Knaresborough Enters., LTD v. Dizazzo
| Citation | 251 A.3d 950 |
| Decision Date | 08 January 2021 |
| Docket Number | No. 19-416,19-416 |
| Parties | KNARESBOROUGH ENTERPRISES, LTD v. Ernest DIZAZZO, Jean Dizazzo, Nicole Durand, and Anne Dizazzo |
| Court | United States State Supreme Court of Vermont |
Kevin A. Lumpkin and Daniel J. Mullen of Sheehey Furlong & Behm P.C., Burlington, for Plaintiff-Appellee.
Thomas C. Nuovo of Bauer Gravel Farnham, LLP, Colchester, for Defendants-Appellants.
PRESENT: Reiber, C.J., Robinson, Eaton, Carroll and Cohen, JJ.
¶ 1. In this property dispute between neighboring landowners, defendants appeal a provision in the trial court's final order that requires the parties to submit future disagreements to binding arbitration. The court included the provision in the order based on plaintiff's representation during the final hearing that the parties had orally agreed to such a provision. Defendants argue that this was error because they did not confirm plaintiff's assertion and the parties did not sign a written agreement or acknowledgement of arbitration, as required by the Vermont Arbitration Act, 12 V.S.A. § 5652. We conclude that under the circumstances of this case, it was inappropriate for the court to include an arbitration provision in its final order, and therefore reverse and remand for the court to strike the provision.
¶ 2. In December 2014, plaintiff filed this declaratory judgment action in the civil division to determine whether defendants had the right to use an easement granted by plaintiff's predecessor-in-interest to defendants’ predecessor-in-interest to access a beach on plaintiff's property on Lake Champlain. In March 2017, the court granted partial summary judgment to defendants, concluding that the easement was an appurtenant easement that benefited defendants’ property.1 However, it determined that a material dispute of fact remained about whether defendants’ use of the land had overburdened the conveyed easement. Plaintiff moved for reconsideration, and in response, the court modified its decision to give plaintiff an opportunity to offer further evidence regarding whether the easement was an appurtenant easement.
¶ 3. A few days before trial was set to begin in April 2019, the parties entered into a partial settlement agreement that was approved by the court. The agreement clarified that the easement was an appurtenant easement and stated that defendants could use it solely for the purposes of keeping, mooring, accessing, or launching boats on Lake Champlain.
¶ 4. At trial, the court heard evidence regarding the remaining unresolved issues, which included how defendants were permitted to store their boats on the easement and whether defendants could use the easement to launch jet skis. Testimony regarding the latter issue gave rise to questions about how the parties would manage erosion and maintenance of the beach. After some discussion of these issues, the court took a recess to permit the attorneys to consult with their clients. Following the recess, plaintiff's attorney, on the record, informed the court that the parties had agreed to revise paragraph 12 of the settlement agreement concerning maintenance of the beach and right-of-way, and to add a new paragraph 16. He read the revised language of paragraph 12 into the record. He then stated:
¶ 5. The court responded that the provisions sounded appropriate and that it would incorporate the proposed language into its final order. Defendants’ attorney interjected, "Judge, I just had one other brief comment ... because we sort of stalled at this point, and I just wanted to address one other area that my colleague addressed that I feel the need to respond to." Plaintiff's attorney stated that he was not finished speaking. Defendants’ attorney responded that he would let plaintiff's attorney finish. Plaintiff's attorney briefly argued that defendants should be required to launch their jet skis from a different location than the beach. Defendants’ attorney then presented argument regarding various topics but did not discuss or object to the proposed arbitration provision. There was no further discussion of the arbitration provision at the hearing. At the end of the hearing, the court asked the parties to submit an amended order reflecting the discussed modifications.
¶ 6. Following the hearing, the parties submitted proposed findings and orders addressing the use of the easement for storage of boat trailers and launching of jet skis. In May 2019, the court issued an order confirming its findings on these points and directing the parties to incorporate the text of the order, as well as the modifications made on the record at the hearing, into their settlement agreement.
