Noble v. Kalanges
Annotate this Case
Noble v. Kalanges (2004-437); 179 Vt. 1; 886 A.2d 767
2005 VT 101
[Filed 26-Aug-2005]
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.
2005 VT 101
No. 2004-437
Denise A. Noble, et al. Supreme Court
On Appeal from
v. Chittenden Superior Court
William C. Kalanges April Term, 2005
Matthew I. Katz, J.
Christopher J. Smart, Montpelier, for Plaintiffs-Appellants.
Mark L. Sperry of Langrock Sperry & Wool, LLP, Burlington, for
Defendant-Appellee.
PRESENT: Reiber, C.J., Johnson and Skoglund, JJ., and Hayes, Supr. J.
and Grearson, D.J., Specially Assigned
¶ 1. JOHNSON, J. In this appeal, we consider whether plaintiffs
have the right to prevent defendant from developing his property, which at
one time was designated on a subdivision plat as "reserved" for an
elementary school. Plaintiffs argue that because their deeds reference the
subdivision plat, they acquired an implied easement that limited the use of
the site to a school. Alternatively, they argue that through a
reversionary clause of a 1985 warranty deed, they acquired an equitable
servitude that required the site to remain open space. The trial court
rejected these arguments and granted summary judgment for defendant. We
affirm.
¶ 2. The following facts are undisputed. Plaintiffs and defendant
reside in Essex, Vermont. Defendant owns real property in a subdivision
called "Countryside," as do some plaintiffs. The remaining plaintiffs own
property in an adjoining subdivision called "Essex Park."
¶ 3. The subdivisions were created as follows. In 1984, Essex
Housing Partnership (EHP) recorded a plat depicting the Countryside
subdivision. The plat designated an approximately fourteen-acre parcel as
"reserved elementary school site." EHP also recorded a plat for the Essex
Park subdivision. The Essex Park plat depicted an approximately
twenty-acre parcel of land as "common open space area." Both plats
expressly stated that they had been approved by the town's planning
commission in May 1984 "subject to all requirements and conditions" of the
commission's resolution of the same date. As discussed in greater detail
below, the planning commission approved the plats on the condition that EHP
deed land to the school district for an elementary school. (FN1)
¶ 4. Consistent with this agreement, EHP executed two documents in
favor of the school district. (FN2) In February 1985, it conveyed the
Countryside site to the school district by deed subject to the following
terms and conditions. If the school district did not begin construction of
an elementary school building within five years after the completion of the
Countryside subdivision, EHP could prompt the planning commission and
zoning board to review the Countryside site. If both bodies made
unconditional determinations that the school site should not continue to be
reserved for public school use, they would notify the school district's
governing board of their decision in writing and file a certified copy of
their official resolution in the town's land records. If the school
district exercised a purchase option for the Essex site in accordance with
the terms and conditions of the option (discussed below), then the
Countryside site would revert to EHP subject to the restriction that it
would be forever reserved as common open space for the benefit of the Essex
Park subdivision.
¶ 5. As noted above, EHP also provided the school district with a
purchase option for the Essex site in February 1985. The option reiterated
that the planning commission's final approval of the Countryside
subdivision plat was conditioned on the dedication of a school site, and
the school district wanted the option of choosing between the Countryside
site and the Essex site for future construction. It explained that the
Countryside site had been conveyed to the school district with restrictions
by warranty deed but EHP still held title to the Essex site. Thus, and as
partial consideration of the final approval of the planning commission, EHP
granted the school district an exclusive option to purchase the Essex site
for nominal consideration.
¶ 6. The option provided that the grant would revert back to EHP
and be forever null and void: (1) if the school district had not commenced
construction of a school building on the Essex site within five years after
the completion of the Countryside subdivision; or (2) if the school
district commenced construction of a school building on the Countryside
site. In the case of reversion under either of these clauses, the Essex
site would forever remain common open space "as [was] currently required."
The option also provided that if the school district gave timely and proper
notice of its intent to exercise the option, then EHP must execute and
deliver a warranty deed conveying the Essex site to the school district.
