Main Street Landing v. Lake Street Associates, No. 494-04 Cncv (Katz, J.,
Sept. 7, 2004)


[The text of this Vermont trial court opinion is unofficial. It has been
reformatted from the original. The accuracy of the text and the
accompanying data included in the Vermont trial court opinion database is
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STATE OF VERMONT                                       SUPERIOR COURT
Chittenden County, ss.:                             Docket No. 494-04 CnCv




MAIN STREET LANDING LLC

v.

LAKE STREET ASSOCIATES, INC.




                         FINDINGS OF FACT
                      CONCLUSIONS OF LAW AND
                        NOTICE OF DECISION
       The parties have found themselves in a dispute regarding plaintiff
developer’s right to terminate a parking easement which defendant
property owner has enjoyed for some years and substitute another form of
parking.
                           FINDINGS OF FACT

1.      Plaintiff Main Street Landing is the successor in title to Alden
Development, both companies having been active in the development of a
substantial parcel of waterfront land in Burlington.

2.       Late in 1985, Alden conveyed to defendant’s predecessor in title
the property known as the McKenzie Building. That conveyance
constituted a subdivision from Alden’s far greater parcel. Because it was
a subdivision, it required substantial oversight by the City. The McKenzie
parcel that resulted included the actual building and only a minimal
amount of land surrounding it. No parking for tenants or their clients
would have been possible with the bare land and structure conveyed.
Being a building in an urban setting, it would be useless without parking.

3.      The parties met this parking issue by including the following
parking provision in the deed to defendant’s predecessor:

       There is included in this conveyance the license and right to use
      the number of parking spaces required by the City of Burlington
      Planning Commission in connection with the granting of
      Certificate of Appropriateness #85-524 but not to exceed 65
      spaces under any circumstances, which right shall be appurtenant
      to the above described Premises, without cost to Grantee [now
      defendant Lake Street] unless or until the provisions set forth in
      subparagraph 2 occur, and shall be subject to the following rights
      which are reserved to the Grantor [now plaintiff Main Street]:

             1. Grantor shall have the right to designate the location of
             alternative parking spaces to those initially designated in
             this deed at any point without 300 feet of any boundary of
             the Premises;

             2. Grantor shall have the right to require Grantee to
             relinquish the parking spaces provided pursuant to this
             paragraph when a multi-story parking structure is
             constructed by Grantor or its successors for occupants of
             the waterfront area and/or the public in connection with
             the general development of the waterfront area, at which
             time the Grantee shall have the option to rent the same
             number of parking spaces as are provided under this
             paragraph in the parking structure described herein at the
             then-prevailing rental rate.

Now, plaintiff has given defendant notice that it has constructed such a
multi-story parking structure, so plaintiff is demanding defendant
relinquish the pre-existing parking arrangements. Simply put, plaintiff
Main Street considers the pre-existing 65-space easement or license at an
end and has given notice that defendant Lake Street may no longer expect
to park tenant or client vehicles on Main Street property.

4.      The original Purchase and Sale Agreement between these parties’
predecessors contained some different language regarding parking rights
for the McKenzie Building. In pertinent part, its provisions were as
follows:

      Parking. . . . Seller shall provide sixty-five parking spaces to meet
      all the zoning requirements of the City of Burlington in the
      approximate locations as shown on Exhibit “B” attached hereto
      unless a lesser amount is granted under permits and then the
      lesser number of spaces shall be provided by Seller . . . . Seller
      shall have the right to relocate the parking spaces to within three
      hundred (300) feet of the Premises. Purchase shall notify Seller
      as soon as possible of the accurate number of parking spaces
      required for Purchaser’s Project, including any reductions
      permitted by the state and the City of Burlington during the
      permit process. All such parking spaces shall be provided
      without charge until such time as parking facilities are
      constructed in connection with the general development of the
      waterfront area by Seller within 300' of the Premises. At such
      time as such parking facilities become available, Purchaser shall
      relinquish the spaces provided pursuant to this paragraph and
      shall rent the number of spaces needed for the Premises in the
      parking facility at the then prevailing rental rate, consistent with
      the City of Burlington zoning regulations. All obligations of the
      Seller set forth herein including all future agreements with the
      City of Burlington to reserve such parking for the benefit of the
      Premises shall be set forth in the deed of conveyance and shall
      run with the land conveyed therein.

The italicized language was added some months after the original
purchase and sale agreement was executed. It was added during the
period the parties were going through the process of obtaining subdivision
approval for their transaction, and only three days before “final staff
approval.” The inference is clear that this language was added in order to
facilitate such approval.

5.     Burlington City officials reviewed the purchase and sale contracts
“to make sure the transaction flowed with the zoning permit.” (B.
Mossman testimony.)

