Justia Contracts Opinion Summaries

Defendant appealed the trial court's refusal to vacate a default judgment against it. This dispute arose from a 2009 contract between plaintiff LaFrance Architect, d/b/a Lake Architectural, and defendant Five Point Development South Burlington, LLC. Under the contract, plaintiff was to provide defendant architectural services for the construction of a Walgreens in South Burlington. Plaintiff invoiced defendant for services rendered, but two days after the invoice was payable and three days after the store opened, defendant sent plaintiff a letter indicating that defendant was terminating plaintiff's services due to an unspecified failure to fulfill the contract and unspecified "significant design errors that caused additional costs."  Plaintiff responded by filing notice of a mechanics lien. Defendant then secured a bond to discharge the mechanics lien, but failed to send a copy of the bond to plaintiff. Plaintiff later filed suit to perfect its mechanics lien by filing a verified complaint with a request for attachment and a claim for damages. Because the parties' contract contained mandatory mediation and arbitration provisions, plaintiff also filed a motion for stay, requesting that the court consider its motion for attachment but then stay proceedings pending mediation and arbitration as required by the contract. Upon review of the matter, the Supreme Court held that the trial court improperly declined to consider the strength of defendant's proffered defenses to its motion to vacate the default judgment, but that defendant's Rule 60(b) motion did not establish a prima facie case to support a meritorious defense. Therefore the Court affirmed the trial court's decision. View "LaFrance Architect v. Five Point Development South Burlington, LLC" on Justia Law

Plaintiff Robert Foti sold most of his fuels business to defendant James Kurrle and agreed to sell gasoline to defendant through a retained wholesale distributorship. When the business relationship soured, plaintiff sued defendant for one month's nonpayment of gasoline and other claims. Defendant counterclaimed for breach of contract, breach of the covenant of good faith and fair dealing, and violation of the Vermont Consumer Fraud Act (CFA), all stemming from the original purchase of plaintiff's business. Defendant appealed the trial court's judgments as a matter of law on the counterclaims in favor of plaintiff, specifically the CFA counterclaim, arguing that the court should not have considered plaintiff’s motion because plaintiff did not raise the argument that the CFA did not cover the transaction until after trial, and that the court erred in holding that the transaction was not "in commerce." Furthermore, defendant appealed the court’s ruling on the breach of contract and breach of the covenant of good faith and fair dealing counterclaims arising from the non-competition provision. The Supreme Court affirmed in part and reversed in part. The Court concluded, as the trial court did, that the CFA did not apply to this transaction as a matter of law. The Court agreed with defendant that the trial court should have sent the case to the jury on the contract claims. View "Foti Fuels, Inc. v. Kurrle Corporation" on Justia Law

Plaintiff Janet Knutsen appealed a superior court decision to deny her motion for summary judgment and and for granting defendant Vermont Association of Realtors, Inc.'s (VAR) motion for summary judgment on her consumer fraud claim arising out of her purchase of a home in Moretown. Plaintiff argued that VAR's form purchase and sale agreement, which was used in her real estate purchase (to which VAR was not a party) violated the Vermont Consumer Fraud Act (CFA) in that two provisions of the form were unfair and deceptive, and that she was therefore entitled to damages under section 2461(b) of the CFA. Upon review of the facts of this case, the Supreme Court concluded that the trial court correctly held that 'VAR's sole connection to this case was its drafting of the template clauses that [plaintiff] and her buyer's broker used for the purchase of the house, and that could not support a consumer fraud claim. View "Knutsen v. Dion" on Justia Law

Plaintiffs Peter and Nicole Dernier appealed the dismissal of their action for: (1) a declaratory judgment that defendant U.S. Bank National Association could not enforce the mortgage and promissory note for the debt associated with plaintiffs' purchase of their house based on irregularities and fraud in the transfer of both instruments; (2) a declaration that U.S. Bank has violated Vermont's Consumer Fraud Act (CFA) by asserting its right to enforce the mortgage and note; and (3) attorney's fees and costs under the CFA. They also appealed the trial court's failure to enter a default judgment against defendant Mortgage Electronic Registration Systems, Inc. (MERS). Plaintiffs fell behind on their mortgage, and brought suit against two parties: Mortgage Network, Inc. (MNI), which is in the chain of title for both the note and the mortgage, and MERS, which is in the chain of title for the mortgage as a "nominee" for MNI. Plaintiffs sought a declaratory judgment that the mortgage was void, asserting that: (1) MERS, as a nominee, never had any beneficial interest in the mortgage; (2) MNI had assigned its interest in both instruments to others without notifying plaintiffs; and (3) no party with the right to foreclose the mortgage had recorded its interest. MNI responded that plaintiffs had named MNI as a party in error, because MNI did "not own the right to the mortgage in question." MERS did not respond. Around this time, plaintiffs received a letter in which U.S. Bank represented that it possessed the original promissory note and mortgage and that it had the right to institute foreclosure proceedings on the property. The trial court denied plaintiffs' motion to amend and dismissed plaintiffs' case for failure to state a claim. Plaintiffs appealed. After careful consideration of the trial court record, the Supreme Court concluded the trial court erred in dismissing Counts 1 and 2 of plaintiffs' amended complaint for lack of standing, to the extent that these counts alleged irregularities in the transfer of the note and mortgage unconnected to the pooling and servicing agreement. The Court affirmed as to dismissal of Counts 3 and 4 of plaintiffs' proposed amended complaint. The case was remanded for further proceedings. View "Dernier v. Mortgage Network, Inc." on Justia Law

