Nursing negligence. Summary judgment for defense where plaintiff had no expert.

Taylor v. Fletcher Allen Health Care,  2012 VT 86 (Skoglund, J.) (Dooley, J., joined by Robinson, J., concurring and dissenting.)

Plaintiff Sally J. Taylor sued Fletcher Allen Health Care (FAHC) for medical negligence and negligent infliction of emotional distress, in connection with her medical care following a surgery. A nurse was assisting plaintiff in moving to the bathroom when plaintiff alleges that the nurse "withdrew support and assistance . . . unexpectedly and without warning and caused [p]laintiff to fall violently on to the toilet." After plaintiff failed to disclose any expert witness in response to discovery requests, FAHC moved for summary judgment, arguing that plaintiff’s claims failed as a matter of law without an expert witness.  The trial court granted FAHC’s motion.  We agree with the trial court that this case is sufficiently complex that plaintiff cannot prove her claims without expert testimony.  Accordingly, we affirm.

Whether a gait belt should have been used in this case or whether the use of a gait belt could have prevented her drop onto the toilet is beyond the ken of a layperson. There are countless variables that could explain the lack of a gait belt, and only testimony from an expert familiar with general nursing practices and the details of plaintiff's medical record would enable a jury to make an informed decision as to whether FAHC breached its duty of care by not using a gait belt in this case. ...Our holding here is limited to the unique facts of this case given the specificity of plaintiff's argument that the nurse failed to use a specific tool and technique and that the drop was the cause of the need for the second surgery. Those claims are outside of the experience of typical lay person's understanding.

Dooley, J., concurring and dissenting,  concurs in the dismissal of plaintiff's claims that FAHC was negligent in its failure to recognize and diagnose the problems with the hardware and in its treatment of the pain complaints as well as her claim for negligent infliction of emotional distress. I do not concur with the dismissal of the claim that FAHC was negligent when plaintiff fell while attended by a nurse. The majority unnecessarily transforms a routine hospital-fall case into a complex medical-malpractice action requiring expert evidence.

Workers compensation death benefit. No set-off for life insurance.

 Estate of Dunn v. Windham Northeast Supervisory Union, 2012 VT 91 (Reiber, C.J )

This case asks us to determine whether a workers’ compensation insurer is entitled to reimbursement of death benefits it has paid when a claimant’s beneficiary also receives proceeds from a life-insurance policy.  We hold that under 21 V.S.A. § 624(e) a workers’ compensation carrier cannot seek reimbursement from life-insurance payments because such proceeds are not “damages,” as contemplated by the statute, paid because of a third party’s tortious actions.  We therefore affirm the Commissioner of Labor’s grant of summary judgment to the estate of claimant.

Arbitration. Court reverses ruling that court can decide arbitrability in the midst of an arbitration.

Bandler  v. Charter One Bank,  2012 VT 83 (Robinson, J.) 

This case presents the question of whether the superior court has authority to review questions regarding arbitrability in the midst of an arbitration, and outside of the specific review provisions in the Vermont Arbitration Act (VAA).  We conclude that it does not, and reverse the superior court’s ruling concerning the arbitrability of class claims in this case.

Municipal immunity bars claim of negligent tax assessment. Estoppel claim not proven.

Sobel v. City of Rutland, 2012 VT 84 (Burgess, J.)              

Plaintiff owners of an office building appeal the superior court’s grant of summary judgment for defendant municipality. Plaintiffs claim the municipal assessor was negligent in providing inaccurate property tax estimates on the proposed, but not yet built, office.  Plaintiffs also sought to enjoin enforcement of the tax assessment on the office building ultimately constructed.  On appeal, they argue that the court erred in concluding, on summary judgment, that their negligence claim was barred by municipal immunity and that they failed to establish equitable estoppel. We affirm.

Municipal immunity protects municipalities "from tort liability in cases where the municipality fulfills a governmental rather than a proprietary function." Governmental functions are those performed when a municipality "exercise[s] those powers and functions specifically authorized by the Legislature, as well as those functions that may be fairly and necessarily implied or that are incident or subordinate to the express powers." Proprietary activities, on the other hand, are, essentially, commercial activities performed by a municipality in its corporate capacity, for the benefit of the municipality and its residents, and unrelated to its "legally authorized activity." Plaintiffs admit that the estimates here were sought from the Assessor in his official capacity.  But for his office plaintiffs would not haveinquired. Tax estimates thus  elicited solely on account of the Assessor’s official position are reasonably treated as governmental, as opposed to proprietary, activity, that entitle the municipality for immunityfrom suit stemming from the Assessor's estimates.

