State v. Delaney

• Decision Date: 09 August 1991
• Docket Number: No. 89-580,89-580
• Citation: 157 Vt. 247,598 A.2d 138
• Parties: STATE of Vermont v. Robert D. DELANEY.
• Court: Vermont Supreme Court

Page 138

598 A.2d 138

157 Vt. 247

STATE of Vermont v. Robert D. DELANEY.

No. 89-580.

Supreme Court of Vermont.

Aug. 9, 1991.

Jeffrey L. Amestoy, Atty. Gen., and William E. Griffin, Chief Asst. Atty. Gen., Montpelier, for plaintiff-appellant.

James P.W. Goss and Peter W. Hall of Abell, Kenlan, Schwiebert & Hall, P.C., Rutland, for defendant-appellee.

Before ALLEN, C.J., GIBSON and MORSE, JJ., and CHEEVER, Superior Judge and PECK, J. (Ret.), Specially Assigned.

GIBSON, Justice.

The State, which seeks specific performance of an alleged contract to sell certain land formerly owned by defendant, appeals from summary judgment in his favor and the denial of its motions for summary judgment and a preliminary injunction. Defendant cross-appeals the denial of his motion for sanctions. We affirm.

I.

Defendant is trustee for a group of individuals who, in the summer of 1988, put up for sale a 3,135-acre parcel of land adjoining Willoughby State Forest. During the fall of 1988 and winter of 1989, the Nature Conservancy made three different offers for the land, all of which were rejected. The Nature Conservancy was acting, at least in part, as an agent for the State.

On January 30, 1989, defendant's broker told John Roe, director of land protection at the Nature Conservancy, that the land was to be sold to the Dotolis for $1.2 million on February 1, 1989. This information was passed on to State officials and, in response, Governor Kunin telephoned defendant that same evening. She confirmed that the price was $1.2 million and requested defendant not to sell the property to a third party because the State wanted to purchase it. Defendant declined the governor's request, stating that he "was not interested in that because [he] didn't believe the state was in a position to consummate any kind of a deal" in the time before the scheduled sale to the Dotolis.

At about that time, the Nature Conservancy decided it would advance the purchase money for the property if the Legislature adopted a resolution in support of the purchase. With this in mind, the governor decided to sponsor such a resolution and, on January 31, again telephoned defendant, this time reading the text of the draft resolution to him. The draft stated that it was the intention of the State to appropriate $750,000 toward the purchase price of the land, but did not set forth the full purchase price. Defendant suggested that a reference to the full purchase price be added so there would be no misunderstanding. This was done.

A few hours later, defendant called the governor's office and left a message to the effect that the governor was "off the hook for another week." In response, the governor called defendant, and according to her affidavit, defendant "offered and agreed to give the State of Vermont until February 8, 1989 to commit to the purchase of the property at the agreed upon price. In that same conversation, [defendant] stated that he had always preferred to sell the property to the State." Defendant's recollection of the conversation is somewhat different. In his deposition, he stated that he told the governor that the State "had another week to do whatever they wanted to do" and that "[i]f they had a viable contract I saw that was right I told her I would consider it." The joint resolution passed the Senate on January 31, 1989 and the House on February 3, 1989.

On February 2, the Nature Conservancy telefaxed a signed purchase and sale agreement to defendant. The next day, John Roe telephoned defendant on behalf of the Nature Conservancy to discuss the document. Defendant said that, although the document looked perfectly acceptable, he wanted to speak with a real estate attorney before giving final approval. After being pressed for an appointment to sign the document, defendant said he would check his partners' schedules and call back on Monday, February 6. Defendant did not indicate there was any change in the February 8 deadline.

On February 6, defendant called the Nature Conservancy, reached Robert Klein, its Vermont director, and informed him that the property was being sold to the Dotolis. After Klein expressed surprise, defendant voiced several objections to the Nature Conservancy's proposed purchase and sale agreement. Klein said they could all be accommodated. Defendant nevertheless ended the conversation and, by letter dated February 6, informed the governor that the property was being sold to a third party, "even though the Nature Conservancy seemed to have everything pretty well in line to be able to go to contract tomorrow."

