Conover v. Baker

• Decision Date: 05 October 1976
• Docket Number: No. 39-75,39-75
• Citation: 134 Vt. 466,365 A.2d 264
• Parties: Peter S. CONOVER et al. v. Wolford J. BAKER et al.
• Court: Vermont Supreme Court

Page 264

365 A.2d 264

134 Vt. 466

Peter S. CONOVER et al. v. Wolford J. BAKER et al.

No. 39-75.

Supreme Court of Vermont.

Oct. 5, 1976.

May & Davies, Barton, for plaintiffs.

Swainbank, Gensburg, Morrissette & Neylon, St. Johnsbury, for defendants.

Before BARNEY, C. J., and SMITH, DALEY, LARROW and BILLINGS, JJ.

DALEY, Justice.

In November, 1972, the plaintiffs, Peter and Robin Conover, at the time residents of the State of New Jersey, entered into negotiations with the defendants, Wolford and Priscilla Baker, for the purchase of a small ski lodge located in the Town of Jay. The lodge, situated upon 9.6 acres of land, consisted of four guest bedrooms, a restaurant, and an unfinished area on the second floor. The plaintiffs negotiated with the defendants on several occasions, and a purchase and sale agreement was entered into between the parties in February, 1973. The real property was conveyed to them by deed in July, 1973, for a consideration of $62,000.00.

The plaintiffs subsequently brought a civil action in fraud and deceit claiming that the defendants had, at various times during the course of the negotiations, made several false representations concerning the lodge and its facilities. These representations related to the nature and quality of the water supply; the size and capacity of the septic system; and the ability of certain floor joists to withstand expansion in the unfinished portion of the lodge. They further alleged that the defendants, as part of a scheme to defraud the plaintiffs, promised to reconstruct a certain chimney and to leave a television antenna on the premises.

Trial by jury resulted in a verdict in favor of the plaintiffs to recover $9,845.00. From the judgment on the verdict, made after the denial of their motion for a new trial, the defendants appeal. The claims of error may be summarized as follows: any representation by the defendants as to the water supply and the weight bearing capacity of the floor joists were but expressions of opinion, not representations of existing fact, and thus were not actionable in fraud. Their failure to reconstruct the metal chimney and leave the antenna on the premises were unfulfilled promises and thus the court erred in submitting these matters to the jury. The defendants also claim that the court erred in its instructions to the jury relating to the burden of proof and the measure of damages.

For a better understanding of the issues presented, a short factual presentation, viewed in the light most favorable to the plaintiffs, is in order. During the course of negotiations preceding their purchase of the property, the plaintiffs informed the defendants of their intention to operate the ski lodge as a commercial venture on an expanded basis. To this end, they made inquiries as to the source and quality of the drinking water. They were told that the lodge was supplied by pure spring water meeting state standards and that the defendants had not encountered any previous trouble with the system. The plaintiffs were further told that the septic system consisted of two 1000-gallon tanks with sufficient capacity to meet state standards for an expanded guest facility. Several discussions were held relative to the plaintiff's desire to provide more guest rooms; they were assured that they could do as they pleased with the unfinished second floor area. The plaintiffs did not particularly like the metal stovepipe from a stove on the first floor which projected through a side wall. One of the defendants assured them that he would relocate this pipe so that it would exit through the roof. The plaintiffs also asked if the television antenna would remain on the premises after the conveyance of the property; Mr. Baker indicated that it would.

Soon after the property was conveyed to them the plaintiffs discovered that the spring was contaminated. As they commenced their expansion plans, it was learned that the septic tanks were not as represented but consisted of two tanks with a total capacity of 750 gallons. A contractor employed by the plaintiffs to construct rooms in the unfinished area informed them that the 2 inch by 6 inch floor joists were of insufficient strength to support the planned expansion. The stovepipe chimney had not been relocated and the television antenna was gone.

The defendants, relying upon the general rule that an unfulfilled promise does not constitute actionable fraud, Woods v. Scott, 107 Vt. 249, 251, 178 A. 886 (1935), maintain that the lower court erred in allowing the jury to consider evidence relating to the promise to relocate the chimney and the promise not to remove the antenna from the premises. The Vermont courts have recognized an exception to the general rule. If the promise is shown by the evidence to be an integral part of a general scheme or plan to defraud, then the promise can be the basis of an action in fraud. Fayette v. Ford Motor Credit Co., 129 Vt. 505, 510, 282 A.2d 840 (1971); Comstock v. Shannon, 116 Vt. 245, 250, 73 A.2d 111 (1950). In Fayette v. Ford Motor Credit Co., supra, the Court found that the unfulfilled promises were a material part of a general scheme or plan to induce the plaintiff to advance money. In Comstock v. Shannon, supra, the evidence demonstrated that the broken or unfulfilled promises were not only part of a scheme to defraud but were also material inducements relied upon by the plaintiffs in purchasing the premises. In our opinion, the evidence taken in the light most favorable to the plaintiffs in this case does not demonstrate that the unfulfilled promises were a material inducement within a general scheme to defraud the plaintiffs. It was therefore error for the trial court to allow the jury to consider the promises concerning the chimney and the antenna in determining liability and assessing damages.

The defendants before the trial court requested that the jury be instructed that the measure of damages was the sum of money the plaintiffs had to expend to make the property...