Case Title: Kelly v. Lord

Citation: 173 Vt. 21, 783 A.2d 974

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2001-09-21T00:00:00Z

Document:
Kelly v. Lord (99-496); 173 Vt. 21; 783 A.2d 974

[Filed 21-Sep-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. 99-496

Daniel J. and Jodi C. Kelly	                 Supreme Court

                                                 On Appeal from
     v.	                                         Orange Superior Court

Edwin P. Lord, Helen Lord, IngaBritt 	         May Term, 2001
Lillbask, Morris Teig, Robert Ziccardi, 
Carl Roof and Department of Corrections

Shireen Avis Fisher, J.

William J. Donahue, White River Junction, for Plaintiffs-Appellees.

Christopher Dye, Bradford, for Defendant-Appellant, Edwin P. Lord.

PRESENT: Dooley, Morse and Johnson, JJ., and Katz, Supr. J. and 
         Gibson, J. (Ret.), Specially Assigned

       JOHNSON, J.   Seller Edwin P. Lord appeals from several superior court
  orders, which   address the claim of buyers Daniel and Jodi Kelly to
  enforce a contract to purchase Stonecliff Farm  from seller.  In various
  orders, the court ruled that (1) the parties' original installment contract
  was  assigned by seller to a trust and subsequently modified by the
  trustees; (2) under the terms of the  modified contract, seller must
  deliver the deed to the farm to buyers' attorney pending negotiations  with
  the Agency of Natural Resources (ANR) concerning the solid waste that
  seller had illegally  dumped on the property; and (3) the modified contract
  cancelled the installments buyers owed under 

 

  the original contract.  The court entered partial final judgments under
  V.R.C.P. 54(b) on these rulings  and subsequently granted buyers' motion to
  enforce the order requiring seller to deliver the deed to  buyers'
  attorney.  Seller appeals from all of these orders.  We affirm.

       Following a trial by court on buyers' claim for specific performance
  of the contract, the court  made twenty-five pages of findings, which we
  summarize here.  In 1983, seller Edwin P. Lord  acquired title to
  Stonecliff Farm in Bradford, Vermont.  On April 26, 1990, the State of
  Vermont  filed a criminal action, charging seller with operating a solid
  waste facility on the property without a  certificate in violation of 10
  V.S.A. § 6605(a), claiming that investigators had found more than sixty 
  tractor-trailer truckloads of debris in a ravine about 200 yards behind the
  farmhouse.  In the spring of  1991, buyers Daniel and Jodi Kelly drove by
  the property, liked it and stopped to talk to seller about  buying it. 
  Buyers inspected the property, observed the debris, and learned from town
  officials that  the debris had been illegally dumped.  Although buyers knew
  that a criminal action was pending,  they took possession of the farm and
  then, a few days later, on June 28, 1991, entered into an  installment land
  contract to purchase it.  

       The installment contract provided in relevant part as follows:

         (1) Buyers agreed to buy Stonecliff Farm for $300,000, of 
    which $20,000 was paid on or before June 28, 1991, and the 
    remaining $280,000 was to be paid in monthly installments of 
    $3,111.00 - $1,555.50 of each payment being applied to principal
    and  the same amount applied to interest - for a term of fifteen
    years.  

         (2) Seller agreed to pay two notes secured by mortgages on
    the  property.  In the event that buyers paid any amount on these
    notes,  they were entitled to deduct an equal amount from their
    monthly  installments due to seller.

         (3) Seller agreed to pay all expenses for the proper removal 
    and disposal of the debris as required by law.  In the event that
    buyers 

 

    paid any of these expenses, they were entitled to deduct an equal 
    amount from their monthly installments to seller.

         (4) Buyers agreed to pay all real estate taxes starting in
    1991.

         (5) Upon receiving payment of the entire principal and any 
    accrued interest, seller agreed to execute a warranty deed
    conveying  the property to buyers free of any liens.

       On August 7, 1991, a jury convicted seller on four counts of operating
  an illegal solid waste  facility.  Later that month, seller was sentenced
  to zero-to-six months on each count, consecutive, for  a total maximum of
  twenty-four months incarceration and a $100,000 fine.  The court set an
  appeal  bond in the amount of $100,000.  Seller's mother, Helen Lord, paid
  $70,000 for the bail, seller paid  the remaining $30,000, and seller was
  released.  Seller filed a pro se notice of appeal.