We also conclude that plaintiffs cannot establish the elements of equitable estoppel: (1) the party to be estopped must know the facts; (2) the party being estopped must intend that its conduct be acted upon; (3) the party asserting estoppel must be ignorant of the true facts; and (4) the party asserting the estoppel must rely on the conduct of the party to be estopped to its detriment.

Defective construction claim dismissed: Economic loss rule bars recovery for negligence; privity rule bars recovery for breach of warranties.

 Long Trail House Condominium Association, v. Engelberth Construction, Inc., 2012 VT 80 (Skoglund, J.)

Plaintiff Condominium Association appeals from the trial court's order granting summary judgment to defendant general contractor Engelberth Construction, Inc. on the Association’s complaint that Engelberth in constructing the project was negligent and breached express and implied warranties. The Association argues that the court erred by: (1) applying the economic loss rule to bar its negligence claim; and (2) dismissing its breach of warranty claim because of lack of privity. We affirm.

The economic loss rule "prohibits recovery in tort for purely economic losses." EBWS,LLC v. Britly Corp., 2007 VT 37, ¶ 30, 181 Vt. 513, 928 A.2d 497. The rule serves to maintain a distinction between contract and tort law. Id. We require actual injury, not simply risk of harm, before one can recover in negligence. Privity, or lack thereof, is not the determining factor. The rule's application does not turn on whether the parties had the opportunity to allocate risks. The existence of a duty, apart from a contractual duty, is a prerequisite to recovery of economic damages in a negligence case. That critical element is lacking in the instant case.  The "professional services" exception to the economic loss doctrine does not apply.  Foreseeability alone is not sufficient to warrant the imposition of a professional duty. We have twice rejected the notion that contractors owed a special duty of care for purposes of this exception, separate and apart from their contractual obligations.  Engelberth presented itself as a contractor and it operated as a contractor, not as a provider of a specialized professional service. 

Our case law plainly contemplates the existence of contractual privity before a breach of implied warranty claim can be raised. The Association's warranty remedy lies against the entity that sold it the condominium units and implicitly warranted through the sale that the units were built in a good and workmanlike manner and that they were suitable for habitation. Its remedy does not lie against Engelberth.

Note: Only two regular members of the Court sat on this case, Skoglund and Burgess, JJ.. These two joined by Davenport, Supr. JJ., formed the majority, with Kupersmit, Supr. JJ., and Johnson, J. (Ret.), dissenting.

Foreclosure; future advances: Creditor with judgment lien takes priority over future advances by mortgagee with actual notice of the lien, whether or not in writing, and whether or not notice is given by the creditor.

Daniels v. Elks Club of Hartford, 2012 VT 55 (Dooley, J.) (Cohen, S.J. concurring) (Reiber C.J.  joined by Burgess,  J. dissenting)

Plaintiff seeks to foreclose a mortgage on real property owned by defendant Elks Club of Hartford, Vermont (the Club).  Defendant creditors  all have junior liens  arising from a discrimination lawsuit aginst the Club. Creditor sappeal from a trial court decision on summary judgment, concluding that plaintiff  is entitled to a judgment of foreclosure against all parties, and dismissing creditors’ counterclaims.   On appeal, creditors argue the Bank was on actual notice of creditors’ interest, and, therefore money advanced thereafter is not part of the mortgage amount that has priority over creditors’ interests. We  reverse and remand the trial court’s decision to include certain advances in the mortgage amount and remand for reconsideration under the correct legal standard. 

The trial court ruled the Bank’s future advance did not lose its priority because, regardless of what the Bank may have known or inferred, it had not received written notice and objection from the creditors.  We disagree and hold that demonstrated actual notice from any source cuts of the priority of future advances , and that the notice need not be a writing and need not be an objection to future advances.

27 V.S.A. § 410(b)(3)(B) does not require that the intervening interest holder actually object to future advances.  It is enough that the mortgagee “receives written notice of the intervening interest.”  Also, § 410(b)(3)(B) does not require that it be the intervening creditor that provides the notice; the statute is written in the passive voice, requiring that “the mortgagee receives written notice” without specifying by whom.  In short § 410(b)(3)(B) is satisfied by any written notice and requires neither that the notice come from the junior creditor nor that the junior creditor specifically object to future advances.  

