Justia Vermont Supreme Court Opinion Summaries

Plaintiff Berkshire Bank filed this action seeking possession of funds in an investment account owned by defendant Thomas Kelly, which defendant purportedly pledged as security for a business loan to his sister Dorothea Kelly. The civil division granted summary judgment in favor of defendant, concluding that plaintiff did not have a valid security interest in the account. After review, the Vermont Supreme Court agreed and affirmed. View "Berkshire Bank v. Kelly" on Justia Law

R.E.E. & C. Capital Management Services, Inc. (buyer) appealed a trial court order granting People’s United Bank’s motion to compel buyer to complete the purchase of a foreclosed commercial property. Buyer raised three arguments: (1) it was not a party to the foreclosure sale, and the court therefore lacked jurisdiction to compel it to purchase the property; (2) the trial court erred in declining to apply the statutory remedy; and, (3) the trial court erred in ordering specific performance because an adequate remedy at law exists. After review, the Vermont Supreme Court determined a high bidder’s successful bid in a judicial sale, and the court’s subsequent confirmation of the foreclosure sale pursuant to 12 V.S.A. 4954(a), renders a buyer a limited party such that the court is authorized to issue orders directing the buyer’s action relative to the property’s purchase. The Court found 12 V.S.A. 4954 (e) did not limit the Bank’s remedies: “the legal right to an agreement’s completion does not arise exclusively from Vermont’s foreclosure statutes.” However, the Supreme Court found that while specific performance was a permissible remedy in some instances, the trial court did not engage in the analysis of whether this case was one of those instances. Therefore, the trial court’s order of specific performance was an abuse of its discretion, leading the Supreme Court to reverse and remand this case for the trial court to perform that analysis. View "People's United Bank, NA v. Alana Provencale, Inc., et al." on Justia Law

Defendant-borrowers Skip and Paris Watts appealed the trial court’s summary judgment decision in favor of plaintiff-lender Deutsche Bank National Trust Company in this mortgage foreclosure action. They argued that the trial court erred by finding that a dismissal with prejudice under Vermont Rule of Civil Procedure 41(b) was not an adjudication on the merits given preclusive effect in a foreclosure action. Lender argues in response that earlier decisions of this Court that gave preclusive effect to the dismissal of foreclosure actions should be applied only prospectively and not to this case. Defendants entered into the mortgage at issue here in 2006. They failed to make payments in 2008. The lender accelerated payments and called for the note in late 2008. Foreclosure proceedings were initiated, and publication by service was completed in early 2010. Borrowrs did not file an answer to the complaint. The case sat for approximately one year; the trial court dismissed the case in July 2011. Following the dismissal, the borrowers attempted to find a solution that would allow the borrowers to resume payments. The Lender then filed suit again in 2013, alleging the borrowers defaulted on the 2008 promissory note. Borrowers answered the complaint, arguing that the 2013 action was precluded by res judicata by the 2009 action. The trial court granted lender’s motion, applying equitable principles to find that the 2011 dismissal was not a preclusive adjudication on the merits but that lender was entitled to recover interest only if it was due after the date of lender’s first, 2009, complaint against borrowers. The Vermont Supreme Court reversed, finding that the lender did not advance a new default theory by refiling its 2009 case in 2013. Therefore, its claims were precluded by the dismissal of the 2009 case. View "Deutsche Bank National Trust Co. v. Watts" on Justia Law

The lender Cenlar FSB appealed a judgment in favor of the borrowers Laurie and Joseph Malenfant, Jr. in the lender’s second action for a judgment on the note and foreclosure, after the first was dismissed with prejudice. The lender argued that the first dismissal could not be interpreted as vacating the judgment on the note and for foreclosure that the trial court had previously issued in that case. Alternatively, the lender contended that its notice of default in the initial foreclosure action was sufficient to satisfy its notice obligation in connection with its second foreclosure action. After review, the Supreme Court concluded that the trial court’s dismissal with prejudice of the first action on the promissory note and complaint for foreclosure did effectively vacate that court’s prior judgment for lender on the note and for foreclosure. Furthermore, the lender was not, on this record, entitled to pursue a second action because it had not taken any steps to reinstate borrower’s monthly payment obligations after lender had accelerated the note. Accordingly, the Supreme Court affirmed the trial court's judgment. View "Cenlar FSB v. Malenfant, Jr." on Justia Law

