Case Title: Bixler v. Bullard

Citation: 172 Vt. 53, 769 A.2d 690

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2001-02-09T00:00:00Z

Document:
Bixler v. Bullard (2000-137); 172 Vt. 53; 769 A.2d 690

[Filed 09-Feb--2001]

       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.

                                No. 2000-137

Thomas S. and Judy L. Bixler	                 Supreme Court

                                                 On Appeal from
     v.	                                         Addison Superior Court

James R. Bullard, et al.	                 November Term, 2000
Shorewell Ferries, et al.

Dean B. Pineles, J.

William B. Miller, Jr. and Kevin E. Brown of Langrock Sperry & Wool, LLP, 
  Middlebury, for Plaintiffs-Appellees.

James C. Foley, Jr. of Deppman & Foley, P.C. Middlebury, for 
  Defendants-Appellants Bullard and Jewett.

Norman Williams, Dennis R. Pearson and Robert F. O'Neill of Gravel and Shea, 
  Burlington, for Defendants-Appellants Leith, Floyd, 1759 Ltd. and Shorewell 
  Ferries, Inc.

PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

       AMESTOY, C.J.  This appeal from a grant of summary judgment to
  plaintiffs arises from a  dispute involving the sale of a Vermont business
  which began operation when Mozart was three  years old.

       In early 1997, defendant James Bullard entered into negotiations with
  plaintiffs Thomas and  Judy Bixler for the sale of the Ft. Ticonderoga
  Ferry.  The negotiations continued for approximately 

 

  two years, during which time the parties entered into a "basic agreement"
  to execute the sale through  a charitable remainder trust.  Due to
  contentious disagreements regarding the terms of the sale, in  November
  1998, Mr. Bullard's attorney informed plaintiffs' attorney that he would no
  longer  negotiate with, nor sell the Ferry to, the Bixlers.  Defendant
  Bullard sold the Ferry to William Leith  and David Floyd. (FN1)  Plaintiffs
  sued Mr. Bullard, arguing that their agreement was an  enforceable
  contract.  Both parties moved for summary judgment.  The trial court,
  finding that Mr.  Bullard and the Bixlers had formed a binding contract as
  a matter of law, granted plaintiffs' motion  for summary judgment, and
  motion for specific performance, requiring defendants Floyd and Leith to 
  convey their title to, and interest in, the property.  We find that summary
  judgment was inappropriate  as factual disputes remain as to whether
  defendant manifested the requisite intent to be bound, and  therefore,
  reverse and remand for a trial. (FN2)

       One of Vermont's oldest businesses, the Ft. Ticonderoga Ferry
  ("Ferry") was originally  chartered in 1759.  In February 1997, Mr. Bullard
  advertised the sale of the Ferry , which he owned 

 

  "through his closely held corporation, Shorewell Ferries, Inc."  The sale
  was to include his residence,  located next to the Ferry.  Mr. Bullard
  listed the price of the Ferry and the residence at $750,000, and  stated
  that the sale would only be made for cash or a large down payment.  The
  advertisement also  indicated that "the owner desired to execute the sale
  through a charitable remainder trust, and that if  such mechanism were used
  there could be some price flexibility." 

       Plaintiffs contacted Mr. Bullard in February to express their interest
  in purchasing the Ferry.   In May 1997, Mr. Bullard sent the Bixlers a
  marine survey in order to establish the current market  value of the ferry
  business.  The survey included, and valued: the tug, the barge, two
  landings, a  marine railway, a fuel dispenser/tank, an equipment shed, a
  shop and equipment, and a pickup truck.  The parties' negotiations
  continued over the next several months.  Prior to February 15, 1998, the 
  Bixlers and the Bullards each met separately with a representative from St.
  Lawrence University to  explore the tax benefits of conducting the sale
  through a charitable remainder trust (CRT).  Both  parties were informed
  that IRS regulations forbid prior agreements pertaining to trust property
  before  a trust is funded.

       On February 15, 1998, the parties met at Bullards' residence and
  entered into a "basic  agreement" for the sale of the business, which Mr.
  Bullard outlined in "scratchy notes" as follows:

		I	600,000 at 8%
		II	Stock!
		III	House/Stock?
			Shelter?
		IV	JRB   Fall '98

		No erosion of Principal amount to taxes!

		Basically Accepted
		Sun 15 Feb.  JRB, SPB

 

       The parties continued to negotiate the remaining terms of the sale. 
  In July 1998, through  written correspondence, the parties explored making
  several changes to the proposed transaction,  including the purchase of
  corporate assets rather than stock, and selling Mr. Bullard's residence 
  outside of the CRT.  In one such letter, dated July 14, 1998, Mr. Bixler
  agreed not to have a "formal  and normal" business deal due to CRT
  requirements, and informed Mr. Bullard that the sale of the  Bixlers' car
  dealerships was to be completed by October 1, 1998, in anticipation of
  their purchase of  the Ferry.  

