Johnson v. Sullivan

Vermont Superior Court
Filed 11/10/25
Rutland Unit

CIVIL DIVISION
Case No. 24-CV-00146

VERMONT SUPERIOR COURT
Rutland Unit

83 Center St

Rutland VT 05701

802-775-4394
www.vermontjudiciary.org

Timothy Johnson et al v. Jeremy Sullivan

RULING ON PLAINTIFFS’ THIRD MOTION IN LIMINE REGARDING DAMAGES

On October 14, 2025, Plaintiffs filed a motion in limine to exclude certain evidence tending to
show the fair market value of the subject property at different times. Specifically, Plaintiffs wish to
exclude, as irrelevant and/or as substantially more prejudicial than probative: (a) a professional
appraisal done prior to any alleged tree-cutting, and received by Plaintiffs shortly before they
discovered the alleged tree-cutting, which valued the subject property at $562,000; and (b) evidence
showing that the property was sold, several months after this lawsuit was brought, for $520,000, which
is $10,000 more than the parties’ contract price of $510,000. For reasons that follow, the Court will
deny the motion.

As this motion concerns different concepts and principles pertaining to the law of remedies for
breach of contract, the Court believes it helpful to frame its analysis with a fairly plain-spoken
explanation of that area of law, from Professor Dobbs:!

The traditional goal in awarding damages for breach of contract is to award a
sum that will put the non-breaching party in as good a position as he would have been
in had the contract been performed. This gives him the benefit of his bargain, that is,
the “profit” he would have made upon performance. This is said to give him his
expectancy and to protect his “expectation interest.” An example of this basic rule is
the case of a simple sale of realty. If Seller contracts to sell his home for $20,000, the
transfer to take place three weeks later, and the house is really worth $25,000, then the
buyer “expects” a net gain in his assets of $5,000. This is because he will pay $20,000
in exchange for a value of $25,000. There are many reasons why a seller might agree to
such an exchange. He might simply misjudge the market value of his house, or he
might be in a hurry to sell and willing to make sacrifices to do so. Or the house might
be worth exactly the agreed price at the date the contract is made, but values might
suddenly rise before the performance is due. Whatever the reason, however, the seller
has agreed to a bargain and the buyer is normally entitled to the benefits of it. Thus in
the example, if the seller breaches, the buyer will recover $5,000 and perhaps certain
incidental expenses as well.

Since the purpose of the expectancy recovery is to put the non-breaching party
in as good a position as he would have achieved had the contract been performed, it is

' Professor Dobbs’ treatise on the law of remedies has been cited many times over the years by our Supreme
Court.

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sometimes necessary to award him special or consequential damages in addition to the
basic measure of his expectancy. For example, if a seller of a tractor fails to deliver it
as promised, the buyer may be forced to pay more for a similar tractor. The difference
in the cost would form his basic expectancy damages. However, if the seller’s failure to
deliver cost the buyer the loss of a crop, this special or consequential damage would
also be recoverable, subject to the limitation that such damages must be within the
contemplation of the parties in order to be recovered.

Dan B. Dobbs, Handbook on the Law of Remedies § 12.1, at 786-787 (1973). The Court also finds
helpful another clarifying passage:

The general rule applicable to most real estate sales contracts is that the vendor who
commits a total breach of his contract to convey land, for any reason other than because
of a title defect, is liable for loss of the bargain damages to his purchaser, plus any
consequential damages recoverable under general rules. This means that the vendor is
liable for the difference between the contract price and the value of the land, with
appropriate adjustments for any amounts still unpaid on the contract price. The value of
the land is calculated as of the date of breach, which is normally the date on which the
deed is to be delivered. For example, if the contract price is $10,000 and the value of
the land at breach is $12,000 (either because the market is rising or the buyer made a
good contract), the damages would be $2,000, the gross “profit” the buyer would have
had if the contract had been performed.

Id. § 12.8, at 833-34.?

Here, at trial, Plaintiffs will not be seeking “loss of the bargain” or “lost profit” damages as
described by Professor Dobbs. That is because of this Court’s ruling on Defendant’s motion for
summary judgment regarding Plaintiffs’ claim for breach of contract. Defendant correctly argued in
his motion that proof of damages is an essential element of a claim for breach of contract, on which the
claimant (Plaintiffs) bear the burden of proof. Plaintiffs responded without offering any proof of their
loss of the bargain damages, and only offered proof of certain special or consequential damages. It
appears that Plaintiffs actually received the professional appraisal in late November of 2023, but for
whatever reason (as is their prerogative), they did not present the appraisal to the Court for purposes of
proving that they had suffered a “lost profits” style of injury. Indeed, Plaintiffs’ opposition brief
clarified that, for purposes of their claim for breach of contract, Plaintiffs were only seeking special or
consequential damages. The Court therefore granted partial summary judgment to Defendant, which
means that Plaintiffs now lack any claim for breach that is predicated on “loss of the bargain”
damages. It follows, therefore, that the appraisal, showing the market value of the subject property just
prior to closing (but absent the fact of tree cutting as alleged by Plaintiffs), is not needed by Plaintiffs
for purposes of proving, at trial, the amount of their “lost profits” injury (which presumably was
$52,000 (i.e., $562,000 less contract price of $510,000)). The appraisal is thus irrelevant in that sense
and for that reason, regardless of whatever it may have proven.

