Opinion
C. A. PC-2021-07468
01-10-2023
NASSER BUISIER, Plaintiff, v. THE R.I. DIVISION OF LOTTERIES, Mark A. Furcolo, in his Capacity as Administrator, UTGR, INC., a/k/a TWIN RIVER CASINO, d/b/a BALLY'S TWIN RIVER LINCOLN CASINO RESORT, and TWIN RIVER MANAGEMENT GROUP, INC. Defendants.
For Plaintiff: Mylene L. Cathcart, Esq. For Defendant: Kyle Zambarano, Esq. Brendan F. Ryan, Esq.
For Plaintiff: Mylene L. Cathcart, Esq.
For Defendant: Kyle Zambarano, Esq. Brendan F. Ryan, Esq.
DECISION
STERN, J.
Before this Court is Defendants'-The State Lottery Division of the State of Rhode Island Department of Revenue ("R.I. Lottery"), UTGR, Inc., a/k/a Twin River Casino, d/b/a Bally's Twin River Lincoln Casino Resort ("TR Lincoln"), and Twin River Management Group, Inc. ("TR Management") -Motion to Dismiss pursuant to Rule 12(b)(6) of the Superior Court Rules of Civil Procedure. Plaintiff Nasser Buisier ("Plaintiff") filed a timely objection. Jurisdiction is pursuant to Rule 12(b)(6) of the Superior Court Rules of Civil Procedure.
All Defendant parties will be referred to throughout this Decision collectively as "Defendants."
I.
In accordance with Rule 12(b)(6), the Facts and Travel section of this Decision will be based upon the facts as alleged in Plaintiff's Amended Complaint.
On or about August 2, 2020, Plaintiff purchased sports betting lottery tickets from Defendants. (Pl.'s Am. Compl. ¶ 10.) Relying on online "House Rules" ("the Online Rules") posted on TR Lincoln's website, Plaintiff took photographs of the purchased tickets because the Online Rules indicated that photographic evidence of purchased tickets would be honored. Id. ¶ 12. Two of the tickets Plaintiff purchased that day won. Id. ¶ 14. Plaintiff asserts he had-and still has-photographic evidence that he did in fact purchase the two winning tickets. Id. ¶ 16. Plaintiff alleges he made multiple attempts to collect on the winning tickets within the given one-year timeframe permitted to claim sports betting winnings. Id. ¶ 25; see also Defs.' Reply Mem. Ex. A (House Rules) § 1.B.d. At the time Plaintiff placed his wagers on August 2, 2020, he believed the outdated Online Rules were in effect, which contradicted the updated May 2019 version of the House Rules (the May 2019 House Rules) governing the collection of winnings. (Pl.'s Am. Compl. ¶¶ 12-13.) Defendants refused to honor the photographic evidence of the winning tickets. Id. ¶¶ 25-31.
Based on Defendants' refusal to accept the photographs as evidence of his purchased tickets, Plaintiff filed his original Complaint on December 13, 2021, asserting seven claimsagainst the R.I. Lottery, Mark A. Furcolo, UTGR, Inc., Twin River Management Group, Inc. and American Wagering, Inc. See generally Pl.'s Compl. ("Complaint"). Following the filing of Plaintiff's Complaint, Defendants filed an answer and jointly filed a Motion for Judgment on the Pleadings against all of Plaintiff's claims. See Docket (PC-2021-07468).
The seven counts are as follows: (1) Declaratory Judgment; (2) Unjust Enrichment; (3) Breach of Contract; (4) Contractual Breach of the Implied Covenant of Good Faith and Fair Dealing; (5) Tortious Breach of the Implied Covenant of Good Faith and Fair Dealing; (6) Bad Faith: Contract; and (7) Bad Faith R.I.G.L. § 9-1-33. See Compl.
On May 2, 2022, this Court issued its decision on Defendant's Rule 12(c) Motion for Judgment on the Pleadings against all of Plaintiff's counts in his original Complaint. Decision (Stern, J.) 16 (May 2, 2022) ("Decision"). In that Decision, this Court dismissed Plaintiff's original Complaint because it was beyond a reasonable doubt that Plaintiff would not be entitled to relief under the set of facts alleged. (Decision 16.) This Court determined that the May 2019 House Rules superseded the outdated Online Rules before Plaintiff placed his August 2, 2020 bets. Id. at 6-8. Relying on that determination, this Court held that Plaintiff could not redeem his winnings with only photographs of the tickets. Id. at 8-9. Among other things, this Court agreed with Defendants' argument to apply the May 2019 House Rules regarding redeeming ticket winnings: "[n]o winning wager will be paid without the customer copy of the wagering ticket. No reproductions or photos of wagering tickets will be accepted. Management is not responsible for lost, stolen, altered or unreadable tickets." Id. at 5 (quoting Defs.' Mem. of Law in Supp. of J. on the Pleadings, 8).
Following that Decision, Plaintiff filed an Amended Complaint on June 21, 2022, asserting a total of twenty-three new causes of action. See generally Pl.'s Am. Compl. Now, Defendants bring this instant joint Motion to Dismiss the First Amended Complaint for Failure to State a Claim pursuant to Rule 12(b)(6) of the Superior Court Rules of Civil Procedure. Plaintiff filed a timely objection. See Docket (PC-2021-07468). Oral arguments were heard on October 24, 2022. Id. This Decision follows.
II.
Standard of Review
A motion to dismiss under Rule 12(b)(6) "has a narrow and specific purpose." Mokwenyei v. Rhode Island Hospital, 198 A.3d 17, 21 (R.I. 2018). Its function is to test the sufficiency of the complaint. Pontarelli v. Rhode Island Department of Elementary and Secondary Education, 176 A.3d 472, 476 (R.I. 2018). When considering a Rule 12(b)(6) motion to dismiss, the Court "need not look further than the complaint in conducting our review." Palazzo v. Alves, 944 A.2d 144, 149 (R.I. 2008) (citing Rhode Island Affiliate, ACLU, Inc. v. Bernasconi, 557 A.2d 1232, 1232 (R.I. 1989)). A motion to dismiss will be granted only "if it 'appears beyond a reasonable doubt that a plaintiff would not be entitled to relief under any conceivable set of facts.'" Laurence v. Sollitto, 788 A.2d 455, 456 (R.I. 2002) (quoting Rhode Island Affiliate, ACLU, 557 A.2d at 1232). The trial justice must take all allegations in the complaint as true and "resolve any doubts in a plaintiff's favor." Pontarelli, 176 A.3d at 476.
