Thursday, June 28, 2012

Statute of limitations not tolled by estoppel or acquiescence.


Beebe v. Eisemann, 2012 VT 40 (mem.)


Plaintff appeals from the trial court's dismissal of his medical malpractice action for failing to satisfy the applicable statute of limitations.  Plaintff argues that the Eisemann defendants are equitably estopped from invoking the statute. We affirm.

In  Fercenia v. Guiduli, 2003 VT 50, ¶ 8, 175 Vt. 541, 830 A.2d 55 (mem.) we held that claims of a plaintiff who filed complaint within one day of the expiration of the limitations period, secured a waiver of service within sixty days, but failed to file that waiver in court within sixty days of filing the complaint were barred by statute of limitations. 

All parties agree that the limitations period for plaintiff’s malpractice claims pursuant to 12 V.S.A. § 521 was due to expire on October 9, 2009.  By letter dated September 16, 2009, plaintiff’s counsel proposed to Dr. Eisemann’s counsel and other potential defendants a “time out” agreement, tolling the statute of limitations for ninety days so the parties could pursue settlement.  Although Dr. Eisemann signed off on the agreement, not all of the defendants did.     As a result, plaintiff filed a summons and complaint on October 7, 2009 against all of the defendants in the trial court.  On October 15, 2009, plaintiff’s counsel sent a letter to the defendants’ lawyers informing them that a summons and complaint had been filed in the matter, and requesting that their clients sign and return acceptances of service.  In this letter, plaintiff’s counsel requested that the acceptances be returned at defendants’ “earliest opportunity,” but stated that he would not file the acceptances with the court without notice “so that this lawsuit will not be open to public inspection.” Plaintiff was required to file any waivers of service within sixty days of filing his complaint, December 6, 2009. 

Counsel for Dr. Eisemann signed the acceptance of service on October 20, 2009, but did not return the acceptance to plaintiff’s counsel on January 13, 2010. 

The trial court dismissed the complaint , viewing plaintiff’s request that defendant voluntarily "accept service" as a request for "waiver of service" of summons pursuant to V.R.C.P. 4(l) that was untimely filed.

On appeal, plaintiff does not argue that he legally satisfied the statute of limitations, but argues that equitable estoppel precludes defendant from invoking the statute of limitations.  Specifically, plaintiff argues that “estoppel by acquiescence” should have prevented Dr. Eisemann from asserting the statute of limitations because he claims Dr. Eisemann was aware that the parties were operating under a de facto agreement to ignore the time period within which plaintiff was to file the waiver of service, and, in effect, to toll the statute of limitations indefinitely while the parties negotiated.
Estoppel-by-acquiescence arises where the party being estopped is silent in the face of a duty to speak.  Assuming that estoppel-by-acquiescence is a valid theory, we affirm the trial court’s ruling because Dr. Eisemann was under no “duty to speak” at any time prior to the expiration of plaintiff’s deadline for filing the waivers.  He had no duty to affirmatively remind plaintiff to secure and file the acceptance within the period prescribed by the Rules of Civil Procedure. Plaintiff’s failure to enter into a tolling agreement, timely file Dr. Eisemann’s waiver of service, seek judicial relief from the applicable deadlines, or effectively serve Dr. Eisemann within the limitations period via other means cannot be cured by Dr. Eisemann’s silence.
[Filed 18-Jun-2012]

Tuesday, June 26, 2012

Consumer Fraud Act can apply to statements other than at point of sale.

First Quality Carpets, Inc. v. Kirschbaum, 2012 VT 41 (Burgess, J.)

The Kirschbaums appeal the ruling of the Civil Division in favor of First Quality in a dispute over carpet installed in 2007.  The Kirschbaums argue that the civil division erred in awarding First Quality attorney’s fees under  9 V.S.A. § 4007(c) of the Prompt Pay Act because that section of the statute authorizing attorney’s fees recovery effectively expired in 1996 pursuant to a sunset provision included in the Act.  Alternatively, the Kirschbaums argue that because they withheld payment to First Quality in good faith, they were entitled to a directed verdict and that First Quality should not have been awarded attorney’s fees under § 4007(c). Finally, the Kirschbaums argue that the court erred in denying their counterclaim under the Consumer Fraud Act.  We affirm in all respects.

We hold section 4007(c) remained in effect after June 30, 1996, and reject the Kirschbaums’ argument that the court erred in denying their motion for a directed verdict on First Quality’s Prompt Pay Act claim.  The court’s findings as to the Kirschbaums’ bad faith are supported by the record.  The court relied on two particular instances of less-than-straightforward dealing to conclude that the Kirschbaums had no good faith basis to withhold payment.

