93 A.3d 571
Vt.2014Background
- The Woods at Killington is a condominium created by a 1985 declaration; original plan allowed 147 units but only 107 were built. 105 deeds included a 10-year durational power-of-attorney limiting future developer amendments, creating a conflict with the declaration.
- Amherst Realty (successor developer) acquired development rights in 1994 and sought Act 250 permit extensions to complete the remaining 40 units; the Association opposed and litigation followed (including this Court’s earlier decision resolving declaratory issues).
- In 1998 an Association representative told an Amherst contractor to stop work and leave (alleged trespass); thereafter the Association generally refused to cooperate with Amherst’s development efforts.
- Amherst sued seeking declaratory relief and damages for interference with its development rights under the condominium declaration; the superior court and this Court resolved the declaratory question in earlier proceedings (Madowitz I).
- On remand the trial court granted summary judgment to the Association on Amherst’s interference/damages claims (finding lost profits speculative/new-business rule), and granted summary judgment to Amherst on the Association’s consumer-fraud counterclaim; both parties appealed/cross-appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Association’s opposition/interference supports recovery of lost profits for thwarted development | Amherst: interference (including 1998 trespass and ongoing noncooperation) caused lost profits for units that could have been built by Jan 1, 2000 | Association: plaintiff cannot recover for opposing Act 250 process; any other acts produced only speculative damages; litigation privilege and law-of-the-case bar broader damages | Court: Affirmed summary judgment for Association — lost-profits claim too speculative to submit to jury (profits limited to work completable by 1/1/2000 and evidence of construction/profit is speculative) |
| Applicability of new-business/lost-profits certainty rule | Amherst: rule should not bar recovery here or be applied inflexibly | Association: new-business rule and reasonable-certainty requirement bar lost-profits recovery | Court: did not reach modifying rule; held lost-profits claim fails on speculative record regardless of new-business rule |
| Temporal/scope limit of recoverable damages (pre- vs post-2000) | Amherst: damages include later years; suspension of development during litigation was futile because permit appeal was pending | Association: only damages for construction that could have been completed by Jan 1, 2000 are at issue; court of the case bars post-2000 claims | Court: only profits tied to construction completable by 1/1/2000 were potentially actionable; Amherst offered no admissible evidence showing units would have been built then, so damages speculative |
| Whether Amherst (a good-faith successor purchaser) is liable under Vermont Consumer Fraud Act via ratification of original developer’s deception | Association: original developer deceived buyers via durational limit; Amherst ratified/benefited and thus should disgorge profits under CFA | Amherst: was unaware of the deed/declaration conflict at purchase and did not perpetrate or directly participate in any deceptive acts | Court: Affirmed dismissal of CFA claim as to Amherst — an innocent successor who did not directly participate, aid, or act as principal/agent for the original fraud is not liable under §2453/§2461(b); ratification theory does not extend to CFA liability here |
Key Cases Cited
- Madowitz v. The Woods at Killington Owners’ Ass’n, 188 Vt. 197 (2010) (prior interlocutory appellate decision resolving declaratory issues about development rights)
- Ferrisburgh Realty Investors v. Schumacher, 187 Vt. 309 (2010) (breach-of-contract damages must be proved with reasonable certainty)
- Berlin Dev. Corp. v. Vt. Structural Steel Corp., 127 Vt. 367 (1968) (lost profits for a new business are generally too speculative)
- Jones v. Stearns, 97 Vt. 37 (1923) (acceptance of benefits from another’s fraud can imply adoption of fraudulent methods in common-law contexts)
- Elkins v. Microsoft Corp., 174 Vt. 328 (2002) (private claim under consumer-fraud statute may reach parties beyond direct contractual privity)