Main Street Landing, LLC v. Lake Street Assoc., Inc.

Main Street Landing, LLC v. Lake Street Association, Inc. (2004-485); 179 Vt. 583; 
892 A.2d 931

2006 VT 13

[Filed 08-Jan-2006]

                                 ENTRY ORDER

                                 2006 VT 13

                      SUPREME COURT DOCKET NO. 2004-485

                             OCTOBER TERM, 2005


  Main Street Landing, LLC	         }	APPEALED FROM:
                                       }
                                       }
       v.	                           }	Chittenden Superior Court
                                       }	
  Lake Street Association, Inc.	   }
                                       }	DOCKET NO. S0494-04 CnC

                                          Trial Judge: Matthew I. Katz

             In the above-entitled cause, the Clerk will enter:

       ¶  1.  In this dispute involving the construction of a deed,
  plaintiff Main Street Landing, LLC appeals the superior court's ruling that
  the availability of parking spaces in plaintiff's garage located
  approximately 1200 feet from defendant Lake Street Association, Inc.'s
  office building did not allow plaintiff to terminate its obligation to
  provide defendant sixty-five parking spaces within 300 feet of defendant's
  building.  We affirm.


       ¶  2.  In late 1985, Lake Street Association's predecessor-in-title,
  McKenzie Associates, negotiated with Alden Waterfront Corporation, which
  later became Main Street Landing, for the purchase of two historic brick
  mill buildings located near Lake Champlain in the City of Burlington.  The
  buildings were subdivided from a much larger parcel owned by Alden, which
  had extensive plans to develop and reinvigorate portions of the Burlington
  waterfront.  Part of the property that was later sold to Lake Street
  Association and is the subject of this dispute - the McKenzie building -
  had no room for parking.  Hence, the parties' purchase-and-sale agreement
  obligated the seller, Alden, to provide parking on its adjacent property -
  not only to satisfy the practical needs of the building's tenants but also
  to meet Burlington's zoning requirements.
        
       ¶  3.  To obtain a zoning permit, the parties to the transaction had
  to amend their agreement to include the number of parking spaces then
  required by the city for the building.  City zoning regulations further
  required that parking spaces be located within 400 feet of the subject
  property.  On December 9, 1985, the city issued a zoning permit conditioned
  upon parking being provided in perpetuity as set forth in the parties'
  agreement.  The parties' agreement required the seller to provide
  sixty-five parking spaces to meet the zoning requirements, giving the
  seller the right to relocate the spaces within 300 feet of the building. 
  The agreement further provided that "[a]ll such parking spaces shall be
  provided without charge until such time as parking facilities are
  constructed in connection with the general development of the waterfront
  area by Seller within 300 feet of the premises."  The last clause of the
  quoted sentence was one of several handwritten additions to the agreement.

       ¶  4.  On December 10, 1985, the day after the city issued the
  zoning permit, a bond issue essential to Alden's expansive waterfront
  development plan failed to win public approval.  The sale of the McKenzie
  building went forward, however, on December 16, 1985.  The deed to the
  property contained the following relevant language concerning parking:

      There is included in this conveyance the license and right to use
    the number of parking spaces required by the City of Burlington
    Planning Commission . . . but not to exceed 65 spaces under any
    circumstances, which right shall be appurtenant to the above
    described Premises, without cost to the Grantee unless or until
    the provisions set forth in subparagraph 2 occur, and shall be
    subject to the following rights which are reserved to the Grantor:

    1.  Grantor shall have the right to designate the location of
        alternative parking spaces to those initially designated in this
        deed at any point within 300 feet of any boundary of the Premises;

    2.  Grantor shall have the right to require Grantee to relinquish
        the parking spaces provided pursuant to this paragraph when a
        multi-story parking structure is constructed by Grantor or its
        successors for occupants of the waterfront area and/or the public
        in connection with the general development of the waterfront area,
        at which time the Grantee shall have the option to rent the same
        number of parking spaces as are provided under this paragraph in
        the parking structure described herein at the then-prevailing
        rental rate.
 
       ¶  5.  In the early 1990's, McKenzie Associates sold the McKenzie
  building to Lake Street Association's predecessor-in-title.  Meanwhile,
  Alden changed its name to Main Street Landing Company and continued its
  waterfront development on a smaller scale after the defeat of the bond
  issue.  In the mid-1990's, Main Street developed the Union Station area and
  built a small parking garage dedicated to that site.  From 1985 until 2003,
  Alden, and later Main Street, provided parking spaces pursuant to the deed
  within 300 feet of the McKenzie building.  In the summer of 2003, upon
  commencing a construction project adjacent to the McKenzie building, Main
  Street fenced off most of the parking area used by tenants of the building. 
  A dispute ensued as to parking arrangements, and Lake Street Association
  sought injunctive relief.  The action was resolved by a court order that
  recognized the parking rights in the deed and accepted a temporary plan
  that the parties had worked out to satisfy those requirements.  The
  temporary parking provided by the plan was all within 300 feet of the
  building.  When the parties were unable to work out a permanent plan, Main
  Street filed the instant action, seeking a permanent declaration regarding
  the parties' rights and obligations concerning parking.

