Case Title: Highgate Associates v. Merryfield

Citation: 

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1991-03-01T00:00:00Z

Document:
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, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 90-032


Highgate Associates, Ltd.                    Supreme Court

     v.                                      On Appeal from
                                             District Court of Vermont,
Lorna Merryfield                             Unit No. 3, Washington Circuit

                                             March Term, 1991


Michael Kupersmith, J.

George K. Belcher and Eric G. Parker, Barre, for plaintiff-appellant

John J. McCullough III, Vermont Legal Aid, Inc., Montpelier, for defendant-
   appellee


PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.


     DOOLEY, J.     Plaintiff, Highgate Associates, Ltd, the owner of a
federally subsidized housing project in Barre, appeals the trial court's
ruling that the late charge provision contained in its lease agreements is
void as an unenforceable penalty.  We affirm.
     Defendant, Lorna Merryfield, occupied an apartment in the project
beginning in January of 1986.  The lease contained the following provision:
            If the Tenant does not pay the full amount of the rent
          by the end of the 5th day of the month, the Owner may
          collect a fee of $5.00 on the 6th day of the month, the
          Owner may collect a fee of $1.00 for each additional day
          the rent remains unpaid during the month it is due.  The
          owner may not terminate this Agreement for failure to
          pay rent charges, but may terminate this Agreement for
          non-payment of rent . . . .  The charges herein discuss-
          ed are liquidated damages, are not to be considered
          charges for the use or forbearance of money, are in
          addition to the regular monthly rent payable and are
          being incurred to cover administration costs caused by
          late rent payments.

Defendant was not a model tenant; her rent payments were late on numerous
occasions and by the time she had vacated her apartment in July of 1988, she
had accrued late charges of $397.  Plaintiff brought this action to recover
unpaid rent, damages to the apartment, and the late charges.  After an
expedited hearing, the trial court awarded judgment to plaintiff on the
unpaid rent and on part of the claimed damages.  The court denied recovery
on the late charges.  On appeal, the sole issue is whether the trial court
erred in concluding that the late payment provision was void as an illegal
penalty.
     We begin by emphasizing our limited standard of review in this matter.
The trial court's findings of fact must stand unless they are clearly
erroneous, viewing the supporting evidence in a light most favorable to the
prevailing party and excluding the effect of modifying evidence.  Lawrence
v. Pelletier, 154 Vt. 29, 33, 572 A.2d 936, 939 (1990).   A finding will not
be disturbed merely because it is contradicted by substantial evidence;
rather, an appellant must show there is no credible evidence to support the
finding.  See Gokey v. Bessette, 154 Vt. 560, 564, 580 A.2d 488, 491 (1990).
Where the trial court has applied the proper legal standard, we will uphold
its conclusions of law if reasonably supported by its findings.  Goodrich v.
U.S. Fidelity & Guaranty Co., 152 Vt. 590, 596, 568 A.2d 385, 389 (1989).
     The ultimate test for the validity of a liquidated damages clause is
whether the clause is reasonable under the totality of the circumstances.
See Wassenaar v. Panos, 111 Wis. 2d 518, 525,