Morrisseau v. Fayette

MORRISSEAU_V_FAYETTE.94-506; 164 Vt 358; 670 A.2d 820

[Filed 09-Nov-1995]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                No. 94-506


Dennis Morrisseau                           Supreme Court

                                            On Appeal from
     v.                                     
                                            Chittenden Superior Court

Frederick Fayette, Jr. et al                June Term, 1995


Matthew J. Katz, J.

Samuel H. Press of Portnow, Little & Cicchetti, P.C., Burlington,
for plaintiff-appellant

John J. Collins and Michael J. Harris of Sutherland & Collins,
Inc., Burlington, for defendants-appellees


PRESENT:   Allen, C.J., Dooley, Morse and Johnson, JJ., and
           Cheever, Supr. J., Specially Assigned


       DOOLEY, J.   Plaintiff Dennis Morrisseau appeals the Chittenden County
  Superior Court's grant of summary judgment to defendants, Philip Fayette
  and the heirs to the estate of Frederick J. Fayette, in an action for
  specific performance of a purchase agreement for the sale of Juniper
  Island, an island in Lake Champlain.  Plaintiff argues (1) that the trial
  court improperly reversed previous rulings of law by another judge in the
  same action, (2) that performance of a contract for sale of real estate was
  stayed by defendants' appeal of a probate court order approving that sale,
  and (3) that the liquidated damages clause of the purchase agreement does
  not limit defendants' liability solely to the return of plaintiff's
  deposit.  We affirm.

                                    I.
       At least by anecdotal reputation, this is the latest episode (and we
  hope the last), in the longest running litigation in Vermont.  The matter
  began with the 1974 death intestate of Frederick Fayette, Sr. while he
  owned Juniper Island.  After opening the estate, the probate 

 

  court appointed commissioners, pursuant to the procedure then in
  effect, to assign to the widow the "third in value of the real estate" to
  which she was entitled by statute.  See 14 V.S.A. Sec. 466.  Apparently,
  the commissioners reported that they could not set out the widow's share of
  the many properties involved and they obtained from the probate court a
  license to sell all of the real estate to pay the widow's share.  See 14
  V.S.A. Sec. 469.  Title to some of these properties, including Juniper
  Island, was disputed by one of the Fayette sons; for example, he claimed to
  own 50% of the Island.  The commissioners were specifically authorized to
  sell the properties involved in the disputed claims, subject to the claims. 
  Pursuant to the authority of the license, the commissioners entered into a
  contract with plaintiff, allowing him to purchase Juniper Island if the
  estate perfected title to it by June, 1984, some four years after the
  purchase agreement was signed.  Plaintiff put up $10,000 to insure
  performance, to be refunded if the estate could not clear up the title.

       The heirs objected to certain actions of the commissioners, including
  the sale of Juniper Island.  After hearing, the probate court decided with
  respect to Juniper Island that the applicable statute did not authorize the
  commissioners "to enter into such a long-time, option type, contingent
  contract for the sale of the subject land."  The court ordered the return
  of plaintiff's deposit and that all other rights under the purchase and
  sale contract were "extinguished."

       The commissioners, who still held a license to sell Juniper Island,
  renegotiated the contract with plaintiff to eliminate the estate's
  obligation to clear title and to provide for the payment of the $100,000
  purchase price in three installments, the first two of $2,500 and the third
  of $95,000.  The contract states that it is "subject to the approval of the
  Chittenden District Probate Court" and that it would "become effective and
  binding for all purposes as soon as a court order approving it is issued by
  the probate court."  Closing was to take place "one hundred eighty (180)
  days -- or such lesser period as Buyer may elect on ten (10) days notice to
  sellers -- after Probate Court approval of this agreement."  The probate
  court approved this agreement, 

 

  including the following language in the findings:

         Purchase Agreement is to become effective and
         binding for all purposes as soon as a Court
         Order, approving it, is issued by the Probate
         Court.  It is the expressed intent of both
         parties that the times specified for
         performance shall commence from date of
         Probate Court approval of the Purchase
         Agreement, notwithstanding appeal by any other
         party to this contract of sale.

  Defendants appealed the approval order to the superior court on April
  17, 1980.

