STATE OF VERMONT
ENVIRONMENTAL COURT
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In re Smith 4-Lot Subdivision Final Plat {
(Appeal of Pauze) { Docket No. 244-12-09 Vtec
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Decision on Motion to Approve and Enforce Settlement Agreement
E. Francis Pauze, Jr. (“Appellant”) has filed a motion to approve and enforce a
settlement agreement executed after court-ordered mediation in July 2010. The
motion followed an appeal of municipal permits granted to Howard Smith (“Applicant”)
for a four-lot subdivision in Poultney, Vermont. Applicant opposes the motion to
approve and enforce, claiming that the Court lacks jurisdiction to enforce the
settlement agreement and that the agreement is not binding.
In this proceeding, Appellant is represented by John C. Thrasher, Esq. and
Applicant is represented by Phyllis R. McCoy-Jacien, Esq.
Factual Background
For the sole purpose of putting the pending motion in context, we recite the
following facts, which we understand to be undisputed unless otherwise noted:
1. By his appeal to this Court, Appellant alleges that the Town of Poultney Design
Review Board (“DRB”), in a decision issued November 18, 2009, failed to properly
apply the Town of Poultney Subdivision Regulations (“Regulations”) to Applicant’s
subdivision application and that this Court, in its de novo review, should deny the
pending application.
2. Applicant’s proposed four-lot subdivision is of a 4.63± acre parcel located at 122
On the Green in Poultney, in the Rural Residential 1-Acre Zoning District. The parcel
contains one existing house.
3. On July 29, 2010, as a result of court-ordered mediation, the parties reached an
agreement resolving “all issues raised or that could have been raised” in this appeal.
With the assistance of a mediator, the parties reduced their agreement to writing in a
document entitled “Settlement Agreement.” The mediator filed a copy of this
Settlement Agreement with the Court as an exhibit to the parties’ Alternative Dispute
Resolution Report which is dated July 30, 2010 and was filed August 2, 2010.
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4. Both parties and their respective attorneys signed the Settlement Agreement.
5. The Settlement Agreement states that the parties will file a stipulation so that the
Court may enter an order affirming the DRB’s November 18, 2009 decision. See
Settlement Agreement at 1.
6. The Settlement Agreement contains an “Acknowledgement of Arbitration” term,
whereby the parties relinquish their rights to further litigate this dispute and commit
to resolve any further disputes through arbitration. See id. at 2.
7. Paragraph 8 of the Settlement Agreement states that the parties will cooperate and
sign all documents necessary to implement their Agreement. Id.
8. Paragraph 9 of the Settlement Agreement represents that the parties intend their
Agreement “to resolve all issues raised or that could have been raised in” this pending
appeal. Id.
9. The parties left the mediation session, after having signed the Settlement
Agreement, with the understanding that further documents, incorporating the terms of
the Agreement, would be completed by each party and filed with this Court, so that
the Court could then sign an order disposing of this appeal based on those
documents.
10. Within a matter of days after the parties signed the Settlement Agreement,
Appellant contacted Applicant with suggested proposals to resolve outstanding
landscaping and septic siting issues. See id. at 1.1
11. By December 7, 2010, Appellant made efforts to file the anticipated documents
with the Court.
12. At a telephonic conference with the Court on March 31, 2011, Applicant first
expressed his unwillingness to file the anticipated documents. Appellant thereafter
filed the pending motion to have the parties’ Settlement Agreement enforced by this
Court.
1 While it is not explicitly stated, these provisions make clear that the parties agreed to “negotiate in good
faith the location and type of [additional landscaping] plantings,” Settlement Agreement at 1, ¶ 2, and would
“jointly agree” on whether the “state approved replacement leach field for Lot 1 may remain where it is.” Id.
at 1, ¶ 5. After the parties signed the Settlement Agreement, the Court inquired as to the status of these
outstanding items. By letter dated August 26, 2010 and filed with the Court on August 30, 2010 (with a copy
provided to Applicant’s attorney), Appellant’s attorney represented that the parties were working to resolve
these final items, but that they might need until October 15 to complete the engineering and other
preparatory work. During a status conference with the Court on October 18, 2010, both attorneys
represented that the settlement was still moving forward.
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Discussion
Pending before the Court is Appellant’s motion to approve and enforce the
Settlement Agreement that Appellant and Applicant executed after court-ordered
mediation in July 2010. Appellant argues that the Agreement is enforceable by the
Court because it was fully executed by both parties and their attorneys while the
matter was part of the Environmental Division’s exclusive jurisdiction and because
Appellant is now simply requesting the Court’s approval of that Agreement.
Applicant argues, in opposition, that this Court lacks jurisdiction to enforce the
parties’ Settlement Agreement. Applicant also asserts that the Agreement was not
intended to be binding on the parties and that the Court cannot consider it so because
the settlement has not yet been approved by the Court and incorporated into a
judgment order. Applicant’s final argument is that Appellant delayed in complying
with the terms of the Agreement, thereby breaching the Agreement.
