Punitive damages must be considered whenever jury finds actual fraud.

 
Follo v. Florindo, 2009 VT 11 (Burgess, J.)  

This is an action for common-law fraud and violations of Vermont’s Consumer Fraud Act in connection with the sale of a bed and breakfast business.  The purchaser and current operator of the bed and breakfast claims error in the trial court’s exclusion of punitive damages as a matter of law.  We reverse the trial court’s punitive-damages decision.

The particular intentional tort for which a party is liable is one of the integral issues in determining whether punitive damages are appropriate.  Because the jury found defendants liable for actual common-law fraud, an intentional act with a specific intent to defraud the buyer, the trial court erred in not sending the issue of punitive damages to the jury. 

The prerequisites for imposing punitive damages in tort actions are demanding, Brueckner “limit[s] the availability of punitive damages to cases where the evidence shows that ‘defendant’s wrongdoing has been intentional and deliberate, and has the character of outrage frequently associated with crime.’”  Monahan, 2005 VT 110, ¶ 55 (quoting Brueckner,) 169 Vt. at 129, 730 A.2d at 1095 (internal quotation omitted)).  Malice is not established by proof of “intentional, wrongful, [or] even illegal conduct” alone; it requires, additionally, proof sufficient to “support[] an inference of ‘bad motive.’“  Id. ¶ 56 (quoting Brueckner,). Merely intentional, but non-fraudulent torts, can be performed without the tortfeasor acting maliciously. 

By contrast, our cases indicate that it is proper to put the issue of punitive damages to the jury whenever the jury finds that “actual fraud” was committed.  Proctor Trust Co. v. Upper Valley Press, Inc., 137 Vt. 346, 354, 405 A.2d 1221, 1226 (1979).  Actual common-law fraud, as opposed to other kinds of intentional torts, inherently possesses the necessary malice and ill will that may make punitive damages appropriate. 

Real Estate. Property owned by charity can be acquired by adverse possession, if not used for charitable purposes.

 Mahoney v. Tara, LLC, 2011 VT 3 (mem.)

Plaintiffs appeal from the trial court’s dismissal of their complaint for adverse possession. The question presented is whether the charitable name of a property owner, without more, is sufficient to protect land from an adverse possession claim.  Plaintiffs’ claim the trial court erroneously assumed that 12 V.S.A. § 462 provides a complete exemption for all public, charitable, and pious owners, regardless of the actual use of the property.  Plaintiffs argue the trial court prematurely dismissed their adverse possession claim without sufficient development of the record as to the actual use of the property. We agree, and reverse and remand.

Plaintiffs claim ownership of a strip of beach located between the parties’ properties. The adjacent lot to the northeast (the Tara Lot) was owned by Vermont Catholic Charities, Inc. (VCC) from 1958 until 2006 when it was sold to defendant.  The trial court ruled that VCC’s ownership of the land prevented plaintiffs from fulfilling the necessary fifteen-year period for adverse possession.  The court said that the “adverse possession clock is tolled while a pious or charitable owner holds the property.” 

Section 462 reads: “Nothing contained in this chapter [relating to the limitation of actions] shall extend to lands given, granted, sequestered or appropriated to a public, pious, or charitable use, or to lands belonging to the state.” 12 V.S.A. § 462.  The text of § 462 and our cases support plaintiffs’ argument that the court erred in dismissing the claim based without allowing any discovery and without any showing that VCC’s use qualified for the protection the statute provides.  By its plain terms, the focus of the exemption is not on lands held by a public pious or charitable user, as the trial court’s ruling suggests, but rather on “lands given, granted, sequestered or appropriated to a public, pious, or charitable use.”  Id. (emphasis added).

Plaintiffs cite to a series of our cases wherein we held § 462 did not bar claims of adverse possession against public or charitable land owners because their use (or lack of use) of the land—as distinct from their identity as public, pious, or charitable entities—was not to a public end.   In all of our cases, we have recognized the necessarily fact-intensive nature of the inquiry under § 462. While the name, Vermont Catholic Charities, Inc., certainly suggests it is a pious or charitable organization, the name alone does not reveal whether the use of the property was for a privileged purpose.  The trial court’s reliance, with no analysis, on the name of the Tara Lot’s previous owner was error that requires reversal and a remand. 