In July 1992, EHP conveyed the Essex site to the school district via
warranty deed. Ultimately, the school district did not build on either
site.
¶ 7. In January 1995, EHP assigned defendant its "right, title and
interest in and to the reversionary rights" in the property described in
the February 1985 warranty deed and the February 1985 purchase option. In
July 1995, defendant provided formal notice to the school district that the
Countryside development had been completed. In May 1996, defendant
requested that the zoning board make a determination regarding the
revertible rights of the Countryside site. The board concluded that
defendant's request was premature as five years had not yet passed from the
completion of the Countryside subdivision. In November 1996, the school
district executed a quitclaim deed releasing its interest in the
Countryside site to EHP. The next day, EHP executed a quitclaim deed
releasing its interest in the Countryside site to defendant.
¶ 8. In August 1999, defendant requested a zoning permit to
construct a home on the Countryside site. His request was denied pending a
meeting of the planning commission. At a September 1999 meeting, the
planning commission determined that the Countryside site would not be used
for a school and ownership of the site would therefore revert to EHP. It
then granted defendant's request for a permit to build a home on the
Countryside site.
¶ 9. In February 2000, the zoning board and the planning commission
issued a notice of decision regarding the Countryside site. The notice
stated that both boards had agreed that the Countryside site and the Essex
site were no longer encumbered by the original restrictions contained in
the February 1985 deed and purchase option. The notice was intended to
comply with the original deed restrictions, included in deeds to both
parcels, which required that a notice of the unconditional resolution of
the planning commission and the zoning board be recorded in the town's land
records.
¶ 10. In October 2000, defendant obtained an Act 250 permit to
construct his home. Defendant began construction on his home in April 2001
and moved in during June 2002. In January 2003, the planning commission
approved defendant's plan to build seven more houses on the site. (FN3)
¶ 11. In July 2003, plaintiffs filed suit against defendant, seeking
the removal of his home and an injunction against the construction of any
additional homes on the site. Plaintiffs asserted that they possessed an
implied easement and equitable servitude that were enforceable against
defendant. Specifically, the Countryside plaintiffs claimed that because
the subdivision plat, which was referenced in their deeds, depicted the
Countryside site as reserved for a school, they had acquired an implied
easement that barred the construction of anything other than a school on
the site. The Essex Park plaintiffs argued that the open space restriction
in the 1985 deed (conveying the Countryside site to the school district)
was triggered when the school district received a warranty deed for the
Essex site, and they had thereby acquired an enforceable equitable
servitude.
¶ 12. Both parties moved for summary judgment and the court granted
defendant's motion. The court first addressed the Countryside plaintiffs'
implied easement claim. It acknowledged that under Clearwater Realty Co.
v. Bouchard, 146 Vt. 359, 364, 505 A.2d 1189, 1192 (1985), "lot owners
acquire rights in all roads, streets, parks, and other designated ways
shown on the plat map unless a contrary intent is affirmatively shown."
The court distinguished Clearwater, however, explaining that a designated
school site did not create the same kind of third-party easement as would a
right-of-way, street, or park. The court concluded that its analysis of
plaintiffs' claim resembled more of an equitable evaluation, and the
equities in this case favored defendant. The court noted that implied
easements are disfavored and that enforcing the right would create a
particularly heavy burden to run with the land, for a purpose that had been
disavowed by the intended party. In light of these facts, the court found
it difficult to see how plaintiffs would have a right to the reserved
school site parcel merely because it was part of the plat referenced in
their deeds. It therefore rejected plaintiffs' implied easement claim.
¶ 13. The court similarly rejected the Essex Park plaintiffs'
equitable servitude claim. It stated that an option contract was not an
agreement but rather a "continuing offer by one to sell and convey within
the time and upon the conditions stated." In this case, the court
explained, one of the conditions of the purchase option was that the school
district build on the property within five years of Countryside's
completion. The fact that the parties had exchanged deeds acknowledged
that the school district intended to exercise its option, but the building
term remained unfulfilled. Thus, the school district took possession of
the property but it did not take it in accordance with the option's
original terms. Moreover, the court explained, the school district
returned the parcel in 1995 before it could exercise the terms of the
purchase option.
