Osborn v. Osborn

 NOTICE:  This opinion is subject to motions for reargument under V.R.A.P.
 40 as well as formal revision before publication in the Vermont Reports.
 Readers are requested to notify the Reporter of Decisions, Vermont Supreme
 Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
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                                 No. 91-308


 Elizabeth Osborn                             Supreme Court

                                              On Appeal from
      v.                                      Windsor Family Court

 David D. Osborn                              April Term, 1992



 George F. Ellison, J.

 Mary G. Kirkpatrick and Pamela Fitzgerald of Lisman & Lisman, Burlington,
 for plaintiff-appellee

 Kimberly B. Cheney of Cheney, Brock & Saudek, P.C., Montpelier, for
 defendant-appellant



 PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.



      JOHNSON, J.   Defendant husband appeals from a family court decision
 ordering payment to plaintiff of $40,788.05 under the terms of a divorce
 judgment, and wife cross-appeals the denial of certain interest payments
 under the same judgment. We affirm.
      The original final order in this case was reversed by this Court in
 Osborn v. Osborn, 147 Vt. 432, 519 A.2d 1161 (1986).  On remand, the parties
 reached a property settlement, and a judgment order based on their stipu-
 lation was entered on December 29, 1987.  Husband paid $30,000 of the
 $230,000 due wife under terms of the settlement within forty-five days of
 the order, and the remaining $200,000 was to be paid by June 16, 1989.  If
 that sum was not then paid, husband was to begin payments of $400 per month
 on July 1, 1989, to continue until the full amount of the balance was paid.
 There was no provision for interest on unpaid amounts.
      This appeal focuses on an additional provision of the order dealing
 with property owned by the parties in Portugal.  Husband was authorized to
 attempt sale of the property by December 16, 1989.  If he sold it, wife
 would receive the entire net amount, up to a maximum of $200,000 -- the
 balance due under the property settlement. The language at issue in the
 judgment states:
           Elizabeth shall be entitled to receive the following
           sums of money from the sale proceeds:

           a.  The entire net amount due the parties on account of
           the sale up to a maximum of $200,000.  As used in
           Paragraph (a), "net amount" means the sale proceeds less
           commissions paid to any broker or Trustee reasonably
           necessary to procure a buyer.

 The order also required husband to obtain an irrevocable letter of credit
 for $70,000, payable to wife if she had not been paid the full $200,000 by
 December 16, 1989.
      Husband's attorney advised wife's attorney on September 14, 1989 that
 his client intended to sell the land in Portugal for about $80,000, and was
 going to deduct a $40,000 "trustee fee," before remitting the balance to
 wife.  The "trustee fee" was evidently an amount that the record title-
 holders in Portugal demanded to allow the sale to proceed.  The reason
 title had been placed in nominees or trustees was that under the law of
 Portugal, nonresidents could not legally have taken title.  The result was
 that the parties had no recourse in Portuguese courts, and the trustees
 could effectively demand a large fee to allow the sale to proceed.  That
 sale was subsequently completed, on December 5, 1989, for $85,000, and
 husband deducted the "trustee fee" of about $40,000, a brokerage fee of
 $4,211.95 and miscellaneous expenses. Wife received $40,000 from the sale.
      On September 14, 1989, wife deemed that the terms of the stipulation
 and order had been violated by husband's intention to deduct the "trustee
 fee" from the proceeds of the sale, and on the basis of an asserted antici-
 patory breach, demanded payment under the letter of credit from the issuing
 bank.  The bank honored the letter, and wife received $70,000 about three
 months earlier than specified in the order.
      Wife thereafter sought a contempt order against husband for deducting
 and withholding the $40,000 "trustee fee" and a declaration that she was
 within her rights to demand payment under the letter of credit.  Wife also
 sought interest on settlement amounts outstanding after June 16, 1989.  She
 moved for partial summary judgment, and husband also moved for summary
 judgment, denying contempt and seeking a declaration that the deduction of
 the $40,000 was proper.
      The trial court allowed the brokerage fee, but found that the "trustee
 fee" could not be included in "commissions paid to any broker or trustee
 reasonably necessary to procure a buyer" and ordered husband to pay
 $40,788.05, plus interest from the date of sale, December 5, 1989.  The
 court also found that there had been no justification for wife's early
 demand under the letter of credit and ordered her to pay lost interest of
 $2,312.65, plus interest on that amount from the day of the demand exercise,
 September 18, 1989.  Both appeals followed.
                                     I.
      Husband argues that the property order and underlying stipulation were
 ambiguous and that the trial court erred when it failed to consider evidence
 of the "surrounding circumstances" in an effort to interpret their terms.
 Specifically, husband faults the court for failing to account for what the
 parties knew and intended by the phrase "commissions necessary to procure a
 buyer" and what they said to each other at the time they reached a written
 understanding.
      In Isbrandtsen v. North Branch Corp., 150 Vt. 575, 579, 556 A.2d 81, 84
 (1988) we held:
           [W]e believe it appropriate, when inquiring into the
           existence of ambiguity, for a court to consider the
           circumstances surrounding the making of the agreement.
           Ambiguity will be found where a writing in and of itself
           supports a different interpretation from that which
           appears when it is read in light of the surrounding
           circumstances, and both interpretations are reasonable.

