Title: Vastano v. Killington Valley Real Estate

State: vermont

Issuer: Vermont Supreme Court

Document:

Vastano v. Killington Valley Real Estate (2005-324)

2007 VT 33

[Filed 01-May-2007]

                                 ENTRY ORDER

                                 2007 VT 33

                      SUPREME COURT DOCKET NO. 2005-324

                              MARCH TERM, 2006


  Frank Vastano and Tracy Lees         }         APPEALED FROM:
                                       }
                                       }
      v.                               }         Rutland Superior Court
                                       }
  Killington Valley Real Estate        }
                                       }         DOCKET NO. 751-12-01 Rdcv

                                                 Trial Judge: William D. Cohen

             In the above-entitled cause, the Clerk will enter:

       ¶  1.  Plaintiffs Frank Vastano and Tracy Lees appeal from the
  jury's verdict in favor of defendant Killington Valley Real Estate (KVRE)
  in this consumer fraud action.  KVRE acted as the property manager and
  listing agent for a home that plaintiffs purchased.  Shortly after
  purchasing the property, plaintiffs discovered that the home was located
  near a leaking underground storage tank (LUST) site and that their well was
  being monitored for the presence of gasoline-related contaminants. 
  Plaintiffs alleged that KVRE knew this information and violated the
  Consumer Fraud Act by failing to disclose it to them before the sale.  The
  jury rejected plaintiffs' claim, finding that,  although KVRE made an
  omission likely to mislead reasonable consumers, and plaintiffs interpreted
  the omission reasonably, the omission was not material.  We conclude that
  the omission was material as a matter of law, and therefore set aside the
  jury's verdict and direct the trial court to enter judgment for plaintiffs. 

       ¶  2.  The record indicates the following history.  Richard Paul
  owned a home in Killington, Vermont.  In 2000, he listed the property for
  sale with Judy Storch, a principal in KVRE.  KVRE placed the property in
  the multiple listing service, which allowed other realtors to show the
  property to prospective customers.  Plaintiffs lived in New Jersey, and
  they purchased the Paul property in November 2000.  Shortly after the sale,
  plaintiffs discovered that their well was being monitored on an ongoing
  basis by Marin Environmental, an environmental engineering firm, for
  possible gasoline contamination.  In December 2001, plaintiffs filed a
  complaint against KVRE alleging consumer fraud.
   
       ¶  3.  In October 2003, plaintiffs moved for summary judgment,
  asserting that it was undisputed that KVRE knew of the ongoing testing of
  their well and failed to disclose this information.  The trial court denied
  the motion, finding that, although KVRE admitted that it was aware that the
  Paul well was being regularly monitored for potential gasoline
  contamination and did not disclose this information to plaintiffs, KVRE
  denied having any knowledge of unacceptable drinking water at the subject
  property.  Accordingly, the court concluded that it remained for the trier
  of fact to decide if failing to inform plaintiffs of the testing and
  monitoring of the Paul well and other wells in the area rose to the level
  of a material omission. 

       ¶  4.  Plaintiffs moved for reconsideration, arguing in part that
  the court erroneously focused its analysis on what KVRE did not know,
  rather than what it did know.  Plaintiffs reiterated  that it was
  undisputed that KVRE knew of the monitoring of wells in the area, including
  the Paul well, and asserted that, given its failure to disclose this
  information, plaintiffs were entitled to judgment in their favor as a
  matter of law.  The court denied the request for reconsideration in a May
  2004 entry order.  Plaintiffs renewed their motion for summary judgment in
  February 2005, before trial began, reiterating their assertion that KVRE's
  failure to disclose the monitoring was a material omission as a matter of
  law.  The renewed motion was denied as moot after trial.

       ¶  5.  At trial, plaintiffs presented evidence about the underground
  gasoline spill, which was discovered in 1993, as well as the ongoing
  remediation efforts.  KVRE acknowledged that it provided Marin
  Environmental with keys to the Paul property, as well as other properties,
  to facilitate the monitoring and testing of the water supply in connection
  with the remediation efforts.  Judy Storch of KVRE admitted knowing about
  the spill and the testing of nearby wells, including the Paul well. 
  According to a record kept by KVRE, the Paul well was tested for possible
  contamination at least three times in 2000, the latest of which occurred
  just prior to the sale of the property.  Although Storch was never informed
  of any test results, she stated at trial that she now considered the
  gasoline spill and monitoring to be material facts that should have been
  disclosed to plaintiffs.  Nevertheless, plaintiff Lees acknowledged during
  cross-examination that she testified  in her deposition that she did not
  know what she would have done differently had she known of the testing
  prior to purchase.

       ¶  6.  On a special verdict form, the jury found that defendant made
  an omission that was likely to mislead reasonable consumers and that
  plaintiffs had interpreted the information reasonably under the
  circumstances.  It concluded, however, that the omission was not material. 
  Plaintiffs filed a motion for a new trial or to amend the judgment under
  V.R.C.P. 59, which was denied, and this appeal followed.

       ¶  7.  Plaintiffs raise numerous arguments on appeal.  Because we
  agree with their assertion that the alleged omission was material as a
  matter of law, we do not reach their remaining arguments.  For the same
  reason, we do not address the argument raised by the State of Vermont in
  its amicus curiae brief.
        
       ¶  8.  The Consumer Fraud Act prohibits "unfair or deceptive acts or
  practices in commerce."  9 V.S.A. § 2453(a).  To establish a "deceptive act
  or practice" under the Act, plaintiffs needed to show that:  (1) there was
  a representation, practice or omission likely to mislead them; (2) they
  interpreted the message reasonably under the circumstances; and (3) the
  misleading effects were "material," that is, "likely to affect [their]
  conduct or decision with regard to a product."  Greene v. Stevens Gas
  Serv., 2004 VT 67, ¶ 15, 177 Vt. 90, 858 A.2d 238 (quotations omitted);
  see also 9 V.S.A. § 2453(b) (in determining what constitutes an unfair or
  deceptive act under the Vermont Consumer Fraud Act, courts should be guided
  by the construction of similar terms in the Federal Trade Commission Act,
  15 U.S.C. § 45(a)(1)).  As reflected above, the jury found that the first
  two elements were satisfied.  Given the undisputed facts, as conceded by
  KVRE and specifically found by the trial court in its denial of summary
  judgment, that KVRE knew of, and failed to disclose the testing, we
  conclude that the third element is satisfied as a matter of law.

       ¶  9.  The question of whether an omission is material is "generally
  measured by an objective standard, premised on what a reasonable person
  would regard as important in making a decision."  Carter v. Gugliuzzi, 168
  Vt. 48, 56,