Plaintiff Michelle Straw appealed a superior court judgment that dismissed her case for breach of an implied employment contract against defendant Visiting Nurse Association and Hospice of Vermont and New Hampshire (VNA). She argued the jury instructions in her case were erroneous and prejudicial because they failed to instruct on the standard for "just cause" termination. Finding no error, the Supreme Court affirmed. View "Straw v. Visiting Nurse Association and Hospice of VT/NH" on Justia Law

The Probate Court appointed Theodore Ballard's niece, Leala Bell, as Ballard's guardian. Bell signed a promissory note to a mortgage as a "borrower"; she did not expressly indicate that she was signing as Ballard's guardian or that her signature indicated only her "approval" of Ballard's action. The loan was secured by a mortgage on Ballard's real property. The mortgage deed granted and conveyed Ballard's property to CitiFinancial, including the power to sell the property. Ballard signed the mortgage deed but Bell did not. There was no showing that the probate court licensed the mortgage. CitiFinancial alleged that Ballard had failed to make the payments called for under the note and mortgage, and therefore breached these agreements. Ballard moved for summary judgment, arguing in relevant part that he lacked the legal capacity to execute a mortgage deed and promissory note while he was under guardianship. Upon review, the Supreme Court found that Ballard's argument relied on the notion that Bell participated in the transaction with CitiFinancial, subjected herself to personal liability as a cosigner of the note, signed the settlement statement as well as the promissory note, but did not actually approve Ballard's signing of the note. Although the mortgage deed purportedly executed by Ballard and the promissory note secured by that deed were executed as part of the same overall transaction, the two documents created distinct legal obligations. The Supreme Court concluded that the trial court erred in analyzing the note and mortgage as if they were one and the same, both subject to the requirement of probate court approval. Therefore the Court reversed the award of summary judgment to Ballard on CitiFinancial's claim on the promissory note and remanded the case back to the trial court for further proceedings on that claim. View "CitiFinancial, Inc. v. Balch" on Justia Law

Plaintiff Thomas Kellogg owned a house and land in Bethel.  In 1999, he entered into a rent-to-own agreement with William Oren whereby Oren would pay over time for the property, at which point ownership would be transferred to him. Beginning in 2000 and then from 2001 onwards, defendant Cindy Shushereba began to occupy the house with Oren in a romantic relationship. By August 2004, it was contemplated that defendant would co-own the property.  Plaintiff indicated that he wished to come to an agreement to sell the property to defendant and Oren. To that end, defendant liquidated her savings and paid plaintiff for a downpayment on the house.  Plaintiff credited Oren and defendant with the amount Oren had paid in rent.  These two contributions left roughly $98,721 to be paid to reach the purchase price.  The parties agreed orally that the balance would be paid monthly over fifteen years. No written purchase and sale agreement was ever prepared, but the parties intended that Oren and defendant would receive title immediately and give a mortgage secured by a promissory note for the installments. Plaintiff delivered a signed warranty deed to defendant, but defendant never signed the promissory note or the mortgage.  Because defendant could not pay the property transfer tax that would be due on recording, she never recorded the warranty deed.  Plaintiff testified that, at the time, he considered himself the mortgage holder only. Ultimately, the relationship between Oren and defendant dissolved, and, in May 2008, Oren moved out. A couple of months later, plaintiff and defendant became sexually involved.  During this time, plaintiff sought neither rent nor the purchase installments from defendant, and she made no payments. At some point in 2010, plaintiff began seeking rent from defendant, and she did make between two and four monthly rental payments of $650. Plaintiff paid the property taxes on the property throughout the time that defendant lived by herself in the house. Oren then sued plaintiff and defendant, seeking to be declared half-owner of the property along with defendant, from whom he sought a partition and accounting.  In September 2009, the superior court rejected Oren's claims. Defendant counterclaimed, contending that she owned the property or, in the alternative, that plaintiff had been unjustly enriched by defendant’s payments to him.  Prior to trial, the court dismissed as res judicata defendant’s claim that she owned the property, leaving the unjust-enrichment claim in her counterclaim. After a bench trial, the trial court ruled in favor of plaintiff’s claims for back rent and property taxes. However, the trial court ruled in favor of defendant with regard to her unjust enrichment claims for the return of the downpayment on the purchase price and several of her alleged capital and repair contributions. Both parties appealed. Upon review, the Supreme Court concluded that the contract between plaintiff and defendant was a contract for deed; the trial court erred in concluding it was a landlord-tenant relationship. Because the agreement between plaintiff and defendant was a contract for deed, the amount of $833 per month that defendant had agreed to pay plaintiff went entirely toward the purchase price plus interest. When the periodic payments were complete, defendant would become the owner of the property, free and clear of any interest of plaintiff, without a further payment. There was not an agreement to pay rent; the $833 monthly payment was not part of a rental agreement between plaintiff and defendant. View "Kellogg v. Shushereba" on Justia Law