 Although a trial court may examine the factual circumstances under which an
 agreement is reached, the question of the existence of ambiguity remains
 unequivocally a question of law for the court to decide.  Id. at 577, 556 A.2d  at 83.  In the present case, the heart of the trial court's decision is
 its conclusion -- after a consideration of "surrounding circumstances"  --
 that the parties intended to allow deduction of only a broker's commission,
 and not any other fees, even if payment of those fees was a required
 condition of the sale. Those "surrounding circumstances" strongly support
 the court's conclusion that there was no ambiguity.  The proceedings in this
 matter have been vigorously pursued from the outset, as is evident from the
 first appeal to this Court and, even more so, from the intense and thorough
 advocacy in the present round.  As the court put it:
           The court has carefully considered the circumstances
           surrounding this document [i.e., the order].  There was
           a contested property settlement and maintenance award.
           The formation of the agreement was preceded by nearly
           two days of testimony.  The document was written and
           reviewed by competent counsel paragraph by paragraph.
           Other provisions of the agreement are consistent with
           the plain meaning of the words and do not contradict the
           court's interpretation of those words as detailed below.
           None of these circumstances lead the court to believe
           that there is an equally reasonable alternative to the
           plain meaning of the words.

      Although the ultimate question of ambiguity is a question of law, a
 court's consideration of the factual circumstances surrounding the text of
 an agreement will be viewed with the same deference as we give to any other
 factual findings, and that consideration will not be set aside unless
 clearly erroneous.  See, e.g., Sutton v. Sutton, 147 Vt. 639, 640, 523 A.2d 1249, 1250 (1987).  In the present case it is clear that the trial court put
 the words of the order in the proper factual context.
      Husband argues that both parties were aware of the potential deduction
 from the sale, and faults the court for failing to consider the affidavit of
 a New York attorney familiar with the negotiations stating that at the date
 of the stipulation underlying the order the parties were aware of the amount
 that might have to be paid to the trustees in order to effect sale.  But
 wife's awareness of the trustees' demands does not imply agreement that the
 "trustee fee" would be treated as a "commission paid . . . to procure a
 buyer."  The economics of their respective positions would have suggested a
 very different understanding.  If the unpaid balance of $130,000 were not
 received in full by June 16, 1989, husband was to begin payments of $400 per
 month until the total settlement amount was reached.  The main source of the
 additional payments was to be the proceeds of the sale of the Portugal
 property.  Every net dollar from the sale would reduce the balance payable
 by husband in the future.  At the same time, because of the parties' tenuous
 legal position under Portuguese law, the trustees commanded a powerful bar-
 gaining position.
     With these facts as background, husband asks this Court
 to conclude as a matter of law that wife's knowledge of the trustees'
 demands implied that she agreed to credit him with a greater amount than the
 total he could be expected to "net" from the sale, given the parties' legal
 predicament in Portugal.  This would have been an irrational agreement on
 her part, since that outcome would have left a greater balance to be paid at
 the rate of $400 per month, with no provision for interest on the unpaid
 balance. (FN1) Assuming she knew of the trustees' demands, a more plausible
 version of an understanding between the parties might have been one that
 allowed husband to pay whatever "trustee fee" he wished to pay, thereby
 reducing the amount to be paid out in future periodic payments, but which
 would credit him only with the amount of net proceeds after paying both any
 brokerage commission necessary to find a buyer and any "trustee fee." That
 understanding would leave in the hands of husband (who had sole control over
 the sale as between the parties) the decision  whether to pay the "trustee
 fee," after weighing his own benefits against his own costs.
