Prue v. Royer, Sr., and Department of Liquor Control
67 A.3d 895
Vt.2013Background
- Prue and Royer formed a long-running bar investment deal in 1999–2000; the written instrument mixed sale and lease terms, creating ambiguity about ownership rights.
- A separate Financing Property Agreement valued the total at $190,000, with down payments and monthly/weekly payments; payments were purportedly applied toward the purchase price, not merely rent.
- An Addendum assigned operating responsibilities and required insurance, with Royer named as lienholder and approval for renovations; the arrangement continued for years with intermittent payments.
- In 2004 a building addition was financed by Royer and added to the principal; a 2004 amortization schedule extended the balance to $253,549 over 25 years, without revising the balloon date.
- In 2006 the parties modified the payment plan to weekly payments; insurance issues and liquor control concerns culminated in the first quarter of 2007, after which the Prues ceased payments and surrendered possession in March 2007.
- The Prues filed suit March 29, 2007 seeking declaration of equitable title and damages; Royer counterclaimed for breach of contract and unjust enrichment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Contract type (deed vs lease-option) | Prue contends a contract for deed. | Royer contends it is a lease with option to purchase. | Contract for deed; equitable mortgage. |
| Validity of 2004 and 2006 modifications under Statute of Frauds | Modifications relate to the original contract and were signed. | Modifications lack essential terms (closing date) and thus are unenforceable. | Modifications enforceable; waivers/timing considerations allow modification authentication. |
| Foreclosure propriety | Foreclosure entered sua sponte despite not being pled as such. | Foreclosure appropriate as mortgage-equity remedy. | Foreclosure premature; remand for proper foreclosure proceedings. |
| Damages for waste | Damages appropriate for waste by removal of items. | Waste damages not properly pled or measured. | Damages for waste upheld; cost of repair/repairable damage adopted. |
Key Cases Cited
- Tromblay v. Dacres, 135 Vt. 335 (1977) (equitable mortgage doctrine; contract for deed characteristics)
- Evarts v. Forte, 135 Vt. 306 (1977) (Statute of Frauds and writing requirement for modifications)
- Chomicky v. Buttolph, 147 Vt. 128 (1986) (modification validity under Statute of Frauds requires written form)
- North v. Simonini, 142 Vt. 482 (1983) (waiver of time limitations may validate modification)