Billewicz v. Town of Fair Haven

1

2023 Vt Super 080901

Johnathan J. Billewicz, J and M Investment Trust, and Lillian E. Billewicz, Plaintiffs v. Town of Fair Haven, Vermont, Defendant

No. 22-CV-04159

Superior Court of Vermont, Civil Division, Rutland Unit

August 9, 2023

DECISION AND ORDER

Megan J. Shafritz Superior Court Judge

RULING ON DEFENDANT'S MOTION FOR RULE 11 SANCTIONS

Plaintiffs Johnathan J. Billewicz, Lillian E. Billewicz, and J and M Investment Trust (collectively "Plaintiffs") filed this action against Defendant Town of Fair Haven based on the Town's allegedly wrongful refusal to collect delinquent taxes owed by Plaintiffs. In a prior order, the Court granted the Town's motion to dismiss the action for failure to state a cognizable legal claim. Currently pending before the Court is the Town's motion under Rule 11 of the Vermont Rules of Civil Procedure seeking an injunction against Plaintiffs preventing them from filing any future cases relating to four real properties in Fair Haven acquired by the Town from Plaintiffs via a tax sale unless the filing is signed by a licensed Vermont attorney, or (upon proof of indigence) this Court grants permission to file without counsel. Plaintiffs represent themselves and Defendant is represented by Kevin L. Kite, Esq. No party has requested a hearing on the motion. For the reasons discussed below Defendant's motion for Rule 11 sanctions is GRANTED.

Factual Background and Procedural History

Plaintiffs Johnathan and Lillian Billewicz are residents of the Town of Fair Haven. Am. Compl. ¶¶ 1-2. Plaintiff J and M Investment Trust is a trust established under the laws of Vermont; Mr. Billewicz is a beneficiary of the Trust and Ms Billewicz is the Trust's sole trustee. Id. ¶¶ 3-5. As of 2013, Plaintiffs, along with Michael Billewicz (the son and brother of Lillian and Johnathan Billewicz) owned four real properties in Fair Haven, located at 5 and 7 Union Street, 16-18 River Street, and 2-4 Willard Avenue. In late 2013, the Town's tax collector notified Plaintiffs that outstanding taxes were due with respect to those properties and that taxsale procedures would be commenced if the delinquencies continued. Plaintiffs did not pay the back taxes, however, and in February of 2014, the tax collector recorded notices of a tax sale, together with warrants, tax bills, levies, and property descriptions. At the tax sales held in March 2014, all four properties were sold to the Town, and during the one-year period following the sale, neither the Trust nor any of the Billewiczs exercised their statutory right of redemption. On April 1, 2015, the Town's tax collector executed tax collector's deeds transferring the properties to the Town, and duly recorded the deeds in the land records of the Town. However, reports of sale of these properties were not recorded in the Fair Haven Town Clerk's office until November of 2017.^[1]

On March 22, 2018, Plaintiffs, proceeding pro se, filed an action in this Court against the Town asserting claims of quiet title, trespass to real property and to chattel invasion of privacy, and conversion. All of Plaintiffs' claims were based solely on the theory that the tax deeds conveying the four properties to the Town were void because the tax collector did not record the reports of sale within the thirty-day period following the sales, as required by 32 V.S.A. § 5255, and therefore Plaintiffs remained the rightful owners of the properties. The trial court granted summary judgment to the Town, finding that the lawsuit constituted a challenge to an act of the tax collector related to the collection of a tax, and therefore was barred by the one-year statute of limitation imposed by 32 V.S.A § 5294(4).

On appeal, Plaintiffs, who were then represented by counsel argued that their action was for the recovery of lands from a grantee who had obtained title through a tax collector's deed, and thus governed by the three-year limitations period set forth under 32 V.S.A. § 5263. The Vermont Supreme Court affirmed, however, holding that "because the issue on which this matter turns is a challenge to the tax collector's procedural steps in collecting the tax, §§ 5294 and 5295 do apply, and this action is thereby barred." Billewicz v. Town of Fair Haven, 2021 VT 20, ¶ 23, 214 Vt. 511 ("Billewicz I").^[2]

In May 2021, shortly after the Supreme Court denied reargument, Plaintiffs filed a new pro se action in this Court, again alleging that the Town failed to record the report of sale as required by 32 V.S.A. § 5255, and asserting claims against the Town for negligence, trespass, invasion of privacy, and conversion. The Town moved for summary judgment on grounds of issue preclusion and claim preclusion. Plaintiffs countered that their new lawsuit was distinguishable because it alleged that the town clerk (rather than the tax collector) failed to record the deeds of sale within the statutory time. The trial court granted summary judgment on grounds of claim preclusion, reasoning that both cases were between the same parties, concerned the same subject matter, and raised the same essential issues concerning the validity of the deeds that were or should have been asserted in Billewicz I. On appeal, Plaintiffs argued that their new case was not identical because it alleged new instances of trespass that occurred after the original, 2018 litigation. In affirming, the Supreme Court held that:

