                                            “all  costs,  charges,  deposits  and
assessments related” to Utilities attributable to the Premises; and Landlord had no liability to any
party “for any inadequacy, cessation, or interruption of any Utilities.”  Id. § 10.01.
Beginning in 2005, Cinemaworld constructed the necessary Improvements and site work;
and the theater opened in November of 2005.   The Building contained approximately 60,000
square feet and consisted of sixteen individual movie theaters, concession stands for the sale of
food and novelties, and space for coin operated game machines.  Cinemaworld spent in excess of
$10.5 million, of which $9.9 million was financed through a mortgage.
In addition to its construction and utility obligations, the Lease required Cinemaworld to
make monthly Rental payments.   Id. § 3.01.   These Rental payments included not only the
Minimum Rent, but also an Additional Rent which consisted of “[a]ll other sums [that] bec[a]me
due and payable by Tenant to Landlord under th[e] Lease.”  Id.
As part of the Additional Rent, Cinemaworld was also responsible for monthly payments
equal to one-twelfth of Tenant’s Proportionate Share of the Common Area Maintenance Costs.4
Id. § 8.04.   Tenant’s Proportionate Share was calculated by multiplying Landlord’s estimate of
the monthly Common Area Maintenance Costs by a fraction, the “numerator of which is the
                                                                                                                                                                                               4 The Common Area Maintenance Costs are the “total costs and expenses incurred in operating,
                                                                                                       maintaining, managing, insuring and repairing all or any part of the Common Area. . .                                                                                                  .”   (Lease
§ 8.03.)  Common Area is defined as
“[a]ll areas and space provided for the common or joint use and
benefit of tenants in the Shopping Center (including any expansion
thereof to adjacent and contiguous land), their employees, agents,
and invitees, including without limitation, parking areas, access
roads,  driveways,  retaining  walls,  landscaped  areas,  truck
serviceways  or  tunnels,  pedestrian  walks,  outside  courts  and
curbouts, and . . . [a]ll other non-leasable portions of the Shopping
Center.”  Id. § 8.02.
Taxes and Utilities were among the expenses not included in the Common Area Maintenance
Costs.  Id. § 8.03.
3




leasable floor area of the Building and the denominator of which is the leasable floor area of all
buildings on the Shopping Center as of the first day of the applicable calendar year to which
Common Area Maintenance Costs relate.”    Id.    In the instance that the estimated monthly
amounts paid by Cinemaworld were greater or less than the actual Common Area Maintenance
Costs, within 180 days after the expiration of the calendar year, an adjustment was made to
reflect the difference.  Id. § 8.05.
The Lease also required that Cinemaworld pay as Additional Rent, “all taxes, duties,
assessments  and  charges  commonly  and  generally  referred  to  as                                   ‘real  estate  taxes’  and
assessments                                                                                             .  imposed  upon  the  Land  or  any  part  thereof,  the  Building(s)  and
Improvements.”5   Id. § 9.01.   The Lease distinguished the manner of payment depending on
whether or not the Premises was assessed as a separate tax parcel or as part of the Shopping
Center.   Id. § 9.02.   If the Premises was assessed as a separate tax parcel, then the Tenant was
responsible for directly paying all Taxes to the applicable taxing authority.   Id.   However, if the
Premises was not separately assessed, Tenant was required to pay as Additional Rent, “such
amount as Landlord shall reasonable estimate to equal one-twelfth (1/12) of the Taxes for the
current calendar and/or fiscal year.”   Id.   In such instances, Tenant was required to pay Landlord
its “reasonable share” of the Taxes or Charges (which included taxes, assessments, levies, fees,
and other governmental charge of every kind or nature) “as reasonably determined by Landlord
in consultation with Tenant.”  Id. § 25.01.  As with Common Area Maintenance Costs, following
the receipt of all tax and assessment bills for the year in question, an adjustment was made to
reflect any excess or deficiency resulting from the difference between the estimated and actual
amount billed.  Id. § 9.02.
5 See supra note 3.
4




