SCOVT affirms summary judgment in favor of defendant who pledged investment account as security, holding plaintiff did not have a valid security interest in account that was never subject to the control of the plaintiff as required by terms of the security agreement .

Berkshire Bank v.  Kelly, 2023 VT 2 

WAPLES, J. Plaintiff Berkshire Bank filed this action seeking possession of funds in an investment account owned by defendant Thomas Kelly, which defendant purportedly pledged as security for a business loan to his sister Dorothea Kelly. The civil division granted summary judgment in favor of defendant, concluding that plaintiff did not have a valid security interest in the account. We agree and affirm.

 

The trial court ruled a a security interest never attached under 9A V.S.A. § 9-203(b) and granted defendant's motion for summary judgment because plaintiff never possessed or controlled the Merrill Lynch account as required by the language of the pledge agreement.  

Article 9 provides that a creditor has a secured interest in collateral when the interest attaches, meaning "when it becomes enforceable against the debtor with respect to the collateral." 9A V.S.A. § 9-203(a). In turn, a security interest becomes enforceable against the debtor when one of four specified evidentiary conditions is satisfied. Id. § 9-203(b)

 

The parties agree that prior to the commencement of this litigation the Merrill Lynch account was never in plaintiff's possession or control, ruling out three of the methods of satisfying the evidentiary requirement. See 9A V.S.A. § 9-203(b)(3)(B)-(D) (providing for possession, delivery, or control pursuant to security agreement as alternative evidentiary tests of enforceability).

 

Accordingly, the security interest only attached if the evidentiary condition set forth in § 9-203(b)(3)(A) was met; that is, if defendant "authenticated a security agreement that provides a description of the collateral.".

Here, the agreement between the parties defined the collateral as "all of [defendant's] property . . . in the possession of, or subject to the control of, [plaintiff] . . . whether existing now or later and whether tangible or intangible in character, including" defendant's Merrill Lynch account.

On appeal, plaintiff argues that the security agreement describes  the collateral as the Merrill Lynch account, and that the  possession-or-control language is not a precondition to the creation of the security interest.

The language of the clause does not support plaintiff's interpretation, since it refers to the account already being in plaintiff's control. Under the plain meaning of this language, collateralization was dependent on transfer of possession or control of the Merrill Lynch account to plaintiff. Because that event never occurred, the security interest never attached.

 

 Plaintiff argues "a security agreement may create or provide for a security interest in after-acquired collateral." 9A V.S.A. § 9-204(a), and that the pledge agreement described the collateral as property within plaintiff's possession or control "whether existing now or later."  We are not persuaded by this argument. The account never met the description of the collateral because plaintiff never took control of it as the agreement contemplated. Section 9-204 applies to property in which the debtor does not have any rights at the time the security agreement is executed. The rule on after-acquired property does not assist plaintiff.

 

Finally, plaintiff argues that its security interest eventually did attach when defendant complied with the court's order directing him to set aside $208,000 "as security for the asserted debt in this matter" by placing that amount in escrow with his attorney, claiming that  plaintiff took possession of the collateral under 9A V.S.A. § 9-313(c)(1) at that point. We disagree. 

Section 9-313(c)(1) provides that a secured party takes possession of collateral held by a person other than the debtor when "the person in possession authenticates a record acknowledging that it holds possession of the collateral for the secured party's benefit." Id. cmt. 3. However, "a court may determine that a person in possession is so closely connected to or controlled by the debtor that the debtor has retained effective possession, even though the person may have agreed to take possession on behalf of the secured party." Id.

 

We conclude that such is the case here. We see nothing in the record indicating that defendant's counsel was acting as an agent of plaintiff. Under these circumstances, we conclude that plaintiff did not take possession of the collateral when the funds were placed in escrow by court order.

Because defendant's Merrill Lynch account was never within plaintiff's control, it did not fall within the description of collateral contained in the parties' pledge agreement, and no security interest ever attached to the account. The civil division therefore correctly granted summary judgment in favor of defendant.

 

Affirmed.  

SCOVT reverses suspension of driver’s license, holding blood -alcohol test inadmissible for lack of foundation showing compliance with performance standards in DPS rules.

State v.  White, 2023 VT 38 

COHEN, J. Defendant appeals from the civil division’s final judgment suspending his driver’s license. He argues that the trial court abused its discretion in admitting the results of an evidentiary blood-alcohol test because the State did not offer sufficient evidence to demonstrate that defendant’s blood sample was collected and analyzed in compliance with Department of Public Safety (DPS) rules. We conclude that there was an insufficient foundation to allow admission of the test result and therefore reverse and remand for entry of judgment for defendant.

The trial court overruled the defense objection, reasoning that the plain terms of 23 V.S.A. § 1203(d) do not require anything more than a “conclusory” statement of compliance with DPS rules.

To provide a proper foundation for admission of blood-test results, the State must show that the sample was analyzed by gas chromatography according to the performance standards established in the DPS rules. The State submitted no foundational evidence to demonstrate compliance with any of these performance standards.  It would serve no purpose to remand  because the record is devoid of foundational evidence regarding performance standards.

We emphasize the narrowness of our decision today. We are not deciding the level of detail necessary in the State’s foundational evidence for admitting blood-test results. The trial court may, or may not, be correct as a general matter that a conclusory statement of compliance with 23 V.S.A. § 1203(d) will suffice.

We need not reach that inquiry because the State did not meet the minimal burden to present an adequate foundation to admit the results of defendant’s blood-alcohol test into evidence.

The court erred by admitting and relying on that evidence. The State therefore could not prove an essential element, 23 V.S.A. § 1205(h)(1)(D), and the judgment in the State’s favor cannot stand.

Reversed and remanded for entry of judgment for defendant.

How cited

SCOVT reverses in part environmental division enforcement order based on clearly erroneous finding of knowledge of terms of prior owners agreement found to have been violated.

