Stonewall of Woodstock Corp. v. Stardust 11TS, LLC
| Decision Date | 10 August 2018 |
| Docket Number | No. 2017-417,2017-417 |
| Citation | 2018 VT 79 |
| Court | Vermont Supreme Court |
| Parties | Stonewall of Woodstock Corp. and Accordion, LLC v. Stardust 11TS, LLC and Oliver Block, LLC |
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 by email at: JUD.Reporter@vermont.gov or by mail at: 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.
On Appeal from Superior Court, Windsor Unit, Civil Division
Norman C. Williams of Gravel & Shea PC, Burlington, for Plaintiffs-Appellants.
Frank P. Urso of Reis, Urso & Ewald, PC, Rutland, for Defendant-Appellee Oliver Block, LLC.
Steven E. Ferrey, Suffolk University Law School, Boston, Massachusetts, for Amicus Curiae Stacy Gallowhur.
PRESENT: Skoglund, Robinson, Eaton and Carroll, JJ., and Morris, Supr. J. (Ret.), Specially Assigned
¶ 1. During the spring of 2015, plaintiff Stonewall of Woodstock Corporation (Stonewall) entered into negotiations to buy commercial property located in Woodstock from defendant Oliver Block, LLC (Oliver Block). A written contract of sale was signed by Stonewall, but not by Oliver Block, which instead sold the land to defendant Stardust 11TS, LLC (Stardust). Stonewall sued, claiming that there was a valid contract and seeking specific performance. The trial court granted summary judgment for Oliver Block, on the basis that any contract with Stonewall was unenforceable under the Statute of Frauds because it had not been signed by Oliver Block. We affirm.
¶ 2. Stonewall is a Vermont corporation whose shareholders include John Ruggieri-Lam and Maria Freddura.1 Oliver Block is a Vermont limited liability corporation whose sole member is Richard Coburn. The negotiations in 2015 were largely carried out between Ruggieri-Lam on behalf of Stonewall and Coburn, Coburn's lawyer Frank Urso, and Coburn's personal assistant Richard Sbeglia on behalf of Oliver Block.
¶ 3. On May 28, 2015, Sbeglia sent an unsigned contract of sale by email to Ruggieri-Lam, who returned it with proposed modifications. On June 2, Urso sent Ruggieri-Lam an updated unsigned version of the contract, incorporating the modifications that Ruggeri-Lam had requested, with instructions to execute and return it with a deposit of $25,000. Later the same day, Ruggieri-Lam and Freddura returned the document, which they had signed, to Urso along with the deposit check. In an email reply on June 3 Urso acknowledged receipt. On Coburn's instructions, Urso deposited the check in his law firm's trust account. But neither Coburn nor anyone else acting on behalf of Oliver Block signed the contract. In the days immediately following his return of the contract document and check, Ruggieri-Lam made several inquiries to Urso about whether Coburn had signed the contract. No representation was ever made to Ruggieri-Lam that Coburn had signed the document. Finally, on June 11, Coburn informed Stonewall that he could not go through with the negotiations as laid out in the June 2 document. During this same time, Coburn had been negotiating with another potential purchaser, Stardust. Those negotiations resulted in Coburnsigning a contract of sale with Stardust on June 10. Urso returned Stonewall's deposit money on June 26.
¶ 4. Shortly after learning of the deal with Stardust, Ruggieri-Lam and Freddura filed suit against Oliver Block in the Federal District Court of Vermont, seeking specific performance on their own contract with Oliver Block. Ruggieri-Lam v. Oliver Block, LLC, 120 F. Supp. 3d 400 (D. Vt. 2015). They asserted that the emails sent by Urso on June 2 and 3 (instructing Ruggieri-Lam and Freddura to sign and return the contract with a deposit and then acknowledging receipt) satisfied the Statute of Frauds. They also sought an attachment on the Oliver Block property. As part of Oliver Block's response, Coburn prepared an affidavit denying that he had ever made a contract with Stonewall or authorized Urso or anyone else to make one. In July, the court denied Ruggieri-Lam and Freddura's petition for a writ of attachment on the Oliver Block property, concluding that they had no reasonable chance of success on the merits under Vermont contract law. Id. at 406-09. In February 2016, the federal suit was dismissed without prejudice on plaintiff's petition.