       A second installment of $2,500 was due under the contract in July,
  1980.  Plaintiff unsuccessfully sought a stay of his obligations under the
  contract, pending the appeal, from the Chittenden Superior Court.  He
  failed to pay the second installment, prompting the commissioners to
  terminate the contract in a letter to plaintiff, which provided:

         You . . . became obligated to pay the sum of
         $2,500.00 on July 10, 1980.
              We are aware that you requested a stay of
         the above-mentioned order of the probate court
         pending appeal . . . . [I]t is our position
         that such request does not relieve you of any
         of your obligations under the contract.
              Since you failed to make the payment
         specified in the contract and have ignored our
         offer to extend the time of payment for six
         (6) months in return for an increase of the
         additional deposit from $2,500.00 to
         $5,000.00, we regard the contract as
         terminated and hereby give you formal notice
         to that effect.

       On July 22, 1985, the Chittenden County Probate Court entered a decree
  of settlement and distribution regarding the Fayette Estate.  Juniper
  Island was granted to defendants, each of whom received an undivided
  one-eleventh interest in the property.  In August 1995, upon learning that
  title to Juniper Island had been settled, plaintiff tendered to defendants
  the second $2500 payment required by the contract.  Defendants returned
  plaintiff's check and refused to perform.  Plaintiff then brought suit for
  specific performance of the purchase agreement on September 6, 1985.  

       On October 19, 1987 the superior court dismissed plaintiff's action
  for specific performance of the purchase agreement, finding that plaintiff
  had failed to timely serve three of the eleven defendant heirs under
  V.R.C.P. 3, and had not requested an enlargement of time in 

 

  which to serve them under V.R.C.P. 6(b).  The trial court also found
  that paragraph 9 of the purchase agreement restricted plaintiff's remedy to
  the return of his deposit.  Plaintiff appealed, and we affirmed based on
  the trial court's procedural decision, without reaching the remedy issue. 
  Morrisseau v. Estate of Fayette, 155 Vt. 371,  371, 584 A.2d 1119,  (1990).

       In December of 1990, plaintiff commenced this action, known
  colloquially as Juniper IV, seeking specific performance and damages for
  defendant's alleged breach of contract.  On March 4, 1991, defendants'
  motion to dismiss and for sanctions was denied.  Plaintiff's motion for
  summary judgment was denied on September 3, 1991.

       Approximately six months into the litigation, Judge Frank Mahady, who
  had presided over the early stages of the litigation, rotated out of the
  Chittenden Superior Court and the case was assigned to Judge Matthew Katz. 
  On September 6, 1994, Judge Katz granted defendants' motion for summary
  judgment.  In his order, Judge Katz found that plaintiff breached the
  contract and, as a result, was not entitled to the remedy.  He held that,
  notwithstanding the stay of enforcement of the probate court order
  approving the sale occasioned by defendants' appeal, the plain language of
  the contract required plaintiff to tender the second $2500 payment on July
  10, 1980, and he failed to do so.  Judge Katz also found that paragraph 9
  was a valid liquidated damages clause and restricted plaintiff's remedy to
  return of his deposit.

                                    II.

       Plaintiff first argues that Judge Katz erred by reversing Judge
  Mahady's previous rulings of law in this action in the absence of new
  evidence or other grounds for such reversal.  Specifically, plaintiff
  argues that, by granting defendants' motion for summary judgment after a
  similar motion by plaintiff had been previously denied, Judge Katz allowed
  defendants an impermissible "horizontal appeal" and modified the law of the
  case.

       The issue relates to both grounds for the decision granting summary
  judgment.  The first ground, that plaintiff failed to tender the second
  installment of the price and, thus, breached the purchase and sale
  contract, was resolved at least indirectly in Judge Mahady's ruling that
  Juniper 

 

  IV was not barred by the statute of limitations.  Judge Mahady ruled
  that plaintiff did not have to tender further payments once defendants
  appealed the probate court approval of the contract.  On the second issue,
  whether plaintiff's remedy was restricted to return of the deposit, Judge
  Mahady ruled that further factual development was necessary, but Judge Katz
  ruled the remedy was so restricted without this factual development.

       Plaintiff labels defendants' second motion for summary judgment, on
  which Judge Katz ruled, as a "horizontal appeal" from one superior judge to
  another (FN1), prohibited by our opinion in Economou v. Economou, 133 Vt.
  418, 421-22, 340 A.2d 86, 88 (1975).  In Economou, we reversed a judgment
  on the pleadings for two reasons, one of which was that the decision
  represented a horizontal appeal from the denial of a motion for summary
  judgment by another judge.  We explained why such a horizontal appeal was
  undesirable:

         [t]o allow a subsequent irreconcilable ruling
         to stand would encourage litigants in superior
         courts to delay proceedings already initiated
         while awaiting the future assignment of a
         presiding judge they believed more likely to
         rule in their favor.

  Id.  Plaintiff argues that Economou applies equally to the grant of
  summary judgment after the denial of summary judgment by another judge.  