In May 2006, MB Lincoln Mall, LLC (MB) purchased the Shopping Center from LB and
Inland became its managing agent.  Prior to the closing, LB and Cinemaworld executed a release
agreement (Release Agreement) concerning a dispute over the completion of and payment for
additional site-work resulting from the parties’ agreement to relocate the Premises to a different
site  pad.    See  Pl.’s  Summ.  J.  Mem.  Ex.  K.    The  Release  Agreement  provided  that  in
consideration for LB’s payment of $240,000 to Cinemaworld’s contractors, Cinemaworld agreed
to “release, remise, hold harmless and forever discharge all claims” against LB arising out of or
connected with the disputed additional work.  Id.
In connection with the Release Agreement and closing, Cinemaworld provided a tenant
estoppel certificate (Estoppel Certificate) certifying to Inland that LB was not in default under
the Lease and that “Rent ha[d] been paid through May 31, 2006.”   Id.   The Estoppel Certificate
further stated that the “certification [was] made with the knowledge that Purchaser [was] about to
acquire title to the Property and obtain financing.”  Id.
On July 30, 2007 and January 11, 2008, Cinemaworld experienced power surges that
resulted in a total loss of power.   As a result, Cinemaworld was unable to conduct business
during the outage, and alleges that it incurred $63,087.15 in lost revenue during those two days
of operations.
On July 7, 2008, Inland notified Cinemaworld that it was in default of its obligations
under the Lease in light of its failure to pay the full amount of Taxes due to date, and made an
immediate demand for the past due Additional Rent.   See Pl.’s Summ. J. Mem. Ex. I.   Inland
alleges that it was owed an additional $280,538.27 for unpaid Taxes for the years 2006-2008.
Additionally, on January 9, 2009, Cinemaworld received an invoice and notice of default form
from Inland.   In the notice of default, Inland demanded $343,063.31, which included the unpaid
5




real estate taxes, unpaid electric, unpaid base rent, and “Catch Up Billing” to date.6   See Pl.’s
Summ. J. Mem. Ex. F.  Inland further threatened eviction if the demanded sum was not paid.
II
Standard of Review
Summary judgment is proper when, after reviewing the admissible evidence in a light
most favorable to the non-moving party, “no genuine issue of material fact is evident from the
pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, and the motion justice finds that the moving party is entitled to prevail as a
matter of law.”   Smiler v. Napolitano, 911 A.2d 1035, 1038 (R.I. 2006) (quoting Rule 56(c)).
When considering a motion for summary judgment, “the court may not pass on the weight or
credibility of the evidence but must consider the affidavits and other pleadings in a light most
favorable to the party opposing the motion.”   Westinghouse Broad. Co., Inc. v. Dial Media, Inc.,
122 R.I. 571, 579, 410 A.2d 986, 990 (R.I. 1980) (internal citations omitted).  During a summary
judgment proceeding, “the justice’s only function is to determine whether there are any issues
involving material facts.”   Steinberg v. State, 427 A.2d 338, 340 (R.I. 1981).   Moreover, in
passing upon a motion for summary judgment under Rule 56, if no genuine issue of material fact
exists, the trial justice may determine “‘whether the moving party is entitled to judgment under
the applicable law.’”   Ludwig v. Kowal, 419 A.2d 297, 301 (R.I. 1980) (quoting Belanger v.
Silva,  114 R.I.  266,  267,  331 A.2d  403,  404  (1975)).                                          “When there is no genuine issue of
material fact and the moving party is entitled to judgment as a matter of law, summary judgment
6  For  tax  year                                                                                    2008,  Inland  increased  Cinemaworld’s  monthly  estimated  tax  payments  to
$14,298.75 and billed this amount beginning in November 2008.                                        “Catch Up Billing” reflected
the difference between the estimated payments made from January 2008 through October 2008
and the increased monthly tax payments.   Inland intended for Catch Up Billing to reduce the
amount paid by Cinemaworld when the year-end adjustment between estimated and actual Taxes
billed was calculated.
6