To establish a claim under the CFA, a plaintiff must prove three elements: “(1) there must be a representation, practice, or omission likely to mislead the consumer; (2) the consumer must be interpreting the message reasonably under the circumstances; and (3) the misleading effects must be ‘material,’ that is, likely to affect the consumer’s conduct or decision with regard to a product.” The Kirschbaums argue that the court misinterpreted the CFA to apply only to statements made at the point of sale .  They assert that the CFA covers both sales as well as services provided after the point of sale, and that First Quality violated the CFA by failing to “disclose the extent of the installation of the defective carpeting” and “by refusing to replace all of the defective carpeting or repair defective seams.”  Material misrepresentations may be made either at the time of sale, or in the course of services provided after the point of sale.”[¶ 19 ] Jordan v. Nissan N. Am., Inc., 2004 VT 27, ¶ 5, 176 Vt. 465, 853 A.2d 40 (stating that to prove third element of consumer fraud plaintiff must show that “the misleading representation was material in that it affected the consumer’s purchasing decision”.) However the civil division did not reinterpret this third element of consumer fraud in denying the Kirschbaums’ claim.  Rather, its ruling rested on the factual determinations that First Quality made no misleading statements at any point regarding the defective carpeting and that, in any event, the Kirschbaums did not rely on any such statements in making decisions regarding their purchase.

Under the Vermont Parental and Family Leave Act, an employee does not continue earning paid leave during unpaid parental leave.

Vermont Human Rights Commission v. State of Vermont, (2011-081) (08-Jun-2012)(Burgess, J.)

Plaintiffs Vermont Human Rights Commission (HRC) and Ursula Stanley, an employee of the State Agency of Transportation, appeal the Washington Civil Division’s decision to grant the State’s motion to dismiss her complaint for failure to state a claim upon which relief can be granted.  Ms. Stanley complains that, under the Vermont Parental and Family Leave Act (VPFLA), 21 V.S.A. § 472(c), which requires continuation of certain “employment benefits” during family leave, she was entitled to accrue, but was denied, paid vacation and sick time during the course of an unpaid parental leave.  The trial court held that under § 472(c) an employee does not continue earning paid leave during unpaid parental leave. We affirm.

Computation of Medicaid lien.

Doe v. Vermont Office of Health Access , 2012 VT 15A (14-Jun-2012)(Reiber, C.J.) (on reargument?)

John Doe, a Medicaid recipient, and the State appeal the trial court’s decision allowing the State to partially recover the amount of its lien against Doe’s settlement with a third party.  The trial court calculated the State’s reimbursement pursuant to Arkansas Department of Health & Human Services v. Ahlborn, 547 U.S. 268 (2006).  The State argues that the trial court should have reduced the Court of Claims’ findings of future economic damages to present value before making its lien allocation, complainig that the trial court’s allocation percentage was unfair because the numerator represented actual expenses, but the denominator included future expenses not discounted to present value.  Doe’s cross-appeal contends that the trial court erred because it attached the State’s lien to all past medical expenses, including those paid by him and his family, and failed to account for the attorney’s fees.  We affirm in part, and reverse and remand in part.

Although Ahlborn held that states are limited to the portion of a settlement that represents medical costs paid by Medicaid, it did not provide concrete guidance on how those allocations should be made.   We find no support for the proposition that, as a matter of law, future damages must be reduced to present value in Medicaid lien cases.  We do agree with the State that a reduction to present value is generally appropriate for economic damages, but not noneconomic damages.  See Levine v. Wyeth, 2006 VT 107, ¶ 42, 183 Vt. 76, 944 A.2d 179.  This is, however, not the appropriate case for discounting.  Doe presents a damages figure of $42 million to be used in making the allocation, while the State presents a figure of approximately $18 million.  The State simply did not prove that the $18 million figure is more fair,  nor did it carry its burden in demonstrating that the figure is accurate.  In light of those problems, we conclude that discounting is unwarranted, and that the trial court did not err.

