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| More sample articles from Vermont Property Owners Report | ||||
| Decisions | ||||
| The following sample summaries of legal decisions first appeared in the Decisions section of the Aug. - Sept. 2002 edition, Vol. 17 No. 3, of Vermont Property Owners Report. | ||||
| Lender Can Foreclose Mortgage Even If It Cannot Sue On Promissory Note Huntington v. McCarty and Baker (Docket No. 2000-545) |
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| Reaffirming a 100-year-old Vermont case, the state Supreme Court has held that the remedies under a mortgage survive the extinguishment of the note. In this case, a lender was able to foreclose on a property even though the statute of limitations barred enforcement of the underlying note. In November 1990, Patricia Raitt Baker issued a promissory note in the amount of $9,000 to George Huntington, with the principal and interest due in November 1991. The note was secured in December 1991 by a mortgage deed from Baker to Huntington. Baker made no payments to Huntington, and was in default in November 1991. In August 1998, nearly seven years later, Huntington filed a complaint for foreclosure in Orange Superior Court. Baker filed a motion to dismiss, claiming that the six-year statute of limitations applicable to promissory notes had run and rendered both the note and the mortgage securing it unenforceable. Baker lost at the trial court, which held that the 15- year statute of limitations for mortgages permitted Huntington to collect on the debt, but she appealed to the Vermont Supreme Court. A century earlier, in Houghton v. Tolman, the Vermont Supreme Court ruled that the statute of limitations "does not extinguish the debt, but only bars the remedy; and that a mortagee has two independent remedies, one upon the note … and one upon the mortgage." Baker argued that more recent decisions of the court suggested this decision should be changed, but the Supreme Court disagreed and held that an enforceable mortgage debt can survive when the statute of limitations has run on the underlying promissory note. Analysis: A lender may foreclose - within the 15-year statute of limitations for mortgage deeds - to collect a debt, even if the note on which the mortgage is based is not enforceable because of the six-year statute of limitations on notes. |
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| Homeowners Not Liable To Woman Who Fell Off Their Spiral Staircase Menard v. Lavoie (Docket No. 2001-355) |
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| Mark and Nancy Lavoie owned a home which they purchased from Mark's mother, Mary Lavoie, in 1978. Upon purchasing it, they built a garage-apartment where Mary lived. They also installed a spiral staircase connecting Mary's apartment to the rest of this house. The staircase had guardrails at its top, but did not have railings along its sides. Throughout the 20 years that Mary lived in the garage apartment, Sandra Menard - Mary's daughter and Mark's sister - made annual visits to the Lavoie's home. Menard had only used the staircase once because, as she testified in her deposition, it made her nervous. Instead, she used an alternate staircase in a different part of the house. On Sept. 14, 1999, while visiting her mother, Menard chose to descend the spiral staircase. Not watching the stairs or holding on to the railing, Menard missed the first step and fell completely off the stairs. She dropped nine feet to the floor below, breaking her leg. Menard sued the Lavoies, seeking damages for her injury. The trial court found that a "social guest" standard of care applied, and ruled in favor of the Lavoies. Menard appealed, contending that the determination of a "social guest " standard was in error, since Mary had a landlord-tenant relationship with the Lavoies, and arguing that she was entitled to be treated as a "business invitee." Alternatively, she argued that the Vermont Supreme Court ought to abandon the status-based approach to landowner liability and instead apply a "reasonable care" standard regardless of the party's relationship. Currently in Vermont, a landowner is liable to a "social guest" when the guest suffers injury as a result of active or affirmative negligence by the landowner. A social guest is defined as one who enters or remains on the land with the consent of the landowner. A "business invitee," by contrast, enters the land for the purpose of business dealings with the landowner. Business invitees are entitled to a higher standard of care, under which the landowners must also keep the premises free from unreasonable risks. The Court ruled against Menard, holding that it did not have to consider a change in Vermont law since the Lavoies' actions met either standard. The Court noted the Lavoies had installed a guardrail at the top of the stairs, and Mary Lavoie had used the stairs for 20 years without incident. "Whatever dangers the stairs posed were obvious to any observer, and were well known by plaintiff," the Court said. Analysis: Vermont's property owner liability law remains unchanged: social guests must be protected against affirmative negligence, while business invitees must be protected against all unreasonable risks, a higher standard of care. |
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| These sample summaries of legal decisions first appeared in the Decisions section of the Aug. - Sept. 2002 edition, Vol. 17 No. 3, of Vermont Property Owners Report.
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