Myers v. LaCasse

• Decision Date: 10 October 2003
• Docket Number: No. 02-052.,02-052.
• Citation: 838 A.2d 50
• Parties: Nancy L. MYERS v. James J. LaCASSE and Marie A. LaCasse.
• Court: Vermont Supreme Court

838 A.2d 50

Nancy L. MYERS v. James J. LaCASSE and Marie A. LaCasse.

No. 02-052.

Supreme Court of Vermont.

October 10, 2003.

Andre D. Bouffard of Downs Rachlin Martin, PLLC, Burlington, for Plaintiff-Appellant.

David Putter, Montpelier, and Terrance R. Wolfe, Bennington, for Defendants-Appellees.

Present: AMESTOY, C.J., DOOLEY, JOHNSON and SKOGLUND, JJ., and ALLEN, C.J. (Ret.), Specially Assigned.

DOOLEY, J.

¶ 1. In this foreclosure action, plaintiff Nancy Myers appeals from the decision of the Bennington Superior Court vacating a previous order granting summary judgment in her favor and granting summary judgment for defendants James and Marie LaCasse. Plaintiff argues that the court erred by (1) reopening and vacating the prior summary judgment decision based on arguments not raised in connection with the initial motion for summary judgment, and (2) ruling that a mortgage¹ granted on one of two adjacent parcels several years before common ownership of the two parcels was severed does not have priority over a way of necessity that arose on foreclosure of a junior mortgage. We affirm.

¶ 2. The undisputed facts tell a complex and unique story.² At different times, in 1987, defendants acquired title to two adjacent parcels of real estate located in Bennington, Vermont. While the southern parcel (Parcel I) had approximately 300 feet of public road frontage, the northern parcel (Parcel II) lacked any such frontage and also had no deeded rights of access to any public road. Defendants proceeded to mortgage Parcel I three times, first to Merchants Bank (Merchants) in 1987, then again to Merchants in 1990, and finally to First Vermont Bank and Trust (First Vermont) later in 1990.

¶ 3. In 1996, defendants defaulted under the terms of the third mortgage, and First Vermont subsequently brought a foreclosure action and obtained a decree of foreclosure. The decree provided that if defendants failed to redeem they would be "forever foreclosed and barred from all equity of redemption in the premises and the plaintiff on such date [would] be entitled to title, possession and ownership of said lands." Defendants also defaulted under the terms of Merchants' first and second mortgages, and Merchants commenced its own foreclosure action. However, Merchants voluntarily dismissed this action and instead took an assignment from First Vermont as to all rights under its decree of foreclosure. When defendants failed to redeem in the First Vermont action, Merchants obtained a certificate of nonredemption and title to the property subject to the first two mortgages which, at that point, Merchants continued to hold as mortgagee. As a result of these events, defendants lost title to Parcel I, and Parcel II became completely landlocked. Defendants did not appeal the decree of foreclosure or the writ of possession issued pursuant to it.

¶ 4. Later in 1996, Merchants quitclaimed Parcel I to Atlantic Bank and Trust Company (Atlantic) and assigned to it the outstanding mortgages on the property. Atlantic sold the parcel to plaintiff in 1998, also assigning to her the first and second mortgages given by defendants to Merchants, together with the related notes. The deed specifically provided that the title in the property would not merge with the mortgages so that the mortgages would remain in effect.

¶ 5. Plaintiff subsequently filed this foreclosure action based on the second mortgage in order to foreclose any outstanding interests in Parcel I, including any easement by necessity which defendants might claim to have arisen over Parcel I in order to provide access to Parcel II. Defendants raised numerous defenses to foreclosure and counterclaims, including the following:

22. In the event LaCasses' legal title to the mortgaged premises is deemed already foreclosed and to have succeeded to plaintiff by virtue of her succeeding to the interests of the other banking institutions mentioned herein, or as a result of judgment in this instant action, defendants submit that an easement or right of way by necessity or implication nevertheless burdens the mortgaged premises and benefits the other 4.6 acre parcel owned by LaCasses. Furthermore, LaCasses submit that this easement is an independent and separate property right and not one which was, or would be, considered a part of the property secured by the Merchant's mortgages, but rather one encumbering it, and therefore not subject to this foreclosure proceeding for any proved breach of Merchants' notes and mortgages.

In its prayer for relief, defendants requested the court to lay out "defendants' recordable rights of access over the mortgaged premises to their other parcel."