In the alternative, if the Court decides to consider matters outside of the pleadings, then the motion will be treated as one for summary judgment pursuant to Rule 56 of the Superior Court Rules of Civil Procedure. Multi-State Restoration, Inc. v. DWS Properties, LLC, 61 A.3d 414, 417 (R.I. 2013). As such, if the Court were to consider matters outside of the pleadings, then the Court will convert the motion to one for summary judgment and grant said motion if there is no genuine issue of material fact and "the moving party is entitled to judgment as a matter of law." Id. During a summary judgment proceeding-if the Court were to decide to treat this matter as such-the Court does not pass judgment on the weight or credibility of the evidence. See DeMaio v. Ciccone, 59 A.3d 125, 129-30 (R.I. 2013). The hearing justice must consider affidavits and pleadings in the light most favorable to the opposing party. O'Connor v. McKanna, 116 R.I. 627, 634, 359 A.2d 350, 354 (1976).
Following oral arguments on October 24, 2022, this Court requested that the parties address the issue of whether Defendants consented to its consideration of certain factual representations made by Plaintiff in his opposition memorandum but not set forth in Plaintiff's First Amended Complaint. See Pl.'s Am. Compl.; see also Pl.'s Mem. in Obj. to Defs.' Mot. to Dismiss. In Defendants' post-hearing filing on October 26, 2022, Defendants specifically consented to the Court considering Plaintiff's Exhibit B, which is a photograph of a blue plastic bag that Plaintiff alleges contains his actual, physical sports wagering tickets. (Defs.' Post-Hr'g Mem. in Supp. of Mot. to Dismiss, 1-2; see also Pl.'s Obj. to Defs.' Mot. to Dismiss (Pl.'s Obj. Mem.) (Ex. B)). As such, this Court will treat the following motion as a motion to dismiss and analyze the issues under that standard of review.
III
As in this Court's May 2, 2022 Decision, the Court will first address Plaintiff's Count X (Breach of Contract) and will then address the remaining counts in turn.
Plaintiff's First Amended Complaint asserts a total of twenty-three claims for relief. (Pl.'s Am. Compl.) This Decision will analyze each count for the sake of clarity and completeness. This Court begins with Plaintiff's Count X: Breach of Contract. At the outset, this Court reiterates that, with the parties' consent, it will be considering Plaintiff's Exhibit B-the blue plastic bag-and will apply the standard of review applicable in deciding a Motion to Dismiss. However, this Court does note that Plaintiff failed to timely submit the blue plastic bag to Defendants for review of the winning tickets as required by the May 2019 House Rules. See May 2019 House Rules § 1.B.d. ("Expiration of any winning ticket will be one year from the date of the conclusion of the last event on the wager.")
A
Count X: Breach of Contract
Defendants argue that Plaintiff's breach of contract claim is "predicated on a legally flawed theory that the R.I. Lottery somehow breached and/or otherwise violated its own agency Rules and Regulations." (Defs.' Mem. in Supp. of Mot. to Dismiss (Defs.' Mem.) 12.) Defendants also argue that this Court already ruled that the "contractual requirement stating '[n]o winning wager will be paid without the customer copy of the wagering ticket' has the force of law[.]'" Id. at 13 (quoting Decision at 5).
Plaintiff counters Defendants' position, first by arguing that Plaintiff can now produce the tickets, and thus, Defendants' argument is now moot. (Pl.'s. Mem. in Obj. to Defs.' Mot. (Pl.'s Obj. Mem.) 10.) Plaintiff avers that the May 2019 House Rules call only for the production of the original tickets, and nowhere in the May 2019 House Rules "does it state the tickets produced need to be legible, readable, whole, complete, or otherwise." Id. As evidence, Plaintiff offers Exhibit B, which is a photograph of a blue plastic bag that Plaintiff alleges contains the sports wagering tickets, albeit "unreadable, illegible, incomplete, or otherwise defective." Id. at 11. Plaintiff also argues that this Court must "consider Defendants' duties and obligations under the Rhode Island Lottery Rules and Regulations, as these too, carry the force of law." Id. at 11 n.1.
This Court previously dismissed Count III of Plaintiff's Complaint for breach of contract. (Decision 8-9.) This Court determined that Plaintiff failed to point to any cognizable facts that could support a breach of contract claim because it could not produce its winning tickets. Id. Now, Plaintiff argues he does in fact have possession of the winning tickets, and the May 2019 House Rules require only possession of the winning ticket, not that the ticket be "readable, legible, or complete." (Pl.'s Obj. Mem. 10-11.) The Court cannot agree.
The parties do not dispute whether a contract existed between Plaintiff and Defendant TR Lincoln in the present action. (See generally Pl.'s Obj. Mem.; Defs.' Mem.) However, at the outset, the Court notes that it has already decided in a previous decision that the "House Rules govern contracts between sports bettors and Defendants" and that a contract exists between a bettor and Defendants when that person placed a sports wager. Oliveira v. Rhode Island Lottery, No. PC-2021-03645, 2022 WL 8345018, at *5 (R.I. Super. Oct. 5, 2022).
To have a viable claim for breach of contract, a plaintiff must prove "both the existence and breach of a contract, and that the defendant's breach thereof caused the plaintiff's damages." Fogarty v. Palumbo, 163 A.3d 526, 541 (R.I. 2017). As the parties do not dispute, and as this Court has previously decided, there was a contract between Plaintiff and Defendants. Whether a party has materially breached its contractual obligations is usually a question of fact to be decided by the jury. Women's Development Corp. v. City of Central Falls, 764 A.2d 151, 158 (R.I. 2001). However, if there is only one reasonable answer, then the court can resolve the matter as a question of law. Id. (citing Gibson v. City of Cranston, 37 F.3d 731, 736 (1st Cir. 1994)).
