Case Title: Catamount Slate Products, Inc. v. Sheldon

Citation: 176 Vt. 158, 2003 VT 112, 845 A.2d 324

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2003-12-19T00:00:00Z

Document:
Catamount Slate Products, Inc. v Sheldon (2002-487); 176 Vt. 158;
845 A.2d 324

2003 VT 112

[Filed 19-Dec-2003]

  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.

                                 2003 VT 112

                                No. 2002-487

  Catamount Slate Products, Inc.                      Supreme Court
  d/b/a Reed Family Slate Products,      
  and Fred and Suellen Reed
                                                      On Appeal from
       v.                                             Rutland Superior Court

  Lorene Sheldon, Lee Sheldon and
  The Lorene Sheldon Revocable Trust                  September Term, 2003

  William D. Cohen, J.

  David Putter, Montpelier, and Stephanie A. Lorentz of Lorentz, Lorentz and
  Harnett, Rutland for Plaintiffs-Appellants.

  Emily J. Joselson, Kevin E. Brown and Abby C. Moskovitz of Langrock Sperry
  & Wool, LLP, Middlebury, for Defendants-Appellees.
       
  PRESENT:  Amestoy, C.J., Johnson and Skoglund, JJ., and Allen, C.J. (Ret.),
  and Gibson, J. (Ret.), Specially Assigned

       ¶ 1   SKOGLUND, J.   Catamount Slate Products, Inc. and its
  principals the Reed family appeal from a Rutland Superior Court ruling
  enforcing what appellees characterize as a binding, mediated settlement
  agreement.  The trial court concluded that, at the end of their September
  5, 2000 mediation, the parties had reached a binding settlement agreement. 
  Because the Reeds lacked the requisite intent to be bound to the settlement
  agreement in the absence of a writing, we hold that no binding agreement
  was reached.  We reverse and remand for further proceedings.
   
       ¶ 2   The Reeds own and operate Catamount Slate, a slate quarry and
  mill, on 122 acres in Fair Haven, Vermont.  The appellees, the Sheldons,
  are also Fair Haven property owners and the Reeds' neighbors.  Since 1997,
  the parties have been litigating the Reeds' right to operate their slate
  business and to use the access road leading to the quarry.  In 2000, with
  several legal actions pending (FN1), the parties agreed to try to resolve
  their disputes in a state-funded mediation with retired Judge Arthur O'Dea
  serving as mediator.

       ¶ 3   Prior to the mediation, Judge O'Dea sent each party a
  Mediation Agreement outlining the rules governing the mediation.  Paragraph
  nine of the Mediation Agreement stated that: 

       i.   [a]ll statements, admissions, confessions, acts, or
       exchanges . . . are acknowledged by the parties to be offers
       in negotiation of settlement and compromise, and as such
       inadmissible in evidence, and not binding upon either party
       unless reduced to a final agreement of settlement.  Any final
       agreement of settlement must be in writing and signed by
       every party sought to be charged.
 
  The cover letter transmitted with the Agreement asked the parties to sign
  and return the Agreement prior to the mediation.  All parties received the
  Mediation Agreement, but Judge O'Dea apparently failed to collect the
  signed mediation forms at the outset of the mediation because he could not
  locate them in his files.
   
       ¶ 4   The mediation was held on September 5, 2000.  Judge O'Dea
  began the session by reaffirming the statements made in the Mediation
  Agreement.  After ten hours, the parties purportedly reached an agreement
  on all major issues.  Judge O'Dea then orally summarized the terms of the
  resolution with the parties and counsel present.  The attorneys took notes
  on the terms of the agreement with the understanding that they would
  prepare the necessary documents for signature in the coming days.

       ¶ 5   The resolution required the Reeds to pay the Sheldons $250 a
  month for the right to use the access road, while the Sheldons agreed to be
  coapplicants on Catamount Slate's pending Act 250 permit.  Payments were to
  commence on October 1, 2000.  The parties also agreed to a series of terms
  governing the operation of the slate quarry, including, among other things,
  hours of operation, number of truck trips permitted on the access road, the
  amount and frequency of blasting, and the location of seismic measurements. 
  These terms were to be memorialized in two distinct documents, a Lease
  Agreement and a Settlement Agreement. 

       ¶ 6   On September 7, 2000, two days after the mediation, the
  Sheldons' attorney, Emily Joselson, drafted a letter outlining the terms of
  the settlement and sent copies to James Leary, the Reeds' attorney, and
  Judge O'Dea.  Within a week, Leary responded by letter concurring in some
  respects and outlining the issues on which the Reeds disagreed with
  Joselson's characterization of the settlement.  

       ¶ 7   The parties' actions before the environmental court were in a
  holding pattern pending the resolution of the mediation.  In response to a
  court order to file quarterly status reports, Leary wrote a letter to the
  environmental court dated September 28, 2000 stating that "[t]he mediation
  was successful and we appear to have achieved a global settlement resolving
  all outstanding issues.  We presently are in the process of working out the
  details of the agreement and preparing the appropriate documents."  Leary
  went on to say that once the agreements were finalized, "I anticipate that
  we will file the appropriate paperwork with the Court to resolve [the
  pending cases]."  
   
       ¶ 8   On October 1, 2000, the Reeds began paying the $250 monthly
  lease payments, but, since the settlement agreement was not final, the
  parties agreed that the money would go into an escrow account maintained by
  the Sheldons' counsel.  The check was delivered to the Sheldons' attorney
  with a cover memo stating, "This check is forwarded to you with the
  understanding that the funds will be disbursed to your clients only after
  settlement agreement becomes final.  Of course, if the settlement agreement
  does not come to fruition, then the funds must be returned to my clients."  
  The parties continued to exchange letters actively negotiating the
  remaining details of the Lease and Settlement Agreements for the better
  part of the next five months.  Although there were others along the way, by
  early 2001 the only remaining issues in dispute were the location of
  seismic measurements and the definition of "overblast."

       ¶ 9   In February 2001, while drafts were still being exchanged,
  Christine Stannard, the Reeds' daughter, saw a deed and map in the Fair
  Haven Town Clerk's Office which led her to believe that the disputed road
  was not owned by the Sheldons, but was a town highway.  The Reeds then
  refused to proceed any further with negotiating the settlement agreement. 
  A written settlement agreement was never signed by either party.  
   
       ¶ 10   The Sheldons responded by filing a motion to enforce the
  settlement agreement in the quiet title action pending in the Rutland
  Superior Court.  The trial court granted the motion, finding that the
  attorneys' notes taken at the end of the mediation and the unsigned drafts
  of the Lease and Settlement Agreements sufficiently memorialized the
  agreement between the parties and thus constituted an enforceable
  settlement agreement.  The court conceded that, since the Lease Agreement
  involved an interest in land, the statute of frauds applied.  The court
  circumvented the statute's voiding effect, however, by invoking the
  judicial admission exception.  Under the judicial admission exception, a
  court can enforce an otherwise unenforceable oral agreement when the party
  against whom enforcement is sought admits the existence of the agreement. 
  10 R. A. Lord, Williston on Contracts § 27:10, at 69-70 (4th ed. 1999)
  (collecting federal and state cases).

       ¶ 11   Acknowledging that the judicial admission exception has not
  been recognized in Vermont, see Chomicky v. Buttolph, 147 Vt. 128, 130,