is properly entered.”   Tangleridge Dev. Corp. v. Joslin, 570 A.2d 1109, 1111 (R.I. 1990); see
also Holliston Mills, Inc. v. Citizens Trust Co., 604 A.2d 331, 334 (R.I. 1992) (stating that
“summary judgment is proper when there is no ambiguity as a matter of law”).
III
Discussion
A
Taxes
1
Cinemaworld’s Reasonable Share of the Taxes
The instant action focuses on the parties’ responsibilities under the Lease.   Inland asserts
that Cinemaworld has breached the Lease and owes Additional Rent, specifically its reasonable
share of real estate taxes.   Conversely, Cinemaworld contends that Inland has applied a standard
for the allocation of Taxes that is inconsistent with the plain language of the Lease.
Contract interpretation is generally a question of law; it is only when contract terms are
ambiguous that construction of terms becomes a question of fact.  Clark-Fitzpatrick, Inc., v. Gill,
652 A.2d 440, 443 (R.I. 1994).   Thus, “the construction of a clear and unambiguous contract
presents an issue of law which may be resolved by summary judgment.”   Lennon v. MacGregor,
423 A.2d 820, 822 (R.I. 1980).   Simply stated, a court must apply the terms of a clear and
unambiguous contract as written.  A.F. Lusi Constr., Inc. v. Peerless Ins. Co., 847 A.2d 254, 258
(R.I. 2004) (citing  W.P. Assocs. v. Forcier, Inc., 637 A.2d 353, 356 (R.I. 1994)).
In determining whether an agreement is clear and unambiguous, the document must be
viewed in its entirety and its language given its plain, ordinary, and usual meaning.   Antone v.
Vickers, 610 A.2d 120, 123 (R.I. 1992).   Therefore, an agreement is ambiguous only when it is
7




reasonably and clearly susceptible to more than one interpretation.   W.P. Assocs., 637 A.2d at
356 (citing Gustafson v. Max Fish Plumbing & Heating Co., 622 A.2d 450, 452 (R.I. 1993); see
also Federal Deposit Ins. Corp. v. Singh,  977 F.2d  18,  22  (1st Cir.  1992)  (stating that  “[a]
contract is not ambiguous simply because litigants disagree about its proper interpretation”).
When ascertaining the usual and ordinary meaning of contractual language, every word of the
contract should be given meaning and effect; an interpretation that reduces certain words to the
status of surplusage should be rejected.  Andrukiewicz v. Andrukiewicz, 860 A.2d 235, 239 (R.I.
2004); see also Systematized of New England, Inc. v. SCM, Inc., 732 F.2d 1030, 1034 (1st Cir.
1984) (noting that when ambiguous contracts arise, a court should favor interpretations which
give meaning and effect to every part of the contract and reject those which reduce words to
mere surplusage).
Here, the Court finds that the language of the Lease is both clear and unambiguous, and
therefore, a construction of the Lease is ripe for resolution as a matter of law.   The Lease stated
that Rental consisted of both “Minimum Rent” and “Additional Rent.”                                    (Lease § 3.01.)   As part
of Additional Rent, the Tenant was required to pay “all taxes, duties, assessments and charges
commonly and generally referred to as ‘real estate taxes’ and assessments [on the] Land or any
part thereof, the Building(s) and Improvements. . .                                                    .”   Id. § 9.01.     The Lease further provided
that:
“Tenant  shall  be  responsible  for,  and  shall  pay,  prior  to
delinquency, any and all taxes, assessments, levies, fees and other
governmental  charges  of  every  kind  or  nature                                                     (collectively,
‘Charges’) levied or assessed by a municipal, county, state, federal
or other taxing or assessing authority upon, against or with respect
to:
“(i) The Premises or any leasehold interest therein, or any use
thereof, including, without limitation, any use and/or occupancy
tax;
8




