Title: Arnold v. Cantini

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. 88-457
 
 
Andrew and Joanne Arnold                     Supreme Court
 
     v.                                      On Appeal from
                                                      Bennington Superior Court
Gerald P. Cantini and
Trask & Waite Realtors, Inc.                 May Term, 1989
 
 
Theodore S. Mandeville, Jr., J.
 
William J. Bloomer of Bloomer & Bloomer, P.C., Rutland, for plaintiffs-
   appellants
 
Harold E. Eaton, Jr., of Miller, Cleary & Faignant, Ltd., Rutland, for
   defendant-appellee
 
 
PRESENT:  Allen, C.J., Peck, Gibson, Dooley and Morse, JJ.
 
     PECK, J.  Plaintiffs appeal from a jury verdict in favor of defendant
listing broker in an action brought to recover an earnest money deposit of
$10,000.  We reverse and remand.
     On October 10, 1982, plaintiffs Joanne and Andrew Arnold signed a
purchase and sale agreement for a parcel of land in Winhall, Vermont.
Hickory Hills, Inc. owned the property, and the agreement provided that
Hickory Hills would build a house on the lot according to specifications
attached to the agreement.  The Arnolds gave a $10,000 earnest money deposit
to Trask & Waite Realtors, Inc. for deposit in a client's trust account.
John Waite, the realtor, signed for Trask & Waite.  The agreement provided
that the deposit was to be released at the closing, set for October 22.
     The closing did not take place on October 22.  The Arnolds retained a
local attorney, Gerald Cantini, and on October 25, executed a power of
attorney giving Cantini authority to act for them in transactions relating
to the property.  Andrew Arnold mailed a check for $20,000 to John Waite so
that work could begin, enclosing a note saying that "[p]er our verbal
agreement, you will wait for Mr. Cantini's permission to use the funds."
There was conflicting testimony about a telephone conversation between
Cantini and Waite, in which Cantini purportedly authorized the release of
both the $20,000 and the $10,000 held in escrow.  It is undisputed that
$30,000 of the fund was ultimately released to Hickory Hills, and that
Hickory Hills paid Trask & Waite $10,000 in connection with the deal.
     Building commenced on the house, but no closing ever took place.  In
January of 1983, the Arnolds occupied the house.  Plaintiffs had made a
number of progress payments, and had withheld only $2,000 of the $130,000
price agreed upon.  Green Mountain Bank held a mortgage on the property,
and when Hickory Hills failed to pay, the Bank foreclosed.  The Arnolds
bought the property from the Bank, and paid off delinquent taxes and other
liens.
     Plaintiffs sued Gerald Cantini and Trask & Waite to recover the $10,000
deposit.  By this time, Hickory Hills had gone out of business, and its
owner, Steven Bruehl, could not be located.  Plaintiffs settled with
Cantini.  The case was tried against Trask & Waite, and the jury returned a
verdict for defendants.  This appeal ensued.
     Plaintiffs raise three issues on appeal.  The first two concern the
content of the trial judge's charge to the jury.  Plaintiffs assert that
the jury instructions mischaracterized the transaction in question, because
specific contractual language was not mentioned, and because the judge
removed the issue of the propriety of the payment of a broker's commission
from the jury's consideration.  Plaintiffs also claim that the trial court
erred in refusing to permit plaintiffs' attorneys to split the closing
argument between them.
     First, plaintiffs assert that the court's charge to the jury concerning
Trask & Waite's obligations with respect to the deposit did not emphasize
the details of the particular purchase and sale agreement.  The court's
charge was as follows:
            Although a real estate broker is ordinarily considered
          the agent of the seller, he has a contractual duty to
          the buyer and that is not to disburse the purchaser's
          earnest money or down payment if the contract is broken
          by the seller.
 
            In order to find the defendant liable under this
          theory of recovery, you must be convinced by a
          preponderance of the evidence of the following:  First,
          that the contract was broken by the seller; second, that
          the defendant knew that the contract had been broken by
          the seller; third, having known of the seller's breach
          of contract or inability to perform, the defendant
          nevertheless paid the earnest money or down payment over
          to the seller without the buyer's permission; fourth,
          that because of the defendant's breach of the
          contractual duty, the plaintiffs occasioned a financial
          loss; fifth, you must find by a preponderance of the
          evidence the amount of any financial loss sustained by
          the plaintiffs. . . .
 
          The defendant alleges in defense to the plaintiffs'
          cause of action that it was directed by the plaintiffs
          or their agent to disburse the earnest money deposit to
          Hickory Hills.  If you find that the plaintiffs or their
          duly authorized agent directed or permitted the
          disbursement of the earnest money, that is a defense to
          the plaintiffs' claim under this cause of action.
          (Emphasis added.)
 
Plaintiffs made prompt objection to the charge.
     An appellant challenging the trial court's instruction has the burden
of showing that the charge was both erroneous and prejudicial.  Sachse v.
Lumley, 147 Vt. 584, 588,