¶ 14. The court found that the purpose of the option in conjunction
with the 1985 deed was to provide the school district with one school site
while reserving one as open space; the fact that the school district had
walked away from both parcels did not change this effect and intent. The
court thus concluded that the reversion clause in the school site deed had
not been triggered by the 1992 transfer of title for the Essex site and any
equitable servitude that might arise out of the deed was not kindled. The
court therefore granted defendant's motion for summary judgment.
Plaintiffs appealed.
¶ 15. Plaintiffs first argue that the trial court erred in granting
summary judgment to defendant on their implied easement claim. According
to plaintiffs, the trial court misread and misapplied Clearwater, 146 Vt.
359, 505 A.2d 1189. Plaintiffs maintain that the touchstone of Clearwater
is "inducement," and because they were induced to purchase their lots by
the promises of the subdivision plat, the promises of the plat are
enforceable. Plaintiffs argue that Clearwater should apply to reserved
school sites because schools convey an image analogous to a park, the
inducement test was met, and the underlying evil ("bait and switch") was
shown.
¶ 16. We review a grant of summary judgment using the same standard
as the trial court. Richart v. Jackson, 171 Vt. 94, 97, 758 A.2d 319, 321
(2000). Summary judgment is appropriate when, taking all allegations made
by the nonmoving party as true, there are no genuine issues of material
fact and the movant is entitled to judgment as a matter of law. V.R.C.P.
56(c)(3); Richart, 171 Vt. at 97, 758 A.2d at 321. As discussed below, we
conclude that Clearwater is inapplicable in this case, and the trial court
properly granted summary judgment for defendant.
¶ 17. In Clearwater, we recognized the "familiar principle of law
that where lots are sold by reference to a recorded plat, lot purchasers
acquire the right to keep open and use roads, streets, highways, and park
areas as indicated on the plat." 146 Vt. at 363, 505 A.2d at 1191. The
Clearwater case involved a dispute over a beach path that had been depicted
on a subdivision plat, which was referenced in defendants' deed. The path
did not abut defendants' property, however, and we noted that a minority of
jurisdictions held that lot purchasers only acquired easements over platted
streets or ways that touched their land or that were necessary for the use
and enjoyment of their property. Id. We rejected this approach in
Clearwater, holding with the majority of jurisdictions that "lot owners
acquire rights in all roads, streets, parks, and other designated ways
shown on the plat map unless a contrary intent is affirmatively shown."
Id. at 363-64, 505 A.2d at 1192. We explained that the object of this
principle was " 'not to create public rights but to secure to persons
purchasing lots under such circumstances those benefits, the promise of
which, it is reasonable to infer, has induced them to buy portions of a
tract laid out on the plan indicated.' " Id. (quoting Callahan v.
Ganneston Park Dev. Corp., 245 A.2d 274, 278 (Me. 1968)); see also Crabbe
v. Veve Assocs., 150 Vt. 53, 55-56, 549 A.2d 1045, 1047 (1988) (explaining
that implied easement rule is rooted in equitable considerations).
¶ 18. In Lalonde v. Renaud, 157 Vt. 281, 283, 597 A.2d 305, 306
(1989), we clarified that Clearwater set forth an objective test for
evaluating implied easement claims. In that case, the trial court held
that plaintiffs had acquired an implied easement in a lot that had been
depicted as a park on a subdivision plat. Id. at 283, 597 A.2d at 305.
Defendants argued that they had been denied the opportunity to show that
one of the plaintiffs had not actually relied on the existence of the park
in purchasing his lot. Defendants asserted that absent reliance on the
plat or reliance on the park itself, plaintiff had not been injured by the
subsequent development of the lot. Id. at 283, 597 A.2d at 306. We
rejected this argument, explaining that under Clearwater, lot owners were
granted "rights as a result of purchasing 'with reference to' a plat,
without adding a requirement of specific reliance on depictions in the
plat." Id.
