Huard v. Henry

• Citation: 2010 VT 43,999 A.2d 1264
• Decision Date: 19 May 2010
• Docket Number: No. 09-246.,09-246.
• Parties: Frank HUARD and Karen Huardv.Michael HENRY, Melinda Henry, Joel Prive and Lisa Prive.
• Court: United States State Supreme Court of Vermont

999 A.2d 1264

2010 VT 43

Frank HUARD and Karen Huardv.Michael HENRY, Melinda Henry, Joel Prive and Lisa Prive.

No. 09-246.

Supreme Court of Vermont.

May 19, 2010.

Present: REIBER, C.J., DOOLEY, JOHNSON, SKOGLUND and BURGESS, JJ.

ENTRY ORDER

¶ 1. This action stems from a long-standing and much-litigated dispute between neighbors over maintenance of a community septic system. Following the trial court's grant of injunctive relief in favor of plaintiffs, plaintiffs appeal from the trial court's denial of their post-judgment motion to amend the terms of the injunction and the court's calculation of attorney's fees. We affirm.

¶ 2. The parties are residents of a subdivision in Morristown. According to covenants set forth by the subdivision developer, “inspection, maintenance, repair and replacement of any ... equipment” related to the community septic system is the responsibility of “all lots having a beneficial use of that system.” The lots having beneficial use of the septic system include lots owned by plaintiffs and defendants. Plaintiffs brought the original action for breach of contract, nuisance, and injunctive relief in 2005, claiming that defendants had breached their duty to maintain and repair the septic system, resulting in noxious fumes and effluent that interfered with plaintiffs' use and enjoyment of their property.

¶ 3. A bench trial was held on plaintiffs' claims in August 2007, at the conclusion of which defendants moved for judgment as a matter of law. The court granted defendants' motion from the bench, concluding that plaintiffs had not established that defendants' actions “constitute[d] an unreasonable interference with [plaintiffs'] right to continue to use ... their property.” With regard to plaintiffs' breach-of-contract claim, the court found that “the evidence presented in the plaintiffs' case does in fact establish that there are some defects and some noncompliance with the plan specifications ... of the applicable covenants.” The court, however, concluded that because plaintiffs had not established that they suffered any direct damages as a result of this noncompliance, defendants were also entitled to judgment as a matter of law on the breach of contract claim. The court failed to consider plaintiffs' argument that injunctive relief was necessary. Plaintiffs appealed the decision to this Court, and we issued an opinion in May 2008. Huard v. Henry (Huard I), No. 2007-417, 2008 WL 2781189 (May Term 2008) (unpub.mem.). In that opinion, we affirmed the trial court's dismissal of the nuisance and breach-of-contract claims, but remanded the case to the trial court for consideration of plaintiffs' request for injunctive relief. Id. at *3.

¶ 4. On remand, the trial court addressed plaintiffs' request “for an injunction to require and compel Defendants to perform and abide by all pertinent provisions of the deeded covenants, and/or applicable State permits, concerning the Defendants' shared sewage disposal system located (via deeded easement) on Plaintiffs' property.” The court reiterated that, based on the evidence presented at trial, defendants were “to some extent not in compliance with the letter of the permit and/or covenant conditions.” Thus, the court issued an injunction requiring defendants to comply with the subdivision covenant, including compliance with the current wastewater permit, with regard to maintenance of the community sewer system.

¶ 5. Following this amended final order granting them injunctive relief, plaintiffs moved to amend the injunction to require defendants to comply with the permit in effect at the time the covenants were imposed rather than any amended permit. Plaintiffs also moved for attorney's fees pursuant to a covenant provision allowing recovery of attorney's fees incurred as a result of an owner's enforcement of another covenant. The court denied the motion to amend the injunction and granted the motion for attorney's fees. The court, however, disagreed with the amount of hours plaintiffs' attorneys claimed were necessary to the litigation and reduced the hours claimed by two of plaintiffs' three attorneys in its lodestar calculation. After calculating the lodestar amount, the court then reduced the total by one-third, because “the ultimate ‘results achieved’ were minimal and arguably could, and would have been obtained solely by pursuing the related, and much less expensive permit amendment proceedings” and because the court perceived the suit to be motivated by “retributive” intent. This appeal followed.

¶ 6. On appeal plaintiffs make three arguments: (1) the trial court erred in denying plaintiffs' motion to amend the injunction by misconstruing the relevant covenant provision and improperly considering the existence of a state wastewater permit amendment not introduced into evidence; (2) the trial court abused its discretion in reducing the award of costs and attorney's fees and in doing so relied on prior litigation between the parties not introduced as evidence; and (3) the trial judge erred in failing to recuse himself.¹

I.