       On October 21, 1991, seller created the Edwin P. Lord Irrevocable
  Trust, appointed Helen  Lord, his mother, and IngaBritt Lillbask as
  trustees, and assigned "all of his interest, right and title in  and to
  said Installment Land Contract to Helen Lord and IngaBritt Lillbask,
  Trustees of the Edwin P.  Lord Irrevocable trust u/a/t dated October 21,
  1991."  Seller remained the record owner of the farm  but buyers were given
  to understand that seller had deeded the farm to the trust.  In late 1991,
  seller  hired attorney Peter Hall to represent him in his criminal case on
  appeal.  Attorney Hall also  incorrectly believed that seller had deeded
  the farm to the trust and made this erroneous  representation to the
  assistant attorney general in the criminal case, the attorney for ANR,
  attorney  Donahue representing buyers, and Judge Cashman.  In January 1992,
  attorney Hall began to  represent Helen Lord and IngaBritt Lillbask as
  trustees of the trust also.

       In early January 1992, seller suffered a traumatic brain injury at the
  home of IngaBritt  Lillbask in Connecticut.  On February 17, 1992, attorney
  Hall entered his appearance as counsel for 

 

  seller in his criminal appeal and requested a stay, alleging that seller
  had hired him to appeal the  conviction but had since suffered a traumatic
  brain injury and therefore could not consult with him.   This Court stayed
  the criminal appeal until April 20, 1992, and upon further motion, until
  July 6,  1992.  On March 5, 1992, the Connecticut probate court appointed
  Camilla Lillbask as conservator  of seller's estate and person. 

       In the spring of 1992, buyers sought a bank loan to pay off the
  installment contract, but the  bank wanted assurance from ANR that no
  clean-up of the debris would be required.  At this point,  buyers contacted
  ANR, learned that clean-up would be required, and became concerned that the
  cost  of removing the debris would exceed what they owed in principal. On
  August 20, 1993, ANR sent  buyers and attorney Hall a draft administrative
  order for the clean-up, which found buyers and seller  guilty of running a
  solid waste landfill and ordered buyers and seller to provide an engineer's
  report  evaluating the impact of the disposal site and the cost of debris
  removal or capping.  Attorney Hall  responded to ANR, maintaining that
  seller had brain damage and could not make decisions on his  own but that
  Hall was authorized to represent seller in the administrative proceedings
  and that a  court-appointed conservator would act for seller on any
  agreements.  On October 28, 1993, the  Connecticut probate court accepted
  the resignation of Camilla Lillbask as seller's conservator and  appointed
  Morris Teig as successor.  Attorney Hall wrote this Court indicating that
  he was  attempting to work out a global resolution of the criminal case and
  the debris removal and that Teig  had been appointed seller's new
  conservator.

       On November 24, 1993, attorney Donahue sent a letter to attorney Hall
  confirming their  telephone conversation of that day.  The letter stated
  that he and Hall were working toward an  agreement wherein buyers would
  take title to the property and assume the mortgages and remediation 

 

  costs, provided that seller's $30,000 bail money could be contributed. 
  Donahue told Hall that buyers  would make no further payments under the
  installment contract but were willing to make the  mortgage payments
  directly to the bank.  On December 10, 1993, Hall wrote Donahue, indicating 
  that he thought the State would agree that the $30,000 in bail money could
  be used for the clean-up,  that Teig agreed with the November 24 proposal,
  that buyers would have to give a third mortgage to  seller/the trustees to
  secure buyers' obligation to complete the clean-up, and that this mortgage
  would  not be necessary if ANR relieved seller of clean-up
  responsibilities.  Finally, Hall agreed that buyers  would receive a deed
  to the property from the trust when an agreement was reached with ANR. 

       On December 17, 1993, the State and Hall stipulated to dismissal of
  seller's criminal appeal,  and subsequently, this Court dismissed the
  appeal.  On February 4, 1994, Hall moved before the  district court for
  reduction of the sentence, alleging that seller was not able to take
  responsibility for  himself and that Teig had been appointed his
  conservator.  Hall indicated that seller was negotiating  with ANR to clean
  up the property contingent on the court resentencing seller. 

