Hinsdale v. Sherman

Hinsdale v. Sherman (2000-030); 171 Vt. 605; 764 A.2d 1218 

[Filed 8-Nov-2000]


                                 ENTRY ORDER

                      SUPREME COURT DOCKET NO. 2000-030

                             OCTOBER TERM, 2000


Clark W. Hinsdale, Jr.	               }	APPEALED FROM:
                                       }
                                       }
     v.	                               }	Chittenden Superior Court
                                       }	
Crosby and Helen Sherman, and	       }
Arthur and Martha Burleigh	       }	DOCKET NO. S1129-98 CnC

                                                Trial Judge: Matthew I. Katz

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


       Plaintiff Clark Hinsdale appeals from a decision of the Chittenden
  Superior Court granting  defendants Crosby and Helen Sherman's  motion for
  judgment on the pleadings pursuant to V.R.C.P.  12(c).  The court ruled
  that defendants' purchase of a lot of land according to an existing
  purchase  and sale agreement did not trigger plaintiff's later-granted
  option to purchase the same land.  On  appeal, plaintiff argues that
  defendants took the land subject to the option contract because, at the 
  time of purchase, defendants had notice of the option.  We affirm.

       This action arose from a series of agreements that defendants Arthur
  and Martha Burleigh  made regarding the conveyance of Lot No. 3 of the
  Cedar Crest at Spear Development.  On April 11,  1994, the Burleighs
  entered into a purchase and sale agreement with the Shermans to purchase
  Lot  No. 3 for $51,000.  On May 31, 1994, the Burleighs executed a "Right
  of First Refusal" to plaintiff  for Lot No. 3.  Specifically, the Burleighs
  granted plaintiff the right to purchase Lot No. 3 "[i]n the  event that
  [Burleighs] shall not convey lot 3 according to the terms of a certain
  purchase and sale  agreement between [Burleighs] and [Shermans], and
  amendments thereto" (emphasis added).  On  June 10, 1994, the Burleighs
  conveyed Lot No. 3 to the Shermans for $47,000 by warranty deed.  At  the
  time of the closing, the Shermans knew about the agreement between
  plaintiff and the Burleighs.

       Plaintiff brought suit, claiming that by reducing the price of Lot No.
  3 from $51,000 to  $47,000, defendants failed to convey the property
  "according to the terms" of the Sherman/Burleigh  Purchase and Sale
  Agreement and this reduction triggered his right to purchase the lot.  The 
  Shermans moved for judgment on the pleadings pursuant to V.R.C.P. 12(c). 
  The trial court held that  the minor price reduction did not trigger
  plaintiff's option to purchase under the Hinsdale/Burleigh  agreement
  because the Burleighs did not break free from their contract with the
  Shermans.  Plaintiff  appeals, arguing that because the Shermans knew 

 

  of the Hinsdale/Burleigh agreement when they closed on Lot No. 3, they took
  the property subject to  plaintiff's option.

       On review of a motion for judgment on the pleadings, we will 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."  In re Estate
  of  Gorton, 167 Vt. 357, 358, 706 A.2d 947, 949 (1997).  We will affirm a
  judgment on the pleadings if  the plaintiff's pleadings contain no
  allegations that if proven would permit recovery.  See Knight v.  Rower, __
  Vt. __, __, 742 A.2d 1237, 1239 (1999).  Plaintiff contends that the trial
  court assumed  facts not on the pleadings when it rendered its decision, in
  effect converting defendants' motion to  one for summary judgment under
  V.R.C.P. 56.  We need not address that issue, however, because  the
  pleadings alone are sufficient to affirm the court's decision.

       The only question we must address is whether the terms of the sale of
  Lot No. 3 between the  Shermans and the Burleighs triggered plaintiff's
  option to purchase the lot.   Although the  Hinsdale/Burleigh agreement was
  titled "Right of First Refusal," in actuality the contract more  closely
  resembled an option contract-plaintiff had the option to buy Lot No. 3 if
  and when the deal  between the Shermans and the Burleighs was not
  completed.  See Cameron v. Double A. Services,  Inc., 156 Vt. 577, 585, 595 A.2d 259, 263 (1991) (right of first refusal becomes an option with 
  appearance of another purchaser).  This characterization is bolstered by
  the fact that the  Sherman/Burleigh agreement was signed a month before the
  Hinsdale/Burleigh one.  Because the  Shermans had secured their right to
  purchase Lot No. 3 first, plaintiff could not have gained a right  of first
  refusal.

       The interpretation of the Hinsdale/Burleigh contract is a matter of
  law.  Morrisseau v. Fayette,  164 Vt. 358, 366, 670 A.2d 820, 826 (1995). 
  According to the contract, plaintiff's option would be  triggered only if
  the Sherman/Burleigh agreement was not consummated according to its terms
  and  "amendments thereto."  Here, the sale was consummated according to the
  terms of the  Sherman/Burleigh agreement, except that the price term was
  changed.  We find that a change in the  price term is precisely the type of
  "amendment" contemplated by the Hinsdale/Burleigh agreement.   See Okemo
  Mountain, Inc. v. Town of Ludlow, 164 Vt. 447, 451, 671 A.2d 1263, 1267
  (1995)  (noting that we presume the language of an instrument declares the
  intent of the parties).  Thus when  the Sherman/Burleigh agreement, which
  predated plaintiff's option contract, was consummated,  plaintiff's option
  was extinguished.  According to the plain language of the Hinsdale/Burleigh 
  contract, the Shermans or the Burleighs were entitled to amend the price,
  or any other term of their  agreement and plaintiff's option would be
  relevant only if the sale of Lot No. 3 ultimately failed.

       Plaintiff argues that because the Shermans knew of the
  Hinsdale/Burleigh agreement at the  time the sale was completed, they took
  the property subject to his option.  We need not reach this  question,
  however, because we hold that the sale did not trigger the option and so it
  was  extinguished.  The Shermans, therefore, own Lot No. 3 free of any
  encumbrances relating to the  Hinsdale/Burleigh contract.

 


       Affirmed.



                                       BY THE COURT:



                                       _______________________________________
                                       Jeffrey L. Amestoy, Chief Justice

                                       _______________________________________
                                       John A. Dooley, Associate Justice

                                       _______________________________________
                                       James L. Morse, Associate Justice

                                       _______________________________________
                                       Denise R. Johnson, Associate Justice

                                       _______________________________________
                                       Marilyn S. Skoglund, Associate Justice