Weed v. Weed

• Citation: 2008 VT 121,968 A.2d 310
• Decision Date: 29 August 2008
• Docket Number: No. 07-338.,07-338.
• Parties: Jane WEED v. Leah WEED, James Weed, Cynthia Weed, Benjamin Weed, Baxter Weed and Olivia Weed.
• Court: United States State Supreme Court of Vermont

968 A.2d 310

2008 VT 121

Jane WEED v. Leah WEED, James Weed, Cynthia Weed, Benjamin Weed, Baxter Weed and Olivia Weed.

No. 07-338.

Supreme Court of Vermont.

August 29, 2008.

Motion for Reargument Denied September 25, 2008.

Douglas D. DeVries, Enosburg Falls, and Michael Rose (On the Brief), St. Albans, for Plaintiff-Appellant.

George E. Spear II, Swanton, for Defendants-Appellees.

Present: REIBER, C.J., DOOLEY, JOHNSON, SKOGLUND and BURGESS, JJ.

¶ 1. SKOGLUND, J.

This appeal arises out of an ongoing land dispute among members of the Weed family. Jane Weed appeals the trial court's rulings as to two intra-family land transfers involving Jane, her mother Leah, her brother James and sister-in-law Cynthia, and their children. We reverse.

¶ 2. The following facts were found by the superior court or are uncontroverted. In 1916, the Weed family acquired two contiguous parcels of land—a 103.4-acre tract in Enosburg, Vermont and a 63.6-acre tract in Sheldon, Vermont. When this dispute began in 1996, both parcels were owned by Leah and the late Leonard Weed.^* Leah and Leonard had two children, Jane and James Weed. James is married to Cynthia Weed, and they have three adult children.

¶ 3. In 1996, Leah and Leonard's financial situation was poor and the Sheldon land went into tax sale. At the tax sale, Jane, James, and Cynthia were the high bidders and the plan was for Leah and Leonard to pay their back taxes and redeem the property. However, Leah and Leonard were unable to make these payments within the one year required by law. While Jane, James, and Cynthia's names all appear on the tax sale report, Jane alone paid for the land. Subsequently, the administrative assistant for the Sheldon town attorney asked Cynthia whose name should appear on the Sheldon land deed. Since she and James had not paid any money, Cynthia told the town attorney to deed the land to Jane alone. Since receipt of the tax deed, Jane has paid the yearly real estate taxes on the land. The parties dispute whether James and Cynthia offered to repay Jane. The court's finding on this is inconclusive. The fact remains that Jane never received payment and no attempt was ever made to change the Sheldon land's title to reflect co-ownership.

¶ 4. In July 1999, Leah and Leonard deeded half of the Enosburg property to Jane and half to James and Cynthia, with Leah and Leonard each reserving a life estate and "the right to sell the subject property." Leonard died on December 24, 2000. Leah then executed a new deed in January 2001, purportedly transferring the Enosburg property in five equal shares to James, Cynthia, and their three children. Jane received nothing under this deed. The deed recited that "ten or more dollars" was exchanged for the land. However, the Vermont Property Transfer Tax Return accompanying the transfer indicated that no consideration was paid in the transaction. Due to an error that does not concern this case, a new deed was executed three days later. This deed contained the following language: "This conveyance supersedes a previous conveyance from Leonard W. Weed and Leah A. Weed to Jane Weed and James and Cynthia Weed, dated July 18, 1999." It further specified Leah's intention to "exclude her daughter Jane Weed."

¶ 5. Leah's attorney wrote to Jane explaining that Leah had exercised her reserved right to sell. He further noted that "[a]s it stands you have sole title in the Sheldon parcel. The value, according to the Town assessment, is approximately equal to one-sixth of the value of the Enosburg and Sheldon [p]arcels combined."

¶ 6. Jane was not pleased at having her interest in the Enosburg property extinguished. Jane's lawyer suggested to Leah's lawyer that the transfer was not a sale, but rather a gift unauthorized by the 1999 deed's reserved right to sell. At some point after questions concerning the nature of the purported sale surfaced, Cynthia paid Leah ten dollars.

¶ 7. Jane met with her mother and in September 2003 they executed a written sales agreement that provided that Leah would transfer to Jane twenty-two acres of the Enosburg property with a right of way in exchange for Jane transferring to Leah fifteen acres of the Sheldon property and whatever cash would be necessary to make the two sides of the transaction equal in value. Jane gave Leah a $100 earnest money deposit. The property to be exchanged was described generally in the agreement and Jane agreed to pay to have the land surveyed. The exchange was to take place by September 2004 with no pro-ration of real estate taxes. However, in December 2003 Leah returned the $100 and announced that she was backing out of the deal.

