Field v. Costa

• Citation: 958 A.2d 1164,2008 VT 75
• Decision Date: 06 June 2008
• Docket Number: No. 2007-005.,2007-005.
• Parties: Eugene F. FIELD, Jr. and Nancy N. Field v. Armando C. COSTA, Maria F. Costa, Lorenzo P. Quesnel, Jr., Amy Quesnel, et al.
• Court: United States State Supreme Court of Vermont

958 A.2d 1164

2008 VT 75

Eugene F. FIELD, Jr. and Nancy N. Field v. Armando C. COSTA, Maria F. Costa, Lorenzo P. Quesnel, Jr., Amy Quesnel, et al.

No. 2007-005.

Supreme Court of Vermont.

June 6, 2008.

Peter F. Langrock and Kevin E. Brown of Langrock Sperry & Wool, LLP, Middlebury, for Plaintiffs-Appellants.

James A. Dumont of Law Office of James A. Dumont, PC, Bristol, for Defendants-Appellees Costa.

James F. Carroll of English, Carroll, Ritter & Boe, P.C., Middlebury, for Defendants-Appellees Quesnel.

James M. Cooley of Heilmann, Ekman & Associates, Inc., Burlington, for Defendants-Appellees Coldwell Banker Bill Beck Real Estate and Esty.

Michael Marks of Tarrant, Marks & Gillies, Montpelier, for Defendant-Appellee Vermont Land Trust.

Present: JOHNSON, SKOGLUND and BURGESS, JJ., and KUPERSMITH, D.J., and BENT, Supr. J., Specially Assigned.

SKOGLUND, J.

¶ 1. Plaintiffs in this case are Nancy and Eugene Field, farmers from Connecticut who wanted to purchase a particular Vermont farm. Defendants are four independent parties including: the previous owners of the subject farm, Armando and Maria Costa; the current owners of the farm, Lorenzo and Amy Quesnel; a real estate agency and one of its brokers, Coldwell Banker Bill Beck Real Estate and Richard G. Esty (realtor); and the holder of a conservation easement on the farm, Vermont Land Trust, Inc. (Land Trust). This case involves a contractual dispute that arose after the Fields bargained to purchase the Costa farm, a farm subject to a conservation easement with a right of first refusal (ROFR) held in perpetuity by Land Trust. Land Trust exercised its ROFR to purchase the Costa farm and immediately assigned its interest to the Quesnels. The Fields then commenced this action, alleging breach of contract against the Costas and tortious interference against the other three defendants, and requesting specific performance by conveyance of the entire farm, along with punitive, contractual, and other damages. We affirm the superior court's grants of summary judgment in favor of all defendants on all claims.

¶ 2. The State of Vermont has long sought to preserve its rural landscape and natural-resource-based economy. As early as 1970, the Legislature created a statutory framework for transferring development rights from landowners to municipalities, state agencies, or qualified organizations. 10 V.S.A. §§ 6301-6309. Widely known as conservation easements, these transfers often come to rest with Land Trust, a non-profit entity that partners with state agencies and other organizations in acquiring "those rights and interests which may be of no actual worth to the owner in light of his prospective use of his land but which represent a material portion of the fair market value of the property." 1969, No. 229 (Adj.Sess.), § 1(c). Meanwhile, the owner retains some "rights and interests in [the] land, including the right of enjoyment and continuation of its present agricultural [use]." Id.

¶ 3. Land Trust entered into such an agreement in 2000 with Maria and Armando Costa, owners of a farm straddling the border of Whiting and Orwell, Vermont. The Costas transferred to Land Trust the "development rights, right of first refusal, and a perpetual conservation easement and restrictions" covering 296.5 acres of their farm. Another 10.1 acres of the Costa farm, on which were located the Costas' home, a garage, and a barn, were specifically excluded from the conservation easement. The specific restrictions placed on the 296.5-acre parcel (known as the "protected property") are not relevant to this case; suffice it to say that the primary purpose of the grant is to "conserve productive agricultural and forestry lands to facilitate active and economically viable farm use of the Protected Property now and in the future."

¶ 4. Of greater importance to this case are the details of the ROFR. The grant specifies that whenever the Costas "receive a written offer ... to purchase all or any part of the Protected Property and [the Costas] accept said offer," the Costas must send a copy of the written offer by certified mail to Land Trust. Under the ROFR, Land Trust may then "elect to purchase the Protected Property at the offered price and upon such other terms and conditions not less favorable to [the Costas] than those contained in the conditionally accepted offer." Land Trust then has 90 days to exercise its ROFR, or the Costas may unconditionally accept the written offer and sell the protected property to any party. Any purchaser, of course, takes the land subject to the conservation easement held by Land Trust.