       ¶  6.  In the declaratory judgment action, Main Street claimed that
  the availability of parking spaces in the Union Station garage met the
  condition contained in subparagraph two of the deed's parking provision
  quoted above, thereby terminating Lake Street Association's right to
  sixty-five parking spaces within 300 feet of the McKenzie building.  For
  its part, Lake Street Association argued that construction of the Union
  Street Station garage did not terminate its right to sixty-five parking
  spaces within 300 feet of the McKenzie building because the garage was
  located more than 1200 feet from the building and thus did not satisfy the
  deed's requirement that the parking spaces be located within 300 feet of
  the building.  The superior court ruled in favor of Lake Street
  Association.  After examining the circumstances surrounding the sale of the
  McKenzie building and finding ambiguity in the relevant deed provision, the
  court concluded that the parties intended the deed to guarantee the
  sixty-five parking spaces unless a structure was built that provided
  parking within 300 feet of the building.  On appeal, Main Street argues
  that the trial court erred: (1) in concluding that the deed is ambiguous
  regarding the parties' parking rights; (2) in resorting to extrinsic
  evidence to read into the deed a provision that the parties had deleted in
  an earlier deed draft; and (3) in rejecting the parties' demonstrated
  intent on the basis that it was illogical.

       ¶  7.  When construing a deed or other written agreement, the
  "master rule " is that the intent of the parties governs.  Kipp v. Chips
  Estate, 169 Vt. 102, 105, 732 A.2d 127, 129 (1999) (internal quotations
  omitted).  In discerning the intent of the parties, the court must consider
  the deed as a whole and give effect to every part contained therein to
  arrive at a consistent, harmonious meaning, if possible.  Id.  The court
  may consider "limited extrinsic evidence of 'circumstances surrounding the
  making of the agreement' in determining whether the writing is ambiguous,"
  which is a question of law subject to de novo review.  Id. at 107, 732 A.2d 
  at 131 (quoting Isbrandtsen v. N. Branch Corp., 150 Vt. 575, 579, 556 A.2d 81, 84 (1988)).  Ambiguity exists if the extrinsic evidence, in combination
  with the writing, "supports an interpretation that is different from that
  reached on the basis of the writing alone, and both are reasonable."  Id. 
  If the court determines that a writing is not ambiguous, the plain meaning
  of the language controls without resort to rules of construction or
  extrinsic evidence.  Id.  On the other hand, if the court determines that
  the writing is ambiguous, interpretation of the parties' intent becomes a
  question of fact to be determined based on all of the evidence-not only the
  language of the written instrument, but also evidence concerning its
  subject matter, its purpose at the time it was executed, and the situations
  of the parties.  Mann v. Levin, 2004 VT 100, ¶ 17, 177 Vt. 261, 861 A.2d 1138.
          
       ¶  8.  Here, Main Street first argues that the trial court erred in
  concluding that the deed is ambiguous with respect to the parties' parking
  rights.  Main Street asserts that, considering the deed as a whole, it is
  not possible to read subparagraph two as requiring that a structure be
  built within 300 feet of the McKenzie building to trigger defeasance of
  Lake Street Association's right to sixty-five free parking spaces.  In
  support of this contention, Main Street points out that subparagraph two
  makes no reference to either the proximity of the parking structure or the
  City's zoning regulations regarding the proximity of required parking. 
  According to Main Street, subparagraph one's inclusion of a 300-foot
  parameter for parking spaces demonstrates that the parties to the
  conveyance knew how to provide for a proximity limitation but intentionally
  omitted such a restriction in subparagraph two with respect to the parking
  structure.  In Main Street's view, because the language of the deed is
  unambiguous, the court erred by resorting to extrinsic evidence to infer
  the intent of the parties.

