Title: Limoge v. People's Trust Co.

State: vermont

Issuer: Vermont Supreme Court

Document:

Limoge v. People's Trust Co.  (97-419); 168 Vt. 265; 719 A.2d 888

[Filed 4-Sep-1998]

       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.

                            No. 97-419

Raymond and Patricia Limoge                  Supreme Court

                                             On Appeal from
    v.                                       Chittenden Superior Court

People's Trust Company                       May Term, 1998

     v.

Synergy Group, Inc. d/b/a
Smith Bell Real Estate

Linda Levitt, J.

       Jon R. Eggleston and Robert A. Pinel of Miller, Eggleston & Cramer,
  Ltd., Burlington, for Plaintiffs-Appellants

       David H. Greenberg, Burlington, for Defendant-Appellee Peoples Trust
  Co.

       Michael Harris of Sutherland & Collins, Inc., Burlington, for
  Defendant-Appellee Synergy Group, Inc.

PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

       DOOLEY, J.   Plaintiffs Raymond and Patricia Limoge appeal from an
  order of the Chittenden Superior Court granting summary judgment to
  defendant People's Trust Company of St. Albans on claims arising out of
  plaintiffs' purchase of a camp and land in Milton, Vermont from People's
  Trust.  Plaintiffs claim that the acreage of the lot is not as represented
  in the contract for sale and the deed, and that People's Trust is liable
  for the reduced value of the lot based on theories of negligent
  misrepresentation and breach of warranty.   On appeal, plaintiffs argue
  that the trial court erred in granting summary judgment based on a warranty
  disclaimer in the deed and without considering whether People's Trust
  violated a covenant of good faith and fair dealing implied in the sales
  contract.  We conclude that the superior court

 

  properly granted summary judgment on the deed warranty theory and properly
  rejected the claim based on an implied covenant of good faith and fair
  dealing because the claim was not properly pleaded.  We also conclude,
  however, that summary judgment was improperly granted on the negligent
  misrepresentation theory and reverse and remand for trial of that claim.

       Plaintiffs sought a parcel of land on Lake Champlain on which to build
  a year-round home and found in Milton a lot, with a camp, being sold by
  Synergy Group, Inc. d/b/a Smith Bell Real Estate as the realtor for the
  owner, People's Trust Company of St. Albans.  The lot was one of five
  acquired by People's Trust in a foreclosure proceeding.  Agents for Smith
  Bell presented the  property to the plaintiffs as .53 acres in size with
  road frontage on Camp Road, a Milton town road, as depicted on a town tax
  map.  Prior to signing a sales agreement, plaintiffs specifically inquired
  about the presence of road frontage.  Direct access to the town road was
  important to plaintiffs because they intended to build a year-round
  residence on the property and believed road access was necessary to meet
  zoning requirements.  Based on the representations of the agents,
  plaintiffs decided to purchase the property.

       On April 12, 1995, plaintiffs executed a sales agreement with People's
  Trust.  An addendum to the agreement contained a disclaimer stating that
  the property was sold "as is" with no warranty, expressed or implied, as to
  the merchantability of the property.  The disclaimer goes on to state that
  there is no warranty with respect to "structures" and with respect to the
  heating or cooling system, electrical system, water supply system, sewage
  disposal system, and all appliances found in the house.  The disclaimer
  makes no reference to boundaries or acreage.

       On April 21, 1995, People's Trust closed the sale with plaintiffs,
  conveying a limited warranty deed which described the property as "[a] camp
  property located on the easterly shore of Lake Champlain containing .53
  acres."  The deed also contained the disclaimer described above and limited
  the warranty obligation to "lawful claims arising from the Grantor's acts
  or from encumbrances created during the period of the Grantor's ownership
  of the Property."

       Shortly before the sale to plaintiffs, People's Trust sold an
  adjoining lot to third parties

 

  who hired a surveyor to determine their boundaries. The survey showed that
  part of the land plaintiffs thought they had purchased actually belonged to
  the third party.  Specifically, the survey showed that the back line of
  plaintiffs' property does not abut the town road, but is instead closer to
  the lake.  As a result, plaintiffs have access to their property only
  through a private road, called the old camp road.  The exact size of
  plaintiffs' lot is disputed, but is no greater than .43 acres.

       There is substantial dispute about whether Smith Bell, as agent for
  People's Trust, should have known of the acreage discrepancy.  Smith Bell
  argues that it took all reasonable steps to determine the size and shape of
  the lot.  Similarly, there is dispute over the consequences of the
  discrepancy, particularly the lack of direct access to the town road.  
  Plaintiffs assert that they spent $85,000 to $90,000 on the camp to convert
  it to year-round use, but now cannot use it for that purpose because of
  lack of direct access to the town road.  Smith Bell responds that Milton
  zoning regulations prohibit year-round-occupancy irrespective of access to
  the town road.  These disputes are not resolved on the summary judgment
  record.

       Plaintiffs filed a complaint against People's Trust, which then
  asserted a third-party claim against Smith Bell.  Both plaintiffs and
  People's Trust moved for summary judgment,  and the court granted People's
  Trust's motion on September 12, 1997.  The court found the acreage shortage
  did not violate the limited warranty contained in the deed.  On the
  negligent misrepresentation claim, the court held that there were disputed
  issues of material fact as to whether People's Trust was negligent, but in
  light of the limited warranty and the disclaimer, plaintiffs could not
  justifiably rely on the acreage representation.

       On appeal, plaintiffs argue that the lower court should not have
  granted summary judgment against them because 1) they could justifiably
  rely on People's Trust's representations of the lot's acreage and
  boundaries; 2) People's Trust breached covenants of title by not conveying
  the property specified; and 3) People's Trust breached implied warranties
  of good

 

   faith and fair dealing by not conveying the property specified.(FN1)

       We begin by noting that when reviewing a grant of summary judgment
  "[w]e apply the same standard as the trial court: summary judgment is
  appropriate when the record clearly indicates there is no genuine issue of
  material fact and that the moving party is entitled to judgment as a matter
  of law.  Lane v. Town of Grafton, 166 Vt. 148, 150,