









2014 VT 126










Hayes and Hayes-McGraw v. Town of
Manchester Water & Sewer Boards and Mountain View Estates Homeowners
Association (2013-277)
 
2014 VT 126
 
[Filed 21-Nov-2014]
 
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@state.vt.us 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.
 
 



2014 VT 126



 



No. 2013-277



 



Jeffrey D. Hayes and Deborah
  Hayes-McGraw


Supreme Court




 


 




 


On Appeal from




     v.


Superior Court, Bennington
  Unit,




 


Civil Division




 


 




Town of Manchester Water &
  Sewer Boards and
Mountain View Estates Homeowners Association


May Term, 2014




 


 




 


 




Katherine
  A. Hayes, J.




 



Richard H. Coutant of Salmon & Nostrand, Bellows Falls,
for Plaintiffs-Appellees.
 
Stephen L. Saltonstall, Manchester Center, for
Defendant-Appellant Town of Manchester.
 
Lon T. McClintock, McClintock Law Office, P.C., Bennington,
for Defendant-Appellant
  Mountain View Homeowners Association.
 
 
PRESENT:  Reiber, C.J., Dooley, Skoglund, Robinson and
Crawford, JJ.[1]
 
 
¶ 1.            
ROBINSON, J.   This case involves the power of a court
to require an estate to create a trust to satisfy feared future claims against
the estate, as well as the proper application of the dead man’s statutes, 12
V.S.A. §§ 1602-1603.  Developers of a residential subdivision died,
triggering various claims by and against their estates relating to the estates’
responsibilities for the subdivision’s private roadway, water, and sewer
infrastructure.  The Town of Manchester appeals a superior court decision
denying the Town’s request that the court create a trust from the assets of the
estates to pay for repairs, maintenance, and improvements to the subdivision’s
sewer system to protect the Town’s water supply. A group of homeowners
separately appeals the trial court’s denial of their request for a ruling that
the estates have a legal obligation to dedicate the infrastructure to the Town
and, until that happens, to maintain the infrastructure at their expense. 
We affirm the superior court’s refusal to create the trust requested by the
Town, but reverse the court’s denial of the homeowners’ request for a ruling on
their claims, and remand for reconsideration of those claims based on the
evidence, including evidence that the trial court previously excluded under the
dead man’s statute, to determine whether an enforceable promise was made
concerning maintenance of the infrastructure pending its dedication to the
Town.
¶ 2.            
The parties stipulated to the basic facts.  In the late 1970s and
early 1980s, Richard Hayes developed a subdivision called Mountain View Estates
on land jointly owned by him and his wife, Nadine Hayes, in the Town of
Manchester.  The subdivision grew to include forty residential homes, a
school building, and a chiropractic clinic on forty-four lots.  It is by
now essentially built out, and no further sales of lots for additional building
are likely.  
¶ 3.            
The subdivision plan was approved by the Town and the state, and the
water and sewer systems were permitted.  The subdivision plan did not
include any specific plans or requirements for dedication of its two privately
owned roads or water and sewer systems to the Town.  Richard Hayes
initially supplied water to the subdivision through his water company, which he
sold to the Town in 1982 along with the water and sewer lines underlying nine
of the lots in the subdivision.  Since then, the Town has supplied the
water for the entire subdivision.  The Hayeses continued to own the
remaining portions of the subdivision’s water and sewer systems, as well as the
roadways, until they were simultaneously killed in a car accident in
2004.  The sewer system includes underground lines and manholes that
convey effluent by gravity to a pump station consisting of a holding tank and
two submersible pumps.  From the pump station, effluent is carried through
an underground force main to the municipal sewer system, ending up at the
Town’s wastewater facility.
¶ 4.            
From the sale of the first lot in about 1981 until his death in 2004,
Richard Hayes paid for maintenance and plowing of the roads that ran through
the subdivision and maintained the subdivision’s sewer system and the portion
of the water system that he and his wife still owned, without charge to the
homeowners.
¶ 5.            
In 2004, the Hayeses were killed in a car accident.  A probate
proceeding was opened in connection with their individual estates, and the
Hayeses’ adult children, Jeffrey D. Hayes and Deborah Hayes-McGraw, were