The State immediately initiated this suit and filed a motion for a preliminary injunction, seeking to restrain defendant from selling the property to the Dotolis. The State argued it had entered into a binding contract to purchase the property from defendant prior to the agreement between defendant and the Dotolis. The trial court denied the motion, holding that the State had not established a reasonable likelihood of prevailing on the merits. The State's motion for reconsideration was also denied, and the sale from defendant to the Dotolis was completed. Subsequently, the State requested specific performance under several contractual theories, both parties filed motions for summary judgment, and defendant filed a motion for sanctions. The court denied the State's motion for summary judgment, granted defendant's motion for summary judgment, and denied defendant's motion for sanctions.

On appeal, the State argues that the court erred in its summary judgment rulings. ¹ Defendant cross-appeals the denial of sanctions.

II.

The State advances two contractual arguments: (1) its part performance of an offer from defendant created an option contract for sale of the property, and (2) it entered into a contract for sale of the property with defendant before defendant sold the property to the Dotolis. ² We are not persuaded by either argument and conclude that the trial court did not err by granting defendant's motion for summary judgment and denying the State's motion for summary judgment.

Initially, we set out the law applicable to both arguments. Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law, after giving the benefit of all reasonable doubts and inferences to the opposing party. Toys, Inc. v. F.M. Burlington Co., 155 Vt. 44, 48, 582 A.2d 123, 125 (1990); V.R.C.P. 56(c). Where both parties seek summary judgment, each party receives this benefit when the opposing party's motion is being considered. Toys, Inc., 155 Vt. at 48, 582 A.2d at 125. On appeal, the same summary judgment standard serves as our standard of review. Cavanaugh v. Abbott Laboratories, 145 Vt. 516, 520, 496 A.2d 154, 157 (1985). " 'The question whether there was a contract between the parties does not depend alone upon the specified facts found but also upon the reasonable inferences to be drawn from them,' " the " 'situation and purpose of the parties,' " and the " 'subject matter and course of the negotiations.' " Toys, Inc., 155 Vt. at 50, 582 A.2d at 126-27 (quoting Ackerman v. Carpenter, 113 Vt. 77, 81, 29 A.2d 922, 925 (1943)).

A.

The State argues that its motion for summary judgment should have been granted or, alternatively, defendant's motion denied, because an option contract was created between the defendant and the State by the State's part performance of defendant's offer. For support, the State cites to Restatement (Second) of Contracts § 45 (1981). Under the State's theory, defendant's offer of a unilateral contract consisted of defendant's (1) participation in the drafting of the resolution, (2) assurance that he wanted to sell the property to the State, (3) statement that he would not sell to a third party before February 8, 1989, and (4) promise that he would give the State until then to make a final commitment. The State further contends that it began to complete the invited performance by drafting, debating, and enacting the joint resolution, and negotiating through the Nature Conservancy with defendant for a deposit amount, closing date, and draft contract.

An argument analogous to the State's argument was made, and rejected, in Ragosta v. Wilder, 156 Vt. 390, 592 A.2d 367 (1991). In Ragosta, the defendant had told the plaintiffs--the prospective purchasers--that he would sell his property to them if they appeared at a designated place before a certain time with the purchase money, provided the property was not sold to someone else in the meantime. The defendant later assured the plaintiffs that no one else was currently interested in purchasing the property. The plaintiffs obtained a loan and incurred certain costs in attempting to acquire the property. The trial court ruled that obtaining financing constituted the beginning of performance, apparently relying on Restatement (Second) of Contracts § 45. We reversed, holding that "plaintiffs were merely engaged in preparation for performance." Id. at ----, 592 A.2d at 370; cf. Chomicky v. Buttolph, 147 Vt. 128, 131-32, 513 A.2d 1174, 1176 (1986) (part-performance exception to Statute of Frauds not satisfied by making financing arrangements).

This case is governed by Ragosta and is less compelling. Defendant told the State on several occasions that he was interested only in a "solid, viable contract." The joint resolution did not appropriate any money; it merely expressed an "intention to proceed with the State's appropriation," which was set forth as $750,000 of the $1.2 million purchase price. The remainder of the purchase price was to be raised privately by the Nature Conservancy during the spring and summer of 1989. Thus, the resolution could not constitute the beginning of performance. Ragosta, 156 Vt. at ----, 592 A.2d at 370 (obtaining loan did not constitute beginning of performance). Nor do the Nature Conservancy's attempts to negotiate certain other terms,...