Iannarone v. Limoggio
| Decision Date | 12 August 2011 |
| Docket Number | No. 2010-054,2010-054 |
| Parties | Carmela (Limoggio) Iannarone v. Robert W. Limoggio |
| Court | Vermont Supreme Court |
NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal revision before publication in the Vermont Reports. Readers are requested to notify the Reporter of Decisions, Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in order that corrections may be made before this opinion goes to press.
James Maxwell, Brattleboro, for Plaintiff-Appellant/Cross-Appellee.
David G. Reid of David G. Reid, Attorney at Law, P.L.L.C., Brattleboro, for Defendant-Appellee/Cross-Appellant.
PRESENT: Reiber, C.J., Dooley, Johnson, Skoglund and Burgess, JJ.
¶ 1. DOOLEY, J. Wife appeals from a family court order denying a motion to enforce the property division set forth in the parties' original divorce decree. She contends the court abused its discretion by: (1) failing to enforce a provision requiring payment of $150,000 for the marital home; and (2) failing to exercise its equitable power to impose a constructive trust on the home. We conclude that wife's claims are precluded by res judicata and affirm.
¶ 2. The parties were divorced in June 1996, following a thirteen-year marriage. Together they have two children, who are now grown. The parties engaged in extensive post-judgment litigation, part of which is involved in this appeal.
¶ 3. A principal issue of litigation concerned the marital home in the Town of Dover. The stipulated divorce judgment provided that: (1) wife could continue to live in the marital home with the children until the youngest child reached age eighteen, which would occur in June 2005; (2) wife had the option to sell the home after July 1, 1997, and husband had a right of first refusal on any sale; and (3) at the time of any sale (or, if no sale occurred, at the time the youngest child turned eighteen), wife would be guaranteed the sum of $150,000 to be paid by husband. The judgment stated further that title to the home would vest with husband when wife was paid $150,000. The divorce judgment awarded wife title to the home until the youngest child reached age eighteen and required each party to sign all documents necessary to implement this title arrangement. It provided that husband would hold wife "harmless" for a $200,000 balloon payment to be made in July 1997 on a mortgage on the property held by husband's father. The mortgage secured a note the parties had given to husband's father to repay a loan of $200,000 father had made so the parties could purchase and improve the marital home.
¶ 4. Apparently, a dispute arose over title to the home. In July 1997, the court issued a post-judgment order directing husband to execute and deliver a quitclaim deed and transfer tax return for the marital homestead within thirty days, specifying that the draft deed prepared by wife's counsel properly implemented the divorce order. The deed contained three distinct reservations from the grant of title to wife: (1) a right of husband to first refusal; (2) a right of husband to purchase on or before August 1, 1997, for $150,000 minus any unpaid real estate taxes accruing since January 9, 1996, subject to encumbrances of record, and requiring a $15,000 deposit; and (3) a right of husband to purchase on or after June 4, 2005, for $150,000 minus any unpaid real estate taxes since January 9, 1996, again subject to encumbrances of record.
¶ 5. Although husband's father's note became due in July of 1997, he never sought to collect on it and did not foreclose on the mortgage. The mortgage remained in the land records, undischarged. This fact is significant and controls many later events.
¶ 6. Wife continued to live in the marital residence with the children until 2000, when she moved with them to Brattleboro to be closer to school. As a result, the marital residence became unoccupied and unmaintained, and it deteriorated. It was repeatedly broken into, and many appliances and even parts of the house were stolen. By post-judgment motion, husband sought an order requiring wife to maintain the premises in reasonable repair and to pay property taxes. The court denied the motion because the divorce order did not impose these responsibilities on wife.