Plaintiffs' trespass claims, whether for alleged incursions that occurred before or after 2018, are inextricably interwoven with their assertion that they are the rightful owners of the land parcels and not the Town because the Town failed to properly timely record the reports of the [2014] tax sale. Contrary to plaintiffs' assertion, there is no new legal theory here. Plaintiffs' "new" trespass claims rest on the same allegations asserted in Billewicz I, and therefore claim preclusion bars their suit.

Billewicz v. Town of Fair Haven, No. 21-AP-244, 2022 WL 424881, at *2 (Vt. Feb. 11, 2022) (unpub. mem.) ("Billewicz II").

Plaintiffs again moved for reargument, but before the Supreme Court denied the motion, Plaintiffs filed their third pro se action in this Court against the Town. See Billewicz v. Town of Fair Haven, No. 22-CV-677 (Vt. Super. Ct. filed Feb. 28, 2022) ("Billewicz III"). Plaintiffs again alleged ownership of all four properties, and that the Town was liable for trespass to real estate and to chattel, for having installed boards, sheets of plywood, and padlocks on the subject properties. Notably, in an apparent effort to avoid preclusion, Plaintiffs' new complaint made no mention of Billewicz I or Billewicz II, and did not allege that the tax deeds granting ownership to the Town were void for noncompliance with 32 V.S.A. § 5255. Nevertheless, the Town filed a motion to dismiss on grounds of claim preclusion, and served Plaintiffs with a motion for sanctions under Rule 11. In response, and with the Court's permission, Plaintiffs voluntary dismissed their complaint without prejudice within Rule 11's safe harbor provision. See Vt. R. Civ. P. 11(c)(1)(A).

Next, on the same day they voluntarily withdrew Billewicz III, Plaintiffs commenced a new pro se lawsuit against the Town and various Town officials, this time in federal court. See Billewicz v. Town of Fair Haven, Vt., Case No. 5:22-cv-73 (D. Vt. filed Mar. 28, 2022) ("Billewicz IV"). This action asserted claims for damages under 42 U.S.C. § 1983, based on familiar allegations that Town officials unlawfully deprived Plaintiffs of access to their personal and real properties at River and Union Streets in Fair Haven. The Town moved to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, arguing that Plaintiffs' claims were without legal basis, and also barred by claim preclusion, statutes of limitation, and the Rooker-Feldman doctrine. In addition, the Town also filed a motion for Rule 11 sanctions seeking, among other things, an injunction to preclude further pro se filings by Plaintiffs relating to the River Street and Union Street properties without prior court authorization.

The federal district court dismissed the case on the grounds that it was barred by Vermont's claim preclusion doctrine. See Billewicz IV, 2022 WL 4115966, at *7-11 (D. Vt. Aug. 11, 2022), aff'd, 2023 WL 3961437 (2d Cir. June 13, 2023).^[3] Critically, the court concluded that Plaintiffs' federal claims arose "out of the same transaction that gave rise to Billewicz I, II, and III," and that key facts in all four cases had the same origin, namely, "the 2014 tax sale and the Town's subsequent possession of the River Street and Union Street properties." Id. at *8; see also id. at *9 ("Plaintiffs' allegations in this § 1983 case are 'based on new alleged incursions of their land' but 'the same nucleus of facts is at issue.'" (quoting Billewicz II, 2022 WL 424881, at *2)). The federal court also rejected Plaintiffs' assertion that Billewicz I and II were without preclusive effect and not final judgments "on the merits" - i.e., not adjudications of the issue whether the four tax collectors' deeds were invalid and void. See id. at *10 (concluding that "Vermont's claim-preclusion law does treat limitations dismissals as rulings 'on the merits'" and "[g]iven that Plaintiffs have litigated this transaction twice before the Vermont Supreme Court, the purposes of claim preclusion would be served by" such treatment).

With regard to the Town's Rule 11 motion, the federal court first discussed whether Plaintiffs' complaint was not "warranted by existing law" or presented for an "improper purpose" in violation of Rule 11(b). The court observed that while Plaintiffs were pro se, they were not "untutored in the law" or lacking in legal experience. Id. at *12. The court noted that...