In re Estate of Gorton

In re Estate of Gorton  (96-454); 167 Vt. 357; 706 A.2d 947

[Opinion Filed 12-Dec-1997]

[Motion for Reagrument Denied 31-Dec-1997]

       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. 96-454


In re Estate of Doris I. Gorton              Supreme Court

                                             On Appeal from
                                             Addison Superior Court

                                             September Term, 1997


Matthew I. Katz, J.

Andrew Jackson, Middlebury, for Appellant.

James C. Foley of Deppman & Foley, P.C., for Appellee.


PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.


       JOHNSON, J.  Appellants Leo and Betty Lou Gorton, the son and
  daughter-in-law of the deceased, Doris Gorton, appeal from a decision of
  the superior court dismissing their claim against the estate of the
  deceased.  Appellants allege that they had an oral agreement with the
  deceased to provide services and make payments to her during her life in
  exchange for the transfer of a barn and farmland to them upon her death. 
  They contend that the court erred by concluding that their allegations are
  insufficient to establish reliance on the oral agreement such that they are
  equitably entitled to specific performance.  Appellants also appeal the
  court's decision that, under V.R.C.P. 72(d), they are not entitled to a
  jury trial on their claim.  We reverse and remand for trial by court.

       This case presents us with a procedural puzzle.  Although the parties
  refer to the motion before the superior court as a motion for summary
  judgment, the record contains no affidavits, depositions, answers to
  interrogatories or admissions.  Further, the decision of the court
  indicates that the court assumed that all of appellants' allegations were
  supported by sworn testimony in the probate court, evidently without ever
  reviewing that testimony.  Thus, we

 

  review the superior court decision as though it dismissed appellants'
  request for a trial de novo on the pleadings.  See V.R.C.P. 12(c).  To
  review a judgment on the pleadings, we consider all the factual allegations
  in the pleadings of the nonmoving party and all reasonable inferences that
  can be drawn from them to be true and allegations to the contrary by the
  moving party to be false.  Thayer v. Herdt, 155 Vt. 448, 456, 586 A.2d 1122, 1126 (1990).  The administratrix of the estate is not entitled to
  judgment if appellants' allegations, if proved, permit recovery. Id.  Thus,
  we summarize the facts as alleged by appellants.

       Leo Gorton, Sr. and Doris I. Gorton owned and operated a farm in
  Cornwall, Vermont, where they raised their six children.(FN1)  The farm
  consists of seventy acres and a barn on the west side of West Street and
  forty-two acres and a home on the east side of West Street.  None of the
  six children continued in farming.  Appellants Leo Gorton, Jr. and Betty
  Lou Gorton live next door to the family farm on their own land.  Leo Jr.
  worked in the construction business, and Betty Lou worked at the Middlebury
  A & P.

       In 1986, Doris first complained of ailments that later were diagnosed
  as resulting from cancer, and Betty Lou left her job of fourteen years to
  care for her mother-in-law.  In April 1988, Doris was diagnosed with cancer
  and began chemotherapy treatments, and in May 1988, Leo Sr. died, leaving
  his share of the farm to his wife Doris.  Because Doris wanted to keep the
  farm in the family, Leo Jr. and Betty Lou agreed to pay Doris $350 per
  month and one-half of her real estate taxes, plus provide assistance by
  maintaining her home and farm and providing for her care.  In exchange,
  Doris agreed that upon her death certain farmland would be conveyed to Leo
  Jr. and Betty Lou.  Under the agreement, Leo Jr. and Betty Lou began
  farming a portion of his mother's land by purchasing beef cattle in June
  1988.  Doris spoke with her attorney, a surveyor, friends and family
  members over the years about the agreement.

       The same summer, Doris and Leo Jr. hired a survey technician, Ramona
  Powers.  They

 

  explained to Ms. Powers that they wanted her to prepare maps of the land
  Doris intended to convey to Leo Jr. and Betty Lou.  Ms. Powers prepared
  maps indicating the four lots that were to be conveyed: seventy acres on
  the west side of West Street and three lots of 3.75 acres, 8.75 acres and
  4.75 acres on the east side of West Street.  In 1989, Doris visited her
  attorney, Mike Mathes, and informed him that she had an agreement with Leo
  Jr. and that Leo Jr. was getting a large part of the farm, including a
  large pasture and barn on the west side of the road.  In 1991, Leo Jr. and
  Betty Lou purchased 178 acres of land that has no road frontage but that
  adjoins Doris's land on the west side of the street.  Attorney Mathes
  represented the seller at the closing and remembers Leo Jr. informing him
  that he was purchasing the 178 acres to go along with the land he was
  getting from his mother.  Leo Jr. invested in expensive fencing and spent
  over a week enclosing all the lands, which he operated as one farm.