appointed co-administrators.  In August 2005, the Town filed a “claim,”
which the estates denied, asking that estate funds be set aside for updating
and servicing the subdivision’s water and sewer systems.  The probate
court allowed the claim and also granted the homeowners’[2] motion to intervene in the proceeding to
protect their rights with respect to the access, operation, maintenance,
inspection, repair, and improvement of the subdivision’s sewer, water, and road
infrastructure.  During the probate proceeding, the Town and the
homeowners raised related issues concerning the subdivision’s infrastructure,
but the legal issues raised by each on appeal are distinct.  For
simplicity, we discuss the pertinent facts, procedural background, and legal
issues raised by each appellant separately.
I.
The Town’s Appeal
¶ 6.            
The Town’s primary concern in the proceedings below was that the
subdivision’s sewer system, which was owned and managed by the estates, was in
disrepair and threatened the Town’s water supply.  In September 2008,
after a multiple-day hearing, the probate court ordered the estates to set
aside $1 million to inspect the subdivision’s water and sewer systems and to
make any necessary updates and repairs, and to dedicate the updated systems to
the Town.
¶ 7.            
The estates appealed the probate court’s order to the civil division of
the superior court, which considered the case in a de novo hearing.  See
12 V.S.A. § 2555 (authorizing appeals of probate orders to civil division
of superior court); In re J.C., 169 Vt. 139, 143, 730 A.2d 588, 590
(1999) (stating that superior court “sits as a higher court of probate,
considering the case anew as if no prior proceeding had occurred in the probate
court”).
¶ 8.            
In July 2009, the superior court denied the estates’ motion for summary
judgment, in which they argued that the Town’s and the homeowners’ claims
against the estates were time-barred because the claims were not presented
within four months of the first publication of the estates’ notices to
creditors.  See 14 V.S.A. § 1203(a)(1) (“All claims against a
decedent’s estate which arose before the death of the decedent . . .
are barred . . . unless presented . . . within four months
after the date of the first publication of notice to creditors if notice is
given in compliance with the rules of probate
procedure . . . .”).  The court ruled that (1) the
estates’ motion was procedurally nonconforming because it failed to contain
specific citations to the record, as required by Vermont Rule of Civil
Procedure 56; and (2) even if not procedurally deficient, the motion would be
denied on its merits because neither the Town nor the homeowners had set forth
“claims” as contemplated under § 1203.
¶ 9.            
The superior court held a hearing over five days between early August
and late November 2012.  With respect to its request that the court
require the estates to set up a trust to finance repairs and maintenance to the
subdivision sewer system, the Town presented testimony that: (1) the entire
subdivision is within the Town’s aquifer-protection area; (2) the pump station
and some of the houses are located such that in the event of a leak, spill, or
other failure, it would take a maximum of two years for pollution to migrate
into and foul the Town’s aquifer; (3) the Town’s water wells and pump station
are situated so that anything leaking from the subdivision sewage pump station
naturally flows to the Town’s wellhead; (4) users of the subdivision sewage
system sometimes flush rags into the system, thereby clogging the pumps; (5)
during and following Hurricane Irene, the electric power needed to operate the
pump station was out for two days; (6) the co-administrators were not
performing regular preventive maintenance on the system, including flushing the
sewer lines; (7) the sewage system had not been tested or certified; and (8)
the system needed substantial modifications to protect the Town’s
aquifer—including replacement of some pipes, repair of a leak, installation of
a standby electric generator or emergency storage tank, installation of an
alarm dialer that provides telephonic warnings of failure, installation of a
new pump and meters, and periodic pressure testing of the wet well.  
¶ 10.        
On the basis of this evidence, the Town asked the court to require the
estates either: (1) to set aside $934,800 in a trust to improve and maintain
the sewage system, in addition to monies in trust in connection with the water
system and roads,[3]
or (2) to dedicate the entire infrastructure to the Town accompanied by a lump-sum
payment of $600,000.[4] 