      Viewed in that light, proof that the parties were aware of the
 possibility of a significant "trustee fee" at the time of the stipulation
 does not weigh in favor of husband's interpretation of the agreement, even
 if the terms were ambiguous.  What husband proves, if anything, is that
 both parties knew that a "trustee fee" was looming, and that he failed to
 obtain an agreement about the treatment of that fee different from that
 suggested by the logic of the parties' respective positions and the specific
 language of the agreement limiting husband's credits to "commissions paid
 to any broker or Trustee reasonably necessary to procure a buyer."
      The court properly refused to consider a New York attorney's affidavit
 as to what the stipulation and resultant order meant.  Though framed in
 terms of an explanation of an ambiguous term of the agreement, the affidavit
 sought to show that "commissions paid to any broker or Trustee reasonably
 necessary to procure a buyer" meant a fee paid to the trustees having
 nothing to do with the procuring of a buyer, a modification of a prior
 agreement.  See Tilley v. Green Mountain Power Corp., 156 Vt. 91, 93, 587 A.2d 412, 414 (1991).  The court committed no error in construing the words
 of the order.
                                     II.
      Wife argues on cross-appeal that the court erred in declaring that
 husband had not anticipatorily breached terms of the judgment by agreeing to
 pay the $40,000 "trustee fee" and then deducting the amount of the fee from
 the net proceeds to her.  The trial court was correct that husband's
 interpretation of the order -- right or wrong -- was not a repudiation of
 the parties' agreement and in no event sanctioned wife's premature call on
 the letter of credit.  Wife's remedies under the order were clear and did
 not involve self help.  The court properly allowed husband's interest on
 $70,000 for the period up to the date of authorized exercise.
      Wife also contends that she should be awarded interest on that part of
 the $200,000 unpaid after June 16, 1989.  The parties' stipulation and the
 ensuing order specifically provided that after that date, husband was
 required to begin periodic monthly payments of $400.  Because the agreement
 and order did not provide for interest on the unpaid balance, husband had an
 incentive not to pay in full by that date, or to pay as little as he
 properly could under the agreement.  Therefore, leaving such a large
 portion of the balance to periodic payments was a clear alternative under
 the judgment.  Just as husband may not be allowed to redraft this agreement
 to allow his own version of a broker's commission, wife should not be
 permitted to do the same with respect to an interest provision.  The trial
 court ruled that the agreement should be enforced in accordance with its
 terms.  It committed no error.  See Lewis v. Lewis, 149 Vt. 19, 22, 538 A.2d 170, 172 (1987) (in disposing of marital property trial court should give
 great weight to any agreements between the parties).
      Affirmed.


                                    FOR THE COURT:



                                    ___________________________________
                                    Associate Justice



FN1.    In light of the absence of an interest requirement on the unpaid
 balance, shifting a greater portion of the settlement to periodic payments
 by husband would have reduced the total present value of the settlement.
 If husband was not credited with the $40,000 payment to the "trustees," the
 result would have been that wife's funds in hand would be $140,000 (initial
 payment of $30,000, plus the $70,000 letter of credit, plus the $40,000),
 rather than $100,000.
      Husband could have avoided making the additional $40,000 cash "down
 payment" to wife by declining to sell the property in Portugal.  That
 option would have stretched out the period of monthly payments, reducing the
 present value of the settlement to plaintiff.  But it would also have denied
 husband the net proceeds of the sale as a credit against his total
 obligation -- making the no-sale option a "lose/lose" proposition.
       Husband's argument that wife's knowledge of the "trustees'" demand
 implies allowance of the $40,000 as an added brokerage commission -- an
 outcome that would only favor him -- flies in the face of logic.  The trial
 court's failure to so find was not clearly erroneous.