Oehler v. Pyskacek

Oehler v Pyskacek (99-189); 171 Vt. 538; 758 A.2d 786 

[Filed 27-Jul-2000]


                                 ENTRY ORDER

                       SUPREME COURT DOCKET NO. 99-189

                               JUNE TERM, 2000


Gretchen Oehler	                       }	APPEALED FROM:
                                       }
                                       }
     v.	                               }	Windham Superior Court
                                       }	
Donald J. Pyskacek, Vermont National   }
Bank and Jack W. Milton	               }	DOCKET NO. 437-11-96 Wmcv

                                                Trial Judges: John P. Meaker &
                                                              John P. Wesley  

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


       In this appeal, defendant-appellant Donald Pyskacek and 
  plaintiff-cross-appellant Gretchen  Oehler (the parties), who consented to
  reference of disputed issues in a partnership accounting to a  court
  appointed master in the action below, jointly seek reversal of a Windham
  Superior Court order  that required them to pay the master's fees and
  expenses.  We affirm.

       The initial dispute between plaintiff and defendant involved a civil
  action for partition of real  estate and a counterclaim seeking dissolution
  of their partnership.  After a two-day hearing, the court  ordered that the
  case proceed as a partnership dissolution.  In March 1998, after announcing
  its  decision, the court asked the parties to consider submitting the
  partnership accounting to a court-appointed master.  The court ordered the
  parties to confer with each other to determine whether they  would consent
  to reference to a court-appointed master pursuant to V.R.C.P. 53, and to
  notify the  court of their collective decision on or before April 17, 1998.

       Defendant's attorney notified the court on April 17, 1998 that the
  parties had agreed to  reference the matter to an identified and available
  master.  At a May 1, 1998 hearing, the court asked  defendant's attorney to
  submit a proposed reference order for the master.  Defendant's attorney 
  submitted a proposed reference order on May 29, 1998, which cited V.R.C.P.
  53 and stated that the  master "shall set a time and place for hearing, to
  be held no later than June 19, 1998."  The proposed  order concluded by
  addressing the master's costs:  "The compensation to be allowed to the
  master  shall be fixed by the court, and such compensation and necessary
  expenses incurred by the master as  allowed by the court, shall be paid by
  the State as provided by law."

       Although the court had not yet authorized the reference or formally
  appointed the master, the  parties scheduled a hearing for June 11, 1998. 
  At the request of the agreed-upon master, who did 

 

  not want to begin the hearing until he was officially appointed by the
  court, defendant's attorney  contacted the court on or about June 8, 1998,
  regarding the status of the reference order.  On June 10,  1998, the court
  faxed its reference order to the parties.  The court's order tracked the
  proposed order,  including its reference to V.R.C.P. 53 and the June 19,
  1998 hearing deadline, with one critical  difference.  In a handwritten
  note, the court added a condition to the provision regarding the master's 
  compensation:

    The compensation to be allowed to the master shall be fixed by the
    court,  and such compensation and necessary expenses incurred by
    the master as  allowed by the court, shall be paid by the State as
    provided by law.  If there  are insufficient funds budgeted for
    this by the State the court will allocate  compensation between
    the parties as justice requires.

  (Emphasis added.)   

       The parties did not move for reconsideration of the condition the
  court imposed on their  proposed order.  Nor did they, when the master's
  hearing commenced on June 11, 1998, preserve any  objection to it on the
  record.  The hearings proceeded over several days without any notice to the 
  court that the parties objected to the terms of the reference order.  When
  the parties asked the court in  a July 21, 1998 stipulation to extend the
  time for the master's report because the hearings were  lasting longer than
  anticipated, they made no objection to any provision of the reference
  order.  

       After several hearing dates, the evidence was closed, and the parties
  submitted proposed  findings of fact and conclusions of law to the master
  in August 1998.  In October 1998, before the  master issued his decision,
  the parties settled their dispute.  One of the provisions addressed the 
  master's compensation:

    [I]n the event the Windham Superior Court directs the parties to
    pay all or  any portion of the fees of the . . . court-appointed
    master in connection  with the accounting proceeding before the
    master, the parties shall each  pay one-half of such fees, or
    portion thereof, reserving to each party the  right to contest
    and/or appeal, individually or jointly, any such order by the 
    court.

  The parties evidently forwarded the master's bill to the court, and the
  court requested the parties  inform it of the matter's status before it
  submitted the bill to the court administrator.  In a December  1, 1998
  stipulation, the parties stated that they had settled their dispute and
  that, pursuant to V.R.C.P.  53 the court "may allow" compensation for the
  master "to be paid by the State."  

       On December 29, 1998, the court informed the parties that, according
  to the court  administrator, "there are no funds allocated in the
  judiciary's budget for the payment of masters  appointed by the court,
  notwithstanding the provisions of V.R.C.P. 53(a) and 32 V.S.A. § 1758."  
  The parties then filed a joint motion for an order requiring the State to
  compensate the master.  The 

 

  court denied the motion and ordered the parties to each pay one-half of the
  master's fees and  expenses, noting that the parties had reserved their
  right to appeal this determination in the  settlement agreement.  The
  parties then appealed jointly to this Court.  