¶ 11.        
The estates’ expert offered contrary testimony, explaining that the
Town’s expert’s video inspection was compromised by a failure to flush out the
system beforehand, that the pumping station and sewage system generally were
compliant with the standards in effect at the time they were installed, that
the system was properly built and installed, that the pumping station was still
in good working order at the time of trial, that there were a number of similar
systems still functioning properly throughout the state, and that the very
significant changes to the system proposed by the Town were  unnecessary.
¶ 12.        
After examining the conflicting testimony of the parties’ experts, the
court found that the subdivision’s current water and sewage systems did not
present “a significant and imminent risk to the Town’s water supply.”  In
the court’s view, the estimates of the Town’s experts as to the repairs needed
for those systems “went far beyond what would be reasonably necessary to keep
the thirty-year-old systems in good working order.”  The court declined to
impose a constructive trust and concluded that injunctive relief was not
necessary to protect the Town’s water supply by addressing perceived shortfalls
in the subdivision’s sewer system because “the existing monitoring program is
likely to be reasonably effective in detecting leakage” from the pump station.
¶ 13.        
On appeal, the Town takes issue with the superior court’s findings and
conclusions, emphasizing its evidence that the subdivision’s sewer system
presents a threat to the Town’s aquifer.  The Town argues on appeal that
the court erred by failing to analyze the applicability of 14 V.S.A. §
1210(b)(2), a statute that authorizes the court to set up a trust to cover
“future payment, or possible payment, on the happening of the contingency or on
liquidation,” despite multiple invocations of that statute by the Town. 
According to the Town, instead of evaluating the Town’s claim under this
statute, the court considered only the Town’s common-law constructive trust
argument and improperly subjected the Town’s claims to the special burden of
proof associated with claims for injunctive relief.  Pointing to decisions
in which this Court has emphasized a trial court’s duty to decide the issues
presented by the parties, the Town asks us to hold that § 1210(b)(2) applies in
this case, and remand for a determination of the how much money the estates
should set aside in trust to repair, upgrade, and operate the sewage system.
¶ 14.        
The estates respond that the Town waived this argument.  In
connection with the estates’ motion to dismiss the Town’s claim as untimely,
the superior court ruled that the Town’s concern about the potential for a
failure of the subdivision’s sewer system, and the threat that would pose to
the Town’s drinking water source, was not a “claim” as defined in 14 V.S.A.
§ 1203 and was thus not time-barred.  Rather, the court ruled, any
claim by the Town had not yet arisen, as there had been no failure of the sewer
system that would jeopardize the town’s water supply.  The court
reaffirmed this conclusion in its final order, and the Town did not challenge
that conclusion—which benefitted the Town with respect to the question of
whether its claim was timely.  Given that both § 1203(a) and
§ 1210(b)(2) are part of the same chapter concerning settlement of claims
in probate proceedings, the estates assert that it would be inconsistent for
the Town to argue that it had not submitted a “claim” for purposes of
§ 1203(a), but that it had for purposes of § 1210(b)(2).  The
estates further contend that, even if not waived, the argument fails on its
merits because the court specifically refused to create a constructive trust
under the common law, its ruling was supported by sufficient evidence, and 14
V.S.A. § 1210(b)(2) does not establish any particular standard for the
creation of a trust or require anything beyond the discretionary findings made
by the court in denying the Town’s request for a trust.
¶ 15.        
We review the superior court’s discretionary decision not to establish a
trust deferentially.  Weed v. Weed, 2008 VT 121, ¶ 16, 185 Vt.
83, 968 A.2d 310 (“We review equitable remedies, like the creation of a
constructive trust, for a trial court’s abuse of discretion.”).  We will
uphold the trial court’s factual findings unless they are clearly erroneous or
unsupported by evidence in the record, but we review legal questions, such as
whether § 1210(b)(2) potentially applies in this case, de novo.  See First
Quality Carpets, Inc. v. Kirschbaum, 2012 VT 41, ¶ 15, 192 Vt. 28, 54
A.3d 465 (“Factual findings underlying the court’s decision will be upheld
absent clear error, while the court’s legal conclusions are reviewed de
novo.”).
¶ 16.        
We accept the superior court’s factual findings as supported by
substantial evidence, offered primarily through the estates’ expert, and
conclude as a matter of law that the Town has not established a claim,
contingent or otherwise, of the sort for which § 1210(b)(2)(a) offers
potential security.[5] 
That statute, entitled “Claims not due and contingent or unliquidated claims”
provides in relevant part:
 
(a) If a claim which will become due at a future time or a contingent or
unliquidated claim becomes due or certain before the distribution of the
estate, and if the claim has been allowed or established by a proceeding, it is
paid in the same manner as presently due and absolute claims of the same class.
 