Here, there is only one reasonable conclusion as to the breach of contract claim, and the Court has the authority to rule on that issue in the context of this motion to dismiss. Plaintiff's argument misinterprets the language of the May 2019 House Rules. See Pl.'s Obj. Mem. 10. Included in the section concerning "Ticket Accuracy," the May 2019 House Rules also state that management is not responsible for lost, stolen, or unreadable tickets. May 2019 House Rules § 1.B.b-c. Because the contents of the blue plastic bag are unreadable, Defendants are not responsible for Plaintiff's defective tickets.
Furthermore, Plaintiff misapplies the R.I. Lottery Rules and Regulations. Plaintiff attempts to circumvent the May 2019 House Rules by citing and referencing the R.I. Lottery Rules and Regulations, specifically Chapter 2. See Pl.'s Obj. Mem. 16. Plaintiff's argument does not sway this Court. The R.I. Lottery Rules and Regulations reference Chapter 20 as the text governing sports wagering tickets. See Defs.' Mem. Ex. A (R.I. Lottery Rules and Regulations) Ch. 2 § 2.3.N.1. Chapter 20, § 29 of the R.I. Lottery Rules and Regulations governs "Erroneous or Mutilated Tickets." Subsection A clearly states, "Unless the Director is satisfied that a mutilated Sports Wagering Ticket is genuine, no credit or prize will be issued to the holder of said Ticket." R.I. Lottery Rules and Regulations, ch. 20, § 29.A. Even reading the R.I. Lottery Rules and Regulations as Plaintiff wishes this Court to do, these rules cannot be interpreted to support the allegation that Defendants breached the contract here. Moreover, the rules governing sports wagering tickets are the May 2019 House Rules, rather than the R.I. Lottery Rules and Regulations, which govern tickets being submitted to collect lottery winnings. Plaintiff's blue plastic bag also does not save Plaintiff here because the May 2019 House Rules clearly state that no reproductions or photos will be accepted, and that "Management is not responsible for lost, stolen, altered or unreadable tickets." May 2019 House Rules § 1.B.b-c. Plaintiff therefore has failed to state a claim upon which relief can be granted for breach of contract because it cannot possibly be found that Defendants have breached the contract in any way.
This subsection states: "For game description, wagering, and payoff, see Chapter 20 of these Rules and Regulations.
This Court states that it also cannot accurately determine the contents of the blue plastic bag. The photograph of the blue plastic bag could contain pieces of the tickets, but this Court has no way of knowing that information here. In addition, Plaintiff admits that the tickets are in a mutilated or unreadable state, claiming now only that he is in possession of the tickets. However, a plain reading of the May 2019 House Rules refutes Plaintiff's argument.
B.
Counts III, VI, XI, XII, XIII, XIV XV, XVIII: Other Claims Already Disposed of By this Court
The claims are for the following counts, respectively:
Count III: Unjust Enrichment Under Contract Theory: Defendant Twin River Casino, Count VI: Unjust Enrichment Under Equity: Defendant Twin River Casino,Count XI: Tortious Breach of Contract: R.I. Lotteries, Count XII: Contractual Breach of Implied Covenant of Good Faith and Fair Dealing: R.I. Lotteries, Count XIII: Tortious Breach of Implied Covenant of Good Faith and Fair Dealing: R.I. Lotteries, Count XIV: Bad Faith Under Contract Theory: R.I. Lotteries, Count XV: Unjust Enrichment Under Contract Theory: Defendant R.I. Lotteries, and Count XVIII: Unjust Enrichment Under Equity: Defendant R.I. Lotteries.
1
Counts XI, XII, XIII: Tortious Breach of Contract, Contractual Breach of Implied Covenant of Good Faith and Fair Dealing, and Tortious Breach of the Implied Covenant of Good Faith and Fair Dealing
Plaintiff's claim for contractual breach of implied covenant of good faith and fair dealing (Count XII) was previously rejected by this Court because "a claim for breach of the implied covenant of good faith and fair dealing 'does not create an independent cause of action'" separate from a breach of contract claim, and "Plaintiff has failed to assert a viable claim for breach of contract[.]" (Decision 14 (quoting McNulty v. Chip, 116 A.3d 173, 185 (R.I. 2015)).) In that Decision, this Court dismissed Plaintiff's Count IV for contractual breach of implied covenant of good faith and fair dealing. Id. This Court stated that "claims for breach of the implied covenant of good faith and fair dealing are not actionable in the absence of another contractually based claim." Id. Here, as stated above, Plaintiff has failed to introduce any facts or evidence in his Amended Complaint to state a claim upon which relief may be granted for breach of contract. (See Pl.'s Am. Compl.) Therefore, for the same reasons given in this Court's previous Decision in this case, Plaintiff has again failed to state a claim upon which relief can be granted for contractual breach of implied covenant of good faith and fair dealing. See Decision 13-15.
Plaintiff also brings claims against Defendants for tortious breach of contract (Count XI) and tortious breach of implied covenant of good faith and fair dealing (Count XIII). (Pl.'s Am. Compl. ¶¶ 100-04, 110-14.) Defendants argue that Rhode Island law does not recognize a claim for tortious breach of contract. (Defs.' Mem. 11 n.12.) Therefore, Defendants argue, Plaintiff is unable to bring a claim for relief under this theory in a Rhode Island court. Id. This Court must agree. Plaintiff cites to no authority and indeed there is no evidence that Rhode Island has ever recognized an independent cause of action for tortious breach of contract. It is also a rarely used claim for relief. Tortious breach of contract "refers to a 'bad-faith' breach of an agreement arising out of a specific and special contractual relationship." 34 Am. Jur. Trials § 1. A tortious breach of contract claim generally requires not only a breach, but also an intentional wrong or "negligence so gross as to constitute an independent tort." 86 C.J.S. Torts § 5 (citing Carl E. Woodward, L.L.C. v. Acceptance Indemnity Insurance Co., 743 F.3d 91 (5th Cir. 2014)). Furthermore, and most importantly here, this Court herein determines again that Defendants did not breach their contract with Plaintiff. See supra Part III.A. In the absence of a cognizable breach of contract claim, Plaintiff cannot rely on tort liability to bring a new cause of action for the alleged "tortious" breach of contract. As such, it is beyond a reasonable doubt that Plaintiff cannot recover under a theory of tortious breach of contract in the absence of a breach. This Court therefore dismisses Plaintiff's claim for tortious breach of contract because no such cause of action is recognized in Rhode Island.