Defendants, Nancy and Thomas Bernheim, appealed the trial court’s summary judgment decision granting plaintiff GEICO Insurance Company’s claim against them for reimbursement of $10,000 that GEICO had paid defendants under the medical-payments provision of their automobile insurance policy. Although the Supreme Court agreed with the trial court that defendants should have reimbursed GEICO, it reversed and remanded for a determination of the proper reimbursement amount. View "GEICO Insurance Co. v. Bernheim" on Justia Law

At the heart of this case was a dispute between developer, Birchwood Land Company, Inc., and contractor, Ormond Bushey & Sons, Inc. over a construction contract.  The developer sued for breach of contract, claiming mainly that the contractor had removed excavated sand from the construction site without permission.  The contractor counterclaimed for amounts due under the contract. The court found that the contractor breached the contract and granted the developer damages for the lost sand. The unpaid balance owed on the contract was offset by the damages. On appeal, the contractor argued that the court erred in denying its request for interest penalties and attorney's fees as the substantially prevailing party. The developer argued that the court erred in limiting damages for the sand removal, denying its request for punitive damages, granting prejudgment interest on contractor's net recovery, and denying its claim for slander of title. Upon review, the Supreme Court concluded the evidence in the record supported the trial court's judgment in this case and affirmed the outcome. View "Birchwood Land Company, Inc. v. Ormond Bushey & Sons, Inc." on Justia Law

Plaintiffs Patrick and Terese Ayer appealed a trial court's order granting summary judgment to Frances Harris and Louis Hemmingway, III. The dispute arose over plaintiffs' attempts to collect a debt from defendant Hemmingway individually, and doing business as Hemmingway Construction. Plaintiffs obtained a default judgment against Hemingway in February 2001. Plaintiffs subsequently secured a nonpossessory writ of attachment against Hemingway's nonexempt goods and estate. In 2010, Frances Harris brought an unrelated action against Hemingway for damages. The trial court issued a stipulated judgment order that, among other things, awarded Harris judgment against Hemingway plus interest from September 8, 2005 until the release of the lien in favor of plaintiffs, required Hemingway to keep current on payments to plaintiffs pursuant to a written payment agreement signed by Hemingway and plaintiff Terese Ayer, and provided that if Hemingway defaulted on the lien, he would be liable to Harris for any costs, including attorney's fees, to obtain a release of the lien. In May 2011, plaintiffs filed a complaint seeking to foreclose on their judgment lien. Plaintiffs cited a 2006 trial court order as controlling and asked the court to renew or revive it. Hemingway filed an unverified answer to plaintiffs' complaint, acknowledging his debt to plaintiffs and offering to make immediate payments pursuant to the 2010 agreement. Plaintiffs moved for a default judgment, but the court denied their request. Harris responded to this order; Hemingway did not. Harris later moved for summary judgment, and plaintiffs filed a cross-motion for summary judgment and default.  In January 2011, the trial court granted Harris's motion, and found that plaintiffs' judgment lien was no longer effective because more than eight years had elapsed from the issuance of the original final judgment on which it was based. In reaching its conclusion, the court rejected plaintiffs' assertion that the 2001 judgment had been renewed or revived by the 2006 stipulated amended order. This appeal followed. Agreeing with the trial court's reason to dismiss plaintiffs' motion, the Supreme Court affirmed. View "Ayer v. Hemingway" on Justia Law