  

City of Burlington v. Sisters & Brothers Investment Group, LLP, 2023 VT 24

CARROLL, J. Defendant-landowner Sisters & Brothers Investment Group, LLP (SBIG) appeals an environmental-division enforcement order enjoining it from using real property in the City of Burlington, ordering it to address site-improvement deficiencies as required by an agreement executed by a prior owner and the City, and imposing $66,759.22 in fines. We reverse and remand.

 

The trial court “independently” concluded that SBIG had “failed to ever comply with a  2004 agreement,” and substantially relied on that finding in assessing a fine of $50 per day for a zoning violation.

 

SBIG’s arguments challenging the DRB decision fail under our long line of precedent forbidding collateral attacks on unappealed DRB orders.

 

SBIG next contends that the trial court abused its discretion by finding that SBIG was liable for 892 days of continuing violations, each subject to penalty. We disagree. We have held that municipalities “need not produce evidence of a continuing violation for each and every day.”

 

Finally, we agree with SBIG’s argument that t the $66,759.22 fine was an abuse of discretion because the court found that it knowingly breached the 2004 agreement without any evidence demonstrating that SBIG knew or should have known of the agreement’s existence. The mere fact of SBIG’s purchase one day following the agreement’s execution does not reasonably lead to the conclusion that it knew or should have known of its existence, even when viewed in the light most favorable to the City. More evidence was needed for the court to conclude SBIG was aware of and intentionally disregarded the agreement from the time it purchased the property for the purpose of calculating fines.

 

Because the trial court erroneously found that SBIG knew or should have known about the 2004 agreement, we reverse the judgment order, direct the trial court to strike the condition requiring SBIG to address the site-improvement deficiencies in the agreement, and remand for the court to recalculate fines without considering whether SBIG violated the agreement’s terms.

 

Considering this disposition, we need not address SBIG’s remaining arguments that the fine was punitive rather than remedial or that the 2004 agreement is moot.

 

Reversed and remanded to strike the condition requiring SBIG to address site-improvement deficiencies in the 2004 agreement and to recalculate fines without considering the 2004 agreement.

How cited

SCOVT affirms Rule 12(b)(6) dismissal of a challenge, under the Education Clause and Common Benefits Clause of the Vermont Constitution, to statutes that allow school districts to refuse to permit children to attend an out-of-district public school or an independent school at the state’s expense.

Vitalev. Bellows Falls Union High School, 2023 VT 15 

EATON, J. Plaintiffs are three sets of parents of schoolchildren who reside in school districts which maintain a public school for at least some grades and do not provide the opportunity for children to attend the public or independent school of their parents’ choice for all grades at the state’s expense. They raise a facial constitutional challenge to Vermont statutes that allow school districts to choose whether to maintain a public school, permit children to attend an out-of-district public school or an independent school at the state’s expense, or some combination of both. The civil division dismissed parents’ complaint for failure to state a claim upon which relief could be granted. We affirm.

 

Plaintiffs seek total school choice for parents at the state’s expense for all elementary and high school education. They claim that they are being denied school choice merely because they live in a district that has a public school, resulting in an inability to tuition their children at the state’s expense to the schools of their choice while parents living in districts that do not have a public school have school choice through tuitioning. Parents assert that their lack of school choice, while parents in tuitioning districts have school choice, violates the Education and Common Benefits Clauses of the Vermont Constitution. See Vt. Const. ch. II, § 68; id. ch. I, art. 7.

 

Under the Education Clause and Common Benefits Clause of the Vermont Constitution, “the state must ensure substantial equality of educational opportunity throughout Vermont.” Brigham v. State (Brigham I), 166 Vt. 246(1997) (per curiam). at 268. However, the Education Clause “states in general terms the state’s responsibility to provide for education, but is silent on the means to carry it out.” 166 Vt. at 264. School choice is permitted but not required by the Education Clause; there is no entitlement to school tuitioning at the state’s expense derived from the Education Clause itself. “[T]here is no constitutional right to be reimbursed by a public school district to attend a school chosen by a parent.” Mason v. Thetford Sch. Bd., 142 Vt. 495, 499(1983)

 

Differences in the availability of school choice alone do not constitute a substantial inequality of educational opportunity. Parents must show that school choice results in substantially different educational opportunities. To state a claim for a Common Benefits Clause violation under Baker,, it is insufficient to assert that there is a law that results in some people having a benefit and others not, accompanied by the legal conclusion that this difference in treatment violates the Vermont Constitution. A complaint must demonstrate, on its face, that the challenged law excluding some part of the community from a government benefit does not bear a reasonable and just relation to a governmental purpose.

 

Parents’ failure to allege facts to connect school choice with better educational opportunities is fatal to their claim.  A statement that the statutes are “inherently unequal” and “patently unfair” does not suffice. We are not required to accept conclusory allegations as true. The complaint does not explain how the statute is unreasonable or unjust or unfair in light of the government’s stated purpose to provide quality education while adapting to local needs and desires.

 

 What parents have alleged here is not enough to state a claim for a violation of the Education Clause or Common Benefits Clause of the Vermont Constitution.

 

Affirmed.

How cited

SCOVT affirms summary judgment that 21 V.S.A. § 640(c) did not require prior employer to reimburse claimant for lost wages, holding claimant had no standing to assert constitutional rights of new employer.

Mahmutovic v. Washington County Mental Health Services, Inc., 2023 VT 37

COHEN, J. Claimant Semir Mahmutovic appeals a decision of the Commissioner of the Vermont Department of Labor concluding that claimant’s prior employer was not obligated to reimburse claimant for lost wages under 21 V.S.A. § 640(c), and that the statute was not unconstitutional as applied to claimant. We determine that claimant has conceded that the Commissioner properly interpreted § 640(c), and further conclude that claimant does not have standing to challenge the constitutionality of § 640(c). Therefore, we affirm the Commissioner’s decision granting summary judgment to prior employer.

 

Claimant submitted a reimbursement request to prior employer for $152.72 of lost wages. Prior employer denied payment on the ground that 21 V.S.A. § 640(c), which governs workers' compensation payments for medical benefits, shifts the financial burden of covering wages to current employer.