¶ 5. Stonewall then filed this suit against Oliver Block and Stardust, alleging breach of contract and fraud, and again seeking specific performance. In September 2017, the court granted summary judgment for Oliver Block with respect to Stonewall's contract claims, holding that the June 2 purchase agreement was not an enforceable contract under the Statute of Frauds. The court denied Oliver Block's motion for summary judgment with respect to fraud, but this claim was later dismissed on a stipulated motion by Stonewall.
¶ 6. On appeal, Stonewall argues that a valid contract was formed when it returned the signed contract with the deposit on June 2, thus accepting an offer made by Oliver Block. Stonewall further contends that the Statute of Frauds is satisfied by either (1) the signed affidavit by Coburn in opposition to the petition for writ of attachment produced in federal court or (2) the two emails from Urso sent on June 2 and 3. Coburn's affidavit was part of the record below, butwas not mentioned in the trial court's decision. Oliver Block and Stardust respond that no contract was ever formed and that in any event the signed writings offered by Stonewall do not meet the requirements of the Statute of Frauds.
¶ 7. We agree with the trial court that the Statute of Frauds bars enforcement of Stonewall's claim. As a contract for the sale of land, the contract falls under the Statute, and neither Coburn's signed affidavit nor the emails from Urso meet the Statute's requirements. Because we hold that the contract is unenforceable under the Statute, we do not reach the questions of whether an otherwise valid contract was formed by offer and acceptance or whether specific performance would be the appropriate remedy for any breach.
¶ 8. We review a grant of summary judgment de novo, under the same standard as the trial court. Bixler v. Bullard, 172 Vt. 53, 57, 769 A.2d 690, 694 (2001). We will uphold a grant of summary judgment if we agree that "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Id. (quotations omitted); see V.R.C.P. 56(a). None of the relevant facts are disputed. The issue is whether the trial court correctly applied Vermont's Statute of Frauds, and this question is solely one of law.
¶ 9. The Statute of Frauds derives from the Act for the Prevention of Frauds and Perjuries passed by the Parliament of England in 1677, 29 Car. 2 c. 3, which remains in force in some form in almost all states, Restatement (Second) of Contracts ch. 5, stat. note (1981). It has apparently been part of Vermont law since at least 1779, when the common law of England was adopted as the law of the State. See Clement v. Graham, 78 Vt. 290, 300-04, 63 A. 146, 148-50 (1906) (). The Statute is currently codified at 12 V.S.A. § 181, which provides as follows:
Despite the Statute's pedigree, "its rote application is not automatic," and courts should be sensitive to its "underlying purposes." In re Estate of Maycock, 2001 WY 103, ¶ 19, 33 P.3d 1114 (2001). The main purpose of the Statute is, as its name suggests, to protect parties from the enforcement of fraudulent contracts, but it also "helps to ensure that contracts for the sale of land or interests therein are not entered into improvidently." Chomicky v. Buttolph, 147 Vt. 128, 130, 513 A.2d 1174, 1175-76 (1986) ().
¶ 10. The central requirements of the Statute are (1) a signature, affixed to (2) a writing. The requirement of a signature by the party to be charged is strict. Pike Indus., Inc. v. Middlebury Assocs., 136 Vt. 588, 592, 398 A.2d 280, 282 (1979) (). As for what is signed, the Statute's requirements are not rigid. The signed writing does not need to be the contract itself, just "a sufficient memorandum" of it. First Nat'l Bank of St. Johnsbury v. Laperle, 117 Vt. 144, 148, 86 A.2d 635, 638 (1952).
¶ 11. A sufficient memorandum is any writing that indicates the existence of an agreement on a given subject and its essential terms. Restatement (Second) of Contracts § 131. In Laperle, for instance, this Court concluded that a receipt acknowledging a down payment for the purchase of a building, signed by the buyer under the word "Attest," satisfied the Statute. 117 Vt. at 146-47, 82 A.2d at 637. Both the property and the price were specified on the receipt signed by the buyer. Id. In Dickson v. McMahan, 140 Vt. 23, 24-25, 433 A.2d 310, 311-12 (1981), the Statute was satisfied by a signed letter from the seller of property stating that he was "inagreement" about the purchase price and the date of possession, despite the fact that he...
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...on all essential particulars." EverBank v. Marini, 2015 VT 131, ¶ 17, 200 Vt. 490 (quotation omitted); see also Stonewall of Woodstock Corp. v. Stardust 11TS, LLC, 2018 VT 79, ¶ 20 ("A party cannot escape a contract on the basis of an unexpressed mental reservation.") (quotation omitted); R......