Will v. Mill Condominium Owners' Assoc., et al.

Will v. Mill Condominium Owners' Association (2005-019); 179 Vt. 500; 898 A.2d 1264

2006 VT 36

[Filed 28-Apr-2006]


       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.


                                 2006 VT 36

                                No. 2005-019


  Anne M. Will                                   Supreme Court

                                                 On Appeal from
       v.                                        Windsor Superior Court


  Mill Condominium Owners' Association, et al.   November Term, 2005


  Theresa S. DiMauro, J.

  Stephen S. Ankuda of Parker & Ankuda, P.C., Springfield, for
    Plaintiff-Appellant.

  Jennifer G. Mihalich of Lynn, Thomas & Mihalich, P.C., Burlington, for
    Defendants-Appellees Mill Condominium Owners' Association, Inc., Graham,
    and McMillen.

  Robert Reis and Matthew D. Anderson of Reis, Urso & Ewald, LLP, Rutland,
    for  Defendant-Appellee Nitka.

  T. Darrah Moore of Birmingham & Moore, P.C., Ludlow, for
    Defendants-Appellees Seiple.



  PRESENT:  Reiber, C.J., Dooley, Johnson, Skoglund and Burgess, JJ.

       ¶  1.  JOHNSON, J.   Plaintiff Anne M. Will, owner of a unit in the
  Mill Condominiums, challenges the trial court's decision denying her claims
  for damages, attorneys' fees, and costs resulting from the commercially
  unreasonable foreclosure sale of Will's condominium by defendant Mill
  Condominium Owners' Association.  We affirm in part and reverse in part.
   
       ¶  2.  This is the second time this case has come before us on
  appeal.  The facts underlying the conflict between Will and the defendants
  are recited in our first decision, Will v. Mill Condo. Owners' Ass'n, 2004
  VT 22, 176 Vt. 380, 848 A.2d 336 ("Will I").  In brief, Will failed to pay
  her condominium dues for a period of time; in response, the Association
  foreclosed and sold Will's condominium.  The Association sold the
  condominium to defendants Allen and Linda Seiple for $3,510.10, although
  the condominium was valued at approximately $70,000.

       ¶  3.  In turn, Will sued the Association, the Association's attorney
  (Martin Nitka), and the Seiples, challenging the validity of the
  foreclosure sale and seeking its rescission.  When the trial court
  indicated that it considered the sale valid and would not order rescission,
  Will amended her complaint to add claims for money damages based on various
  theories including breach of contract, mutual mistake, unjust enrichment,
  inadequacy of consideration, breach of fiduciary duty, and breach of the
  duty to sell the condominium in a commercially reasonable manner.  Upon
  motions for summary judgment, the trial court ruled in favor of the
  Association, attorney Nitka, and the Seiples, concluding that the
  foreclosure sale was valid and Will was not entitled to damages on any of
  her additional claims.  Specifically, with regard to the Association and
  attorney Nitka, the court determined: (1) there was no breach of a
  contractual duty in connection with the foreclosure sale; (2) the sale
  contract could not be invalidated on grounds of mutual mistake or
  inadequate consideration; and (3) neither the Association nor attorney
  Nitka owed Will a fiduciary duty in connection with the foreclosure sale or
  a duty to conduct the sale in a commercially reasonable manner.  With
  regard to the Seiples, the court concluded: (1) there could be no
  contract-based cause of action against them because there was no contract
  between Will and the Seiples; and (2) Will had no claim for unjust
  enrichment against the Seiples because they had paid for the condominium.
   
       ¶  4.  Thus, one of the central findings supporting summary judgment
  in favor of the Association and attorney Nitka was that they did not owe
  Will any duty to sell the condominium in a commercially reasonable manner. 
  Will contested this conclusion on appeal, and this was the argument on
  which she prevailed. (FN1)  We held that a standard of commercial
  reasonableness applied to the foreclosure sale, and that the Association
  and attorney Nitka (as the agent of the Association) had failed to meet
  that standard in this case.  Will I, 2004 VT 22, ¶¶ 15-18.  Accordingly, we
  reversed and remanded.
                              
