Sunday, June 3, 2012

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.

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