       Where only one judge is involved, we have upheld a decision granting
  summary judgment following an earlier decision which denied the motion. 
  See Kelley v. Town of Barnard, 155 Vt. 296, 307, 583 A.2d 614, 620 (1990);
  Morrisville Lumber Co. v. Okcuoglu, 148 Vt. 180, 182, 531 A.2d 887, 888
  (1987).  In Kelley, we explained the rationale for allowing a court ot
  grant a second motion for summary judgment, even in the absence of new
  facts:

         [u]ntil final decree the court always retains jurisdiction to modify 
         or rescind a prior interlocutory order.  Although the court might
         properly refuse to reconsider a second motion, we will not require 

 

         a judge to perpetuate error or take a more roundabout way to 
         arrive at an ultimately necessary judgment by refusing him the 
         right to entertain a second motion for summary judgment after 
         he has ruled once the other way.

  155 Vt. at 307, 583 A.2d  at 620 (quoting Lindsey v. Dayton-Hudson
  Corp., 592 F.2d 1118, 1121 (10th Cir. 1979)).  We believe this rationale
  applies whether or not a second judge ultimately grants the motion for
  summary judgment.

       The necessary consequence of plaintiff's position is that even if both
  this Court and the trial court agree that summary judgment is appropriate,
  a trial must be held to avoid a horizontal appeal.  As the United States
  Supreme Court has pointed out, "[s]ummary judgment procedure is properly
  regarded not as a disfavored procedural shortcut, but rather an integral
  part of the . . . Rules as a whole, which are designed 'to secure the just,
  speedy and inexpensive determination of every action.'"  Celotex Corp. v.
  Catrett, 477 U.S. 317, 327 (1986).  The central purpose of summary judgment
  is "to avoid a useless trial."  Sykas v. Kearns, 135 Vt. 610, 612, 383 A.2d 621, 623 (1978).  Although the policy considerations outlined in Economou
  are valid, we have not given them overriding effect in other contexts. 
  Indeed, in criminal cases, we require defendants to seek a "horizontal
  appeal" of pretrial rulings made by a different judge so that the trial
  judge is not put in error by another judge's ruling.  See State v. Gonyaw,
  146 Vt. 559, 562, 507 A.2d 944, 947 (1985) (explaining rule announced in
  State v. Senecal, 145 Vt. 554, 558, 497 A.2d 349, 351 (1985)).  Whichever
  posture we adopt on horizontal appeals, the reality is that there are
  likely to be few because "[r]outinely, the trial judge refuses to consider
  refiled motions because of lack of time and discomfort with the role of
  reversing the decision of a colleague."  State v. Bruno, 157 Vt. 6, 13, 595 A.2d 272, 276 (1991) (Dooley, J., concurring).  Although we condemn judge
  shopping, and dilatory tactics adopted as part of that practice, we do not
  believe that the risk described in Economou is so great that we should
  reverse a proper grant of summary judgment to avoid this practice.

       We overrule Economou's holding that a second judge may not grant a
  motion for 

 

  summary judgment or judgment on the pleadings after denial of a
  similar motion by another judge.  In cases like this, rigid application of
  the Economou rule would defeat the purpose of summary judgment and mire our
  trial courts in "useless" trials.  

       Plaintiff's position fares no better when grounded in the law of the
  case doctrine.  The doctrine "posits that when a court decides upon a rule
  of law, that decision should continue to govern the same issues in
  subsequent stages in the same case."  Christianson v. Colt Industries
  Operating Corp., 486 U.S. 800, 816 (1988).  The doctrine is a "rule of
  practice" from which the court may depart "in a proper case."  State v.
  Cain & Burnett, 126 Vt. 463, 469-70, 236 A.2d 501, 505 (1967).  Thus, where
  a court ruled on an issue of law in the course of denying summary judgment,
  it "retained the power to ''reopen what ha[d] been decided.''"  Converse v.
  Town of Charleston, 158 Vt. 166, 169, 605 A.2d 535, 537 (1992) (quoting
  Perkins v. Vermont Hydro-Electric Corp., 106 Vt. 367, 415, 177 A. 631, 653
  (1934)).

       For the reasons stated with respect to the horizontal appeal argument,
  we are unwilling to apply a useful rule of practice in a way that prevents
  efficient adjudication.  A decision denying summary judgment is an
  inappropriate foundation on which to build immutably the law applicable to
  on-going litigation before the court.

                                   III.

