Wednesday, October 3, 2018

Divided Court affirms judgment on a verdict for conversion of proceeds of sale, breach of fiduciary duty, and unjust enrichment, but reverses punitive damages

Eugene W. Beaudoin, Derivatively on Behalf of The New England Expedition Ltd. Partnership II & IV v. Barry E. Feldman, The New England Expedition-Colchester LLC and Colchester Managing Member Inc., 2018 VT 87  [filed 8/17/2018]

SKOGLUND, J. In this commercial dispute involving the sale of a grocery store, defendants Barry Feldman, the New England Expedition-Colchester, LCC (NEE-Colchester), and Colchester Managing Member, LLC (CMM), ask this Court to strike jury-awarded punitive damages and to find that the trial court erred in numerous evidentiary rulings, in denying defendants’ motion for judgment as a matter of law, and in denying defendants’ motion for a new trial. For the below-stated reasons, we strike the punitive damages, but affirm the remainder of the trial court’s rulings and orders.

Feldman appeals, arguing that the trial court: (1) erred by allowing the jury to consider punitive damages in this commercial dispute; (2) abused its discretion by allowing Beaudoin to introduce evidence of the Rhode Island contempt order; (3) abused its discretion by excluding evidence of Beaudoin’s pre-2005 tax returns; (4) abused its discretion by admitting evidence of Feldman’s additional real estate projects; (5) erred by denying Feldman’s motion for judgment as a matter of law for Beaudoin’s failure to join allegedly indispensable parties; and (6) erred in denying Feldman’s motion for a new trial after Beaudoin’s counsel’s closing statement remarks.

Where a party failed to object to jury instructions pursuant Rule 51(b), it properly preserved its claim “that the trial court erred in submitting plaintiffs’ demand for punitive damages to the jury” by seeking judgment as a matter of law in compliance with Rule 50(a) and  renewing its motion after entry of the judgment as required by Rule 50(b). Murphy v. Stowe Club Highlands, 171 Vt. 144, 154, 761 A.2d 688, 695-96 (2000). Because Feldman challenges the presentation of punitive damages to the jury in the first, Feldman properly preserved his claim for appellate review by complying with V.R.C.P. 50(a) and (b), regardless of “whether or not [he] also objected to the jury instruction.”

An award of punitive damages requires a showing of two essential elements—“wrongful conduct that is outrageously reprehensible” and “malice, defined variously as bad motive, ill will, personal spite 9 or hatred, reckless disregard, and the like.” The “conduct need not only be wrongful, but truly reprehensible,” and malice must be proven by “some showing of bad motive.”

Not every claim of bad faith, conversion, or breach of fiduciary duty warrants a punitive-damages award. The dispute must result in behavior that is truly reprehensible or egregiously awful. The evidence in this case did not rise to that level This was a dispute between two businessmen. While Feldman’s conduct may have been wrongful, intentional, and even actionable—as evidenced by the conversion, unjust enrichment, and breach of fiduciary duty judgments against him—as a matter of law, it falls short of the type of egregious behavior this Court has found to support punitive damages in the past.  The record before this Court “cannot support a punitive award given the absence of outrageously reprehensible conduct and the lack of actual or legal malice towards” Beaudoin. Fly Fish Vermont, 2010 VT 33, ¶ 17. The trial court erred when it submitted the question of punitive damages to the jury because there was insufficient evidence to support it, and thus this Court must strike the punitive damages awarded by the jury.

ROBINSON, J., dissenting. The trial court’s refusal to admit highly relevant evidence bearing on the critical issue in this case was not supported by its reasoning and exceeded its discretion. I dissent from the majority’s affirmance of the trial court’s exclusion of evidence of Beaudoin’s pre-2005 tax returns, and I would reverse

I cannot agree that the trial court’s conclusion that the proffered evidence was irrelevant was within its broad discretion. I respectfully dissent. I am authorized to state that Chief Justice Reiber joins this dissent

Divided Court affirms suppression under Chapter I, Article 11 of the Vermont Constitution, of fruits of warrantless “open fields” search, despite argument that purpose of search was to enforce fish and game regulations and defendant’s “no trespass” postings did not comport with Vermont’s hunting posting statute.

State v. Ronald Dupuis, 2018 VT 86 [filed August 17, 2018]

ROBINSON, J. In State v. Kirchoff this Court held that Chapter I, Article 11 of the Vermont Constitution protects against warrantless searches of “open fields” when the landowner objectively demonstrates his or her intent for privacy through actions such as posting “no trespass” signs. 156 Vt. 1, 10, 587 A.2d 988, 994 (1991). This case now calls on us to examine whether Article 11 provides the same protection when the warrantless search is for the purpose of enforcing hunting laws and the landowner has not strictly abided by Vermont’s regulations for posting against hunting. The State appeals from the trial court’s grant of defendant Ronald Dupuis’s motion to suppress evidence arising from a game warden’s warrantless search of his property, arguing that because defendant’s “no trespass” postings did not comport with Vermont’s hunting posting statute, he enjoyed no expectation of privacy. We disagree and affirm.