Zoning. Ambiguous “footprint” permit construed in favor of landowner, even if structure violates ordinance, and zoning administrator had no authority to issue permit.

In re Clyde's Place, LLC., 2011 VT 7 (Reiber, C.J.)

Landowner appeals the Environmental Court’s decision upholding the Town of Orwell’s notice of violation (NOV) as to landowner’s replacement nonconforming structure. Notwithstanding the court’s determination that the new structure violated certain Town bylaws, we conclude that landowner was entitled to judgment in its favor because of the court’s conclusion, which is supported by the record, that the permit terms were ambiguous and had to be construed in favor of landowner. Accordingly, we reverse the Environmental Court’s decision and remand the matter for the court to enter judgment for landowner.

A zoning permit that has become final cannot be collaterally attacked even based on arguments that it was void on the grounds that the zoning administrator lacked the authority to issue it.  A municipality may later argue, however, “that the bounds of permitted use have been exceeded.”  The Town claims that the new structure’s 24' by 35' dimensions are not “over” the 21' by 21' “footprint” of the original building, as required by the 2006 permit.

We ordinarily accept the plain meaning of the words contained in a zoning permit, but any uncertainty in the meaning of those words “must be decided in favor of the property owner.”  The uncertainty and confusion over the permit’s “footprint” requirement led to several conversations between the members of Clyde’s Place and the Town’s zoning administrators.  Overall, the record reveals that there was no consensus as to what was meant by requiring landowner to build “over” the “footprint” of the preexisting structure. The Environmental Court specifically found that the permit terms “over” and “footprint” to be ambiguous, absent definitions of the terms in the zoning ordinance. 

We see no reason to question this determination. Given these findings and conclusions, which are supported by the record, we agree with landowner that, rather than going on to find a violation of town bylaws, the court should have stricken the Town’s NOV and entered judgment in favor of landowner because the as-built structure was allowed by the ambiguous permit.

SCOVT 2009: Selected Short Topical Summaries

©2009-  2011 Allan R.Keyes, Esq., all rights reserved

Agency.

Agency/ insurance law: What is “personal knowledge” of a corporation?  Mann v. Adventure Quest, 2009 VT 38 (Dooley, J.)

Cats and  Dogs.

Private bylaws do not unlawfully discriminate against cats. Gardenside Townhouse Association v. Ziccon, 2009 VT 47 (mem.)       

No damages for lost companionship or emotional distress arising from death of cat. Goodby v. Vetpharm, 2009 VT 52 (Burgess, J.)          

Insurance coverage for dog, even though dog bite occurred off premises where dog was only visiting. Northern Security v. Doherty, 2009 VT 27(mem.)       

Constitutional law.

First Amendment rights: no prosecution for disturbing the peace without proof of substantial disruption of a lawful assembly. State v. Colby, 2009 VT 28 (Johnson, J.) 

Employment law.

Unfair labor practice finding affirmed by divided court. Vermont State Employees Assn. v. State, 2009 VT 21 (Skoglund, J.) (Burgess, J. and Chief Justice Reiber, concurring in part and dissenting in part.)     

Wrongful discharge: False press report of reasons for discharge is not “stigma” caused by employer implicating liberty interest in public employment. Herrera v. Union No. 39 School District, 2009 VT 35 (Burgess, J.)       

Evidence.

Evidence of other property values properly excluded.  Eminent domain award affirmed. Harrington v. Vermont Agency of Transportation, 2009 VT 25 (mem.)
  

Evidence. Daubert. Improper admission of the DNA evidence was harmless. State v. Tester, 2009 VT 3 (Dooley, J.)           

Family law. 

Education savings funds are marital property Drumheller v. Drumheller, 2009 VT 23 (Dooley, J.)

           

Insurance.

 Beneficiaries of Trust are the insureds where Trust is the named insured. Off-premises dog bite arose “with respect to” premises for purposes of homeowner policy because dog lived there. Northern Security v. Doherty, 2009 VT 27(mem.)

