Note: Decisions of a three

- justice panel are not to be considered as precedent before any tribunal.

ENTRY ORDER

SUPREME COURT DOCKET NO. 2013

- 267

NOVEMBER TERM, 20 1 3

Valerie Zimmerman and PopXue America,

LLC } } APPEALED FROM:

} } Superior Court, Washington Unit

,

v. } Civil Divisio n } } Bruce Bjornlund , Esq. } DOCKET NO. 208

- 3

- 09 Wncv

Trial Judge: Geoffrey W. Crawford

In the above

- entitled cause, the Clerk will enter:

Plaintiff PopXue America, LLC, appeals from the trial court’s order granting judgment to

defendant Bruce Bjornlund on it s legal malpractice complaint. Plaintiff suggests that it was entitled to judgment in its favor as a matter of law. We affirm.

The court made the following findings, which are unchallenged on appe al. This case

concerns a twelve

- acre parcel of undeveloped land in Waterbury, Vermont , which plaintiff purchased in 2006 . The land is located at the northeast corner of the intersection of Route 100 and Guptil Road. The la nd was originally part of a farm own ed by the Grenier family. In 1967,
Theodore Barnett acquired the property as part of a 122

- acre parcel. Barnett transferred the property to Elmore Realty Corporation, a company he controlled.

In 1971, Elmore Realty d ivided the 122 acres. It retained ownership of the twelve acres bordering Route 100, and sold 110 acres to Ai gner Enterprises, Inc. The 110

- acre parcel did not border Route 100. The 1971 deed to Aigner included a right of way across the twelve acres, de scribed as follows:

The property conveyed herein contains 110.85 acres, more or less. There is also conveyed a right of way from Vermont Ro u te #100 to the parcel conveyed herein, across the parcel reserved herein. The actual location of the right of wa y shall be determined by the parties and when the right of way is developed, its location shall then become fixed. This right of way shall be 50 foot in width.

In 1971, Barnett also recorded a ma p of the entire property (the twelve

- acre parcel and the 1 10

- acre parcel). This map showed a proposed subd ivision of the 110 acres into twelve home sites
with road acc ess from Route 100 across the twelve acres as well as access from Guptil Road. Barnett was a real estate developer who was active in many towns i n Vermont. It was his2

practice to record maps and drawings showing potential subdivisions even if the development
took a different direction.

The subdi vision and proposed road depicted in Barnett’s map was never built. Instead, Aigner sold the back lot (the 110 acres) to the Smart Corporation, which sold three home lots with access onto Guptil Road. One of these lots was subdivided, bringing the total number of
house lots to four . There are four single

- family lots today. Each lot has road access from Guptil Road. They are separated from the noise an d traffic on Route 100 by the twelve

- acre parcel. No one has ever proposed to build any portion of the “proposed road” shown on Barrett’s map. No one has ever proposed to fix the location of the right of way con tain ed in the Aigner deed.

Between 1971 and 2006, the twelve acres remained the property of Elmore Realty and its

successors , Barnett and his colleague Ezra Nasser. In 2005

- 2006, a local realtor named Valerie Zimmerman and her partner Dennis Mar shall became interested in purchasing and developing
the twelve acres. Zimmerman and Marshall formed PopXue America, LLC to hold title. Zimmerman was familiar with the property because she had listed it with her real estate brokerage from time to time, a lways without success. Marshall is an excavator and developer who frequently purchases land for development purposes. Th e twelve

- acre parcel contained wetlands, which created potential problems with its development.

Marshall’s attorney was defendant B ruce Bjornlund. The two had worked together for over thirty years. Marshall was in the habit of stopping by defendant’s office to discuss projects
that interested him , including the twelve

- acre parcel in question. Marshall and Zimmerman hired
defendant to do the title work for the twelve

- acre parcel , and Marshall stopped by frequently to
discuss the real estate transaction with defendant.