In addition, this Court cannot independently recognize a new cause of action for tortious breach of implied covenant and good faith and fair dealing. This Court previously cited to A.A.A. Pool Service &Supply, Inc. v. Aetna Casualty &Surety Co., 121 R.I. 96, 395 A.2d 724 (1978), in support of its conclusion that Rhode Island does not recognize an independent tort for implied breach of good faith and fair dealing. A.A.A. Pool Service & Supply, Inc, 121 R.I at 99, 395 A.2d at 725-26. For that reason, this Court stands by its previous conclusion. Decision 15. As such, Plaintiff cannot state a cognizable tortious breach of implied covenant of good faith and fair dealing.
2 Count XIV: Bad Faith under a Contract Theory (R.I. Lottery)
Plaintiff realleges his claim for contractual bad faith against Defendant R.I. Lottery. Compare Pl.'s Am. Compl. ¶¶ 115-17 with Pl.'s Compl. ¶¶ 44-46. Plaintiff now argues that Defendant R.I. Lottery acted in bad faith because it failed to validate Plaintiff's lottery tickets after multiple requests within the year. (Pl.'s Obj. Mem. 16.) Again, Plaintiff relies erroneously on the R.I. Lottery's Rules and Regulations Chapter 2. Id. However, the Court need not analyze the minutia of the Rules and Regulations, as this Court must maintain consistency with its prior conclusion: Rhode Island does not recognize an independent cause of action for contractual bad faith. (Decision 15-16.) In its May 2, 2022 Decision, the Court concluded "Rhode Island does not recognize an independent cause of action for general contractual bad faith." (Decision 15-16.) This Court refused to recognize a claim for general contractual bad faith because Plaintiff failed to state a viable claim for breach of the implied covenant of good faith and fair dealing, and therefore, Plaintiff cannot maintain an independent cause of action for general bad faith in contract. Id. Because this issue also was previously decided and dismissed, the Court now dismisses Plaintiff's Count XIV: Bad Faith under a Contract Theory for failure to state a cognizable claim upon which relief can be granted.
3 Counts III, VI, XV, XVIII: Unjust Enrichment (TR Lincoln and R.I. Lottery)
Plaintiff brings claims for unjust enrichment under contractual and equitable theories against Defendants TR Lincoln and R.I. Lottery. (Pl.'s Am. Compl. ¶¶ 50-59, 75-79, 118-26, 14145.) This Court previously concluded, "Plaintiff has not presented any facts which would allow him to recover under an unjust enrichment theory. Consequently, Plaintiff has failed to sufficiently state a cognizable claim of unjust enrichment[.]" (Decision 12.) Plaintiff asserts that this Court should now allow his claim for unjust enrichment because, "Under Rhode Island law, an unjust enrichment claim is available to the Plaintiff, who transferred a benefit pursuant to a contract, but does not have a valid claim under the contract." (Pl.'s Obj. Mem. 26) (citing Colleen P. Murphy, Recognizing Restitutionary Causes of Action and Remedies Under Rhode Island Law, 20 Roger Williams Univ. L.R. 442 (2015)).) "'To recover [on a claim] for unjust enrichment, a claimant must prove: (1) that he or she conferred a benefit . . .; (2) that the recipient appreciated the benefit; and (3) that the recipient accepted the benefit . . . [where] it would be inequitable for the recipient to retain the benefit without paying [for] the value thereof."' South County Post &Beam, Inc. v. McMahon, 116 A.3d 204, 210-11 (R.I. 2015) (quoting Emond Plumbing &Heating, Inc. v. BankNewport, 105 A.3d 85, 90 (R.I. 2014)). Unjust enrichment claims arise when a "benefit is conferred deliberately but without a contract." Id. at 210. However, this Court has previously decided Plaintiff has no unjust enrichment claim because he entered into a valid contract with Defendants. (Decision 12.)
Here, there is no dispute or argument as to whether a valid contract existed between the parties. In fact, Plaintiff outlines on the first page of his memorandum that "for valuable consideration, Plaintiff purchased sports betting lottery tickets from Defendant UTGR, Inc." (Pl.'s Obj. Mem. 1.) Because Plaintiff undisputedly had a valid contract with Defendants, Plaintiff cannot state a claim for unjust enrichment. This Court now decides for the same reason that those counts for relief under an equity theory are substantially similar theories as under a contract theory and dismisses those as well, in accordance with its prior Decision. (Decision 12.) Plaintiff has failed to state a claim for unjust enrichment, and accordingly, this Court dismisses Counts III, VI, XV, and XVIII of Plaintiff's Amended Complaint.
C
Counts I and II: Negligent Misrepresentation and Fraud in the Inducement 1
Count I: Negligent Misrepresentation (TR Lincoln)
The first count of Plaintiff's Amended Complaint is for Negligent Misrepresentation against TR Lincoln. (Pl.'s Am. Compl. ¶¶ 32-40.) Plaintiff alleges that he "timely presented photographic evidence of his winning tickets." Id. ¶ 37. Defendants aver that this claim-along with Plaintiff's claims for fraud in the inducement and promissory estoppel-allege reliance on the outdated Online Rules that did accept photographic evidence in the place of tangible sports wagering tickets, but that no longer apply and did not apply to the parties' contract in this action. (Defs.' Mem. 8.) The tort of negligent misrepresentation has four elements: "'(1) a misrepresentation of a material fact; (2) the representor must either know of the misrepresentation, must make the misrepresentation without knowledge as to its truth or falsity or must make the representation under circumstances in which he [or she] ought to have known of its falsity; (3) the representor must intend the representation to induce another to act on it; and (4) injury must result to the party acting in justifiable reliance on the misrepresentation.'" Cruz v. DaimlerChrysler Motors Corp., 66 A.3d 446, 453 (R.I. 2013) (quoting Manchester v. Pereira, 926 A.2d 1005, 1012 (R.I. 2007).
