Reynolds v. Brousseau, No. S1153-01 CnC (Norton, J., May 25, 2005)


[The text of this Vermont trial court opinion is unofficial. It has been
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STATE OF VERMONT           SUPERIOR COURT
Chittenden County, ss.:    Docket No. S1153-01 CnC


REYNOLDS

v.

BROSSEAU


                                  ENTRY

       This is a motion for reconsideration of the court’s earlier entry
allowing defendants to amend their counterclaim to include a claim for
reimbursement. Reynolds, trustee for the estate of Frank Irish, opposes the
amendment on the grounds that it comes too late in the case and at great
disadvantage to her.

       This case concerns a very lucrative parcel of land that belonged to
Frank Irish. Once a dairy farm, the roughly twenty-six acre parcel is now
prime commercial and residential real estate in the heart of South Burlin-
gton. In 1996, Brosseau, Irish’s brother-in-law, and Smejkal, his partner,
approached Irish about selling his property. The parties signed an initial
agreement that this court in a previous entry ruled as unenforceable.
Reynolds v. Brosseau, No. S1153-01 CnC (Katz, J., Dec. 29, 2003).
        From filings in this case dating back to 2002, Brosseau and Smejkal
have claimed that they paid Irish up to $40,000 as consideration for this
agreement. Payments came, according to the defendants, at various points
in their relationship, including $10,000 when the parties signed and
whenever Irish needed money for taxes or because of his failing health.
Irish came to dispute the nature of the relationship and even his signature on
the agreement. In 2001, he brought this case to have the agreement
declared unenforceable. It is not clear from the filings if he ever disputed or
characterized the alleged payments he may have received from Brosseau
and Smejkal. After years of declining health, Frank Irish died in 2003. His
remaining interests in this case are represented by Reynolds, his sister and
trustee for the estate. In August 2004, following the court’s rejection of
their motion to reconsider, the defendants moved to amend their
counterclaim to include a cause of action for a return of the $40,000. The
court granted this motion, and this claim is their sole remaining cause of
action.* Plaintiff has moved to reconsider the amendment.

        In deciding a motion to amend, the court has fairly wide discretion.
Perkins v. Windsor Hosp. Corp., 142 Vt. 305, 313 (1982). Rule 15 requires
that motions to amend be granted liberally, but that does not mean
automatically. V.R.C.P. 15(a); 6 C. Wright, et al., Federal Practice and
Procedure § 1474 (2d ed. 1990). The court’s analysis must include
consideration of four factors that the Vermont Supreme Court has adopted
to facilitate the court’s implementation of the underlying policy purpose, the
just and expedient disposition of the controversy. Perkins, 142 Vt. at 313.
The four factors are “(1) undue delay; (2) bad faith; (3) futility of
amendment; and (4) prejudice to the opposing party.” Id.

       To the question of prejudice, plaintiff argues that she is greatly
prejudiced by this late amendment because the person best suited to rebut or
explain defendants’ claims is dead. Frank Irish, she argues, was the witness
best suited to testify as to whether or not he received any payments from the

* Defendants argue in their August 4, 2004 motion that they are entitled to specific
performance for the agreement, but the courts previous entries specifically deny
that agreement’s enforceability. Specific performance is not a potential remedy at
this time.
defendants and to state the purpose for which he understood them to be
given. Apart from the undertones of bad faith in plaintiff’s argument, her
point is that defendants waited too long and that this claim could have and
should have been made as an alternate request for relief at the beginning of
the case when defendants’ requested specific performance. In this light,
plaintiff’s argument comes against one of the most common uses of rule
15(a) amendments, to amend defective pleadings. 6 Wright, supra, at §
1474. It is true that defendants could have included this cause of action in
their original counterclaim pleadings, but mere failure to do so is not a
reason to refuse amendment now.

        Considering the prejudice plaintiff suffers because of Irish’s death,
there is no evidence to support the accusation that defendants purposefully
withheld the cause of action until this moment. Oversight and mistake are
possible explanations; trial strategy may also be a possible cause, but
defendants’ possible right money that they gave Irish money in expectation
is also compelling. To refuse amendment would require the court to ignore
the fact that defendants have a colorable claim to the money.

        As to the issue of whether plaintiff might have benefitted from
Irish’s testimony, it is far from certain. Irish could only testify about what
he understood his relationship with Brosseau and Smejkal to be and what he
received from them. As to the first, there is evidence from Irish’s
depositions to illustrate his understanding of his relationship with the
defendants. As to the second, plaintiff may use bank records, receipts, and
other such evidence to refute or confirm defendants’ evidence as to when
any money was received or not received. These may not be ideal
evidentiary circumstances, but they show that the plaintiff is far from
paralyzed in presenting her case.

       The big question here is really whether this motion to amend has
come too late and caused undue delay. This case was originally filed in
September 2001. It has outlasted the original plaintiff and has survived its
original cause of action, namely to end any claims Brosseau and Smejkal
might have against the Irish land. The remaining questions are fairly
discrete, when, if ever, did the defendants give Irish money and do they
have a right to have that money returned.
       The allegation that the defendants gave Irish money in the amount of
up to $40,000 was well-established early on in this case. While defendants
have see-sawed as to whether to pursue it as a claim of action, its
appearance as a claim is not a complete surprise to the plaintiff. Cf. 6
Wright, supra, at § 1487, at 632 (discussing lack of surprise). In fact, this
amendment is best characterized as the assertion of a alternative theory of
recovery that could have been included in the counter-claim but was not.
At this point in the litigation, the parties should have conducted discovery
about these remaining issues since they are so closely tied to the agreement.

        It would be unfair to freeze out defendants’ last claim if there is
some merit to it, a point plaintiff disputes. In her last argument against
amendment, plaintiff argues that the evidence is inconclusive and
defendants will be unable to prove their case. Specifically, plaintiff refers
to 12 V.S.A. § 1602, the so-called dead man’s statute, which will block
defendants from testifying about their dealings with Irish. Certainly, this
statute has the potential to weaken the defendants’ case, but it does not
appear to fatal. Under § 1603, defendants would be blocked from testifying
about their understanding of the land agreement and presumably their intent
when sending Irish money, but this would not preclude them from entering
other evidence such as cancelled checks, time-lines of payments, and other
circumstantial evidence that may carry their burden. Plaintiff’s arguments
are valid but their points go to the weight of the evidence for summary
judgment or trial rather than the possibility of evidence and the viability of
the claim.

       Based on the foregoing, defendants’ motion to amend is affirmed.

       Dated at Burlington, Vermont________________, 2005.




              ________________________
              Judge