Defendant’s assistant searched the title. She brought copies of Barnett’s map and the Aigner deed to defendant. The two discussed the map and the unlocated right

- of

- way. Defendant and his assistant met multiple times with Marshall to go over the transaction. They discussed the map and the unlocated right of way in the Aigner deed. Defendant t old Marshall
that the map and the right of way did n o t affect marketability of the title because the development of the 110

- acre back lot had taken a dif ferent direction

— t he subdivision depicted on the map never occurred. No drive was ever constructed to Route 100 because all lots created by Smart Corporation had their own access to Guptil Road. Defendant explained to Marshall
that n o one would spend time and money const ructing a new road across the twelve acres when they already had access to a public ro ad. Marshall denied having these discussions with
defenda nt and his assistant. He admitted at most to seeing Barnett’s map.

In July 2006, plaintiff purchased the twelve acre lot for $75,000. The title opinion provided at closing did not mention the e asement in the Aigner deed. Barrett’s map was identified in the paragraph concerning “surve ys.” The title opinion contained no disclosure or warning concerning the potential establishment of a right of way over the property.

Marshall and Zimmerman orig inally planned to develop the property themselves and
build two three

- bedroom homes with a shared septic system

, but very quickly abandoned this plan and de cided to sell the property. In 2007, a developer became interested in the property.
The d e veloper’ s company, Penny Lane, purchased approx imately one half of the twelve

- acre lot3

for $120,000 with an option to buy the other half for $130,000. The developer planned to build

six c ondominium units for senio rs. He intended to use the same septic p lans as t hose developed by Marsh all and Zimmerman. Shortly after closing, Penny Lane demanded that plaintiff obtain a
conditional use determination (CUD) for the septic system. Plaintiff retained an engineering
firm to draw up plans and in January 2008, the Agenc y of Natural Res ou rces issued a CUD. Penny Lane began to market the senior condos on a preconstruction basis.

In April 2008, an attorney for Penny Lane discovered the Aigner deed and the unlocated right o f way. Penny Lane took the position th at t h e sit e could n ot be developed because the right
of way would have to cross over the sept ic area. The engineer who comp leted the CUD application advised the develop er that there was room for a fifty

- foot right of way without a ny change to the leach field or ot h er aspects of the septic design. Unpers u a ded, Penny Lane sued plaintiff seeking rescission of the sale ; Penny Lane also sued its title attorney seeking damages. Plaintiff in turn sued defendant Bjornlund. Penny Lane settled its claim against its title a ttorney. Penny Lane and plai n ti ff also settled. That s ettlement took the form of a stipulated judgment order providing for rescission of the deed and the re turn of the purchase money plus inter e st and attorney’s fees to Penny Lane at the conclusion of th e current lawsuit.

Turning to the elements of pla intiff’s claim against Bjornlund , the court explained that a title attorney owed a duty of care to his client to disclose easements and other encumbrances on the title and to explain their significance. The court found that defendant satisfied this duty here.

He discussed the deed and map with Marshall , and he accurately described the import and
potent ial effect of the e n c umbrances. He provided a title opinion in which he stated that plaintiff
would rec eive marketable title. The court found that defendant’ s adv ice that the ri g ht of way
would n ot prevent development was rea son a b le and accurate.

The court explained that marketable title was defined as a title whose “ validity cannot be
said to involve a question of fact, and is good as a matter of law. ” First Nat’l Bank v. Laperle

, 117 Vt. 144, 157 (1952). The court considered each alleged encumbrance separately. First, it
found that Barrett’s map established nothing. Nei ther the proposed road nor th e pictured
subdivision was ever built. The map did n o t convey any rights to any one; i t was simply a sketch of the shape one owner believed development might take in the future. The court concluded that no one could bring suit on the strength of the map a nd impose the road depicted therein on his neighbors. It was, as defendant explained to Marsha l l, a nullity. The court thus concluded that showing Marshall the map and explaining its lack of consequence w as sufficient to meet the

attorn ey ’s standard of care.

As to the easement in the Aigner deed, the court noted that as the property had been developed, each of the four homeowners had turned to Guptil Road for road access. In more than twenty years, no one had ever approached the owners of the twelve

- acre parcel and exercised his or her right to locate a second driveway across the twelve

- acres to Route 100. There was undisputed trial testimony, moreover, that by the time Marshall discussed the easement with defendant, it had become very unlikely that the Agency of Transportation would permit a new and unnecessary curb cut onto Route 100 for property that already had adequate road access onto Guptil Road. The court found that the se factors made the assertion of a right of access very unl ikely. Finally, the court observed that the issue was not whether there was an easement or whether someone might decide to act upon it someday. Rather, the question was4

whether the easement pre vented the development of the twelve acres. On this question

, the court

f o und the evidence very strong that either the original PopXue plan of two residences served by a common septic system or the Penny Lane plan for six senior citizen townhouses was consistent with a driveway between the Ai gner property and Route 100. In the unlikely event that a

successor to the Aigner deed established that he or she was the person in possession of rights under the easement, there was a practical route across the twelve acres that avoided the planned development and the wetlands

.