6.      Burlington’s Zoning Ordinance at the time required, for parking:

      Location: If the required off-street parking space cannot
        reasonably be provided on the same lot as the building it serves,
        such space may be provided on other property located not more
        than four hundred (400) feet distant, as measured along the
        nearest pedestrian route.

EX Q.

7.      At the time of the 1985 conveyance between these parties’
predecessors in title, Alden Waterfront Corporation, predecessor of Main
Street Landing, had detailed, proposed site plans including a large
“parking structure” immediately adjacent to the McKenzie Building. EX
11.

8.       Suitable parking was important to the McKenzie Building for two
distinct, although not unrelated reasons—the commercial need to provide
it to prospective tenants and their clients, and the need to satisfy City
development regulators.

9.      Defendant’s predecessor, original recipient of the McKenzie
Building conveyance, is Barry Mossman. He is, and was then, an
experienced real estate developer. The dual considerations of satisfying
the marketplace demands of prospective tenants and the regulatory
demands of the City for parking were not lost on him.
       Having the McKenzie building succeed as a commercial venture
was also important to plaintiff’s predecessor—Alden. Its principal Paul
Flinn did not want an empty building in the middle of his project.
(J.Knapp testimony.)

10.     The garage constructed by Main Street Landing, known as the
Cornerstone, has about 100 spaces, 50 available to the general public, the
balance rented monthly by permit. It is located 1,200+ feet from the
McKenzie Building.

                         CONCLUSIONS OF LAW

1.       Deeds are to be interpreted according to their plain language.
Morrisseau v. Fayette, 164 Vt. 358, 366 (1995). Nevertheless, should that
language prove ambiguous, because it could support two or more readings
on the point in question, it is the duty of the court to resolve the legal
question of proper interpretation, so as to ascertain the intent of the
parties. Vermont Nat'l Bank v. Chittenden Trust Co., 143 Vt. 257, 266
(1983) (“It is hornbook law that construction of contract terms is a matter
of law and not a factual determination.”). In the end, the long-standing
purpose of deed construction has always been the effectuation of the
actual intent of the parties at the time of the bargain. Blanchard v. Morey,
56 Vt. 170, 174 (1883).

2.       In consideration of whether an ambiguity exists, the court may
read the pertinent language against the context of existing circumstances.
Morriseau, 164 Vt. at 366; Isbrandtsen v. North Branch Corp., 150 Vt.
575, 578 (1988) (Plain meaning cannot exist in a vacuum, evidence
admitted as to circumstances surrounding the making of agreement). This
view is supported by the Restatement (Second) of Contracts §212 cmt. b
(1981), “Any determination of meaning or ambiguity should only be made
in the light of the relevant evidence of the situation and relations of the
parties, the subject matter of the transaction . . . .” See also M. Glasser &
K. Rowley, On Parol: the Construction and Interpretation of Written
Agreements and the Role of Extrinsic Evidence in Contract Litigation, 49
Baylor L. Rev. 657, 665–69 (1997) (“Unlike all other primary rules of
construction, this rule affirmatively invites the trial court to consider
extrinsic proof even in the absence of a pleading of, much less a finding
of, ambiguity, and even in those cases in which the parties stipulate that
the contract is fully integrated.”).

3.        One obviously pertinent circumstance would have been the
zoning ordinance then governing use of development of this site. See,
e.g., Hollis v. Garwell, Inc., 974 P.2d 836, 844 (Wash. 1999) (using
zoning statutes to give otherwise ambiguous terms plain and definite
meaning); see also Restatement (Second) of Contracts § 201 cmt. c (1981)
(illustrating that courts can find mutual understanding through an existing
statute that the parties were aware of at the time of drafting). Quite
clearly, in this case, the parties were very attuned to the need to conform
to zoning. They amended their purchase and sale agreement at what must
have been a critical point of the administrative review process, to make
explicit their intent to comply with zoning. Even the ultimate deed, on
which plaintiff rests its case, referred to the “parking spaces required by
the City,” although perhaps in the strict context of number. There is no
doubt that administrative approval was an issue always staring at the 1985
parties. The law will always prefer an interpretation which makes for
compliance with applicable law. See Restatement (Second) of Contracts §
203(a); 11 S. Williston & R. Lord, A Treatise on the Law of Contracts §
30:11, at 453 (4th ed. 1999) (“Consonant with the principle that all parts
of a contract be given effect where possible, an interpretation which
renders a contract lawful is preferred to those which render it unlawful.”).