“(ii)  All  fixtures,  furnishings,  equipment,  merchandise  and
personal  property  of  any  kind  owned  by  Tenant  and  placed,
installed or located in, within, upon or about the Premises, and
“(iii) All or any portion of the Rentals payable by Tenant to
Landlord; irrespective of whether any of such items described in
clauses (i) through (i) [sic] above are assessed as real or personal
property, and irrespective of whether any such items are assessed
to or against Landlord or Tenant.”  Id. § 25.01.
Therefore, under the plain language of the Lease, Cinemaworld’s liability for Taxes and Charges
is limited to the Premises, which includes only the Land, the Building, and the Improvements as
defined by the Lease.7   In fact, nothing in the Lease requires Cinemaworld to pay Taxes or
Charges on any parking or common areas, and the Taxes attributable to those areas should be
deleted prior to calculation.
The Lease further provides that the manner of payment of the Taxes is contingent upon
whether  the  Premises—defined  as  “[t]he  Land,  the  Building  and  the  Improvements”—are
assessed as a separate tax parcel.   Id. § 9.02.   Where, as here, Cinemaworld is not separately
assessed, it is required to make monthly escrow payments in the amount of one-twelfth of
Landlord’s reasonable estimate of the Taxes for the year.  Id.  Further, following the receipt of all
tax and assessment bills, Tenant is required to pay or be credited for the difference between the
amount of actual Taxes due for the year and the total estimated amount paid.  Id.
Similarly, when Charges—which includes more than just real estate taxes—are not levied
and assessed separately and directly to Cinemaworld, the Lease required that Cinemaworld “pay
to the Landlord Tenant’s reasonable share thereof as reasonably determined by Landlord in
consultation with Tenant.”   Id. § 25.01.     Hence, it is manifestly clear to the Court that unlike
7 See supra note 3.
9




Common Area Maintenance Costs, the Lease does not contain an explicit formula by which to
calculate Cinemaworld’s “reasonable share” of the Taxes and Charges.8
Presently, neither party appears to dispute the basic formula by which to calculate
Cinemaworld’s  “reasonable share” of the Taxes.    While the parties differ as to appropriate
deductions to be taken from the yearly tax bill and the appropriate square footage of the
Shopping Center to be used in the calculation, it is not disputed that Cinemaworld’s reasonable
share should be computed by multiplying the tax bill by a fraction, the numerator of which is the
square footage of the theater and denominator of which is the square footage of the Shopping
Center.
As a matter of law, the Court has previously determined that the plain and unambiguous
language of the Lease does not require Cinemaworld to pay Taxes attributable to parking and
common areas.   Now, upon further review, the Court also finds that the square footage of the
Shopping Center to be used in calculating Cinemaworld’s reasonable share of the Taxes is not
limited  to  the  square  footage  depicted  in  Exhibit  A  to  the  Lease.    Cinemaworld  has
unquestionably overstated the binding effect of Exhibit A.    The Lease clearly defined the
Shopping  Center  as                                                                                   “Lincoln  Mall  Shopping  Center,  Lincoln,  Rhode  Island,  the  present
boundaries of which are delineated on Exhibit A, which includes the Premises.”   Id. § 1.01
(emphasis added).   A plain reading of the definition indicates that “Shopping Center” refers to
Lincoln Mall Shopping Center, while Exhibit A is referenced for purely illustrative purposes.   It
8  Under  section                                                                                      8.04,  Cinemaworld  was  required  to  pay  Landlord,  as  Additional  Rent,
Landlord’s reasonable estimate of one-twelfth of Tenant’s Proportionate Share of the Common
Area Maintenance Costs for the then current calendar year.                                             (Lease § 8.04).   Said estimate was
determined by multiplying Landlord’s estimate of the monthly Common Area Maintenance
Costs by Tenant’s Proportionate Share.   Id.   Tenant’s Proportionate Share is a fraction, “the
numerator of which is the leasable floor area of the Building and the denominator of which is the
leasable area of all buildings on the Shopping Center as of the first day of the applicable calendar
year to which Common Area Maintenance Costs relate.”  Id.
10