Claimant argued below that requiring a subsequent employer to cover lost wages is unconstitutional. Prior employer argued that claimant did not have standing to bring the constitutional claim.

This Court has adopted a three-part test for standing originally articulated for federal courts: (1) injury in fact; (2) causation; and (3) redressability.  Ferry v. City of Montpelier, 2023 VT 4, ¶ 12, In other words, standing requires a litigant to demonstrate they "have suffered a particular injury that is attributable to the defendant and that can be redressed by a court of law." Parker v. Town of Milton, 169 Vt. 74, 77 (1998).

The Commissioner concluded that claimant has standing because he suffered an injury in fact when he requested lost wages and prior employer declined to pay them.

We disagree.  Even assuming that claimant's $152.72 in lost wages due under § 640(c) is an injury in fact, claimant has not demonstrated that this injury is "fairly traceable to [prior employer]'s allegedly unlawful conduct." Id. at 78, 726 A.2d at 480. Claimant has essentially accepted that the Commissioner's interpretation of the statute does not obligate prior employer to compensate him for lost wages. Therefore, his injury—his alleged loss of the property interest created by § 640(c)—is not a result of prior employer's actions. We therefore conclude that claimant does not have standing to bring this as-applied constitutional challenge.

In his briefing, claimant additionally asks us to consider his standing as a third-party beneficiary to pursue a constitutional challenge on behalf of current employer. However, "[l]ike the federal courts, we generally do not allow third-party standing." Baird v. City of Burlington, 2016 VT 6, ¶ 15, 201 Vt. 112, 136 A.3d 223 (finding no exception to general rule against third-party standing because litigants failed to show those potentially harmed in future would likely not be able to assert their own constitutional claims). Claimant provides no basis to allow him to present this constitutional claim on behalf of current employer, and we therefore conclude that he does not have third-party standing in this matter.

Affirmed.

How cited

Divided Court affirms confirmation of arbitration award against employer without deciding whether “manifest disregard" of the law is an appropriate standard of review. The law did not manifestly require employer to discipline employee for HIPAA violation in this case.

 

Howard Center v. AFSCME Local 1674,  2023 VT 6 

 

REIBER, C.J. . Employer Howard Center appeals from a trial court order that confirmed an arbitration award in favor of grievant Daniel Peyser and AFSCME Local 1674. Employer asks this Court to adopt "manifest disregard" of the law" as a basis for setting aside an arbitration award and to conclude that the arbitrator violated that standard here. We do not decide whether to adopt the manifest-disregard standard because, assuming arguendo it applies, employer fails to show that its requirements are satisfied. We therefore affirm.

Employer issued a written reprimand to grievant for sharing client records with his union representative without redacting confidential information. The arbitrator concluded employer should have instead used informal counseling and directives rather than formal discipline, and that employer thus lacked just cause to reprimand grievant. Employer argues the arbitrator manifestly disregarded HIPAA, which it contends required it  to discipline grievant by imposing an "appropriate sanction[]" and it therefore had just cause to reprimand him.

"Vermont has a long history of upholding arbitration awards whenever possible." Shahi v. Ascend Fin. Servs., Inc. , 2006 VT 29, ¶ 10,  Review is limited to "whether there exist statutory grounds for vacating or modifying the arbitration award" and "whether the parties were afforded due process." Id. See 12 V.S.A. § 5677(a)(1)-(5). We have not yet decided whether to recognize "manifest disregard of the law" as an additional basis for vacating an arbitration award, although other courts have done so. See Masseau v. Luck, 2021 VT 9, ¶ 30  (recognizing that this "remains an open question" under VAA and under Federal Arbitration Act (FAA)

 We review de novo whether the arbitrator manifestly disregarded the law in this case. The HIPAA Privacy Rule mandates that covered entities "must . . . [e]nsure the confidentiality, integrity, and availability of all electronic protected health information" and "[e]nsure compliance with this subpart by its workforce." 45 C.F.R. § 164.306(a)(1), (4). In accordance with § 164.306, a covered entity "must" implement a sanction policy and "[a]pply appropriate sanctions" against employees who fail to comply with patient-confidentiality policies and procedures. Id. § 164.308(a)(1)(ii)(C)

 Neither the HIPAA statute nor regulation define the term "appropriate sanction" and there is no case law interpreting the term. The arbitrator found that grievant did not engage in "intentional misconduct" and, at worst, he "made an error in judgment." Because  the HIPAA Privacy Rule does not clearly require a certain type of sanction for violations, Employer fails to show that this case presents an "exceedingly rare instance[]" of "egregious impropriety," Masseau, 2021 VT 9, ¶ 31  that rises to the level of manifest disregard,

We conclude, as in Masseau, that "even assuming that courts are empowered to vacate an arbitrator's decision based on manifest disregard of the law -- which we do not decide -- the asserted legal error in the arbitrator's decision here does not rise to the level of manifest disregard." 2021 VT 9, ¶ 32.

EATON  J. dissenting. The majority's decision essentially transforms our limited review of arbitration decisions into no review. The arbitrator here recognized that the law required employer to sanction grievant for disclosing confidential patient information but the arbitrator chose to disregard that law and reverse employer's decision. The majority's refusal to adopt the manifest-disregard standard is harmful generally because it erodes confidence in arbitration awards and provides an incentive for arbitrators to avoid explaining the bases for their decisions. It is also detrimental under the circumstances of this case because it punishes employer for carrying out its obligations under federal law and ignores the harm to patients whose information was improperly disclosed. Because employer's decision to sanction grievant was supported and required by law and the arbitrator disregarded the law in overturning it, I would reverse and remand for the trial court to vacate the arbitration order. Therefore, I dissent.

I agree with Employer that the arbitrator manifestly ignored the law in concluding that employer lacked just cause to discipline grievant for violating patient confidentiality. I would adopt the manifest-disregard standard and allow courts to vacate an arbitration award when they find that (1) the arbitrator knew the governing law but refused to follow it or ignored it, and (2) the applicable law was well defined, explicit, and clearly applicable to the case.  Although mere legal error will not suffice to vacate an award, this Court should not turn a blind eye to intentional disregard of the law.

