Rule 60(b) as the Required Vehicle to Litigate Notice Defects After Conditional Default; Bonded Remand Authorized Under Appellate Rule 2

Case: Reagan Marine Construction, LLC v. Victor Costa et al. (Supreme Court No. 2024-344-Appeal. (PC 22-6418))
Court: Supreme Court of Rhode Island
Date: July 7, 2026
Disposition: Default judgment affirmed

1. Introduction

This appeal arose from a construction dispute connected to the expansion of the Church Street Marina in Bristol, Rhode Island. Reagan Marine Construction, LLC (“Reagan”) served as general contractor and subcontracted electrical work to Costa Companies, Inc., with Victor Costa signing as “CEO.” Reagan later sued Costa Companies (and, on certain counts, Costa personally) alleging breach of contract, negligent misrepresentation, fraud, and conversion, seeking damages and attorney’s fees (including under G.L. 1956 § 9-1-45).

The litigation pivoted away from the merits and toward procedure: after defendants’ counsel withdrew, defendants repeatedly failed to comply with discovery orders and the corporate defendant failed to obtain replacement counsel. Reagan sought and obtained a conditional order of default, and later a default judgment exceeding $716,000 inclusive of costs, prejudgment interest, and attorney’s fees.

On appeal, defendants framed the central issue as defective service/notice of the motions leading to default—arguing Reagan should have served Costa Companies’ registered agent. The Supreme Court, however, treated that argument primarily as an unpreserved request to undo the default without following the required procedural pathway: a motion under Rule 60(b) in the Superior Court.

2. Summary of the Opinion

The Supreme Court affirmed the default judgment. It held that defendants’ notice/service challenge was not preserved for appellate review because defendants did not file a Rule 60(b) motion to vacate the conditional default or the ensuing judgment after being instructed to do so. The Court further held that the trial justice did not abuse discretion in entering default judgment given repeated, extended noncompliance with discovery orders and failure of the corporate defendant to obtain counsel. Finally, the Court rejected defendants’ due-process challenge to the Supreme Court’s earlier decision conditioning remand on posting a cash bond, relying on Article I, Rule 2 of the Supreme Court Rules of Appellate Procedure.

3. Analysis

3.1 Precedents Cited

A. Standards of review and the discretionary nature of defaults

  • Ferris v. Progressive Casualty Insurance Company — Provided the governing appellate standard: entry of default is reviewed for abuse of discretion or error of law; motions to vacate default are likewise discretionary.
  • Reyes v. Providence Place Group, L.L.C. — Cited through Ferris for the abuse-of-discretion framework in default contexts.
  • Clark v. Dubuc — Quoted via Ferris emphasizing that vacating a default is committed to the trial justice’s sound discretion.
  • Marchionte v. Jaramillo — Critical to the preservation holding: where a party does not seek Rule 60(b) relief after default judgment, appellate review is limited and the trial justice is deprived of the opportunity to rule on relief-from-judgment arguments.
  • Rodriguez v. Virgilio — Quoted through Marchionte for the appellant’s burden to show abuse of discretion or legal error when seeking relief from default judgment.
  • Providence Gas Company v. Biltmore Hotel Operating Co. — Used to reinforce that default judgment is a “drastic remedy” but may be appropriate when a party is given “every opportunity” before it is imposed.

B. Preservation doctrine (raise-or-waive) as the decisive filter

  • Patel v. Patel — Stated the “longstanding raise-or-waive rule” and required preservation below to obtain appellate review.
  • Heneault v. Lantini — Quoted in Patel for the same proposition.
  • State v. Parrillo — Required a “specific objection” to preserve an issue.
  • State v. Pona — Quoted in Patel emphasizing the purpose of specific objections: to give the trial justice an opportunity to rule.
  • State v. Ricker — Reinforced that a litigant cannot present a new objection or theory on appeal if not raised in the trial court.

C. Pro se and corporate-party constraints

  • E.H. Turf Supply Co., Inc. v. Tavares — Applied to explain that self-represented litigants are not exempt from procedural rules.
  • Jacksonbay Builders, Inc. v. Azarmi — Quoted within E.H. Turf Supply Co., Inc. to the effect that courts cannot “entirely overlook” procedural rules for pro se litigants.
  • Oliveira v. Levesque — Cited for the principle that pro se litigants may receive latitude but are not exempt from rules.

D. Timing of Rule 60(b) relief (raised by appellee)

  • Seaport Studios, Inc. v. Waldo — Cited by Reagan for Rule 60 timing (“reasonable time” and, for certain grounds, no later than one year), underscoring that Rule 60(b) relief is bounded by strict temporal limits.

3.2 Legal Reasoning

A. The Court treated “defective service” chiefly as an unpreserved Rule 60(b) theory

Defendants argued that Reagan’s motions (conditional default, default judgment, and attorney’s fees) were defective because Reagan did not serve Costa Companies’ registered agent—an argument defendants tied to G.L. 1956 § 7-1.2-501. The Supreme Court did not decide that merits question. Instead, it focused on how and when the issue was raised.

