Reynolds v. Brosseau ( 2003 )

Reynolds v. Brosseau, S1153-01 CnC (Katz, J., Dec. 29, 2003)
[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.]
STATE OF VERMONT SUPERIOR COURT
Chittenden County, ss.: Docket No. S1153-01 CnC
DORIS REYNOLDS, TRUSTEE OF THE FRANK IRISH TRUST
v.
RONALD P. BROSSEAU and PETER SMEJKAL
ENTRY
This is a contract formation case. Defendants Brosseau and Smejkal
seek specific performance on a purchase and sale agreement that they
signed with Frank Irish as purchasers on March 18, 1996. This action was
originated by Frank Irish, recently deceased. Doris Reynolds as trustee of
the Frank Irish trust now holds title to the land in question subject to
probate review of the will. Reynolds as trustee disputes the enforceability
of the agreement citing to its incomplete and missing terms as illustrative of
its lack of binding intent. Both parties have moved for summary judgment.
Frank Irish’s estate contains a 26.3 acre lot on Allen road in South
Burlington, where Irish had farmed. As with many farms in the areas
immediately outlying Burlington, Irish appears to have moved away from
agrarian pursuits in the mid-1990s toward developing his parcel into much
more profitable suburban sub-developments. In 1996, Irish had an
increased property tax bill from the city and limited means to pay it. (Pl.
Resp. to Mot. to Am. Answer, Feb. 18, 2003, at 7). Irish was also suffering
from serious medical problems. Id. at ex. 4 (Dep. of Frank Irish); (Aff.
Doris Reynolds, Jun. 12, 2002). During this time, his brother-in-law,
Brosseau and Smejkal approached Irish about purchasing the 26.3 acre lot
on Allen Road. (Pl. Stmt. Of Undisp. Facts, Feb. 18, 2003).
This led to a document signed on March 18, 1996, titled “purchase
and sale agreement.”1 (Def. Suppl. Memo. in Opp’n to Summ. J., Jun. 26,
2003, at ex. A). The document identifies Frank Irish as seller and the Irish
Development Corporation, represented by partners Ronald P. Brosseau and
Peter Smejkal, as purchaser. Id. It describes the lot and its location, and
states it will be conveyed for the purpose of developing the land into 48
residential lots based on the seller’s preliminary sketch. Id. The document
lays out the price as $225,000 for the property minus $10,000 down at
signing and “other advance payments if any will be made prior to the final
closing and ownership transfer.” Id. The document does not contain any
payment or financing terms leaving them to “be clarified at a later date.”
Id. These terms were apparently never clarified between the parties
although there is evidence that Brosseau and Smejkal paid Irish $30,000 at
1
While Irish came to dispute even signing the document, we will infer
solely for the purposes of summary judgment that the signature is authentic.
later points in time. (Pl. Resp. to Mot. to Am. Answer, Feb. 18, 2003, at ex.
4 (Dep. of Frank Irish)) The final paragraph of the agreement allows
purchaser to change the development plan for Act 250 or state and local
permits. (Def. Suppl. Memo. in Opp’n to Summ. J., Jun. 26, 2003, at ex.
A).
The week after the agreement was signed by all parties, Irish hired a
contractor who began work on excavating and draining out wetland areas
on the 26.3 acres, without a permit, which led to charges against Irish in
Environmental Court. Agency of Natural Resources v. Irish, 169 Vt. 407,
409 (1999). At the beginning of the permit litigation, Brosseau appeared
to act as agent for Irish, Agency of Natural Resources v. Irish, 69-5-97
Vtec (Wright, J., Nov. 19, 1999), but neither Brosseau nor Smejkal
attempted to intervene or assert their rights as future owners in this
litigation. They also stopped all work on obtaining permits or modification
their design work after September 1996. (Pl. Stmt. of Undisp.Facts, Feb.
