Wednesday, September 17, 2014

Evidence: End run around hearsay rule fails under Rule 602, because witness who testifies to his understanding after an out-of-court interview lacks personal knowledge.

State v. Porter, 2014 VT 89 (01-Aug-2014)

CRAWFORD, J. Defendant Harold D. Porter, Jr. appeals from his conviction for attempted kidnapping. He argues that the trial court erred in admitting the testimony of police officers that they had ruled out other suspects based on interviews with out-of-court declarants; We reverse and remand.

Because the truck was relatively unique, police investigators working with the Department of Motor Vehicles were able to identify approximately twenty vehicles registered in Vermont which matched the make and color of the truck seen on camera. Ten vehicle owners testified at trial for the purpose of eliminating their truck or trucks from identification. The police interviewed five other owners prior to trial. These owners did not testify at trial. Instead, the investigating officers testified that based on the out-of-court interviews with the owners, the officers were able to eliminate those remaining trucks from the identification process. In the absence of evidence that the statements were based on personal knowledge, the requirement of Rule 602 was not met and the testimony of the officers should have been excluded.

Insurance. Proof of negligent claims-handling, short of knowing or reckless conduct required for a finding of bad faith, insufficient to support claim by policyholder against insurer for mold damage.

Murphy v. Patriot Insurance Company, 2014 VT 96, 106 A. 3d 911 (14-Aug-2014)

 DOOLEY, J.     Plaintiff Helena Murphy appeals from a superior court judgment in favor of defendant, Patriot Insurance Company, her homeowner’s insurer.  She contends that the trial court erred in dismissing claims for negligence and bad faith.  We affirm


Plaintiff added claims against Patriot for negligence “in inspecting and processing [the] claim and in retaining adjusters to investigate her claim,” and “bad faith” in denying the claims with “no reasonable basis.” Patriot moved for partial summary judgment on the additional claims, asserting that it owed no independent tort duty to plaintiff sounding in negligence; Patriot also argued that there was no basis to conclude that it had acted in violation of the covenant of good faith and fair dealing. The trial court granted Patriot’s motion. The court agreed that plaintiff had failed to “present[] a basis upon [which] to establish that [Patriot] owed a clear, non-contractual duty to her,” and further found on the facts alleged that Patriot “had a reasonable, if debatable, basis to deny [p]laintiff’s claims under the policy.” This appeal followed.

We agree with the trial court that plaintiff had failed “to establish that [Patriot] owed a clear, non-contractual duty to her” on the facts alleged. We rejected an independent tort duty on the part of the insurer’s agent in Hamill v. Pawtucket Mutual Insurance Company, 2005 VT 133, ¶¶ 2-3, 179 Vt. 250, 892 A.2d 226.in part on a recognition that the relationship between insurer and insured is fundamentally contractual, defined and governed by the coverage provisions in the insurance policy and the covenant of good faith and fair dealing implied therein. Id. ¶ 13. Indeed, the bad faith remedy would generally be superfluous if mere negligence in handling a claim would be sufficient for liability.

Most other courts have limited actions by insureds against their insurers to breach of contract or the implied covenant of good faith and fair dealing and have disallowed actions for negligence based upon an independent duty of care. We concur in the general view that,the insurance policy and the implied covenant of good faith and fair dealing defined plaintiff’s expectations for coverage and recovery in the event that benefits were wrongfully denied. Accordingly, we affirm the trial court’s dismissal of the negligence count.

“Bad faith,” is the general shorthand for breach of the covenant of good faith and fair dealing which the law implies in every insurance policy. Such a claim requires “more than negligence on the part of the insurer.” To establish bad faith, the plaintiff must show that: “(1) the insurance company had no reasonable basis to deny benefits of the policy, and (2) the company knew or recklessly disregarded the fact that no reasonable basis existed for denying the claim.” Where a claim is “fairly debatable,” the insurer is not guilty of bad faith even if it is ultimately determined to have been mistaken.

Measured against our bad faith standard, we find no basis to disturb the trial court’s ruling. At best, any claim that the adjuster’s failure to find that the true cause of the water infiltration was through the front chimney would fall well short of the knowing or reckless conduct required for a finding of bad faith

Thursday, September 11, 2014

Attorney’s fees not excessive. Statutory civil remedy for unlawful mischief permits award of attorneys fees though only nominal damages are awarded.

