Smith v. Osmun

Smith v. Osmun  (94-527); 165 Vt 545; 676 A.2d 781

[Opinion Filed 08-Mar-1996]


                               ENTRY ORDER

                      SUPREME COURT DOCKET NO. 94-527

                             JANUARY TERM, 1996


Gregory and Patricia Smith           }     APPEALED FROM:
                                     }
                                     }
     v.                              }     Addison Superior Court
                                     }
John Osmun                           }
                                     }     DOCKET NO. S193-88Ac


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

       Defendant John Osmun appeals a decision of the Addison Superior Court
  enforcing an agreement to settle a specific performance action brought by
  plaintiffs Gregory and Patricia Smith.  Defendant claims that the court
  erred in finding that a settlement agreement existed, in finding that
  defendant's former lawyer had authority to enter into a settlement
  agreement, and in assessing damages and prejudgment interest.  We affirm in
  part and reverse in part.

       Plaintiffs were living in a camp they constructed on defendant's
  property in Starksboro. In November 1988, they brought an action to require
  defendant to specifically perform an alleged contract for sale of 3.2 acres
  on which the camp was constructed.  Defendant denied the existence of the
  contract for sale and responded that plaintiffs were tenants who failed to
  pay their rent and who were notified to vacate in October 1988.  Defendant
  sought a writ of possession by counterclaim.  The underlying actions were
  never tried.  Instead, plaintiffs moved to enforce a settlement agreement
  which they claimed was entered into between the parties. Eventually, after
  taking evidence, the court issued two decisions finding that a settlement
  agreement existed and enforcing it.

       In the first decision, the court found that through an exchange of
  letters of their lawyers, the parties had agreed to a settlement under
  which plaintiffs would relinquish claim to the real estate and pay $1,500
  in back rent and an amount for any damage to the real estate; defendant in
  turn would purchase the camp from plaintiffs for a price to be determined
  by an independent appraiser.  The appraiser set the value of the camp at
  $13,700.  The court found that defendant balked at complying with the
  settlement because he disagreed with the appraisal and not because he
  seriously disputed the existence of the settlement or the lawyer's
  authority to consummate it.

       In the second decision, the court again found the agreement valid and
  that defendant had breached it, specifically responding to defendant's
  renewed argument that no agreement existed because defendant's lawyer
  failed to include as a term that plaintiffs vacate immediately, as
  defendant instructed the lawyer to do; and that if an agreement existed, it
  necessarily included the term that plaintiffs vacate immediately, which
  they failed to do.  The court accepted the appraiser's value of the camp
  and awarded net damages of $11,450, plus interest on the amount running
  from December 1, 1989.

       Defendant first argues that a finding that a letter of February 20,
  1989 from plaintiffs' attorney contained the terms of the settlement is
  clearly erroneous.  Defendant misconstrues the finding, which states only
  that the letter of February 20 was "key" and ended the dispute.

 

  Elsewhere, the court found that the parties reached a resolution of the
  dispute in May of 1989, when the last letter was sent by defendant's
  lawyer.  Read in context, the finding about the key letter is not clearly
  erroneous.

       We reach a similar conclusion with respect to a finding that defendant
  did not convey to his lawyer his view that the appraisal of the camp should
  be based on salvage value.  The court found that defendant agreed to the
  appraisal, without tying the hands of the appraiser to a particular
  methodology, whatever he thought the outcome of the appraisal might or
  should be. The evidence supports this finding, and we will not overturn it. 
  See Pinewood Manor, Inc. v. Vermont Agency of Transp., 6 Vt. L.W. 245, 246
  (1995).

       Defendant next claims that the exchange of letters did not create a
  settlement agreement because there was never an agreement on a set of
  specific terms and the terms plaintiffs claimed were vague and
  unenforceable.  Specifically, defendant claims that there was no meeting of
  the minds on when plaintiffs would leave the property or, alternatively,
  the agreement was vague or incomplete on this point, and vague or
  incomplete on the question of whether plaintiffs would relinquish their
  claim to the land.  The trial court concluded that the terms were fully
  stated in the May 17, 1989 letter from defendant's attorney to plaintiffs'
  attorney, there was a meeting of the minds on these terms, and these terms
  were not vague or incomplete.

       There is no dispute about the law applicable to defendant's claims. 
  Before there is a contract, there must be initial assent to the terms. 
  Milot v. Calkins, 150 Vt. 537, 538, 554 A.2d 260, 261 (1988).  Vagueness
  and indefiniteness as to an essential contract term can preclude formation
  of an enforceable contract.  Evarts v. Forte, 135 Vt. 306, 310, 376 A.2d 766, 769 (1977).  We must affirm conclusions of law that are supported by
  findings and are consistent with the applicable law.

       The trial court rejected defendant's theory that plaintiffs' immediate
  departure from the land was ever intended to be a contract term or, more
  broadly, that any departure date was made part of the agreement.(FN1)  The
  findings support the court's conclusion that there was a meeting of minds
  on the terms of the contract.  Moreover, the absence of specification on
  the leaving date does not make the agreement vague or incomplete as to
  essential terms.  Similarly, it was unnecessary to include a specific
  statement that plaintiffs made no further claim to the land because the
  settlement agreement necessarily had that consequence.