Further, although a mortgagee need not seek out information about attachments to ensure that its priority is preserved, we hold it  loses its priority where it has received such information, even though the information is not in writing, as the statute requires. see In re Blackmore , No. 05-12045, 2006 WL 1666194, at *2 (Bankr. D. Vt. Jan. 25, 2006) (“[F]uture advances made by a mortgagee will be subordinate if made after the mortgagee has actual notice of the intervening lien.”)

Members may be personally liable for unpaid judgment against an unincorporated association.

Daniels v. Elks Club of Hartford, 2012 VT 55 (Dooley, J.) (Cohen, S.J. concurring) (Reiber C.J.  joined by Burgess,  J. dissenting)

Plaintiff seeks to foreclose a mortgage on real property owned by  the Elks Club of Hartford, Vermont (the Club).  Defendant creditors  all have junior liens  arising from a discrimination lawsuit aginst the Club. Creditors  sappeal from a trial court decision on summary judgment, concluding that plaintiff  is entitled to a judgment of foreclosure against all parties, and dismissing creditors’ counterclaims.   On appeal, creditors argue the Club’s reinstatement of a dissolved corporation nineteen years after its dissolution does not alter its liability under a final judgment entered against it as an unincorporated association, and that plaintiff is personally liable for the judgment as a member of the Club. We agree.

The Club functioned as a voluntary association for nineteen years after its corporate status was terminated.  Creditors dealt with it as a voluntary association, not as a corporation.  Under Vermont law, the Club while acting as a voluntary association had the same liability as it had as a corporation, but the members had individual liability if the Club failed to pay a judgment against it.   

We conclude that reinstatement of the Club’s corporate status did not result in limiting liability on the Club’s debts arising from the discrimination lawsuit.  Because the Club was a voluntary association at the time it discriminated against the individual women certain members of the Club are liable for the judgments to the extent they cannot be collected from the Club.  The statute, 12 V.S.A. § 5060,   treats “partners, associates or shareholders” alike, imposing liability on them when execution against their partnership, association, or company is unfulfilled.  We have  applied the statute to unincorporated associations.  We acknowledge that the possibility of visiting liability on a mostly inactive Club member, who may have supported admission of women and opposed the Club’s decision to fight the discrimination litigation, with its very high cost, seems an inappropriate result.  Nonetheless, absent the corporate shield on liability,  the law permits the creditors to collect from individuals who were members when the various aspects of the judgment against the Club arose if collection from the Club itself is not possible. Reinstatement of the corporate status does not insulate officers, trustees, or members from liability for the judgment 

Having determined that the reinstatement of the corporate form did not insulate persons who are members, officers, or trustees from liability, we turn to the question of who could be personally liable to the creditors.  A number of courts have imposed liability on officers, directors, or shareholders only if they were aware that the corporation had been terminated.  We hold that reinstatement of the corporate status will not restore the corporate shield on personally liability for a person who knew, or should have known by virtue of the person’s position, that there was no corporate shield at the time of the act that created liability.  If the proceeds available to creditors do not satisfy their judgments, reduced by any other funds they may have received from or on behalf of the Club, they may pursue their counterclaims.

If creditors choose to pursue plaintiff for the unpaid judgment amounts, they must prove that plaintiff is a financially responsible member as defined in this decision: that is, with regard to any particular judgment, a member who knew, or should have known by virtue of his position, that the Club was not a corporation at the time that particular judgment accrued.  These same elements would apply if creditors opt to collect from another member.

Justiciability; ripeness: constitutional issue not decided below is not ripe.

 State v. M.W. (2011-229) (03-Aug-2012) (Burgess, J.)   

The Windsor County State’s Attorney filed this interlocutory collateral final order appeal seeking review on the question of whether 13 V.S.A. § 4815(g)(1) violates the Vermont Constitution’s separation-of-powers provision by divesting the trial court of the authority to order an inpatient mental health evaluation of a potentially incompetent defendant.  The Attorney General intervened on behalf of the State, arguing that the appeal was improvidently granted, and that the statute is constitutional.  We conclude that there is no justiciable claim because the necessity of an inpatient evaluation and the constitutionality of the statute were not decided below.  Therefore, we dismiss the appeal.

We do not reach the separation-of-powers question because we dismiss the appeal for lack of a justiciable controversy in this case.  An appeal of a collateral final order is appropriate if the court’s ruling: (1) conclusively determines a disputed question; (2) is separate from the merits of the case; and (3) will be unreviewable on appeal from final judgment.  V.R.A.P. 5.1(a); see In re F.E.F., 156 Vt. 503, 507, 594 A.2d 897, 900 (1991).  Here, there was no conclusive determination of the disputed question—namely, whether § 4815(g)(1) unconstitutionally precluded the court from ordering a necessary inpatient evaluation. 

