184 A.3d 1192
Vt.2018Background
- Plaintiff (Daiello) built a residence on leased glebe land originally conveyed to the Town in an 1838 lease; he claims an implied covenant of quiet enjoyment includes access to the property.
- The contested route is Stebbins Road (discontinued as a public road in 1904), which crosses land owned by the Merritts to the east.
- In 2008 the Merritts sued for a declaration that Daiello had no right to cross their property; the superior court found Stebbins Road was never properly laid out and that Daiello had no easement by necessity; this Court affirmed on alternative grounds in 2010.
- In 2014 Daiello sued the Town for breach of the implied covenant of quiet enjoyment (lack of access). The Town moved for summary judgment, arguing Daiello is precluded by the prior litigation and, as a nonparty to that litigation, the Town can prove the road was properly laid out.
- The superior court granted summary judgment for the Town, holding (1) the lease implies a covenant of quiet enjoyment that includes access, but (2) Daiello was issue-precluded from relitigating that he has western access because of Merritt v. Daiello, and thus the Town did not breach.
- The Vermont Supreme Court reversed and remanded: it held Daiello is not precluded from relitigating western access (because that fact was not decided on appeal) and, in certain circumstances, the issue whether the Town properly laid out Stebbins Road may be relitigated despite the prior adjudication (joinder/foreseeability concerns and risk of inconsistent judgments), meaning the Merritts may be indispensable parties on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Daiello is precluded from relitigating that he lacks access from the west | Merritt appellate decision did not resolve the trial court’s finding about western access on appeal, so Daiello may relitigate it | Merritt findings bind Daiello as a party; therefore he cannot relitigate his western access | Not precluded: appellate court did not pass on that factual finding, so issue preclusion does not apply to Daiello |
| Whether the Town (a nonparty to Merritt) is precluded from asserting Stebbins Road was properly laid out | Seeks to litigate layout as relevant to Town’s covenant breach; Merritts failed to join the Town earlier so relitigation is appropriate | Town contends it is not bound by Merritt because it was a nonparty and can show contrary facts | Town is not automatically precluded as a nonparty, but under limited Restatement/Rule 19 principles relitigation of the layout issue may be allowed because of fairness, foreseeability, and joinder concerns |
| Whether the Town breached an implied covenant of quiet enjoyment by impairing access | Covenant implied in 1838 lease includes access; Town’s acts/omissions deprived Daiello of use | Town argued no breach as a matter of law (preclusion + evidence of access over time) | Court did not decide scope of covenant on appeal; reversed summary judgment and remanded for factual proceedings to determine breach and access issues |
| Whether Merritts should have joined the Town in the first action (Rule 19/indispensable party) | Merritts alleged Town failed to lay out the road but did not join Town; that failure makes earlier judgment unfairly binding in subsequent suit | Merritts may claim they had no duty or that joinder was unnecessary then | Court held Merritts had stronger obligation to join the Town earlier; failure to join supports allowing relitigation and may render Merritts indispensable on remand |
Key Cases Cited
- Okemo Mountain, Inc. v. Town of Ludlow, 171 Vt. 201 (Vt. 2000) (abutting landowner retains private right of access after public road discontinuance)
- Trepanier v. Getting Organized, Inc., 155 Vt. 259 (Vt. 1990) (elements and fairness factors for issue preclusion)
- Berisha v. Hardy, 144 Vt. 136 (Vt. 1984) (distinguishing claim preclusion and issue preclusion)
- Masco Corp. v. United States, 303 F.3d 1316 (Fed. Cir. 2002) (appellate non-review of a factual finding prevents preclusive effect against the appellant)
- Niagara Mohawk Power Corp. v. Tonawanda Band of Seneca Indians, 94 F.3d 747 (2d Cir. 1996) (appellate consideration of only one of alternative grounds limits preclusive effect)