Lay v. Pettengill, 2011 VT 127 (Dooley, J. )

Plaintiff David M. Lay appeals from an order granting summary judgment to DPS staff attorney Novotny on Lay’s claim of fraudulent nondisclosure. Lay’s claim stems from an internal investigation into his behavior as a state trooper. Lay hired an attorney who negotiated a resolution to the internal charges with attorney Novotny. Lay, alleges attorney Novotny had a duty to inform him during the negotiation process that that she believed Lay’s conduct might give rise to a criminal action, even though there was no discussion or inquiry between the parties’ attorneys about criminal matters. As a result of the negotiation, Lay resigned and executed a release in exchange for eight weeks of pay and an agreed-upon process for addressing future employment referral requests. Following Lay’s resignation, criminal charges were brought. Lay argues that the superior court erred in granting judgment to defendant on his claim of fraudulent nondisclosure. We affirm.

“Fraudulent concealment involves concealment of facts by one with knowledge, or the means of knowledge, and a duty to disclose, coupled with an intention to mislead or defraud.” “[A]s between bargaining adversaries there can ordinarily be no justifiable reliance upon an opinion. The recipient is not justified in accepting the opinion of a known adversary on the law and is expected to draw his own conclusions or to seek his own independent legal advice.” “Failing to disclose information is not fraudulent unless one has an affirmative duty to disclose, as in a confidential or fiduciary relationship.” A duty to disclose may arise “from the relations of the parties, such as that of trust or confidence, or superior knowledge or means of knowledge.” “In arm’s-length transactions,” however, “where facts are equally within the means of knowledge of both parties, neither party is required to speak, in the absence of inquiry respecting such matters.” In context of fraudulent nondisclosure cases that a “defendant may reasonably expect the plaintiff to make his own investigation, draw his own conclusions and protect himself”)

As an initial matter, at issue is a subjective opinion, not a statement of fact. Lay knew the facts on which Novotny based her opinion about his potential criminal liability. He and his attorney had full access to the information and presumably both Lay and his attorney read these materials before engaging in settlement negotiations. Lay and his attorney could have inquired whether a criminal referral had been made. Novotny and Lay were adversaries. Novotny was representing DPS, and Lay had his own lawyer who was actively involved in the negotiation process. Each attorney owed a duty of care to her own client, not to third parties