Kinahan v. Gulli
| Docket Number | 21-CV-03725 |
| Decision Date | 26 July 2023 |
| Parties | Mike Kinahan v. Dominick Gulli et al |
| Court | Superior Court of Vermont |
CORRECTED OPINION AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT
The instant matter comes before the Court on cross-motions for summary judgment concerning the sale of real property. In the complaint, Plaintiff Mike Kinahan seeks specific performance of a purchase and sale agreement with Defendants Dominick and Melissa Gulli. Defendants move for summary judgment arguing that the purchase and sale agreement is void. They also maintain that Plaintiff was required to engage in mediation prior to bringing suit. Plaintiff opposes the motion and argues that he is entitled to summary judgment under the terms of the purchase and sale agreement and requests specific performance thereof.
On April 27, 2023, the Court heard argument on the motions. Plaintiff appeared through Attorney Melvin Fink; Defendants appeared through Attorneys Joel lannuzzi and Thomas Aicher. The Court afforded the parties an opportunity to submit post-hearing memoranda regarding the application of a Vermont Supreme Court case. Based on the submissions and arguments of the parties, the Court makes the following determinations.
"Summary judgment is appropriate when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law." In re Hemingway, 2014 VT 42 ¶ 7, 196 Vt. 384, 388; Vt. R. Civ. P. 56(a). The Court derives the undisputed facts from the parties' statements of facts submitted pursuant to Rule 56, and the supporting documents. Boulton v. CLD Consulting Engineers Inc., 2003 VT 72, ¶ 29, 175 Vt. 413. The movant has the burden of proof, and the opposing party must be given the benefit of all reasonable doubts and inferences in determining whether a genuine issue of material fact exists. Price v. Leland, 149 Vt. 518 (1988). Where, as here there are cross-motions for summary judgment, "both parties are entitled to the benefit of all reasonable doubts and inferences." Montgomery v. Devoid, 2006 VT 127, ¶ 9, 181 Vt. 154, 156.
The parties do not dispute the relevant material facts. On or about November 21, 2000, Defendants' parents, Nicholas and Barbara Gulli, executed Quit Claim Deeds granting title to parcels of contiguous land (collectively "the Property"). Nicholas and Barbara deeded an undivided one-half interest to themselves as tenants-by-the-entirety. Dominick received an undivided one-quarter interest; Melissa received the remaining undivided quarter interest. On February 14, 2005, Nicholas died. By operation of law, his ownership rights to the Property transferred to Barbara.
On October 19, 2020, Barbara, Dominick, and Melissa executed an Exclusive Right to Market Agreement with a realty company to list the Property. In May 2021, Barbara passed, and her property interest transferred to her estate ("the Estate"). Prior to September 24, 2021, the Estate had not issued any authorization for the right to market, negotiate, offer, accept, or facilitate a sale of its interest in the Property.
On or about September 24, 2021, Plaintiff entered a Purchase and Sale Contract ("PSA") with Dominick and Melissa to purchase the Property in total. At issue is the following clause:
Purchaser's Examination of Title: Purchaser, at his or her sole cost and expense, shall cause the title to the Property be examined and shall notify Seller in Writing, prior to the date set for Closing, of the existence of any encumbrances or defects which are not excepted in this Contract which render title unmarketable as defined by Vermont law. In such event, Seller shall have thirty (30) calendar days from the time Seller receives such notice to remove the specified encumbrances or defects. Promptly following receipt of such notice, Seller shall exercise reasonable efforts and diligence to remove or cure the specified encumbrances or defects. If, at the expiration of thirty (30) calendar days from the receipt of such notice, or on the date set for Closing, whichever is later, Seller is unable to convey marketable title free and clear of such encumbrances or defects, Purchaser may terminate this Contract, and, if so, shall receive all Contract Deposits and, in addition, may pursue all legal and equitable remedies provided by law, including damages incurred after the thirty (30) day period referred to above.
Pl.'s Exh. 1, ¶ 19 (filed Nov. 22, 2021). Later that week, Defendants asked Plaintiff to increase the price to meet a higher offer they had received. Plaintiff declined and advised that he intended to proceed with the sale at the PSA price.