       The parties contend that the issue presented by the facts of this case
  is whether the State of  Vermont must pay the fees and expenses of court
  appointed masters.  The State, arguing as amicus  curiae pursuant to
  V.R.C.P. 29, contends that the issue is much narrower; that is, whether the
  court  has the authority to require parties who have voluntarily elected to
  utilize a master in resolving their  dispute to bear the costs of the
  master's proceedings.  We agree with the State that it is the latter 
  rather than former issue that is before us and conclude that on the facts
  of this case, the trial court's  order requiring the parties to bear the
  costs of the master was proper.

       We note at the outset that this was not a case in which the parties
  were compelled to utilize a  master.  Indeed, the court's order directing
  the parties to consider whether they would consent to a  master could not
  be more explicit:

    It is further ORDERED that the parties shall confer with each
    other  through their respective attorneys and shall notify the
    court on or before  April 17, 1998, whether they will consent to
    reference of this matter to a  court appointed master pursuant to
    V.R.C.P. 53(b) for determination of  disputed issues with regard
    to partnership accounting.  If the parties  consent to such
    reference, the parties shall advise the court by such a date  of a
    mutually acceptable master or, in the alternative, each party
    shall  provide the court with three or more names of individuals
    acceptable to  such party for appointment as master.

  (Emphasis added.).  Nor could there be a clearer expression of the parties'
  understanding that the  reference to the master was contingent upon their
  voluntary agreement.  On behalf of the parties,  defendant's attorney
  notified the court by letter of April 17, 1998, that "the parties will
  consent to  reference of this matter to a court appointed master for
  determination of disputed issues with regard  to the partnership
  accounting." (Emphasis added.).  Moreover, the court incorporated verbatim
  the  language used by defendant's attorney in the proposed reference order:
  "Based upon the agreement of  the plaintiff and the defendant Pyskacek, and
  pursuant to V.R.C.P. 53, the court hereby appoints  Raymond P. Perra, Esq.,
  . . . to serve as master in the above-entitled action, for the purpose of
  taking  evidence and making findings of fact and conclusions of law with
  regard to the partnership  accounting."  (Emphasis added.).

       We emphasize the parties' consent to the use of a master because the
  essence of their argument  on appeal is that subsequent events rendered
  their consent "involuntary."  The parties first claim that  they and the
  court were implicitly, if not explicitly, in accord that V.R.C.P. 53
  required payment by  the State of the master's fees and expenses.  The
  difficulty with the parties' assertion of this claim is  that irrespective
  of whether the court and the parties had the same view of the application
  of  V.R.C.P. 53 at the time reference to a master was first discussed, the
  reference order promulgated 

 

  by the court contained an unmistakably significant caveat to whatever
  expectation may have existed  as to the State's capacity or the judicial
  branch's authority to pay the master's costs.  Indeed, the fact  that it
  was the judge's handwritten addition to the typed order, prepared by the
  parties and otherwise  unaltered, revealed rather than concealed its
  significance.  The judge wrote:  "If there are insufficient  funds budgeted
  for this by the State the court will allocate compensation between the
  parties as  justice requires."

       The parties cannot reasonably maintain that they were unaware of the
  court's insertion of this  language into the reference order, nor can they
  argue that it is irrelevant to the issue of whether their  subsequent use
  of the master was voluntarily undertaken with notice that they may be
  liable for the  master's fees and expenses.  On appeal, the parties concede
  notice but contend that the relevance of  the quoted language of the
  reference order is mitigated by the circumstances they faced.

       The parties' continuing conduct does not support this contention.  The
  record shows that the  parties (1) scheduled and made arrangements for the
  June 11, 1998 hearing before the court issued its  reference order; (2) did
  not postpone the hearing or even note an objection to the court's reference 
  order once the hearing commenced; and (3) failed to inquire or otherwise
  alert the court, in their  stipulation for an extension of time, that they
  were concerned about the reference order's  compensation caveat, even
  though the need for more time was presumably proportional to increased 
  costs of the master's services.  The important fact is not, as the parties
  argue, that "neither party here  indicated his or her acceptance of the
  court's addition to the proposed reference order," but rather that  neither
  party indicated his or her objection to it.  The parties now claim that
  they were "doing the  court a favor" by "conducting time consuming
  litigation outside of court."  Even if we accept the  parties'
  characterization of their motive for utilizing a master, it is difficult to
  find the benefit for  either the judicial system or the litigants where
  parties "avail [themselves] of the benefit of [an] order  and [then] deny
  its validity."  Spaulding v. Kimball, 98 Vt. 169, 174,126 A. 588, 590
  (1924).

       It may be, as the parties argue, that the failure to impose the costs
  of the master upon the State  in the circumstances of this case will deter
  litigants from the use of the master.  To the extent the  payment of
  masters depends upon the appropriation of public funds, the parties'
  argument must  necessarily be addressed to the Legislature.  See Bouvier v.
  Wilson, 139 Vt. 494, 499, 431 A.2d 465,  468 (1981) (rejecting plaintiffs'
  argument that State was required to adequately fund general  assistance
  program of Department of Social Welfare because such "shortcoming is only
  remediable  by the Legislature").  We hold only that on the facts of this
  case, the parties cannot be said to have  been unfairly burdened by the
  imposition of the costs in a matter to which they voluntarily consented  to
  the utilization of a master. 

 


       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