Here the arbitrator purposely ignored applicable law to excuse an unnecessary and unlawful breach of patient confidentiality by grievant who deliberately accessed and shared private health information of his patients solely for his own purposes. While the arbitrator did not find any malicious intent, there is no question grievant acted deliberately. The majority's failure to adopt the manifest-disregard doctrine in this case is essentially a rejection of it.

How cited

SCOVT affirms murder conviction, holding warrantless ping search for cell phone location did not under exigent circumstances violate Article 11 of the Vermont Constitution.

State v. Murphy, 2023 VT 8 


CARROLL, J. Defendant appeals from his conviction for second-degree murder following a jury trial. He argues that the trial court erred by: (1) denying his motion for judgment of acquittal; (2) denying his motion to suppress evidence obtained as a result of a warrantless “ping” of his cell phone; (3) failing to sua sponte give a limiting instruction on evidence of flight; and (4) denying his motion for new trial. We conclude that defendant was not entitled to a judgment of acquittal. We further hold that, while defendant had a legitimate privacy interest in his realtime cell site location information under Article 11 of the Vermont Constitution, the warrantless ping was justified by exigent circumstances, and defendant’s motion to suppress was therefore properly denied. We reject defendant’s remaining arguments as well. We therefore affirm.


Neither the U.S. Supreme Court nor this Court has yet addressed whether individuals have a legitimate privacy interest in their real-time cell site location information (CSLI). We decide this case under Chapter I, Article 11 of the Vermont Constitution, which provides that “the people have a right to hold themselves, their houses, papers, and possessions, free from search or seizure.”


Cellphone providers do not routinely collect the information that the police sought here. Real time CSLI is not a passive location record but data generated by an affirmative action—a ‘ping’— taken by the cell-service provider at the behest of a law enforcement officer. We agree that individuals do not reasonably expect that by using their phone, they will be sharing their real-time location information with police. They do not expect their cellphone to act as “a hidden tracking device that can be activated by law enforcement at any moment." We hold that individuals have a reasonable expectation of privacy in their real-time CSLI and that the acquisition of this information by police is a search that requires a warrant unless an exception to the warrant requirement applies.


Exigent circumstances may justify an exception to the warrant requirement if the facts, as they appeared at the time, would lead a reasonable, experienced officer to believe that there was an urgent need to take action. Police requested the ping on the day after the murder after, among other things, searching unsuccessfully for defendant at his known locations and interviewing an eyewitness who identified defendant as having probably shot the victim. Given the violent offense and an ongoing danger posed to the police and the public by a fleeing, armed, suspect accused of murdering a stranger on the street we conclude that the totality of the circumstances in this case shows that exigent circumstances justified the warrantless ping. We therefore affirm the trial court’s denial of defendant’s motion to suppress.

How cited

SCOVT affirms dismissal of constitutional and common law tort claims under the six-year statute of limitations where suit was filed more than six years after defendant's construction of improvements that periodically directed stormwater toward plaintiff’s land, holding that none of the claims are for recovery of land subject to the fifteen-year statute and that the continuing tort doctrine, which Vermont has not adopted, would in any event not apply since no "tortious act" occurred within the general six-year limitations period.

 

Nesti v. Agency of Transportation, 2023 VT 1 

 

CARROLL, J. Landowner Frances Nesti appeals two civil-division orders resolving multiple claims in favor of the Vermont Agency of Transportation (VTrans) on grounds of statute of limitations. We affirm.

 In 2006, VTrans rebuilt Route 7 in South Burlington and Shelburne. The project included constructing a new, enclosed stormwater-drainage-management system that directed stormwater downhill from the road in a westerly direction toward Lake Champlain. Nesti’s property lies west of Route 7 and abuts the lake.  Nesti filed suit on December 31, 2018, pleaded takings, trespass, and private-nuisance claims, seeking damages and injunctive relief arising from stormwater runoff that began forming in a ravine sometime after the completion of the project.

 

The court found on motion under Rule 12(b)(6 ) that Nesti was on notice that her claims accrued before December 31, 2012 (a conclusion Nesti does not challenge on appeal, except to claim continuing accrual). This  was the cutoff date for her December 31, 2018, complaint under 12 V.S.A. § 501, if it applies.

 

The court permitted Nesti’s trespass and nuisance claims to proceed to summary judgment on the question of whether they were continuing torts.  However, on summary judgment, the court determined that the lack of any tortious conduct within the limitations period would take the case out of the doctrine’s operation. The court entered judgment for VTrans on all claims. 

 

On appeal Nesti makes essentially four arguments: (1) her takings (inverse condemnation) claim  is not time-barred because it is subject to the fifteen-year limitations period for bringing claims to recover lands under 12 V.S.A. § 501; (2) to the extent the takings claim is time-barred under 12 V.S.A. § 511, it violates the federal and Vermont Constitutions; (3) her trespass and nuisance claims are also subject to 12 V.S.A. § 501; and (4) if § 501 does not apply to the tort claims, they are not time-barred under the continuing-tort doctrine

 

(1)

An inverse condemnation claim is not an action for the recovery of land

Nesti argues that her takings claim is subject to the fifteen-year statute of limitations for bringing actions to recover lands under 12 V.S.A. § 501,  not the general six-year statute of limitations for civil actions under 12 V.S.A. § 511.

12  V.S.A § 501 provides

[A]n action for the recovery of lands, or the possession thereof, shall not be maintained, unless commenced within 15 years after the cause of action first accrues to the plaintiff or those under whom he or she claims.

Nesti argues, in effect, that because VTrans could obtain a prescriptive easement or adversely possess her property only  after the fifteen-year limitations period, her takings claim cannot be cut off at six years under § 511 because that would be tantamount to granting the State a property interest without just compensation nine years before it could make out a prima facie claim of adverse possession  for such an interest.  We disagree. 