2 See also id. § 12.3, at 798 (“[S]uppose a land seller agrees to sell Blackacre to the plaintiff for $10,000, title to
be transferred on March 1. The defendant deliberately refuses to make the transfer on March 1, at which time
the land is worth $15,000. In such a case the plaintiff-buyer’s general damages are said to be $5,000, and he
will recover this sum if he likes.”); Restatement (Second) of Contracts § 347 cmt. b (“If no performance is
rendered [by the breaching party], the loss in value caused by the breach is equal to the value that the
performance would have had to the injured party.” (citing Illustrations 1 and 2)).

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This conclusion does not necessarily resolve the pending motion in limine, however.
Defendant has asserted a counterclaim for breach of the implied covenant of good faith and fair
dealing, and Defendant claims that the valuation evidence is relevant to that claim. Defendant asserts
that the appraisal figure and the sale price figure reveal that Plaintiffs’ refusal to perform, and their
decision to essentially declare an anticipatory repudiation as a result of the alleged tree-cutting, were
bad faith actions, taken without any basis or reason. Defendant’s theory is that, because the property’s
appraised value was substantially higher than the contract price, and because the property later sold
(after the alleged tree-cutting) for $10,000 more than the contract price, the Plaintiffs—had they simply
gone forward, performed, and closed on the property transfer—would likely have come out “ahead”
financially. In that sense, Defendant finds Plaintiffs’ conduct and position unreasonable and in bad
faith. Here are some pertinent excerpts from Defendant’s legal memorandum, filed in opposition to
the pending motion, that articulates Defendant’s theory of the relevancy of the property valuation
information to Defendant’s claim of bad faith:

The [property valuation] evidence is relevant on whether Plaintiffs’ refusal to close unless
Defendant reduced the contract price down to $475,000 had a good faith basis.

[...]

[T]he [valuation] Evidence demonstrates that prior to this lawsuit and to Plaintiffs’
demand in a reduced contract price, Plaintiffs were well aware that the property had a
higher value than they claimed. This directly supports Defendant’s counterclaim as
there was no sufficient basis to excuse Plaintiffs from contract performance.

[...]

A decision to refuse to close unless the property is sold for $475,000, despite evidence
suggesting that the property is worth more, is directly relevant to whether Plaintiffs
acted reasonable, and is appropriately deemed a breach of contract.

[...]

Will the Jury perceive [the difference between the appraisal price and the demand price
of $475,000] as being good grounds on plaintiffs’ part for their breach? Or, how will
the Jury interpret Plaintiffs’ claims for consequential damages, in light of the sole cause
for such being Plaintiffs’ refusal to purchase property which had a value in excess of
what they were buying it for?

Def.’s Opp’n to Motion Jn Limine Regarding Damages (Oct. 28, 2025), at 2-4.

However, based on the above discussion from Professor Dobbs, Plaintiffs’ knowledge of the
profit they would have realized from the deal ($52,000) is not a basis on which to find that their
conduct was in bad faith. It actually tends to show that their lawsuit, which apparently had sought
“loss of the bargain damages” when filed, had some reasonable evidentiary basis, at least on the issue
of their general damages. Assuming that the tree-cutting occurred as alleged (which is certainly a
disputed factual issue here), Plaintiffs’ knowledge of the appraisal could support the inference that

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Plaintiffs’ demand price ($475,000) was merely an effort to preserve their expected profit (assuming
that the loss of trees reduced the value of the subject property by roughly $35,000).