       On March 14, 1994, the district court granted the motion for reduction
  of sentence, imposing  a sentence as follows: (a) zero-to-six months on
  each of the four counts of operating an illegal solid  waste facility, to
  run concurrently, all suspended upon conditions of probation; (b) all fines
  reduced  to zero; and (c) probation conditions in the attached probation
  order, plus the additional conditions,  summarized as follows:

    (1)	Defendant shall transfer $30,000 in bail funds to William 
    Donahue as trustee to be disbursed to pay for costs of the clean-
    up of Stonecliff Farm, "to be accomplished under an agreement 
    negotiated 

 

    with the Agency of Natural Resources, Daniel and Jodi Kelly,      
    present occupants of the Farm, defendant and the "Helen Lord     
    Trust." (FN1)  

    (2) To effect the clean-up of the farm under the ANR agreement,        
    defendant shall release to the Kellys all interests in the farm
    held by defendant or the Helen Lord Trust, subject only to the
    two bank mortgages and any security given by the Kellys
    for their agreement to clean up the property.

    (3) Upon transfer of the $30,000 to Donahue and conveyance of all     
    interests in the farm to the Kellys, the court will discharge            
    defendant from probation.

  The court issued a probation order under which (1) condition 10 required
  restitution of $30,000 as  provided in the sentence-reduction order, and
  (2) condition 14 required seller "to transfer any  remaining legal or
  equitable right in subject real estate to Daniel and Jodi Kelly provided
  said  grantee clean up property in accordance with agreement with State of
  Vermont."  Attorney Hall sent  the probation order to Helen Lord, who
  returned it bearing both her signature and a purported  signature of
  seller.  Teig and probation officer Robert Ziccaradi also signed the order.

       On March 28, 1994, buyers hired the engineering firm Caswell, Eichler
  & Hill (CEH) to  prepare a report on the clean-up.  Attorney Donahue then
  wrote attorney Hall that he understood that  seller would not be released
  from probation until he gave a deed to buyers and that buyers would not 
  accept a deed until they were satisfied they could afford the clean-up. 
  Attorney Hall replied, sending  attorney Donahue an agreement entitled
  "Agreement Regarding Engineering Services and Clean Up"  (the engineering
  agreement).  The agreement was signed by buyers, Helen Lord and IngaBritt 
  Lillbask, as trustees, and Teig, as seller's conservator, by May 5, 1994.  

 

       The engineering agreement states that (1) buyers are acquiring the
  farm under an installment  contract, (2) seller is required as a condition
  of probation to pay $30,000 in restitution to clean up the  farm, (3)
  buyers and ANR have agreed that buyers will do the clean-up provided there
  is no  significant amount of hazardous waste at the site, (4) engineering
  assessments are necessary for ANR  to determine the method of clean-up
  appropriate, (5) seller is required as another condition of  probation to
  relinquish title in the Stonecliff Farm to buyers provided they undertake
  the clean-up  under the agreement to be negotiated with ANR.  The parties
  agreed: (1) if the engineering studies  showed no significant hazardous
  waste, buyers would enter into an agreement with ANR to take 
  responsibility for the clean-up and relieve seller and the trust of any
  responsibility; (2) seller and the  trust "shall provide to the Kellys a
  Quit Claim Deed of all their interests in the Stone Cliff Farm  property,
  such deed to be held in trust by William Donahue, Trustee, until such time
  as the Kellys  enter into their assurance of discontinuance agreement with
  the State, as required by  2 above, to  undertake the clean-up of the Stone
  Cliff Farm property site;" and (3) buyers shall be responsible for  paying
  the notes secured by mortgages; seller and the trust authorize buyers to
  enter into negotiations  with the bank necessary to finance the clean-up
  under the assurance of discontinuance.

       In August 1994, CEH produced a report finding no hazardous materials. 
  It estimated the cost  of removal at $596,000, and the cost of capping at
  $218,100, consisting of $132,700 for capping and  $85,400 for water
  monitoring for the next twenty years. Based on the CEH report, ANR agreed
  on  December 13, 1994, that buyers could remediate the farm by capping and
  monitoring.