       ¶  5.  Following remand, Will filed a proposed order with the trial
  court seeking to vacate the foreclosure deed and to set the matter for
  trial on Will's claim for damages.  Will then filed a motion for damages,
  costs, and attorneys' fees.  The trial court vacated the foreclosure
  immediately and initially indicated that it would hold further proceedings
  on the claims for damages, attorneys' fees, and costs.  Ultimately,
  however, the trial court denied Will's damages claim, concluding that a
  trial on damages would exceed the scope of our remand, and also noting that
  the specific damages claim Will asserted on remand had not been pursued
  previously.  The trial court further denied the claim for attorneys' fees,
  concluding that fees were not available under the statutory section Will
  had invoked.  Finally, the trial court denied Will's claim for costs
  because she had not provided an adequate accounting.  Will challenges these
  rulings in her appeal.  The trial court denied Will's damages claim and
  attorneys' fees as a matter of law; therefore, our review is de novo. 
  Concord Gen. Mut. Ins. Co. v. Madore, 2005 VT 70, ¶ 8, 178 Vt. 281, 882 A.2d 1152.  We review the denial of costs for abuse of discretion.  Jordan
  v. Nissan N. Am., Inc., 2004 VT 27, ¶ 16, 176 Vt. 465, 853 A.2d 40.

       ¶  6.  We first examine whether Will should have been allowed to
  pursue a claim for damages against the Association and attorney Nitka for
  breach of the duty to sell the condominium in a commercially reasonable
  manner. Will claimed damages in the amount of $79,500 for lost use of her
  condominium, $5,000 for the cost of removing property and storage, $3,500
  for replacement of personal property, $1,200 to clean and repair the unit,
  and $12,500 for lost personal time.  We express no view on the merits of
  these claimed damages, but conclude that Will should at least be allowed to
  present them to the trial court in the first instance.
   
       ¶  7.  The trial court gave three related reasons for concluding that
  Will could not pursue her damages claim.  First, the trial court determined
  that rescission and money damages were alternative and mutually exclusive
  remedies.  The trial court did not cite authority in support of this
  proposition, and defendants offer none in their appellate briefing. (FN2)   
  In fact, while a plaintiff is generally not permitted to recover twice for
  the same injury, in this case, Will's claim for rescission and her claim
  for money damages are directed at distinct harms.  See Gokey v. Bessette,
  154 Vt. 560, 565-66, 580 A.2d 488, 492 (1990) (noting general bar on double
  recovery but concluding that bar did not apply where recovery was for two
  distinct harms).  It is true that Will cannot have the foreclosure sale
  rescinded and also recover the fair market value of the property, as she
  would be recovering twice for the same harm (loss of ownership of the
  condominium); however, that is not what Will seeks here.  Rather, she seeks
  to be compensated for damages resulting from her loss of use of the
  condominium for an extended period of time-a harm distinct from loss of
  ownership.  See, e.g., Coty v. Ramsey Assocs., 149 Vt. 451, 464, 546 A.2d 196, 205 (1988) (affirming award of damages, including lost rental income,
  for loss of use of property in nuisance action).

       ¶  8.  Second, the trial court concluded that this Court had
  implicitly confirmed that rescission and damages were mutually exclusive
  remedies by the phrasing of our mandate in Will I: "Summary judgment is
  vacated, and the case remanded to the trial court for entry of judgment
  voiding foreclosure sale of appellant's condominium unit."  2004 VT 22. 
  Our mandate specifically instructed that the foreclosure be voided, but
  also generally instructed that the summary judgment be vacated.  The
  mandate does not purport to relate the two forms of appellate relief to one
  another or to limit their consequences upon remand.  To the contrary, the
  claims disposed of by the summary judgment rulings-based in large part on
  the trial court's conclusion that the Association and its attorney owed
  Will no duty-must be reconsidered in light of our decision nullifying that
  logic.