¶ 6. After discovery, plaintiff moved for summary judgment pursuant to V.R.C.P. 80.1(c). In an August 4, 2000 opinion, the superior court rejected all of defendants' defenses and granted plaintiff's motion. The court also dismissed defendants' counterclaim on res judicata grounds. Regarding the defense that the claimed way of necessity could not be foreclosed, the court concluded that any way of necessity that may have arisen as a result of the first foreclosure was necessarily junior to the outstanding mortgages and therefore was subject to the present foreclosure. Defendants attempted to take an appeal from this decision, but permission to do so was denied by the trial court because no judgment of foreclosure had yet been entered.

¶ 7. Plaintiff then moved for an accounting, as provided in 80.1(f), and the matter was set for hearing in order to determine the equity of redemption. Prior to the hearing, the superior court—now with a new trial judge presiding—issued an entry order in which it raised sua sponte a number of issues that the court concluded were important but had been left unresolved by the August 4, 2000 order, and requested that the parties submit further briefing on these issues. In particular, the court was concerned that the method of determining the equity of redemption was still disputed and that the issue of what interest defendants would receive in the event they did redeem remained unresolved. After the parties submitted further briefing, the court held a hearing on the accounting issues. Shortly after, defendants moved to vacate the summary judgment order, and at the same time filed their own motion for summary judgment. Plaintiff opposed the motions both on procedural and substantive grounds.

¶ 8. On August 10, 2001, the court issued an opinion and order granting defendants' motion to vacate as well as their motion for summary judgment. The court concluded that it could review the earlier summary judgment order pursuant to Morrisseau v. Fayette, 164 Vt. 358, 363-64, 670 A.2d 820, 824 (1995), and V.R.C.P. 54(b). In granting summary judgment for defendants, the court first concluded that there was no basis to modify the summary judgment decision that the First Vermont foreclosure decree precluded defendants from relitigating issues concluded in that litigation. The court ruled, however, that the first judge had erred in ruling that the claimed way of necessity was junior to the mortgages held by plaintiff, and thus held that the way of necessity was not subject to foreclosure. Plaintiff subsequently filed a motion for reconsideration, which the court denied. This appeal followed.

¶ 9. Plaintiff's first argument on appeal is that the trial court erred by reopening and vacating the prior grant of summary judgment, and doing so on the basis of arguments never raised in connection with the prior grant. Plaintiff contends that allowing the trial court to overstep the bounds of its plenary authority to revise interlocutory orders in this "horizontal appeal" undermines the finality of orders granting summary judgment, encourages judge shopping, and inserts unreasonable delay into the foreclosure process.

¶ 10. Plaintiff acknowledges that the trial court's action violates no explicit command of our procedural rules. Indeed, the grant of a motion for summary judgment by itself is an interlocutory order and not a final judgment. See Powers v. Hayes, 170 Vt. 639, 640, 751 A.2d 781, 782 (2000) (mem.). Moreover, in this case, the summary judgment decision was intended to resolve only part of the issues before the court. While it was intended to resolve completely the issues raised in defendants' counterclaim, it did not fully resolve the only claim remaining—plaintiff's foreclosure claim. Thus, it was a partial summary judgment, see Berlin Dev. Assocs. v. Dep't of Soc. Welfare, 142 Vt. 107, 112, 453 A.2d 397, 399 (1982), that did not even reach the point where the decision with respect to plaintiff's complaint was governed by V.R.C.P. 54(b). See Kelly v. Lord, 173 Vt. 21, 31-32, 783 A.2d 974, 982-83 (2001) (application of V.R.C.P. 54(b) requires final adjudication of one of multiple claims, not merely resolution of some issues pertaining to a single claim).

¶ 11. The court had the discretion to modify an interlocutory order. See Dudley v. Snyder, 140 Vt. 129, 131, 436 A.2d 763, 764-65 (1981); Brown v. Tatro, 136 Vt. 409, 411, 392 A.2d 380, 382 (1978) ("[A]n interlocutory order or judgment is left within the plenary power of the court that rendered it to afford such relief as justice requires ...."). We find no abuse of that discretion here. Once the court began to confront the ramifications of the summary judgment order on its ability to craft a foreclosure decree, it concluded that the implementation difficulties demonstrated flaws in the summary judgment decision. Thus, we are not dealing with a situation where the court adjudicates all the issues necessary for a final judgment, but without grounds fails to issue that judgment, instead repetitively modifying the preliminary decisions on which the judgment should be based. See Russell v. Russell, 157 Vt. 295, 300, 597 A.2d 798, 801 (1991). "`[W]e will not require a judge to perpetuate error or take a more roundabout way to arrive at an ultimately...