LaPorte v. Blum ( 2015 )

LaPorte v. Blum, No. 1167-11-13 Cncv (Toor, J., Mar. 17, 2015).
[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy
of the text and the accompanying data included in the Vermont trial court opinion database is not guaranteed.]
VERMONT SUPERIOR COURT
CHITTENDEN UNIT
CIVIL DIVISION
│
WILLIAM LAPORTE, JAMES LAPORTE, │
and BURGESS SUGARHOUSE, LLC │
Plaintiffs │
│
v. │ Docket No.1167-11-13 Cncv
│
│
PAMELA B. BLUM, RICHARD W. │
BURGESS, NANCY B. RICE, and JUDITH │
K. BURGESS, │
Defendants │
│
RULING ON THE MERITS
This is an intra-family dispute over an option to buy land. Plaintiffs are (1) the
grandchildren of the former owners, and (2) the grandchildren’s sugaring business. Defendants
are Plaintiffs’ aunts and uncles. Plaintiffs seek to enforce the option to purchase the family land
on which they have been sugaring; Defendants filed a counterclaim seeking a declaration that
they properly revoked the option in 2013.1 A court trial was held on January 21 and 22 and post-
trial filings were complete February 13.2 Robert O’Neill, Esq. represents the Plaintiffs; Craig
Weatherly, Esq. represents the Defendants.
Findings of Fact
The court finds the following facts to be established by a preponderance of the evidence.
Lawrence W. Burgess and Ruth O. Burgess (“the Grandparents”), now deceased, owned and
1
They also raised the defense of undue influence, but have withdrawn that claim.
2
The court notes that Defendants’ post-trial memo refers to some exhibits that were never offered in evidence, such
as, by way of example, 29, 30 and 31.
lived on the Underhill land in question. They had run a sugarhouse on the land, with about 2,000
taps. In 2001 they realized the lines needed to be replaced and, at 80 and 81 years of age, they
decided to stop sugaring. In 2004, their grandsons William and James hung a few buckets –
perhaps 150 – and in 2005 started buying new sugaring equipment. The Grandparents put in
about $10,000 to help with the roughly $52,000 worth of equipment. In 2005 they had about
1,000 taps going. William and James registered their trade name (Burgess Sugarhouse) in 2004.
There is no evidence that the name had any value. William and James would not have invested
the $52,000 if they had not been assured by their Grandparents that they could continue to sugar
on the property.
At some point, Defendants became unhappy about the fact that the grandsons were
running the sugaring operation. None of the Defendants testified, so it is not clear to the court
why they objected.
The Grandparents offered to give William and James the land, but the boys declined.
They discussed buying it, but because of concerns that the funds from a sale might reduce the
Grandparents’ Medicaid eligibility, that plan was rejected. The Grandparents met with lawyers to
work out an estate plan, which ended up as follows: the land would be given to Lawrence and
Ruth’s five children in equal shares, and William and James would be given an option to buy the
land. There would also be a lease allowing them to keep sugaring prior to execution of the
option. The Grandparents were fully aware that the Defendants objected to the option, but went
forward with it anyway. William and James told their Grandparents that they would not stay to
sugar there without the option and the lease.
In May 2006, the property was deeded to the five children (the four Defendants plus the
mother of William and James) with Lawrence and Ruth reserving a life estate. In addition, the
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lease and option (the Option) were executed. Exs. 13-19. The lease runs until May 2021, with an
option to renew for another fifteen years. Ex. 14. The Option permits William and James to buy
the land for $400,000. Ex. 13, ¶ 3. It has two parts: one an option to buy the residence and one
for the balance of the land. Each is priced at $200,000. The residence option could not be
exercised until after the Grandparents were no longer living there, and even then only with their
permission. The option on the balance of the land could be exercised sooner. Both options would
expire if not exercised within nine months after the later of both Grandparents’ deaths. Id. ¶ 2.
Defendants sent Requests for Admissions in July of 2014 to which Plaintiffs failed to
respond, and they are thus deemed admitted. They state that the fair market value was higher
than $400,000 both at the time the Option was issued and as of July 2014. However, there is no
other evidence as to fair market value. Thus, the court cannot say whether the land is worth $1
more, or $100,000 more, than the Option price.
The Option has the usual recitation that it is given for “Ten Dollars and other good and
valuable consideration.” No one recalls ten dollars being exchanged at the closing. The lawyer
who drafted the Option testified that in fifty years of closings he never saw anyone exchange the
dollars recited as consideration.
In 2010 Lawrence revised his will. It leaves a one quarter interest in the real estate to
each of the Defendants, but not to the fifth daughter, William and James’ mother. Ex. 28, ¶
6.1(a).3 This was the result of the family dispute over the grandsons getting the Option, which
led their mother to say her siblings could have her share. The will also states that it is Lawrence’s
intent “to provide my grandsons, JAMES LAPORTE and WILLIAM LAPORTE, the benefits of
the option and lease” referenced therein. Id. ¶ 6.1(d). It was the Grandparents’ desire that
3
It is unclear whether the deeds were also revised at that time, but the court presumes they were. Likewise, the
court presumes that Ruth’s interests had already been transferred to Lawrence. No one has raised any issue about
those aspects of the case.
