B & C Management Vermont, Inc. v. John, 122 A.3d 511

Tenant is successor lessee to a 1987 thirty-year commercial lease setting a basic rent of $26,500 and a CPI-based annual adjustment with a 4% cap.
Paragraphs 9B, 9C, 9E, and 9F govern CPI definition, adjustment method, calculation base, prohibition against computing increases on the Increased Basic Rent, and a non-decrease provision.
From 2008–2012 landlords issued annual notices and tenant paid; landlords computed each year’s increase by applying the year-to-year CPI percentage to the prior year’s rent (i.e., computing increases on the increased rent).
In 2013 tenant objected after landlords’ notice of a $54,060 rent; tenant sought declaratory relief and damages, arguing increases must be computed from the 1987 base and never on the Increased Basic Rent, yielding a lower rent (tenant: ~$45,820 for 2013).
Both parties moved for summary judgment; trial court found the rent-increase provision ambiguous, relied on the parties’ historical course of performance, adopted the calculation the parties had used, and granted summary judgment for landlords.
Tenant appealed challenging the use of extrinsic evidence and arguing the result was inequitable; the court affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the rent-adjustment clause is ambiguous	Tenant: ¶9B ambiguous but ¶9E (prohibiting computation on Increased Basic Rent) is clear and controls	Landlords: clause permits computing CPI multiplier from 1987 and landlords’ method follows the lease	Court: clause read in whole is ambiguous; extrinsic evidence (performance) may be used to interpret it
Proper formula for annual increases	Tenant: compute CPI change cumulatively from 1987 (with per-year 4% cap applied to CPI increments) and apply multiplier to $26,500	Landlords: apply percentage change in CPI from 1987 to current year to $26,500; 4% cap limits annual rent increase, not CPI percentage	Court: adopted the method actually used by parties (annual increase = prior-year rent × year-to-year CPI change, subject to 4% cap as applied in practice)
Admissibility/weight of course of performance	Tenant: court erred to override unambiguous term using performance	Landlords: parties’ long course of performance supports their method	Court: where contract is ambiguous, course of performance/acquiescence is proper and persuasive evidence; here it supported landlords’ calculation
Equity/windfall concern	Tenant: adopting parties’ practice gives landlords a windfall	Landlords: their method reflects contract and intent	Court: result is equitable and reasonable (middle-ground between parties’ competing calculations)

Handverger v. City of Winooski, 191 Vt. 84, 38 A.3d 1158 (standards for de novo review of summary judgment)
Dep’t of Corr. v. Matrix Health Sys., P.C., 183 Vt. 348, 950 A.2d 1201 (contract interpretation is question of law when unambiguous)
R&G Props., Inc. v. Column Fin., Inc., 184 Vt. 494, 968 A.2d 286 (give effect to parties’ intent reflected in clear contract language)
Isbrandtsen v. N. Branch Corp., 150 Vt. 575, 556 A.2d 81 (ambiguity exists when reasonable alternative interpretations arise in context)
Bissonnette v. Wylie, 166 Vt. 364, 693 A.2d 1050 (course of performance/acquiescence informs ambiguous contract interpretation)
Howard v. Maple Leaf Farm Assocs., 151 Vt. 555, 563 A.2d 996 (reliance on parties’ subsequent conduct to inform meaning of indefinite terms)
Highridge Condo. Owners Ass’n v. Killington/Pico Ski Resort Partners, LLC, 198 Vt. 44, 111 A.3d 427 (course of performance is relevant only when contract is ambiguous)
Huddleston v. Univ. of Vt., 168 Vt. 249, 719 A.2d 415 (appellee seeking to alter trial court’s order must cross-appeal)
In re Estate of Price, 180 Vt. 548, 904 A.2d 1196 (contract terms must be read in light of surrounding circumstances)