On October 6, 2021, Plaintiff first raised the issue of ownership and the need for the sale to include action on behalf of the Estate. On October 19, 2021, Defendants advised the realty company they would not be selling the Property to Plaintiff. On October 23, 2021, Plaintiff notified Defendants that it would bring suit if the transaction was not completed.
The PSA also contains a mandatory Mediation of Disputes clause which states, in relevant part:
In the event of any dispute or claim arising out of or relating to this Contract, to the Property, or to the services provided to Seller or Purchaser by any real estate agent who brought about this Contract, it is agreed that such dispute or claim shall be submitted to mediation prior to the initiation of any lawsuit. The party seeking to mediate such dispute or claim shall provide notice to the other party and/or to the real estate agent(s) with whom mediation is sought and thereafter the parties and/or real estate broker(s) with whom mediation is sought shall reasonably cooperate and agree on the selection of a mediator.... This provision shall be in addition to, and not in replacement of, any mediation or alternative dispute resolution system required by an order or rule of court in the event the dispute results in a lawsuit. In the event a lawsuit is initiated without first resorting to mediation as required by this Section, any party or real estate agent named in Section 31 of this Contract shall be entitled to reimbursement of the reasonable cost of attorney's fees or other expenses arising out of such lawsuit until the mediation required by this Section occurs.
Pl.'s Exh. 1, ¶ 23.
At the time of notice, Plaintiff did not demand mediation. On November 15, 2021, Plaintiff, again, notified Defendants of his intent to enforce the PSA through a lawsuit. Defendants returned Plaintiffs deposit and ceased communications. On November 22, 2021, Plaintiff brought this action seeking specific performance and did not demand mediation prior to commencing litigation.
On December 13, 2021, Defendants petitioned the Probate Division to open Barbara's Estate. On December 16, 2021, the Probate Division appointed Melissa as Executor to Barbara's Estate, pursuant to Barbara's will. The relevant portion of the will gives Melissa authority to "sell real estate as well as personal property as he in his sole discretion deems to be appropriate." Dominick and Melissa are the sole beneficiaries to the Estate.
On summary judgment, Defendants argue that the PSA is unenforceable for failure to include a necessary party. Defendants further contend that the ownership issue here is not a title defect within the meaning of the PSA's Purchaser's Examination of Title clause. Alternatively Defendants assert that, if the contract is enforceable, they are entitled to attorney's fees under the PSA for Plaintiffs failure to pursue mediation as required by the PSA's mandatory mediation provision.
Plaintiff argues that he is entitled to specific performance because the PSA expressly requires Defendants to cure title defects under the Purchaser's Examination of Title clause. Further, Plaintiff maintains that the ownership interest issue constitutes a title defect under that clause. As such, the PSA obligates Defendants, as legal and equitable owners of the Property, to perform under the contract. Plaintiff opposes Defendants' alternative argument for attorney's fees by arguing mediation was futile. The Court addresses each argument in turn.
Defendants argue that the PSA is unenforceable. According to Defendants, the failure to include the Estate is fatal to enforcing the PSA because Defendants lacked the necessary control over the Estate's interest when the parties entered the PSA.[1] The Court is unpersuaded for two reasons.
First, the plain language of the Purchaser's Examination of Title clause demonstrates the parties' intent to contract even if present control over the Property is not fully determined. "A contract must be interpreted according to the parties' intent as expressed in the writing." Sutton v. Purzycki, 20222 VT 56, ¶ 37 (). "The court must accept the plain meaning of the language and not look to construction aids if the language is not ambiguous." City of Newport v. Village of Derby Ctr., 2014 VT 108, ¶ 14, 197 Vt. 560, 569 (quotation and brackets omitted).
The relevant portion of the PSA contemplates the possibility that title could be unmarketable in a manner not presently known to the parties by requiring Plaintiff to examine and notify Defendants of defects "which render title unmarketable as defined by Vermont law." Pl.'s Exh. 1. "Marketable title is defined as title that will enable the purchaser to hold the land purchased free from the probable claim by another, a title which, if he wished to sell, would be reasonably free from doubt." Trinder v. Connecticut Attorneys Title Ins. Co., 2011...
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