       ¶  9.  We find this argument unavailing because the record supports
  the trial court's determination that the relevant deed language is
  ambiguous.  As discussed above, the trial court was entitled to examine the
  circumstances surrounding the subject conveyance in determining whether the
  deed was ambiguous.  The court determined that the deed was ambiguous after
  finding that, at the time the deed was negotiated: (1) the city zoning
  ordinance required parking to be located within 400 feet of the property;
  (2) without such parking, the property would be subject to losing its
  zoning permit, and the owner would have been unable to rent space to its
  commercial tenants, making the property worthless; (3) strong incentives
  existed for both the grantor and the grantee to assure that suitable
  parking was provided-the need to satisfy the city's development regulators
  and the desire to make the property commercially viable; (4) the grantor
  had detailed plans to build a parking structure within 300 feet of the
  building; and (5) the purchase-and-sale agreement explicitly required the
  grantor to provide sixty-five parking spaces free of charge until a parking
  structure was built within 300 feet of the building.

       ¶  10.  Given these circumstances, the trial court did not err in
  determining that the deed was ambiguous as to whether availability of
  spaces in a parking structure located within 300 feet of the McKenzie
  building was required before the grantor could revoke the grantee's parking
  rights.  Although no such limitation is explicit in subparagraph two of the
  deed's parking provision, the provision's reference to the city's zoning
  regulations (albeit with respect to the number of spaces required) and its
  language requiring the grantor to provide sixty-five parking spaces within
  300 feet of the building suggest, at least as one reasonable interpretation
  of the deed, that subparagraph two was intended to address only the
  charging of rent for parking in the event a garage was built, but was not
  intended either (1) to disturb the 300-foot parameter set forth in
  subparagraph one in compliance with the zoning permit, or (2) to allow the
  grantor to terminate the grantee's parking rights by providing parking
  spaces in a garage located outside the parameters required by the zoning
  regulations.  Indeed, the fact that Main Street did not seek to impose its
  interpretation of the deed on Lake Street Association until several years
  after the Union Station garage was built supports the court's conclusion
  that the deed's parking provision is ambiguous.
        
       ¶  11.  Main Street argues, however, that the trial court erred by
  resorting to extrinsic evidence to read into the deed a provision that the
  parties had deleted from an earlier draft of the deed.  At trial, Main
  Street produced a draft in which subparagraph two explicitly provided that
  the grantor could require the grantee to relinquish the sixty-five parking
  spaces if a parking structure was included "within 300 feet of the
  Premises."  Ironically, in challenging the trial court's reliance on
  extrinsic evidence to determine the parties' intent, Main Street itself
  relies on extrinsic evidence and rules of construction to support its view
  of what the parties intended.  We agree with the trial court that the
  earlier draft deed did not overcome other evidence indicating that the
  parties intended to authorize revocation of the grantee's parking rights
  only upon construction of a parking structure within 300 feet of the
  McKenzie building.  Main Street has not provided a coherent reason why the
  300-foot limitation would have been intentionally removed from the deed. 
  Further, the evidence at trial did not show that the grantee had ever seen
  the earlier deed draft, let alone that omission of the 300-foot limitation
  in subparagraph two of the final deed was negotiated and done
  intentionally.  Main Street's witness could testify only that the deed
  draft was found in a file, and that, more probably than not, it was sent to
  the grantee.  In short, evidence of the deed draft was insufficient to
  overcome significant other evidence that the parties did not intend to
  allow the grantor to revoke the grantee's parking rights upon construction
  of a parking structure outside the 300-foot parameter set forth in the
  purchase-and-sale agreement and subparagraph one of the deed.  Nor do we
  find significant the grantee's execution of a document acknowledging that
  execution and delivery of the deed discharged the grantor of its
  obligations under the purchase-and-sale agreement.  The grantee's
  acknowledgment only begs the question as to the meaning of the ambiguous
  deed language.

       ¶  12.  Finally, Main Street argues that the trial court erred in
  rejecting the parties' demonstrated intent by finding that intent to be
  illogical.  Main Street is referring to the court's conclusion that, under
  the circumstances surrounding the agreement, it would not have made any
  sense for the deed to ignore the required proximity of parking spaces,
  given the problems that would ensue with city administrators.  Again, we
  find this argument unavailing.  The court did not err by considering what
  was reasonable under the circumstances in determining which of two
  competing interpretations was intended by an ambiguous deed provision.  See
  Restatement (Second) of Contracts § 203(a) (1981) (recognizing that
  interpretation of agreement that "gives a reasonable, lawful, and effective
  meaning to all the terms is preferred to an interpretation which leaves a
  part unreasonable, unlawful, or of no effect").

       Affirmed.

                                       BY THE COURT:


                                       _______________________________________
                                       Paul L. Reiber, Chief Justice

                                       _______________________________________
                                       John A. Dooley, Associate Justice
    
                                       _______________________________________
                                       Denise R. Johnson, Associate Justice

                                       _______________________________________
                                       Marilyn S. Skoglund, Associate Justice

                                       _______________________________________
                                       Brian L. Burgess, Associate Justice