       Next, defendant claims that his lawyer lacked authority to settle the
  litigation except with express terms that guaranteed plaintiffs' immediate
  departure from the land and adopted defendant's methodology for the
  appraisal.  We agree with defendant that the settlement is valid only if
  defendant was found to have granted express authority to settle on those
  terms.  See Plourde v. Smith, 151 Vt. 100, 102, 557 A.2d 883, 884 (1988);
  NEET v. Silver Street Partnership, 148 Vt. 99, 104, 528 A.2d 1117, 1120
  (1987).  The court found, however, that defendant granted his lawyer
  express authority to settle.

       In challenging the court's analysis, defendant places great emphasis
  on his letter to his lawyer and the testimony of himself and his daughter. 
  The letter described the concerns now raised as observations and the court
  accepted the testimony of the lawyer who believed he had express authority
  to conclude a settlement on the terms stated in his May 17th letter.  It
  was up to the trial court to resolve the conflicts in the evidence.  The
  court's conclusion that the lawyer had the express authority to settle on
  the terms stated is supported by the findings, which, in

 

  turn, are supported by the evidence.  There is no error.

       Defendant next claims that the damage award is erroneous, primarily
  because it is based on an appraisal which even the appraiser indicated was
  based on improper methodology.  The issue centers on the permissible uses
  of the camp for valuation purposes.  The appraiser valued it as an
  accessory use, which, because of the lack of sewer and water, did not
  include normal residential occupancy.

       Although defendant's brief is vague on this point, we believe the
  deficiencies in the appraisal, if any, went to the amount of damages and
  not to whether there was a breach.  The agreement provided that the
  appraiser would "determine how much value, if any, the structures and other
  improvements placed on the property by Smith have added to the entire
  property." Apart from the valuation reached by the appraiser, the trial
  court found that the appraiser performed as specified in the agreement, and
  that finding is supported by the evidence.

       The appraiser testified three times, and the substance of the
  testimony gradually changed over that period.  Similarly, defendant's
  lawyer testified three times and his testimony grew increasingly critical
  of the action of the appraiser.  The shifting testimony necessarily created
  a range of outcomes from which the trial judge could choose.  In
  determining damages, the finder of fact has the "`liberty of broad
  discretionary judgment.'"  Roy v. Poquette, 147 Vt. 332, 334, 515 A.2d 1072, 1074 (1986) (quoting Kerr v. Rollins, 128 Vt. 507, 510, 266 A.2d 804,
  806 (1970).  The court could find from the appraiser's testimony that the
  value he came up with was based on the camp as an accessory use, and this
  was the basis contemplated by the parties in the settlement agreement. 
  There is no error.

       In connection with this argument, defendant asserts that it was error
  for the court to rely on the town's property tax valuation of the camp
  because that evidence was inadmissible and irrelevant.  The issue first
  arose when plaintiffs' lawyer asked the appraiser if he knew that the
  town's appraised value was close to his, to which the appraiser answered,
  "Really?"  This question in response to a question added no evidence to the
  proceeding.  Thereafter, plaintiff moved to admit the town's grand list
  value.  Defendant objected because the evidence went only to whether there
  was an agreement, which had already been decided by the court.  The court
  determined that the valuation went to damages and admitted the evidence on
  that basis. Defendant has not preserved his claim because the ground for
  the objection asserted below is not the same as that presented here.  See
  State v. Bissonette, 145 Vt. 381, 392, 488 A.2d 1231, 1237 (1985).  The
  evidence was marginally relevant and could be used by the trial court.  See
  V.R.E. 401 (defining relevancy).

       Finally, defendant contests the award of prejudgment interest. 
  Without explanation, the court awarded interest from December 1, 1989. 
  Prejudgment interest is available as a matter of right where damages are
  liquidated or readily ascertainable.  Winey v. William E. Dailey, Inc., 161
  Vt. 129, 141, 636 A.2d 744, 752 (1993).  Otherwise, the decision to award
  lies within the discretion of the trial court.  See Reporter's Notes, 1991
  Amendment to V.R.C.P. 54. Whether awarded as of right or discretionarily,
  interest is measured from the date of breach. Winey, 161 Vt. at 141, 636 A.2d  at 752.

       We cannot accept that the date of breach was December 1, 1989, the
  date defendant received the appraisal from his lawyer.  There was no demand
  at that time and no immediate action to repudiate the contract. 
  Defendant's breach occurred at some later time when defendant repudiated
  the settlement agreement and refused to perform as agreed.



       Except for the calculation of prejudgment interest, the judgment of
  the Addison Superior

 

  Court is affirmed.  The calculation of prejudgment interest is reversed and
  remanded for proceedings not inconsistent with this order.



     BY THE COURT:



     _______________________________________
     Frederic W. Allen, Chief Justice

     _______________________________________
     Ernest W. Gibson III, Associate Justice

     _______________________________________
     John A. Dooley, Associate Justice

     _______________________________________
     James L. Morse, Associate Justice

     _______________________________________
     Denise R. Johnson, Associate Justice




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                                  Footnotes


FN1.  This construction also answers defendant's claim that plaintiffs
  breached by failing to leave as agreed.