Evans v. Cote,  2014 VT 104 (29-Aug-2014)


DOOLEY, J. Defendant appeals the superior court’s order concluding that defendant violated 13 V.S.A. § 3701(c) by intentionally knocking down a tree belonging to plaintiff and trespassing on plaintiff’s land, and granting plaintiff $1 in damages plus attorney’s fees and costs. On appeal, defendant argues that plaintiff failed to demonstrate that defendant violated the statute, that nominal damages do not support an award of attorney’s fees, and that the court abused its discretion in awarding attorney’s fees of $22,406 based on $1 of actual damages. We affirm.

Based on its findings that defendant had trespassed on plaintiff’s property and that there was a substantial probability that he would continue to do so, the court granted plaintiff’s request for a permanent injunction. As to damages, the court concluded that the statute of limitations barred any recovery for actions taken prior to August 2002, which was six years before the case was filed. The court found that the sole damage occurring after August 2002 that was supported by the evidence was that in 2008 defendant had “knocked down one dead but standing softwood tree” on plaintiff’s side of the boundary line. The court awarded damages of $1 for the felled tree, explaining that it could not determine the replacement value of a single tree from the evidence presented.

In addition, the court awarded plaintiff attorney’s fees and costs under the unlawful mischief statute. 13 V.S.A. § 3701(f). The court found that the fees requested by plaintiff were reasonable, but that a downward departure was warranted because plaintiff had obtained a poor outcome in comparison to what was sought. Thus, the court made a 75% reduction in the requested amount, and awarded $22,406 in attorney’s fees and costs. Defendant moved to reconsider, arguing that a nominal damage recovery of $1 did not support an award of attorney’s fees under the statute. The court rejected defendant’s argument, concluding that recovery of attorney’s fees is not dependent on obtaining a certain monetary amount of damages.

Defendant has not ordered a transcript of the trial on the merits, and therefore has waived any challenge to sufficiency of the court’s findings. V.R.A.P. 10(b)(1) (explaining that it is appellant’s responsibility to order transcript and appellant “waives the right to raise any issue for which a transcript is necessary for informed appellate review”). Without the transcript, this Court assumes that the trial court’s findings are supported by the evidence. 

This brings us to the central issues, whether the statute allows the award of any attorney’s fees where the amount of damages is only nominal and, if so, whether the fee amount is reasonable in light of the compensatory damages award.

The relevant statutory section provides:
A person who, having no right to do so or any reasonable ground to believe that he or she has such right, intentionally does any damage to property of any value not exceeding $250.00 shall be imprisoned for not more than six months or fined not more than $500.00 or both.
13 V.S.A. § 3701(c). The statute creates a civil remedy for violations: “A person who suffers damages as a result of a violation of this section may recover those damages together with reasonable attorney’s fees in a civil action under this section.” Id. § 3701(f).

We would undermine the Legislature’s purpose in establishing civil liability for damage to property from unlawful mischief, even where the damage is small, if we did not authorize fee shifting in all unlawful mischief cases.

Defendant  next argues that a larger than 75% reduction was warranted because of the extremely poor result on plaintiff’s damages claim, and because the court improperly considered plaintiff’s success in obtaining a permanent injunction in awarding fees. Defendant has failed to demonstrate that the award was an abuse of discretion.

We have explained in the past that it is not whether the attorney’s fee award is proportional to the damages, but “whether the fee award is reasonable given the demands of the case.” Kwon, 2010 VT 73, ¶ 20. The proportionality argument is particularly difficult here since the Legislature has explicitly authorized civil unlawful mischief claims for very small amounts of money where the attorney’s fees and costs are almost certain to greatly exceed the amount of damages recovered.

The court’s decision does not support defendant’s claim that the court improperly considered plaintiff’s success in obtaining a permanent injunction in its analysis of how much to reduce the lodestar amount. Further, the court provided an adequate explanation for its decision to reduce the lodestar figure by 75%. 

 We reiterate that our review of the court’s decision on the amount of fees is a limited one. “[A]bsent strong evidence of excessiveness,” this Court defers to the trial court’s judgment as to the amount of fees. Human Rights Comm’n v. LaBrie, Inc., 164 Vt. 237, 252, 668 A.2d 659, 670 (1995). Defendant has failed to demonstrate that a 75% reduction was an abuse of the court’s discretion.

No personal jurisdiction over a nonresident defendant for relief from abuse based on out-of-state assault.

Fox v. Fox, 2014 VT 100 (14-Aug-2014)


ROBINSON, J. This case requires us to evaluate the constitutional requirements for personal jurisdiction over a nonresident defendant in the context of a relief-from-abuse (RFA) order. Nonresident defendant appeals the family court order granting plaintiff’s request for a final RFA order. We conclude that the trial court lacked personal jurisdiction to enter a final RFA order, and reverse.