¶ 19. In reaching our conclusion, we noted that Clearwater did not
absolutely bar a different analysis in a significantly different factual
setting. Id. at 284 n.2, 597 A.2d at 306 n.2. We explained that
Clearwater involved rights-of-way, not parks, and parks might well be
considered distinguishable on the basis of a different degree of necessity
to the lot owner. Id. at 284, 597 A.2d at 306. We indicated that we had
had no occasion in Clearwater to consider a third line of cases that had
adopted the "intermediate" or "beneficial enjoyment" rule, under which the
extent of the private right is limited to streets, alleys, or parks that
are reasonably or materially beneficial to the grantee. Id. Even under
this test, we explained, the inquiry into whether a lot owner is benefitted
would involve an objective test, not one that depends on an owner's
specific reliance on what was depicted on the plat map. Id.
¶ 20. Plaintiffs argue that, as in Clearwater, they acquired an
implied easement in the reserved school site because it is "reasonable to
infer" that they were induced to purchase their lots by the promises of the
plat. (FN4) While plaintiffs correctly assert that inducement is an
integral component of the implied easement analysis, there can be no
reasonable inducement under the circumstances of this case. The
construction of a school, unlike a platted road or park, is completely
outside of the developer's control. Thus, unlike Clearwater, and the cases
on which plaintiffs rely, plaintiffs could never acquire or enforce a
"private right" to the construction of a school building on the Countryside
site. Cf. Clearwater, 146 Vt. at 363, 505 A.2d at 1191 (platted path);
Lalonde,157 Vt. at 283, 597 A.2d at 305 (platted park); Ute Park Summer
Homes Ass'n. v. Maxwell Land Grant Co., 427 P.2d 249, 253 (N.M. 1967)
(confirming lot owners' "private right" to construction of golf course
depicted on plat where lot sales were based on plat and specific
representations to this effect had been made to buyers).
¶ 21. Looking at the types of cases in which the implied easement
has been applied, it is apparent that its underlying rationale is simply
inapplicable here. In Callahan, 245 A.2d at 275-76, for example, the Maine
Supreme Judicial Court held that plaintiffs, who had purchased their lot
with reference to a plan that depicted a cul-de-sac abutting their lot,
acquired the right to prevent the cul-de-sac's destruction. As the court
explained, it is not in the public interest "to permit land developers to
hold out the hope and expectation of the availability of streets to serve
lots being purchased and at the same time to retain the power at their whim
to subsequently destroy that availability." Id. at 279.
¶ 22. Similarly, in Ute Park Summer Homes Assoc., 427 P.2d at 253,
a developer sold lots with reference to a subdivision plat that depicted a
large open area as a "golf course." Id. at 251. The developer then sought
to sell the "golf course" area without restriction as to its use. The lot
owners sued, and the court held that the lot owners had acquired a legally
enforceable right in the property based on the promises of the plat. As
the court explained,
The rationale of the [implied easement] rule is that a grantor,
who induces purchasers, by use of a plat, to believe that streets,
squares, courts, parks, or other open areas shown on the plat will
be kept open for their use and benefit, and the purchasers have
acted upon such inducement, is required by common honesty to do
that which he represented he would do. It is the use made of the
plat in inducing the purchasers, which gives rise to the legally
enforceable right in the individual purchasers, and such is not
dependent upon a dedication to public use, or upon the filing or
recording of the plat.
Id. at 253.
¶ 23. Unlike the cases discussed above, and similar cases involving
platted streets, parks, and open space areas, the grantor in this case
lacks authority to construct a school on the Countryside site and its
reservation of the school site cannot reasonably be seen as a promise to
purchasers that such construction would actually occur. See generally
Restatement (Third) of Property: Servitudes, § 2.13, Reporter's Note at
174 (2000) (stating that "[u]nless the grantor has the power to create the
servitude, there would be no point to implying the servitude," and citing
cases). Indeed, in this case, the grantor was required by the planning
commission to reserve the school site and convey the site to the school
district to secure approval of the plat.