       Performing their part of the agreement, Leo Jr. and Betty Lou paid
  Doris $350 monthly and one-half the taxes on the whole farm every year
  until Doris died, an amount three times the rental value of the farm
  property.  Betty Lou cared for Doris by preparing meals, driving her to
  hospital appointments and staying overnight with her in the last months of
  her life, while Leo made substantial repairs and capital improvements to
  Doris's home.

       In August 1994, Betty Lou informed attorney Mathes that Doris's cancer
  was terminal. Based on the maps prepared by Ramona Powers, attorney Mathes
  prepared three deeds covering the four lots and took them to Doris's house
  on August 22, 1994, but Doris was not feeling well enough to discuss the
  deeds.  On August 31, 1994, Betty Lou telephoned attorney Mathes and told
  him that Doris was alert and able to deal with the deeds but attorney
  Mathes was unable to get to Doris's home that day.  Doris died on September
  1, 1994

       In January 1995, the administratrix of the estate of Doris Gorton sent
  Leo Jr. a demand for rent payment of $350 per month for the last five
  months and for one-half of the property taxes on the entire farm for use of
  the barn and farmlands.  Leo Jr. and Betty Lou responded by filing a claim
  against the estate for the barn and the surveyed lands on the basis of the
  oral

 

  agreement with Doris.  The administratrix disallowed the claim.  Following
  a hearing, the probate court concluded that (1) the testimony of attorney
  Mathes must be excluded due to the attorney/client privilege,(FN2) (2)
  appellants had an oral contract with the deceased for the transfer of real
  estate in exchange for payments and care given her in her lifetime, (3)
  appellants had not shown a change in position in reliance on the oral
  agreement requiring specific performance, but (4) appellants were entitled
  to damages for the expenses they incurred as a result of the oral contract.

       Appellants requested a trial de novo by jury in superior court.  See
  V.R.C.P. 72(d) and Reporter's Notes (appeal from probate court is by trial
  de novo in superior court).  Rule 72 limits the issues before the superior
  court to those raised by appellants in their statement of questions.  See
  Reporter's Notes to V.R.C.P. 72.  Appellants' statement asserted that they
  were raising all issues that were before the probate court, but then
  specified two questions regarding recovery only: (1) whether appellants
  were entitled to specific performance, and (2) if not, whether appellants
  were entitled to damages.  Because appellants won damages before the
  probate court and the administratrix did not appeal from that judgment, we
  review this case as though the only issue before the superior court was the
  issue of specific performance.(FN3)

       The administratrix filed a motion for summary judgment in superior
  court without any supporting affidavits.  Appellants responded to the
  motion, also without any supporting affidavits, but with references to the
  taperecording of the testimony before the probate court. The court granted
  the administratrix's motion without reviewing the testimony, holding that,

 

  accepting all appellants' factual claims as true, the agreement was too
  vague to enforce and was barred by the Statute of Frauds.  The court also
  held that appellants had no right to trial by jury because an action for
  specific performance sounded in equity, and therefore, did not afford the
  right to trial by jury.  Nonetheless, the court affirmed the decision of
  the probate court awarding appellants damages.  Appellants appeal.

                                     I.

       In general, a contract for the sale of lands is controlled by the
  Statute of Frauds and must be in writing to be enforceable.  Chomicky v.
  Buttolph, 147 Vt. 128, 130, 513 A.2d 1174, 1175 (1986); see 12 V.S.A. §
  181(5).  A court may specifically enforce an oral contract to convey land,
  despite the Statute of Frauds, where the plaintiff is equitably entitled to
  the real estate. Enforcement is justified on the ground that repudiation by
  one party after the other has fully performed amounts to a virtual fraud. 
  Restatement (Second) of Contracts § 129 cmt. a (1981). In such
  circumstances, enforcing the requirements of the Statute of Frauds would
  promote rather than prevent a fraud.  Towsley v. Champlain Oil Co., 127 Vt.
  541, 543, 254 A.2d 440, 442 (1969).

       The Restatement (Second) of Contracts § 129 states the exception to
  the general rule in the Statute of Frauds:

     A contract for the transfer of an interest in land may be
     specifically enforced notwithstanding failure to comply with the
     Statute of Frauds if it is established that the party seeking
     enforcement, in reasonable reliance on the contract and on the
     continuing assent of the party against whom enforcement is sought,
     has so changed his position that injustice can be avoided only by
     specific performance.