¶ 7. Plaintiffs first argue that the trial court erred in denying plaintiffs' motion to amend the injunction issued on May 19, 2008. On remand from this Court, the trial court duly considered whether injunctive relief was appropriate based on the evidence presented at trial indicating that defendants were in technical violation of a subdivision covenant requiring defendants to maintain the community sewer system.² The court concluded that the violations-though minor-did warrant relief and issued the following injunction:

Defendants ... shall comply with, abide by, or perform all terms and conditions of (A) State subdivision/wastewater permit (# EC-5-1824), as amended (either to date, or hereafter); and/or (B) paragraph 8 of the applicable deed covenants ... all to the extent said terms and conditions apply to or concern the shared sewage disposal system located on Plaintiffs' property.³

Plaintiffs, however, take issue with the terms of the injunction and argue that the trial court improperly pegged compliance with the covenant to compliance with any amendments to the state wastewater permit. Instead, plaintiffs argue that the terms of the covenant require compliance with the state wastewater permit as it existed when the covenants went into effect in 1989.⁴ In denying plaintiffs' motion to amend, the trial court refused to credit plaintiffs' argument that the applicable covenant provision binds defendants to the terms of the state wastewater permit as it existed in 1989 “forever and without end, regardless of any changes in conditions, or regulatory provisions, which the State wastewater engineers may determine are necessary, reasonable, and appropriate.” The court found that “[s]uch a result is unreasonable, not required by the manifest intent of the parties expressly set forth in Covenant # 8, and would be bad public policy to boot.” On appeal, plaintiffs repeat their argument below regarding the interpretation of the covenant provision. In addition, plaintiffs argue that the court erred in considering the amendment to the state wastewater permit, as it was not properly introduced into evidence.

¶ 8. “Our review of the court's decision to grant injunctive relief is for abuse of discretion.” Alberino v. Balch, 2008 VT 130, ¶ 7, 185 Vt. 589, 969 A.2d 61 (mem.). We will review the trial court's findings in the light most favorable to the nonmoving party and will uphold factual findings unless clearly erroneous. Id. As we noted in Huard I, where there have been violations of a subdivision covenant requiring repair or maintenance of common areas, an injunction may be necessary to ensure future compliance. 2008 WL 2781189, at *3; see also Collins v. Hayden on the Hudson Condo., 197 A.D.2d 482, 602 N.Y.S.2d 867, 868 (1993) (mem.) (granting injunction in favor of condominium owner to compel board to repair common area); Agassiz W. Condo. Ass'n v. Solum, 527 N.W.2d 244, 249 (N.D.1995) (noting that injunctive relief available to compel compliance with condominium bylaws requiring board to make repairs to common areas); Sea Pines Plantation Co. v. Wells, 294 S.C. 266, 363 S.E.2d 891, 896 (1987) (upholding injunctive remedy enforcing restrictive covenant in subdivision). We also note that trial courts have wide discretion to fashion fair and just equitable relief. See Richardson v. City of Rutland, 164 Vt. 422, 427, 671 A.2d 1245, 1249 (1995) (“Courts have a wide range of discretion to mold equitable decrees to the circumstances of the case before them.” (quotation omitted)); George Basch Co. v. Blue Coral, Inc., 968 F.2d 1532, 1542 (2d Cir.1992) (“It is axiomatic that the contours of an injunction are shaped by the sound discretion of the trial judge and, barring an abuse of that discretion, they will not be altered on appeal.”).

¶ 9. With these standards in mind, we conclude that the trial court's injunction, premised on its construction of the relevant covenant provision to reflect any amendments to the state-issued wastewater permit, was entirely reasonable. The language of covenant 8 simply does not support plaintiffs' argument that the provision binds the owners to the letter of the 1989 permit, especially considering that the provision itself merely references the 1989 permit and does not explicitly peg compliance with the covenant to compliance with the specifications of the permit as it existed in 1989. Compare Cold Brook Fire Dist. v. Adams, 2008 VT 28, ¶ 4, 183 Vt. 614, 950 A.2d 1206 (mem.) (concluding that where language in restrictive covenant tracked language found in 1988 water supply standards, it was necessary to look to standards in effect in 1988 rather than amended standards to determine current compliance with covenant).⁵ Instead, the requirement that sewer lines, septic tanks, and pump stations comply with “state approved engineering plans” indicates a broader intent to peg compliance with the covenant to a...