Adverse possession and takings claims are distinct causes of action and subject to different limitations periods because each is a product of contrasting public policy choices.  The fifteen-year state, 12 V.S.A. § 501, does not apply to inverse condemnation claims under Vt. Const. ch. I, art. See Dep’t of Forests, Parks & Recreation v. Town of Ludlow Zoning Bd., 2004 VT 104, ¶ 6.

(2)

 Constitutional arguments raised below but not addressed by the trial court will not be considered on appeal.

Nesti next argues that barring her takings claim under § 511 violates the federal and Vermont Constitutions. However the civil division did not actually address this argument in either its summary-judgment order or on the State’s motion to dismiss.  Nesti did  not assign error to the civil division’s failure to address her constitutional arguments This  results in waiver in this Court. See State v. Nash, 2019 VT 73, ¶ 18, 211 Vt. 160, 221 A.3d 386 (holding that issues not challenged for plain error on appeal are waived without review); see also V.R.A.P. 28(a)(3) (requiring appellants to provide, among other things, “specific claims of error”). Accordingly, we do not address the merits of this argument.

(3)

 Trespass and nuisance claims are not actions for the recovery of lands.

Nesti next argues that her tort claims are  “an action for the recovery of lands, or the possession thereof” under  12 V.S.A. § 501, not governed by  12 V.S.A. § 511.

 

a) Trespass

 Liability for trespass arises when one intentionally enters or causes a thing to enter the land of another. Thus, one who causes water to enter the land of another is liable for trespass.

 

 We have held that trespass claims are subject to the six-year statute of limitations provided by 12 V.S.A. § 511. Jadallah v. Town of Fairfax, 2018 VT 34, ¶ 16, 207 Vt. 413, 186 A.3d 1111 (holding that appellant’s claims, including trespass, “are all civil” rendering them subject to “the six-year period under § 511”); Wheeler v. Town of St. Johnsbury, 87 Vt. 46, 51-52, 87 A. 349, 351-52 (1913) (same).

 

Nesti is correct that she has fifteen years to bring an action to recover lands under § 501, but she is incorrect that she has fifteen years—or more—to bring a trespass action from the date on which the trespass cause of action accrues. The aggrieved party has the full six-year period to file a trespass claim, and the full fifteen years to recover lands under § 501. It is simply not true that affirming the civil division will mean “trimming” nine years off the fifteen years permitted by statute to recover lands.; instead, she failed to file her trespass  complaint within the six years the Legislature provided for such actions.

 

b) nuisance

Private nuisance is “a substantial and unreasonable interference with a person’s interest in the use and enjoyment of land.” A claimant has six years to bring a nuisance cause of action following the causes of action’s accrual. Alpstetten, 137 Vt. at 512-13, 408 A.2d at 646 14 (“The appellant alleged a tortious act resulting in an interference with the use and enjoyment of his property. Accordingly, the six[-]year statute of limitations is applicable.”)

 

(4) No continuing tort

Nesti’s final argument is that her trespass and nuisance claims are timely under the continuing-tort doctrine, and she asks this Court to apply the doctrine for the first time.  Nesti argues that she suffers a continuing harm with “each rush of water creating a fresh harm for which a new [cause of action] should accrue.”

 

The continuing tort doctrine requires “at least two elements: a continuing wrong, and some action contributing to the wrong that occurred within the limitations period.” Gettis v. Green Mountain Economic Development Corp., 2005 VT 117¶ 25. The contributing action cannot be “simply the continuing ill effects of prior tortious acts,” Id. ¶ 28.

 

VTrans has made no material change to the system since 2006.  Nesti has not alleged that VTrans committed a tortious act after the 2006 reconstruction. Without at least one such act occurring within the six-year limitations period, we are unpersuaded by Nesti’s argument because, even if we adopted the doctrine, it would not apply in this case. Accordingly, Nesti’s tort claims are time-barred.

 

Affirmed.

How cited

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SCOVT NOTE:  This case is puzzling because it seems to determine the applicable statute by reference to the legal theory (nuisance, trespass, inverse condemnation) rather that the nature of the harm or relief requested.  That is, an action for trespass or ejectment that seeks return of possession could be potentially be treated differently under the 15-year statute than one that sought only damages. (In this case the  trial court dismissed Nesti's ejectment causes of action for failing to state a claim, and Nesti did not appeal that determination.) The holding that an inverse condemnation claim is not governed by the 15-year statute can only be explained by defining an inverse condemnation claim as one seeking only damages for an unconstitutional taking.

Neither Jadallah nor Wheeler, cited by the Court, held that § 511 applies to “trespass claims.” Section 511 is the general civil statute of limitations that applies “unless as otherwise provided." -- when no other statute is applicable. Jadallah merely held that § 511 governed in that case because “appellant has not presented any reason to this Court that any statute of limitations other than the six-year period under § 511 is applicable.” 2018 VT 34, ¶ 16.

The Wheeler Court expressly did not decide if the six-year statute applied. It reversed a dismissal on the pleadings based on the six- year statute because the allegations supported a continuous accrual theory, invoked equity jurisdiction based on a  continuous trespass; and in event the six -year statute did not bar claims for injury within the most recent six-year period. The Court remanded the case in language that seems to support, rather than reject, a "continuing tort" theory that looks at when the harm, not the tortious act, occurred:

As to the statute of limitations, the demurrer is too large, for it goes to the whole bill, whereas, if good at all, which we do not decide, it is good only for what lies back of the statutory period, for the case is one of continuous injury without fresh violence, and of constantly accruing damages, the statute can cut off only back of six years from suit brought.

Wheeler v. Town of St. Johnsbury, 87 Vt. 46, (1913) (emphasis added) (citing precedent elsewhere establishes that a wrongful continuous flowing of land by means of a dam is a continuing injury, and affords a constantly accruing cause of action) 

Plaintiff Nesti's reply brief alerted the Court to no avail that Wheeler did not hold the six-year statue applies to trespass claims but instead supported the continuing trespass theory: 

VTrans' also relies on Wheeler v. Town of St. Johnsbury 87 Vt. 46, 51-52 (1913) as support for the imposition of a six-year statute of limitations to trespass claims. Wheeler does not support VTrans. Rather Wheeler stands for the opposite position and supports Appellant. In Wheeler this Court explained that where there was a continuous trespass (say the continued diversion of water) that gives rise to constantly accruing causes of action, dismissal under a six-year statute isn't warranted (though damages may be limited). Id. at 349. Thus the Wheeler Court reversed a denial of claims on the basis of a six-year statute of limitations claim when there was a constant trespass. 

