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Stonewall of Woodstock Corp. v. Stardust 11Ts, LLC

Supreme Court of Vermont

August 10, 2018

Stonewall of Woodstock Corp. and Accordion, LLC
Stardust 11TS, LLC and Oliver Block, LLC

          On Appeal from Superior Court, Windsor Unit, Civil Division Robert P. Gerety, Jr., J.

          Norman C. Williams of Gravel & Shea PC, Burlington, for Plaintiffs-Appellants.

          Christopher W. Blanchard of Facey Goss & McPhee P.C., Rutland, for Defendant-Appellee Stardust 11TS, LLC.

          Frank P. Urso of Reis, Urso & Ewald, PC, Rutland, for Defendant-Appellee Oliver Block, LLC. Steven E. Ferrey, Suffolk University Law School, Boston, Massachusetts, for Amicus Curiae Stacy Gallowhur.

          PRESENT: Skoglund, Robinson, Eaton and Carroll, JJ., and Morris, Supr. J. (Ret.), Specially Assigned

          EATON, J.

         ¶ 1. During the spring of 2015, plaintiff Stonewall of Woodstock Corporation (Stonewall) entered into negotiations to buy commercial property located in Woodstock from defendant Oliver Block, LLC (Oliver Block). A written contract of sale was signed by Stonewall, but not by Oliver Block, which instead sold the land to defendant Stardust 11TS, LLC (Stardust). Stonewall sued, claiming that there was a valid contract and seeking specific performance. The trial court granted summary judgment for Oliver Block, on the basis that any contract with Stonewall was unenforceable under the Statute of Frauds because it had not been signed by Oliver Block. We affirm.

         I. Facts and Procedural History

         ¶ 2. Stonewall is a Vermont corporation whose shareholders include John Ruggieri- Lam and Maria Freddura.[1] Oliver Block is a Vermont limited liability corporation whose sole member is Richard Coburn. The negotiations in 2015 were largely carried out between Ruggieri-Lam on behalf of Stonewall and Coburn, Coburn's lawyer Frank Urso, and Coburn's personal assistant Richard Sbeglia on behalf of Oliver Block.

         ¶ 3. On May 28, 2015, Sbeglia sent an unsigned contract of sale by email to Ruggieri- Lam, who returned it with proposed modifications. On June 2, Urso sent Ruggieri-Lam an updated unsigned version of the contract, incorporating the modifications that Ruggeri-Lam had requested, with instructions to execute and return it with a deposit of $25, 000. Later the same day, Ruggieri-Lam and Freddura returned the document, which they had signed, to Urso along with the deposit check. In an email reply on June 3 Urso acknowledged receipt. On Coburn's instructions, Urso deposited the check in his law firm's trust account. But neither Coburn nor anyone else acting on behalf of Oliver Block signed the contract. In the days immediately following his return of the contract document and check, Ruggieri-Lam made several inquiries to Urso about whether Coburn had signed the contract. No representation was ever made to Ruggieri-Lam that Coburn had signed the document. Finally, on June 11, Coburn informed Stonewall that he could not go through with the negotiations as laid out in the June 2 document. During this same time, Coburn had been negotiating with another potential purchaser, Stardust. Those negotiations resulted in Coburn signing a contract of sale with Stardust on June 10. Urso returned Stonewall's deposit money on June 26.

         ¶ 4. Shortly after learning of the deal with Stardust, Ruggieri-Lam and Freddura filed suit against Oliver Block in the Federal District Court of Vermont, seeking specific performance on their own contract with Oliver Block. Ruggieri-Lam v. Oliver Block, LLC, 120 F.Supp.3d 400 (D. Vt. 2015). They asserted that the emails sent by Urso on June 2 and 3 (instructing Ruggieri-Lam and Freddura to sign and return the contract with a deposit and then acknowledging receipt) satisfied the Statute of Frauds. They also sought an attachment on the Oliver Block property. As part of Oliver Block's response, Coburn prepared an affidavit denying that he had ever made a contract with Stonewall or authorized Urso or anyone else to make one. In July, the court denied Ruggieri-Lam and Freddura's petition for a writ of attachment on the Oliver Block property, concluding that they had no reasonable chance of success on the merits under Vermont contract law. Id. at 406-09. In February 2016, the federal suit was dismissed without prejudice on plaintiff's petition.

         ¶ 5. Stonewall then filed this suit against Oliver Block and Stardust, alleging breach of contract and fraud, and again seeking specific performance. In September 2017, the court granted summary judgment for Oliver Block with respect to Stonewall's contract claims, holding that the June 2 purchase agreement was not an enforceable contract under the Statute of Frauds. The court denied Oliver Block's motion for summary judgment with respect to fraud, but this claim was later dismissed on a stipulated motion by Stonewall.

         ¶ 6. On appeal, Stonewall argues that a valid contract was formed when it returned the signed contract with the deposit on June 2, thus accepting an offer made by Oliver Block. Stonewall further contends that the Statute of Frauds is satisfied by either (1) the signed affidavit by Coburn in opposition to the petition for writ of attachment produced in federal court or (2) the two emails from Urso sent on June 2 and 3. Coburn's affidavit was part of the record below, but was not mentioned in the trial court's decision. Oliver Block and Stardust respond that no contract was ever formed and that in any event the signed writings offered by Stonewall do not meet the requirements of the Statute of Frauds.

         ¶ 7. We agree with the trial court that the Statute of Frauds bars enforcement of Stonewall's claim. As a contract for the sale of land, the contract falls under the Statute, and neither Coburn's signed affidavit nor the emails from Urso meet the Statute's requirements. Because we hold that the contract is unenforceable under the Statute, we do not reach the questions of whether an otherwise valid contract was formed by offer and acceptance or whether specific performance would be the appropriate remedy for any breach.

         II. Standard of Review

         ¶ 8. We review a grant of summary judgment de novo, under the same standard as the trial court. Bixler v. Bullard, 172 Vt. 53, 57, 769 A.2d 690, 694 (2001). We will uphold a grant of summary judgment if we agree that "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Id. (quotations omitted); see V.R.C.P. 56(a). None of the relevant facts are disputed. The issue is whether the trial court correctly applied Vermont's Statute of Frauds, and this question is solely one of law.

         III. The Statute of Frauds

         ¶ 9. The Statute of Frauds derives from the Act for the Prevention of Frauds and Perjuries passed by the Parliament of England in 1677, 29 Car. 2 c. 3, which remains in force in some form in almost all states, Restatement (Second) of Contracts ch. 5, stat. note (1981). It has apparently been part of Vermont law since at least 1779, when the common law of England was adopted as the law of the State. See Clement v. Graham, 78 Vt. 290, 300-04, 63 A. 146, 148-50 (1906) (discussing history of reception of English common law in Vermont). The Statute is currently codified at 12 V.S.A. § 181, which provides as follows:

An action at law shall not be brought in the following cases unless the promise, contract, or agreement upon which such action is brought or some memorandum or note thereof is in writing, signed by the party to be charged therewith or by some person thereunto by him or her lawfully authorized:
(5) A contract for the sale of lands, tenements, or hereditaments, or of an interest in or concerning them. Authorization to execute such a contract on ...

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