  The next issue is whether the trial court erred in allowing the State to assert its lien against all medical expenses beyond those which were paid by Medicaid.  Vermont’s reimbursement statute—now amended—provided at the time of the suit that “[t]he agency shall have a lien against a third party, to the extent of the amount paid by the agency, on any recovery for that claim, whether by judgment, compromise, or settlement.”  By its plain language, the pre-2008 statute does not allow the State to assert a lien against any recovery for money not paid by Medicaid, as the State did here.We express no opinion on the meaning of the statute following the 2008 revisions and additions

Doe also contends that the trial court erred in refusing to allocate to the State a portion of attorney’s fees incurred in procuring the 2006 settlement. We conclude that the State’s lien should have been reduced to account for attorney’s fees.   Here, the State was not involved with the litigation in the New York Court of Claims, nor with obtaining the settlement against the NYSTA.  Instead, the State asserted a lien against the “fruits of the suit once they materialized,” but did not expend its own resources in pursuing litigation or settlement.  Ahlborn, 547 U.S. at 286. The record reflects that it was the State’s practice to reduce its lien claims by a proportionate share of attorney’s fees.  The State was required to negotiate in good faith and in accordance with this general practice.  The trial court failed to take into account the State’s practice, and therefore abused its discretion in denying Doe’s request to reduce the State’s judgment in the amount of reasonable attorney’s fees.

Rule 50 motion not waived by failing to request jury instruction or by failing to object to evidence. Whether release is ambiguous so as not to bar retaliation claim must be decided by trial court in first instance.

Hall v. State, 2012 VT 43 (Skoglund, J.)
Plaintiff Frank Hall, a longtime employee of the State of Vermont Agency of Transportation (AOT), sued his employer in the fall of 2007, alleging discrimination on the basis of, among other things, a physical disability and retaliation for his having filed a workers’ compensation claim.  The jury found no disability discrimination, but awarded Hall damages based upon its finding that the State had retaliated against him as alleged.  On appeal, the State argues that Hall’s retaliation claim was precluded by a Stipulation and Agreement releasing the State from liability for any and all claims associated in any way with Hall’s reclassification and transfer stemming from hostile work environment allegations against him. At trial he State consistently and repeatedly argued that Hall waived any claims against the State based on his reclassification.  That question was for the court to evaluate in the first instance.  The failure of the court to resolve the State’s Rule 50 motion is fatal to the validity of the ensuing jury verdict because the retaliation claim was grounded on actions taken by the State pursuant to the Agreement. Accordingly, we vacate the jury verdict and remand the matter for the trial court to address the  scope of the September 2003 release.

TheAOT and Hall, with the assistance of counsel, negotiated a resolution of allegations against him and signed a Stipulation and Agreement.   Pursuant to the Agreement, AOT reclassified Hall’s job.  The critical release provision contained in the Agreement states as follows: “Frank E. Hall hereby waives any grievance, complaint, lawsuit, or other claim of legal wrongdoing or liability whatsoever against the State of Vermont, . . . associated in any way with his employment by the State of Vermont, the negotiation of this Agreement, and his reclassification as called for in this Agreement.”  At trial, Hall’s attorney testified that he wanted to make sure that the release would be limited to matters surrounding the hostile work environment allegations and would not preclude unrelated future claims, and that he insisted on adding to the end of the above-quoted sentence the following language: “specifically pertaining to the aforesaid ‘hostile work environment’ as stated, supra.”  

Upon the close of evidence  and following the vedict the State  made and renewed its Rule 50 motion.  The State argued the Agreement released the State from any liability based on his claim that the State had retaliated against him for having filed a workers’ compensation claim by demoting him. The State asserted that the Agreement plainly required him to waive any claims based on his reclassification as the result of the hostile work environment investigation.  In response, Hall argued that the Agreement was ambiguous and that the State had waived any reliance on the release contained in the Agreement.  According to Hall, the State had conceded the Agreement’s ambiguity by allowing evidence of the handwritten addition to the release language to be admitted into evidence without objection. The trial court did not reach the merits, but ruled that “the failure to seek an instruction on the issue is most equitably treated as a waiver of the claim by the State.”

The State cannot reasonably be said to have, at any time, voluntarily or knowingly waived its defense .The Agreement was raised in the State’s answer to the complaint, was asserted in its Rule 50 Motion submitted to the court at the close of Hall’s case, and was renewed after the close of evidence.  While a party generally may waive its right to a ruling by failing to proceed with the motion or by acting in a manner inconsistent with the object of the motion, in this case the court continued to inform the State that the matter was still under advisement.  Therefore, a waiver could not be implied based on the State’s failure to seek a jury instruction on the defense, given that the State reasonably assumed the defense was still under advisement by the court. Likewise, the State  did not waive any defense based on the Agreement by not objecting to evidence presented at trial concerning the circumstances surrounding the signing of the Agreement. Here, the State does not argue that the parol evidence rule precluded the admission of trial testimony concerning the Agreement.  Rather, the State argues that the Agreement Hall signed precluded his claims in this case, that it sought judgment at trial based on this argument, but the trial court never ruled on its motion.