¶ 7. In April 2005, wife entered into a purchase and sale agreement to sell the house in its then-current condition for $210,000, but the sale apparently stalled because of the undischarged mortgage held by husband's father. In July 2005, wife filed a motion to enforce, seeking an order requiring husband to deliver to her "good and sufficient deed to the marital homestead, without exceptions or reservations, and . . . [a] discharge or release of his father's recorded mortgage deed against the property." In her motion, wife stated that she had asked husband for the quitclaim deed and discharge from the mortgage in the event that husband did not wish to exercise his right of first refusal to purchase the property. Because the parties' youngest child had reached the age of eighteen years in June, she also alleged that "[husband] has made no tender of the required $150,000 to reclaim title to the property." She stated that because of husband's failures, she did not have the ability to sell the property or the required $150,000 and "has thus been deprived the property settlement awarded to her by this court nine years ago." Husband opposed the motion, arguing that wife should be ordered to quitclaim her interest in the home to him, and, in return, he would be obligated to pay her only $150,000 less the real estate taxes that were unpaid after 1996 and the value of any unreasonable wear and tear on the marital home property.
¶ 8. In March 2006, the family court issued a written decision on wife's motion to enforce, concluding that husband had no obligation to obtain a discharge of his father's mortgage for the benefit of any third-party buyer. The court also found that the terms of the parties' stipulation and the final order did not require wife to reimburse husband for his payment of real estate taxes. Finally, the court ruled that husband had the right to purchase the property, and that wife had the obligation to quitclaim all her interest therein, provided that husband paid the full price of $210,000 less any real estate taxes currently due. If husband did not purchase the property for $210,000, the family court held that wife would "be free to sell the property on such terms as she can arrange." The court failed to conclude that husband would be required to tender $150,000 to wife in exchange for title if the proposed sale for $210,000 fell through. It remained silent on this issue.
¶ 9. Ultimately, the proposed sale for $210,000 did fail, and husband made no attempt to purchase the home. Wife continued to hold title to the property until it came up for a tax sale in 2008 for unpaid property taxes of $26,352. In August 2008, husband purchased the property with a bid of $80,100. The following month, wife moved the family court to enforce the divorce judgment, requiring husband, at a minimum, to pay or guarantee wife was paid $150,000 plus interest from June 4, 2005, when the payment allegedly became due.1 Husband subsequently moved to dismiss the motion, claiming that it was barred by principles of res judicata and collateral estoppel. The parties agreed to submit the issue on their filings, and the family court issued a written decision in June 2009, concluding "that the terms of the divorce decree are clear, and that [wife] is in fact entitled to $150,000, provided that she tenders a quitclaim deed of her interest in the residence to [husband]." The court further ruled that wife was entitled to interest "from the date that she made clear her intention and willingness to transfer title to him on these terms, rather than selling to third parties," and that husband was "entitled to deduct the entire amount of unpaid taxes, from 1996 to present from the amount owed to [wife]." The court also ruled that husband had no obligation to discharge his father's mortgage and the hold-harmless provision required husband to indemnify wife but only if husband's father sought to enforce the debt obligation against wife, which had not occurred. The court did not address husband's res judicata and collateral estoppel arguments.
¶ 10. Between June and August 2009, both parties filed motions to reconsider the June 2009 order and motions for the imposition of a constructive trust over the property and the tax sale proceeds. Following an evidentiary hearing, the family court issued another order in January 2010, ruling on these new motions. Again, the court did not rule on husband's res judicata and collateral estoppel arguments. Explaining its initial decision, the court concluded that wife was not entitled to the $150,000 payment because she no longer held any title that she could transfer to husband. The court also rejected wife's claim that she was entitled to an equitable trust on the property, ruling that "her own inaction" in failing to pay property taxes had led to her loss of title through the tax sale. The court further rejected husband's claim for reimbursement of real estates taxes that he had paid over the previous years and for damage to the property allegedly due to wife's neglect. Finally, the court awarded wife attorney's fees and costs totaling $2051. Wife appeals, and husband cross-appeals this order.2
¶ 11. On appeal, wife argues: (1) the family court abused its discretion in failing to hold husband accountable for the guaranteed property settlement payment of $150,000 as provided in the final order, payable irrespective of wife's title; and (2) the family court should have invoked its equitable powers to do justice considering husband's failure to tender the property settlement payment to wife and the subsequent purchase of the...
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