Plaintiff-lender Deutsche Bank National Trust Company (as trustee) appealed a superior court decision to grant defendant-borrower Kevin Pinette's motion to dismiss. The lender tried to foreclose on property of Pinette, but the superior court dismissed its claims on foreclosure, the unpaid balance on a promissory note, and a deficiency judgment on the ground that they were barred by claim preclusion, as lender had previously instituted an identical action against borrower in 2013, which had been dismissed for failure to prosecute. On appeal, the lender argued that because the 2013 action did not actually adjudge the enforceability of the note and mortgage, the dismissal did not have preclusive effect. Further, lender urged the Vermont Supreme Court to hold that in the mortgage foreclosure context, dismissals with prejudice did not bar subsequent actions based upon new defaults occurring after dismissal of the prior action. Finding no reversible error, the Supreme Court affirmed. View "Deutsche Bank v. Pinette" on Justia Law

This appeal stemmed from a superior court decision to grant summary judgment in favor of defendant Caroline Marini on plaintiff EverBank’s complaint for foreclosure on a mortgage that Caroline signed in 2009 together with her co-defendant and then-husband Gary Marini. In ruling on cross-motions for summary judgment, following a hearing, the trial court concluded that Caroline was entitled to judgment as a matter of law on EverBank’s foreclosure complaint because the undisputed material facts established that Caroline signed the mortgage under the threat of physical violence from Gary and thus the mortgage was void as to her. The trial court also concluded that regardless of whether the mortgage was void as to Caroline, EverBank was not a bona fide purchaser. EverBank subsequently moved to alter or amend the judgment on the ground that the grant of summary judgment as to Caroline unjustly enriched her. The trial court denied the motion, explaining that EverBank had not raised the issue of unjust enrichment in response to Caroline’s cross-motion for summary judgment. EverBank appealed both decisions. After review, the Supreme Court reversed the decision granting summary judgment in favor of Caroline on the issue of whether the mortgage was void, and directed the trial court to enter judgment for EverBank on that issue. The Court remanded for trial the issues of whether the mortgage was voidable and, if so, whether it was enforceable because it was ratified by Caroline, but affirmed the trial court’s decision that the bona fide purchaser doctrine was not available to EverBank. View "Everbank v. Marini" on Justia Law

Defendants Barrett and Linda Gregoire, sought to amend or set aside judgments of foreclosure in favor of plaintiff bank based on claims of fraud and misrepresentation. The dispute underlying this case concerned four multi-family rental properties: three in Washington County and one in Caledonia County that were part of defendants' rental-property business. The bank's loans to defendants were secured by the properties and were cross-collateralized with each other. In March and April 2010, the bank filed foreclosure complaints with respect to the properties. The parties executed a forbearance agreement under which defendants retained control of the properties as landlords, but the tenants were to pay rent directly to the bank. The parties stipulated to the appointment of a receiver to collect rent for the bank. The receiver filed a report with the court stating that defendant Barrett Gregoire was renting to new tenants and collecting rents and security deposits without turning over the funds to the receiver. Shortly thereafter, the bank filed an emergency motion to enforce the receivership order based on allegations that defendant Barrett Gregoire was substantially interfering with the receivership. The court issued a supplemental order, expanding the receiver's authority and placing the receiver in full control of the properties. The bank notified the court that the forbearance was no longer in place, and that it would proceed with foreclosure. The trial court denied the Gregoires' motions to set aside the trial court's grant of the bank's motions. On appeal, defendants argued that there was no final judgment so the order could have been amended without resort to post-judgment proceedings, and even if it was a final order, the court erred in denying their request for relief and in entering judgment of default. Finding no reversible error in the trial court's decision, the Supreme Court affirmed. View "TBF Financial, LLC v. Gregoire" on Justia Law