       ¶  9.  It is true that, in proceedings on remand, the trial court is
  limited to the specific directions in the remand order as interpreted in
  light of the opinion.  Bissonnette v. Wylie, 168 Vt. 561, 562, 711 A.2d 1161, 1163 (1998) (mem.) (citing Coty, 154 Vt. at 171, 573 A.2d at 696). 
  Unless the Court states explicitly otherwise, (FN3) however, the scope of
  the remand must encompass the scope of the error found on appeal.  In re
  UNUM Life Ins. Co. of Am., 162 Vt. 201, 205, 647 A.2d 708, 711 (1994)
  (concluding that Commissioner of Department of Banking, Insurance and
  Securities did not exceed scope of Supreme Court's remand by making
  additional findings on remand where (1) mandate did not bar Commissioner
  from making such findings and (2) additional findings were necessary to
  carry out mandate).  By ignoring the impact of our holding on the claims
  disposed of in the vacated summary judgment rulings, the trial court failed
  to implement the remand order in light of the content of our opinion.

       ¶  10.  Third, the trial court determined that Will's damages claim
  was waived because she had not raised this particular damages claim
  previously, stating, "The obvious reason for the limited remand is that
  plaintiff had not pursued further claims for damages."  From this statement
  it is not clear whether the trial court faults Will for failing to include
  certain, specific damages claims in her amended complaint (i.e., for loss
  of use of property), or for failing to raise the denial of her damages
  claims as a separate issue (distinct from the challenge to the ruling that
  no duty existed) in her first appeal.  The Association focuses on Will's
  failure to discuss her damages claim in the first round of appellate
  briefing, arguing that Will solely sought rescission of the foreclosure
  sale as a remedy.  Similarly, attorney Nitka asserts that Will has waived
  any damages claim by failing to file a motion under V.R.A.P. 40 asking this
  Court to clarify the status of Will's damages claim in light of our mandate
  in Will I.  
   
       ¶  11.  These arguments fail in light of the record.  Will included
  damages claims based on breach of a duty of commercial reasonableness in
  the amended complaint.  The trial court rejected this theory; Will appealed
  on that basis and prevailed.  We held that the Association and its attorney
  did owe a duty and had breached that duty.  Our decision in Will I
  validated Will's theory of recovery, and therefore the claims based on that
  theory were revived for determination upon remand.  That the specific
  components of the damages sought by Will have changed between the filing of
  her complaint and the proceedings on remand is to be expected. (FN4)
        
       ¶  12.  We emphasize that we are not deciding the merits of Will's
  damages claim, only that it deserves a hearing.  The Association and
  attorney Nitka are entitled to seek to dismiss the claim, move for summary
  judgment, or pursue whatever strategy they wish.  But it was error for the
  trial court to conclude that the claim was waived, precluded by our remand,
  or generally unavailable in light of the award of rescission.

       ¶  13.  Will's claims against the Seiples were not based on the breach
  of the duty to conduct a commercially reasonable foreclosure sale.  Rather,
  the amended complaint asserted claims against the Seiples for mutual
  mistake and unjust enrichment.  The basis for granting summary judgment in
  favor of the Seiples was unaltered by our holding in Will I.  Furthermore,
  Will concedes in her brief that these two claims are moot.  Therefore, the
  Seiples are correct that Will no longer has a live claim against them in
  this action.
   