The other way of looking at it is this: assuming Defendant “left money on the table,” by
entering into a contract that would give him only $510,000 at closing, rather than the market’s price of
$562,000; the Defendant is not thereby immunized from liability for any of his breaches that cause
direct monetary injuries to Plaintiffs that are less than the amount of money that Defendant left on the
table. By the same logic, Plaintiffs are not required by the implied covenant of good faith and fair
dealing to bear any and all losses caused by Defendant’s breach, so long as Plaintiffs still come out
“ahead” to some degree or extent. Here, Plaintiffs apparently bargained for a deal that was favorable
to them, considering the property’s actual worth (or valuation) as compared to the contract price.
When Plaintiffs so contracted, that deal then became their enforceable right. With that contract,
Plaintiffs could rightly insist upon paying only the contract price to Defendant at closing, rather than
any other (higher) price, regardless of what the market had said. Plaintiffs are not obligated to “give
away” any part of that favorable deal—some or all of their likely profits from the deal. They are not
required to absorb all losses caused by Defendant’s breach, so long as the breach still leaves Plaintiffs
“even” or “ahead,” given what the market said about the value of the thing they contracted to purchase
(assuming all trees were intact). Capitalistic tendencies and motives, to enforce one’s own right to a
good deal and to realize a full profit from such a deal, are not bad faith tendencies or motives. See
Carmichael v. Adirondack Bottled Gas Corp., 161 Vt. 200, 208 (1993) (each party to a contract
impliedly promises “not to do anything to undermine or destroy the other’s rights to receive the
benefits of the agreement’’) (emphasis added).*

The Court has given this issue careful consideration, and it cannot find that Plaintiffs’
knowledge of the actual market value of the property that they were contracted to purchase is relevant
to Defendant’s claim that Plaintiffs’ actions in claiming anticipatory repudiation by Defendant,
demanding a lowered sale price (below the contract price) to still consummate the sale (given the
supposedly diminished condition of the property), and suing for breach of contract for their alleged
injuries, were in bad faith. Of course, if the tree-cutting allegation was entirely fraudulent or contrived
by Plaintiffs, that is another factual circumstance entirely. If that sort of conduct is established, there
would appear to be bad faith, apart from Plaintiffs’ knowledge of the appraised value. However, on
the assumption that the tree-cutting occurred as alleged, and on the assumption that it reduced the fair
market value of the subject property as a whole, the evidence as to Plaintiffs’ knowledge of the pre-
cutting fair market value of the property (i.e., evidence showing that Plaintiffs knew they had a “good
deal”) does not tend to show that their conduct, after learning of the tree-cutting, was taken in bad

3 Likewise, if the relevant real estate marked cooled dramatically between time of appraisal and time of
closing, such that the FMV dipped below the contract price at time of closing, the seller would

likewise have an enforceable right to receive from buyer the full contract price, which means the buyer
would be in breach if at closing he merely tendered the current (lowered) FMV. Actions taken by the
seller to enforce his favorable contract price under such circumstances would not be in bad faith, but
merely profit-seeking.

4 Relatedly, the Court has difficulty making sense of Defendant’s theory that the property valuation
information indicates that the positions taken, or actions taken, by Plaintiffs were “not correct.” Def.’s
Opp’n at 2. There is no “correct” or “incorrect” position in this context. An appraisal is ultimately an
opinion, which may be disputed by another’s opinion. And a party seeking to enforce the full benefit

of his bargain, relying on such an appraisal opinion, is not acting “incorrectly.”
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faith. Perhaps the valuation information is relevant in some other way to Defendant’s bad faith claim,
but the Court does not find it relevant based upon the arguments presented by Defendant.

However, this conclusion still does not resolve the motion. “Evidence should be excluded on a
motion in limine only when the evidence is clearly inadmissible on all potential grounds.” Rosas v.
Miri Gen. Contracting Inc., 782 F. Supp. 3d 15, 18 (E.D.N.Y. 2025) (omitting quotation marks). Thus,
“the denial of a motion in limine is appropriate when the trial court can conceive of a set of
circumstances that would make the evidence admissible.” State v. Dubois, 150 Vt. 600, 602 (1988).
Here, the valuation evidence—either the appraisal figure or the later sale price, or both—would tend to
undercut Defendant’s claim that Plaintiffs’ supposed breach cost Defendant any lost profits or benefit
of the bargain. The valuation evidence actually tends to show that Defendant “left money on the table”
when he contracted to sell the property for just $510,000. Defendant thus avoided a likely direct
economic injury: but for the non-occurrence of the closing with Plaintiffs, Defendant would have lost
money, at least relative to what the market had to say about the value of the property. Defendant
appears to acknowledge this very point in his opposition filing, though he relies on the later sale price
figure ($520,000) to conclude that the amount of loss he would have incurred, had the closing with
Plaintiffs taken place, would have been limited to $10,000, rather than $52,000. Def.’s Opp’n at 2.