       In an undated letter sent that July, Mr. Bullard responded to Mr.
  Bixler's letter, detailing the  terms of their "basic agreement" at the
  February 15, 1998 meeting.  The letter states, "This, according  to my
  scratchy notes, is the basic agreement to which you and I agreed last
  February.  On this basis I  have ceased negotiations with other buyers and
  stopped marketing."  In the letter, Mr. Bullard  outlined four key aspects
  of the transaction, including the purchase price, the allocation of the 
  purchase price between stock and assets, that the sale would proceed
  through a charitable remainder  trust, and that Mr. Bullard would operate
  the Ferry during the 1998 season.  Mr. Bullard's letter also  stated, "In
  sum, I do not propose any changes to what I understand to be our basic
  handshake of 15  February. . . . Shirley and I will not consider any shift
  or change that would impinge negatively on  our agreement." 

       On October 1, 1998, the Bixlers sold their automobile dealerships.  On
  October 15, the  Bullards funded the CRT with company stock, and Mr.
  Bullard and his attorney, Willem Jewett,  were named as its co-trustees. 
  On October 19, the Bixlers received a copy of draft contracts from 
  attorney Jewett, which did not include reference to the pickup truck or
  inspection provisions.  The  parties met on October 21 to discuss whether
  the pickup truck was to be included as an asset of the 

 

  business, who would pay an employee's salary through the off-season, and
  inspections.  

       The meeting was "contentious."  The Bullards "perceived a statement by
  Mr. Bixler as a  challenge to find another buyer."  According to Mr.
  Bixler, however, the parties "felt all of [the]  items were addressed and
  resolved at our meeting and we left having shaken hands again and 
  apologizing for any misunderstanding, feeling that all was fine."

       On October 28, defendants Leith and Floyd made a written offer to
  purchase the company  stock from the CRT and the residence from Mr.
  Bullard.  On October 29, attorney Jewett sent revised  contract drafts to
  Bullard as an "offer" from the Bixlers, to reflect the parties' most recent 
  discussions.  Attorney Jewett also informed the Bixlers that they were to
  no longer deal with Bullard  directly, that Bullard had found another
  acceptable buyer and that the Bixlers needed to make their  intentions
  clear by the following week.  Mr. Bixler contacted attorney Jewett that
  same day and  stated that he and his wife accepted the draft contracts. 
  Attorney Jewett informed him that the draft  contracts remained
  unacceptable to Bullard.  According to Mr. Bixler, he agreed to all the
  revisions  requested by Mr. Bullard, and made changes to the documents by
  hand, initialled them and sent them  to attorney Jewett.

       On November 2, 1998, attorney Jewett informed the Bixlers through
  their attorney that   Bullard would no longer negotiate with them, nor sell
  them the Ferry.  Also on November 2, Mr.  Bullard and attorney Jewett, as
  CRT trustees, accepted and signed an agreement to sell the CRT  stock and
  residence to Mr. Leith and Mr. Floyd.

       Plaintiffs promptly brought suit in Addison County Superior Court
  which granted their  motion for summary judgment, finding that the parties
  entered into an enforceable agreement at their  February 15, 1998 meeting,
  as "the essential elements of the contract were agreed upon."  The trial 

 

  court further found that as of their February meeting, both parties,
  including Mr. Bullard, intended to  be bound.  The court denied the Floyd
  defendants' motion to reconsider, and finding that "all of the  equities
  favor the Bixlers," granted plaintiffs' motion for specific performance,
  compelling  defendants to convey the property to them.  The trial court
  refused the Floyd defendants' subsequent  motion for a stay of the court's
  order for specific performance.  This Court granted a stay in May  2000.

                            I.  Summary Judgment

       Summary judgment is appropriate only if there is "no genuine issue as
  to any material fact,"  and the moving party is entitled to judgment as a
  matter of law.   V.R.C.P. 56(c).  "Thus, if we find  genuine issues of
  material fact, within the meaning of V.R.C.P. 56(c), we must reverse the
  decision  granting summary judgment."  Messier v. Metropolitan Life Ins.
  Co., 154 Vt. 406, 409, 578 A.2d 98,  99 (1990).  "We apply the same
  standard as the trial court in ruling on a motion for summary  judgment." 
  Garneau v. Curtis & Bedell, Inc., 158 Vt. 363, 366, 610 A.2d 132, 133
  (1992).  In this  case, both parties moved for summary judgment at the
  trial level, and thus both were entitled to the  benefit of all reasonable
  doubts and inferences when the opposing party's motion was being judged. 
  Toys, Inc. v. F.M. Burlington Co., 155 Vt. 44, 48, 582 A.2d 123, 125
  (1990).  

                           II. Intent to be Bound

       Defendants first contend that Mr. Bullard did not intend to be bound
  by his preliminary  negotiations with the Bixlers for the sale of the
  Ferry.  As the court noted in Teachers Ins. & Annuity  Assoc. v. Tribune
  Co.,