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Mongeon Bay Properties, LLC v. Mallets Bay Homeowner's Association, Inc.

Supreme Court of Vermont

April 17, 2017

Mongeon Bay Properties, LLC
Mallets Bay Homeowner's Association, Inc. and Anthony J. Sineni III

         On Appeal from Superior Court, Chittenden Unit, Civil Division

          David H. Greenberg, Burlington, for Plaintiff-Appellee.

          David D. Aman of Heilmann, Ekman, Cooley & Gagnon, Inc., Burlington, for Defendant- Appellant.

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

          Dennis R. Pearson, J.

         ¶ 1. Mallets Bay Homeowner's Association appeals the trial court's partial denial of its motion to stay the issuance of a writ of possession in favor of Mongeon Bay Properties (MBP) following the termination of the Association's ground lease. We reverse the trial court's order in part, and remand for the trial court to exercise its discretion.

         ¶ 2. The events leading to the termination of the ground lease between the parties are recounted in greater detail in this Court's recent decision in Mongeon Bay Properties, LLC v. Mallets Bay Homeowner's Association (Mongeon Bay I), 2016 VT 64, __ Vt. __, 149 A.3d 940. The Mongeon family owned property in Colchester on the shore of Lake Champlain. There are over twenty-five camps on the property, ten of which are built on an embankment right next to the lake. Over time, the camp structures built on the property became seasonal residences owned by camp occupants, although the Mongeon family continued to own the underlying land. In 1995, members of the Mongeon family set up a partnership to own the land under the camps, and the partnership entered into a ground lease with the Association, a non-profit corporation, rather than the individual owners of each residence. As amended by the parties, MBP and the Association, the ground lease was due to expire in 2036. The lease contained a forfeiture clause, providing that the lease would terminate "if the [Association] shall fail to perform or comply with any terms of this Lease, " and "such failure shall continue for more than 45 days after the [Association] receives notice or knowledge of such failure."

         ¶ 3. MBP sued the Association in January 2012, seeking damages and termination of the ground lease because the Association had failed to perform reasonable repairs and upkeep as required by the lease. In particular, MBP showed that severe damage to the property along the banks of the lake could have been prevented if the Association had undertaken reasonable steps to protect against erosion. The trial court concluded that the Association's failure to properly maintain the property and the resulting damage amounted to "waste, " and therefore the Association had violated the lease. However, the trial court determined that terminating the lease under the default provision was inequitable and instead awarded MBP damages to cover the cost of repairing the property.

         ¶ 4. On appeal, this Court affirmed the trial court's determination that the Association had breached the lease, but remanded for reconsideration of MBP's remedy. We concluded that the trial court did not have the authority to decline to enforce the contract's default provision where it concluded that the Association had substantially defaulted pursuant to the terms of the ground lease, and MBP had timely invoked its right to terminate. Mongeon Bay I, 2016 VT 64, ¶ 64-69. We stated that MBP was entitled to terminate the ground lease as a matter of law, and was entitled to a writ of possession. Id. We remanded to the trial court for determination of a remedy in light of our decision. We issued this decision on June 10, 2016, and denied a motion for reargument on July 11, 2016.

         ¶ 5. On remand, the parties spent several months litigating issues relating to post- judgment trustee process, attorneys' fees, and other collateral matters.

         ¶ 6. On September 20, 2016, the Association requested that the trial court stay the issuance of a writ of possession pursuant to 12 V.S.A. § 4854, which states in relevant part: "A writ of possession shall issue on the date judgment is entered, unless the court for good cause orders a stay." The Association argued that there was good cause for the court to stay the writ until 2036, when the lease was set to expire. The Association argued that it should be entitled to receive the benefit of the substantial improvements to the property, and in particular the repairs to the embankments ordered by the trial court. The Association emphasized the hardship the writ of possession would cause individual homeowners, and argued that staying the judgment until 2036 was reasonable because it would give the homeowners enough time to relocate their homes from the property, avoid the hardship of removing children from their schools, and enable homeowners to make arrangements with their lenders and terminate leases with subtenants. The Association also argued that the lease was silent as to how much time the Association had to remove their residences from the property upon termination of the lease. For all these reasons, the Association argued that there was good cause to stay the writ of possession until the 2036 lease expiration. Alternatively, the Association asked for a ten-year stay "[a]t the very least, " given what is at stake financially. Finally, the Association requested, "[a]t a bare minimum, [MBP] should be estopped from taking possession of the property until April 30, 2017, " because the Association had paid rent through that day.

         ¶ 7. On October 31, the trial court issued an amended final judgment in response to this Court's decision. It ordered that judgment was entered in favor of MBP, that the ground lease was terminated, and that MBP was to be granted a writ of possession for the property. That same day, the trial court also issued an order in response to the Association's motion to stay. The court stated:

The opinion and mandate of the Vermont Supreme Court make it very clear that this court has no ability to exercise any equitable discretion . . . to deny [MBP] the requested writ of possession, and not to consider the lease terminated pursuant to its express terms . . . . This court must assume that the Vermont Supreme Court understood, and considered most, if not all of the adverse consequences of its holding on the individual camp owners. This court has no authority given the mandate in this case to exercise any further discretion on those grounds, as compelling as some of the points made might otherwise be.

         Nonetheless, the court determined that Vermont Rule of Civil Procedure 62(a)(3)(B) authorized it to stay the writ for up to twenty days or until the time to appeal to this Court had expired, which is thirty days under Vermont Rule of Appellate Procedure 4(a)(1). Accordingly, the court stayed enforcement of the writ for thirty days, subject to any further stays that could be granted pursuant ...

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