2008 VT 121



Weed v. Weed (2007-338)
 
2008 VT 121
 
[Filed 29-Aug-2008]
 
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, Vermont Supreme
Court, 109
  State Street, Montpelier, Vermont05609-0801
of any errors in order that corrections may be made before this opinion goes to
press.


 
 

2008 VT 121 

 

No. 2007-338

 

Jane Weed


Supreme Court


 


 


 


On Appeal from


     v.


Franklin Superior Court


 


 


 


 


Leah Weed, James Weed, Cynthia
  Weed, 
Benjamin Weed, Baxter Weed and Olivia Weed


May Term, 2008


 


 


 


 


Alden
  T. Bryan, J. (Ret.), Specially Assigned


 

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, ___ Vt. ___, 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. 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 (1890) (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; 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 (1981).  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 care for an elderly parent may constitute valid
consideration, it does not in this case.  Both parties must regard a
bargained-for promise or act as consideration.  Philpot v. Gruninger, 81 U.S. 570, 577 (1871). 
There is no indication in the record that either party regarded the caretaking
as consideration, or that Leah transferred the Enosburg land to James and
Cynthia in exchange for their caretaking.  Whatever services James and
Cynthia provided to Leah, those services did not constitute consideration so as
to transform the gift of land into a sale.  The court erred in injecting
this notion into the case.
¶ 15.         We
are therefore persuaded that the purported exchange of consideration was a pretense,
and that the transfer was a gift not authorized by Leah’s reserved right to
sell.  Leah reserved a right to sell the Enosburg property, not a right to
give it away.  The 2001 deed is invalid and, therefore, the 1999 deed
remains in effect.
¶ 16.         We
turn now to the issue of whether the lower court properly placed two-thirds of
the Sheldon land in a constructive trust held by Jane for the benefit of James
and Cynthia.  We review equitable remedies, like the creation of a
constructive trust, for a trial court’s abuse of discretion.  Legault v. Legault,
142 Vt. 525, 531, 459 A.2d 980, 984 (1983).  This is a deferential
standard that “requires a showing that the trial
court has withheld its discretion entirely or that it was exercised for clearly
untenable reasons or to a clearly untenable extent.”  Quenneville
v. Buttolph, 2003 VT 82 ¶ 11, 174 Vt. 444, 833
A.2d 1263 (quotation omitted).  We conclude that the trial court’s
imposition of a constructive trust cannot be sustained.
¶ 17.         A
court may impose a constructive trust when a party obtains some benefit that
they cannot, in good conscience, retain.  “It is a familiar principle of
equity that a trust is implied whenever the circumstances are such, that the
person taking the legal estate, whether by fraud or otherwise, cannot enjoy the
beneficial interest without violating the rules of honesty and fair
dealing.”  Legault, 142 Vt. at 529, 459
A.2d at 983 (quotations and citations omitted).  Courts may employ
constructive trusts to avoid unconscionable results and to prevent unjust
enrichment.  Preston v. Chabot, 138 Vt. 170,
174-75, 412 A.2d 930, 933 (1980).  Unjust enrichment, in turn,
only exists when a party improves his or her own position at the expense of
someone else:
[T]he
equitable doctrine of unjust enrichment rests upon the principle that a man
shall not be allowed to enrich himself unjustly at the expense of another.
 In other words, the inquiry is whether, in light of the totality of
circumstances, it is against equity and good conscience to allow [a party] to
retain what is sought to be recovered.  Thus, whether there is unjust
enrichment may not be determined from a limited inquiry confined to an isolated
transaction.  It must be a realistic determination based on a broad view
of the human setting involved.  
 
Legault, 142 Vt. at 531, 459 A.2d at 984 (quotations
and citations omitted).  Given the
totality of the circumstances in this case, the trial court erred in imposing a
constructive trust.
¶ 18.         The trial court concluded that “Jane’s retention of the
Sheldon property constitutes unjust enrichment.”  The trial court looked
to the intent of the parties at the time of the purchase of the property at tax
sale.  Although Jane, James, and Cynthia’s names all appear on the 1996
tax-sale purchase form, and the three originally planned to own the property
together, James and Cynthia contributed no money to the purchase, and Cynthia
therefore agreed that Jane’s name should appear on the deed as purchaser. 
Jane paid the full price for the property, and received the full
title.  She got exactly what she paid for—hardly an unjust enrichment.
¶ 19.         The
trial court created the constructive trust to “protect James and Cynthia’s
interests in the Sheldon parcel.”  However, the court also upheld Leah’s
2001 transfer of the Enosburg property to James, Cynthia and the grandchildren,
finding that it was made in part because Jane owned the Sheldon land—and
therefore one-sixth of the Weed family’s property—in full.  These findings
by the court are inconsistent.  Additionally, the record reveals that
James and Cynthia were largely uninterested in the Sheldon property.  That
they may have eventually attempted to pay Jane for a portion of the purchase
price after questions arose concerning the ownership of the Enosburg property
does not support a finding that Jane was unjustly enriched at the expense of
James and Cynthia.  Having paid the full tax-sale purchase price and taxes
on the property for approximately five years before James and Cynthia first
allegedly proffered repayment, Jane’s taking of title does not violate the
rules of honesty and fair dealing.  Jane was not unjustly enriched; the
court erred in imposing a constructive trust on the Sheldon land.
¶ 20.         We
turn finally to the enforceability of the 2003 contract between Leah and Jane
to swap twenty-two acres of the Enosburg land for fifteen acres of the Sheldon
land plus cash.  This issue was not reached by the trial court because it
ruled that the constructive trust it had placed on two-thirds of the Sheldon
property prevented Jane from contracting for the trade.  Given our
conclusion that Jane has retained full title in the Sheldon property and that
the gift of the Enosburg property was invalid, the land-swap agreement is again
at issue.  We note the general rule regarding specificity in land
transactions that “where only a portion of a larger tract of land owned by the
seller is to be conveyed . . . instruments which do not definitely separate the
portion to be sold from the tract remaining are insufficient.”  Evarts
v. Fortes, 135 Vt. 306, 310, 376 A.2d 766, 769 (1977).  If Jane can
show that the relevant instruments sufficiently delineate the Enosburg and
Sheldon parcels for purposes of the exchange, it very well may be that the
land-swap agreement is enforceable.  However, we cannot apply this rule to
the case absent fact-finding, which is the trial court’s province.  See State v. Ford, 2007 VT
107, ¶ 12, ___ Vt. ___, 940 A.2d 687 (remanding to allow trial court to make
findings of fact because existing findings were insufficient for purposes of
drawing a legal conclusion); Waterbury Feed Co. v. O’Neil, 2006 VT 126,
¶ 13, 181 Vt. 535, 915 A.2d 759 (same).  We therefore remand this
case to the trial court to decide in the first instance whether the 2003
land-swap agreement is enforceable. 
The court’s
ruling that the 2001 transfer of the Enosburg land was valid and the court’s
imposition of a constructive trust on two-thirds of the Sheldon land are
reversed.  The issue of whether the 2003 land-swap agreement is
enforceable is remanded for proceedings consistent with this opinion.
 
 

 


 


FOR THE COURT:


 


 


 


 


 


 


 


 


 


 


 


Associate
  Justice

 





* 
For purposes of clarity, we use the parties’ first names.