Here, Plaintiff alleges that there was a misrepresentation of material fact of the House Rules on TR Lincoln's website and that Defendants should have known the House Rules on the website were outdated. See Pl.'s Am. Compl. ¶¶ 36-40. However, the Court does not find this argument persuasive. Plaintiff fails to show that Defendants intended for players to rely on the outdated information or that Plaintiff actually relied on the Online Rules when purchasing the tickets. Furthermore, as Defendants point out in its memorandum, this Court already ruled that "'Plaintiff is presumed to have been aware of the May 2019 House Rules when he initially purchased his wagering tickets and is contractually bound by those rules.'" (Defs.' Mem. 8) (quoting Decision at 7). Plaintiff has failed to assert that Defendants intended to misrepresent the May 2019 House Rules. Because Plaintiff fails to allege facts supporting the third element of negligent misrepresentation, the claim for negligent misrepresentation must be dismissed for failure to state a claim on which relief may be granted.
2 Count II: Fraud in the Inducement (TR Lincoln)
Plaintiff alleges in Count II of his Amended Complaint that Defendant TR Lincoln "refused to honor Plaintiff's photographic evidence of his winning tickets" and that this shows fraud in the inducement of the contract. (Pl.'s Am. Compl. ¶¶ 41-49.) Specifically, Plaintiff alleges that the "representation [of the outdated Online Rules] induced Plaintiff to undertake a bargain without understanding the risks involved, or his duties or obligations under the contract." Id. ¶¶ 42-43. Plaintiff now includes his Exhibit B, a photograph of what he purports to be the remnants of the two winning tickets in a blue plastic bag. See Pl.'s Obj. Mem. Ex. B. Alternatively, Defendants argue that Plaintiff's fraud in the inducement claim relies on the original, outdated Online House Rules. (Defs.' Mem. 8.) Additionally, Defendants aver that Plaintiff failed to mention his fraud in the inducement claim in his memorandum, and, therefore, Defendants urge this Court to find that Plaintiff does not oppose Defendants' request to dismiss that claim (among others not mentioned). (Defs.' Reply Mem. in Supp. of Mot. to Dismiss (Defs.' Reply) 2.) For the sake of completeness, this Court will analyze all claims rather than conclude Plaintiff does not oppose certain requests to dismiss for lack of reference in his memorandum.
"Fraud in the inducement is defined as '[m]isrepresentation as to the terms, quality or other aspects of a contractual relation, venture or other transaction that leads a person to agree to enter into the transaction with a false impression or understanding of the risks, duties or obligations she has undertaken."' Bourdon's, Inc. v. Ecin Industries, 704 A.2d 747, 753 (R.I. 1997) (citing Black's Law Dictionary 661 (6th ed. 1990)). To prevail on a claim of fraud in the inducement, a party must prove four elements: (1) a false representation; (2) knowledge of the statement's falsity; (3) intent to induce reliance; and (4) detrimental reliance. Women's Development Corp. 764 A.2d at 161.
Although Plaintiff alleges that the information on Defendant TR Lincoln's website was false, and further alleges that Plaintiff relied on that information to his detriment, Plaintiff fails to allege that Defendant TR Lincoln knew the false information was on the website or that Defendants intended to induce reliance. In addition, for the same reasons Plaintiff's negligent misrepresentation claim fails, Plaintiff is "presumed to have been aware of the May 2019 House Rules when he initially purchased his wagering tickets and is contractually bound by those rules." (Decision 7 (citing Ronca v. New York State Racing and Wagering Board, 394 N.Y.S.2d 386, 387 (N.Y. Sup. Ct. 1977)).) Moreover, the Court notes that the addition of Plaintiff's Exhibit B is essentially an attempt to now follow and abide by the May 2019 House Rules that carry the force of law. Plaintiff therefore can no longer claim he relied on the Online Rules and claim that TR Lincoln would receive an unjust benefit if it did not pay out Plaintiff's winnings.
It is therefore beyond any reasonable doubt that Plaintiff cannot recover damages from Defendant TR Lincoln. Plaintiff's claim for fraud in the inducement is dismissed for failure to state a claim.
D
Counts IV and XVI: Promissory Estoppel (TR Lincoln and R.I. Lottery)
For the same reasons as above, the Court must dismiss Plaintiff's claims for promissory estoppel against Defendants TR Lincoln and R.I. Lottery. As articulated in his Amended Complaint, Plaintiff seeks to rely on the outdated Online Rules, which allowed the presentation of a photograph of the tickets, instead of the current, applicable May 2019 House Rules, which require presentation of the original wager tickets. (Pl.'s Am. Compl. ¶ 16.) Defendants invoke the Court's previous Decision, which held that the May 2019 House Rules carry the force of law and therefore preclude Plaintiff from recovering under a promissory estoppel theory. (Defs.' Mem. 8.)
Rhode Island courts have held that "[t]o establish promissory estoppel, there must be: 1 [a] clear and unambiguous promise; 2 [r]easonable and justifiable reliance upon the promise; and 3 [d]etriment to the promisee, caused by his or her reliance on the promise." Filippi v. Filippi, 818 A.2d 608, 626 (R.I. 2003) (citing Nilavar v. Osborn, 711 N.E.2d 726, 736 (Ohio 1998)). Rhode Island courts have imposed the following conditions precedent for promissory estoppel:
"(1) Was there a promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee?
"(2) Did the promise induce such action or forbearance?
"(3) Can injustice be avoided only by enforcement of the promise?" East Providence Credit Union v. Geremia, 103 R.I. 597, 603, 239 A.2d 725, 728 (1968).