Ripeness is part of justiciability and is built on the premise “that courts should not render decisions absent a genuine need to resolve a real dispute.”  Claims are ripe when there is a “sufficiently concrete case or controversy” and when the exercise of judicial power is justified by “prudential considerations.”  “The Vermont Constitution confers judicial authority only to determine actual controversies arising between adverse litigants, and issuing an advisory opinion . . . would exceed our constitutional mandate.”   The exception to the mootness doctrine for issues that are capable of repetition yet evade review does not apply to the ripeness analyis.   The issue was not once live and now moot; the mere possibility of future injury does not transform a nonjusticiable controversy into a justiciable one.

Without a conclusive determination on the issue, there is no controversy to appeal. 

Statute of Limitations; discovery occurs and statute accrues when plaintiff "suspects" a claim; economic loss is not always a six-year limit.

 Eaton v. Prior, 2012 VT 54 (Skoglund, J.)

Plaintiff's lawsuit against her former employer and supervisor for sexual assault was dismissed for failure to prosecute. She claims that her ability to prosecute the case was thwarted by a licensed polygraph examiner who determined that she did not tell the truth in responding to questions about the alleged assault. This action claims negligent administration of the polygraph examination,  improper disclosure of the examination results and conspiracy to cover up the misconduct. The trial court entered judgment for defendants on the ground that the suit was barred by the three-year statute of limitations applicable to actions for "injuries to the person," under 12 V.S.A. § 512(4). We conclude that the trial court correctly applied the three-year statute of limitations to bar the claims for emotional distress, but mistakenly failed to consider the applicability of 12 V.S.A. § 511's general six-year limitation period to the claims for economic harm resulting from dismissal of the underlying lawsuit and other alleged economic costs. Accordingly, we affirm in part, reverse in part, and remand for further proceedings.

We reject plaintiff's  argument  that plaintiffs were not reasonably aware of a potential cause of action  until they received a professional analysis in November 2006, so that the complaint—filed in October 2009—was timely.  The great bulk of plaintiff's claims were plainly known or suspected well before the receipt of his analysis. The law does not require absolute certainty for the statute to run. See Bull v. Pinkham Eng'g Assocs., 170 Vt. 450, 456, 752 A.2d 26, 31 (2000) (holding that statute did not commence on plaintiff's negligence claim against surveyor until he acquired evidence to "suspect that the southern boundary depicted on the survey" was inaccurate) (emphasis added). There is no reasonable dispute here that the action accrued no later than March 2006. Accordingly, the claims for personal injury were untimely.

Plaintiff next argues the claims for economic harm in the form of lost income and medical expenses are separately governed by 12 V.S.A. § 511, the general six-year statute of limitations applicable in civil actions, and therefore remain timely. Although  this argument was expressly raised in opposition to defendants' motions for summary judgment, the trial court failed to address it. In Fitzgerald v. Congleton, a legal malpractice case,  we held the emotional distress claims were time-barred under the three-year limitations period of § 512 while the claim for costs and expenses was controlled by the general six-year provision of 12 V.S.A. § 511, and therefore remained timely. On the other hand, the mere fact that economic harm is alleged will not invariably invoke § 511's six-year limitation provision where the "gravamen or essence" of the claim remains personal injury. See Rennie v. State, 171 Vt. 584, 587, 762 A.2d 1272, 1276 (2000) (mem.) (holding that, although plaintiff claimed she lost income and other economic benefits from alleged tortious interference, this did not alter the "underlying nature" of the claim as one for personal injuries governed by § 512's three-year limitation period).  As noted, the trial court did not address or resolve this issue. Accordingly, we conclude that the case must be remanded for the trial court to consider whether the claims for economic harm are sufficiently distinct from the claims for emotional distress to be governed by § 511 and therefore remain timely.

How cited

Attorneys fees cannot be denied to prevailing party under Prompt Pay Act where other claims on which party lost had no common core of facts

Nystrom v. Hafford, 2012 VT 60 (Robinson, J. ) 

Defendant appeals pro se from the trial court’s order granting plaintiff's request to partition jointly owned property.  Defendant argues that the court erred in rejecting his argument that he added plaintiff's name to the deed only in anticipation of marriage, in calculating the parties’ respective interests in the property, in granting plainitff’s request for occupancy, and in declining to award him attorneys’ fees in connection with plaintiff’s father’s Prompt Pay Act claim.  We affirm the trial court’s rulings concerning the partition itself, but reverse the trial court’s ruling with respect to attorneys’ fees and remand for reconsideration of defendant's fee petition pursuant to the Prompt Pay Act.