3
William and James continue to run a sugaring operation on the property after the Grandparents’
deaths.
William and James continued to run the sugaring operation. Lawrence and Ruth both died
in 2013. In June of 2013, Defendants sent a letter to William and James saying that “the offer
represented by the Option is hereby withdrawn, and . . . no purported exercise of the Option by
you hereafter will be recognized as valid.” Ex. 33. In September of 2013, William and James
obtained financing and sent a letter attempting to exercise the Option. Ex. 35. This lawsuit
followed.
Conclusions of Law
Plaintiffs seek to enforce the Option as written. Defendants argue that because the ten
dollars recited in the Option was never paid, the Option was not supported by consideration and
is therefore unenforceable.
The Restatement (Second) of Contracts states that an “option agreement is not invalidated
by proof that the recited consideration was not in fact given.” Restatement (Second) of Contracts
§ 87 cmt c (1981); see also, 3 Williston on Contracts § 7.21 (4th ed.) (“In one very important
respect, the recital or payment of a small sum, under the modern view, will suffice to make a
promise enforceable. This occurs when the promise is contained in an option
contract.”)(emphasis added). Another court has noted that “[t]he authors of the national treatises
on contracts have generally endorsed” this view. 1464-Eight, Ltd. v. Joppich, 154 S.W.3d 101,
109 (Tex. 2004). The Joppich court also pointed out that “the authors of law review commentary
have agreed that the nonpayment of a recited nominal consideration should not preclude
enforcement of a written option agreement.” Id. at 111.
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As is often the case, it does not appear that the Vermont Supreme Court has yet addressed
this question. However, the Restatement approach is reasonable because it seeks to enforce the
intent of the parties to the document at issue. As the evidence shows, it is typical to recite a few
dollars as consideration but not expect it to be paid. To hold that every such agreement is void
would not be in keeping with the intent of the parties to such options. Moreover, the Supreme
Court’s trend is to adopt the more modern views expressed in the Restatements. Thus, the court
predicts that it would do so here. In the absence of any controlling authority, the court will
therefore apply the Restatement approach. The recital of consideration is thus sufficient,
regardless of whether it was actually paid.
While “gross disproportion between the payment and the value of the option” may make
an option unenforceable, that is not the case here. Restatement at § 87 cmt. b. There is no
evidence here as to the fair market value of the property. It may be $100 more than the $400,000
option price, or $100,000 more, but there is no evidence from which the court can make such a
determination. Thus, there is no evidence of “gross disproportion.”
In any case, the court finds that there was “other consideration” for the Option aside from
the recital of ten dollars: the fact that William and James remained on the family land to continue
running the sugaring operation that the Grandparents could no longer manage themselves. The
Grandparents desired that continuity, and offered the Option in exchange for that commitment by
William and James. It is true that William and James had already spent considerable funds on
equipment prior to the Option, but that does not undercut the value of their remaining on the land
and running the operation after May 2006. William testified that they expressly told their
Grandparents that they would not stay to sugar there without the Option and the lease. This is
highly credible given the known opposition from Defendants, and the risk that they would seek
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to remove William and James once the Grandparents died. The fact that the Grandparents went
forward with the Option in the face of the known opposition of four of their five children makes
clear that they heavily valued having William and James continue the family’s sugaring
operation.
While the court cannot place an exact dollar value on the continuation of the sugaring
operation, that is not necessary to sustain the Option. “[A]nything which fulfills the requirement
of consideration will support a promise, regardless of the comparative value of the consideration
and of the thing promised. The rule is almost as old as the doctrine of consideration itself.” 3
Williston on Contracts § 7.21 (4th ed.); see also, Restatement (Second) of Contracts § 87, cmt a
(1981) (in analyzing option contracts, “courts do not ordinarily inquire into the adequacy of the
consideration bargained for.”). In any case, continuation of a family farm or family business is
often of very high value to older family members, and the evidence here supports a conclusion
that it was so valued by the Grandparents. There was adequate consideration here.
Defendants also argue that the Option could be withdrawn, as they did in June of 2013.
The court disagrees. “An option is a continuing offer, and if supported by a consideration, it
cannot be withdrawn before the time limit.” Buchannon v. Billings, 127 Vt. 69, 75 (1968). It is
“an agreement by which one binds himself to sell and convey to another party certain property at
a stipulated price within a designated time.” Id. at 74. “The optionor is bound that the offer shall
be kept open and available in accordance with its terms[.]” Id.; see also 1 Williston on Contracts
§ 5:16 (4th ed.) (“During the option period the irrevocable offer may only be modified, released
or rescinded by agreement of the parties. It cannot be unilaterally withdrawn.”).
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Thus, Defendants did not have the right to revoke the Option. Plaintiffs exercised it in
September 2013, within the nine-month period after their grandfather’s death. It became a
binding, enforceable contract at that time.
Order
The court will enter judgment for Plaintiffs William and James LaPorte. The Option is
enforceable and has not been revoked.
Dated at Burlington this 17th day of March, 2015.
_____________________________
Helen M. Toor
Superior Court Judge
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