UIM insurance: Primary UIM carrier pays nothing because primary carrier, not the excess carrier, is entitled to offset its coverage by the full amount of a tortfeasor’s liability payment. Humphrey v. Vermont Mutual, 2009 VT 53 (mem.)

Successful UIM plaintiff not entitled to attorney fees. Ovitt v. American Home, 2009 VT 26 (mem.)

Liquor regulation.

Prohibition on “loitering” not vague as enforced against bar that allowed an intoxicated patron to dance. In re Rusty Nail Acquisition, Inc., 2009 VT 68 (Burgess, J.)

Real Estate and Land use. 

Zoning ruling affirmed against pro se. Summary judgment procedure is constitutional.  In re Deer View LLC Subdivision Permit, (2009 VT 20 (mem.)      

Act 250 findings re:  no “substantial change” affirmed. In re Hale Mountain Fish and Game Club, Inc., 2009 VT 10 (mem.)

           

ACT 250: farming exemption does not apply to Act 250 subdivision jurisdiction; or to preexisting permit requirements.  In re Eustance Act 250 Jurisdictional Opinion, 2009 VT 16(Dooley, J.)      

Zoning: Erroneous conditional use application vested rights to a permitted use that was not applied for, notwithstanding later zoning amendment.  In re Sisters and Brothers Investment Group, 2009 VT 58 (Reiber, C.J.)

Municipal Charter trumps statute: utility forced to pay for undergrounding, even if it serves merely aesthetic purposes. City of Burlington v. Fairpoint Communications, 2009 VT 59 (Reiber, C.J.)

Wind Generation Facility Approved. In re UPC Vermont Wind LLC, 2009 VT 19 (Burgess, J.)   

Procedure and Jurisprudence. 

Appeal;  missing record; “may” means “must.”  Although the use of “may” in Rule 10(c) appears permissive, “an appellant who fails to seek preparation of a substitute statement of trial proceedings forfeits any claim that he or she has been prejudiced by the absence of a transcript.” State v. Bain, 2009 VT 34  (Reiber, C.J.)

Moot Land Use Appeal. In re Keystone Development, 2009 VT 13 (mem.)           

Open meeting law violations cured in open session. Katz v. South Burlington School District, 2009 VT 6 (mem.)

           

 Claim preclusion bars claim that easement can be moved because it is an easement by necessity, not a prescriptive easement.  Carlson v. Clark, 2009 VT 17 (Johnson, J.)(Dooley, J., dissenting.)       

Collateral Estoppel. In re P.J., 2009 VT 5 (mem.)

           

Depositions at trial:  prejudicial error to admit video “preservation” deposition of expert w/o showing witness unavailable; even though party did not object at time of deposition.   Nichols v. Brattleboro Retreat (2007-310) (23-Jan-2009) (Reiber, C.J.; Burgess, J., dissenting.)

           

New trial on amount of punitive damages granted where malice proven as a matter of law, even though plaintiff made no Rule 50 motion.  DeYoung v. Ruggerio, 2009 VT 9 (Dooley, J.)  

Remittitur standards for excessive verdict; late expert; failure to preserve issues not “plain error”; standard of review of Rule 50 motions where charge is agreed to.  Follo, v. Florindo, 2009 VT 11 (Burgess, J.)

Prisoners Rights.

 Hearing needed to feed inmates Nutraloaf. Borden v. Hofmann, 2009 VT 30 (Skoglund, J.)(Reiber, C.J., & Burgess. dissenting,)  

Punitive damages.

“Malice” standard clarified as not requiring personal ill will in all cases. New trial on amount of punitive damages granted where malice proven as a matter of law, even though plaintiff made no Rule 50 motion.  DeYoung v. Ruggerio, 2009 VT 9 (Dooley, J.)     

Punitive damages should have been awarded for actual fraud. Follo v. Florindo, 2009 VT 11(Burgess, J.).

Statute of limitations.

Cause of action that accrues after decedent’s death is not limited under §557(a) to two years. Benson v. MVP Health Plan  2009 VT 57 (Skoglund, J.)