A puzzling case indeed.  A case well-briefed, but the briefs were unread.

 

SCOVT reverses, as an abuse of discretion, order vacating dismissal of complaint due to pending bankruptcy proceeding, holding the court had no legal basis to vacate the dismissal order under Rule 60 or otherwise, two years after it issued.

Hill v. Springfield Hospital and Emergency Services of New England, Inc., 2023 VT 23

CARROLL, J. In this interlocutory appeal, defendants challenge the civil division’s order granting plaintiff’s request to vacate its previous order dismissing her malpractice complaint. We agree that there was no legal basis for the court to grant such relief, and therefore reverse.

 After notification of bankruptcy proceedings, the court entered a “dismissal order” without prejudice to the Plaintiff’s right to have the order vacated, and the case reopened, if Plaintiff made application within thirty (30) days of the date of Bankruptcy Court removed the automatic stay.

Plaintiff moved to vacate, but more than thirty days after the bankruptcy case was closed.

The court granted plaintiff’s motion, stating that it was “persuaded that there was no legal or equitable basis to dismiss the action simply because one of the two defendants filed a bankruptcy petition.” The court stated that it had intended to simply stay the action and that dismissal would be unjust.

 The court denied defendants’ request for reconsideration, reasoning that “[w]hether pursuant to the court’s inherent authority to vacate unlawful orders, or pursuant to V.R.C.P. 60(b)(4) or (6), the court is duty bound to vacate the unlawful dismissal order because failure to do so would work a substantial injustice by unlawfully denying plaintiff’s right to seek redress for her alleged injuries."

This Court accepted the interlocutory appeal on the question whether the civil division had a legal basis to vacate the 2019 dismissal order V.R.A.P. 5(b)(6)(B).  We conclude that it did not, and reverse.

 

First, plaintiff failed to comply with the terms of the dismissal order. By law, the bankruptcy court’s decision closing the bankruptcy case operated to remove the automatic stay. Under the plain terms of the dismissal order, plaintiff had thirty days from that date to move to reopen the case. She did not do so.

 

The trial court had no inherent authority independent of Rule 60 to modify or vacate a final judgment. Once the twenty-eight-day time period set forth in Rule 59 elapsed, relief is only available if one of the conditions in Rule 60 is satisfied. Kotz v. Kotz, 134 Vt. 36, 38, 349 A.2d 882, 884 (1975); see also Reporter’s Notes, V.R.C.P. 60 (“The rule is intended to provide the sole means of obtaining relief from a judgment after the time for a motion under Rule 59 has run.”). Having failed to follow that procedure, plaintiff’s sole avenue of relief was Vermont Rule of Civil Procedure 60.

 

In this case, plaintiff’s motion was filed more than a year after the judgment, so she is not entitled to relief under subdivisions (b)(1), (2), or (3).  Thus, even assuming the 2019 dismissal order qualified as a “mistake” within the meaning of Rule 60(b)(1), that provision is of no aid to her.

 

Plaintiff does not claim that she is entitled to relief under subdivision (b)(5), nor does that provision appear to fit the circumstances in this case. We accordingly assess whether the trial court could properly grant relief under Rule 60(b)(4) or (b)(6).

 

Plaintiff argued below that relief was available under Rule 60(b)(4) because the 2019 dismissal order was contrary to law and therefore void when it was entered.  Whether it was unlawful for the civil division to dismiss her entire case in response to Springfield’s notice of bankruptcy is not the issue before us.  The question certified for review is whether the court had a valid reason to vacate the dismissal. We conclude that the civil division had jurisdiction to enter the dismissal order, meaning that it was not “void” within the meaning of Vermont Rule of Civil Procedure 60(b)(4), and that plaintiff demonstrated no other valid basis to challenge the order two years after it was issued.

A judgment is void within the meaning of Rule 60(b)(4) “only if the court that rendered it lacked jurisdiction of the subject matter, or of the parties, or if it acted in a manner inconsistent with due process of law.” In re C.L.S., 2020 VT 1 ¶ 17.  The civil division had jurisdiction, concurrent with the bankruptcy court, to determine the applicability of the automatic stay to plaintiff’s case. Klass v. Klass, 831 A.2d 1067, 1071 (Md. 2003).  Plaintiff had notice and multiple opportunities to object to or remedy the dismissal order, and we see no basis to conclude that the order was inconsistent with due process such that it was void for purposes of Rule 60(b)(4).  The argument that the order violated the automatic stay is not grounds for relief under Rule 60(b)(4).

Rule 60(b)(6) allows the trial court to relieve a party from a final judgment for any reason beside those set forth in the first five sections of the rule, as long as the request for relief is made within a reasonable time.  The record is clear that plaintiff’s own lack of diligence, not the dismissal order or defendants’ conduct, is the reason for her situation. It was therefore an abuse of discretion for the court to grant plaintiff’s motion to reopen the case under that subdivision of the rule.

 

The civil division did not have inherent authority or any basis under Rule 60(b) to vacate the dismissal order.

 

 Reversed.

How cited

SCOVT NOTE: The Court expressly did not validate the dismissal order in question as a lawful response to the automatic stay. 

In another context, the Court characterized this type of dismissal without prejudice to a time-limited motion to reopen as “procedurally unorthodox,” stating “litigants and courts would be well advised not to follow its model."  Re Purvis Nonconforming Use, 2019 Vt 60 ¶ 14.

 

SCOVT affirms partition order that did not physically divide property, rejects objection that infeasibility of zoning permit was not a lawful consideration.

  Wells  v. Spera, 2023 VT 18   

           

CARROLL, J. Plaintiffs appeal a civil-division order assigning real property to defendant in this partition action. We affirm.

