kennedy v. sterling

7ermont Superior Court
Filed_05/20/24
Essex Unit

VERMONT SUPERIOR COURT CIVIL DIVISION
Essex Unit Case No. 22-CV-03200
75 Courthouse Drive
Guildhall VT 05905
802-676-3910
www.vermontjudiciary.org

Sandra Kennedy v. Theresa Sterling

FINDINGS, CONCLUSIONS, AND JUDGMENT

The present dispute came before the Court for a bench trial on May 17, 2024. Based on the
evidence and testimony, the Court makes the following findings: !

Plaintiff Sandra Kennedy is the executor and beneficiary of the estate of Bradley Tatro. Mr.
Tatro held a promissory note with a principal amount of $76,854.11 as of J anuary 1, 2021 from
Defendant Theresa Sterling. Ms. Kennedy also provided credible testimony that she had effectively

purchased this note from Mr. Tatro and had been making payments to him for the right to receive the

proceeds from this note. While this relationship was not formalized, there was evidence of Ms.

Kennedy's payments and records consistent with this relationship.

While the loan of money to Ms. Sterling was initially tied to a rent-to-own scheme created by
Mr. Bradley, the house was transferred outright by deed to Ms. Sterling in 2013, and no reservation of

rights or mortgage had been executed to create or retain an interest in the property for Mr. Tatro.

By the terms of the promissory note, Mr. Tatro is entitled to an 8% rate of interest and
attorney's fees for any dispute related to the collection of the note. As of the date of trial, Plaintiff's
legal fees were $10,304.39 with legal costs of $498.76. These fees and costs are reasonable.

While the amount remaining on the promissory note is only $10,000 less than Defendant

Sterling's purchase price, despite regular monthly payments, the evidence shows that the payments
have been properly allocated between principal and mortgage according to an amortization table for
the relevant periods.

1
The Court also incorporates its oral findings made on the record into this Decision.

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22-CV-03200 Sandra Kennedy v. Theresa Sterling
Defendant Sterling stopped paying on the note at the end of 2020 and has not made any
payments since January 2021. Nevertheless, Plaintiff is looking to calculate the rate of interest from
March of 2021 forward. Upon Mr. Tatro’s death, he bequeathed $2,000 to Ms. Sterling to use as she
saw fit. Ms. Sterling has elected to apply it to the balance of her loan.

Legal Analysis

Based on the testimony, the Court concludes that Plaintiff Kennedy is the beneficial and actual
owner of the promissory note, and the Court permitted Plaintiff’s oral motion under V.R.C.P. 25 to
substitute her as the Plaintiff in the present matter in lieu of the late Mr. Tatro’s estate. The Court finds
that Ms. Kennedy’s claims flow through two sources. First, she has an equitable claim to the note
through her agreements and payments to Mr. Tatro as supported by her testimony. Second, as the
residual beneficiary of Mr. Tatro’s estate, she is entitled to claim all assets of the estate not otherwise
granted. The note, itself, does not limit assignment, and the probate estate has effectively assigned the
note to Ms. Kennedy, and this Court will acknowledge the same.

The note itself is an unsecured promissory note. Plaintiff’s request to have the property
assigned to her lacks any legal or equitable basis and is denied.

The Court has also found that the promissory note to be a valid and enforceable note to which
Plaintiff is entitled to a judgment and award for the amounts outstanding based on Defendant’s failure
to make timely payments as called for in the loan and resulting default.

This leaves the question of the amounts due and owning on this note. At this time, the Court
finds that the balance on the note to be $76,854.11 minus the $2,000 bequest for an outstanding
balance of $74,854.11. Under the terms of the loan, the lender is entitled to 8% interest annually.
Given that no payments have been made from an agreed upon starting date of March 1, 2021, the Court
calculates the amount of unpaid interest for the intervening 1,176 days to be: $19,293.90.

Finally, the Court having found the attorney’s fees to be reasonable and allowable under the
terms of the parties June 13, 2014 promissory note, the Court awards Plaintiff her attorney’s fees in the
amount of $10,304.39 plus costs of $498.76.

ORDER

Based on the evidence and conclusions, it is ORDERED and ADJUDGED that Plaintiff Sandra
Kennedy shall have judgment against Defendant Theresa Sterling in the amount of $74,854.11 in

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22-CV-03200 Sandra Kennedy v. Theresa Sterling
unpaid principle and $19,293.90 in prejudgment interest, and $10,803.15 in attorney’s fees and costs.
The total judgment awarded to Plaintiff is $104,951.16. This decision constitutes the final judgment
of the Court for purposes of V.R.C.P. 58.

Electronically signed on 5/19/2024 2:42 PM pursuant to V.R.E.F. 9(d)

__________________________________
Daniel Richardson
Superior Court Judge

Electronically signed 5/19/2024 2:42 PMpursuant to V.R.E.F. 9(d)

________________________________________
Hon. Kenn Stransky
Assistant Judge

Electronically signed 5/19/2024 2:42 PM pursuant to V.R.E.F. 9(d)

_________________________________________
Hon. Evan Hammond
Assistant Judge

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22-CV-03200 Sandra Kennedy v. Theresa Sterling