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Panagiotidis v. Galanis

Supreme Court of Vermont

December 18, 2015

Christos Panagiotidis and Hrisanthi Panagiotidis
Alexander Galanis

          On Appeal from Superior Court, Windsor Unit, Civil Division. Theresa S. DiMauro, J. (final judgment); Harold E. Eaton, Jr., J. (partial judgment).


          Cabot Teachout of DesMeules, Olmstead & Ostler, Norwich, for Plaintiffs-Appellees.

          Lisa A. Wellman-Ally, Claremont, New Hampshire, for Defendant-Appellant.

         Present: Reiber, C.J., Dooley, Skoglund and Robinson, JJ., and Morse, J. (Ret.), Specially Assigned.


Page 1233

          Skoglund, J.

          [¶1] Defendant appeals from the trial court's order granting judgment to plaintiffs on their complaint for ejectment and damages. We affirm.

          [¶2] Plaintiffs own a building, with a mortgage, in Hartford, Vermont, where they operated a pizza business. In 2013, they sold the pizza business to defendant and leased him the premises. In November 2013, plaintiffs brought an eviction action, asserting that defendant had failed to pay rent. The court granted plaintiffs a default judgment and a writ of possession in December 2013. The court subsequently granted defendant's request to vacate the default judgment and stay the writ of possession. Defendant then filed an answer and a counterclaim. In his counterclaim, defendant argued that he was fraudulently induced into entering into the lease agreement and that the lease should be declared void. Alternatively, defendant argued that he had cured any breach of the lease by paying money into an escrow fund.

          [¶3] Following a final hearing, the trial court granted judgment to plaintiffs on their ejectment claim and on defendant's counterclaim. The court made the following relevant findings. The parties entered into a written lease agreement in March 2013. The lease required a monthly rental payment of $2200 for five years. Defendant

Page 1234

paid rent from March 2013 until October 2013. Defendant became dissatisfied with his purchase of the pizza business. He sent a letter to plaintiffs through his attorney on August 29, 2013, seeking to renegotiate the purchase of the pizza business. This dissatisfaction apparently triggered defendant's decision to pay rent into an escrow account at his attorney's office. Plaintiffs did not agree to defendant's unilateral decision and brought this ejectment action. For several months, defendant made payments into his attorney's trust account. The funds were held there until March 2014, when the parties agreed that rent could be paid into court and disbursed to the mortgagee. The funds held by the attorney were disbursed through to the mortgagee in this manner as well. Defendant did not pay any interest or court costs to cure his alleged breach. During the time that the funds were being held in escrow, plaintiffs became delinquent on their mortgage concerning the building.

          [¶4] Based on these and other findings, the court concluded that the lease agreement between the parties was valid and enforceable and that defendant breached the lease by failing to pay rent. While defendant had the right to cure a breach for nonpayment of rent, see 12 V.S.A. § 4773, he was required to pay all unpaid rents, interest, and court costs to rely on this statutory right to redeem. Defendant had paid the past-due rent, but he had not paid interest or plaintiffs' costs. The court noted that the lease also provided a separate contractual right to cure that did not require the payment of interest and costs, and was not confined to nonpayment breaches. This right, however, had to be exercised within ten days of written notice of the breach. The court found that plaintiffs brought their ejectment claim in November 2013 and provided defendant with written notice of the claimed nonpayment breach at that time. Money was not paid into the court through the agreement of counsel until March 2014, well outside the ten-day lease provision.

          [¶5] The court agreed with defendant that a lease must be terminated in accordance with its terms. In this case, the lease required that written notice of the breach be given, and it allowed the breaching party ten days to cure the breach after receiving such notice. In a separate provision, the lease stated that any notices required to be given under the lease " shall be deemed to be given when deposited in the United States Mail, postage prepaid, via certified mail, with return receipt requested," to certain specified addresses. The lease did not require that written notices be provided exclusively by mail; it stated only that notices were effective when given in the manner specified in the lease. The court found this significant. In this case, the written notice was provided by personal service, which exceeded that which was permissible under the lease. While a lesser means of service would have been adequate under the lease, the court concluded, it did not follow that a more effective means of ...

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