The court found that what had developed through the discussions between defendant and
his client was that the easement presented a prob lem that was unlike ly to o c cur. T he lawyer’s job was to advise the client of the potential prob lems so that the cli ent could make an informed
decision about the risks and b enefits of the transaction. The court found strong evi dence that just
such a discussion occurred over the co urse of se v er al v isits by Marshall to the defend a n t’s office.

As to the problems that a rose with Penny Lane, the court found strong circumstantial evidence that the developer had seized upon the easement as a pretext for abandoning a deal that had become too costly for him. In its decision, the court provided numerous reasons to support
thi s conclusion. Ultimately, as set forth above, the court concluded that defendant’s advice that the easement and the map would not interfere with the marketability of title appeared reasonable at the time and, indeed, even today despite all the lit i gation. It explained that t he damages sustained by plaintiff and its principals

— chi efly the rescission of the sale of the property and resulting costs

—

were not caused by defendant’ s advice. Rather, t he rescission was best
unders t ood as the result of a change of heart by Penny Lane which sought and found a pretext for walking away from its purchase. The court thus entered judgment for defendant and this appeal
followed.

Plaintiff appears to argue that defendant must have committed legal malpractice simply
because Penny Lane filed a lawsuit against it

. The trial court concluded otherwise and its unchallenged findings, set forth above, amply support its conclusion

. * The court recognized that “[i]n conducting a title search for a client, an attorney h as a duty to inform and explain to the client the implications of any clouds on the title that would influence a reasonably prudent purchaser not to purchase the property.” Estate of Fleming v. Nicholson , 168 Vt. 495, 498 (1998). It found that defendant complied with that duty here. Defendant discussed on numerous occasions both the map and the Aigner deed and the implications of these documents , and the
court found that his advice was reasonable and accurate

. As set forth above, it concluded that Penny Lane’s lawsuit was driven by its desire to get out of the land deal, and that development of
the lot remained feasible.

Plaintiff’s remaining arguments are equally unpersuasive . Plaintiff suggests that Barrett’s map was not a nullity as found by the tr ial court. The cases cited by plaintiff as support for this argument are inapposite. Both involve plats of subdivisions that were approved and constructed, or at least partially constructed. See, e.g., Clearwater Realty Co. v. Bouchard , 146
Vt. 359 , 363

- 64 (1985) ( recognizing the “ familiar principle of law that where lots are sold by

* Plaintiff did not order a transcript of the proceedings below, and thus, it has waived any challenge to the court’s factual findings. V.R.A.P. 10(b)(1) (appellant must produce transcript if appellant challenges findings or evidence in support thereof).5

reference to a recorded plat, lot purchasers acquire the right to keep open and use roads, streets, highways, and park areas as indicated on the plat,” and explaining that t he object of this principle is “to secure to persons purchasing lots under such circumstances those benefits, the promise of which, it is reasonable to infer, has induced them to buy portions of a tract laid out on the plan
indicated” ); Crabbe v. Veve Asso cs. , 150 Vt. 53 (1988) ( case involving deeded easements in lots sold as part of a partially constructed subdivision ). As explained above, Barrett’s proposed development never came to pass , and n o enforceable legal rights were created by this map.
Plainti ff’s contention that they remain in the “shadow of further litigation” based on this map is baseless. To the extent that plaintiff refers to the Aigner deed as creating a shadow of future litigation, its claim is speculative. In any event, the key issue is whether defendant informed and explained the effect of the encumbrances, and the record amply supports the court’s conclusion

that he did so here.

Affirmed

.

BY THE COURT:

_______________________________________ Marilyn S. Skoglund, Associate Justice

_______________________________________ Beth Robinson, Associate Justice

_______________________________________ Thomas A. Zonay, Superior Judge,

S pecially Assigned