       In January 1995, a New Hampshire probate court appointed Helen Lord as
  guardian for  seller.  On February 17, 1995, the Department of Corrections
  petitioned the district court in the  criminal case to discharge seller
  from probation, stating: (1) defendant has made full restitution in 

 

  the amount of $30,000, (2) defendant has significant mental limitations and
  legal proceedings are  pending for defendant's mother to obtain
  guardianship of him, (3) defendant has no permanent  residence but stays
  with friends in Connecticut, Vermont and New Hampshire, (4) defendant is a 
  "handicapped wanderer" who cannot be properly supervised on probation, and
  (5) defendant has not  met condition # 14 - requiring transfer of the farm
  to buyers; however, his ability to comply with  condition # 14 lies in the
  hands of the buyers.  On February 28, 1995, the court granted the motion 
  and released seller from probation.  Neither ANR nor buyers were notified
  prior to seller's release  from probation.

       Throughout the summer and fall of 1994 buyers attempted to renegotiate
  seller's mortgages  with the bank.  In the spring of 1995, the bank
  accepted buyers' last offer of $65,000.  Buyers then  approached the
  Woodsville Guaranty Savings Bank to borrow $165,000 to purchase the
  mortgages  and to begin the clean-up.  The loan was scheduled to close on
  July 10, 1995, and the trustees were  expected to be present and to deliver
  a quitclaim deed for Stonecliff Farm to buyers.  On June 28,  1995,
  attorney Hall wrote attorney Donahue informing Donahue that he would no
  longer be  representing the two trustees, and he doubted whether he could
  continue to represent seller.  Three  days later, seller petitioned the
  Connecticut probate court for dismissal of his conservatorship, and on 
  July 8, an unidentified woman informed the bank that seller owned
  Stonecliff Farm and would not  give the deed to buyers or anyone else.  The
  closing was cancelled.

       On July 12, 1995, attorney Colin Robinson wrote to attorneys Hall and
  Donahue informing  them that the New Hampshire probate court had vacated
  its decree of January 22, 1995, which had  appointed Helen Lord seller's
  guardian, and that seller intended to discharge Hall, to disavow the 
  engineering agreement and to try to rescind the irrevocable trust.  On
  September 6, 1995, the 

 

  Connecticut probate court found seller capable of managing his affairs, and
  the court terminated  conservatorship over his person and his estate.  

       This case began on January 10, 1996, when buyers filed a foreclosure
  action against seller in  superior court.  In response, seller alleged that
  buyers were in default of the installment  contract. (FN2) In May 1996,
  buyers moved to amend their complaint to add a claim for specific 
  performance of the installment contract as modified by the engineering
  agreement and to add as  defendants the trustees, Teig, Ziccardi,
  Ziccardi's supervisor Carl Roof and the Department of  Corrections.  The
  motion was granted.  Seller counterclaimed for the money owed under the 
  installment contract, plus interest and attorneys' fees.  Two years later,
  on April 15, 1998, the court  set the specific-performance claim for
  immediate trial by court, and bifurcated seller's claim for  damages
  because seller did not waive his right to jury trial.  The court dismissed
  the foreclosure  claim on agreement by the parties, and ordered that
  buyers' motion for summary judgment on seller's  claim for money damages be
  heard at the bench trial on the claim for specific performance.  The trial 
  was held on July 1 and 2, 1998.  	

       On January 14, 1999, the court issued findings, conclusions and an
  order, ruling that buyers  were entitled to specific performance of the
  installment contract as modified by the engineering  agreement - in other
  words, that they were entitled to delivery of the deed to their attorney,
  and that  seller was not entitled to any money from buyers.  On January 20,
  1999, buyers filed a motion for 

 

  partial final judgment on the deed-delivery decision, which the court
  granted on February 23, 1999.   Seller then filed a series of post-judgment
  motions and an appeal to this Court.

       On May 6, 1999, the court ruled on the parties' cross-motions for
  partial summary judgment  on seller's claim for money due under the
  installment contract.  The court ruled that buyers did not  owe seller any
  money under the installment contract because that contract had been
  modified by the  engineering agreement, cancelling the monthly installment
  payments.  Buyers moved the court to  enter partial final judgment on the
  no-pay decision; seller moved for reconsideration of the court's  decision.  