 
(b) In other cases the executor or administrator, or . . . the probate division
of the superior court, may provide for payment as follows:
 
 
. . . . 
 
 
(2) arrangement for future payment, or possible payment, on the happening of
the contingency or on liquidation may be made by creating a trust, giving a
mortgage, obtaining a bond or security from a distributee, or otherwise.
 
14 V.S.A. § 1210.  The
plain purpose of the provision is to provide security to a claimant who has a
contingent claim, or other claim that may or will mature in the future against
an estate.
¶ 17.        
Although not defined in chapter 66 of Title 14, the word “claim” in
statutes that establish deadlines for filing claims in probate proceedings
generally “means those obligations which are in the broad sense of the term,
debts and would include obligations arising out of contract express or
implied.”  Matey v. Estate of Dember, 774 A.2d 113, 126-27 (Conn.
2001) (citation omitted).  While our statutes expressly allow for the
timely filing of contingent claims, 14 V.S.A. § 1203(a), and further allow
the court to create a trust from estate assets based on such claims, id.
§ 1210(b)(2), those claims—though not yet matured—nevertheless must be
“existing obligations . . . capable of proof.”  Matey, 774 A.2d at
at 127.  Here, there was no contract between the Town and the Hayeses,
either express or implied, regarding the sewer system, and thus no contractual
obligation that could be triggered by some defined contingency.  The
Town’s concern that the subdivision’s sewer system could malfunction and
potentially threaten the Town’s aquifer at some time in the future is
essentially a concern about the possibility of a future claim arising and does
not constitute a contingent claim of the sort addressed by
§ 1210(b)(2).  We need not decide whether evidence of a likely and
imminent tortious invasion may in some case be so strong as to elevate a
concern about a future harm to the level of a contingent claim.  In this
case, based on the superior court’s well-supported findings, the Town has no
present or contingent future claim against the estates; therefore, the court
did not err in failing to expressly address § 1210(b)(2).  Nor did
the court abuse its discretion, given the record before it, in concluding that
the Town was not entitled to equitable or injunctive relief in the form of a
common law constructive trust.  Accordingly, we affirm the superior
court’s judgment against the Town on this issue.
II.
The Homeowners’ Appeal
¶ 18.        
In 2004, shortly after the Hayeses were killed in the car accident, the
co-administrators of the Hayeses’ estates sent a letter to the homeowners in
the subdivision stating that, effective immediately, the homeowners would be
responsible for maintaining and plowing the subdivision’s roads.  The
homeowners refused to assume that responsibility, and the estates have
continued to maintain the roads and water and sewer systems at their own
expense throughout this litigation.
¶ 19.        
In the probate proceeding, the homeowners argued that when they bought
their properties the Hayeses promised to maintain the roads at their own
expense and eventually pave them and dedicate them to the Town.  With
respect to the water and sewer infrastructure, they argued that the Hayeses
never disclosed to the homeowners that this infrastructure was privately owned,
and instead led them to believe that they were directly connected to Town-owned
facilities.  They sought an order requiring the estates to fund the infrastructure
maintenance pending dedication of the infrastructure to the Town.  After a
hearing, the probate court ordered the estates to set aside $1 million to
inspect the subdivision’s water and sewer systems and make any necessary
updates and repairs, to dedicate the updated systems to the Town, and to pave
the subdivision’s roads and dedicate them to the Town.  In so ruling, the
probate court denied the estates’ objection to admission of the testimony of
several homeowners regarding oral agreements between them and the Hayeses
concerning maintenance of the subdivision’s roads, ruling that the testimony
was admissible under an exception in the dead man’s statutes “to meet or
explain the testimony of living witnesses produced against” them.  12 V.S.A.
§ 1603.
¶ 20.        
On appeal de novo to the superior court, the homeowners requested that
the court order the estates to dedicate the infrastructure to the Town, to pay
the Town $600,000 should the Town accept the dedication, and to maintain the
infrastructure at the sole expense of the estates.  In support of their
request, they sought to prove that the Hayeses made an enforceable promise to
the homeowners to maintain the roads and then dedicate them to the Town. 
They pointed to one deed, from the Hayeses to the Norses, which provided that
maintenance of the roadway would be maintained by the Hayeses until such time
as the roadway was turned over to the Town of Manchester.[6]  The homeowners also sought to
introduce testimony of various witnesses concerning the Hayeses’ intentions