       We next address plaintiff's argument that defendants' appeal of the
  probate court order stayed performance of the terms of the contract, such
  that plaintiff was not required to perform until 1985, when the appeal
  terminated and title to Juniper Island was settled.  Plaintiff relies on
  the automatic 

 

  stay provided by our procedural rules.  V.R.C.P. 72(b) provides:
  "[P]ending the appeal if a notice is filed, the decree of the probate court
  shall be stayed as provided in Rule 62 of the Rules of Probate Procedure." 
  Probate Rule 62(c) provides that "the taking of an appeal from a judgment
  shall operate as a stay of enforcement of the judgment during the pendency
  of the appeal . . . ."  A "judgment" is defined by the probate rules to
  mean "a decree and any order from which an appeal lies."  V.R.P.P. 54(a). 
  Plaintiff argues that the automatic stay of the probate court approval of
  the purchase and sales contract tolled his obligation to perform under that
  agreement.

       At the outset, we must distinguish between the obligations created by
  the purchase and sales agreement and the action of the probate court.  Our
  stay rule affects the latter if it involves a judgment, V.R.P.P. 62(c), but
  not necessarily the former.  An example of the distinction is provided by
  Roy's Orthopedic, Inc. v. Lavigne, 145 Vt. 324, 487 A.2d 173 (1985), where
  defendant violated a covenant not to compete with plaintiff for a period of
  three years following the termination of his employment.  Although
  plaintiff obtained an injunction to enforce the agreement in the superior
  court, the injunction was stayed during appeal and the three-year period
  expired during the litigation.  Recognizing that the result was "harsh," we
  held that the stay suspended the implementation of plaintiff's remedy but
  not the running of the three-year-period of the covenant, id. at 327-28,
  487 A.2d at 175- 76, even though plaintiff was left with no remedy.  We
  emphasized that "the possible consequences of the delays inherent in
  litigation based on a breach of the noncompetition clause might have been
  provided for [in the contract]." Id. at 328, 487 A.2d  at 176.

       Plaintiff argues, however, that the stay indirectly suspended his
  contractual obligations because the contract was made contingent on the
  approval of the probate court, and this approval was stayed by the appeal. 
  For two reasons, we disagree with this argument.

       First, plaintiff's position is inconsistent with the language of the
  contract, especially in the context of the earlier action by the probate
  court.  The contract provided that it would "become effective and binding
  for all purposes as soon as a court order approving it is issued by the
  probate court."  Nowhere does it add that performance under the contract
  would be tolled if the probate court approval were appealed.  The probate
  court addressed this exact point, stating in its order that it was "the
  expressed intent of both parties that the times specified for performance
  shall commence from date of Probate Court approval . . ., notwithstanding
  appeal 

 

  . . . ."(FN2)   This contemporaneous understanding of the agreement
  is reinforced by a letter from plaintiff to the attorney for the
  commissioners stating that he understood that he could close on the
  property despite the appeal.

       The obligation to close the sale is further reinforced by the
  surrounding circumstances. In 1978, one of the Fayette sons brought an
  action against the estate claiming he held title to Juniper Island, among
  other properties, by a deed from his father.  Because of this litigation,
  the original contract between plaintiff and the commissioners was made
  contingent on the estate perfecting title to Juniper Island.  It was this
  provision that caused the probate court to reject the first contract
  because it was a "long-time, option type, contingent contract" which the
  court found inconsistent with the statutory requirement that the property
  be sold to provide the widow's interest.  See 14 V.S.A. Sec.Sec. 466, 469.  If
  the terms of the second contract allowed the sale to be suspended pending
  the appeal to superior court, the same court in which the son's title
  action was pending, the second contract became indistinguishable from the
  first one in delaying the realization of the widow's interest until after
  the title to Juniper Island was cleared.  The second contract, and the
  probate court approval of it, makes sense only if the sale was to go
  forward despite the appeal.

       Unless it is ambiguous, the construction of a contract is for the
  court as a matter of law.  See Ianelli v. Standish, 156 Vt. 386, 389, 592 A.2d 901, 903 (1991).  The question of whether a contract 

 

  is ambiguous is also a question of law.  See In re New England
  Telephone and Telegraph Co., 159 Vt. 459, 466, 621 A.2d 232, 237 (1993). 
  In determining whether a contract is ambiguous, the court may consider
  evidence of the circumstances surrounding the making of the contract.  See
  Breslauer v. Fayston School Dist., ___Vt.___, ___, 659 A.2d 1129, 1135
  (1995).  To determine the meaning of a contract, we consider all parts so
  they "form a harmonious whole," but do not read terms into the contract
  unless they arise by necessary implication.  Hill v. City of Burlington,
  157 Vt. 241, 247, 597 A.2d 792, 795-96 (1991).