  Accord Nutting v. Freda, 153 Vt. 501, 502, 572 A.2d 896, 897 (1990).  Thus,
  the court may enforce an oral agreement for the transfer of land where the
  plaintiffs can show that (1) there was an oral agreement (2) upon which
  they reasonably relied (3) by changing their position so that they cannot
  be returned to their former position, and (4) the other party to the
  agreement knew of such reliance.

 

  The main issue in dispute, as in most cases of this nature, is whether
  appellants have alleged a substantial and irretrievable change in position
  in reliance on the agreement.  See Jasmin v. Alberico, 135 Vt. 287, 289,
  376 A.2d 32, 33 (1977) (real issue is change of position in reliance on
  oral agreement to such measure that parties cannot be restored to
  reasonable equivalence of former condition).  The reliance must be
  something beyond injury compensable by money to warrant enforcement of the
  contract despite the Statute of Frauds.  Chomicky, 147 Vt. at 131, 513 A.2d 
  at 1176.  Payments on the purchase price are not enough to make an oral
  agreement enforceable.  Id. at 132, 513 A.2d  at 1176.

       Possession coupled with substantial improvements may be such that the
  plaintiffs cannot be restored to their former position.  Jasmin, 135 Vt. at
  290, 376 A.2d  at 34; see, e.g., Bassler v. Bassler, 156 Vt. 353, 359, 593 A.2d 82, 86 (1991) (installing hot water heaters, insulation, new siding,
  new flooring, new furnace, new windows and frames, excavating and grading
  road to house, removing barn, building deck and draining and clearing brush
  around pond sufficient to support trial court decision to take agreement
  out of Statute of Frauds).  Moreover, full performance by one party in
  reliance on the agreement may support equitable enforcement where the
  parties cannot be returned to their former position.  See, e.g., Nichols v.
  Nichols, 139 Vt. 273, 277-78, 427 A.2d 374, 377 (1981) (defendants fully
  performed under contract for many years by farming family farm, paying all
  bills and taking care of mother until her death, and therefore, were
  entitled to have farm conveyed to them).  And full performance by one party
  and part performance by the other may support an order for specific
  performance. See, e.g., LaPlante v. Eastman, 118 Vt. 220, 223-25, 105 A.2d 265, 268-69 (1954) (full performance by plaintiff by caring for deceased,
  his household, and his lands, plus part performance by deceased by
  purchasing home for plaintiff and giving her possession supports order of
  specific performance).

       Appellants here allege that they had an oral agreement with Doris that
  they would receive eighty-eight acres of farmland at her death if they
  cared for Doris and her home and paid her

 

  $350 per month and one-half the taxes on the entire farm until her death. 
  The land intended to be conveyed to appellants is the land described on the
  surveys prepared by Ramona Powers. Appellants maintain that they fully
  performed under the terms of the agreement, and in addition, relied on the
  agreement by leaving their employment to farm and take care of Doris, by
  purchasing an additional 178 acres adjoining Doris's land subject to the
  agreement, and by making improvements to the land.  They also claim that
  Doris acknowledged the oral agreement by speaking of it with her attorney,
  the surveyor, friends and other family members.

       The trial court erred in holding, as a matter of law, that the facts
  alleged do not rise to the level that would allow equity to enforce
  specific performance.  Cf. Thayer, 155 Vt. at 456, 586 A.2d  at 1126
  (judgment on pleadings reversed where it cannot be said, as matter of law,
  that acts alleged would not allow recovery).  If we regard all appellants'
  allegations as true, it would not have been an abuse of discretion for the
  court to enforce the oral agreement based on equitable considerations.  See
  Nutting, 153 Vt. at 502-03, 572 A.2d  at 897 (court has discretion to order
  specific performance of oral contract to convey land based on equitable
  considerations); see, e.g., Nichols, 139 Vt. at 276, 427 A.2d  at 376-77
  (oral agreement to leave family farm to son if he farmed it, paid off bills
  and took care of mother until her death specifically enforced where son
  fully performed under contract); LaPlante, 118 Vt. at 224-25, 105 A.2d  at
  269 (1954) (evidence supported specific enforcement of oral agreement to
  convey home to plaintiff where plaintiff fully performed under contract by
  maintaining home and farms for deceased who had purchased home for
  plaintiff and given her possession).