The property valuation evidence also appears relevant to another issue at trial—the materiality
of Defendant’s supposed breach. In moving for summary judgment, Defendant argued that the tree-
cutting, even if proved as alleged, did not constitute a material or total breach of the parties’ contract,
and therefore was an insufficient basis for Plaintiffs to claim an anticipatory repudiation, and also an
insufficient basis for Plaintiffs to be excused from further performance. As noted in the Court’s ruling
on Defendant’s motion, the question of materiality of breach is generally a question of fact, dependent
on the circumstances of the case. See Johnson v. Sullivan, No. 24-CV-00146, “Ruling on Def.’s Mot.
for Summ J.,” at 6 (Vt. Super Ct. Jul. 29, 2025) (citing several authorities). The Restatement also
contains the following comment:

Although the relationship between the monetary loss to the injured party as a result of
the failure [to perform] and contract price may be significant, no simple rule based on
the ratio of one to the other can be laid down, and here, as elsewhere under this Section,
all relevant circumstances must be considered.

Restatement (Second) of Contracts § 241 cmt. b (alteration added); see also 23 Williston on Contracts
§ 63:3 (4th ed., May 2025 update) (“[C]ourts have defined a breach of contract as ‘material’ if the
promisee receives something substantially less or different from that for which the promisee
bargained.”). Thus, the amount of monetary loss to the injured party (promisee) as a result of the
promisor’s breach, relative to the contract price, is likely relevant, if not significant, to the question
whether the breach was material.

Here, the appraisal does not appear to directly reveal the fair market value of any quantum of
trees, or forested acres of land, that was part of the subject property at the time of appraisal. The
parties have not supplied a copy of the appraiser’s report to the Court in connection with the pending
motion, but the parties do not suggest that the appraisal does anything other than declare an overall
(aggregated) property value of $562,000 (prior to the loss of any trees). Thus, the appraisal does not,
by itself, conclusively or directly show “the monetary loss to the injured party” as a result of
Defendant’s supposed breach, within the meaning of the Restatement.

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However, the appraisal presumably takes account of the value of the trees, or the acres of
mature forest, at the time of contracting or just prior to the date of the supposed breach.” As such, the
appraisal is a relevant marker. Indeed, putting aside questions as to the appraisal’s accuracy (or the
weight it is due), and also putting aside many factors that could affect or impact a sale price agreed to
and paid several months later, a factfinder might reasonably infer that the difference between the
appraisal price ($562,000) and the later sale price ($520,000) reflects an actual change in the condition
of the subject property that decreased the property’s overall market value. It will be up to the parties,
of course, to convince the factfinder that the price change (of less $42,000) was likely due to a change
in the condition of the property (e.g., removal of trees), or for some other reason, or for no pertinent
reason. And Defendant may well use the difference between these two property valuation indicators,
assuming the difference is reflective of the loss of trees, to convince the jury that the tree-cutting and
resulting change in property value was too slight to constitute a material breach. Thus, the appraisal
and sale price figures might be used to demonstrate whether the breach (assuming it occurred as
alleged by Plaintiffs) was so significant as to be material or total (or not).®

The Court is not persuaded by Plaintiffs’ arguments under V.R.E. 403. Plaintiffs argue that the
jury might conclude that Defendant’s alleged tree-cutting does not “matter” because the jury might
conclude—from the valuation information—that the tree-cutting did not diminish the value of the
property. As just explained above, the valuation information, reflecting property values before and
after tree-cutting (as alleged), might be used to demonstrate a loss in the fair market value of the
property, due to tree-cutting. Thus, the predicate assumption of Plaintiffs’ Rule 403 argument is
without basis. Plaintiffs’ contention of likely jury confusion is unpersuasive. Plaintiffs will likely
need to explain to the jury that they are not pursuing lost profit damages at trial, and explain that they
are seeking only special damages, but that is the result of Plaintiffs’ tactical decision at summary
judgment, and not because the jury may learn that there is evidence that tends to show a “loss of the
bargain” injury to Plaintiffs resulting from Defendant’s supposed breach. Further, the Court’s
instructions to the jury on damages will specify the nature of the type of damages actually being sought
by Plaintiffs. The jury should be able to discern that “lost profit” damages are different, and not part of
Plaintiffs’ claim.

In conclusion, therefore, the Court finds that the valuation information has probative value to
pertinent issues at trial (as discussed above), and that value is not “substantially” outweighed by a risk
of jury confusion or any prejudice.

Electronically Signed on: Monday, November 10, 2025 pursuant to V.R.E.F. 9(d).

si ied ho
SuSan A. McManus

Superior Court Judge

> The parties both presume as such, with regard to the appraisal’s scope—it not being limited to an estimate of
the value of the residence, for example.

© These same figures could also be relevant, to give context to Plaintiffs’ demand that the contract price be
reduced by $35,000, to account for the loss in the value of the thing that Plaintiffs had contracted to purchase.
Again, the Court remains skeptical that the actions of a party taken to secure his own profit from a good deal can
be understood as bad faith, but since that claim is to be presented at trial, the valuation evidence might show that
the tree-cutting reduced the property value by $42,000 ($562,000 less $520,000), and that would likely give
context to Plaintiffs’ demand for a reduced purchase price.

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