On April 6, 2012, defendant, a New Hampshire resident, and plaintiff, a Vermont resident, attended a probate court hearing in New Hampshire. Following the hearing, defendant followed plaintiff to his car and proceeded to punch, kick, and step on plaintiff. Plaintiff was hospitalized as a result of the encounter.

Plaintiff filed a complaint for relief from abuse with the family division of the Windsor Superior Court. The trial court granted a temporary RFA order. The court interpreted 15 V.S.A. § 1102 to establish jurisdiction in RFA cases even in the absence of minimum contacts between defendant and the forum state. .

Vermont’s long-arm statute, 12 V.S.A. § 913(b), permits state courts to exercise jurisdiction over nonresident defendants “to the full extent permitted by the Due Process Clause” of the U.S. Constitution. N. Aircraft, Inc. v. Reed, 154 Vt. 36, 40, 572 A.2d 1382, 1385 (1990). Vermont’s RFA statute cannot extend the court’s jurisdiction beyond the bounds of federal due process. Accordingly, the statutory and constitutional analyses in this case are one and the same.

The focus of the minimum contacts inquiry is on the relationship among the defendant, the forum state, and the cause of action. A court may exercise either general or specific jurisdiction over a nonresident defendant. General jurisdiction applies to suits not arising out of or related to the defendant’s contacts with the forum state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415 n.9 (1984). Nobody suggests that Vermont has general jurisdiction to adjudicate claims against defendant

A court may exercise specific jurisdiction where a defendant has “purposefully directed . . . activities at residents of the forum and the litigation results from alleged injuries that arise out of or relate to those activities.” By attacking plaintiff in New Hampshire, defendant did not avail himself of any benefits or protections of Vermont’s laws, or subject himself to the authority of Vermont’s courts. The fact that plaintiff happens to be a Vermont resident is not itself enough to give Vermont courts jurisdiction over a New Hampshire defendant for an assault in New Hampshire. .

In light of defendant’s stipulation that he abused plaintiff, and the relative proximity of New Hampshire, this may seem like a harsh result. But we decline to carve out a blanket exemption from the constitutional due process requirement of personal jurisdiction for requests for final RFA orders. The due process requirement that a court have personal jurisdiction before entering a judgment against a defendant applies to those defendants with meritorious defenses, as well as those without. And it applies to defendants in New Mexico as well as New Hampshire.

We conclude that the trial court lacked the personal jurisdiction required to issue a final RFA order.

Premises liability. Under standard of reasonable care jury could find that owner should have foreseen the harm even if the danger was obvious. Court gives force to change in law while case on appeal -- abrogating invitee/licensee distinction.

Ainsworth v. Chandler, 2014 VT 107 (29-Aug-2014)


REIBER, C.J. These consolidated cases stem from alleged injuries suffered by plaintiff Faye Ainsworth while she was at defendant Charles Chandler’s business, Chandler Electric. Plaintiff filed suit, claiming that she was injured when she tripped on a coil of wires that had been placed in the stairway. Defendant filed suit against his insurer, Concord Insurance Group (insurer), arguing that insurer had wrongfully and in bad faith failed to provide adequate coverage for the claim. Insurer filed a counterclaim seeking a declaration of noncoverage. The court granted summary judgment to defendant, concluding that plaintiff was a social guest of defendant at the time of her visit, that the duty of care defendant owed her was the lesser duty applicable to licensees under Vermont law, as contrasted with that owed to business invitees, and that defendant did not breach this duty. The trial court also granted summary judgment to insurer, on the basis that the underlying personal injury action had been dismissed and therefore no coverage was owed. For the following reasons, we reverse with respect to plaintiff’s suit and reverse and remand for further proceedings with respect to defendant’s claim against insurer and insurer’s counterclaim for declaration of noncoverage.

We begin with plaintiff’s claim that the court wrongfully found that she was a social guest rather than a business invitee. We reverse and remand for further proceedings in light of our recent abrogation of the common law distinction between invitees and licensees, as held in Demag v. Better Power Equipment, 2014 VT 78, ¶ 26, ___ Vt. ___, ___ A.3d ___. We find Demag controlling based on the common-law rule, recognized in both civil and criminal litigation, that a change in law will be given effect while a case is on direct review. In accordance with Demag, on remand the trial court is to apply the standard of “reasonable care under all the circumstances,” which “is no more and no less than that of any other alleged tortfeasor.” Id. ¶¶ 26-27 (quotations omitted). In this determination, “[t]he entrant’s status, no longer controlling, is simply one element, among many, to be considered in determining the landowner’s liability under ordinary standards of negligence.” Id. ¶ 26 (quotation omitted).