The purpose of promissory estoppel is to enforce clear and unambiguous commitments in order to avoid injustice. Cote v. Aiello, 148 A.3d 537, 538 (R.I. 2016). The elements of promissory estoppel therefore must be strictly enforced. Id.
This Court has previously stated the applicable May 2019 House Rules carry the force of state law. See Decision at 7. The May 2019 House Rules govern the contract at issue here. Furthermore, because the May 2019 House Rules have the force of law, Plaintiff "is presumed to have been aware of the May 2019 House Rules[.]" Id. Additionally, considering Plaintiff's Exhibit B and applying the May 2019 House Rules, the Court returns to its previous conclusion that Defendants did not breach the parties' contract, nor was there any evidence whatsoever that they would be unjustly benefited by not paying out Plaintiff's winnings. Here, the May 2019 House Rules are clear and unambiguous in their requirements that bettors return the tickets in their original form and that management is not responsible for unreadable tickets. May 2019 House Rules § 1.B.c. No promise was made by any Defendant that it would pay out winnings for simple possession of winning tickets, as Plaintiff argues. Therefore, Plaintiff's claims for relief under a promissory estoppel must fail.
E
Counts V and XVII: Quantum Meruit (TR Lincoln and R.I. Lottery)
In his Amended Complaint, Plaintiff brings claims for relief under a quantum meruit theory against Defendants TR Lincoln and R.I. Lottery. See Pl.'s Am. Compl. ¶¶ 68-74, 134-140. Defendants argue that Plaintiff's quantum meruit claims should be dismissed for the same reasons that Plaintiff's unjust enrichment claims must be dismissed. (Defs.' Mem. 16.) The Court agrees.
Quantum meruit is a claim that is closely related to, but slightly different from, a claim for unjust enrichment. McMahon, 116 A.3d at 211. It is defined as a '"claim or right of action for the reasonable value of services rendered."' Process Engineers &Constructors, Inc. v. DiGregorio, Inc., 93 A.3d 1047, 1052 (R.I. 2014) (quoting Black's Law Dictionary 1361, 1362 (9th ed. 2009)). To recover on a claim for quantum meruit, a plaintiff must show that a defendant received some benefit from services rendered, and that the defendant would be unjustly enriched without making compensation. McMahon, 116 A.3d at 211. In addition, "a plaintiff must prove the same three elements as in a claim for unjust enrichment." Id. (citing Dellagrotta v. Dellagrotta, 873 A.2d 101, 113 (R.I. 2005)). Much like unjust enrichment, quantum meruit involves a quasi-contractual relationship. DiGregorio, Inc. 93 A.3d at 1052. As previously stated, Rhode Island courts have already determined that sports wagering tickets and bets form valid contracts. See Oliveira, 2022 WL 8345018, at *5.
Here, there is no claim for quantum meruit or quasi-contract because the parties entered into a valid contract supported by consideration, as Plaintiff has admitted. (Pl.'s Obj. Mem. 1.) Because there is not a quasi-contractual relationship upon which Plaintiff can recover under a quantum meruit theory, the Court hereby rules that Plaintiff is not entitled to relief under quantum meruit, and these counts must be dismissed.
F
Counts VII and XIX: Constructive Trust and Equitable Lien (TR Lincoln and R.I. Lottery)
Plaintiff also brings claims for relief under a theory of constructive trust and under a theory of equitable lien against Defendants TR Lincoln and R.I. Lottery. (Pl.'s Am. Compl. ¶¶ 80-85; 146-151.) In his Amended Complaint, Plaintiff claims again that "Defendant[s] [are] unjustly enriched by the acquisition of the valuable consideration Plaintiff conferred to Defendant[s] and unjustly enriched by the acquisition of the winnings that Plaintiff is entitled to[.]" Id. ¶¶ 84, 150. Defendants aver that Counts VII and XIX are "merely equitable remedies" and that "neither are remotely applicable to the allegations in the First Amended Complaint." (Defs.' Mem. 17.) Specifically, Defendants argue that constructive trusts operate only in limited circumstances and that an equitable lien is merely a "'special form of constructive trust' that is seldom employed by local courts in modern times[.]'" Id. (quoting Darr v. Muratore, 143 B.R. 973, 976 (D.R.I. 1992)).
To start, the Court notes that it agrees with Defendants' position that constructive trusts and equitable liens are equitable remedies and not substantive claims for relief. (Defs.' Mem. 17.) "A constructive trust is an equitable remedy that a court may impose upon the parties, in the absence of their actual intent to create a trust, in order to avoid the unjust enrichment of one party at the expense of another." J.K. Social Club v. J.K. Realty Corp., 448 A.2d 130, 134 (R.I. 1982). Regardless, Plaintiff cannot satisfy the requirements necessary to invoke these equitable remedies. A constructive trust is a remedial device used by courts to accomplish justice. Simpson v. Dailey, 496 A.2d 126, 128 (R.I. 1985). To warrant imposition of a constructive trust, there must have been unjust enrichment obtained by fraud, violation of a fiduciary duty, or by a testamentary devise. Id. (citing Desnoyers v. Metropolitan Life Insurance Co., 108 R.I. 100, 272 A.2d 683 (1971)). The purpose of a constructive trust is the "'equitable prevention of unjust enrichment of one party at the expense of another in situations in which legal title to property was obtained by fraud or in violation of a fiduciary [duty] or confidential relationship.'" Salvadore v. LaRoche, 252 A.3d 288, 289 (R.I. 2021) (quoting Connor v. Schlemmer, 996 A.2d 98, 109 (R.I. 2010)). This Court has previously determined that Plaintiff failed-and still does fail-to show that Defendants received unjust enrichment through fraud, violation of a fiduciary duty, or a testamentary devise. See supra Part III.B.3; see also Decision at 11-12. On the contrary, Plaintiff failed to adhere to the May 2019 House Rules that were in effect when Plaintiff placed his sports wager, regardless of Plaintiff's Exhibit B. Plaintiff is not entitled to recovery under a constructive trust theory.
