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Hayes v. Mountain View Estates Homeowners Association

Supreme Court of Vermont

April 20, 2018

Jeffrey D. Hayes and Deborah Hayes McGraw
Mountain View Estates Homeowners Association

          On Appeal from Superior Court, Bennington Unit, Civil Division Katherine A. Hayes, J.

          Eric G. Velto of Salmon & Nostrand, Bellows Falls, for Plaintiffs-Appellants.

          Lon T. McClintock of McClintock Law Office, P.C., Bennington, for Defendants-Appellees.

          PRESENT: Reiber, C.J., Skoglund, Robinson, Eaton and Carroll, JJ.

          ROBINSON, J.

         ¶ 1. Developers of a residential subdivision died, leading to claims against their estates by the homeowners in the subdivision regarding the estates' responsibilities for the subdivision's private roads, water system, and sewer system. The estates appeal the trial court's decision that the estates were obligated, based on an agreement between the developers and the homeowners, to continue to maintain and repair the roads and water and sewer systems until the town accepted the dedication of the infrastructure. We affirm the court's findings and conclusions, and remand the matter to the trial court for remand to the probate division for further proceedings consistent with this decision.

         I. Facts

         ¶ 2. This is the second appeal to reach the Court in this matter. In the first appeal, we summarized the following basic facts, which are undisputed:

In the late 1970s and early 1980s, Richard Hayes developed a subdivision called Mountain View Estates on land jointly owned by him and his wife, Nadine Hayes, in the Town of Manchester. The subdivision grew to include forty residential homes, a school building, and a chiropractic clinic on forty-four lots. It is by now essentially built out, and no further sales of lots for additional building are likely.
The subdivision plan was approved by the Town and the state, and the water and sewer systems were permitted. The subdivision plan did not include any specific plans or requirements for dedication of its two privately owned roads or water and sewer systems to the Town. Richard Hayes initially supplied water to the subdivision through his water company, which he sold to the Town in 1982 along with the water and sewer lines underlying nine of the lots in the subdivision. Since then, the Town has supplied the water for the entire subdivision. The Hayeses continued to own the remaining portions of the subdivision's water and sewer systems, as well as the roadways, until they were simultaneously killed in a car accident in 2004. The sewer system includes underground lines and manholes that convey effluent by gravity to a pump station consisting of a holding tank and two submersible pumps. From the pump station, effluent is carried through an underground force main to the municipal sewer system, ending up at the Town's wastewater facility.
From the sale of the first lot in about 1981 until his death in 2004, Richard Hayes paid for maintenance and plowing of the roads that ran through the subdivision and maintained the subdivision's sewer system and the portion of the water system that he and his wife still owned, without charge to the homeowners.

Hayes v. Town of Manchester Water & Sewer Boards, 2014 VT 126, ¶¶ 2-5, 198 Vt. 92, 112 A.3d 742 (Hayes I).

         II. Procedural History

         ¶ 3. Following the Hayeses' deaths in 2004, a probate proceeding was opened and the Hayeses' adult children, Jeffrey Hayes and Deborah Hayes McGraw, were appointed co-administrators of their estates. The co-administrators sent a letter to the homeowners in the subdivision stating that effective immediately, the homeowners would be responsible for maintaining and plowing the subdivision's roads. The homeowners refused to assume responsibility for the road maintenance. They sought and were granted permission to intervene in the probate proceeding to protect their rights regarding the subdivision's road, water, and sewer infrastructure.[1] The estates have continued to maintain the roads and water and sewer systems at their own expense throughout this litigation.

         ¶ 4. In September 2008, after a multiple-day hearing, the probate court ordered the estates to set aside $1 million to inspect the subdivision's water and sewer systems and make necessary updates and repairs, to dedicate the updated systems to the Town, and to pave the subdivision's roads and dedicate them to the Town. The estates appealed to superior court.

         ¶ 5. The superior court held a de novo trial over five days in August and November 2012. The homeowners argued that the Hayeses made an oral agreement to maintain the roads at their own expense and to eventually pave them and turn them over to the Town. They argued that the Hayeses never disclosed that the water system and sewer system were privately owned, and led them to believe that they were directly connected to Town-owned facilities. The homeowners asked the court to order the estates to continue to pay for maintaining the infrastructure until the roads, water system, and sewer system were dedicated to and accepted by the Town, and to establish a constructive trust from the assets of the estates to fund maintenance and repairs. In support of their claims, the homeowners pointed to a deed from the Hayeses to the Norses, which provided that the roadway would be maintained by the Hayeses until such time as it was turned over to the Town of Manchester. The homeowners also presented testimony from individual homeowners concerning promises made by Richard Hayes regarding the maintenance and dedication of the roads and the provision of town water and sewer services. The estates objected to the admission of this testimony on the ground that it was barred by Vermont's dead man's statutes, 12 V.S.A. §§ 1602-1603.

         ¶ 6. Midway through the 2012 trial, the court ruled that testimony by any person regarding promises or commitments made by Richard Hayes to the homeowners, or statements he made concerning financial responsibility for maintaining the infrastructure up to the time when it would be dedicated to the Town, were barred by the dead man's statutes. As a result, the superior court declined to consider the testimony of a number of homeowners that in agreeing to buy their properties they relied upon Richard Hayes's promises to maintain the roads and eventually dedicate them. The court also excluded statements by the co-administrators that they knew their father had promised the homeowners that he would maintain the roads. In the absence of this evidence, the court concluded that the homeowners had failed to prove the existence of an oral agreement by the Hayeses to maintain ...

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