Friday, August 20, 2010

Attorney’s fees awarded to both landlord and tenant, although net amount of judgment was against tenant and tenant did not recover on one of two counterclaims

Kwon v. Eaton, et al. (2009-367) (06-Aug-2010) 2010 VT 73 (mem.)

Landlords appeal the Superior Court’s decision to award attorney’s fees to tenants who established a habitability violation. Landlords contend that because they recovered a net judgment of $8,071.50 and tenants did not recover any net sum, landlords alone should be entitled to receive attorney’s fees. We affirm

The plain language of 9 V.S.A. § 4458(a) does not require a tenant to establish that it was “the prevailing party.” Rather, it grants attorney’s fees to a tenant when “the landlord fails to comply with the landlord’s obligations for habitability.” The attorney’s fee award to tenant is supported by the jury’s verdict that landlords violated the warranty of habitability, even though tenant did not recover damages on their consumer fraud claim. The two theories pursued by tenants involved essentially the same operative facts and were overlapping. See Elec. Man, Inc. v. Charos, 2006 VT 16, ¶ 10, 179 Vt. 351, 895 A.2d 193 (attorney’s fee award should not be apportioned based on recovery on each claim when claims at issue share common core of facts); L’Esperance, 2003 VT 43, ¶ 24 (affirming attorney’s fee award for consumer-fraud claim, including time spent on alternative claims, when alternative claims arose out of same transaction).

Friday, August 13, 2010

Real estate: covenants extinguished by merger of benefited and burdened estates.

Beldock v. Town of Charlotte (2009-007) (13-Aug-2010) 2010 VT 74 (Skoglund, J. )

Plaintiffs appeal from a superior court order granting summary judgment to defendant Town of Charlotte. Plaintiffs argue that deeds place restrictive covenants upon the Town that require the Town to maintain gates and fences along a Town-owned private lane providing access to plaintiffs’ property. The trial court ruled that the Town “has no obligation or duty to erect, maintain, close, or open any gate(s) at either end” of the lane, nor any “obligation or duty to erect, or maintain any fence(s) along any portion of the length of, or in the vicinity” of the lane. We affirm.

Because of consolidated ownership of the property, the doctrine of merger applies to extinguish the covenant. As we have explained before, “[o]nce the title to the adjoining properties vested . . . , the right-of-way was extinguished by the unity of ownership and possession.” Capital Candy Co. v. Savard, 135 Vt. 14, 15, 369 A.2d 1363, 1365 (1976); In 1996 Plouffe possessed plaintiffs’ land and simultaneously held the fifty-foot-wide Plouffe Lane; and, finally, held his own land, including the retained right-of-way. All benefited land—plaintiffs’ and the Plouffe’s—merged with the Town’s burdened land, and any existing covenants were thus extinguished. To preserve a covenant on the Lane would have required the parties to include language in the conveyances of 1996—a step they chose not to take.

Friday, August 6, 2010

Discovery sanction that led to dismissal affirmed even though no finding of bad faith or prejudice, because the sanction was not technically a dismissal.

 State v. Howe Cleaners, Inc. et al. (2009-110) (06-Aug-2010) 2010 VT 70 ( BURGESS, J.)

The State appeals from the dismissal of its civil enforcement action to hold prior and past owners liable for its costs of responding to and cleaning up a hazardous waste contamination site. We affirm.

The State argues that the trial court erred in granting summary judgment to Banknorth based on a litigation-ending discovery sanction against the State by not considering a lesser penalty. Imposition of sanctions under this Rule 37 “is necessarily a matter of judicial discretion” that is “not subject to appellate review unless it is clearly shown that such discretion has been abused or withheld.” John v. Med. Ctr. Hosp. of Vt., 136 Vt. 517, 519, 394 A.2d 1134, 1135 (1978); accord State v. Lee, 2007 VT 7, ¶ 15, 181 Vt. 605, 924 A.2d 81 (mem.)

Notwithstanding this broad discretion, however, we have held “that where the ultimate sanction of dismissal is invoked, it is necessary that the trial court indicate by findings of fact that there has been bad faith or deliberate and willful disregard for the court’s orders, and further, that the party seeking the sanction has been prejudiced thereby.” John, 136 Vt. at 519, 394 A.2d at 1135; accord Rathe Salvage, Inc. v. R. Brown & Sons, Inc., 2008 VT 99, ¶ 12, 184 Vt. 355, 965 A.2d 460 Accordingly, we have reversed trial court orders dismissing cases or entering default judgments as discovery sanctions when the orders did not set forth findings indicating the existence of bad faith on the part of the recalcitrant party and prejudice to the other side. See John, 136 Vt. at 519, 394 A.2d at 1135;see also In re Houston, 2006 VT 59, ¶¶ 13-16, 180 Vt. 535, 904 A.2d 1174 (mem.) (reversing dismissal order as discovery sanction because order was not supported by findings demonstrating bad faith and prejudice); Manosh v. First Mountain Vt., L.P., 2004 VT 122, ¶¶ 1, 10, 177 Vt. 616, 869 A.2d 79 (mem.) (same).

We find the State’s reliance on John unavailing. However similar in its effect, no ultimate sanction was actually imposed here. Although the sanction order led to the adverse judgment against the State, there was no outright dismissal or default. This case is similar to Lee, where the trial court sanctioned the offending party for discovery violations by accepting facts and allegations in the complaint as established and precluding the offending party from presenting a defense. 2007 VT 7, ¶ 6. As here, the trial court later granted summary judgment to the other side, and the sanctioned party argued to this Court that “the superior court was required to make findings [of bad faith and prejudice] on the record prior to imposing such sanctions.” Id. ¶ 17. We acknowledged that such findings are necessary when the “trial court imposes the ultimate sanction of dismissal,” but concluded that “dismissal was not ordered.”

Rather than sanction the State by dismissing or defaulting its case, the court here tailored the sanction to fit the violation by precluding the State “from using at trial evidence that should have been provided in accordance with” the June 2006 order requiring the State’s representative(s) to be available for Banknorth’s noticed deposition. By its terms, the court’s order was the neutralizing evidentiary remedy contemplated by Rule 37(b)(2)(B) (authorizing trial court to prohibit disobedient party “from introducing designated matters in evidence”)—not a dismissal under Rule 37(b)(2)(C) (authorizing trial court to dismiss action). This sanction order required no special findings of bad faith, prejudice, or lack of enforcement alternatives.