Title: Clayton v. Clayton Investments, Inc.

State: vermont

Issuer: Vermont Supreme Court

Document:

Clayton v. Clayton Investments, Inc. (2006-093)

2007 VT 38A

[Filed 13-Jun-2007]

                                 ENTRY ORDER

                                 2007 VT 38A

                      SUPREME COURT DOCKET NO. 2006-093

                             DECEMBER TERM, 2006


  Steven C. Clayton                    }         APPEALED FROM:
                                       }
      v.                               }
                                       }         Chittenden Superior Court
                                       }
  Clayton Investments, Inc.            }
                                       }         DOCKET NO. S0818-05 CnC

                                                 Trial Judge:  Ben W. Joseph

             In the above-entitled cause, the Clerk will enter:

       ¶  1.  Defendant, Clayton Investments, Inc., appeals a decision of
  the superior court that deeds offered by it to plaintiff, Steven Clayton,
  failed to comply with the parties' option-to-purchase agreement.  Defendant
  contends the court "re-wrote" the option by invalidating parking
  restrictions and a provision for common area maintenance (CAM) fees in its
  suggested deeds.  Defendant further contends the court erroneously failed
  to address its claim for past-due CAM fees, raised for the first time at
  trial.  We modify the decision of the superior court and, as modified,
  affirm it.

       ¶  2.  The facts of this family property dispute are as follows. 
  Defendant is owned by Harry and Lucille Clayton and four of their five
  children.  Plaintiff is the fifth child of Harry and Lucille, and is the
  only child not to hold stock in the family business.  Defendant owns the
  Shelburne Shopping Park in Shelburne, Vermont, which is home to the
  Shelburne Supermarket, among other businesses.  Harry and Lucille were
  part-owners of the supermarket business until they sold their shares to
  plaintiff, who now holds the majority of shares.  The supermarket building
  is located on Lot 8 of the shopping park.  In 1983, defendant, then known
  as Clayton Realty Inc., sold the supermarket building to plaintiff.  This
  conveyance was part of a series in which defendant conveyed a building in
  the shopping park to each of the Clayton children.  Each deed for a
  building was substantially identical to the others.  Each deed contained a
  requirement that the purchaser pay CAM fees according to a specified
  allocation formula based on the amount of occupied first floor space in the
  building.  It also contained a noncompetition covenant.  

       ¶  3.  In addition to conveying the supermarket building, defendant
  leased to plaintiff Lot 8, the lot underlying the building, starting in
  1983.  Defendant also leased to the supermarket twenty parking places in
  the shopping park. 
   
       ¶  4.  In 1997, the parties entered into an option-to-purchase
  agreement under which plaintiff could buy Lot 8 at a set price when the
  lease expired on December 31, 2004.  The lease described the property
  subject to the option as Lot 8 and "[n]on-exclusive easements over the
  common areas and driveways of the Shelburne Shopping Center, for purposes
  of vehicular and pedestrian access and egress and utility services."  The
  option did not specifically include the parking spaces that were the
  subject of the separate lease.  It did not mention CAM fees.  It specified
  that if plaintiff exercised the option, defendant had to provide "a good
  and sufficient warranty deed . . . conveying a good and clear, record and
  marketable title . . . and in fact, free from all defects, liens, and
  encumbrances."  The option went on to state that title would not be deemed
  "good and clear, record and marketable, if Seller ha[d] not obtained all
  state and local subdivision, zoning, and land use permits required for the
  conveyance."

       ¶  5.  This dispute arose when plaintiff attempted to exercise the
  option.  Plaintiff informed defendant in writing of his intent to purchase
  Lot 8 in November 2004 pursuant to the terms of the agreement.  Defendant
  subsequently offered two deeds to the property which contained, among other
  things, a provision forbidding parking in the common areas of the shopping
  park and a provision requiring the payment of CAM fees.  Plaintiff refused
  the deeds and proposed his own without the offending provisions on parking
  or CAM fees, which defendant rejected.  Eventually, defendant wrote to
  plaintiff in June 2005 stating that it considered his option to have
  expired and ordered that he quit possession of Lot 8.  Plaintiff, in
  response, filed a complaint and motion for a restraining order in superior
  court.  The case culminated in a bench trial in which the court held that
  the deeds tendered by defendant did not comply with the terms of the
  option.   The court concluded that (1) the attempted parking restriction
  was not permitted by either the option or the original subdivision permit
  for the shopping park discussed below, and (2) the CAM fees were not
  required by these documents, and were already provided for in the
  supermarket building deed.  It therefore ordered defendant to execute a
  deed to Lot 8 without the provisions.  This appeal followed.  
    
       ¶  6.  The parties' claims are based primarily on two documents. 
  The first is the option agreement, which plaintiff argues requires
  defendant to provide parking spaces; defendant disputes this claim.  The
  second is the nine-lot subdivision permit granted by the Town of Shelburne
  for the shopping park in 1983.  Defendant argues that this permit requires
  that any deed to Lot 8 must contain a provision imposing CAM fees;
  plaintiff disputes this construction of the permit and the notion that the
  permit conditions must be in the deed.  

       ¶  7.  Additional facts about the subdivision permit are necessary
  to understand the claims.  The final approval for this permit included a
  provision for "Covenants or Deed Restrictions" for "Maintenance" and
  "Non-competition."  A letter from Harry Clayton to the Shelburne Planning
  Commission contained "proposed covenants and/or deed restrictions" for the
  shopping park; the wording is exactly that which appeared in the building
  deeds discussed above.  As for parking, the final subdivision approval
  identified over eight acres in the shopping park as "Common Space for
  parking" and stated:  "Parking area shown on Plan (Clayton Investments and
  Clayton Realty Inc.) to be left open for parking; to be maintained by
  owner."
        
       ¶  8.  Defendant makes two assertions on appeal: (1) that its
  proffered deeds not only comply with, but are compelled by, the subdivision
  permit, and (2) that the trial court erred in failing to allow defendant to
  assert a claim for past-due CAM fees at trial.  We address each in turn.  

       ¶  9.  Our standard of review is two-tiered.  We are deferential to
  a trial court's findings of fact and will reject them only if they are
  clearly erroneous; conclusions of law, on the other hand, are reviewed de
  novo, and will be upheld only if reasonably supported by the findings. 
  Luneau v. Peerless Ins. Co., 170 Vt. 442, 444-45,