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.