Further, an equitable lien is a "special form of constructive trust" that is seldom employed. Darr, 143 B.R. at 976. An equitable lien is a right to real property that may be proceeded against in an equitable action. Coventry Homes, Inc. v. Scottscom Partnership, 745 P.2d 962, 965 (Ariz.Ct.App. 1987). Turning to the elements at hand, Plaintiff cannot point to any evidence with particularity of fraud, or a violation of a fiduciary duty between Plaintiff and any Defendant upon which constructive trust and equitable lien claims are asserted. Additionally, as mentioned in Part III.B.3, there is no unjust enrichment at hand here. Thus, because there is no unjust enrichment here that warrants the formation of a constructive trust as a remedial device, it follows that there should be no need to employ an equitable lien. As such, the Court dismisses Counts VII and XIX of Plaintiff's Amended Complaint.
G
Counts VIII, IX, and XX: Liability of Defendants Under Agency, Vicarious Liability, and Under the Rhode Island Lottery Rules and Regulations
1
Count VIII: Liability of Defendant R.I. Division of Lotteries Under General Agency and Vicarious Liability Theories
Plaintiff also seeks to impute his claims of relief for negligent misrepresentation, fraud in the inducement, unjust enrichment under contract theory, promissory estoppel, quantum meruit, unjust enrichment under equity, constructive trust, and equitable lien upon Defendant R.I. Lottery under an agency theory, alleging that Defendant TR Lincoln acted as an agent of R.I. Lottery. (Pl.'s Am. Compl. ¶ 92.) As stated above, the Court has dismissed all of these claims for relief against TR Lincoln directly. "It is a fundamental rule of agency law that the principal is bound by, and liable for, the acts of its agent done with or within the actual or apparent authority manifested by the principal, and within the scope of the agent's employment[.]" 12 Williston on Contracts § 35:34 (4th ed.). Further, "[u]nder the principles of agency law, an employer will incur vicarious liability for its employee's negligent act if that act is committed within the scope of the latter's employment." Cayer v. Cox Rhode Island Telecom, LLC, 85 A.3d 1140, 1143-44 (R.I. 2014). Here, because the Court has previously dismissed the above listed claims against Defendant TR Lincoln, it need not analyze further the liability of Defendant R.I. Lottery under an agency or vicarious liability theory. The evidence in the Amended Complaint and the attached, consented-to Exhibit B of Plaintiff's memorandum shows no potential claim for relief against Defendant TR Lincoln. Therefore, it is not possible for Defendant R.I. Lottery to be found liable for any acts of Defendant TR Lincoln, assuming Defendant TR Lincoln is even an agent of Defendant R.I. Lottery. The Court therefore dismisses Plaintiff's Counts VIII and IX for liability under general agency and vicarious liability theories, respectively.
2 Count XX: Liability of TR Lincoln under R.I. Lottery Rules and Regulations
Furthermore, the Court concludes that Plaintiff cannot impute claims for breach of contract, tortious breach of contract, contractual breach of the implied covenant of good faith and fair dealing, tortious breach of the implied covenant of good faith and fair dealing, bad faith, unjust enrichment under contract theory, promissory estoppel, quantum meruit, unjust enrichment under equity, constructive trust, and equitable lien to Defendant TR Lincoln for failing to enforce Defendant R.I. Lottery's Rules and Regulations. (Pl.'s Am. Compl. ¶ 155.) As discussed above, this Court determined that there was no liability attributable to R.I. Lottery on any of the claims mentioned in this paragraph. As such, there is nothing to impute to Defendant TR Lincoln here and Count XX is also dismissed for failure to state a claim.
H
Counts XXI and XXII: Declaratory Judgment under Contract and Equity Theories (Defendants R.I. Lottery and TR Lincoln)
Once again, Plaintiff seeks declaratory judgments against Defendants R.I. Lottery and TR Lincoln. (Pl.'s Am. Compl. ¶¶ 156-66.) In its prior Decision, this Court concluded that "Plaintiff's declaratory judgment claim does not present a justiciable controversy." (Decision 11.) There, this Court reasoned that Plaintiff relied on flawed reasoning to support his declaratory judgment claim. Id. Here, this Court reaches the same conclusion. Under either theory, Plaintiff still relies on flawed reasoning. In his Amended Complaint, Plaintiff asserts "Plaintiff timely presented photographic evidence of his winning tickets, elected to have his tickets validated by Defendants, and asked them to investigate the matter in order to claim his winnings in Defendants' possession, care, custody, and control." (Pl.'s Am. Compl. ¶¶ 160, 165.) However, this Court already determined that the May 2019 House Rules control the contract between Plaintiff and Defendants. (Decision at 11.) Because Plaintiff still relies on his photographic evidence argument previously disposed of by this Court, the Court again finds that there is no justiciable controversy before the Court here. Accordingly, Plaintiff's Counts XXI and XXII are both dismissed for failure to state a claim upon which relief can be granted.
I
Procedural Due Process
Plaintiff's final claim asserts a due process violation under the Rhode Island Constitution article I, section 2. (Pl.'s Am. Compl. ¶¶ 167-73.) Specifically, Plaintiff avers that Defendants R.I. Lottery and TR Lincoln "refused to investigate Plaintiff's claim of winning tickets, refused to attempt to validate Plaintiff's tickets, and refused to pay Plaintiff for his winning tickets or refund Plaintiff the valuable consideration he had paid for the tickets." Id. ¶ 172. In his memorandum, Plaintiff argues that Defendants violated his procedural due process rights because "Plaintiff has been deprived of his winnings" and the "winnings are protected under the due process clause of the Rhode Island Constitution . . . as they are both a property interest and a liberty interest. (Pl.'s Obj. Mem. 20.) Further, Plaintiff argues that Defendant R.I. Lottery is an administrative agency, and that those agencies are required to have a formal hearing process. Id. at 21-22 (citing Bourque v. Dettore, 589 A.2d 815, 823 (R.I. 1991) (citing Davis v. Wood, 427 A.2d 332, 336 (R.I. 1981))). Plaintiff contends that Defendant R.I. Lottery did not perform a proper investigation into the validity of the winning tickets, and that Defendants hold the evidence to validate said tickets. Id. at 22. Furthermore, the R.I. Lottery Rules and Regulations, Plaintiff argues, fall short of Rhode Island procedural due process because there is no opportunity for the Plaintiff to be heard '"at a meaningful time and in a meaningful manner."' Id. at 22 (quoting Millett v. Hoisting Engineers' Licensing Division of Department of Labor, 119 R.I. 285, 296, 377 A.2d 229, 236 (1977)).