Torts. 

Reckless disregard of truth is enough to show fraud. Follo v. Florindo, 2009 VT 11      (Burgess, J.)          

Exculpatory release is clear, valid and enforceable to preclude negligence liability. Provoncha v. Vermont Motocross Assn., 2009 VT 29 (Skoglund, J) (Johnson, J., dissenting.)  

Failure to exhaust administrative remedies for VPAA hostile school environment claims based on peer harassment. Allen v. University of Vermont, 2009 VT 33 (Burgess, J.) (Johnson, J., dissenting.)

           

Wrongful death of a cat: no damages for lost companionship or emotional distress. Goodby v. Vetpharm, 2009 VT 52 (Burgess, J.)

Trusts and Estates.

Disclaimers are irrevocable, but are voidable for duress, coercion, undue influence incompetence, or other equitable basis. Burden of proof shifts in “suspicious circumstances” where attorney represents both sides. Carvahlo v. Estate of Carvahlo, 2009 VT 60 (Dooley, J.)

Beneficiaries of Trust are the insureds where Trust is named insured, because trust can not be sued. Northern Security v. Doherty, 2009 VT 27(mem.)

           

Workers Compensation. 

Appeal to superior court defeated because Commissioner certified only questions of law. Mistake of forum not grounds for late appeal to Supreme Court. Stoll v. Burlington Electric, 2009 VT 61 (Skoglund, J.) (Dooley, J., dissenting.)

Exclusivity extends to supervisor exercising managerial prerogative, whether by affirmative act or by omission, even though supervisor is not owner of business.  Garger v. Desroches, 2009 VT 37 (mem.) 

SCOVT 2010: Selected Short Topical Summaries

 © 2011 Allan R.Keyes, Esq., all rights reserved

Arbitration.

Arbitration proceeding not res judicata to later claim outside the scope of reference. In re Shelburne Supermarket, Inc., 2010 VT 30 (Reiber, C.J.)

Parties are free to agree to arbitrate all kinds of disputes, including old ones. The statute of limitations does not apply to arbitration proceedings, absent agreement to the contrary. Clayton v. Unsworth, 2010 VT 84 (Burgess, J.)

Attorneys and Attorneys fees.

Attorney discipline.  PRB sanction reduced. In re Melvin B. Neisner, Jr., 2010 VT 102     

Attorney fees.  Denial of fees reversed.  Spooner v. Town of Topsham, 2010 VT 71   (Reiber, C.J.)

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, 2010 VT 73 (mem.)

Legal malpractice; no causation. Clayton v. Unsworth, 2010 VT 84 (Burgess, J.)

State’s Attorney sanctioned for filing late briefs. State v. Hutchins,  2010 VT 4 (mem.)

Collections.

Construction contract pay dispute.  Reed  v. Zurn, 2010 VT 14 (mem.)  

Summary judgment  for college on student loan affirmed. Dartmouth College v. Kozaczek. 2010 VT 113 (mem.)

Constitutional Law.

Mandatory retirement of public safety officers does not violate the Common Benefits Clause. Badgley v. Walton, 2010 VT 68 (Dooley, J.) (Johnson, J., dissenting)

Prisoners’ rights; Equal Protection. Nichols v. Hofmann, 2010 VT 36 (Dooley, J.)

           

Contracts, Trusts, Business. 

Trusts and Estates:  new wife vs. son by former marriage. In re Estate of Kurrelmeyer, 2010 VT 20 (mem.)

Trusts and Estates: Administrator’s sale set aside because of unspoken limitation that property be “kept in the family”. In re Estate of Doran. 2010 VT 13 (Burgess, J.) (Reiber, C.J. and Dooley, J., dissenting.)

Evidence.

Daubert:  epidemiological causation evidence inadmissible. Estate of George v. Vermont League of Cities and Towns, 2010 VT 1 (Skoglund, J.) (Dooley, J., concurring.) (Reiber, C.J., joined by Johnson, J., dissenting)

Daubert: error to suppress “relation back” evidence in DUI case. State v. Burgess, 2010 VT 64 (Reiber, C.J.)

