Fay v. Van Ells, 96-75

• Decision Date: 01 November 1976
• Docket Number: No. 96-75,96-75
• Citation: 367 A.2d 167,134 Vt. 536
• Court: Vermont Supreme Court
• Parties: Everett W. FAY et al. v. Paul A. VAN ELLS et al.

Page 167

367 A.2d 167

134 Vt. 536

Everett W. FAY et al. v. Paul A. VAN ELLS et al.

No. 96-75.

Supreme Court of Vermont.

Nov. 1, 1976.

Curtis L. Bourdon, Woodstock, for plaintiffs.

Oreste V. Valsangiacomo, Jr., Richard E. Davis Associates, Inc., Barre, for defendants Van Ells.

Before BARNEY, C. J., SMITH, DALEY and LARROW, JJ., and SHANGRAW, C. J. (Ret.), specially assigned.

BARNEY, Chief Justice.

The failure to consummate a real estate sale of a business with living quarters attached brought a chain of troubles in its wake. These troubles resulted in several sorts of court actions, but the principal lawsuit is now here. The plaintiffs, owners of the property in question, recovered a judgment representing rental for the property and inventory of the store stock sold or destroyed.

The case has a complex factual background, reported in findings. The plaintiffs Everett W. Fay and his wife Dorothy jointly owned a store in Bridgewater with a seven-room apartment upstairs. In 1972, the plaintiffs were having marital difficulties and a divorce action was commenced. A temporary order provided, among other things, that if the property was sold, the net proceeds would be held in escrow. Everett Fay listed the property with a United Farm real estate agent, defendant Ferris Bridge. Mrs. Fay did not sign the listing.

The defendants Mr. and Mrs. Van Ells, having put their Connecticut house on the market, were looking for a Vermont store business to purchase. Through defendant Bridge they came to know of the Fay property. Negotiations followed and a contract of sale was signed by Everett Fay and the Van Ells on October 24, 1972. The Van Ells had placed a $500 deposit with the broker. Mrs. Fay did not sign, although the contract listed her as a party. Both Bridge and Fay indicated to the Van Ells that one signature was sufficient. This was the advice received from an attorney based on the pendency of the divorce action.

The Van Ells called in an attorney who conducted a title search, and pointed out to them the difficulty involved with the lack of Mrs. Fay's signature. Meetings between the parties and their various attorneys were held and negotiations continued into the middle of November. At that time, Mrs. Fay indicated that she would be willing to sign a deed if certain concessions relating to commission and the assumption of back taxes were met. Defendant Paul Van Ells testified that these represented a price increase of about $500, which they could not afford. On December 14, 1972, in response to Van Ells' request, their deposit was returned to them by the real estate agent. The original deposit had been augmented on November 1 for reasons that will be explained.

Going back to October, the Van Ells' house in Connecticut had been sold, with occupany set for November 1. Late in October they brought several loads of their personal belongings to Bridgewater and stored them in the store premises with the assistance of Mr. Bridge. At this time Mr. Fay was anxious to have the store operating, so he gave the Van Ells written permission to move into the apartment and operate the store in advance of sale. The parties agreed on a price for the inventory, and the deposit was increased accordingly. The Van Ells purchased additional inventory of their own and put it on the shelves with the rest.

The Van Ells continued to occupy the apartment from November 1 until the following June 19, 1973, paying no rent. They operated the store, selling from both inventories, until a restraining order was served on them on January 12, 1973. No rent was paid for the store. The plaintiffs were never paid for the inventory.

The lower court found the fiar and reasonable rental value for the store premises to be $250 per month plus utilities, and for the apartment, $150 per month including utilities. This was based on testimony from a real estate appraiser familiar with the property.

After the court order of January 11 was in force, a petition for contempt was filed by the Fays against the Van Ells. No violation was found by the hearing judge. Mrs. Fay became convinced that inventory was being taken from the store by the Van Ells. She saw a truck backed up to the front door and things being loaded into it. She and her attorney went to the state's attorney and persuaded him to issue warrants charging the Van Ells with grand larceny.

Two state police officers went to the store premises. The Van Ells showed the officers the inventory still in the building, and supporting documentation. After a phone consultation with the state's attorney, the warrants were withdrawn and torn up. The Van Ells were not arrested or removed from the premises.

In June of 1973, the Van Ells vacated the property. Both the store and the apartment were found to be in a great state of disrepair and disorder. Food had spoiled in the store, and there had been a small fire in the apartment.

Suit to regain possession of the premises, as well as to recover rent, damage and loss of inventory, was actually commenced in January, 1973. It was in connection with the initiation of this suit that the restraining order issued, although occupany continued until June. In response to this action there were counterclaims and cross actions. As between the plaintiffs Fay and the defendants Van Ells, the defendants claimed the right to recover for fraudulent misrepresentations, for breach of contract, for assault and for malicious prosecution, to state them broadly. The lower court found against the defendants on these counterclaims, and in favor of the plaintiffs for rent, inventory loss and damage in the amount of $3,325. The defendants Van Ells have appealed.

Part of the basis of their appeal is the disposition of their counterclaim for malicious prosecution. As already noted, this was one of several counter and cross claims filed in this case. The issues here relate to matters raised by the plaintiffs' complaint and the disposition of the malicious prosecution and other counterclaims.

We turn first to the claim that the lower court's conclusion with respect to mutual mistake was not supported by the evidence, nor was mutual mistake or actionable fraud correctly defined in those conclusions. Preliminary to an examination of that contention is the question of whether, even assuming error of one sort or another, such an error has any legal significance.

The defendants are not seeking relief from a bad bargain, since none came about. They are not here asking for specific performance of a bargain they claimed to have made. Indeed they do not claim there was one. Since the sale of their Connecticut house antedated their negotiations with the plaintiff, nothing by way of detrimental reliance can be attributed there.

It was the testimony of the plaintiff that he and his wife decided to move permanently to Vermont sometime in the beginning of October, 1972. The contract of sale was entered into on October 24, 1972, Three days later, Mr. Van Ells showed up in Bridgewater with a load of his belongings. On October 25 an attorney was employed on behalf of the Van Ells, and on October 26 he commenced his title search. The attorney immediately discovered that Mrs. Fay was a joint owner, and the attorney communicated that fact to the Van Ells. Meanwhile, Mr. Fay had first allowed the Van Ells to store their goods on the premises, and then given them permission to occupy the apartment and operate the store.

By this time the defendants were on notice from their own attorney that the contract of sale was considered by him not to bind Mrs. Fay. It is apparent that all parties were still apparently acting on the assumption that the sale would be consummated. Mrs. Fay never refused to convey, but said that she would sign a deed if some $500 to pay some back taxes was added to the $40,000 price. This offer was never accepted by the Van Ells, nor did they ever tender the $40,000 stated in the original contract. They simply asked for their deposit back, which they got, and went no further with the transaction, while continuing to occupy the apartment and store.

To support a claim sounding in fraud, it is a key element that the representations must be relied upon to the claimant's damage. Batchelder v. Birchard...