Everbank v. Marini

2015 VT 131, 134 A.3d 189 (2015)

 

RULE:

In general, where one party is but a conduit through which an individual physically compels a victim to appear to manifest assent, one of the fundamental pillars of contract formation is fatally flawed and the agreement is void. On the other hand, where a party's manifestation of assent is unwillingly made but is induced by improper means without the victim having a reasonable means of avoidance, the agreement is subsequently voidable by the victim. Restatement (Second) of Contracts §§ 174-176.

FACTS:

This appeal stems from a decision of the Addison Superior Court, Civil Division, granting summary judgment in favor of defendant Caroline Marini on plaintiff EverBank's complaint for foreclosure on a mortgage that Caroline signed in 2009 together with her co-defendant and then-husband Gary Marini. In ruling on cross-motions for summary judgment, following a hearing, the trial court concluded that Caroline was entitled to judgment as a matter of law on EverBank's foreclosure complaint because the undisputed material facts established that Caroline signed the mortgage under the threat of physical violence from Gary and thus the mortgage was void as to her. The trial court also concluded that regardless of whether the mortgage was void as to Caroline, EverBank was not a bona fide purchaser. EverBank subsequently moved to alter or amend the judgment, pursuant to Vermont Rule of Civil Procedure 59(e), on the ground that the grant of summary judgment as to Caroline unjustly enriched her. The trial court denied the motion, explaining that EverBank had not raised the issue of unjust enrichment in response to Caroline's cross-motion for summary judgment. EverBank appealed both decisions. Affirmed in part, reversed in part, and remanded.

ISSUE:

Did the trial court err in concluding that the mortgage was void as to Caroline because she was not physically compelled to sign the mortgage documentation?

ANSWER:

Yes.

CONCLUSION:

When a husband waved scissors and threatened to divorce his wife if she would not sign mortgage paperwork, but the wife signed the mortgage paperwork the next day in front of an independent person, the mortgage was not void as to the wife as a matter of law, as nothing indicated that the husband overpowered the wife and manually manipulated her hand to appear to assent, nor did the record reveal any evidence of a threat of imminent physical violence upon the wife such that she reasonably feared loss of life or serious physical injury at the time she signed the document. However, remand was required to determine whether the mortgage was voidable, as the record was devoid of any evidence that the wife was without a reasonable alternative but to succumb, given that the improper threat occurred the night before she actually signed her name to the mortgage document.

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