State can impeach its own witness. State v. Davis, 2010 VT 9 (mem.)        

Insurance.

“Independent” trucker was an “employee”, and thus insured by employer’s policy. Hathaway v. Tucker, 2010 VT 114 (Dooley, J.)

Coverage for sexual abuse by minor at a day care center.  Innocent co-insured doctrine.  Burden of proof of no-accident on insurer.  Subjective intent to harm is test.  Northern Security Insurance Company, Inc. v. Stanhope, 2010 VT 92 (Burgess, J.)

Duty to defend partially covered claims.  Where some claims are covered,  insurer is liable for full judgment -- unless it intervenes in tort case to obtain special verdict showing part of verdict was based on uncovered claims.  Insurer must fund appeals.  Personal injury coverage for “negligent defamation.”  Pharmacists Mutual Insurance Co. v. Myer, 2010 VT 10 (Reiber, C.J.)

No coverage ruling affirmed:  breach of warranty of habitability is not wrongful eviction or other “personal injury”; “reasonable expectations’ theory rejected; no decision whether there should be Chinese wall between coverage counsel and insurer-retained defense counsel. Vermont Mutual Insurance Company v. Parsons Hill Partnership, 2010 VT 44 (Dooley, J.) 

Procedure & jurisprudence.

Failure to preserve error in jury charge. No plain error where only damages are at stake. Venturella, Sr. v. Addison-Rutland Supervisory Union, 2010 VT 115 (mem.)

Injunction procedure. Hate crime injunction reversed for lack of findings and because the evidence of racist threats was stale. Injunction based on implied jury findings reversed because of lack of findings and because court had agreed not to try issue concurrently.  Shahi v. Madden, 2010 VT 56 (Skoglund, J.)

Denial of motion to amend; preservation of punitive damage issue. Ferrisburgh Realty Investors v. Schumacher, 2010 VT 6 (Skoglund, J.)

Discovery sanction that led to dismissal affirmed even though no bad faith or prejudice, because the sanction was not technically a dismissal.  State v. Howe Cleaners, Inc., 2010 VT 70 (Burgess, J.)   (Johnson, J., dissenting in part, and concurring in part.) (Reiber, C.J., dissenting in part, and concurring in part.)

Pleading standards, Rule 12 (b)(6). Error to dismiss a complaint alleging personal participation in corporate tort. Prive v. Vermont Asbestos Group, 2010 VT 2 (Reiber, C.J.)

Pleading standards. Courts should view Rule 12(b)(6) motions with disfavor and rarely grant them.  Nichols v. Hofmann, 2010 VT 36 (Dooley, J.)

Res judicata bars prisoner medical care suit. Bain v. Hofmann, 2010 VT 18 (mem.)

Res judicata. Ordinarily, the court issuing a judgment should not address its preclusive effect on future litigation. Alden v. Alden, 2010 VT 3 (mem.)

Res judicata; Arbitration proceeding does not bar later claim outside the scope of reference. In re Shelburne Supermarket, Inc., 2010 VT 30 (Reiber, C.J.)

Stare decisis: Cat precedent applies to Dogs.  Scheele v. Dustin, 2010 VT 45 (Skoglund, J)

Stare Decisis. Decisions of Commissioner of Labor are not precedent  McNally v. Department of PATH.  2010 VT 99 (mem.)

Public Records.  Shlansky v. City of Burlington and Burlington Police Department, 2010 VT 90  (Skoglund, J.)

Punitive damages.

How not to preserve punitive damage issue. Ferrisburgh Realty Investors v. Schumacher 2010 VT 6 (Skoglund, J.)

Punitive damages for breach of fiduciary duty and interference with business relations affirmed based on 1) wrongful conduct that is outrageously reprehensible; and (2) malice as evidenced by  ill will  and intentional and wrongful desire to benefit economically at expense of plaintiff.  J. A. Morrissey, Inc. v. Smejkal,  2010 VT 66 (Johnson, J.)

Standard for punitive damages based on recklessness clarified to include requirement of reprehensibility. Punitive damages award for reckless conduct reversed.  Fly Fish Vermont, Inc v. Chapin Hill Estates, 2010 VT 33 (Burgess, J.)