13, 2003). Neither Brosseau nor Smejkal attempted to close on the
agreement, even after the case against Irish was resolved in August 2000.
Despite facial appearances, an agreement cannot be an enforceable
contract unless it clearly and definitely expresses all of the essential terms.
Evarts v. Forte, 135 Vt. 306, 310 (1977). The agreement that Irish signed
lacks several necessary terms including: 1) payment terms (reserved for
another document, which was never executed); and 2) a closing date.
Brosseau and Smejkal argue that these terms are not essential and may be
filled in.
Brosseau and Smejkal argue that the payment terms are not
important because “if the parties did not agree upon a time or method of
payment, ‘the law construes the offer to be for cash on delivery.’” (Def.
Suppl. Memo. in Opp’n to Summ. J., Jun. 26, 2003, at 4) (quoting Dickson
v. McMahan, 140 Vt. 23, 25–26 (1981)). There are several problems with
the defendant’s use of Dickson and its statement concerning methods of
payment. The facts of Dickson involve a series of agreements between the
parties that established every term of the sale except for time and method of
payment. Dickson, 140 Vt. at 24. This included arranging for the source
of the payment and establishing a closing date. Id. at 26. The Irish
agreement has no mention of payment source or closing date. The
discussions between the parties in Dickson also made the time and method
of payment non-essential since the purchaser had clearly communicated
that it was amenable to any form and left it to seller to determine which
would be best for his tax purposes.
In the Irish agreement, the payment terms were never resolved to
any degree or apparently discussed. The indicated buyer, Irish
Development Corporation did not exist at the time of signing, does not
currently exist, and has never existed as either a registered corporation or
factual entity. (Pl. Resp. to Memo. in Opp’n, Apr. 28, 2003, at ex. 3). In
fact, the only other evidence of this name is in an application Brosseau and
Smejkal made to the South Burlington Planning Commission in February
1996. Id. at ex. 4. Selling to Brosseau and Smejkal would essentially
constitute a reformation of the contract, since the purchaser is listed as Irish
Development and Brosseau and Smejkal are only its agents. New York
Life Ins. Co. v. Kimball, 93 Vt. 147, 153 (1919) (stating the limited
equitable grounds upon which reformation will be granted).
Brosseau and Smejkal’s claimed willingness to pay cash on delivery
is irrelevant to resolving the payment term because it was never discussed
or agreed to by Irish. Evarts v. Forte, 135 Vt. 306, (1977) (“It is never
enough that the parties think they have made a contract; they must express
their subjective intent in a manner that is capable of understanding), quoted
in Quenneville v. Buttolph, 2003 Vt. 82 at ¶ 15. Whatever Brosseau and
Smejkal’s present willingness is, it was not what Irish agreed to. Id. Full
payment, all at once, is not something Irish would have necessarily found
advantageous, and since he did not state a willingness otherwise, it remains
an essential, unfulfilled term.
Brosseau and Smejkal’s reliance on Dickson is further undercut by
the facts surrounding Quenneville. In Quennevile, the plaintiffs, Houghton
and Campbell, sent a down payment with a note expressing their intent to
be bound. Quenneville v. Buttolph, 2003 Vt. 82 at ¶ 3. The landowner
signed a document agreeing to sell his farm to Houghton and Campbell. Id.
at ¶ 4. Shortly thereafter, the sellers began negotiating with another party,
the Quennevilles, eventually forming an oral contract. Id. at ¶ 5. The
Quennevilles acted upon their “purchase” and moved onto the farm and
began managing it. Id. at ¶ 6. When Houghton and Campbell sought to
enforce their agreement, the court found that it was not final and lacked
several important details including the financing of the purchase, amount of
payments, items included as “grey matter,” security for purchaser’s note,
and an option to be retained on a portion of land. Id. at ¶ 8. Sellers had not
entered into an enforceable contract with Houghton and Campbell and were
not bound to sell. Id. Even though both parties appeared to be close on
several issues, the court refused to enforce what had never been reached on
agreement. Id. at ¶ 13. The same failure to include necessary terms in a
land sale contract clearly envisioning owner financing is fatal to
defendant’s position here.