       Indeed, the administratrix counters appellants' claim on factual
  grounds.  She rejects appellants' inference that they left their jobs and
  changed their lifestyle to farm and care for Doris in reliance on the
  agreement, and maintains that Leo Jr. continues in his construction
  business and Betty Lou left her job for reasons unrelated to Doris.  Cf.
  Nichols, 139 Vt. at 275, 427 A.2d  at 376 (son gave up attractive offer to
  become owner of another farm to take care of family farm and mother until
  her death).  Such factual disputes cannot be decided upon motion

 

  for judgment on the pleadings.  We express no opinion on the merits but
  remand because the trier of fact must make findings and decide based on
  those findings whether equitable relief is appropriate in this case.

                                     II.

       The superior court also concluded that the allegation of the specific
  lands to be conveyed was too vague to be enforced.  See Reynolds v.
  Sullivan, 136 Vt. 1, 3-4, 383 A.2d 609, 611 (1978) (vagueness and
  indefiniteness as to essential terms of agreement can preclude court from
  granting specific performance).  Assuming all appellants' allegations are
  true, the lands were surveyed and mapped, and Doris told the surveyor that
  she intended to convey the surveyed lands to Leo Jr. and Betty Lou; thus,
  the pleadings show an agreement adequately specific to enforce.

                                    III.

       Finally, appellants argue that the court erred by holding that they
  are not entitled to a jury trial because their request for specific
  performance is an equitable remedy that does not afford the right to trial
  by jury.  They contend that V.R.C.P. 72(d) grants a right to trial by jury
  in superior court on an appeal from the probate court.  Rule 72(d)
  provides, "The questions contained in the appellant's statement of
  questions shall be tried to a jury if one is demanded in accordance with
  Rule 38."  (Emphasis added.)  Appellants maintain that Rule 72(d) affords
  the right to trial by jury on any issue if the demand is served in
  accordance with Rule 38.  We disagree.

       Rule 38(a) preserves that right of trial by jury as declared by the
  Constitution or by statute.  V.R.C.P. 38(a).  Subsection (b) states, "Any
  party may demand a trial by jury of any issue triable of right by a jury by
  (1) serving upon the other parties a demand therefor in writing . . . ." 
  V.R.C.P. 38(b) (emphasis added).  Thus, a demand for trial by jury is "in
  accordance with Rule 38," as required by Rule 72(d), if it demands "trial
  by jury of any issue triable of right by a jury."  Rule 72(d) would require
  service in accordance with Rule 38 if it meant that

 

  merely the service of the demand must be in accordance with Rule 38.  We
  therefore hold that Rule 72(d) does not grant the right to trial by jury
  where it is not otherwise declared by the Constitution or by statute.

       In this case, there is no statutory right to trial by jury, and the
  Vermont Constitution guarantees the right to trial by jury only to the
  extent that it existed at common law at the time of its adoption.  Hodgdon
  v. Mt. Mansfield Co., 160 Vt. 150, 155, 624 A.2d 1122, 1125 (1992). Thus,
  entitlement to a jury trial "is dependent upon the relief requested; if the
  relief requested is equitable, no right to jury trial exists."  In re
  Estate of Archambault, 147 Vt. 649, 649, 520 A.2d 154, 154 (1986) (mem.);
  see also Hodgdon, 160 Vt. at 155, 624 A.2d  at 1125 (where plaintiff
  requested only equitable relief, she was not entitled to trial by jury). 
  Appellants request specific performance, which is an equitable remedy. 
  Their request for "damages" is more accurately a request for restitution,
  to return them to their former position, and therefore, it is also an
  equitable remedy.  There is no remedy at law, for which they would be
  entitled to trial by jury, because it is barred by the Statute of Frauds. 
  Consequently, plaintiffs are not entitled to trial by jury.

       Reversed and remanded.


                              FOR THE COURT:



                              _______________________________________
                              Associate Justice



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                                  Footnotes



FN1.  To distinguish members of the Gorton family, we refer to them by
  their first names. 

FN2.  We do not decide whether the testimony of the deceased's
  attorney must be excluded based on the attorney/client privilege because
  this issue was not raised before, nor addressed by, the superior court.

FN3.  We can conceive of no reason why appellants would appeal the
  decision that an oral contract existed and that they were entitled to
  damages: both issues were resolved favorably to them in probate court. 
  Moreover, the superior court affirmed the award of damages, the
  administratrix did not file a notice of cross-appeal in this Court, and she
  conceded at oral argument that she owed appellants the damages found by the
  probate court.