           

Real Estate and Land Use. 

Ancient road exists.  Benson v. Hodgdon, 2010 VT 11 (mem.)

Condominium declaration cannot be altered solely by individual deed or private agreement.  Madowitz v. The Woods at Killington Owners' Association, 2010 VT 37 (Johnson, J.) (Dooley, J., dissenting joined by Joseph, D.J., Specially Assigned)

Covenants extinguished by merger of benefited and burdened estates.  Beldock v. Town of Charlotte, 2010 VT 74 (Skoglund, J.)

Easement by prescription denied on appeal.  Schonbek  v. Chase, 2010 VT 91 (Reiber, C.J.)

Environmental law. Junkyard permit. Rhoades Salvage v. Town of Milton, 2010 VT 82 (mem.)

Land contract dispute.  Ferrisburgh Realty Investors v. Schumacher, 2010 VT 6 (Skoglund, J.)

Partition: trial court’s accounting order reversed for failure to consider overall equities. Whippie v. O'Connor, 2010 VT 32 (Burgess, J.)    

Right of First Refusal requires matching offer. Bischoff v. Bletz, 2010 VT 49 (Dooley, J.)

Right of way dispute. Cassani v. Hale, 2010 VT 8 (Burgess, J.)

Zoning: No standing to appeal to E- Court. In re Verizon Wireless Barton Permit, 2010 VT 62 (Burgess, J.)  (Davenport, Supr. J., Specially Assigned, dissenting.)

Taxation. 

Interest on income tax refund limited. Vermont Yankee Nuclear Power Corp. v. Dept. of Taxes, 2010 VT 24 (Dooley, J.)    

Land gains tax refund reversed. GP Burlington South, LLC v. Dept. of Taxes, 2010 VT 23 (Burgess, J.)

Property tax exemption denied:  artist-in-residence program is not “public use.”. Vermont Studio Center, Inc. v. Town of Johnson, 2010 VT 59 (Burgess, J.)  (Crawford, Supr. J., Specially Assigned, dissenting.)

Property transfer tax. 90-day rule. Polly's Properties v. Department of Taxes, 2010 VT 41 (Skoglund, J.)

Torts.   

No noneconomic damages for the malicious destruction of pet dog. Scheele v. Dustin, 2010 VT 45 (Skoglund, J)

Corporate officer not immune for personal participation in corporate tort. Prive v. Vermont Asbestos Group, 2010 VT 2 (Reiber, C.J.)

Concerted action in hunting accident not proved. Knowledge, foreseeability and causation all lacking.  Lussier v. Bessette, 2010 VT 104 (Reiber, C.J.)

Consumer Fraud:  Damages; attorney’s fees. Vastano v. Killington Valley Real Estate, 2010 VT 12 (mem.)

Consumer Fraud; selling a salvaged car. Gregory v. Poulin Auto Sales, Inc., 2010 VT 85 (mem.)

Stealing customers by insider is both breach of fiduciary duty and interference with business relations. J. A. Morrissey, Inc. v. Smejkal,  2010 VT 66 (Johnson, J.)         

Wrongful death proceeds.  Superior court has no control over the investment and spending plan for minor’s wrongful death settlement. In re Willey,  2010 VT 93 (mem.)

Workers compensation.

Commissioner erred in failing to address whether there was a valid claim for workers’ compensation and in barring the claim because claimant was intoxicated at the time his injury. Cyr v. McDermott's, Inc., 2010 VT 19 (Skoglund, J.)     (Reiber, C.J., dissenting joined by Justice Burgess.)

Remand for proper findings. Commisioner’s decisions are not precedent. McNally v. Department of PATH, 2010 VT 99 (mem.)

Superior court has jurisdiction of appeal of summary judgment ruling even though it involves a question of law. The rules of evidence and procedure are applicable in workers’ compensation cases heard by the superior court.  Estate of George v. Vermont League of Cities and Towns, 2010 VT 1 (Skoglund, J.) (Dooley, J., concurring.) (Reiber, C.J., joined by Johnson, J., dissenting)