is abundantly clear to the Court that the use of the word “present” indicates that the boundaries
and square footage illustrated in Exhibit A were not a limitation and were subject to change in
the future.   Any other reading would inappropriately result in surplusage.   Andrukiewicz, 860
A.2d at 239.
The Court’s reading is further bolstered by the following provision:
“Exhibit A shall not be deemed a representation or warranty of the
continuing  layout  or  configuration  of  the  Shopping  Center
(including  the  Common  Area)  and  dimensions  thereon  are
approximate and are not drawn to scale. . .                                                           . Landlord shall have
the unrestricted right to construct from time to time additional
improvements  on  the  Shopping  Center  or  increase,  reduce,
eliminate,  relocate  or  change  the  size,  dimensions,  design,
configuration or location of any or all Common Area (including
without  limitation,  the  parking  areas),  the  buildings,  or  other
improvements in the Shopping Center in any manner whatsoever,
provided  that  the  Landlord  agrees  that  no  such  change  shall
materially  and  adversely  impair  visibility  of  or  access  to  the
Premises on a permanent basis.”  Id. § 8.01.
This  provision  explicitly  contemplated  that  although  Exhibit  A  illustrated  the               “present”
boundaries of the Shopping Center, it in no way was a representation of or limitation on the
Shopping Center’s actual boundaries.   Moreover, although this language is contained in the
section related to Common Area Maintenance Cost, if the Court were to read this language as
merely limited to the common area matters, numerous portions of this provision would also be
improperly reduced to mere surplusage.  Andrukiewicz, 860 A.2d at 239.
Accordingly, in light of these determinations, the Court finds that Defendant’s reasonable
share of the Taxes should be calculated by: (1) taking the entire tax bill for the Shopping Center;
(2) excluding the taxes attributable to the parking and common areas; (3) and multiplying the
remaining tax bill by a fraction, the numerator of which is the square footage of the Building,
11




and the denominator of which is the current leasable square footage of the Shopping Center
which is not separately assessed to other tenants.9
While the Court is willing at this juncture to declare as a matter of law the formula by
which to calculate Defendant’s reasonable share of the Taxes, the Court finds that it has
insufficient information by which to conclude as a matter of law that Cinemaworld has breached
the Lease, and therefore, denies summary judgment as to Count I of Plaintiff’s Complaint.
Indeed, the Court finds that questions of fact remain as to the current leasable square footage of
the Shopping Center and the monetary value of taxes attributable to the parking and common
areas that should be deducted from the corresponding tax bills.   For that reason, the Court finds
an  accounting  appropriate  and  necessary  under  the  circumstances,  and  therefore,  grants
Defendant’s motion for partial summary judgment as to Count II of its Amended Counterclaim.
The Court orders a complete and full accounting of (1) the Taxes attributable to the parking and
common areas to be deducted from the corresponding tax bills; (2) all sums received to date from
or on behalf Cinemaworld; and  (3) the total Taxes owed in light of the Court’s foregoing
determination as to the appropriate Taxes formula.10
9 Defendant points to the language of section 25.01 requiring “Tenant [to] pay to Landlord
Tenant’s reasonable share [of the Charges] as reasonably determined by Landlord in consultation
with Tenant,” and argues that Plaintiff is prohibited from unilaterally imposing a formula for
determining  Defendant’s  share  of  Taxes.     The  Court  finds  this  argument  unavailing.
Cinemaworld does not dispute the general formula used to calculate its reasonable share, and this
language may not be read to negate Defendant’s responsibility under Article  9 to pay its
reasonable share of Taxes or Charges assessed on its Land, Building, and Improvements.
10 As a result of the foregoing determinations, the Court denies Plaintiff’s motion for summary
judgment as to Count I, seeking a declaratory judgment, and Count IV, seeking injunctive relief,
of Defendant’s Amended Counterclaim.
12