with respect to maintaining and dedicating the roads, and concerning various
promises made by Richard Hayes to individual homeowners in connection with the
maintenance and dedication of the roads.
¶ 21.        
The estates sought to exclude “the testimony of any witness concerning
conversations with or representations of the decedents on the issue of the
decedents’ responsibility for maintenance of any of the infrastructure at
Mountain View Estates, the decedents’ plans for the ultimate disposition of the
infrastructure, or any related matters,” based on the dead man’s statutes.
 See 12 V.S.A. §§ 1602-1603.  The first statute precludes a
party from testifying in his or her own favor when the other party to the
contract in issue is dead, except, in relevant part, “to meet or explain the
testimony of living witnesses produced against” that party.  Id.
§ 1602(1).  The second statute similarly restricts parties from
testifying about contracts they had with persons no longer living when an
executor or administrator is the other party to a proceeding.  Id.
1603.
¶ 22.        
The homeowners and the Town argued that the co-administrators had waived
any right to object to such testimony by testifying themselves to their
parents’ intent regarding the maintenance and disposition of the
infrastructure.  
¶ 23.        
In a mid-trial decision, the superior court concluded that the dead
man’s statutes applied, but that the estates “partially waived” the protections
under the statutes by not objecting during the probate division hearing to
Jeffrey Hayes’ testimony that his father intended to build out the
infrastructure and dedicate it to the Town once it was finished. 
Concluding that testimony concerning Richard Hayes’s statements to others
regarding his plan for the development and its infrastructure was admissible
“to meet or explain the testimony of living witnesses produced against them,”
the court ruled that testimony about statements of Richard Hayes regarding his
plan for the development were admissible.  However, the court declined to
consider any testimony by any person concerning any particular promises or
commitments made by Richard Hayes, as well as any testimony regarding Richard
Hayes’s statements concerning financial responsibility for maintaining the
infrastructure up to the time when it would be dedicated to the Town.
¶ 24.        
As a result of this ruling, the superior court declined to allow or
consider[7]
the testimony of a number of homeowners who would have testified that they
relied on Richard Hayes’s promise to maintain the roads and ultimately dedicate
them in agreeing to buy their properties.[8] 
The court apparently also struck testimony from the co-administrators
themselves, both of whom testified that they knew their father had promised the
homeowners that he would maintain the roads.[9]  In particular, Deborah testified
that her father had told her that he would maintain the roads until he turned
them over to the Town, and that she knew her parents had promised to maintain
the roadways for the homeowners until they were dedicated to the Town. 
Jeffrey likewise testified that he knew his father had told people that he
would take care of the roads.
¶ 25.        
In its April 22, 2013 decision on the merits, the superior court first
considered the enforceability of the alleged oral agreement to maintain and
repair the roads, water, and sewer system.  The court acknowledged that
the statute of frauds generally bars claims regarding oral agreements
concerning interests in real estate, but recognized that an equitable exception
applies if the proponent of the agreement can show that (1) there was an oral
agreement, (2) upon which they reasonably relied, (3) by changing their
position so that they cannot be returned to their former position, and (4) the
other party to the agreement knew of such reliance.  In re Estate of
Gorton, 167 Vt. 357, 361, 706 A.2d 947, 951 (1997).  The court
concluded that this exception did not apply because the homeowners failed to
prove that they had an oral agreement with the developers for the maintenance
and repair of the roads, water system, and sewer system until the Town accepted
their dedication.  Although the court found that the evidence presented at
the trial established unequivocally that it was Richard Hayes’s intention,
throughout his lifetime, to dedicate the subdivision water and sewer system to
the Town, and to offer the roads to be accepted as public roadways for which
the Town would assume maintenance responsibility, the court concluded that the
homeowners had not adduced “any credible evidence tending to show that there
was ever a meeting of the minds” on these matters.  Accordingly, the court
ruled that the homeowners were not entitled to an order requiring the estates
to pay for ongoing maintenance to any part of the infrastructure, could not
compel the estates to offer the infrastructure for dedication to the Town, and
were not entitled to any funding from the estates to pay for inspecting or
updating the sewer system.
¶ 26.        
The homeowners argue that the superior court committed reversible error