       ¶  14.  Will sought to recover her attorneys' fees under 27A V.S.A. §
  3-116(g), the attorneys' fees provision of the statute permitting
  homeowners' associations to assert a lien over property where the property
  owner is delinquent in paying assessments.  While it is true that the
  Association foreclosed on Will's condominium under this statute, Will
  brought a separate declaratory judgment action to challenge the foreclosure
  sale.  Thus, the invalidation of the foreclosure did not take place in the
  context of a § 3-116 proceeding.  Generally, a party must proceed under the
  applicable statute to recover statutory attorneys' fees.  See Kirchner v.
  Giebink, 155 Vt. 351, 355, 584 A.2d 1120, 1122-23 (1990) (indicating that
  attorneys' fees available under provision of federal statute would not be
  available if plaintiff prevailed solely on state law grounds).  Further,
  the decision in this case did not invalidate the Association's basic
  entitlement to foreclosure in light of Will's nonpayment of fees, but
  rather invalidated the sale because of the surrounding circumstances.  Will
  is not entitled to attorneys' fees under 27A V.S.A. § 3-116(g). (FN5)
          
       ¶  15.  Finally, we consider the trial court's denial of Will's
  request for costs.  The prevailing party in a civil action is entitled to
  recover his or her costs as a matter of course under V.R.C.P. 54(d). 
  Further, V.R.A.P. 39(a) provides that where, as in Will I, judgment is
  reversed and remanded on appeal, "costs on the appeal shall be taxed
  against the appellee, . . . [and] costs on the first trial shall be held in
  abeyance pending judgment in the new trial, when costs of both trials shall
  be allowed to the prevailing party."  The Association faults Will for
  failing to produce an itemized accounting of her costs.  But at the time
  the trial court requested that Will specify her costs, the court by all
  appearances was intending to hold further proceedings in the case. 
  Instead, the court's next order was to deny all of Will's claims without
  further proceedings.  Accordingly, denial of Will's costs was premature.
  (FN6) 
   
       ¶  16.  We note that attorney Nitka has filed a motion to dismiss
  this appeal.  The motion  presents an argument already covered in attorney
  Nitka's appellate brief: that further proceedings are not warranted in this
  case because our remand in Will I was limited.  In light of our resolution
  of that issue above, we deny the motion.

       The grant of summary judgment to the Seiples and the denial of
  attorneys' fees are affirmed.  The decision of the trial court is otherwise
  reversed and remanded for proceedings consistent with this decision.  Costs
  shall be taxed against the Association and attorney Nitka.  See V.R.A.P.
  39(a).


                                       FOR THE COURT:



                                       _______________________________________
                                       Associate Justice



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                                  Footnotes


FN1.  Will also argued that the foreclosure sale was premised on mutual
  mistake and that the foreclosure violated certain constitutional rights. 
  We rejected both of these arguments.

FN2.  Attorney Nitka cites case law to the effect that a party seeking to
  enforce a real estate contract must elect either specific performance
  (transfer of the property) or damages.  This body of law does not assist us
  in determining the remedies available to Will, who seeks compensation for
  breach of a non-contractual duty.

FN3.  Examples of cases in which we have explicitly entered limited remands
  are abundant, and distinct from the language used in Will I.  See, e.g.,
  DeKoeyer v. DeKoeyer, 146 Vt. 493, 498, 507 A.2d 962, 965 (1986)
  ("Affirmed; remanded for the limited purpose of considering plaintiff's
  request for an award of attorney's fees and costs."); Trombetta v.
  Champlain Valley Fruit Co., 117 Vt. 491, 495, 94 A.2d 797, 800 (1953)
  ("Judgment as to liability affirmed.  Judgment as to damages reversed, and
  cause remanded for retrial on that issue only.").

FN4.  For example, now that rescission has been awarded, Will can no longer
  seek to recover the value of her unit.  Nevertheless, with the passage of
  time since her original complaint, she may be entitled to damages for the
  prolonged exclusion from her property-damages that had not yet been
  realized to a significant extent at the time the amended complaint was
  filed in 2002.

FN5.  In a variation on this argument, the Association argues that 27A
  V.S.A. § 1-114 limits thedamages that Will may recover in the present
  action.  For the same reasons discussed above, this statutory provision
  does not apply.

FN6.  The fourteen-day time limit for filing an itemized and verified bill
  of costs cited by the Association applies to recovery of costs incurred in
  the Supreme Court only.  See V.R.A.P. 39(c).