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Toste Farm Corporation v. Hadbury6/5/2002
The third-party plaintiffs, Richard N. Morash and Hadbury, Inc. (collectively referred to as Morash), appeal from an order of the Superior Court dismissing their complaint against two attorneys and a law firm. Morash alleged that Peter F. Olberg (Olberg) and Eric Shaw (Shaw), on behalf of the law firm of Battle-Fowler, LLP (Battle-Fowler) (collectively referred to as third-party defendants), engaged in a variety of tortious acts toward them in the course of rendering advice to a client, Morash's former business partner Carl Acebes (Acebes). Morash also alleged that although the third-party defendants no longer represented Acebes in the instant litigation, they continued to direct and finance Acebes's pursuit of Morash in exchange for Acebes's agreement not to pursue a legal malpractice claim against them. After careful consideration of the trial justice's disposition of the third-party complaint below, we conclude that she erred by prema turely dismissing count 3, a cause of action under the doctrine of maintenance. The facts pertinent to this appeal are as follows.
I. Facts and Travel
In June 1991, Morash executed a purchase and sales agreement for a 417-acre farm in Tiverton and Little Compton, Rhode Island. Morash intended to deve lop the property, and therefore, he listed the property for sale. At the same time, Acebes was looking to acquire land in the Tiverton and Little Compton area. He learned that Morash had acquired the Toste Farm property (Toste Farm) and decided to contact Morash about a potential sale. After meeting with Morash, Acebes learned that Morash was unwilling to sell the entire parcel but that Morash was interested in developing the land. Acebes proposed a joint venture, whereby they would jointly acquire and develop Toste Farm.
Negotiations began in September 1991. By October 1991, Morash began to question Acebes's true intentions about the future of the partnership. Morash suspected that Acebes would eventually seek to gain control of Toste Farm for his own purposes, rather than continue to effectuate the original goals of the partnership. Specifically, Morash was suspicious of Acebes's proposed provision for an auction process in which one of the partners may elect to retire from the partnership and seek to gain control of the partnership through an auction. At this point, Acebes had local Rhode Island counsel preparing the draft agreement. He decided to turn the draft over to the New York law firm of Battle-Fowler to assist him in finalizing the partnership agreement.
Allegedly, Olberg was responsible for ensuring that the agreement gave Acebes the flexibility he desired, in the event he wished to take control of the property. When Morash's attorney received Olberg's revised draft, Morash objected to its terms and sought to terminate the negotiations. Acebes contacted Morash, and they agreed to continue negotiations. By November 1991, the agreement was finalized.
However, eight months later, Acebes notified Morash that he intended to retire from the partnership and take advantage of an auction provision in the agreement that would force Morash to bid against Acebes for sole ownership of the property. The auction was scheduled for September 1992. One day before the auction, Olberg and Acebes met to prepare an auction bidding strategy. Morash alleges that at the meeting, Olberg realized that he had made a mistake in drafting the auction provision and that Acebes now had reason to pursue a malpractice claim against him. Despite his negligence, Olberg allegedly advised Acebes to pursue a bidding strategy una uthorized by the agreement.
At the auction, when Acebes attempted to pursue his strategy, Morash obj
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