by: (1) improperly applying the dead man’s statutes to exclude testimony
concerning promises that the Hayeses made to certain homeowners; (2) concluding
that they did not enter into a binding contract with the Hayeses; and (3)
failing to consider their promissory estoppel argument.  
¶ 27.        
The homeowners first contend that the superior court improperly applied
the dead man’s statutes to exclude testimony from both the co-administrators
and certain homeowners that Richard and Nadine Hayes had promised the
homeowners that they would maintain the private roads in the subdivision until
those roads were dedicated to the Town.  According to the homeowners, the
co-administrators’ testimony was admissible because the co-administrators were
not parties to the alleged contract, and the homeowners’ testimony was
admissible because it was presented in response to the co-administrators’
testimony concerning promises Richard Hayes had made to homeowners.  We
agree on both counts.
A.
¶ 28.        
In essence, the dead man’s statutes restrict testimony concerning an alleged
contract with a person who is no longer living.  The statutes “must be
construed in favor of the challenged witness” because they were enacted to
allow testimony that was otherwise inadmissible at common law, rather than to
create rules of disqualification, and because it “can be the cause of
tremendous injustice by preventing proof of reasonable and valid claims.” 
In re Estate of Farr, 150 Vt. 196, 199, 552 A.2d 387, 390 (1988).  
¶ 29.        
As noted, § 1602 precludes a party from testifying in his or her
own favor when the other party to the contract is dead, unless certain listed
exceptions apply, including when the testimony is presented to meet or explain
the testimony of living witnesses produced against him or her.  Section
§ 1603 is similar to § 1602 but applies only when an executor or an
administrator is a party: “When an administrator is a party, the other party
shall not be permitted to testify in his own favor, unless the contract in
issue was originally made with a person who is living, . . . except
. . . to meet or explain the testimony of living witnesses produced against
him.”  In this case, § 1603 applies because this dispute is between
the co-administrators of the estates and the homeowners who allege that they
had a contract with the decedents.  See Farr, 150 Vt. at 198, 552
A.2d at 390.
¶ 30.        
In addition to the exceptions to disqualification recognized in these
statutes, this Court has recognized that the disqualification of testimony
based on the dead man’s statutes is waived if the party benefitting from the
statutes acts inconsistently with the statutory disqualification by, for
example, testifying in his or her own favor to the contract at issue or
examining the disqualified party about the contract.  Id. at 199,
522 A.2d at 390.  The benefitting party must act consistently with the
statutory disqualification “at all stages of the proceeding to avoid a finding
of waiver.”  Id. at 199, 552 A.2d at 390 (affirming trial court’s
finding of waiver where party seeking benefit of disqualifying statute
testified as to intent underlying contract in question).  “Thus, failure
to object in the probate court will be a waiver of the disqualification for all
further proceedings.”  Id.
¶ 31.        
With respect to the superior court’s reliance on the dead man’s statutes
to exclude testimony by either of the co-administrators, that decision was
erroneous for two reasons: neither of the co-administrators was a party to the
alleged contracts and neither of them testified in their own favor.  With
respect to the co-administrators’ testimony, this case is governed by In re
Estate of Maggio, 2012 VT 99, 193 Vt. 1, 71 A.3d 1130.  That case
involved the terms of an agreement to dissolve a partnership between a decedent
and a living party.  The trial court ruled against the estate, in part
based on interrogatory answers by the decedent’s widow, and primary
beneficiary, describing her understanding of the terms of the partnership
dissolution between decedent and the other party.  The decedent’s widow
appealed, arguing, among other things, that the trial court’s reliance on her
sworn testimony about the terms of the contract ran afoul of the dead man’s
statutes.
¶ 32.        
We affirmed, ruling in relevant part that the dead man’s statutes did
not preclude admission of the widow’s answers to interrogatories concerning her
understanding of the terms of the dissolution of a partnership agreement
between the decedent and his former partner for two independent reasons: the
wife had not been a party to the agreement between her husband and his former
partner, and the widow’s answers to interrogatories were to her detriment
rather than in her favor.  Id. ¶ 19.  The statutes bar
testimony only by surviving parties to a purported contract, not other witnesses
with knowledge of the agreement.  Id.  Moreover, the statutes
preclude living parties to a contract with a decedent from testifying in
their own favor, not from offering testimony against their own
interests.  Id.
¶ 33.        
