Gregory C. Wark ( 2021 )


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    revision before publication in the Vermont Reports. Readers are requested to notify the Reporter
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    before this opinion goes to press.
    
    2021 VT 37
    No. 2019-344
    Gregory C. Wark                                               Supreme Court
    On Appeal from
    v.                                                         Superior Court, Windsor Unit,
    Civil Division
    Donald Zucker                                                 February Term, 2020
    Michael R. Kainen, J.
    Victor J. Segale, Rutland, for Plaintiff-Appellee.
    Paul S. Kulig and Shannon A. Bertrand of Facey Goss & McPhee, P.C., Rutland, for
    Defendant-Appellant.
    PRESENT: Robinson, Eaton, Carroll and Cohen, JJ., and Tomasi, Supr. J., Specially Assigned
    ¶ 1.   CARROLL, J. Donald Zucker appeals a summary-judgment decision awarding
    attorney’s fees to Gregory Wark because Zucker refused to mediate a dispute arising out of a
    purchase and sale agreement. On appeal, Zucker argues that he was not required to mediate
    because the purchase and sale agreement was not an enforceable contract. We agree, reverse the
    trial court’s grant of partial summary judgment, and vacate the trial court’s award of attorney’s
    fees.
    ¶ 2.   The following facts are undisputed. Zucker owns a roughly sixty-five-acre tract of
    land in Bridgewater, Vermont. In August 2013, Zucker granted an easement to Eugene Heselton,
    which gave Heselton the right to build a road across a portion of Zucker’s tract so that he could
    access his adjoining property. On December 17, 2014, Wark signed a purchase and sale agreement
    providing that Zucker would sell his property to Wark. Zucker signed the agreement the next day.
    ¶ 3.    The purchase and sale agreement was prepared using a pre-printed contract from
    Vermont Realtors, a brokerage firm.         In paragraph 10 of the agreement, entitled “Special
    Conditions,” the following language was added:
    See attached addendum. In addition, both Parties agree that this
    contract is subject to an Attorney Review of the Terms of the
    Contract with the exception of price by the Purchaser’s Attorney and
    the Seller’s Attorney. Said review shall be done within 30 calendar
    days of the Seller’s signed acceptance of the Purchase and Sale
    Contract.
    The attached addendum outlined the following additional special conditions:
    Purchaser acknowledges that Seller has given Eugene Heselton, a
    property abutter, permission to construct a private roadway across
    the land. As a condition of this offer and prior to closing on the land,
    Purchaser requires that the terms and conditions of the Easement
    between Donald Zucker and Eugene Heselton . . . be fully
    satisfied. . . .
    Both Parties agree that this addendum is subject to an Attorney
    Review of the terms and conditions of the afore[]mentioned
    Easement by both Purchaser’s and Seller’s attorneys. Said review
    shall be done within 30 calendar days of the Seller’s signed
    acceptance of the Purchase and Sale Contract. If the Parties are
    unable to agree to the conditions of this Easement or any proposed
    changes or additional conditions as proposed by Purchaser’s or
    Seller’s attorneys, then either Party may withdraw from the contract,
    and any funds herein deposited shall be returned to the depositor.
    Closing shall take place after such time as all Parties perform their
    due diligence and the terms and conditions of the Easement have
    been satisfied, but no later than June 1, 2015.
    ¶ 4.    In paragraph thirty, the agreement specified that a binding contract would not be
    created unless the seller and purchaser agreed in a signed writing to the “conditions of any offer(s)
    and/or counteroffer(s), including any addenda or supplemental conditions” by December 31, 2014.
    In bold, the agreement provided that if a binding contract was not made by that date, “neither party
    [would] have any obligations to the other party.” Finally, the agreement contained a mediation
    clause, which required the parties to submit “any dispute or claim arising out of or relating to th[e]
    Contract . . . to mediation prior to the initiation of any lawsuit.” If a lawsuit was filed without first
    seeking mediation, the mediation clause provided that any party would “be entitled to
    2
    reimbursement of the reasonable cost of attorney’s fees or other expenses arising out of such
    lawsuit” until mediation occurred.
    ¶ 5.    Between January and March 2015, the attorneys for Zucker, Wark, and Heselton
    exchanged numerous emails discussing, among other things, the status of the easement, the
    logistics of having an engineer assess the road Heselton was building, and the possibility of moving
    the closing date. Following these exchanges, Zucker’s attorney sent the following email to Wark’s
    attorney:
    Relative to the contract negotiations between Mr. Donald Zucker
    and your client, Mr. Gregory Wark, and based upon all of the recent
    flow of communications back and forth regarding the uncertain
    status of the road/driveway being built by Mr. Eugene Heselton
    . . . we would simply think it prudent to withdraw the property from
    the market . . . .
