Case Title: Capital Impact Corp. v. Munro

Citation: 162 Vt. 6, 642 A.2d 1175

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1992-07-17T00:00:00Z

Document:
CAPITAL_IMPACT_CORP_V_MUNRO.91-116; 162 Vt. 6; 642 A.2d 1175


[Opinion Filed July 17, 1992]

[Motion for Reargument Denied May 3, 1994]

 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 05609-08046011 of any errors in
 order that corrections may be made before this opinion goes to press.


                                 No. 91-116


 Capital Impact Corporation                   Supreme Court

                                              On Appeal from
      v.                                      Washington Superior Court

 Alasdair T. Munro                            April Term, 1992
 and Marguerite L. Munro


 Alan W. Cheever, J.

 Frederick G. Cleveland of McKee, Giuliani & Cleveland, Montpelier, and Ann
   S. Duross, Colleen B. Bombardier, and Jeannette E. Roach (Of Counsel),
   Washington, D.C., for plaintiff-appellee

 Harriet Ann King of King & King, Waitsfield, for defendants-appellants


 PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.



      JOHNSON, J.   Alasdair and Marguerite Munro appeal from a decision of
 the Washington Superior Court allowing foreclosure on their Waitsfield
 home.  We affirm.
      Alasdair Munro was a principal in Munro, Jennings & Doig Associates,
 Inc. (MJD), a real estate development company that operated in Connecticut
 after 1983.  In 1985, MJD borrowed $250,000 of working capital from Capital
 Impact Corporation (Capital), a small business investment corporation in
 Connecticut.   The Munros guaranteed the full amount of the debt and
 executed a mortgage deed on their house in Waitsfield.  In addition to other
 security interests, the loan was secured by a mortgage on a condominium unit
 partly owned by the Munros in Warren, Vermont, which mortgage Capital
 subsequently subordinated to another lender.  In April, 1986, Capital lent
 an additional $100,000 to MJD, secured by assets of the company and
 additional property.  This additional loan was not secured by the Munros'
 house.
      MJD defaulted on the entire indebtedness in 1986.  Capital brought the
 present foreclosure action, and the trial court granted its petition.  The
 court denied defendants' request for permission to appeal pursuant to
 V.R.C.P. 80.1(m) and denied their motion to reconsider.  The present appeal
 followed.
      Because the trial court denied defendants' request to appeal, a
 preliminary issue is the jurisdiction of this Court to consider the appeal
 under 12 V.S.A { 4601, which states: "When a judgment is for the
 foreclosure of a mortgage, permission of the court shall be required for
 review."  We held in Vermont National Bank v. Clark, 156 Vt. 143, 145, 588 A.2d 621, 622 (1991) that:
           Our longstanding rule on discretionary rulings by the
           trial court is that they will not be disturbed unless an
           abuse of discretion is clearly shown.  Abuse of
           discretion requires a showing that the trial court has
           withheld its discretion entirely or that it was
           exercised for clearly untenable reasons or to a clearly
           untenable extent.  (Emphasis supplied.)

 Here, the trial court did not indicate its reasons for denying permission to
 appeal.  While the lack of an explanation from a trial court will not
 trigger automatic review, the present record leaves us unable to evaluate
 the court's reasons for denying permission to appeal.  We therefore consider
 the instant matter, notwithstanding the trial court's denial under Rule
 80.1(m) and { 4601.
      Defendants' central argument is that Capital's president, Kevin
 Tierney, had promised to enforce the instant mortgage only as a last resort
 and only after Capital had pursued other security.  The trial court found
 that Tierney had made the following statement during a deposition:
             I told both Addie and Sandy [Defendants] that to the
           extent they defaulted on the Capital Impact loan that in
           consideration for the residences being a requirement of
           my collateral base, that I would attempt to liquidate
           corporate or business assets first in a commercially
           reasonable fashion and then to the extent that there was
           a deficiency then I would look to their homes.  That was
           not my objective to go after their homes first and in
           the event of a problem and I would try to work with them
           within the limits of the collateral that I had.

 Tierney, in response to another question, stated that the mortgages on
 defendants' residence and a mortgage on that of another MJD principal were
 his "ultimate safety net."
      The court concluded that "Mr. Tierney's statement[s] were a prior
 parol promise and his stated promise was not embodied in any of the written
 contracts that constitute this loan guaranty transaction between plaintiff
 and defendants."  The court also ruled that there was no evidence "from
 which it could conclude that the promise of Mr. Tierney was made with the
 intention not to perform it."  These rulings were not an abuse of the
 court's discretion.  In the absence of fraud in the inducement, the written
 agreement superseded prior discussions or understandings of the parties.
 Big G Corp. v. Henry, 148 Vt. 589, 594,