¶ 7. The parties submitted proposed final orders that were nearly identical. However, plaintiff's version included a clause requiring the parties to submit "any dispute arising hereunder" to binding arbitration, while defendants’ version contained no arbitration clause. In a memorandum accompanying its proposed order, plaintiff argued that defendants had stipulated to an arbitration provision at the April 2019 hearing and were now attempting to renege on that agreement. In response, defendants argued that the parties never negotiated or signed an agreement to arbitrate future disputes, and that if the record indicated that they acquiesced to such an agreement, they were withdrawing their consent. The court directed plaintiff to order a transcript of the relevant portion of the April 2019 hearing, which is quoted above. Plaintiff argued that the transcript showed that the parties had stipulated to arbitration. In October 2019, after looking at the transcript, the court issued a final order that included the arbitration clause proposed by plaintiff.
¶ 8. Defendants moved for reconsideration, claiming that plaintiff had recently installed posts obstructing the right-of-way in contempt of the order. Defendants asked the court to clarify that the court, rather than an arbitration panel, was the exclusive venue for enforcement of the order so that they could seek to enforce the order in court. The court denied the motion, stating that the language of the order was unambiguous and required any further dispute to be submitted to arbitration.
¶ 9. Defendants then moved to amend the final order to strike the arbitration provision on the grounds that there was no written acknowledgement of arbitration as required by the Vermont Arbitration Act, 12 V.S.A. § 5652, and no clear evidence that defendants had agreed to arbitrate further disputes. Defendants also filed a notice of appeal to this Court. Shortly after defendants filed their notice of appeal, the trial court denied their motion to amend the final order, stating that § 5652 did not apply because the duty to arbitrate arose not from a contract but from the court's order, which was based on the parties’ stipulation at the April 2019 hearing.2
¶ 10. On appeal, defendants argue that the trial court erred in including the arbitration provision in the final order because there was no written agreement or acknowledgement signed by the parties as required by 12 V.S.A. § 5652 and defendants did not confirm plaintiff's assertion that they had orally agreed to arbitrate.3 Plaintiff argues that defendants are estopped from invoking § 5652 or denying that an arbitration agreement existed because they failed to object to plaintiff's assertions during the April 2019 hearing. Plaintiff further claims that where the parties, through counsel, stipulate to arbitration on the record in a court proceeding, the requirement of a writing is met and there is no need for a written acknowledgement under § 5652(b). The interpretation of the statute, the applicability of estoppel or waiver, and the existence of an enforceable agreement are legal questions that we review de novo. See Adams v. Barr, 2018 VT 12, ¶ 8, 206 Vt. 480, 182 A.3d 1173 ; In re Langlois/Novicki Variance Denial, 2017 VT 76, ¶ 11, 205 Vt. 340, 175 A.3d 1222 ; Miller v. Flegenheimer, 2016 VT 125, ¶ 11, 203 Vt. 620, 161 A.3d 524.
¶ 11. Vermont law and public policy favor arbitration as an alternative to litigation for resolving disputes. Lamell Lumber Corp. v. Newstress Int'l, Inc., 2007 VT 83, ¶ 9, 182 Vt. 282, 938 A.2d 1215 ; see 12 V.S.A. § 5652(a) (). However, "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960). By agreeing to submit a controversy to arbitration, parties waive important rights, including trial by jury, procedural protections offered by the courts, and appellate review by an independent judiciary. See Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662, 685, 130 S.Ct. 1758, 176 L.Ed.2d 605 (2010) (). Accordingly, we have held that "[a] court may not order the parties to submit their future disputes to arbitration without a voluntary agreement of the parties concerned, or a statute or rule authorizing such an order." Gates v. Gates, 168 Vt. 64, 72, 716 A.2d 794, 800 (1998). The parties have not identified any applicable statute or rule that would permit the court to order arbitration in this case...
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