The question not reached by the trial judge  is whether the language of the document was ambiguous as to Hall’s waiver of his retaliation claim.   Nothing in the language of the Agreement, provides the trial court with a basis for finding that, as a matter of law, the Agreement unambiguously permitted Hall’s claims in this case.  Rather, on remand, the trial court must consider whether the Agreement unambiguously precluded all or part of Hall’s remaining retaliation claim.  If the language of the Agreement is ambiguous as to its preclusive effect in light of the circumstances surrounding the making of the Agreement, thjen the  court ;must instruct a new jury to that effect.  See Isbrandtsen v. N. Branch Corp., 150 Vt. 575, 579, 556 A.2d 81, 84 (1988) (holding that trial court may consider circumstances surrounding making of agreement in determining whether agreement is ambiguous).

Monday, June 25, 2012

Employers liability. Video surveillance is not retaliation.


 Hall v. State, 2012 VT 43 (Skoglund, J.)

Plaintiff, a longtime employee of the State of Vermont Agency of Transportation (AOT), sued his employer alleging discrimination on the basis of having filed a workers’ compensation claim.  The jury found that the State had retaliated against him as alleged.  On appeal, the State argues that evidence of a video surveillance connected with a second workers’ compensation claim was insufficient as a matter of law to support his retaliation claim and the resulting damages award. We agree with the State and vacate the award.

To make out a prima facie case of retaliation for filing a worker’s compensation claim, a plaintiff must show, among other things, that “he suffered adverse employment decisions, and . . . there was a causal connection between the protected/ activity and the adverse employment decision[s].”  Murray v. St. Michael’s Coll., 164 Vt. 205, 210, 667 A.2d 294, 299 (1995).  Video surveillance can be expected in response to a claim, and indeed the State has the right and responsibility to use such techniques to prevent /fraudulent claims.  If any video surveillance in connection with a workers’ compensation claim could form the sole basis for a retaliation claim, it could well have the effect of pressuring the State into abandoning or unnecessarily restricting one of its legitimate tools for rooting out fraud in the filing of workers’ compensation claims.  In the trial  court’s view, “[t]he jury could reasonably have concluded that the only reason AOT conducted surveillance of Hall was in retaliation for his filing a worker’s compensation claim, since that was obviously the reason the video was taken.”  This is not enough.  



The videotaping of Hall in connection with his second workers’ compensation claim, cannot, in and of itself, support Hall’s retaliation claim. We do not necessarily disagree with Hall’s contention that video surveillance can be submitted as evidence of a larger pattern of retaliation. But in this case, there was no larger pattern, and video surveillance itself  is not an adverse employment decision.

Sunday, June 3, 2012

Award of attorneys fees after settlement of condo development dispute affirmed; “catalyst” theory explained.


Montgomery v 232511 Investments Ltd., 2011 VT 31 (mem.)



Defendant 232511 Investments Ltd., the owner of a planned unit development in the Town of Stowe, appeals from separate superior court orders invalidating certain amendments to the development’s declaration of covenants, conditions, and restrictions and awarding attorney’s fees under the Common Interest Ownership Act and denying its request for attorney’s fees under the declaration.  We affirm

The attorney’s fee award was based largely on the trial court’s finding that plaintiffs had prevailed in their challenge to the Tenth and Twelfth Supplements.  In light of the settlement and order voiding the disputed supplements, a question arises at the outset as to whether plaintiffs may be said to have “prevailed” on the merits.

In Kirchner v. Giebink, 155 Vt. 351, 352, 584 A.2d 1120, 1121 (1990), the plaintiffs’ claims became moot when the defendants unilaterally amended the development agreement at issue. We held, nevertheless, that the plaintiffs were entitled to attorney’s fees under 42 U.S.C. § 1988 even where they did not prevail “by direct judicial action as long as they were the catalyst for the relief.”  To meet this requirement, plaintiffs must “establish that their suit was causally related to the defendants’ actions which improved their condition,” and that their claims had a “colorable or reasonable likelihood of success on the merits.”  Id. at 353-54, 584 A.2d at 1122 (quotation omitted).  

More recently, in Merriam v. AIG Claims Services, Inc., 2008 VT 8, ¶ 15, 183 Vt. 568, 945 A.2d 992 (mem.), we noted that the “catalyst” theory on which Kirchner relied has since been rejected by the U.S. Supreme Court in Buckhannon Board & Care Home, Inc. v. W. Va. Department of Health & Human Resources, 532 U.S. 598 (2001).  In Buckhannon, the plaintiffs’ suit challenging certain state legislation was rendered moot by subsequent legislative amendment, and the Supreme Court held that the plaintiffs could not be considered the prevailing parties for purposes of obtaining attorney’s fees “without obtaining any judicial relief.”  Id. at 606.  