Similarly, in this case, although the co-administrators are heirs to
their parents’ estates, neither of them was a party to the alleged oral
contracts between Richard Hayes and the homeowners.  Nor can their
testimony regarding their father’s promises to dedicate the infrastructure to
the Town upon completion of the subdivision and to maintain the subdivision
roads until that time be considered testimony in their favor.  As noted
above, Jeffrey Hayes testified that he knew from his parents’ arguments and
from letters given to homeowners that his father had told the homeowners he
would take care of the subdivision’s roads, and Deborah Hayes-McGraw testified
that her father told her he would maintain the roads until they were dedicated
to the Town and that she knew her parents had made such promises to the
homeowners in the subdivision.  Because Jeffrey Hayes was not a party to
the alleged oral agreements and neither he nor Deborah Hayes-McGraw testified
in the estates’ favor, the dead man’s statutes did not bar their testimony concerning
promises their father had made to homeowners about maintaining and dedicating
the subdivision’s infrastructure.[10] 
Thus, the superior court erred by excluding from consideration any of their
testimony.
B.
¶ 34.        
We also conclude that the superior court erred by excluding testimony
that the homeowners presented, or would have presented, concerning statements
Richard Hayes made to them about maintaining and dedicating the subdivision’s
infrastructure.  This testimony fits within the statutory exception of
testimony made “to meet or explain the testimony of living witnesses produced
against them”—in this case, the co-administrators.  12 V.S.A.
§ 1603.  Although the co-administrators’ testimony noted above was
not made in their favor, the co-administrators were witnesses produced against
the homeowners, and their testimony could be construed as establishing the full
extent to which promises were made to the homeowners.  Once the
co-administrators broached the subject of promises made to the homeowners in
their testimony, the homeowners had the right to meet or explain the nature and
extent of those promises.  
¶ 35.        
The homeowners’ response to the co-administrators’ testimony should not
have been limited to testimony concerning Richard Hayes’s general intentions
concerning maintenance and dedication of the roadways.  The
co-administrators’ testimony—including the testimony that should not have been
excluded from consideration by the superior court—opened the door under
§ 1603 to testimony concerning the scope and the details of specific
promises made to specific homeowners about maintenance and dedication of the
roadways.  Cf. Abbiati v. Buttura & Sons, Inc., 161 Vt. 314,
321-22, 639 A.2d 988, 992-93 (1994) (concluding that objection based on dead
man’s statutes waived where plaintiff opened door in her case-in-chief).
¶ 36.        
Further, the superior court’s erroneous decision to exclude from its
consideration most of the co-administrators’ and homeowners’ testimony
concerning promises that the Hayeses had made to the homeowners was plainly
prejudicial.  Disregarding that testimony, the court found no meeting of
the minds as to those promises concerning real estate and thus refused to
enforce the oral promises as an equitable exception to the Statute of
Frauds.  If the superior court had considered all of the testimony of the
co-administrators concerning their parents’ promises to homeowners, and the
specific testimony of several homeowners indicating that they relied upon
promises the Hayeses made to them about maintenance of the infrastructure
pending its dedication to the Town, the court could have concluded that the
equitable exception to the Statute of Frauds applied.  See In re Estate
of Gorton, 167 Vt. at 362, 706 A.2d at 951 (holding that court may enforce
oral agreement for transfer of land where plaintiffs can show existence of
agreement upon which other party knew plaintiffs had reasonably relied by
irretrievably changing their position).  Accordingly, the matter must be
remanded for the superior court to consider the additional evidence and to
determine anew whether there were enforceable promises concerning maintenance
of the infrastructure pending its dedication to the Town.[11]  The court may take additional
evidence if necessary to arrive at an informed decision.
C.
¶ 37.        
Finally, the homeowners argue that the superior court failed to consider
their promissory estoppel argument.  The doctrine of promissory estoppel
applies “where there is no contract, where the promise is gratuitous, and there
is unbargained-for reliance.”  Big G Corp. v. Henry, 148 Vt. 589,
594, 536 A.2d 559, 562 (1987) (quotation omitted).  At trial, the
homeowners argued that they relied upon an oral promise as part of an agreement
for the sale of real property.  On remand, the superior court should
address the homeowners’ promissory estoppel argument as an alternative theory
of recovery. 
Affirmed in part, reversed
in part, and remanded for further proceedings concerning the homeowners’ claims.
 