2
Estoppel Certificate
Defendant alleges that the Estoppel Certificate attached as Exhibit B to the Release
Agreement relieves it of liability for any Taxes prior to May 31, 2006.   Conversely, Inland
contends that the Estoppel Certificate is not binding on the instant matter, and even if it were a
binding waiver, it does not bar the collection of real estate taxes that were not yet known or
assessed at the time.
The Court’s review of the Release Agreement and Estoppel Certificate reveals that the
terms are clear and unambiguous, and therefore, must be applied as written.  A.F. Lusi, 847 A.2d
at 258 (citing W.P. Assocs., 637 A.2d at 356).   In the Release Agreement, Cinemaworld agreed
to “release, remise, hold harmless and forever discharge all claims” against LB arising out of or
connected with the disputed work by one of Cinemaworld’s contractors, in consideration of a
payment by LB in the amount of $240,000.                                                              (Pl.’s Summ. J. Mem. Ex. K.)   Therefore, its scope
is expressly limited to claims arising out of the disputed work and has no effect on the matters at
hand.
An “estoppel certificate” is a common device used in real estate transactions.   Lakeview
Management, Inc. v. Care Realty, LLC, No. 07-cv-303-SM, 2009 WL 903818, *19 (D.N.H. Mar.
30, 2009).   It consists of a “‘[a] signed statement by a party (such as a tenant or mortgagee)
certifying for another’s benefit that certain facts are correct.  .  .                                . A party’s delivery of this
statement estops that party from later claiming a different state of facts.’”   Id. (quoting K’s
Merch. Mart, Inc. v. Northgate Ltd. P’ship, 359 Ill. App. 3d 1137, 1443, 835 N.E.2d 965, 971
(Ill. App. Ct. 2005).   Therefore, here, Cinemaworld’s representation in the Estoppel Certificate
that “Rent ha[d] been paid through May 31, 2006,” serves only to estop Cinemaworld from later
13




claiming a different state of facts.   Id.; see also Pl.’s Summ. J. Mem. Ex. K.   The Estoppel
Certificate was provided for Inland’s benefit and may not now be used against it.  See Northgate,
359 Ill. App. 3d at 1443, 835 N.E.2d at 971 (noting that the purpose of an estoppel certificate is
to (1) give a prospective purchaser information about the lease and the leased premises; and (2)
give assurance to the purchaser that the tenant will not, at a later date, make claims that are
inconsistent with the statements contained in the certificate).
In any case, however, it is clear to the Court that the Estoppel Certificate does not relieve
Cinemaworld of liability for the unpaid portion of the actual 2006 Taxes.     Indeed, any “Rent”
payments made by Cinemaworld through May 31, 2006—which would have been comprised of
Minimum and Additional Rent—would only have included the estimated monthly Taxes and not
the actual Taxes which are not calculated and billed until year-end.    Therefore, despite its
representations in the Estoppel Certificate, the Court finds that Cinemaworld is not relieved of
having to pay its reasonable share of the actual Taxes billed at the end of 2006, including the
difference between the estimated and actual Taxes for the period prior to May 31, 2006.
B
Negligence
In Count III of the Amended Counterclaim, Defendant has asserted a claim of negligence
against Plaintiff.    Defendant contends that Plaintiff negligently failed to maintain adequate
protection against power surges, resulting in a loss of power and profits to Defendant.   Plaintiff
seeks summary judgment, arguing that the economic loss doctrine and the plain language of the
Lease preclude such a claim of negligence.
To establish a cause of action for negligence, the plaintiff must allege four elements: (1) a
legally cognizable duty owed by defendant to plaintiff; (2) breach of such duty; (3) that the
14