In 2002, defendant Richard Hardie borrowed money from Brattleboro Savings & Loan Association in order to purchase a vacation home in Weathersfield. The loan was secured by a mortgage on the property and included a "second home rider" clause, asserting that the property was not a primary residence. Hardie was married to intervenor-appellee Lisa Mangini at the time, but was the sole owner of the property, and Mangini did not sign either the promissory note or the mortgage. Hardie twice refinanced the property without Mangini's participation, both with second home riders. By 2007, Hardie and Mangini's marriage was deteriorating. Mangini left the couple's New Jersey home and moved into the Weathersfield property. In 2008, Mangini filed for divorce in Vermont. In her divorce filing, Mangini claimed that the property had become her primary residence as of May 2007. Also in the divorce filing, Mangini requested "an award of the Weathersfield home and the adjoining land either without any encumbrances, or, in the alternative, that [Hardie] be responsible for paying off and releasing the mortgage[] to [Brattleboro Savings]." While Mangini was occupying the property and the divorce was pending, Hardie refinanced the mortgage on the Weathersfield property. The 2008 refinancing was completed without Mangini's participation, and Hardie again claimed that the property was a second home. In 2011, Brattleboro Savings commenced a foreclosure action on the property, naming only Hardie as a defendant. Despite not being named in the foreclosure case, Mangini filed an answer asserting an affirmative defense that she had established a homestead interest in the property prior to the 2008 mortgage, and that therefore the 2008 mortgage was "inoperative to convey" her homestead interest. Brattleboro Savings filed two motions for summary judgment, one requesting a foreclosure judgment against Hardie and the second seeking judgment against Mangini on her homestead claim. Mangini filed a cross-motion for summary judgment, detailing for the first time her claim that she had acquired an equitable interest in the property by her divorce filing. Brattleboro Savings appealed a superior court's decision denying its motions for summary judgment and granting Mangini's cross-motion for summary judgment, finding that Mangini held title to the Weathersfield property free and clear of a mortgage to plaintiff. The superior court ruled that the mortgage was inoperative because Hardie, mortgaged the property without the participation of Mangini in violation of 27 V.S.A. section 141(a). Upon review of the matter, the Supreme Court reversed the grant of Mangini's motion for summary judgment and the denial of Brattleboro Saving's motions for summary judgment, and remanded the case for further proceedings.View "Brattleboro Savings & Loan Assn. v. Hardie, et al." on Justia Law

In July 2003, Michael Bandler and Michael Bandler & Company, Inc., (collectively “Bandler”) sued Charter One for various claims based primarily on Charter One’s alleged failure to honor advertising promises and other representations in connection with Bandler’s checking account at Charter One. Charter One moved to dismiss the case on the ground that Bandler had failed to exhaust his contractual remedy of arbitration before the American Arbitration Association (AAA) as required by Bandler’s depositor agreements with Charter One.  The trial court granted Charter One’s motion to dismiss and indicated that the parties should arbitrate Bandler’s claims as agreed by contract.  The trial court issued a final judgment in favor of Charter One in November 2003, and subsequently denied Bandler’s post-judgment motions for relief. In November 2004, Bandler made a demand to Charter One to arbitrate under the arbitration clauses in his depositor agreement with Charter One, thereby initiating an arbitration proceeding before the AAA.  Bandler’s initial arbitration demand did not include any class-based claims. The issue before the Supreme Court was whether the superior court had authority to review questions regarding arbitrability in the midst of an arbitration, and outside of the specific review provisions in the Vermont Arbitration Act (VAA). Upon review, the Supreme Court concluded that it did not, and reversed the superior court’s ruling concerning the arbitrability of class claims in this case. View "Bandler v. Charter One Bank " on Justia Law

This case was an interlocutory appeal from the trial court's denial of Appellant RBS Citizens, N.A.'s motion for a writ of attachment to Appellee Jan Ouhrabka's property, which Appellee owned jointly with his wife as tenants by entirety.  The trial court held that a creditor like RBS cannot attach property owned jointly by a debtor and a nondebtor when they hold that property as tenants by entirety.  RBS contended on appeal that the estate of tenancy by entirety is an anachronism whose continuing utility should be reconsidered.  In the alternative, RBS argued that Vermont law did not explicitly preclude granting a creditor prejudgment attachment where the property is held jointly by the debtor and a nondebtor in a tenancy by entirety.  Upon review of the applicable legal authority, the Supreme Court disagreed with RBS' argument and affirmed the lower court's decision. View "RBS Citizens, N.A. v. Ouhrabka" on Justia Law