Title: Sisters & Brothers Investment Group v. Vermont National Bank

State: vermont

Issuer: Vermont Supreme Court

Document:

Sisters & Brothers Investment Group v. Vermont National Bank  (99-349); 
172 Vt. 539; 773 A.2d 264

[Filed 12-Mar-2001]

                                 ENTRY ORDER

                      SUPREME COURT DOCKET NO. 1999-349

                            SEPTEMBER TERM, 2000

Sisters & Brothers Investment Group	        } APPEALED FROM:
                                                }
                                                }
       v.                                       } Chittenden Superior Court
                                                }	
  Vermont National Bank, Gerald B. DeForge,	}
  Richard Mazza, David Coates and	        } DOCKET NO. S1431-98 CnC
  Maurice Germain	                        }
                                                  Trial Judge: Matthew I. Katz

       In the above-entitled cause, the Clerk will enter:

       Defendants/buyers, Richard Mazza, David Coates, and Maurice Germain
  (the Mazza group) appeal from a grant of partial summary judgment in favor
  of plaintiff/buyer, Sisters and Brothers Investment Group (SBI).  In
  granting summary judgment, the Chittenden Superior Court ordered specific
  performance of a purchase and sale agreement between SBI and Shore
  Properties, Inc. to sell a restaurant, and surrounding land, on Lakeshore
  Drive in Colchester.   The Mazza group, who also purchased the restaurant,
  argues that the court erred because (1) the purchase and sale agreement was
  not a valid option contract, (2) there was no valid contract between SBI
  and Shore Properties, Inc. because a special condition contained within the
  purchase and sale agreement failed, (3) there was no meeting of the minds
  on the terms of the alleged contract, and (4) there was a genuine dispute
  of material fact on the issue of the parties' intent such that summary
  judgment was inappropriate.  SBI cross-appeals and argues that the court
  erred (1) by refusing to order a warranty deed instead of a quitclaim deed,
  and (2) by refusing to impose the maintenance costs of the property on the
  Mazza group pending the outcome of the instant appeal.  We affirm.  

       Defendant/seller, Gerald DeForge, was president and treasurer of Shore
  Properties, Inc., which owned the property at issue.  Defendant Vermont
  National Bank held the mortgage on the property and a second mortgage on
  DeForge's nearby residence as additional security.  In March 1998, the bank
  started foreclosure proceedings against the property and DeForge's home. 
  In June 1998, SBI, represented by one of its partners, Joseph Handy,
  expressed an interest in purchasing the property and began negotiations
  with DeForge, as Shore Properties' agent, through a third party.  By June
  30, 1998, DeForge and Handy had reached an oral agreement, and DeForge's
  attorney and Handy's real estate agent drafted a purchase and sale
  agreement that was executed that day by Handy and DeForge.  

       This agreement contained two terms relevant to this appeal: (1) the
  sale price of $200,000, and (2) a special condition reading: "Contract
  subject to releasing Shore Properties, Inc. and Gerald B. 

  

  DeForge form [sic] all claims and mortgages by Vermont National Bank." 
  Subsequent to this agreement, Handy tried to get the bank to provide the
  contemplated release for the designated price of $200,000, which was well
  below the amount owed to it, or in the alternative, to have DeForge himself
  pay the excess amount over $200,000 necessary to meet the bank's demands. 
  Handy also asked the bank to extend the redemption period.  

       On July 24, 1998, the court issued a judgment of foreclosure for the
  restaurant property against Shore Properties, DeForge, and others not party
  to this appeal.  The court ordered the redemption period to end August 24,
  1998, for Shore Properties and August 25 & 26 for DeForge.  The court set
  the redemption amount at $448,044.  In August, Handy continued to negotiate
  with the bank; the bank agreed to provide the release to DeForge, as
  contemplated by the purchase and sales contract, in exchange for $325,000,
  and agreed to extend the redemption period for DeForge until September 30,
  1998.  On August 20, 1998, the bank contacted DeForge and Shore Properties
  and offered to release DeForge for $325,000 if received by September 30,
  and if accompanied by both a written acceptance and a copy of the purchase
  and sale agreement with Handy.  The bank's offer was to be open for ten
  days.  DeForge responded that there was no contract with Handy because the
  bank had refused the $200,000 price, and he would not agree to the
  inclusion of the purchase and sale agreement as a term.  

       On August 24, 1998, Shore Properties, DeForge, and the bank stipulated
  to an extension of the redemption period for Shore Properties to September
  29, 1998, an extension for DeForge to September 30, and a reduction in the
  redemption amount to $325,000.  In early September, agents for Handy and
  DeForge communicated regarding the sale of the property, and DeForge
  maintained that there was no agreement to sell to Handy and SBI.  On
  September 24, 1998, the court amended its judgment and approved the new
  redemption periods and the amount.

       Between September 25 and September 27, 1998, Handy offered to pay
  $300,000 toward the $325,000 redemption amount if DeForge would make up the
  difference.  During this same time period, the Mazza group made DeForge an
  offer of $325,000, and there was deposition testimony from Handy that an
  agent representing SBI orally communicated SBI's willingness to pay the
  full $325,000 to DeForge's agents.  On September 28, the Mazza group
  contacted the bank.  The following day, Handy faxed DeForge and the bank an
  offer to pay the full $325,000 in order to "obtain a complete release of
  Shore Properties, Inc. and Gerald B. DeForge."  Handy's position was that
  the special condition of the contract was satisfied, and he demanded
  performance of the contract.  DeForge responded that there was no binding
  agreement with SBI because the bank had rejected it back in late June when
  it turned down the offer for $200,000.  DeForge also revealed that there
  was another party interested in the property.  That same day, Shore
  Properties assigned all its rights in the property to the Mazza group, and
  the bank assigned DeForge all its rights under the loan agreements and the
  foreclosure decree.  DeForge then assigned these same rights to the Mazza
  group, except those rights with regard to DeForge's residence.  

        
       In October 1998, the Mazza group became the plaintiffs in the
  foreclosure action, the court modified its decree to run to the Mazza group
  rather than the bank, and the court issued a certificate 

  

  of nonredemption and a writ of possession for the Mazza group.  On November
  12, 1998, SBI filed a complaint against the bank, DeForge, and the Mazza
  group, seeking specific performance of the purchase and sale agreement and
  damages for breach of contract.  In January 1999, the Mazza group moved for
  summary judgment, and in February, so did the bank and SBI.  

       On May 6, 1999, under V.R.C.P. 56, the court granted partial summary
  judgment for SBI on the grounds that the purchase and sale agreement
  constituted an option contract with the redemption period as the time
  limit.  It ordered partial final judgment under Rule 54(b) for specific
  performance of the purchase and sale agreement, and granted the Mazza
  group's motion to compel SBI to accept a quitclaim deed, tender the
  $325,000, and take possession of the property.  SBI's request for a stay of
  this order was denied by this Court.  SBI subsequently paid the Mazza group
  $325,000 in exchange for a quitclaim deed, and took possession of the
  property.  Both the Mazza group and SBI appeal.  

       During the pendency of this appeal, SBI filed a motion to dismiss,
  claiming that the appeal was mooted by the Mazza group's motion to compel
  and the subsequent transfer of the property by quitclaim deed.  This
  argument is without merit, and the motion is denied.  Complying with a
  court order does not moot an appeal; if we reverse the grant of partial
  summary judgment, then the property may just as easily be reconveyed under
  a new order from the trial court or from this Court.  In re Barlow, 160 Vt.
  513, 518-19,