 9 V.S.A. § 4007(c) provides  that “[n]otwithstanding any contrary agreement, the substantially prevailing party in any proceeding to recover any payment within the scope of this chapter [addressing construction contracts] shall be awarded reasonable attorneys’ fees in an amount to be determined by the court or arbitrator, together with expenses”).  Defendant unequivocally prevailed on this claim.

In a more typical construction dispute, trial courts have significant discretion in identifying the prevailing party.  PPA claims typically arise in construction disputes in which one party seeks to be paid for its work and the other party seeks to avoid paying on the ground that the work was deficient.  In such cases, the commonality of facts underlying the PPA claim and related claims and defenses  is apparent. The Court has held that, where a common core of facts supports multiple theories of recovery, including PPA claims and non-PPA claims, “[t]he lawsuit cannot be viewed as a series of discrete claims.”  Electric Man, Inc. v. Charos, 2006 VT 16, ¶ 10, 179 Vt. 351, 895 A.2d 193 (quotation omitted).  As a result, in most construction cases that include PPA claims, courts typically determine the substantially prevailing party, if any, and the award of fees with reference to the broader range of claims at issue in the case rather than simply focusing exclusively on the PPA claim.  Notwithstanding this flexible standard, we conclude that the trial court’s order in this case exceeds its discretion.  

This case is not a typical construction dispute in which a court cannot reasonably determine the substantially prevailing party with respect to the PPA claim without taking into account the panoply of other claims on the table.  We reaffirm our prior holding that a fee award should not be apportioned among claims that arise from a common core of facts.  Electric Man, 2006 VT 16, ¶ 10.  But  trial courts must consider and determine which claims do, in fact, arise from a common core of facts insofar as the evidence relevant to those claims is the same. See Electric Man, 2006 VT 16, ¶ 10 (applying “common core of facts” analysis where “[v]irtually all of the evidence is relevant to all of the claims” (quotation omitted)). Father’s PPA claim is predicated solely on his labor in constructing the house on the property subject to this partition action.  The remaining claims among the parties do not spring from a core of facts in common with with father’s PPA claim,  and the evidence underlying these claims is largely distinct from the evidence offered to prove and rebut father’s PPA claim. On remand, the trial court should award Mr. Hafford legal fees associated with father’s PPA claim for reimbursement for labor in connection with the construction project. See Monahan v. GMAC Mortg. Corp., 179 Vt. 167, 199, 893 A.2d 298, 324 (2005) (determining attorneys’ fees attributable to specific claims is a question of fact for the trial court).

Affirmed in part, reversed in part, and remanded for further proceedings.

Justiciability, constitutional and prudential standing: predatory pricing statute does not protect governmental "competitors" not engaged in "commerce".

 Franklin County Sheriff's Office v. St. Albans City Police Department (2011-266) (03-Aug-2012) (Reiber, C.J.)  

In this predatory pricing suit, the Franklin County Sheriff’s Office appeals the trial court’s judgment in favor of the St. Albans City Police Department.  The Sheriff’s Office contends that the City Police Department engaged in an unfair method of competition with the intent to harm competition under the Vermont Consumer Fraud Act’s (VCFA) predatory pricing provision, 9 V.S.A. § 2461c.  Specifically, the Sheriff’s Office argues that the City Police Department submitted an “artificially low” bid in response to the Town of St. Albans’s request for proposals for law enforcement services.  We affirm because the Sheriff’s Office was not denied something in which it had a legally protected interest, nor is its claim within the zone of interests protected by the statute, and it therefore lacks both constitutional and prudential standing.

Because it is a threshold requirement, we first address the question of standing.  Vermont courts are limited to deciding actual cases or controversies.   An element of the case-or-controversy requirement is that a plaintiff must have standing—that is, “must have suffered a particular injury that is attributable to the defendant and that can be redressed by a court of law.”  To bring a case, a plaintiff must show “(1) injury in fact, (2) causation, and (3) redressability.”  Standing also embodies a prudential component of self-imposed judicial limits under which a plaintiff’s complaint must “‘fall within the zone of interests protected by the law invoked.’”

