Tooley v. Robinson Springs Corp.

• Decision Date: 29 March 1995
• Docket Number: No. 94-306,94-306
• Citation: 163 Vt. 627,660 A.2d 293
• Parties: James F. TOOLEY v. ROBINSON SPRINGS CORP.
• Court: Vermont Supreme Court

Page 293

660 A.2d 293

163 Vt. 627

James F. TOOLEY v. ROBINSON SPRINGS CORP.

No. 94-306.

Supreme Court of Vermont.

March 29, 1995.

Before ALLEN, C.J., and GIBSON, DOOLEY, MORSE and JOHNSON, JJ.

ENTRY ORDER

Defendant, Robinson Springs Corporation, appeals a summary judgment for plaintiff, James Tooley, awarding plaintiff compensation for the Corporation's default on a $37,500 debenture. On June 24, 1981, Tooley purchased a $37,500 subordinated debenture from the Corporation. According to the debenture's terms, Tooley would receive annual interest payments of ten percent on the unpaid principal, and, starting in 1992, the Corporation would begin paying back twenty percent of the principal each year until paid in full.

Throughout the duration of the debenture, the Corporation was consistently late in making the interest payments. In 1992, the Corporation missed its interest payment and its first installment for repayment of principal. In January of 1993, pursuant to the default provision of the debenture, Tooley requested payment of the full principal and all accrued interest. In response, the Corporation sent two checks, in trust to Tooley's attorney, covering the first installment of principal and the interest payment for 1992. Tooley's attorney deposited these funds in the firm's IOLTA trust account, and wrote the Corporation requesting the additional amounts due. When the Corporation refused to pay the full principal, Tooley initiated this court action. Both parties moved for summary judgment, and the court granted summary judgment for Tooley, awarding him recovery of the principal plus accrued and unpaid interest thereon.

On appeal, the Corporation argues that the court's summary judgment order was erroneous because (1) Tooley either waived or was estopped from claiming default, (2) Tooley's claim was satisfied when the checks were deposited, (3) Tooley was contractually obligated to sell his shares to the Corporation and to offer his debenture for redemption, and (4) there were genuine issues of material fact in dispute, precluding summary judgment. On cross-appeal, Tooley argues the court should have (1) awarded him ten percent interest on the late payment of annual interest obligations from 1982 to 1991, and (2) denied twelve percent interest credit on the funds in the IOLTA trust account. We reverse the twelve percent interest credit and affirm on all other issues.

Summary judgment is appropriate only when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Wesco, Inc. v. Hay-Now, Inc., 159 Vt. 23, 26, 613 A.2d 207, 209 (1992); V.R.C.P. 56(c). When both parties seek summary judgment, both parties are entitled to the benefit of all reasonable doubts and inferences when the opposing party's motion is being judged. Toys, Inc. v. F.M. Burlington Co., 155 Vt. 44, 48, 582 A.2d 123, 125 (1990).

The Corporation claims that Tooley waived his right to claim default because his conduct evidenced intent to relinquish payment in full. A waiver is the intentional relinquishment or abandonment of a known right and may be evidenced by express words or by conduct. Chimney Hill Owners' Ass'n, Inc. v. Antignani, 136 Vt. 446, 453, 392 A.2d 423, 427 (1978). The Corporation argues that Tooley, by accepting late interest payments from 1982 to 1991, waived his right to assert default when the Corporation failed to meet its 1992 obligations. We disagree. The language of the debenture gives the holder the right to claim default sixty days after the Corporation fails to meet its obligation. Just because Tooley did not declare default when there were other opportunities to do so does not mean he could not declare default, after the Corporation failed to meet its first principal repayment obligation.

The Corporation further argues that by paying for dinner after discussing nonpayment of the debenture with the Corporation's president, Tooley implicitly agreed to an extension of payment. Such an act, however, does not rise to the level of intentional relinquishment of a known right. The Corporation also argues that two-thirds of the debenture holders had agreed to delay and extend the payment of principal and interest. Their agreements, however, are not binding on Tooley, who did not make such an agreement. We conclude that Tooley did not waive his right to claim full payment on the debenture.

Similarly, because Tooley's actions were insufficient to permit the Corporation to act upon them, the estoppel argument is without merit. Fisher v. Poole, 142 Vt. 162, 168, 453 A.2d 408, 412 (1982) (second element of estoppel requires party being estopped to intend that conduct be acted upon, or acts must be such that party asserting estoppel has right to believe they are so intended).

The Corporation further claims that the deposit of the checks constituted an accord and satisfaction of Tooley's claims. A creditor may deposit a check for partial payment without sacrificing the right to recover the remainder as long as the creditor "makes a reservation of rights in a manner that clearly and explicitly notifies the debtor that the check is not accepted as full payment on the debt and that no accord and satisfaction has been effected."...