A daycare center that since 2013 had operated out of a building owned by St. Michael’s Church has filed suit in Rhode Island Superior Court alleging that the church violated the terms of their lease agreement by trying to force them out of the building prior to the end of their contractually agreed upon date, and is seeking financial recompense for the revenue lost as a result.

In the initial complaint, filed in May of 2024, The Island Child Care (owned and operated by Ann Hackett) claims that the daycare center entered into a lease agreement on Aug. 19, 2013, which stated they would receive an initial, one-year lease from Aug. 15, 2013 and end on Aug. 14, 2014, with the option to renew for three additional, five-year terms “unless either party gives the other written notice of termination at least One Hundred Eighty (180) days before the end of the then existing term.” It additionally states that The Island Child Care would be responsible to notify St. Michael’s of its intentions to renew the lease not less than six months prior to the end of the license term.

The complaint states that, Leslie Mills, a co-owner of Island Child Care at the time, had given verbal notice on May 8, 2018 (well ahead of the 6-month notification window) to Rev. Elizabeth Habecker, then interim Rector of the church, that the daycare intended to renew its lease for another five years, beginning on Aug. 15, 2019. This intention was then reportedly delivered to Catherine Esselen, then Senior Warden of the Church’s Vestry.

The complaint mentions a phone call on April 7, 2020 between Mills and Rev. Michael Horvath, who had taken over as the Reverend of St. Michael’s, in which Rev. Horvath “confirmed his understanding that the Lease renewed automatically and did not require a formal written renewal.” It states that “at all times up to and following the renewal of the Lease on August 15, 2019, The Church adhered to the lease, collected rent, and behaved as if the Lease had been renewed for another five (5) years.”

Yet, the complaint continues, in a letter dated Oct. 19, 2021, an attorney representing the Church informed Hackett of “the termination of the current occupancy license arrangement with [Island Child Care] effective June 30, 2022.”

This, the suit alleges, represents a breach of contract, since the lease agreement required 180 days prior to the end of the current lease term, and they argue that they were just over two years into a new term that wouldn’t legally conclude until August of 2024.

“Island Child Care had never received written notice of the Church’s intent to terminate the lease at any time prior to the conclusion of the five-year term that had ended on August 14, 2019,” the complaint reads.

An update on our prior reporting

The conflict between the daycare and the church was the subject of a Bristol Phoenix article back in June of 2022, where daycare owner Ann Hackett had reported they had been given a date of June 30, 2022 to vacate the building.

Evidently, as The Island Child Care center remained in place until this past August — when the final, five-year term was scheduled to conclude — that eviction didn’t ultimately happen. But the complaint makes the claim that the problems caused by the attempted eviction back then still amounted to a breach of contract, and resulted in significant financial damages as a result.

It claims that since around September of 2014, the daycare had enjoyed full enrollment and a waitlist for prospective families.

“Following her receipt of the Church’s May 27, 2022 email confirming its intention to terminate the Lease on June 30, 2022, Ann Hackett wrote a letter on June 17, 2022 to the families of all children who were then attending Island Child Care to inform them of the Church’s intention,” the complaint states. “Once families learned of Defendant’s intention to unilaterally and prematurely terminate the Lease Agreement and leave Island Child Care without a suitable facility to provide childcare in Bristol, Island Child Care’s enrollment plummeted and its wait list evaporated.”

The complaint further makes the allegation that, after parents who utilized the daycare had inquired why the lease was being terminated early, Rev. Horvath told them that the daycare center had been failing to pay its rent.

“Plaintiff has consistently paid its rent in a timely manner since the inception of the Lease Agreement,” the complaint reads.

The complaint further states that on March 24, 2023, an attorney representing St. Michael’s provided a letter to Hackett informing them of the upcoming termination of their existing lease period on Aug. 15, 2024, with the expectation that they will leave the premises on or before that date. The complaint alleges that this letter proves the Church understood that the daycare was in the midst of a legal, five-year lease period when they initiated the attempt to evict them in 2022.

“Defendant’s March 24, 2023 affirmation of the existing term of the existing Lease contradicted and undercut Defendant’s previous assertions, dating back to October 19, 2021, that Plaintiffs had been month-to-moth tenants since August 2019,” the complaint reads.

“This admission by Defendant that the Lease had been properly renewed was too little and too late, however, to undo or remediate the financial and reputational damage that Island Child Care has suffered and continues to suffer as a result of the Defendant’s breach of the Lease Agreement and Defendant’s false public statements about the status of Plaintiff’s tenancy,” it concludes.

No public statements

Hackett declined to comment beyond the scope of the complaint filed in court, opting instead to let the suit proceed within the system.

On June 12, 2024, attorneys for St. Michael’s did issue a formal response to the initial complaint, which denies the majority of claims made by the plaintiff. In regards to the financial consequences alleged, the response reads: “If Plaintiff suffered injuries or damage, as alleged, such injuries or damage were caused by

the Plaintiff’s own actions or omissions.”

An email sent to Amy B. Yarbro, a partner at Morrison Mahoney, LLP, listed as a retained counsel for St. Michael’s, did not immediately respond to a call or follow-up email for additional comments on this story.

The Island Child Care Center moved out of the St. Michael’s property in August, and has since expanded its original existing operation in Portsmouth, RI.