The claim does not meet  the injury-in-fact element of constitutional standing.  This element requires an invasion of a legally protected interest, not a generalized harm to the public.  The VCFA prohibits engaging in predatory pricing because it is an unfair method of competition in commerce. The Town was under no obligation to entertain bids for police services in the first instance, or to award the contract to the lowest bidder.  Fundamentally,  the provision of police services in Vermont occurs outside the realm of commerce because it involves no interchange of goods or commodities on the open market.  It is a governmental function provided only by governmental entities for the benefit of the public.  We conclude that no commerce existed in this case. The Sheriff’s Office has no legally protected right to “fair competition” with other statutorily created government entities to provide police services to the Town.

Second, the claim does not meet the requirements of prudential standing, which demands that the Sheriff’s Office’s complaint fall within the zone of interests protected by the predatory pricing statute.  Predatory pricing in its orthodox form exists where a single firm, having a dominant share of the relevant market, cuts its prices in order to force competitors out of the market, or perhaps to deter potential entrants from coming in. Here, the “competitors” are all statutorily created entities, meaning that one entity cannot put another out of business. There is no threat of monopolization by any one of them.  Thus, the Sheriff’s Office’s injuries alleged in the complaint do not fall within the zone of interests to be protected by Vermont’s predatory pricing statute. 

Res judicata; vague use of disjunctive in stipulated administrative order means plaintiff can relitigate in defamation suit the truth of accusation that plaintiff diverted a regulated drug.

Shaddy v. Brattleboro Retreat, 2012 VT 67 (Burgess, J.)  

There were three prior proceedings: in the Windham Criminal Division, the Department of Labor and the Board of Nursing. The criminal charge was resovlved by a plea of nolo contendere, which “is not, in any civil or criminal proceeding, admissible against the defendant.”  V.R.E. 410(2).  Similarly, 21 V.S.A. § 1353, addressing the collateral import of unemployment compensation claims proceedings, provides that a determination of the employment security board "is not binding, conclusive or admissible in any separate or subsequent action between an individual and his or her present or former employer brought before [a] . . . court or judge of this state . . ."   We hold that under Rule 410(2) and § 1353, respectively, neither plaintiff’s criminal plea, nor the result of his unemployment compensation proceeding, can bar his defamation claim. 

Plaintiff  appeals the  dismissal of his complaint against the Brattleboro Retreat and certain employees of the Retreat.  Plaintiff, a former Retreat employee, brought claims of defamation, obstruction of justice, intentional infliction of emotional distress (IIED), and intentional interference with a contract, arising from the Retreat’s allegation that he unlawfully diverted regulated drugs from the medication room at its facility.  The only issue raised on appeal is  whether the court properly dismissed the defamation claim against the Retreat as res judicata, a question of law we consider de novo.    We reverse.  

We further hold that, under our decision in Trepanier v. Getting Organized, Inc., 155 Vt. 259, 583 A.2d 583 (1990), the order settling plaintiff’s Board of Nursing proceeding is too vague to constitute a final judgment on the merits and therefore  does not preclude plaintiff’s claim.  The crux of the issue is whether the truth of the Retreat’s accusation against plaintif was “fully litigated and resolved in favor of the Retreat." Assuming, without deciding, that a stipulated administrative judgment could have preclusive effect as argued by the Retreat, it must at least describe the factual and legal issues being resolved with enough specificity so as to precisely identify what those issues are.   

In this case, the stipulated order was too vague to resolve the issue of whether the Retreat’s allegedly defamatory statements are true.  Pursuant to the order, plaintiff agreed that the State could prove by a preponderance of the evidence that he “engage[d] in conduct of a character likely to deceive, defraud or harm the public which include[d], but [was] not limited to, diverting supplies, equipment, or drugs for personal or other unauthorized use” in violation of 26 V.S.A. § 1582(7).  (Emphasis added.)  This charge reads in the disjunctive and fails to specify plaintiff’s misconduct, so that plaintiff can be understood to admit to preponderant proof of diversion of “supplies” or “equipment” to the public detriment, but not necessarily to diversion of drugs.  Plaintiff's admission that the State could prove misconduct which just possibly included drug diversion does not establish the truth of the Retreat’s specific defamatory allegation that plaintiff thrice diverted a regulated drug.  In short, for want of specificity the order does not establish the truth of the Retreat’s allegations and thus does not preclude plaintiff’s defamation suit.  Accordingly, we reverse the trial court’s dismissal of plaintiff’s defamation suit against the Retreat and remand this matter for proceedings consistent with this opinion.

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]

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).

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.

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.