In Defendants' supporting memorandum in favor of their instant Motion to Dismiss, Defendants argues that Plaintiff has failed to allege a property right at issue, or even allege a violation of due process in his Amended Complaint. (Defs.' Mem. 18.) Defendants assert that "Plaintiff's First Amended Complaint is bereft of any allegation of such a cognizable liberty or property interest." (Defs.' Mem. 19.) Defendants also counter that Plaintiff has failed to allege a cognizable property interest that would give rise to a due process claim, and, even if he does, Plaintiff did receive adequate due process under the circumstances. (Defs.' Reply Mem. 9.) To address the merits of the procedural due process argument, this Court will assume, arguendo, that Plaintiff does have a cognizable property interest that gives rise to a procedural due process claim.
The Rhode Island Constitution article I, section 2 states that "No person shall be deprived of life, liberty or property without due process of law[.]" R.I. Const. art. I, § 2. Rhode Island courts have said that "'[t]he guarantee of procedural due process assures that there will be fair and adequate legal proceedings[.]'" In re McKenna, 110 A.3d 1126, 1142 (R.I. 2015) (quoting State v. Germane, 971 A.2d 555, 574 (R.I. 2009)). Rhode Island courts have employed the three-factor test articulated in Mathews v. Eldridge, 424 U.S. 319, 335 (1976)). See Germane, 971 A.2d at 574; see also In re McKenna, 110 A.3d at 1142. The United States Supreme Court in Mathews acknowledged that determining whether administrative procedures provided are constitutionally sufficient cannot be easily determined by the mechanical application of a technical rule. Matthews, 424 U.S. at 335 . The Court considers three factors to determine whether due process requirements are met:
"First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail." Id.
Plaintiff states that Defendant R.I. Lottery has fallen "woefully short" of due process in Rhode Island because Plaintiff has not had an opportunity to be heard. (Pl.'s Obj. Mem. 21.) Further, Plaintiff avers that Rhode Island law requires administrative agencies hold a formal hearing. Id. at 22 (citing Bourque, 589 A.2d at 823). Plaintiff argues that he had no such opportunity to be heard, which violates his procedural due process protections under the Rhode Island and United States Constitutions. Id.
Assessing each of the elements articulated in Mathews, this Court finds that Defendants did not violate Plaintiff's procedural due process rights. In the case of In re McKenna, the Court focused on the second factor: the right and opportunity to be heard. In re McKenna, 110 A.3d at 1143. There, the respondent was "denied a hearing by the full board." Id. However, the Court still determined that the respondent was given a meaningful opportunity to be heard because the respondent was permitted to be heard by a panel and to submit a post-hearing memorandum. Id.
Here, the Court makes analogous references to the case at hand. Having assumed that Plaintiff has a property interest in his tickets, the Court turns to the second element about the risk of erroneous deprivation of such interest. See Mathews, 424 U.S. at 319; see also In re McKenna, 110 A.3d at 1142. Here, Plaintiff was afforded a right to submit his tickets for winnings within the one-year timeframe, per the May 2019 House Rules. May 2019 House Rules 1.B.d ("Expiration of any winning ticket will be one year from the date of the conclusion of the last event on the wager."). Furthermore, Plaintiff did also offer several correspondences with counsel for the R.I. Lottery, as seen in Exhibit C to Plaintiff's Objection. Plaintiff was heard regarding his sports wagering tickets and their winnings. Counsel for Defendant R.I. Lottery cited to Section 20.27(F) of the R.I. Lottery Rules and Regulations relating to disputes arising from sports wagering tickets, stating that "[i]n the event of a dispute that cannot be resolved at the Sportsbook, a Player may submit a written appeal to the Division. The decision of the Division shall be final." (Pl.'s Obj. Mem. (Ex. C).) Defendant R.I. Lottery made its final decision, denying Plaintiff's appeal. See id. Therefore, this Court cannot find that Plaintiff did not have an opportunity to be heard or have proper notice. Plaintiff followed the proper administrative steps in attempting to recover his winnings. However, the unfortunate truth is that Plaintiff here lost or destroyed his tickets, and the May 2019 House Rules require production of the original tickets in readable form, which Plaintiff cannot do. See May 2019 House Rules. Although it is unfortunate that Plaintiff is unable to retrieve his winnings on his sports wagering tickets, it does not amount to a procedural due process violation here. The Court therefore dismisses Plaintiff's Count XXIII.
IV
Conclusion
For the reasons set forth above, the Court dismisses all counts of Plaintiff's First Amended Complaint. In addition, because Plaintiff does not assert any counts against Defendant TR Management, Plaintiff's First Amended Complaint is dismissed as against Defendant TR Management as well. As this Court has previously stated, Plaintiff failed to follow the May 2019 House Rules, which state, "[n]o winning wager will be paid without the customer copy of the wagering ticket. No reproductions or photos of wagering tickets will be accepted." (Decision 5.) Plaintiff's new argument concerning possession of his tickets pursuant to Plaintiff's Exhibit B, showing a picture of a blue plastic bag, fails because the May 2019 House Rules do not only require possession of the ticket. Plaintiff must present his original customer copy of the ticket, not a reproduction or photograph, to be paid through the wager, and management is not responsible for any unreadable tickets. None of Plaintiff's counts amount to a cognizable claim upon which relief may be granted. Based on the foregoing, Defendants' Motion to Dismiss pursuant to Rule 12(b)(6) is granted. Counsel shall prepare and submit the appropriate order for entry consistent with this Decision.