    On March 18, 2016, almost a year later, Wark, through counsel, sent a letter to Zucker demanding
    mediation pursuant to the mediation clause in the purchase and sale agreement. After a second
    demand for mediation in July, Zucker, through counsel, responded that the contract was properly
    terminated, and he would not participate in mediation unless ordered to do so by a court.
    ¶ 6.    Wark filed suit alleging breach of contract and fraud and sought specific
    performance. Zucker moved for summary judgment arguing that the purchase and sale agreement
    was unenforceable. Wark filed a cross motion for partial summary judgment arguing, in part, that
    because Zucker declined his request to mediate, he was entitled to attorney’s fees under the
    mediation clause.
    ¶ 7.    The trial court granted summary judgment to Zucker on the breach-of-contract
    claim, explaining that although the special condition regarding the easement required Heselton to
    timely construct the easement, the purchase and sale agreement was “silent as to how the terms
    and conditions were to be enforced against [him].” Because such terms were not outlined in the
    purchase and sale agreement, the court held that there was no meeting of the minds and therefore
    no enforceable contract. Alternatively, the court held that Zucker terminated the contract by
    3
    withdrawing the property from the market, which the addendum incorporated into the agreement
    expressly “permitted him to do if agreement was not reached as to additional proposed conditions.”
    ¶ 8.    Although the court granted summary judgment to Zucker on the breach-of-contract
    claim, it concluded that the mediation clause was still enforceable because “courts of external
    jurisdictions have found that the termination of a contract prior to a demand for alternative dispute
    resolution (ADR) will generally have no effect on such demand, provided that the dispute in
    question either arose out of the terms of the contract or arose when a broad contractual [ADR]
    clause was still in effect.” (Quotation omitted.) Because the mediation clause was still enforceable,
    and Zucker refused to mediate, the court granted partial summary judgment to Wark and directed
    him to submit evidence in support of attorney’s fees.
    ¶ 9.    In August 2019, the court awarded $2430 in attorney’s fees and costs to Wark. The
    court noted that in opposing the requested fees, Zucker misconstrued the court’s earlier decision
    as holding that there was no contract:
    To clarify, the court never held that there was no contract. Rather,
    the court specifically stated that “the parties in this case executed a
    Purchase and Sale [agreement] that included special conditions,” but
    held that the [agreement] was “not enforceable against Mr. Zucker,”
    in part because of the lack of a “meeting of the minds” with respect
    to those Special Conditions, as well as because [Zucker] terminated
    the contract when the parties failed to reach agreement as to
    additional proposed conditions. [Zucker] has not timely requested
    reconsideration and the court is not persuaded to amend its decision.
    Zucker subsequently appealed the court’s grant of partial summary judgment and award of
    attorney’s fees to Wark.
    ¶ 10.   “We review a grant of summary judgment de novo, using the same standard as the
    superior court.” Tillson v. Lane, 
    2015 VT 121
    , ¶ 7, 
    200 Vt. 534
    , 
    133 A.3d 832
    . Summary
    judgment is appropriate if, resolving all reasonable doubts in favor of the nonmoving party, the
    moving party can “demonstrate[] that there are no genuine issues of material fact and the party is
    entitled to judgment as a matter of law.” Smith v. Parrott, 
    2003 VT 64
    , ¶ 6, 
    175 Vt. 375
    , 
    833 A.2d
                                                    4
    843. Here, there are no disputed material facts. The issue presented is a legal one—whether Wark,
    pursuant to the mediation clause, is entitled to attorney’s fees for Zucker’s refusal to mediate.
    ¶ 11.   Zucker argues that because the trial court held that the purchase and sale agreement
    was unenforceable in granting summary judgment on Wark’s breach-of-contract claim—and Wark
    did not appeal that decision—it necessarily follows that the mediation clause is also unenforceable.
    In response, Wark argues that the court did not hold that there was no contract; rather, he contends,
    the court held that the contract was not enforceable against Zucker. Alternatively, Wark argues
    that the purchase and sale agreement created an obligation to mediate regardless of whether the
    parties had reached agreement regarding the special condition.
    ¶ 12.   Zucker is certainly correct that because neither party appealed the court’s summary-
    judgment decision on the breach-of-contract claim, the question of whether the purchase-and-sale
    agreement was enforceable is not directly before the Court. The only question presented is whether
    the mediation clause is enforceable. Nevertheless, to determine whether a mediation clause is
    enforceable, we look to contract law. 1 J. Grenig, Alt. Disp. Resol. § 4:14 Enforcement (4th ed.
