• Rhode Island - You Get One, and Only One, Bite at the Apple
  • March 20, 2015 | Author: Michael R. Bosse
  • Law Firm: Bernstein Shur - Portland Office
  • A recent Rhode Island case reminds us that, in litigation, you usually only get one bite at the apple. In Torrado Architects v. Rhode Island Department of Human Services, decided November 25, 2014, Torrado was denied the ability to conduct a second binding arbitration after the first one was concluded and confirmed. In litigation, you must usually put forth all of your claims in one proceeding, and this case is a painful reminder of that fact.

    Torrado signed an agreement to perform architectural, engineering and design services for renovations at a Rhode Island-owned veterans home in Bristol. A not to exceed purchase order was used with a cap of $61,500, calculated as a fee that was a percentage of expected construction costs. Torrado sought additional compensation for services provided outside of the purchase order, and after exhausting administrative proceedings, filed a lawsuit that was stayed pending the parties conducting a binding arbitration. After the arbitration, the arbitrator concluded that while he sympathized with Torrado regarding the additional costs, they were not authorized under the state procurement regulations. Torrado requested that the arbitrator also rule on equitable issues, but he refused to do so. Instead, the arbitrator declared as part of the arbitration award that he was not making any determination on whether Torrado had other equitable claims, such as unjust enrichment or quantum meruit, that could be litigated further. That award was confirmed by stipulation of the parties.

    Torrrado then sought a motion to compel a second arbitration, but the court concluded that the second arbitration was barred, because those equitable issues could have been raised in the first arbitration. The Rhode Island Supreme Court upheld the dismissal of the second Torrado action. Torrado argued that it really could not have made equitable claims in the first proceeding, and therefore should not have been barred from a second action. The Court, however, found that the equitable claims arose out of the same set of facts that were present in the first arbitration and that Torrado either should have presented those issues by an Amended Complaint in court, and should not have stipulated to the eventual arbitration award.

    For a litigator, this decision is harsh given that Torrado did try to raise the equitable issues with the arbitrator but was denied from doing so. It is possible that if Torrado took additional steps in court to present the issue before the arbitration was concluded, or objected to the final order from the arbitrator, the case might have come out differently. Nonetheless, lawyers and clients alike have to ask initially at either an arbitration or court claim whether all issues are being raised that could be raised. You are not likely to get a second bite at the apple.