## Facts

- Russo Brothers, Inc., operated by Rose and Louis Russo, ran a wholesale tobacco business subject to Rhode Island’s requirement that wholesalers post bonds securing payment of tobacco taxes.
- St. Paul Fire & Marine Insurance Company served as surety and issued the required annual tobacco tax bonds for the business.
- As the Russos’ financial condition worsened, St. Paul conditioned continued bonding on the Russos signing a written indemnity agreement.
- The indemnity agreement required the Russos to reimburse St. Paul for amounts St. Paul might have to pay to the state under the bond, without a stated time limitation and described as applying if St. Paul had to pay “at any time.”
- Years later, the state made a claim on the bond, and St. Paul paid the tobacco tax liability on the Russos’ behalf.
- St. Paul sued the Russos to recover its payment under the indemnity agreement.
- The Russos asserted that their insurance agent orally told them the indemnity agreement would be effective for only one year.
- In deposition testimony, Louis Russo stated he signed because he would have been out of business without the bond; he did not testify that he would have refused to sign if the indemnity extended beyond one year.

## Issues

1. Whether an unambiguous written indemnity agreement may be limited by evidence of a contemporaneous oral promise that contradicts the agreement’s temporal scope.
2. Whether the alleged oral representation about a one-year duration created a genuine issue of material fact sufficient to defeat summary judgment, including under a misrepresentation or fraudulent-inducement theory.

## Decision

- The Rhode Island Supreme Court affirmed summary judgment for St. Paul.
- The court held the indemnity agreement was clear and unambiguous and covered the payment St. Paul made to the state regardless of when the tax obligation arose.
- The court applied the parol-evidence rule to exclude evidence of a contemporaneous oral limitation that directly contradicted the written terms.
- The court concluded the Russos’ showing did not create a genuine dispute of material fact precluding judgment as a matter of law.

## Legal Principles

- When a written contract is clear and unambiguous, it is enforced as written, and extrinsic evidence is not used to vary its meaning.
- Under the parol-evidence rule, evidence of prior or contemporaneous oral agreements is inadmissible to contradict or modify the terms of an unambiguous integrated writing.
- A claim of reliance on oral assurances inconsistent with unambiguous written terms, without sufficient evidentiary support, does not defeat summary judgment or justify rewriting the agreement.

## Conclusion

The court enforced the indemnity agreement according to its plain, open-ended language and rejected the Russos’ attempt to limit it through an alleged one-year oral promise, holding that the parol-evidence rule barred the contradiction and that no triable issue existed to avoid summary judgment.


St. Paul Fire & Marine Ins. Co. v. Russo Bros., Inc., 641 A.2d 1297 (R.I. 1994)