    2020) (“In determining whether a mediation clause is enforceable in the absence of statutory
    authority, courts should apply contract law.”). And whether there is an enforceable contract is a
    question of law we review de novo. Miller v. Flegenheimer, 
    2016 VT 125
    , ¶ 11, 
    203 Vt. 620
    , 
    161 A.3d 524
    . Accordingly, to answer the narrow question presented in this appeal—whether the
    mediation clause is enforceable—we consider de novo whether the purchase and sale agreement
    is an enforceable contract.
    ¶ 13.   “An enforceable contract must demonstrate a meeting of the minds of the parties:
    an offer by one of them and an acceptance of such offer by the other.” Starr Farm Beach
    Campowners Ass’n, Inc. v. Boylan, 
    174 Vt. 503
    , 505, 
    811 A.2d 155
    , 158 (2002) (mem.). “To
    constitute a meeting of the minds, the acceptance must in every respect meet and correspond with
    the offer, neither falling short of nor going beyond the terms proposed . . . .” Sweet v. St. Pierre,
    
    2018 VT 122
    , ¶ 12, 
    209 Vt. 1
    , 
    201 A.3d 978
     (quotation omitted).
    5
    ¶ 14.   We conclude that there was no meeting of the minds because the parties never
    agreed to the addendum in the manner required by paragraph thirty of the agreement, which
    specified that a binding contract would not be created “unless all terms and conditions of any
    offer(s) and/or counteroffer(s), including any addenda or supplemental conditions [were] agreed
    to in” a signed writing by December 31, 2014. Although the parties incorporated the addendum
    into the agreement via the special-conditions paragraph, that was insufficient to form a binding
    contract. According to paragraph thirty, they specifically had to agree to the addendum in a signed
    writing by December 31, 2014.
    ¶ 15.   Based on the summary-judgment record, there is no evidence the parties agreed to
    the condition in a signed writing by the December 31, 2014 deadline. Although Wark signed the
    addendum, Zucker never did—the spot for the seller’s initials is blank. In fact, email exchanges
    between Wark’s and Zucker’s attorneys indicate that Wark was still proposing additional addenda
    to the agreement in January and March 2015. Because the parties did not agree to the addendum
    in a signed writing by December 31, 2014, the purchase and sales agreement is not an enforceable
    contract, which also means the mediation clause is unenforceable.1
    ¶ 16.   We are unpersuaded by the rationale provided by the trial court and the arguments
    advanced by Wark as to how the mediation clause could be enforceable if the purchase and sale
    agreement is itself unenforceable. The trial court concluded that the mediation clause was
    enforceable because “courts of external jurisdictions have found that the termination of a contract
    prior to a demand for alternative dispute resolution (ADR) will generally have no effect on such
    demand, provided that the dispute in question either arose out of the terms of the contract or arose
    1
    Zucker argues that the trial court erred in awarding attorney’s fees for two additional
    reasons. First, Zucker argues that the plain language of the mediation clause only allows for
    recovery of attorney’s fees against the party that files a lawsuit without seeking mediation.
    Because Zucker did not initiate a lawsuit, he argues that attorney’s fees could not be awarded
    against him. Second, Zucker argues that the trial court’s award of attorney’s fees in the amount of
    $2430 lacks a sufficient evidentiary basis. Because we conclude that the mediation clause is
    unenforceable, we need not address these arguments. See Nolan v. Fishman, 
    2019 VT 63
    , ¶ 10
    n.2, 
    211 Vt. 1
    , 
    218 A.3d 1034
    .
    6
    when a broad contractual [ADR] clause was still in effect.” (Quotation omitted.) It is certainly
    true that courts have held that ADR clauses—specifically, arbitration agreements—may survive
    the termination of a valid contract. See Geller v. Temple B’nai Abraham, 
    415 N.E.2d 246
    , 248
    (Mass. App. Ct. 1981) (“The agreement’s expiration and the plaintiff’s letters of resignation would
    not, as a matter of law, preclude arbitration.”); County of Orange v. Faculty Ass’n of Orange Cty.
    Cmty. Coll., 
    431 N.Y.S.2d 86
    , 87 (N.Y. App. Div. 1980) (holding that arbitration was required
    because disputed events occurred before contract expired). These cases are inapplicable here,
    however, because there was never a valid contract. Wark’s demand for mediation neither arose
    out of the terms of the contract nor arose when a contractual ADR clause was still in effect.