¶ 8. In July 2004, Jane brought this action against Leah to enforce the land-swap agreement. Leah answered Jane's complaint, arguing that the terms of the land exchange were too vague to enforce, and counterclaimed, seeking a declaratory judgment that the 2001 transfer of land to James, Cynthia, and the grandchildren was a proper exercise of the 1999 deed's reserved right to sell, "without necessary monetary consideration." Additionally, Leah successfully moved to join James and Cynthia as defendants in Jane's suit and as plaintiffs in the counterclaim against Jane. James and Cynthia brought their own counterclaim based on the 1996 tax sale of the Sheldon property, claiming that Jane held two-thirds of the Sheldon property in trust for James and Cynthia because the parties intended to share ownership following the tax sale. The three grandchildren were also later added as defendants.

¶ 9. The parties' claims and counterclaims were heard by the Franklin Superior Court in a two-day trial. The court ruled that Leah's 2001 transfer of the Enosburg land to James, Cynthia, and the grandchildren was a valid exercise of the reserved right to sell. The court concluded that James and Cynthia's care for the aging Leah was adequate consideration to support a sales contract, and did not address whether the ten dollars alone would have been sufficient consideration to support a sale. The court further concluded that Jane, Cynthia, and James had purchased the Sheldon property together, and that Jane was unjustly enriched by retaining sole ownership of it. The court therefore placed two-thirds of the Sheldon property in a constructive trust for the benefit of Cynthia and James. Furthermore, the court ruled that because Jane did not have sole ownership of the Sheldon property, she could not transfer that property to Leah. The court thus declined to rule on whether the 2003 land-swap agreement was sufficiently definite as to be enforceable.

¶ 10. Jane presents two issues for our review. First, was Leah's 2001 transfer of the Enosburg property to James, Cynthia, and the grandchildren supported by adequate consideration and a valid exercise of the reserved right to sell? Second, did the court properly impose a constructive trust on two-thirds of the Sheldon property for the benefit of James and Cynthia? We address each issue in turn.

¶ 11. The trial court concluded that the 2001 deed was "within the reservation of rights contained in the [1999 deed] because there was adequate consideration." "The existence of sufficient consideration for a contract is a question of law and is evaluated at the time the contract was formed." Bergeron v. Boyle, 2003 VT 89, ¶ 19, 176 Vt. 78, 838 A.2d 918. We review questions of law de novo. Dep't of Corr. v. Matrix Health Sys., 2008 VT 32, ¶ 11, 183 Vt. 348, 950 A.2d 1201. We hold that the court erred as a matter of law when it concluded that the 2001 deed was a sale supported by adequate consideration.

¶ 12. In the 1999 deed, Leonard and Leah reserved "the right to sell the subject property in fee simple absolute or in any lesser fee during their natural lives, intending to reserve such power to each of them." Accordingly, the 2001 transfer is valid only if it constitutes a sale. See Stasieczko v. Nichols, 137 Vt. 112, 113, 400 A.2d 992, 993 (1979) (exercise of a reserved right is enforceable so long as right is exercised in accordance with conditions set forth in granting document); Manley Bros. Co. v. Somers, 100 Vt. 292, 296, 137 A. 336, 338 (1927) (conditional license to sell does not include transfer without consideration); Parks' Adm'r v. Am. Home Missionary Soc'y, 62 Vt. 19, 24-26, 20 A. 107, 108 (1889) (gift of property to private individual by life tenant invalid because granting document limited power of disposal to use for life tenant's needs and comfort or charitable donation).

¶ 13. We have frequently held that "[t]o constitute consideration, a performance or a return promise must be bargained for." Restatement (Second) of Contracts § 71(1) (1981). See, e.g., Bergeron, 2003 VT 89, ¶ 19, 176 Vt. 78, 838 A.2d 918; Lloyd's Credit Corp. v. Marlin Mgmt. Servs., Inc., 158 Vt. 594, 600, 614 A.2d 812, 815-16 (1992); Ragosta v. Wilder, 156 Vt. 390, 393, 592 A.2d 367, 369 (1991). Bargained-for consideration must induce a promise or performance, and not be a "mere pretense" of a bargain. Restatement (Second) of Contracts § 71 cmt. b. The parties here did not bargain for the recited sum of ten dollars. The trial record contains no indication that the ten dollars induced the sale. The property transfer tax return stated that there was no consideration paid in the transaction. Leah did not wait for payment to execute the deed, and there is no indication in the record that she expected payment. The ten dollars was only paid when Leah's lawyer became concerned that the transfer would be recognized as a gift. In her counterclaim, Leah asked the court for a declaration that she "acted properly and with complete authority when she conveyed the said property to [James, Cynthia and their children] without necessary monetary consideration."

¶ 14. Despite these admissions and although no party argued the claim, the trial court found that services rendered to Leah by James and Cynthia constituted consideration. Although...