Lamphere v. Malletts Bay Homeowners Ass'n ( 2017 )

Lamphere v. Malletts Bay Homeowners Ass’n, No. 859-10-16 Cncv (Mello, J., Sept. 29, 2017).
[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy of the text and the
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VERMONT SUPERIOR COURT
CHITTENDEN UNIT
CIVIL DIVISION
│
TRACY LAMPHERE, et al., │
Plaintiffs │
│
v. │ Docket No. 859-10-16 Cncv
│
MALLETTS BAY HOMEOWNERS │
ASSOCIATION, │
Defendant │
│
RULING ON PLAINTIFFS’ MOTION TO PRECLUDE RELITIGATION OF ISSUES
This is an action by homeowners in a common interest community (Plaintiffs)
against the homeowners association (Defendant). Plaintiffs allege various claims,
including negligence, breach of fiduciary duty, breach of contract, and breach of certain
statutory duties. Now before the court is Plaintiff’s motion to preclude the relitigation of
issues that have been resolved in previous litigation involving Defendant. Pietro Lynn and
Adrienne Shea, Esqs. represent Plaintiffs. Christopher Sanetti, Esq. represents
Defendant.
The issues raised in this action are identical to those raised in the action titled
Mongeon Bay Properties, LLC v. Mallets Bay Homeowner’s Ass’n. See 2016 VT 64; No.
45-1-12 Cncv (Apr. 28, 2015) (Pearson, J.). There, Mongeon Bay Properties had sued
the homeowners’ association, alleging that it had defaulted under the ground lease, and
seeking termination of the lease. The trial court found that the association had failed to
perform regular maintenance and to address lakeside erosion, and concluded that this
conduct caused substantial injury to the property and constituted waste. The court
concluded that the association was in default of the lease. The Supreme Court affirmed
those findings, and held that Mongeon Bay Properties was entitled to terminate the lease.
The homeowners now seek a ruling from this court that those factual findings and
determinations in the earlier case are entitled to preclusive effect in the present action.
Collateral estoppel, or issue preclusion, “bars the subsequent relitigation of an
issue that was actually litigated and decided in a prior case where that issue was
necessary to the resolution of the dispute.” Scott v. City of Newport, 2004 VT 64, ¶ 7, 177
Vt. 491 (quoting Alpine Haven Prop. Owners Ass’n v. Deptula, 2003 VT 51, ¶ 13, 175 Vt.
559); see also Mellin v. Flood Brook Union Sch. Dist., 173 Vt. 202, 209–10 (2001) (“When
an issue of fact . . . is actually litigated and determined by a valid and final judgment, and
the determination is essential to the judgment, the determination is conclusive in a
subsequent action between the parties, whether on the same or a different claim.”)
(quoting Restatement (Second) of Judgments § 27 (1982)). Application of the doctrine
requires that:
(1) preclusion is asserted against one who was a party or in
privity with a party in the earlier action; (2) the issue was
resolved by a final judgment on the merits; (3) the issue is the
same as the one raised in the later action; (4) there was a full
and fair opportunity to litigate the issue in the earlier action;
and (5) applying preclusion in the later action is fair.
Trepanier v. Getting Organized, Inc., 155 Vt. 259, 265 (1990) (citing Bernhard v. Bank of
Am. Nat. Tr. & Sav. Ass’n, 19 Cal. 2d 807, 813 (1942); Blonder–Tongue Laboratories,
Inc. v. University of Illinois Foundation, 402 U.S. 313, 328 (1971)). Among the appropriate
factors for courts to consider in determining the presence of the final two criteria are “the
type of issue preclusion, the choice of forum, the incentive to litigate, the foreseeability of
future litigation, the legal standards and burdens employed in each action, the procedural
opportunities available in each forum, and the existence of inconsistent determinations of
the same issue in separate prior cases.” Id. (citing Parklane Hosiery Co. v. Shore, 439
U.S. 322, 331–32 (1979); Blonder–Tongue, 402 U.S. at 333–34; Restatement (Second)
of Judgments §§ 28–29 (1982)). Collateral estoppel serves the interests of repose and
reliance, and prevents repetitious litigation. Wright & Miller, 18 Fed. Prac. & Proc. Juris.
§ 4416 (3d ed. Apr. 2017 update).
This case presents a proper scenario in which to apply collateral estoppel. First,
issue preclusion is asserted against Mallets Bay Homeowners’ Association, the same
defendant in the earlier action. Second, the issues were resolved by a final judgment on
the merits in the prior action. The trial court made factual findings after a bench trial, and
the Supreme Court affirmed those findings. Third, the relevant issues here—that the
association was obligated to maintain the leased premises, and that its failure to do so
resulted in waste and resulted in the termination of the lease—were the same issues
resolved in the earlier action. Fourth, there was a full and fair opportunity to litigate the
issue in the earlier action. These issues were contested and litigated in a bench trial and
on appeal. The association argued that it did not breach its obligations under the lease,
and had every incentive to zealously litigate this issue since a finding of a breach could
(and did) result in termination of the lease and issuance of a writ of possession.
Finally, applying collateral estoppel in this action is fair. As plaintiffs observe, the
association arguably had greater incentive to zealously defend on these issues in the
prior action to try to prevent termination of the lease. The concerns that often arise with
an offensive use of collateral estoppel do not apply here. See Parklane Hosiery Co. v.
Shore, 439 U.S. 322, 329–31 (1979) (cited in Trepanier, 155 Vt. at 265 n.2). Plaintiffs
here could not have joined in the prior action as plaintiffs because their interests in that
suit were aligned with those of the association. Additionally, the findings and
determinations in the prior action were “not inconsistent with any previous decision,” and
there will, in the present action, “be no procedural opportunities available to the
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[association] that were unavailable in the first action of a kind that might be likely to cause
a different result. Id. at 332. Lastly, as discussed above, the association “had every
incentive to litigate the [prior] lawsuit fully and vigorously.” Id. In the present case, as in
Parklane, “none of the circumstances that might justify reluctance to allow the offensive
use of collateral estoppel is present.” Id. at 331. Consequently, the factual findings and
determinations of the Superior Court and the Supreme Court in the prior action, see 2016
VT 64; No. 45-1-12 Cncv, are entitled to preclusive effect. The court presumes that the
real issue in this case will be whether the association can be liable to its members as a
matter of law.
Order
Plaintiffs’ motion to preclude relitigation of issues is granted. Accordingly, the
factual findings and determinations of the Superior Court and the Supreme Court in the
prior action, see 2016 VT 64; No. 45-1-12 Cncv, are entitled to preclusive effect in the
present case. The clerk will set this matter for a status conference.
SO ORDERED this 28th day of September, 2017.
_____________________________
Robert A. Mello
Superior Court Judge
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