We did not ultimately decide in Merriam whether Kirchner or Buckhannon governed state law claims, nor is it necessary to do so here, as there is no doubt that plaintiffs prevailed under either approach.  The Buckhannon court recognized that settlement agreements incorporated into judicial consent decrees satisfy the “judicial imprimatur” requirement and alter the “legal relationship of the parties” sufficient to permit an award of attorney’s fees.  532 U.S.  at 604.  Numerous courts have since interpreted and applied Buckhannon to allow attorney’s fees where—as here—the parties’ settlement has been specifically incorporated into a court order or has otherwise received judicial approval.  Thus, we need not specifically hold that Buckhannon is controlling under state law to conclude that its prerequisites for an award of attorney’s fees in this case have been satisfied.

There is also no doubt that plaintiffs’ suit was “causally related” to the stipulated settlement in which Stowe Highlands agreed to void the disputed supplements, and the trial court’s subsequent ruling in favor of plaintiffs—while ultimately superfluous—demonstrates at the very least that their suit had a “colorable or reasonable likelihood of success on the merits.”  Kirchner, 155 Vt. at 353, 584 A.2d at 1122.  

No fee-shifting on theory of implied indemnity where putative indemnitor is exonerated of wrongdoing.

Knappmiller v. Bove,  2012 VT 038  (mem.)


Defendant Vaillancourt Tree and Landscape Service appeals a trial court decision denying its post-trial motion for attorney’s fees and costs under a theory of implied indemnification.  The issue on appeal is whether indemnity for attorney’s fees is appropriate where a jury has found the putative indemnitor not liable in the underlying suit.  We affirm.

The jury returned a verdict for both defendants, finding that plaintiff had not proven a claim for wrongful cutting of trees against the Boves or Vaillancourt.  Because the jury found no wrongful cutting on the part of the defendants, it never reached Vaillancourt’s indemnity cross-claim since the jury instructions and special verdict form required the jury to reach the issue only if Vaillancourt was found liable to plaintiff.  Vaillancourt filed a post-trial motion seeking litigation expenses, including attorney’s fees, under a theory of implied indemnity from the Boves.  The trial court denied Vaillancourt’s motion, stating that indemnity was not available absent any finding of wrongdoing on the part of the Boves. On appeal, Vaillancourt argues that our case law does not require a finding of wrongdoing before attorney’s fees and litigation expenses may be awarded based on a theory of implied indemnity.  

This Court has recognized that an award of fees is appropriate if “the wrongful act of one person has involved another in litigation with a third person or has made it necessary for that other person to incur expenses to protect his interests.”  Albright v. Fish, 138 Vt. 585, 591, 422 A.2d 250, 254 (1980).  Some underlying culpability must appear from the record before attorney’s fees can be awarded under the Albright exception. The party requesting indemnification for attorney’s fees has the burden to demonstrate the would-be indemnitor’s culpability.

Citing Windsor School District v. State, 2008 VT 27, 183 Vt. 452, 956 A.2d 528, and that, 2008 VT 27, ¶ 13, Vaillancourt’s argues that the trial court does not need to make a finding on fault, and that indemnity may be awarded “as a matter of comparative responsibility and fairness.” Vaillancourt asserts that the Boves are more responsible because, as the property owners, they should have been aware of, and alerted Vaillancourt to, the fact that the trees straddled the boundary line.  In Windsor, the town of Windsor bought land that was previously owned and polluted by the Department of Corrections (DOC).   We concluded that the town was entitled to attorney’s fees under Albright because the DOC alone polluted the property and the town was a mere purchaser,  concluding this was a significant difference in the “kind or quality of conduct.”  Id. ¶¶ 10-12, 18.  Contrary to Vaillancourt’s contention, Windsor does not abandon the wrongful act element, but merely explains that a finding of fault is not a necessary predicate to an award of attorney’s fees in the context of that case with its distinct premise of strict liability.  Id. ¶ 13.   We do not extend Windsor  to cases such as this where the jury specifically found no fault, no liability, and no underlying responsibility.

Even if we were to dispense with a requirement of finding fault on behalf of the Boves, Vaillancourt did not object to the jury charge or the special verdict form—both of which unequivocally instructed the jury to reach Vaillancourt’s indemnity claim only if Knappmiller prevailed.  We therefore cannot discern any support for an award of attorney’s fees, other than Vaillancourt’s conclusory allegations that the Boves knew the trees straddled the boundary line and had a duty to inform Vaillancourt of that fact.  The court’s exercise of discretion is affirmed.