    ¶ 17.   Wark advances two different arguments as to why the mediation clause is
    enforceable despite the purchase and sale agreement not being an enforceable contract. First, he
    argues that the trial court only held that the purchase and sale agreement was not enforceable
    against Zucker, not that there was no contract. We fail to see the legal significance of the
    distinction Wark attempts to draw—albeit one the trial court also seemed to draw.                 More
    importantly, however, regardless of what the trial court held, we consider de novo whether the
    purchase and sale agreement is enforceable for the purpose of resolving the narrow issue presented
    on appeal. As outlined above, based on our review of the record, we conclude that the purchase
    and sale agreement is not an enforceable contract.
    ¶ 18.   Second, Wark argues that even though Zucker is not contractually obligated to sell
    his land, the purchase and sale agreement amounted to a “base contract” that created a contractual
    obligation to mediate. A mediation clause certainly may require parties to mediate a dispute
    relating to the validity of a contract. See Leamon v. Krajkiewcz, 
    132 Cal. Rptr. 2d 362
    , 368 (Cal.
    Ct. App. 2003) (“[R]equiring a party to mediate the question of the validity of [a] contract does
    not necessarily mean that [the] party concedes the contract is not voidable. A request for mediation
    can clearly state the party’s position that the contract is voidable or invalid . . . .”). In this case,
    however, the record indicates that the purchase-and-sale agreement did not create any legal
    7
    relationship or obligations between the parties because it expressly provided, in bold, that if a
    binding contract was not made by December 31, 2014, “neither party [would] have any obligations
    to the other party.”
    ¶ 19.   In sum, the trial court erred in granting partial summary judgment and awarding
    attorney’s fees to Wark for Zucker’s refusal to mediate because the purchase and sale agreement
    is not an enforceable contract and created no legal obligation for Zucker to mediate. We
    accordingly vacate the court’s award of attorney’s fees.
    The trial court’s decision granting partial summary judgment to Wark is reversed, and the
    award of attorney’s fees is vacated.
    FOR THE COURT:
    Associate Justice
    ¶ 20.   TOMASI, Supr. J., Specially Assigned, concurring. I do not quibble with the
    majority’s legal conclusion that, if the parties never entered into an enforceable purchase and sale
    agreement, they were not bound by the mediation clause in that document. That is certainly the
    argument urged by Zucker on appeal. I diverge from the majority, however, in its determination
    that the summary-judgment record, viewed in the light most favorable to Wark, shows that the
    parties never agreed to the General Addendum by December 31, 2014, and that, therefore, no
    enforceable contract was formed between them. I believe the summary-judgment record, at most,
    suggests a dispute of material fact as to whether the parties entered into an enforceable agreement.
    ¶ 21.   We review the trial court’s summary-judgment decision without deference,
    applying the same standard as the trial court. In re Gay, 
    2019 VT 67
    , ¶ 7, 
    211 Vt. 122
    , 
    220 A.3d 769
    . Summary judgment is warranted when there are no issues of material fact, and a party is
    entitled to judgment as a matter of law. V.R.C.P. 56(a). In evaluating the state of the summary-
    judgment record, we rely primarily on the parties’ respective statements of material facts and the
    8
    record evidence cited therein, although we may also consider other materials in the record.
    V.R.C.P. 56(c)(1), (3).
    ¶ 22.   The summary-judgment record in this case demonstrates that the factual dispute
    between the parties before the trial court was not whether the parties agreed to the General
    Addendum; rather, they disputed the effect of that addendum in light of subsequent events. With
    respect to the parties’ agreement to the General Addendum, in the affidavit Wark filed in
    connection with the parties’ cross-motions for summary judgment, Wark stated that the parties
    executed the purchase-and-sale agreement, including the General Addendum setting forth the
    special conditions concerning the easement to Haselton, on December 18, 2014. Zucker’s
    summary-judgment motion described the General Addendum as “a contemporaneous addendum.”2
    Importantly, Zucker never expressly averred or argued that he did not agree to the Addendum or
    that it was unenforceable. Instead, he maintained that he properly withdrew from the contract
    pursuant to the terms of that Addendum. Lastly, the initial step in considering whether a
    preliminary agreement is enforceable is whether the parties to the writing intended to be bound by
    it. See Miller v. Flegenheimer, 
    2016 VT 125
    , ¶ 16, 
    203 Vt. 620
    , 
    161 A.3d 524
    . Here, neither the
    parties nor the trial court engaged in that analysis. For all those reasons, I do not believe the factual
    record is clear enough for us to hold that no contract existed as a matter of law.
