Background
Hawk Resort International, LLC (HRI) retained undeveloped lots in a Plymouth, Vermont resort community after a comprehensive settlement transferred common lands and infrastructure to the Salt Ash Owners Association, Inc. (SAOA). The settlement agreement and subsequently recorded covenants linked HRI’s obligation to pay assessments—and its right to vote as an association member—to whether a lot had reasonable driveway access to a common roadway and a reasonable opportunity to connect to a resort sewer main.
After SAOA sought assessments beginning in 2021, HRI requested a declaration that none were currently due, and SAOA counterclaimed for assessments. The trial court found the documents ambiguous as to whether any HRI lots presently satisfied the stated conditions. Following a three-day merits hearing, it determined that the parties intended assessments and voting rights to arise only after further development occurred and that none of HRI’s undeveloped lots yet met the contractual conditions.
The Court’s Holding
The Vermont Supreme Court affirmed. It held that the trial court properly found ambiguity because Schedule A-1 to the recorded covenants did not clearly establish which HRI lots, if any, currently had the required road and sewer access. The schedule’s columns and notations were not self-explanatory, and reasonable minds could disagree about their meaning, making a trial on the parties’ intent appropriate.
The Court also upheld the trial court’s factual determination that the parties did not intend HRI’s undeveloped lots to become assessable until further development extended the necessary roadway and sewer infrastructure. SAOA did not show that the findings lacked credible evidentiary support or that the conclusions were unreasonable. Because no HRI lots were yet subject to assessment, the Court rejected SAOA’s request to declare assessable the seventeen lots identified by its engineer.
Key Takeaways
- A contract is ambiguous when reasonable interpretations differ after its language is considered in light of the surrounding circumstances.
- Ambiguous schedules and unexplained notations may require a factual inquiry into the parties’ intent.
- HRI’s assessment obligations and voting rights remain linked, and neither has attached to its undeveloped lots because the agreed development conditions have not yet occurred.
Why It Matters
The decision underscores the importance of clearly identifying when undeveloped property becomes subject to owners’ association assessments. Lists, access classifications, and infrastructure triggers should expressly state their legal consequences rather than leave those consequences to inference.
It also illustrates the deference an appellate court gives to trial-court findings about contractual intent after an evidentiary hearing. Engineering evidence showing present physical access did not override the trial court’s supported finding that the contractual conditions measured future development progress.