Given plaintiff’s deposition testimony that she did not see the wire in the stairs before she tripped, and defendant’s admissions that the area was poorly lit, covered in debris, and unsecured, a reasonable jury could conclude that either the danger was not open and obvious or that defendant should have foreseen the harm even if the danger was obvious. Thus, a jury could find that defendant had a duty to make the condition safe or warn plaintiff of the danger, and that he breached this duty. Cf. Menard, 174 Vt. at 479-80, 806 A.2d at 1005-07 (holding defendants not liable for negligence under either an invitee or licensee standard where danger of spiral staircase was obvious to plaintiff, defendants had installed a guardrail, area was well-lit, and there was no “foreign substance” on the stairs) Viewing the facts in the light most favorable to plaintiff, plaintiff has presented a genuine issue of material fact as to the elements of common law negligence sufficient to defeat summary judgment.

As to defendant’s lawsuit against insurer, the court’s order granting summary judgment in favor of insurer hinged on its dismissal of plaintiff’s claims. Accordingly, we reverse the court’s grant of summary judgment in favor of insurer and remand for further proceedings consistent with this opinion.

Adverse ruling is not grounds for disqualifying a judge.

Ainsworth v. Chandler, 2014 VT 107 (29-Aug-2014)


REIBER, C.J. Defendant has filed a litany of motions to disqualify judges, court personnel, and attorneys, all of which have been denied as lacking in merit. Defendant claims on appeal that his motions to disqualify the trial judge in this case were wrongly denied. We affirm.

Defendant filed numerous motions to disqualify the trial judge throughout the course of litigation. Defendant based his complaints against the trial judge on the fact that she said on one occasion that she had not read defendant’s case file; his disagreement with her rulings and handling of the case; and an alleged financial conflict with her prior law firm. On appeal, defendant argues that the trial judge harbors prejudice against him due to his interactions with her at her prior law firm, during defendant’s prior cases, and during the instant case.

The Code of Judicial Conduct provides that a judge “shall disqualify himself or herself in a proceeding in which the judge’s impartiality might reasonably be questioned.” A.O. Canon 3E(1). Judges are “accorded a presumption of honesty and integrity, with [the] burden on the moving party to show otherwise in the circumstances of the case.” Ball v. Melsur Corp., 161 Vt. 35, 39, 633 A.2d 705, 709 (1993) (quotation omitted). We will not disturb a decision regarding disqualification unless “there has been an abuse of discretion, that is, if the record reveals no reasonable basis for the decision.” Id. at 40, 633 A.2d at 710.

Here, there is no basis to disturb the denial of defendant’s motions. Defendant has offered no evidence to lend factual support to any of his allegations of prejudice. The fact that the trial judge has previously ruled against him does not, in itself, constitute evidence of bias. See Liteky v. United States, 510 U.S. 540, 555 (1994) (“[J]udicial rulings alone almost never constitute a valid basis for a bias or partiality motion. . . . Almost invariably, they are proper grounds for appeal, not for recusal.”); Luce v. Cushing, 2004 VT 117, ¶ 23, 177 Vt. 600, 868 A.2d 672 (holding that “adverse rulings, no matter how erroneous or numerous” are not sufficient to establish prejudice (quotation omitted).

Partition.. Discretion to depart from equal shares


ROBINSON, J. Plaintiff challenges a partition order reflecting the trial court’s conclusion that defendant had an 81.7% interest in the home that plaintiff and defendant purchased together, and applying various setoffs for contributions to the maintenance of the home after the parties purchased it. We affirm.

Plaintiff suggests that where the deed titles property to joint tenants with rights of survivorship, the presumption of equal ownership interests is conclusive. We disagree. The presumption reflected in 27 V.S.A. § 2(b)(2)(A) is an evidentiary presumption, subject to rebuttal. See, e.g., Whippie, 2010 VT 32, ¶ 14 We conclude that the trial court’s finding that the parties intended to own the property in a 81.7% to 18.3% proportion was amply supported by its findings and the underlying evidence.

Plaintiff next argues that the trial court’s requirement that plaintiff pay defendant $158,144 to buy out his interest is clearly erroneous and inequitable. We review the trial court’s assessment of equitable remedies, like partition, for abuse of discretion, and will uphold the trial court’s judgment unless the trial court has withheld its discretion entirely or exercised it “for clearly untenable reasons or to a clearly untenable extent.” Given the extensive debt and additional expenses built up by the parties in connection with, or attached to, the property, it is no surprise that plaintiff would have to pay more than the value of the property to satisfy her debt to defendant and keep the property. The trial court here considered the appropriate factors, exercising discretion in applying them. Whippie, 2010 VT 32, ¶ 15