¶ 24. Under the circumstances of this case, it would be unreasonable
for a purchaser to rely on such a designation in purchasing his lot. This
is particularly true where, as here, the plat specifically provided that it
was approved on the terms and conditions identified by the planning
commission, and where the reservation (and subsequent reversion of
ownership to the grantor) was consistent with the town's subdivision
regulations. Because there can be no reasonable inducement under the
circumstances of this case, summary judgment was properly granted for
defendant. Given our conclusion, we do not address plaintiffs' claim that
the trial court erred by suggesting that the "broad view" adopted in
Clearwater is subject to an exception when a municipality vacates.
¶ 25. We turn next to plaintiffs' assertion that the trial court
erred in rejecting its equitable servitude claim. Plaintiffs maintain that
the open space restriction in the 1985 warranty deed, which conveyed the
Countryside site to the school district, was triggered when the school
district provided EHP with written notice of its intent to exercise the
purchase option for the Essex site. According to plaintiffs, this act
constituted the "exercise" of the purchase option as contemplated by the
1985 warranty deed, and the trial court erred by failing to distinguish
between the acceptance of the offer (i.e., "exercise" of the option), and
the performance of the resulting contract.
¶ 26. Putting aside defendant's assertions regarding chain-of-title,
the trial court properly construed the terms of the 1985 warranty deed.
The 1985 warranty deed provided that if the school district "exercise[d]
its option to purchase" the Essex site "in accordance with the terms and
conditions" of the purchase option, then the Countryside site would revert
to EHP "subject to the restriction . . . that said lands and premises shall
be forever reserved as common open space for the benefit of the Essex Park
Condominium Regimes." The school district did not exercise its option to
purchase the Essex site in accordance with the terms and conditions of the
purchase option, and the open space restriction was therefore not
triggered.
¶ 27. In construing a deed, the court must "give effect to the
intention of the parties if it can be gathered from the language used when
interpreted in connection with, and in reference to, the subject matter and
purpose sought to be accomplished at the time the instrument was executed."
McDonough v. W.W. Snow Constr. Co., 131 Vt. 436, 441, 306 A.2d 119, 122
(1973); accord Kipp v. Chips Estate, 169 Vt. 102, 105, 732 A.2d 127, 129
(1999); Welch v. Barrows, 125 Vt. 500, 504, 218 A.2d 698, 702 (1966) ("The
intention of the parties, not the language used, is the dominating factor,
and the circumstances existing at the time of the execution of the deed,
the situation of the parties and the subject matter are to be
considered."). In this case, the intent of the parties is clear-the
warranty deed and purchase option were intended to give the school district
the option of choosing between the Countryside site and the Essex site for
the construction of a school. If a school was built on the Countryside
site, then the Essex site would remain open space. Conversely, if the
Essex site was used for a school, then the Countryside site would be used
as open space for the benefit of the Essex Park subdivision. There is no
suggestion in either document that the parties intended to reserve both
sites as open space if a school was not actually constructed on either
site. Given the existence of the purchase option, it would be unreasonable
to draw such an inference.
¶ 28. We reject plaintiffs' assertion that by providing EHP with
written notice of its intent to exercise the option, and receiving a
warranty deed for the Essex site in 1992, the school district exercised the
purchase option as required by the 1985 warranty deed. Plaintiffs'
suggested interpretation would undermine the parties' intent in executing
these documents. The purpose of the option was to provide the school
district with a site on which to build a school; it follows that exercise
of the option in accordance with its terms and conditions, as provided by
the 1985 warranty deed, required that construction on the site actually
occur. Thus, contrary to plaintiffs' assertion, the school district's
actions did not constitute "acceptance" of the offer contained in the
purchase option, nor did its actions give rise to a bilateral contract that
obligated it to build a school on the Essex site within five years of the
completion of the Countryside subdivision. (FN5) See Ackerman v.
Carpenter, 113 Vt. 77, 81, 29 A.2d 922, 924-25 (1943) (recognizing that "an
acceptance which varies from the offer will not conclude a contract;" and
explaining that "[i]n determining what one party intended and the other
ought to have understood, regard must be had to the situation and the
purpose of the parties, the subject matter and course of the
negotiations.").