conduct proximately caused the injury; and (4) actual loss or damage.   Medeiros v. Sitrin, 984
A.2d 620, 625 (R.I. 2009) (citing Santana v. Rainbow Cleaners, Inc., 969 A.2d 653, 658 (R.I.
2009)).    A plaintiff who asserts a cause of action based on negligence has the burden to
“establish a standard of care and prove, by a preponderance of the evidence, that the defendant
deviated from that standard of care.”   Id. (quoting Riley v. Stone, 900 A.2d 1087, 1095 (R.I.
2006)).
1
Economic Loss Doctrine
Under  the  economic  loss  doctrine  “a  plaintiff  is  precluded  from  recovering  purely
economic losses in a negligence cause of action.”   Franklin Grove Corp. v. TNT Bldg. Corp.,
936 A.2d 1272, 1275 (R.I. 2007) (quoting Boston Inv. Prop. No. 1 State v. E.W. Burman, Inc.,
658 A.2d 515, 517 (R.I. 1995)).   Accordingly, a plaintiff may not recover damages under a
negligence claim without suffering a personal injury or property damage.   Id.   Under Rhode
Island law, the economic loss doctrine is limited to disputes involving commercial entities and is
not applicable to consumer transactions.  Id.
At first glance it would seem that the economic loss doctrine would bar Defendant’s
claim of negligence.   Cinemaworld did not suffer personal injury or property damage and is
claiming purely economic damages.   However, in E.W. Burman, our Supreme Court, when
discussing  the  purpose  of  the  economic  loss  doctrine,  stated  that                           “it  is  appropriate  for
sophisticated commercial entities to utilize contract law to protect themselves from economic
damages.”  Id.  Here, the parties have done just that.
The Lease specifically provided that “[e]xcept if caused by Landlord’s negligence or
willful misconduct, neither Landlord nor its agents shall be liable to Tenant for any loss, injury
15




or damage to Tenant or to any other person, or to its or their property, irrespective of the cause of
such injury, damage or loss. . .                                                                        .”          (Lease § 14.07.)   Accordingly, the parties have specifically
contracted for the right of Cinemaworld to bring a negligence cause of action for any losses
sustained.   Therefore, the Court finds as a matter of law that Defendant’s negligence claim is not
barred by the economic loss doctrine.
2
Sufficiency of the Claim
Summary judgment is generally not appropriate in connection with a negligence claim.
Splendorio  v.  Bilray  Demolition  Co.,                                                                682  A.2d   461,                                                            467   (R.I.   1996)   (noting  that   “the
determination of proximate cause . . . is a question of fact that should not be decided by summary
judgment”); see also Seide v. State, 875 A.2d 1259, 1268 (R.I. 2005) (quoting Rodrigues v.
Miriam Hosp., 623 A.2d 456, 461 (R.I. 1993) (stating that “‘the existence and the extent of a
duty of care are questions of law . . . [, but] whether such duty has been breached and whether
proximate cause [exists] are the questions for the factfinder’”).   However, the party opposing
summary judgment may not rest upon mere allegations or denials in its pleading and has an
affirmative duty to set forth specific facts showing a genuine issue of fact to be resolved at trial.
Ouimette v. Moran, 541 A.2d 855, 856 (R.I. 1988).   The failure to set forth such facts will result
in summary judgment entered against the party opposing the motion.  Ardente v. Horan, 117 R.I.
254, 257-58, 366 A.2d 162, 164 (1976).
In the instant matter, several elements of Defendant’s claim fail as a matter of law.   First,
the Court finds that Defendant’s mere allegation of “inadequate equipment” is insufficient to
establish a genuine issue of fact with respect to Plaintiff’s alleged negligence.   Russian v. Life-
Cap Tire Servs., Inc., 608 A.2d 1145, 1147 (R.I. 1992) (noting that a party must assert sufficient
16