       In granting summary judgment, the trial court concluded that the
  parties intended that the obligations under the contract would commence
  when the probate court approved the contract and would not be tolled by a
  subsequent appeal.  Especially in light of the surrounding circumstances,
  we affirm this construction of the contract as the most consistent with the
  unambiguous language and our obligation not to read additional terms into
  the contract.

       There is a second reason why we believe the trial court's conclusion
  was correct.  The controlling rule, V.R.P.P. 62(c), provides a stay only
  with respect to a "judgment," defined in the rules as a decree or order
  from which an appeal lies.  See V.R.P.P. 54(a).  We do not believe that the
  probate court approval order was a judgment within the meaning of Rule
  54(a).

       In order to be appealable, a probate court order must be "final as to
  the subject matter before the court."  In re Estate of Seward, 139 Vt. 623,
  624, 433 A.2d 274, 274 (1981).  An order is final if it "disposed of all
  matters that should or could properly be settled at the time and in the
  proceeding then before the court."  In re Estate of Webster, 117 Vt. 550,
  552, 96 A.2d 816, 817 (1953).  It is not final if "something remained to be
  done before the subject matter therein involved was finally disposed of and
  that further proceedings must be had before a final disposition."  Id.

       The court's order that the real property of Frederick Fayette, Sr. be
  sold to provide the widow's statutory share, and the license to the
  commissioners to effectuate that sale, was conclusive on the question of
  whether Juniper Island would be sold.  The license gave the commissioners
  full power to make the sale and convey a deed "as if the deed had been
  executed by the deceased in his lifetime."  14 V.S.A. Sec. 1652.  The
  commissioners had no duty to report 

 

  to the probate court, or seek its approval, until after the property
  was sold and title passed.  See 14 V.S.A. Sec. 1651(9); V.R.P.P. Forms 39
  (license to sell directs licensee to report "after the sale has been
  completed), 43 (report on license to sell filed after the sale).

       The action of the commissioners in selling property pursuant to a
  license issued by the probate court is procedurally similar to their action
  in setting out homestead and dower.  We have held that such action is
  final, and appealable, only when "it is returned to the court making the
  appointment, accepted and recorded by that court, and a certified copy
  thereof recorded in the town clerk's office where deeds of such land are by
  law required to be recorded."  Brown v. Brown, 66 Vt. 76, 79-80, 28 A. 666,
  667 (1894).

       The order approving the contract of sale was an intermediate step and
  did not finally dispose of Juniper Island.  There is nothing in our
  statutes that either requires or prohibits this intermediate step.  Its
  effect was to give the commissioners an advance ruling on a question that
  would no doubt arise when they sought approval for their post-sale report. 
  See In re Wellman Estate, 119 Vt. 426, 435-36, 127 A.2d 279, 285 (1956). 
  Their power to sell Juniper Island was not contingent on advance approval
  of the probate court.

       We do not believe that the optional approval of the contract of sale
  was in any sense a final order.  Since it was not final, it was not
  appealable, and therefore it was not a judgment.  The attempted appeal of
  this order did not act as a stay.

       Plaintiff was not excused from his obligation to pay the second $2,500
  installment of the purchase price because of defendants' appeal of the
  probate court approval.  The undertakings of the parties under the purchase
  and sales contract were concurrent and dependent so that plaintiff's breach
  prevents him from obtaining specific performance or damages for breach of
  contract.  See Ackerman v. Carpenter, 113 Vt. 77, 82, 29 A.2d 922, 925
  (1943).

       Because of our disposition of this issue, we do not reach the third
  issue raised by plaintiff.

 

       Affirmed.


                               FOR THE COURT:



    
                               _______________________________________
                               Associate Justice

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                                  Footnotes


FN1.   We accept for purposes of analysis that the decisions of Judge
  Katz were contrary to those of Judge Mahady and were not based on new
  evidence.  We note, however, that there was extensive discovery between the
  two rulings and the second motion for summary judgment relied upon facts
  developed in that discovery.

FN2.  Plaintiff argues that we should ignore the probate court
  language because it applies only to an appeal "by any other party to this
  contract of this contract for sale" and defendants, who filed the appeal,
  were not parties to the contract.  This language is clearly in error
  because there were no other parties to the purchase and sales contract and
  it was understood that any appeal would come from defendants.  Also there
  was nothing in the language of the contract that could be interpreted as
  suspending performance because of an appeal by specific persons, but not
  suspending performance if the appeal were filed by a different person.  The
  court's statement about the effect of an appeal must apply whoever filed
  the appeal.