¶ 29. This interpretation is reinforced by the option's provision
that the grant would become null and void if construction had not occurred
on the Essex site within five years after the completion of the Countryside
subdivision or if construction had occurred on the Countryside site within
this period. The option also provided that if the school district obtained
and recorded a warranty deed for the Essex site, this would serve to
"protect the rights of the school district" as granted in the purchase
option. In other words, the school district would retain the right to
commence construction on the Essex site until five years had elapsed from
the completion of the Countryside subdivision. This provision undercuts
plaintiffs' assertion that the school district became contractually
obligated to construct a school on the Essex site once it provided EHP with
its notice of intent to exercise the purchase option. As previously noted,
the school district did not exercise its right to commence construction on
the Essex site, and indeed, it conveyed the site to the Essex Park
Homeowners' Association in December 1998, before the relevant time period
had elapsed.
¶ 30. The trial court properly determined that the option was not
exercised as required by the 1985 warranty deed, and the open space
restriction was not triggered. Given our conclusion, we do not reach
plaintiffs' argument that the open space restriction is an equitable
servitude. Summary judgment was appropriately granted to defendant on
plaintiffs' claims.
Affirmed.
FOR THE COURT:
_______________________________________
Associate Justice
------------------------------------------------------------------------------
Footnotes
FN1. At the time the plats were recorded, the town's subdivision
regulations provided that when a proposed development consisted of one
hundred or more dwelling units, the planning commission could require the
subdivider to reserve a site and mark it on the subdivision plat as a
potential school site. Village of Essex Junction, Subdivision Regulations,
Rule 8.48 (adopted July 14, 1981). If the commission required that a
school site be reserved, the subdivider was required to provide the school
district with a warranty deed for the site, free and clear of encumbrances,
which would be recorded prior to the initiation of improvements on the
site. If the school district did not initiate improvements within five
years after the completion of the development, the commission was required
to review the continuing need for the school site with the prudential
committee. If the commission determined that the site should not continue
to be reserved for public school use, the condition of use would be
considered void. The regulations also provided that if a development had a
potential development capacity of ten or more dwelling units, the
commission could require the subdivider to reserve up to fifteen percent of
the plat for public open space, park land, or recreational purposes.
FN2. It appears from the record that in December 1984, EHP conveyed its
interest in the Countryside development to A&G Investments, a Vermont
general partnership. A&G Investments joined in the conveyance of the
Countryside site "for the purposes of releasing any and all interest they
may have in the within described lands and/or interest therein."
FN3. Plaintiffs Noble, Wasser, Connors, Cobb, Trendles, Mitchells,
Brauneggs, Jordans, and Dalhgren, appealed the site plan approval to the
Environmental Court. According to plaintiffs' complaint, a hearing on this
appeal was scheduled for July 2003. The status of this appeal is not clear
from the record. It appears that the above-named plaintiffs also appealed
the planning commission's approval of an amended Act 250 permit reflecting
the seven-home development project.
FN4. Plaintiffs' assertions that they were in fact induced to purchase
their lots by the promises of the plat are immaterial to the resolution of
their implied easement claim. See Lalonde v. Renaud, 157 Vt. 281, 283, 597 A.2d 305, 306 (1989). We therefore reject their argument that the trial
court erred by ignoring evidence to this effect.
FN5. In their reply brief, plaintiffs assert that the purchase option no
longer exists because it was merged into the 1992 warranty deed for the
Essex site. Plaintiffs raise this argument for the first time on appeal
and we therefore do not address it. See Lane v. Town of Grafton, 166 Vt.
148, 153, 689 A.2d 455, 457 (1997) ("Failure to raise a reason why summary
judgment should not be granted at the trial level precludes raising it on
appeal."). Even if this argument had been preserved, however, we note that
it would not undermine our conclusion that plaintiffs' interpretation of
the 1985 warranty deed is at odds with the parties' intent.
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