facts to satisfy the necessary elements of his negligence claim).   The statement in Rick Starr’s
Affidavit—Cinemaworld’s CEO—that Cinemaworld incurred a loss of business and profits
because of “inadequate equipment” fails to rise above a mere allegation or raise a genuine issue
as to the adequacy of the surge protector.
Moreover, under the facts as presented, the Court declines to find that a duty existed
between Inland and Cinemaworld in connection with the surge protectors and provision of
electricity.   Indeed, the Lease contained no requirement for the provision of a particular surge
protector, and expressly stated:
“Tenant shall pay when due all costs, charges . . . related to the
hook-up, furnishing, consumption, maintenance and installation of
. electricity                                                                                        . light         . power, and any other utilities or
services                                                                                             (collectively   ‘Utilities’)  attributable  to  servicing  the
Premises, whether located in or outside the Premises.   Landlord
shall  have  no  liability  to  Tenant  or  any  other  party  for  any
inadequacy,  cessation,  or  interruption  of  Utilities.”                                           (Lease          §
10.01) (emphasis added).
Therefore, where, as here, Defendant’s negligence claim arises out of the inadequacy and
cessation of Utilities, the Court finds that even when viewed in the most favorable light, the
evidence fails to establish a genuine issue as to duty or liability.
Finally, Defendant has failed to establish recoverable damages.   Although Cinemaworld
seeks recovery for lost profits and business, under the Lease, “neither Landlord nor it agents,
even if negligent, shall be liable for consequential damages arising out of any loss of use of the
Premises or any equipment, facilities or other Tenant’s property therein by Tenant or any person
claiming through or under Tenant.”  Id. § 14.07.  Consequential damages are such damages “that
do not flow directly and immediately from an injurious act but that result indirectly from the
act.”   Riley v. Stafford, 896 A.2d 701, 703 (R.I. 2006) (citing Black’s Law Dictionary 416 (8th
ed. 2004)).   Here, the lost profits and business were merely a consequence of the loss of power
17




and use of the Premises, and therefore, recovery is expressly barred by the Lease.11    K.C. Props.
of N.W. Ark., Inc. v. Lowell Inv. Partners, LLC, 373 Ark. 14, 24, 280 S.W.3d 1, 10 (Ark. 2008)
(stating that “lost profits are well recognized as a type of consequential damages”); Howard
Opera House Assocs. v. Urban Outfitters, Inc., 166 F. Supp.2d 917, 934 (D. Vt. 2001) (holding
that where lease provided that neither landlord nor tenant could recover consequential damages,
it precluded party’s recovery of lost income or profits); Perini Corp. v. Greate Bay Hotel &
Casino, Inc., 129 N.J. 479, 498, 610 A.2d 364, 374 (N.J. 1992) (stating that lost profits fall under
the category of consequential damages) (overruled on other grounds).   Consequently, in light of
Defendant’s failure to plead facts establishing recoverable damages, and for the additional
reasons set forth herein, the Court grants summary judgment to Plaintiff on Count III of the
Amended Counterclaim.
IV
Conclusion
After due consideration of the arguments advanced by counsel at oral argument and in
their memoranda, the Court grants Defendant’s motion for partial summary judgment as to Count
II of its Amended Counterclaim for an accounting.   Although the Court grants Plaintiff’s motion
for summary judgment as to Count III of Defendant’s Amended Counterclaim for negligence, the
Court denies summary judgment as to Counts I, II, and IV in light of the determinations
contained herein.   The Court further finds that Defendant’s reasonable share of the Taxes should
be calculated by: (1) taking the entire tax bill for the Shopping Center; (2) excluding the taxes
attributable to the parking and common areas; (3) and multiplying the remaining tax bill by a
11 The Court notes that the issue of whether damages are consequential or direct is a question of
law and properly determined on summary judgment.   See Chestnut Hill Dev. Corp. v. Otis
Elevator Co., 739 F. Supp. 692, 701 (D. Mass. 1990).
18




fraction, the numerator of which is the square footage of the Building, and the denominator of
which is the current leasable square footage of the Shopping Center which is not separately
assessed to other tenants.   Moreover, the Court finds that the Estoppel Certificate does not
relieve Cinemaworld of having to pay its reasonable share of the actual Taxes billed at the end of
2006, including the difference between the estimated and actual Taxes for the period prior to
May 31, 2006.   While a construction of the Lease was ripe for resolution as a matter of law, the
Court finds, however, that there is insufficient information by which to conclude as a matter of
law that Cinemaworld has breached the Lease, and therefore, denies summary judgment as to
Count I of Plaintiff’s Complaint.   Finally, the Court finds that at this juncture, each party must
bear its own attorney’s fees, costs, and expenses.
Prevailing counsel may present an order consistent herewith which shall be settled after
due notice to counsel of record.   Counsel shall also arrange for a time to meet with the Court for
the purpose of scheduling such further proceedings, if any, as may be appropriate under the
circumstances.
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Rhode Island Law