For the reasons detailed below, we reject Applicant’s three arguments and agree
with Appellant. We conclude that this Court does have the authority to recognize and
enforce the Settlement Agreement, which was reached by the parties in the course of
court-ordered mediation; that the Agreement reached by the parties is binding upon
them; and that the complained-of delays were not so significant as to constitute a
breach of the parties’ Agreement.
I. Whether the Environmental Division has jurisdiction over the Settlement
Agreement
A trial court has jurisdiction to enforce a settlement agreement in an action still
pending and active on the court’s docket, even when the terms of the agreement are
not yet incorporated into an order. See Petition of Telesystems Corp., 148 Vt. 411,
412–13 (1987). However, the Telesystems Court established that when asked to
enforce such an agreement, a trial court retaining jurisdiction must review the terms
of the settlement agreement prior to enforcement, so as to “minimize the possibility
that unconscionable terms of settlement are accorded the force and effect of a
judgment order.” Id. at 413.
We regard Telesystems as both confirming that this Court is an appropriate
forum to enforce the challenged Settlement Agreement and requiring that the Court
first review whether the Agreement’s terms are conscionable before enforcing it. The
fact that this Agreement was a result of court-ordered mediation lends additional
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support to our conclusion that we have jurisdiction to enforce this Agreement.2 We
also note that this Court has jurisdiction to conduct any necessary evidentiary
hearings to resolve disagreements related to an agreement’s formation or
consummation.
Turning to the Agreement itself, we note that it was entered into specifically to
resolve the disputed issues that arose in this Environmental Division docket. The
Settlement Agreement explicitly memorializes that the parties agreed to resolve the
disputes in this appeal. The Settlement Agreement was included in a mediation report
submitted on a form that is routinely used by this Court as part of mediation
proceedings. See 12 V.S.A. § 5717(a)(1) (a signed mediation agreement is not
privileged); 12 V.S.A. § 5718(a) (mediators may disclose a mediation report and signed
mediation agreement). For these reasons, the Settlement Agreement at issue is part of
the open proceedings before this Court.
We note that the alternative of requiring the parties to litigate this enforcement
request in the Civil Division would duplicate the parties’ expenditures and be a waste
of judicial resources because the matter can be resolved now, in the currently pending
proceeding. See Manosh v. Manosh, 160 Vt. 634, 634–35 (1993) (mem.) (indicating
that it “would be unreasonable and a waste of judicial resources” to require a party to
a settlement agreement to seek review and enforcement of the agreement in a different
court proceeding while the dispute was still pending in the family court’s jurisdiction).
We therefore conclude that we have jurisdiction to entertain Appellant’s request for
review of the parties’ Settlement Agreement, and that we have the duty to do so in
these still-open proceedings so as to minimize the expenditure of resources by the
parties and the Court.
II. Whether the Settlement Agreement is binding
The next challenge Applicant raises is that the Settlement Agreement is not
binding on the parties. In his memorandum in opposition, Applicant asserts that the
parties had no intention of being bound by the Settlement Agreement. However, we
find no support for this assertion in the facts presented.
Intent to be bound is a question of fact. Catamount Slate Products, Inc. v.
Sheldon, 2003 VT 112, ¶ 17, 176 Vt. 158 (2003) (citing Bixler v. Bullard, 172 Vt. 53,
2 That is not to say that court-ordered mediation is a pre-condition of a trial court having jurisdiction to
consider a request to enforce a settlement reached in the course of litigation.
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58 (2001)). An agreement need not state that it is legally binding to be so. See
Restatement (Second) of Contracts § 21 (“Neither real nor apparent intention that a
promise be legally binding is essential to the formation of a contract. . . .”). We must
turn to the terms of the agreement, as written, to determine whether the parties
intended to be bound. See Camara v. Camara, 2010 VT 53, ¶ 14 (finding that the
parties intended to be bound when both the offer and acceptance were in writing);
Northern Aircraft, Inc. v. Reed, 154 Vt. 36, 44–45 (1990) (“The law presumes the
parties intended to be bound by the plain and express language of their contracts as
they are written.”).
We find that there is ample evidence in the terms of the Settlement Agreement
itself that both Appellant and Applicant intended to be bound by it. The Settlement
Agreement specifically recites that the parties, who both signed the document,
intended “to resolve all issues raised or that could have been raised in” this pending
appeal and to arbitrate any future disputes. The fact that the parties agreed to an
arbitration clause reinforces the notion that the parties had a desire to be bound by
their agreement. The Settlement Agreement also contains no term suggesting that the
parties did not intend to be so bound.