Plaintiffs argue that the failure to divide the property offends the long-standing preference to order partition in kind over assignment or sale, and that the decision not to divide because of potential zoning violations exceeded the scope of the commissioners’ authority set out in the reference order.

 

Partition actions are governed by statute, 12 V.S.A. §§ 5161-5188, and Civil Rule 53. Under this framework, once the trial court determines partition is appropriate, it appoints three commissioners who reside in the same county as the subject property and who “shall make partition of the estate,” 12 V.S.A. § 5169(a), unless it “cannot be divided without great inconvenience to the parties.” Id. § 5174. If the property cannot be divided without great inconvenience, the “court may order it assigned to one of the parties, provided he or she pays to the other party such sum of money, at such times and in such manner as the commissioners judge equitable.” Id. § 5174. Only if no party will take an assignment may courts order the sale of a property. Id. § 5175. Following receipt of the commissioners’ report, the trial court must accept it “[u]nless cause is shown.” Id. § 5172.

 The court issued an order of appointment of commissioners and order of reference by consent of the parties. The order appointed three commissioners and directed them to determine whether the property could be divided, assigned to one of the parties, or sold. They were ordered to determine the fair market value of the property and each person’s equitable share. Neither party reserved the right to object to the commissioners’ report.

 The commissioners credited defendant’s testimony that division would result in an overall value of $1,300,000, which was $200,000 less than the $1,500,000 combined value and concluded that “given the serious zoning hurdles,” the property could not “be physically divided without great inconvenience to the parties because doing so has the very real potential to materially decrease or perhaps even extinguish the property’s value.” They awarded defendant first option to buy out plaintiffs’ interest. 

 Plaintiffs filed a motion objecting to the report, citing Vermont Rule of Civil Procedure 53(e)(2)(iii), arguing the commissioners erred as a matter of law.  in concluding that partition would result in zoning violations. In the alternative, they argued that the equities favored assigning the property to them.

The court denied the motion and adopted the report without qualification. It reasoned those plaintiffs had not reserved their right to object to the report as required by the plain language of Civil Rule 53(e)(2)(iii). The court found that the commissioners had acted within the scope of their mandate as described in the reference order and that the record supported their findings and conclusions.

 In contrast to plaintiffs’ characterization, the issue is not whether the commissioners concluded partition in kind was inequitable purely because division would create zoning violations; instead, the question here is whether the commissioners can consider potential zoning violations to determine whether physical division would materially decrease the property’s value. See Billings v. Billings, 114 Vt. 70, 74, 39 A.2d 748, 750 (1944) (explaining that great-inconvenience-to-parties test is whether “the aggregate value of the several parts when held by different persons in severalty will be materially less than the whole value of the property if owned by one person”). 

The commissioners’ findings regarding potential zoning violations, among other findings, supported their conclusion that division would materially decrease the property’s value. The record supports their findings, and the findings support their conclusion not to divide the property. It follows that the trial court did not err in accepting this portion of the report. See Messier, 140 Vt. at 314, 438 A.2d at 400

 Plaintiffs’ next argue that the commissioners erred by giving defendant first right of assignment, improperly considering the parties’ ability to buy out the other in making this determination.  As in Nystrom v. Hafford, the findings about the parties’ relative abilities to timely buy out each other’s interests are appropriate equitable considerations. 2012 VT 60, ¶ 17

 Because. the challenged findings are not clearly erroneous, we need not and do not address whether Rule 53(e)(2) permits a party to object to a report following the report’s delivery to the trial court where the party did not reserve a right to object in the first instance.

Finally, plaintiffs request a remand to redetermine the property’s value because of purported changes in the real-estate market. Plaintiffs fail to cite where this argument was preserved and cite no case or other legal authority in support. Accordingly, we will not review it. V.R.A.P. 28(a)(4)(A) (requiring litigant to demonstrate how issues were preserved and to support argument with citations to authorities and parts of record relied upon); see Kneebinding, Inc. v. Howell, 2020 VT 99, ¶ 61, 213 Vt. 598, 251 A.3d 13 (Mere naked statements, unsupported by argument or citation of authorities, constitute inadequate briefing and merit no consideration.)

 Affirmed.

How cited

SCOVT reverses summary judgment, rejects Restatement (Third) of Property, and holds deeded right of way for “ingress and egress” does not allow access to install underground utilities.

Gladchun v. Eramo, 2023 VT 5


CARROLL, J. Jeffrey and Alyssa Gladchun appeal a decision granting summary judgment to neighboring landowners, Michael and Diane Eramo, and the Eramos' lessee, New Cingular Wireless, PCS, d/b/a AT&T (AT&T). The civil division concluded that a deed granting a right-of-way for "ingress and egress" to the Eramos was unambiguous and did not limit AT&T from installing utility lines under the right-of-way to service a planned communications tower. We agree that the deed is unambiguous as to the right-of-way. However, we disagree that it expresses more than the plain, ordinary meaning of "ingress and egress," which does not include installing underground utilities. Accordingly, we reverse and remand.

In March 2021, the Eramos granted AT&T an option to lease a portion of Lot 10 to construct a 195-foot-high communications tower. Lot 10 is benefitted by a thirty-foot right-of-way that is the only access to Lot 10. The right-of-way is described in the deed as “for the purpose of ingress and egress to and from the conveyed premises.”

On summary judgment the only question was whether the deed's express terms permitted underground utility lines. The trial court cited VTRE Investments, LLC v. MontChilly, Inc. for the proposition that "[w]here the intent is clearly to create a right of ingress and egress, but the language of the deed is general, 'the dominant estate "is entitled to a convenient, reasonable, and accessible way.'" 2020 VT 77, ¶ 23 (quoting Patch v. Baird, 140 Vt. 60, 66 (1981). 

Using this framework, the court relied on a comment to § 4.10 of the Restatement (Third) of Property to determine installation of underground utilities was a reasonable use of the right-of-way because normal advances in technology can permissibly increase "the manner, frequency, and intensity" of uses over time, citing previous cases of this Court for that proposition.

