Title: Ragosta v. Wilder

State: vermont

Issuer: Vermont Supreme Court

Document:

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, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                NO. 88-464


Louis W. and Sylvia V. Ragosta               Supreme Court

     v.                                      On Appeal from
                                             Orange Superior Court
Allen S. Wilder, Jr.
                                             May Term, 1990


Hilton H. Dier, Jr., J.

Richard I. Burstein and Michael J. Andrews, Law Clerk (On the Brief),
  Randolph, for plaintiff-appellees

Peter J. Monte of Young, Monte & Lyford, Northfield, for defendant-appellant



PRESENT:  Allen, C.J., Peck, Gibson, Dooley and Morse, J.



     PECK, J.   Defendant appeals from a judgment ordering him to convey to
plaintiffs a piece of real property known as "The Fork Shop."  Defendant
argues that the court improperly found that a binding contract existed and
that it misapplied the doctrine of equitable estoppel.  He also contends
that the ruling cannot be upheld under promissory estoppel principles since
the court failed to examine the extent to which enforcement of defendant's
promise to sell was required to prevent injustice.  Because the trial
court's ruling cannot stand on contract or equitable estoppel grounds and
because the court's analysis of promissory estoppel is inextricably bound in
its contractual analysis, we reverse and remand the cause for further pro-
ceedings consistent with the principles expressed herein.
     In 1985, plaintiffs became interested in purchasing "The Fork Shop"
from defendant but preliminary negotiations between the parties were
fruitless.  In 1987, plaintiffs learned that defendant was again
considering selling the "The Fork Shop," mailed him a letter offering to
purchase the property along with a check for $2,000 and began arrangements
to obtain the necessary financing.  By letter dated September 28, 1987,
defendant returned the $2,000 check explaining that he had two properties
"up for sale" and that he would not sign an acceptance to plaintiffs' offer
because "that would tie up both these properties until [there was] a
closing."  In the letter, he also made the following counter-offer:
          "I will sell you the Fork Shop and its property as
          listed in book 35, at page 135 of the Brookfield Land
          Records on 17 April 1972, for $88,000.00- (Eighty-eight
          thousand dollars), at anytime up until the 1st of
          November 1987 that you appear with me at the Randolph
          National Bank with said sum.  At which time they will
          give you a certified deed to this property or to your
          agent as directed, providing said property has not been
          sold."

On October 1st, the date plaintiffs received the letter, they called
defendant.  The court found that during the conversation plaintiffs told
defendant that "the terms and conditions of his offer were acceptable and
that they would in fact prepare to accept the offer."  Defendant assured
plaintiffs that there was no one else currently interested in purchasing
"The Fork Shop."
     On October 6th, plaintiffs informed defendant that they would not close
the sale on October 8th as discussed previously but that they would come to
Vermont on October 10th.  On October 8th, defendant called plaintiffs and
informed them that he was no longer willing to sell "The Fork Shop."  The
trial court found that, at that time, defendant was aware plaintiffs "had
processed their loan application and were prepared to close."  Plaintiffs
informed defendant that they would be at the Randolph National Bank at 10:00
a.m. on October 15th with the $88,000 purchase price and in fact appeared.
Defendant did not.  Plaintiffs claim they incurred $7,499.23 in loan closing
costs.
     Plaintiffs sued for specific performance arguing that defendant had
contracted to sell the property to them.  They alleged moreover that
defendant knew they would have to incur costs to obtain financing for the
purchase but assured them that the sale would go through and that they
relied on his assurances.
     The trial court concluded that defendant "made an offer in writing
which could only be accepted by performance prior to the deadline."  It
concluded further that defendant could not revoke his offer on October 8th
because plaintiffs, relying on the offer, had already begun performance and
that defendant should be estopped from revoking the offer on a theory of
equitable estoppel.  It ordered defendant to convey to plaintiffs "The Fork
Shop" for $88,000.  This appeal followed.
                                    I.
     Plaintiffs claim that defendant's letter of September 28, 1987 created
a contract to sell "The Fork Shop" to them unless the property was sold to
another buyer.  Rather, defendant's letter contains an offer to sell the
property for $88,000, which the trial court found could only be accepted
"by performance prior to the deadline," and a promise to keep the offer open
unless the property were sold to another buyer.  Defendant received no
consideration for either promise.  In fact, defendant returned plaintiffs'
check for $2,000 which would have constituted consideration for the promise
to keep the offer open, presumably because he did not wish to make a firm
offer.  Thus, the promise to keep the offer to sell open was not enforceable
and, absent the operation of equitable estoppel, defendant could revoke the
offer to sell the property at any time before plaintiffs accepted it.  See
Buchannon v. Billings, 127 Vt. 69, 75,