Appellant has referred to these terms in the Settlement Agreement to provide
the evidentiary foundation that it is binding on the parties. In contrast, Applicant has
failed to file an affidavit or offer any evidence to support his bald assertion that the
parties had no intention to be bound by the Settlement Agreement. Without reference
to such evidence, we view the material fact of whether the parties intended to be
bound as essentially undisputed by Applicant here.3 We therefore conclude, based on
the terms of the Settlement Agreement, that the parties intended the Agreement to be
binding.
III. Whether Appellant breached the Settlement Agreement
Applicant’s final argument is that Appellant delayed in complying with the
terms of the Agreement and that his delay constitutes a breach of the parties’
3 We are reminded that unsupported assertions in a legal memorandum submitted in opposition to a motion
for summary judgment are not to be regarded as support for the conclusion that there are facts in dispute.
See V.R.C.P. 56(e) (party opposing a summary judgment motion “may not rest upon the mere allegation or
denials of the [moving] party’s pleadings”); Webb v. Leclair, 2007 VT 65, ¶ 2, 182 Vt. 559 (2007) (mem.).
While Appellant’s pending motion is not specifically titled as a motion for summary judgment, we believe this
rule provides relevant guidance.
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Settlement Agreement. We note that a party may be relieved of her contractual
obligations following a breach only when the breach by her contractual counterpart is
“material.” See Brady v. CU York Ins. Co., No. 2005-323, slip op. at 2 (Vt. March,
2006) (unpublished mem.) (citing Malladi v. Brown, 987 F.Supp. 893, 905 (M.D. Ala.
1997) and Restatement (Second) of Contracts § 237). For a breach to be material, it
must cause a substantial injury to the party seeking relief from her obligations, id.
(citing Malladi, 987 F.Supp. at 905), although contracting parties can define what
constitutes material breach, essentially identifying for themselves what would
constitute a substantial injury. See McGee Const. Co v. Neshobe Dev., Inc., 156 Vt.
550, 554 (1991).
In the record before us, we find no evidence of a delay by Appellant that would
constitute a material breach. The parties signed their Settlement Agreement on July
29, 2010. The record reflects that within a matter of days, Appellant contacted
Applicant with suggested proposals to resolve the outstanding landscaping and septic
siting issues. Also, by December 7, 2010, Appellant made efforts to file a stipulation
with the Court that would have brought these proceedings to a close and allowed
Applicant to acquire his permit.
Further, Applicant has also made no allegations that he suffered a substantial
injury from any alleged delays by Appellant. Applicant had options available if he was
concerned with Appellant’s pace; for instance, he could have relied on the arbitration
clause in the Agreement to convene arbitration to resolve the remaining disputes.
Moreover, the language of the Settlement Agreement has no set timeline for completion
and no assertion that “time is of the essence.” Thus, the Agreement itself does not
appear to emphasize delay as a particular concern; there is no term indicating that
any delay constitutes a material breach of the Agreement.
Based on the lack of evidence of any delay by Appellant, any substantial injury
to Applicant, or any applicable terms in the Settlement Agreement concerning delay,
we conclude that Appellant did not breach the Settlement Agreement in a material
way. Nor is there any evidence in the record of a non-material breach by Appellant.
We further note that to abandon the parties’ settlement now would only mean
more litigation and delay. The record indicates that Appellant remains ready to
consummate the parties’ Agreement, thereby concluding these disputed proceedings.
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Enforcement of the Settlement Agreement is the most appropriate way to avoid further
delay for Appellant and Applicant.
IV. Approval and enforcement of the Settlement Agreement
As discussed above, this Court may only approve and enforce a settlement
agreement once it has determined that enforcement of its terms would not be
unconscionable. See Telesystems, 148 Vt. at 413. Applicant has made no allegation
that this Agreement is unconscionable. Even so, we have completed our own review,
and we cannot find any term within the parties’ Settlement Agreement that could be
deemed unconscionable.
Moreover, the policy promoting compromise through the voluntary settlement of
litigation is well-established in our case law. See, e.g., Telesystems, 148 Vt. at 413–
14. In the absence of a credible allegation that the settlement terms are
unconscionable, we are unwilling to disturb the parties’ Settlement Agreement. We
therefore are obliged to approve and enforce the Settlement Agreement reached by the
parties on July 29, 2010.
Conclusion
For the reasons detailed above, we GRANT Appellant’s motion to approve and
enforce the parties’ Settlement Agreement. That is, we find that this Court has
jurisdiction to enforce the Agreement and hereby do so. We further conclude that the
Settlement Agreement is binding upon the parties, and we approve the Agreement’s
terms as conscionable. We also conclude that there was no material breach of the
Agreement that would relieve either party from his contractual obligations.
The Court reminds both parties that they have bound themselves to resolve
further disputes through arbitration, pursuant to their Agreement.
A Judgment Order accompanies this Decision. This completes the current
proceedings before this Court.
Done at Berlin, Vermont this 27th day of September, 2011.
Thomas S. Durkin,
Environmental Judge
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