The record showed that Costa raised “notice” orally after conditional default had already entered, and the trial justice expressly instructed him—more than once—that the proper mechanism to litigate that claim was a Rule 60(b) motion to vacate. Rule 60(b) states that “[o]n motion” and “upon such terms as are just,” the court may relieve a party from a final judgment/order for specified reasons, and the motion must be made “within a reasonable time.” The Court emphasized that defendants never filed such a motion.

Invoking the raise-or-waive line (Patel v. Patel; State v. Parrillo; State v. Ricker), the Supreme Court held that because the trial justice was never given a proper motion on which to rule, the notice/service issue was not preserved for appellate review. The Court aligned this with Marchionte v. Jaramillo, which limited appellate review where a party failed to seek Rule 60(b) relief after entry of default judgment.

B. Default judgment was affirmed under an abuse-of-discretion framework

Once the Court narrowed the appellate lens to whether entry of default judgment was an abuse of discretion, the procedural history became decisive:

  • Defense counsel withdrew; the court stayed discovery for 20 days to allow defendants to secure new counsel.
  • The court granted additional time to comply with discovery; defendants did not comply.
  • The court later entered another order giving Costa additional time to comply and giving Costa Companies additional time to procure counsel; defendants again did neither.
  • A conditional order of default entered, giving defendants yet another 20 days; defendants still did not comply or file proper objections.

Against this repeated pattern, the Court held the trial justice “gave defendants ample opportunity to comply,” and the record supported the use of default judgment as a sanction. Echoing Providence Gas Company v. Biltmore Hotel Operating Co., the Court recognized default as “drastic” but found no abuse where the trial court had extended repeated opportunities.

The Court also addressed Costa’s self-represented status. Citing E.H. Turf Supply Co., Inc. v. Tavares (and Jacksonbay Builders, Inc. v. Azarmi; Oliveira v. Levesque), it reaffirmed that pro se litigants are not excused from procedural rules—particularly where, as here, the trial justice patiently explained the steps needed to seek relief.

C. The Court upheld a bonded remand as consistent with appellate authority

Defendants argued that due process required an “unconditional remand” so they could file a Rule 60 motion. The Court rejected this, pointing to Article I, Rule 2 of the Supreme Court Rules of Appellate Procedure, which allows the Court—“[i]n the interest of expediting decision, or for other good cause shown”—to “suspend” requirements and “order proceedings in accordance with its direction.”

The Court reasoned that Rule 2 authorized imposing a bond condition to protect Reagan’s judgment while the appeal was pending, and that doing so did not violate due process. Notably, the Court observed that defendants did not mount a direct constitutional challenge to Rule 2 itself, only to the bond requirement in their circumstances.

3.3 Impact

  • Procedural channeling of “notice” defenses after default: The decision reinforces that service/notice complaints arising after a conditional default or default judgment must be litigated through a properly filed Rule 60(b) motion in the Superior Court, not raised for the first time on appeal.
  • Raise-or-waive is enforced even in high-stakes default settings: Parties cannot rely on informal communications or oral protest to preserve a notice issue; the trial court must be presented with a concrete motion and asked to rule.
  • Discovery noncompliance plus failure to secure counsel can justify default: The opinion underscores that repeated violations of discovery orders and failure of a corporation to retain counsel may culminate in default judgment without constituting an abuse of discretion.
  • Appellate court control over remand mechanics: By approving a bond condition under Article I, Rule 2, the Court signals that remand for post-judgment trial-court proceedings can be structured to preserve the value of an existing judgment during appeal.

4. Complex Concepts Simplified

  • Default vs. default judgment: An “entry/order of default” establishes that a party is in default (often for failing to comply with rules or orders). A “default judgment” is the final judgment fixing liability and damages.
  • Conditional order of default: A warning-stage default order that gives a party a final deadline to cure noncompliance (here, to comply with discovery orders) before the court enters judgment.
  • Rule 60(b) motion: The procedural vehicle to ask the trial court to set aside (vacate) a final judgment/order for specified reasons; it must be brought by motion and within required time limits.
  • Raise-or-waive rule: Appellate courts typically refuse to decide arguments not properly presented to and decided by the trial court, because trial judges must first have the chance to address alleged error.
  • Registered agent: A corporation designates an agent to receive service of process (e.g., initial complaints). Whether later motion practice must be served in that manner can depend on procedural rules; in this case, the Supreme Court did not reach the merits because the argument was not preserved via Rule 60(b).
  • Cash bond condition for remand: A court-ordered deposit to secure the judgment amount while additional proceedings occur, intended to protect the prevailing party from dissipation or delay risk.

5. Conclusion

Reagan Marine Construction, LLC v. Victor Costa et al. is a procedure-forward decision: it affirms that, after conditional default and default judgment, a party seeking to contest notice/service must do so through a Rule 60(b) motion in the trial court, or risk forfeiting the issue on appeal under raise-or-waive principles. It also confirms that persistent discovery noncompliance—combined with a corporation’s failure to obtain counsel—supports default judgment as a discretionary sanction. Finally, the Court endorsed its authority under Article I, Rule 2 to condition a remand on posting a bond, rejecting a due-process objection in the absence of a targeted constitutional challenge to the rule itself.