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Birchwood Land Co., Inc. v. Krizan

Supreme Court of Vermont

February 6, 2015

Birchwood Land Company, Inc.
Judith J. Krizan

On Appeal from Superior Court, Grand Isle Unit, Civil Division November Term, 2014 A. Gregory Rainville, J.

W. Owen Jenkins of W. Owen Jenkins, P.C., Essex Junction, for Plaintiff-Appellant.

Thomas F. Heilmann and James M. Cooley (On the Brief) of Heilmann, Ekman & Associates, Burlington, for Defendant-Appellee.

PRESENT: Reiber, C.J., Dooley, Skoglund, Robinson and Eaton, [1] JJ.


¶ 1. Plaintiff Birchwood Land Company (“Birchwood”) appeals the decision of the Superior Court, Grand Isle Unit denying Birchwood’s motion for attachment and granting defendant Judith Krizan’s motion to dismiss for failure to state a claim. Birchwood’s complaint alleged that Krizan was unjustly enriched by Birchwood’s construction of an access road and other infrastructure to her property such that she is able to develop the property without contributing to the cost of the improvements. We agree that the complaint fails to state a claim upon which relief can be granted and affirm.

¶ 2. The facts as alleged in Birchwood’s amended complaint are as follows. In June 1982, Krizan purchased a vacant and landlocked parcel, currently described as 43 Tanglewood Drive, for $3000 from the Town of Essex. Because the deed to Krizan’s parcel makes reference to a recorded plat, she acquired by law an implied access easement over the portion of the adjacent parcel depicted on the plat and now owned by Birchwood. This is the sole means of access to her property. Without frontage on a public road or access to utilities and other related infrastructure, Krizan’s property was undevelopable. In the thirty years of ownership, she had made no effort to develop her property.

¶ 3. In December 2002, Birchwood purchased the land surrounding Krizan’s parcel to the east, south, and west, including the fee simple ownership of the strip of land on which Krizan’s access easement is located. In April 2005, Birchwood obtained approval from the Town to develop its property, including the construction and extension of Tanglewood Drive and the installation of water, sewer, and electrical lines, and other related infrastructure. The Krizan property was not included in the development approval. As part of its development, however, Birchwood extended road access and water and sewer line connections to Krizan’s property. In July 2007, Birchwood completed the road and infrastructure improvements at a substantial expense.

¶ 4. After Birchwood completed the improvements, Krizan notified the Town of her intent to develop her property. The Town found that Krizan’s lot is now developable because the lot is now located on a public road and is connected to the necessary infrastructure. Consequently, the Town increased the assessed value of Krizan’s parcel from $10, 800 to $92, 700. The fair market value of Krizan’s property, as determined by the sale price of a neighboring property, is no less than $117, 000. Birchwood has calculated that Krizan’s proportionate share of expenses for the construction and extension of Tanglewood Drive and related infrastructure, not including the $2405 water and sewer connection cost, amounts to $50, 100. Krizan initially expressed interest in reimbursing Birchwood for the cost of extending the sewer and water connections to her property but has refused to contribute to the road and other infrastructure improvements.

¶ 5. Birchwood filed a complaint against Krizan in the trial court, alleging that Krizan was unjustly enriched by the creation of the public road access to her lot and should be required to bear a proportionate cost of the construction, and filed a motion for attachment of real estate owned by Krizan. In response, Krizan filed a motion to dismiss for failure to state a claim upon which relief can be granted. [2] Birchwood filed an amended complaint, and the court conducted a hearing on Birchwood’s pending motion for attachment and Krizan’s pending motion to dismiss. The court denied Birchwood’s motion for attachment and granted Krizan’s motion to dismiss. This appeal followed.

¶ 6. We review decisions on a motion to dismiss de novo under the same standard as the trial court and will uphold a motion to dismiss for failure to state a claim only if “it is beyond doubt that there exist no facts or circumstances that would entitle the plaintiff to relief.” Dernier v. Mortg. Network, Inc., 2013 VT 96, ¶ 23, 195 Vt. 113, 87 A.3d 465 (quotation omitted). We assume as true all facts as pleaded in the complaint, accept as true all reasonable inferences derived therefrom, and assume as false all contravening assertions in the defendant’s pleadings. Id. Our role in reviewing the trial court’s decision on such a motion is limited to determining “whether the bare allegations of the complaint are sufficient to state a claim.” Kaplan v. Morgan Stanley & Co., 2009 VT 78, ¶ 7, 186 Vt. 605, 987 A.2d 258 (mem.).

¶ 7. Birchwood claims that it is entitled to restitution from Krizan for the improvements it made to the road, utilities, and other related infrastructure because Krizan was unjustly enriched at Birchwood’s expense. Birchwood argues that Krizan is a “free rider” who held onto her undeveloped property for thirty years awaiting the adjoining property owner to make the necessary improvements. Birchwood also argues that, as an easement holder over the access road, Krizan was obligated to contribute to the improvements. Krizan disputes that she held an easement over the road and has any duty to contribute to Birchwood’s improvements, which were voluntary, unrequested, and in Birchwood’s self-interest. The trial court agreed with Krizan, finding no actionable claim for unjust enrichment.

¶ 8. Our case law recognizes claims of unjust enrichment, see, e.g., Kellogg v. Shushereba, 2013 VT 76, ¶ 22, 194 Vt. 446, 82 A.3d 1121 (stating that plaintiff is entitled to recovery from defendant for period defendant received benefit of living in plaintiff’s home without paying for that benefit), but we have not yet ruled on the validity of a claim of unjust enrichment for unrequested benefits-that is, unrequested benefits voluntarily conferred upon the recipient by the claimant. See Restatement (Third) of Restitution & Unjust Enrichment § 30 (2011) [hereinafter Restatement]. Birchwood places great weight on our recent decision in Lasek v. Vermont Vapor, Inc., 2014 VT 33, ___ Vt. ___, 95 A.3d 447, in which we held that a tenant had no claim of unjust enrichment against his landlord for improvements the tenant voluntarily made to the property on which the landlord collected insurance proceeds after a fire. Id. ¶ 18. We stated that “[a]ssuming without deciding that Vermont law recognizes an unjust enrichment claim by a tenant against a landlord to recover value of improvements made by the tenant, plaintiff’s claim fails because he did not show that landlord received a benefit from his improvements.” Id. Birchwood argues that because here we have no “proof of benefit conferred” deficiency, as in Lasek, we should rely on this case to hold that unjust enrichment occurred here, because there is a benefit. Lasek is of no help to Birchwood. Our statement there regarding an unjust enrichment claim for improvements was pure dicta, stating an assumption and not a holding on which Birchwood can rely. In fact, the application of unjust enrichment to unrequested benefits is an undeveloped area of our law, and we must look beyond our precedents to decide this appeal.

¶ 9. Both parties rely, in part, on the Restatement in making their arguments. We frequently have adopted provisions of this Restatement where our law is undeveloped. See JW, LLC v. Ayer, 2014 VT 71, ¶ 22, ___ Vt. ___, 101 A.3d 906; Kellogg, 2013 VT 76, ¶ 19; Shattuck v. ...

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