 



 


 


FOR THE COURT:




 


 


 




 


 


 




 


 


 




 


 


Associate Justice



 







[1] 
Justice Crawford was present for oral argument, but did not participate in this
decision. 


[2] 
In September 2005, a group of owners representing roughly two-thirds of the
lots in the subdivision formed an unincorporated association and were granted
party status in the probate proceedings.  Throughout this opinion, we
refer to the unincorporated association as the homeowners, even though not all
of the homeowners in the subdivision belong to the association and have
participated in these proceedings.


[3]
 The Town does not appeal the superior court’s ruling as it relates to its
requested relief concerning the roads and water system, but appeals only with
respect to the sewage system.
 


[4] 
Ultimately, the town selectboard, sewer board, and water board would have to
accept any dedication of the roads, sewer system, and water system,
respectively.  In its pleadings, the Town represented that the town
manager would strongly recommend that the respective boards accept the proposed
dedication on the terms proposed by the Town. 


[5]
 We do not rely on the waiver argument urged by the co-administrators,
although we acknowledge the tension between the Town’s position that it is not
subject to the provision governing timeliness of claims but can nonetheless
invoke a provision allowing the court to provide security for contingent
claims. 


[6]
 Wholly apart from any promises the Hayeses made to any other homeowners,
this agreement, clearly reflected in the Norse deed, would seem to settle the
question of the estates’ duty to maintain the road or roads necessary to
provide for ingress and egress to the property identified in that deed, and to
take reasonable steps to dedicate that stretch of road or roads to the
Town.  The record is not clear on the question of whether the estates’
obligations under the Norse deed necessarily cover the full extent of the
private roads in question, and, on appeal, the homeowners are not basing their
argument exclusively on the estates’ obligations by virtue of the Norse
deed.  For that reason, we do not reach the question of whether the Norse
deed alone compels the estates to maintain all the roads in question and
dedicate them to the Town.


[7]
 The court issued its ruling on the applicability of the dead man’s
statutes in response to a standing objection, after some of the challenged
testimony had come in.  The court’s ruling prohibited the introduction of
the forbidden evidence prospectively, and struck from the record evidence that
had been offered during the hearing prior to the court’s ruling.
 


[8]
 With respect to the sewer and water infrastructure, the homeowners
generally did not testify that Richard Hayes promised to maintain this
infrastructure at his expense.  Rather, the homeowners consistently
testified that Richard Hayes never disclosed his continuing ownership of water
and sewer infrastructure and thus they understood that the Town provided not
only their water and sewer services, but also the underlying
infrastructure.  The estates did not introduce any evidence suggesting
that the homeowners did know that the water and sewer infrastructure were
privately owned.
 


[9]
 The superior court did not specifically identify the co-administrators’
testimony in its ruling, but (1) its broad ruling prohibiting and striking testimony
about promises or commitments made by Richard Hayes encompasses this testimony;
(2) the trial court did not reference this testimony in its findings; and (3)
the court apparently did not consider it in reaching its conclusions.


[10]
 Insofar as Deborah Hayes-McGraw testified that her father told her, in
her capacity as a homeowner, that he would maintain the roads until they were
dedicated to the Town, so that she was a party to that particular agreement, we
do not rely on the rationale that she was not a party to the agreement in
ruling that the dead man’s statute did not apply.  We note that the
testimony was nonetheless contrary to her interests as co-administrator of the
estates.


[11]
 As noted above, with respect to the water and sewer infrastructure,
homeowners do not argue that Richard Hayes promised to maintain and dedicate
this infrastructure; rather, they argue that he never disclosed to them in the
first place that he continued to own this infrastructure, and led them to
believe that the Town did.  On remand, the trial court should consider the
factual and legal issues surrounding homeowners’ claims concerning the water
and sewer infrastructure distinct from those relating to the roads.
 



