Title: Myers v. LaCasse

State: vermont

Issuer: Vermont Supreme Court

Document:

Myers v. LaCasse (2002-052); 176 Vt. 29; 838 A.2d 50

2003 VT 86A

[Filed 10-Oct-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 86A

                                No. 2002-052

  Nancy L. Myers	                         Supreme Court

                                                 On Appeal from
       v.	                                 Bennington Superior Court

  James J. LaCasse and Marie A. LaCasse	         January Term, 2003

  John P. Wesley, J.

  Andre D. Bouffard of Downs Rachlin Martin PLLC, Burlington, for
    Plaintiff-Appellant.

  David Putter, Montpelier, and Terrance R. Wolfe, Bennington, for
    Defendants-Appellees.

  PRESENT:  Amestoy, C.J., Dooley, Johnson and Skoglund, JJ., and Allen, C.J.
            (Ret.), Specially Assigned

        
       ¶  1.  DOOLEY, J.   In this foreclosure action, plaintiff Nancy Myers
  appeals from the decision of the Bennington Superior Court vacating a
  previous order granting summary judgment in her favor and granting summary
  judgment for defendants James and Marie LaCasse.  Plaintiff argues that the
  court erred by (1) reopening and vacating the prior summary judgment
  decision based on arguments not raised in connection with the initial
  motion for summary judgment, and (2) ruling that a mortgage (FN1) granted
  on one of two adjacent parcels several years before common ownership of the
  two parcels was severed does not have priority over a way of necessity that
  arose on foreclosure of a junior mortgage.  We affirm.

       ¶  2.  The undisputed facts tell a complex and unique story. (FN2)  At
  different times, in 1987, defendants acquired title to two adjacent parcels
  of real estate located in Bennington, Vermont.  While the southern parcel
  (Parcel I) had approximately 300 feet of public road frontage, the northern
  parcel (Parcel II) lacked any such frontage and also had no deeded rights
  of access to any public road.  Defendants proceeded to mortgage Parcel I
  three times, first to Merchants Bank (Merchants) in 1987, then again to
  Merchants in 1990, and finally to First Vermont Bank and Trust (First
  Vermont) later in 1990.
   
       ¶  3.  In 1996, defendants defaulted under the terms of the third
  mortgage, and First Vermont subsequently brought a foreclosure action and
  obtained a decree of foreclosure.  The decree provided that if defendants
  failed to redeem they would be "forever foreclosed and barred from all
  equity of redemption in the premises and the plaintiff on such date [would]
  be entitled to title, possession and ownership of said lands...." 
  Defendants also defaulted under the terms of Merchants' first and second
  mortgages, and Merchants commenced its own foreclosure action.  However,
  Merchants voluntarily dismissed this action and instead took an assignment
  from First Vermont as to all rights under its decree of foreclosure.  When
  defendants failed to redeem in the First Vermont action, Merchants obtained
  a certificate of non-redemption and title to the property subject to the
  first two mortgages which, at that point, Merchants continued to hold as
  mortgagee.  As a result of these events, defendants lost title to Parcel I,
  and Parcel II became completely landlocked.  Defendants did not appeal the
  decree of foreclosure or the writ of possession issued pursuant to it.

       ¶  4.  Later in 1996, Merchants quitclaimed Parcel I to Atlantic Bank
  and Trust Company (Atlantic) and assigned to it the outstanding mortgages
  on the property.  Atlantic sold the parcel to plaintiff in 1998, also
  assigning to her the first and second mortgages given by defendants to
  Merchants, together with the related notes.  The deed specifically provided
  that the title in the property would not merge with the mortgages so that
  the mortgages would remain in effect.

       ¶  5.  Plaintiff subsequently filed this foreclosure action based on
  the second mortgage in order to foreclose any outstanding interests in
  Parcel I, including any easement by necessity which defendants might claim
  to have arisen over Parcel I in order to provide access to Parcel II. 
  Defendants raised numerous defenses to foreclosure and counterclaims,
  including the following:

    22.  In the event LaCasses' legal title to the mortgaged premises
    is deemed already foreclosed and to have succeeded to plaintiff by
    virtue of her succeeding to the interests of the other banking
    institutions mentioned herein, or as a result of judgment in this
    instant action, defendants submit that an easement or right of way
    by necessity or implication nevertheless burdens the mortgaged
    premises and benefits the other 4.6 acre parcel owned by LaCasses. 
    Furthermore, LaCasses submit that this easement is an independent
    and separate property right and not one which was, or would be,
    considered a part of the property secured by the Merchant's
    mortgages, but rather one encumbering it, and therefore not
    subject to this foreclosure proceeding for any proved breach of
    Merchants' notes and mortgages.  

  In its prayer for relief, defendants requested the court to lay out
  "defendants' recordable rights of access over the mortgaged premises to
  their other parcel."  
   
       ¶  6.  After discovery, plaintiff moved for summary judgment
  pursuant to V.R.C.P. 80.1(c).  In an August 4, 2000 opinion, the superior
  court rejected all of defendants' defenses and granted plaintiff's motion. 
  The court also dismissed defendants' counterclaim on res judicata grounds. 
  Regarding the defense that the claimed way of necessity could not be
  foreclosed, the court concluded that any way of necessity that may have
  arisen as a result of the first foreclosure was necessarily junior to the
  outstanding mortgages and therefore was subject to the present foreclosure. 
  Defendants attempted to take an appeal from this decision, but permission
  to do so was denied by the trial court because no judgment of foreclosure
  had yet been entered.

       ¶  7.  Plaintiff then moved for an accounting, as provided in 80.1(f),
  and the matter was set for hearing in order to determine the equity of
  redemption.  Prior to the hearing, the superior court - now with a new
  trial judge presiding - issued an entry order in which it raised sua sponte
  a number of issues that the court concluded were important but had been
  left unresolved by the August 4, 2000 order, and requested that the parties
  submit further briefing on these issues.  In particular, the court was
  concerned that the method of determining the equity of redemption was still
  disputed and that the issue of what interest defendants would receive in
  the event they did redeem remained unresolved.  After the parties submitted
  further briefing, the court held a hearing on the accounting issues. 
  Shortly after, defendants moved to vacate the summary judgment order, and
  at the same time filed their own motion for summary judgment.  Plaintiff
  opposed the motions both on procedural and substantive grounds.
   
       ¶  8.  On August 10, 2001, the court issued an opinion and order
  granting defendants' motion to vacate as well as their motion for summary
  judgment.  The court concluded that it could review the earlier summary
  judgment order pursuant to Morrisseau v. Fayette, 164 Vt. 358, 363-64,