In contrast to the Quennevilles, Brosseau and Smejkal have not
done anything to further their ownership of the Irish property since 1996.
They have actually receded from possession of the Irish land since their
initial actions in 1996. Their incomplete agreement is more akin to
Houghton and Campbell, whom they resemble as interested parties who
negotiated but never concluded. Such limited actions do not constitute the
behavior of purchasers who are trying to become property owners. Nor do
they provide any of the missing terms in their agreement.
Brosseau and Smejkal’s argument concerning the lack of a closing
date is also similarly flawed. Brosseau and Smejkal argue that when a
purchase and sale agreement lacks a closing date, it should be presumed
within a reasonable time. (Def. Suppl. Memo. in Opp’n to Summ. J., Jun.
26, 2003, at 5) (citing Sisters & Brothers Investment Group v. Vermont
Nat’l Bank, 172 Vt. 539, 542 n.* (2001) (mem.)). In Sisters, the question
of a court-implied closing date arose in a transaction between two
competing buyers seeking a property under foreclosure. Sisters, 172 Vt. at
539–40. The Court concluded that the absence of a closing date does not
defeat a contract on the presumption that the parties mean to close within a
reasonable time. Id. at 542–43 n.*. The Court found a reasonable time
easy to determine because the foreclosure action determined it. Id. In the
present case, a reasonable time is not quite as easy to determine. Brosseau
and Smejkal argue that a reasonable time is a fact based determination
based on the intent of the parties and what was contemplated at the time of
the performance, and circumstances attending. (Def. Suppl. Memo. in
Opp’n to Summ. J., Jun. 26, 2003, at 5). They argue that the wetlands
issues which led to the Environmental Court case was unexpected and
made it unreasonable for them to close at the time until they knew “what
the costs would be associated with the restoration of the property.” Id. at 6.
The problem with this is that the litigation Irish was involved in did not
affect his title to the land or his ability to sell it. What it really shows is that
Brosseau and Smejkal did not deem themselves obligated to close.
The argument is also disingenuous in that contradicts the defendants’
own reasoning. Looking at the agreement defendants would like enforced,
there is no language making the transaction conditional on obtaining
permits or the resolution of any potential litigation. The agreement does
address permitting and environmental regulations but only to the extent that
it allows Brosseau and Smejkal to reform the development plan. This show
that the parties considered the potential problems and delays that Vermont
and South Burlington’s development regulations pose to developers.
Instead of making the sale, the closing date, or any of the details of the sale
conditional on this aspect, the parties chose only to allow alterations to the
development plan. Thus, at the time of contracting, the parties did not
evince any intent to postpone the closing. A reasonable time is not limitless
or subject to the parties whim. 17A Am. Jur. 2d Contracts § 480. It is
impossible at this point to determine when a reasonable time to close would
have been. Holyoke Mut. Fire Ins. Co. v. Horton, 100 Vt. 228, 231 (1927)
(“What constitutes a reasonable time is ordinarily a question of fact to be
determined from the attending circumstances . . .”). But, it is quite certain
that seven years after the agreement was signed is not reasonable.
In conclusion, this 1996 agreement explicitly evinces the expectation
of a later agreement. An agreement to later agree is not a contract.
Quenneville v. Buttolph, 2003 Vt. 82 at ¶ 16. Without this later agreement,
there are several missing or vague terms that leave it incomplete. While the
law allows for some missing terms, incomplete agreements cannot be
bootstrapped into enforceable contracts.
Based on the foregoing, defendants motion for summary judgment is
denied. Plaintiff’s motion for summary judgment is granted. The purchase
and sale agreement between the two parties is declared unenforceable.
Dated at Burlington, Vermont________________, 2003.
________________________
Judge