       In the meantime, this Court issued a show cause order why seller's
  appeal should not be  dismissed for failure to appeal from a final judgment
  or seek permission to appeal from an  interlocutory order, and
  subsequently, dismissed the appeal, ruling: "Appellant not opposing 
  dismissal for lack of a final appealable judgment, in his response to the
  Court's show cause order of  5-6-99, appeal dismissed.  V.R.C.P. 54(b)." 
  Two days later, the superior court denied seller's motion  to reconsider
  its summary judgment decision on his money claim, and entered partial final
  judgment  on the no-pay judgment.

       On July 19, 1999, buyers filed a motion to enforce the deed-delivery
  judgment, which the  court granted on October 27, 1999, ordering seller to
  deliver the deed to attorney Donahue.  In the  interval, the court had
  denied seller's V.R.C.P. 59 motion to amend the deed-delivery judgment, and 
  seller's motion to reconsider the V.R.C.P. 59 denial, as well as seller's
  V.R.C.P. 60 motion for relief  from the no-pay judgment.  On November 2,
  1999, seller appealed to this Court from the deed-delivery judgment, the
  no-pay judgment and the order of enforcement.  On November 30, 1999, 

 

  seller filed in this Court a motion to stay enforcement of the
  deed-delivery judgment, which was  denied on January 28, 2000.

       Despite the superior court's order to deliver the deed to attorney
  Donahue, the order to  enforce the deed-delivery order, the order denying
  seller's V.R.C.P. 59 motion, the order denying  reconsideration, the order
  denying seller's V.R.C.P. 60 motion, and this Court's order denying
  seller's  motion to stay the deed-delivery order, seller has not delivered
  the quitclaim deed to attorney  Donahue.  Seller contends that he will not
  deliver the deed until buyers secure an agreement from  ANR relieving
  seller of any obligation for the clean-up.  Buyers seek to enforce the
  terms of the  engineering agreement requiring seller to deliver the deed to
  their attorney to be held in trust until  they have an agreement with ANR
  relieving seller of any obligation for clean-up.  Because seller has 
  refused to deliver the deed to buyers' attorney, the case remains at a
  standstill. The court noted that  throughout discussions on the clean-up,
  ANR has regarded buyers as well-motivated, cooperative  and acting in good
  faith, but that the Agency has not so regarded seller.  

       With this lengthy history before us, we turn first to the
  jurisdictional issues raised.

                               I. Jurisdiction

       The first issue is whether the two partial final judgments - the
  deed-delivery judgment and  the no-pay judgment - issued under V.R.C.P.
  54(b), are final judgments for purposes of appeal to  this Court.  Buyers
  contend that they are final orders and that the thirty-day period to appeal
  both  decisions expired before seller filed his notice of appeal here, and
  thus, only the decision to enforce  the deed-delivery judgment is properly
  here on appeal.  We disagree.

       Under V.R.C.P. 54(b),

 

    When more than one claim for relief is presented in an action, 
    whether as a claim, counterclaim, cross-claim, or third-party
    claim, or  when multiple parties are involved, the court may
    direct the entry of a  final judgment as to one or more but fewer
    than all of the claims or  parties only upon an express
    determination that there is no just reason  for delay and upon an
    express direction for the entry of judgment.

  Thus, there are three prerequisites to directing an entry of judgment under
  V.R.C.P. 54(b): (1) there  must be multiple parties or multiple claims for
  relief, (2) at least one claim or the rights and  liabilities of at least
  one party must be finally decided, and (3) the court must find that there
  is no just  cause for delaying the appeal.  See C. Wright, A. Miller & M.
  Kane, 10 Federal Practice and  Procedure § 2656, at 48-60 (3d ed. 1998). 
  There is no contention that any of the V.R.C.P.54(b)  judgments disposed of
  any of the claims finally.  Thus, for V.R.C.P. 54(b) to apply, there must
  be  multiple claims and at least one claim must have been finally
  adjudicated.

       In this case, after dismissal of the claim for foreclosure, there was
  only one claim or cause of  action, which was for breach of a contract to
  purchase real property.  See Liberty Mutual Ins. Co. v.  Wetzel,