    ¶ 23.   While I conclude there is a dispute of material fact as to the existence of a contract
    in this case, I join in the result reached by the majority on an alternative legal basis. A secondary
    holding of the trial court was that, even if the parties formed a contract, Zucker withdrew from that
    agreement in March 2015. I would adopt that approach.
    ¶ 24.   The General Addendum to the agreement states that: “If the Parties are unable to
    agree to the conditions of this Easement or any proposed changes or additional conditions as
    2
    I quote from Zucker’s summary-judgment motion because, although Zucker’s motion
    references an attached statement of material facts, I have been unable to locate in the court file any
    such statement or associated affidavits in connection with Zucker’s summary-judgment motion.
    9
    proposed by Purchaser’s or Seller’s attorneys, then either Party may withdraw from the contract.”
    I believe the language of this negotiated provision as to termination is broad and permitted Zucker
    to withdraw from the deal if the parties failed to agree on the easement or additional conditions.3
    My review of the summary-judgment record confirms that the undisputed facts are that the parties
    had not reached an agreement as to the easement and additional conditions by March 19, 2015;
    that Zucker’s attorney sent an email withdrawing the property from the market on that date; and
    that Wark’s attorney acknowledged that very point. It was not until nearly a year later that Wark
    requested mediation. I believe the present record establishes that Zucker effectively terminated
    the contract, assuming there was one.
    ¶ 25.   While there well may be occasions when a mediation clause can survive the
    termination of a contract as a general matter, there is no need to reach that knotty issue in this
    case.4 Each contract must be construed according to its particular terms. In this instance, the
    parties’ agreement convinces me that the mediation provision was not in force at the time
    mediation was requested. These parties augmented a standard purchase and sale agreement in
    several ways. In the General Addendum, they appended the detailed contingency and termination
    provisions described above. On an adjacent page, they added the following provision: “In the
    event this contract is terminated by either Seller’s or Purchaser’s [sic] in accordance with the
    provisions of any applicable contingency, all contract deposits together with all interest therein to
    which Purchaser may be entitled shall be forthwith returned to Purchaser and the contract shall be
    3
    I do not read the General Addendum to limit the power to terminate for disagreements
    concerning the easement to the 30-day period following the signing of the Purchase-and-Sale
    Agreement. In any event, the record shows that Wark’s attorney began to raise issues and make
    proposals for modifications concerning the wording and scope of the easement within that period
    that were not agreed to by Zucker. Those and related disputes regarding the easement continued
    until the March termination.
    4
    While there is strong support for the conclusion that binding arbitration clauses survive
    the termination of a contract as to certain disputes, see Litton Fin. Printing Div. v. N.L.R.B., 
    501 U.S. 190
    , 206 (1991), the nature of nonbinding mediation provisions may not necessarily lead to
    the same result.
    10
    of no further force and effect.” (Emphasis added.) No doubt, the parties could have drafted a
    narrower proviso, but they did not. I would give primary effect to that specific term over the more
    general mediation clause, which is embedded as part of the boilerplate of the contract. See
    Fairchild Square Co. v. Green Mountain Bagel Bakery, Inc., 
    163 Vt. 433
    , 439, 
    658 A.2d 31
    , 35
    (1995) (“As a matter of contract construction, the specific controls the general.”).
    ¶ 26.   In short: these parties agreed that, upon termination, all contract terms—including
    the mediation provision—would no longer be in effect. Zucker effectively terminated the contract
    in March 2015. Wark sought mediation in March 2016. Since the parties no longer had any
    contractual obligations to each other at that point, the trial court’s decision to award attorney’s fees
    in connection with the mediation demand must be reversed.5 On that basis, I concur in the
    judgment of the Court.
    ¶ 27.   I am authorized to state that Justice Robinson joins this concurrence.
    Superior Judge, Specially Assigned
    5
    The timing of Wark’s request for mediation adds further support to that conclusion. The
    contract established a closing date for the sale of “no later than June 1, 2015”; acknowledged that
    “time was of the essence”; and provided that “neither party is obligated to extend the date for the
    Closing.” The closing date arrived and passed with no request for mediation. Wark’s belated
    demand for mediation did not come until over nine months after the mandatory closing date and
    almost a year after Zucker had terminated the contract. Cf. Nolde Bros., Inc. v. Local No. 358,
    Bakery & Confectionery Workers Union, AFL-CIO, 
    430 U.S. 243
    , 255 n.8 (1977) (noting
    contention that arbitration demand must be made within “reasonable time” after expiration of
    agreement).
    11
    

Document Info

Docket Number: 2019-344

Filed Date: 5/28/2021

Precedential Status: Precedential

Modified Date: 5/28/2021