4.      Against this background, we return to the provisions of the
conveyance between these parties’ predecessors. Plaintiff Main Street
would read the pertinent instrument as providing a duty to provide the 65
spaces, subject to complete defeasance at such time as it builds a parking
garage, with no limitation whatever regarding the location of that garage.
Although the garage must be available to occupants of the waterfront area,
or the general public, there is actually no limitation regarding its location,
argues Main Street. Indeed, it need not even be on the Waterfront.

       Defendant Lake Street, by contrast, ties any defeasance of the 65
space parking easement to a garage located so as to satisfy Burlington’s
zoning ordinance, which requires proximity to its McKenzie Building, in
the provision of parking.
       Either of these readings is fairly arguable from the mere words
employed.

5.       The more persuasive of these alternatives is that the conveyance
includes the “parking spaces required” by the City. Although the deed
certainly includes the word “number,” to so interpret it as mandating
sufficient number, while ignoring the required proximity, would make no
sense. Why would the grantee ever pay money for a commercial property,
knowing that he was likely to face future problems with City
administrators over parking too far from his building? Particularly when
the issue was clearly flagged by the documents, the only persuasive
conclusion is that compliance was intended. Of course, this conclusion is
only abetted by the commercial interest of supplying one’s tenants with
immediately adjacent parking. Contemporary Vermont tenants do not
want to have to walk a quarter mile in Vermont winters to get to and from
their cars; they don’t want to tell their clients that such will be required.
At the time these parties negotiated the deed, there was no conflict
between number of spaces and their proximity. The developer’s
predecessor, Alden, had filed detailed plans showing a “parking
structure,” the very words of the deed, immediately adjacent to McKenzie,
and thereby satisfying the 300 foot requirement.

6.      Plaintiff Main Street also makes much from the language in the
purchase and sale agreement and an early draft of the warranty deed.
Both of these documents included specific language guaranteeing that the
parking facility triggering the end of defendant’s parking easement would
be within 300 feet of the property. This “within 300 feet” language was
similar to the language that appears in the final deed in the preceding
paragraph about alternative parking spaces. From these documents, Main
Street argues that the “within 300 feet” limiting language was
purposefully omitted by the parties from the second paragraph and should
not be read into it.

        Breaking this conclusion down into its parts, we find that it rests
upon an inference from the circumstances—namely that what was there in
the purchase agreement and the first draft of the deed was purposefully
removed from the final deed—and another canon of construction, which
states that “the inclusion of certain language in one part of a document
indicates that it was intentionally omitted from a related part.” Howard
Bank v. Lotus-Duvet Co., Inc., 1158 Vt. 393, 396 (1992) (citing Mt.
Mansfield Television, Inc. v. Farrell, 126 Vt. 103, 105 (1966)). Setting
aside the problem of looking at prior and contemporary agreements, we
have two competing interpretations based on circumstances and canons of
construction. The question is whether we should apply the plaintiff’s or
defendant’s canon.

7.      The answer is somewhat circular. All the rules of construction
have as their single goal ascertaining the intent of the contracting parties.
The application of these rules depends “upon the intention of the parties as
it may be discovered from the full text of the contract and the nature of the
transaction involved.” Mt. Mansfield, 126 Vt. at 105. We conclude for
the same reasons stated in the previous paragraphs that the nature of this
transaction was to subdivide and develop a viable piece of commercial
realty. At the time of the deed, the zoning ordinances in Burlington
required parking for such realty to be within 400 feet of the property.
Without such parking, this property would have been in violation of the
ordinance and subject to losing its zoning permits. Without its permits,
the defendant’s predecessor in title would have been unable to rent space
to commercial tenants, and the property would have been worthless.
Beyond permits, though, a future loss of parking would be an investment
high-wire act staged by the Three Stooges —you may not guess just
when, but you know it’s going to fail. We do not believe that it was the
parties’ intention to put the considerable McKenzie Building investment
at such a risk. While plaintiff makes a legalistic, circumstantial case for
inferring the restriction out of the deed, we note that exclusion of the
important 200 foot limit was not explicit. We, therefore, conclude that
defendant’s construction is the stronger, as it represents the more likely
intention of the parties at the time of the deed.

8.       As something of an afterthought, plaintiff’s argument seems
inevitably to require the conclusion that its predecessor, Alden, added the
300 foot requirement to satisfy Burlington zoning scrutiny, then deleted it
when such scrutiny was past. Such an inference of fraud we will not
lightly make.

                          NOTICE OF DECISION

        The court therefore expects to enter a judgment declaring that
plaintiff Main Street Landing may not terminate defendant Lake Street
Associates’ right to 65 parking spaces, on the strength of spaces being
available in the Cornerstone Garage south of Union Station.
Dated at Burlington, Vermont, _________________, 2004.



                                 __________________________
                                                      Judge