The State’s argument follows two steps. First, because defendant did not comply with § 5201 by failing to specify in his signs that hunting was prohibited, and by failing to record the signs with his town clerk for that calendar year,  members of the public could legally enter his property in order to hunt, notwithstanding his general notices against trespass. Second, because hunters could lawfully enter his property for hunting purposes, it follows that he had no reasonable expectation of privacy that would prevent game wardens seeking to enforce state fish and game laws from entering his property.

 The foundation of our analysis rests on the constitutional requirement that police get a warrant before searching most private property. That this requirement can apply to open fields when a property owner has taken sufficient steps to exclude others is well established. We reject the State’s suggestion that the Vermont constitutional provisions concerning hunting, fishing, and trapping create an exemption to the warrant requirement for game wardens investigating hunting violations on private property.
  
It does not follow that a landowner who has effectively put strangers on notice that they are not welcome on the private property surrenders the corresponding reasonable expectation of privacy by failing to take the more burdensome specific steps required to cut off the narrower right of access afforded to hunters. Defendant’s failure to provide notice satisfying the statutory requirements for posting against hunters does not constitute willing exposure of his property to the public—or to law enforcement.

CARROLL, J., dissenting.  The question in this case is not one of fact—whether the landowner put in place sufficient tangible indications such that law enforcement should have known a warrant was required for entry—but one of law—whether posting against general trespassing, but not against entry for purposes of hunting or fishing, is sufficiently indicative of a landowner’s reasonable expectation of privacy to preclude all law enforcement entry regardless of the purpose of the entry. Vt. Const. ch. II, § 67 reserves a right for Vermonters to access privately held lands for the purposes of taking fish and game under regulations promulgated by the Commissioner of Fish and Wildlife as long as those lands are not “inclosed.” It is questionable whether the objective inquiry in the reasonable expectation of privacy test is satisfied here where our Constitution reserves a right of entry onto private lands for persons engaged in taking wild fish and game and defendant took no action to exclude those engaged in the activity. And if the objective prong of the reasonable expectation of privacy test is not met, then the test in general is not met, and a warrant is not required for law enforcement entry. I believe that a rule granting the State the ability to enforce fish and game regulations where the public is, in fact, permitted to hunt and fish is simple logic I am authorized to state that Justice Eaton joins this dissent.

Monday, October 1, 2018

SCOVT affirms summary judgment that neither landlord nor guest of tenant/dog-owner owed a duty to passerby injured when pit bull escaped because they had no "reason to know" that the dog in question posed an unreasonable risk



REIBER, C.J. In this negligence action, we consider whether a landlord and a social guest of a tenant may be held liable for injuries caused by the tenant’s pit bulls to a third person outside of the landlord’s property. We conclude that plaintiffs failed to establish that either defendant owed a duty of care to the injured plaintiff in this case, and therefore affirm.

A landlord owes a duty to take reasonable steps to protect persons outside the land from injuries caused by a tenant’s dog if the landlord knew or had reason to know at the time of entering the lease that the dog in question posed an unreasonable risk of harm to such persons. Restatement (Second) of Torts § 379A. To survive summary judgment on their negligence claim against landlord under the above rule, plaintiffs had to present admissible evidence from which a jury could conclude that at the time of entering the lease, landlord knew or had reason to know the tenants’ dogs posed an unreasonable risk to persons outside the land. Plaintiffs did not meet this burden.

Liability under § 379A turns on whether a landlord “knew or had reason to know” at the time of the lease that the particular animal in question is abnormally dangerous. the phrase “reason to know” does not imply a duty to investigate: Restatement (Second) of Torts § 12, cmt. a. Landlords are not obligated to conduct background checks on tenants’ pets.

A dog’s breed alone is not sufficient to put its owners or others on notice that it poses an unreasonable risk of harm,. In Vermont, liability in dog-bite cases has always depended on the propensities of the individual animal.

Assuming for the purpose of summary judgment that the jury could find the guest was acting as the dogs’ keeper, plaintiffs’ negligence claim against him still fails, for the same reason as their claim against the landlord: they have not shown that the guest knew that the dogs posed a threat to anyone. Plaintiffs have failed to present evidence from which a reasonable jury could conclude that defendant knew or had reason to know that the dogs were a probable source of danger, such that he owed a duty to third persons to restrain them. Nor have they demonstrated that he voluntarily undertook to restrain the dogs.