On appeal, the Gladchuns' primary argument is that the deed term unambiguously limits the use to the plain meaning of "ingress and egress," which does not include installing underground utilities. We agree conclude that the term is unambiguous, and the plain meaning of "ingress and egress" does not permit AT&T's current proposal.

The plain meaning of the words ingress and egress convey a right for defendants to enter and leave Lot 10 using the right-of-way. Nothing we can discern in the definitions of either word individually, or in combination, denote a right to install underground utilities. Where a deed unambiguously limits and defines a right-of-way, as here, our inquiry ends, and we enforce the deed as written. Accordingly, we need not consider what constitutes a "convenient, reasonable, and accessible way", nor do we need to consider what uses may constitute an overburden of the easement.

Defendants counter that this Court should adopt comment d to § 4.10 of the Restatement (Third) of Property (2000), which states that:

O, the owner of Blackacre, granted an easement to Able, the owner of Whiteacre, for `ingress and egress' from Whiteacre to the public street abutting Blackacre. The deed did not specify whether utility lines could be placed in the easement. Unless the facts or circumstances suggest that the parties intended otherwise, it would be proper to define the purpose of the easement generally to include access for anything that could conveniently be transported through the easement corridor and that would normally be used in connection with property situated like Whiteacre, including utility services.

We do not follow the Restatements if there "is a strong rationale to the contrary." Langlois v. Town of Proctor.  2014 Vt 130, ¶ 34,There are strong policy rationales to the contrary here.

First, the comment runs contrary to our long-standing rule for interpreting deeds in Vermont, which is to enforce the intent of the original parties, using whenever possible the plain, ordinary, and popular meaning of the language contained in the document.

Second, the Vermont Constitution vigorously protects private-property ownership, and the present character of the state is indicative of this feature. See, e.g., Vt. Const. ch. I, art. 1 ("That all persons are born equally free and independent, and have certain natural, inherent, and unalienable rights, amongst which are the enjoying and defending life and liberty, acquiring, possessing and protecting property, and pursuing and obtaining happiness and safety . . . .");[1] Since its founding, the people of the state have expressed a robust commitment to private-property ownership. See generally State v. Kirchoff, 156 Vt. 1, 14-19 (1991) (Springer, Dist. J. (Ret.), Specially Assigned,concurring) (explaining centrality of property rights in early Vermont and noting that "[p]rotection of citizens' rights to security in their land was a key motivating force in creating the Vermont Constitution"). This Court's long-standing rules of deed interpretation reflect this commitment.

In short, the comment has little relevance to Vermont given Vermont's unique character and history. While a policy may exist in other jurisdictions favoring the implication of a right to install utility lines where an otherwise unambiguous express easement is silent on the issue, it does not fit well in Vermont.

Because the civil division did not rule on defendants' alternative argument that Lot 10 is benefitted by an easement by necessity, we remand to the civil division to resolve that question.

Reversed.

How cited


 SCOVT note: Many states have constitutional provisions very similar to Article 1. Compare Vt. Const. ch. I, art. 1 with Cal. Const. art. 1, § 1 ("All people are by nature free and independent and have certain inalienable rights. Among these are enjoying and defending life and liberty . . . and pursuing and obtaining safety, happiness and privacy."); Mass. Const. pt. 1, art. 1 ("All people are born free and equal and have certain natural, essential and unalienable rights; among which may be reckoned the right of enjoying and defending their lives and liberties . . . [and] that of seeking and obtaining their safety and happiness."); Nev. Const. art. 1, § 1 ("All men are by Nature free and equal and have certain inalienable rights among which are those of enjoying and defending life and liberty . . . and obtaining safety and happiness[.]"); Va. Const. art. 1, § 1 ("That all men are by nature equally free and independent and have certain inherent rights, of which, when they enter into a state of society, they cannot, by any compact, deprive or divest their posterity; namely, the enjoyment of life and liberty, . . . and pursuing and obtaining happiness and safety.").

The Court has said that although "the text [of Article 1] includes the right to possess and protect property,” that right is listed among other "natural, inherent, and unalienable rights" merely to flesh out “philosophical truisms.” Shields v. Gerhart, 163 Vt. 219, 234-35 (1995) (holding Article 1 is not self-executing.)

The law of easements by necessity is summarized in a case recognizing an implied easement by necessity for water and sewer lines where development the residential property was is impossible without access to utilities:

It is well settled in Vermont and elsewhere, however, that an implied easement by necessity may arise by operation of law where it is essential to the "reasonable enjoyment of [the] land," Berge v. State, 2006 VT 116, ¶ 12, 181 Vt. 1, 915 A.2d 189, and that this principle incorporates access to essential utilities. See McElroy v. McLeay, 71 Vt. 396, 398-99, 45 A. 898, 899 (1899) (recognizing implied easement for access to public sewer line as "within the rule that everything . . . that is essential to the beneficial use and enjoyment of the property designated in the grant is . . . to be considered as passing by the grant"); see also Brown v. Miller, 140 Idaho 439, 95 P.3d 57, 61 (2004) (holding that easement by necessity "reasonably includes utilities"); Smith v. Heissinger, 319 Ill.App.3d 150, 253 Ill.Dec. 543, 745 N.E.2d 666, 671-72 (2001) (rejecting assertion that easement by necessity is limited to ingress and egress, and holding that it may exist for access to power, telephone, water, and sewer lines); Morrell v. Rice, 622 A.2d 1156, 1160 (Me.1993) ("An easement created by necessity can include not only the right of entry and egress, but also the right to make use of the easement for installation of utilities, essential for most uses to which property may reasonably be put in these times."); Huggins v. Wright, 774 So.2d 408, 412 (Miss.2000) (affirming grant of "easement of necessity . . . for ingress/egress and for utilities"); see generally 1 Restatement (Third) of Prop.: Servitudes § 2.15 cmt. d (2000) (observing that "increasing dependence" on access to utilities for reasonable enjoyment of property supports recognition of easement by necessity).

Regan v. Pomerleau. 2014 VT 99 ¶ 34.

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