Contractual Examples as Plain-Language Clarifiers:
Guilmette v. PHH Mortgage Services (R.I. 2025)

1. Introduction

Dino J. Guilmette v. PHH Mortgage Services F/K/A Ocwen Loan Servicing LLC et al. presented the Rhode Island Supreme Court with a seemingly modest dispute over how to compute a “shared appreciation amount” in a loan-modification agreement. Behind the arithmetic, however, lay a recurring interpretive problem: when a contract attaches illustrative examples and disclosure statements, do those examples become part of the agreement’s operative text—and can they eliminate ambiguity as a matter of law?

The plaintiff, former homeowner Dino J. Guilmette, claimed that PHH Mortgage Corporation and Wells Fargo Bank, as trustee, breached his 2014 Shared Appreciation Modification Agreement by overcharging him roughly $40,000 at the time of sale. The Superior Court granted summary judgment for the defendants, and the Supreme Court affirmed, holding that the agreement, read together with its appended disclosure statement, was unambiguous and that the defendants’ payoff calculation was correct.

The decision establishes a significant clarification: where a contract expressly incorporates illustrative examples or disclosure statements, those examples operate as authoritative interpretive guides that can dispel ambiguities and support summary judgment.

2. Summary of the Judgment

Justice Long, writing for a unanimous Court, upheld the Superior Court’s grant of summary judgment. Key determinations:

• The modification agreement, inclusive of its attached Shared Appreciation Disclosure Statement, is clear and unambiguous.
• The defendants’ payoff figure of $149,050.63—built on a shared appreciation amount of $62,325—accurately applied the calculation method illustrated in Example 2 of the disclosure statement.
• A borrower’s alternative reading that adds an extra subtraction step is not “reasonably and clearly susceptible,” and therefore does not create ambiguity.
• A party’s incorrect interpretation cannot, standing alone, manufacture contractual ambiguity.

3. Analysis

3.1 Precedents Cited and Their Influence

• Woel v. Christiana Trust, 228 A.3d 339 (R.I. 2020) – Reiterated the de novo standard for reviewing summary-judgment rulings.
• Garden City Treatment Ctr. v. Coordinated Health Partners, 852 A.2d 535 (R.I. 2004) – Provided the fundamental test for ambiguity (“reasonably and clearly susceptible to more than one rational interpretation”).
• Wilmington Sav. Fund Soc’y v. Cavalloro, 295 A.3d 360 (R.I. 2023) – Confirmed that contracts must be read “in their entirety,” reinforcing that appended documents are part of the whole.
• Botelho v. Pawtucket Sch. Dep’t, 130 A.3d 172 (R.I. 2016) – Distinguished questions of law (ambiguity) from questions of fact (interpretation once ambiguity exists).
• Cathay Cathay, Inc. v. Vindalu, LLC, 962 A.2d 740 (R.I. 2009) and Rotelli v. Catanzaro, 686 A.2d 91 (R.I. 1996) – Emphasized that ambiguity requires more than imaginative reading.
• Textron, Inc. v. Aetna Cas. & Sur. Co., 638 A.2d 537 (R.I. 1994) – Cautioned courts not to “stretch imagination” to find ambiguity.

By weaving these decisions together, the Court bolstered its stance that clarity supplied by incorporated examples defeats claims of ambiguity, allowing courts to dispose of cases at the summary-judgment stage.

3.2 Legal Reasoning

1. Whole-document approach. The modification agreement and its disclosure statement were executed simultaneously; the plaintiff signed both. Applying the Cavalloro mandate to read contracts “in their entirety,” the Court held that the examples are part of the bargain, not mere educational flyers.

2. Illustrative examples as interpretive tools. Example 2 mirrors the plaintiff’s factual scenario and demonstrates the calculation sequence: (i) sale price minus interest-bearing principal, (ii) take 25 % of that difference, (iii) compare the result to the deferred principal balance cap. Because 25 % of the gain ($62,325) is below the cap ($208,591.67), no further subtraction occurs. The plaintiff’s proposed extra step conflicts with this sequence and therefore is unreasonable.

3. No ambiguity from unilateral misreading. Invoking Cathay Cathay, the Court reiterated that ambiguity does not arise merely because parties suggest different readings; the disputed language must be “reasonably” open to the competing reading. Here, the plaintiff’s interpretation detached the key phrase from its functional context and ignored the examples.

4. Summary judgment proper. Because ambiguity is a threshold legal issue, once resolved the Court could determine, as a matter of law, that no contractual breach occurred, warranting summary judgment.

3.3 Likely Impact of the Decision

• Contract drafting: Businesses and lenders may increasingly attach worked examples to complex contracts, confident that Rhode Island courts will give those examples full interpretive weight.
• Litigation strategy: Litigants will face a steeper climb in alleging ambiguity when clear, signed examples exist. Expect more summary-judgment motions citing Guilmette.
• Mortgage modifications: Shared appreciation and other novel mortgage products often use non-standard formulas. The ruling encourages clearer consumer disclosures while simultaneously protecting lenders against creative reinterpretations.
• Broader contract law: The case refines the “integrated-document” doctrine: signed appendices, schedules, or illustrations are not peripheral—they are interpretive touchstones.

4. Complex Concepts Simplified

Shared Appreciation Mortgage (SAM)

A loan in which the lender receives a percentage of the property’s future appreciation, typically calculated when the borrower sells or refinances.

Deferred Principal Balance

The portion of principal set aside (often interest-free) that may later be forgiven or repaid under certain conditions. In this case, it also served as a cap on the shared appreciation amount.

Summary Judgment

A procedural mechanism allowing courts to decide a case without trial when no “genuine issues of material fact” exist and the moving party is entitled to judgment as a matter of law.

Contractual Ambiguity

Occurs when contract language is reasonably susceptible to more than one meaning. If ambiguity exists, factual inquiry (trial) determines the parties’ intent; if absent, the court applies the plain language.

Integrated Documents

Separate writings executed together or expressly incorporated (e.g., schedules, appendices, disclosure statements) that collectively form the contract.

5. Conclusion

Guilmette v. PHH Mortgage Services delivers more than a resolution to a payoff dispute; it crystallizes a practical rule for contract law in Rhode Island: signed illustrative examples and disclosure statements are integral, authoritative, and may conclusively eliminate ambiguity. The Court’s rigorous whole-document reading aligns with consumer-protection goals—promoting clarity—while safeguarding parties against opportunistic reinterpretations. Going forward, lawyers drafting complex financial or commercial agreements should attach precise, plain-language examples, confident that Rhode Island courts will treat those examples as controlling text, not mere guidance.