¶ 5. In 1994, long before the Costas conserved the bulk of their farm, they began leasing the protected property to neighboring dairy farmers, Lorenzo and Amy Quesnel. The Quesnels run a "large farm operation" requiring a special state permit under 6 V.S.A. § 4851, and they depend on the Costa farmland to spread manure from their home farm pursuant to the statute's requirement "to dispose of wastes in accordance with accepted agricultural practices." Id.

¶ 6. The plaintiffs in this case, Nancy and Eugene Field, also have an agricultural background, having raised "dairy replacements" — heifers raised to replace unproductive milking cows in dairy operations — and operated a farm stand in Connecticut. The Fields actively searched for a Vermont farm, with plans to raise Christmas trees, pumpkins, and dairy replacements.

¶ 7. The Costas listed their farm for sale with realtor in July 2003. In early 2004, the Fields learned of the property and began communicating with realtor. The Costas and Fields signed a purchase-and-sale agreement for the entire farm, including both protected and unprotected property, on February 11, 2004. The Costas notified Land Trust by certified mail of the offer to purchase pursuant to the terms of the conservation easement and ROFR.

¶ 8. After several months of discussion between defendants, during which time the Fields' scheduled closing date came and went, Land Trust elected to exercise its ROFR and assigned its interest in the farm to the Quesnels. Land Trust gave the Costas the choice of having Land Trust either purchase only the protected property or the entire farm, including the 10.1 acres not covered by the ROFR. The Costas elected to have Land Trust purchase the entire farm. The Quesnels closed on the property in May 2004, and realtor returned the deposit check the next day to the Fields. The Fields then commenced this action.

¶ 9. All four defendants filed summary-judgment motions. In their motion, the Costas argued that the Fields knew of the conservation easement but did not inquire as to its details; that waiver of the ROFR was either an implied condition of the contract or that there was no meeting of the minds; and that the trial court could not reform the contract to create an agreement to sell only the 10.1 acres of unprotected property as the parties did not contemplate such a transaction. The court ruled that the ROFR was a condition precedent to the purchase agreement, and that Land Trust's failure to waive the ROFR made the purchase agreement unenforceable. The court further ruled that Land Trust's exercise of its ROFR voided the purchase agreement, and granted the Costas' motion for summary judgment.

¶ 10. In its own summary-judgment motion, Land Trust argued that its limited role in the underlying transaction — exercising its ROFR and assigning its interest in the land to the Quesnels — could not give rise to liability for tortious interference with contractual obligations. The court initially ruled that one factual allegation gave rise to a material dispute over whether Land Trust's actions constituted tortious interference: the Fields alleged that a Land Trust representative told them they were "too old" to farm the land. Land Trust disputed this allegation and contended that the age of the potential purchasers played no part in their decision to exercise their ROFR. The trial court disagreed with Land Trust's characterization of the age comment as immaterial, and denied its motion for summary judgment. Land Trust then filed a second motion for summary judgment, characterizing the alleged statement as a "stray comment" that could not form the basis of an age-discrimination claim and that never factored into the ROFR decision. The Fields did not address the substantive legal arguments made by Land Trust, nor did they dispute the more detailed set of factual allegations set forth in Land Trust's second statement of material facts. The court granted Land Trust's second motion for summary judgment.

¶ 11. The Quesnels also filed a motion for summary judgment, arguing that they could not be found liable for tortious interference with the Fields' contractual rights because they acted in compliance with Land Trust's ROFR. Since the Fields alleged no ill will, malice, or improper motive beyond the allegation that the ROFR did not apply to unprotected property, the court granted the motion, consistent with its rulings in favor of the Costas. Specifically, the court ruled that exercising a ROFR cannot alone constitute tortious interference.

¶ 12. Finally, realtor moved for summary judgment, noting that the listing agreement specifically referenced a conservation easement, and that realtor orally informed the Fields of the ROFR. Realtor argued that the Fields therefore knew about the ROFR and that realtor could not be held liable for inducing or causing the Costas to breach their contract. The court denied this motion, ruling that a genuine issue of material fact existed regarding whether the Fields were informed of Land Trust's ROFR. Realtor then filed a second motion for summary judgment, arguing that the exercise of a lawful ROFR could not constitute tortious interference. The court granted realtor's second motion for summary judgment for the same reasons explained in its ruling on the Quesnels' motion. That is to say,...