SCOVT reverses, for inadequate findings, Labor Board ruling that predoctoral fellows and trainees are “employees” for purposes of the State Employees Labor Relations Act.

 In re United Auto Workers, Local 2322, 2025 VT 8 [filed 2/21/2025]

CARROLL, J. The University of Vermont appeals from a Vermont Labor Relations Board decision concluding that predoctoral fellows and trainees are employees for purposes of the State Employees Labor Relations Act (SELRA). We reverse and remand for further consideration of the issue. 

 

The term “employee” is broadly defined under the SELRA in relevant part as “any individual employed on a permanent or limited-status basis by . . . the University of Vermont” The Board, explaining that the term “employed” is not further defined in the statute, adopted the ordinary dictionary definition of employee, which it described as a person “who provide[s] work to someone for pay” or “any person who works for another in return for financial or other compensation.”

The Board concluded that graduate assistants are employees because they work for the University in exchange for compensation. The Board made no such findings with regard to predoctoral fellows and trainees. The Board’s decision fails to address its own findings that predoctoral fellows and trainees apparently have no obligations to the University beyond academic requirements, do not receive W-2s, or that the funding for predoctoral fellows is tied to the individual student. 

 

It is not clear that predoctoral fellows and trainees fall under the Board’s definition of employee based on the record and findings available to us in this appeal. Without such findings or more detailed reasoning supplied by the Board as to why differences between graduate assistants and predoctoral fellows and trainees are immaterial to the outcome, we can only “speculate” as to how the Board reached its decision. Page v.Smith-Gates Corp, 143 Vt. 280, 283 (1983).  Accordingly, the Board’s order with respect to the employee status of predoctoral fellows and trainees is reversed and the matter is remanded to the Board for further proceedings consistent with this opinion.

SCOVT reverses E-Court ruling denying reimbursement from the Petroleum Cleanup Fund, holding the court’s findings were inadequate to show how the decision was reached.

 

In re Cote/Maquam Shore Market, 2025 VT 42 [Filed 7/25/2025]

EATON, J.   This appeal concerns a dispute over reimbursements from the Petroleum Cleanup Fund (PCF).  Appellant Janet Cote owns a property which was once the site of a gas station.  After the discovery of significant petroleum contamination in the soil on her property, she applied for and received reimbursement from the PCF.  The issues on appeal stem from the Agency of Natural Resources’ decision to deny further reimbursement for costs associated with a licensed engineer and with a “punch list” of additional items on Cote’s property.  The Environmental Division affirmed the Agency’s decision in part and reversed in part.  Cote now appeals the reimbursements she claimed which were denied by both the Agency and then the Environmental Division.  We reverse and remand. 

“The purpose of findings is to make a clear statement to the parties, and to this Court, if appeal is taken, of what was decided and how the decision was reached.”  New England Power Co.,. New England Power Co. v. Town of Barnet, 134 Vt. 498, 503,  (1976)  A trial court’s findings are “insufficient when [this Court is] left to speculate as to the basis of the trial court’s decision.”  Bonanno v. Bonanno, 148 Vt. 248, 251, 531 A.2d 602, 604 (1987). 

Here the court failed to provide an adequate basis for its conclusion that the Agency correctly denied reimbursement for the engineer Specifically, the court did not adequately explain why it considered the Agency’s denial of this expense to be reasonable.  The decision merely restates the Agency’s conclusory arguments that the cost was ineligible because all eligible work was complete and that the costs 8 were in excess of what was reasonable.  

In its findings of fact, the court listed the twenty items on the punch list that the Agency identified as ineligible for reimbursement. As above, the court did not explain why the Agency’s denial for each specific item was reasonable.  The court’s use of the terms “many” and “in general” when describing the punch list items forces us to speculate about whether and how each item is ineligible .The decision provides no analysis of the Agency’s reasoning for denying each vastly dissimilar punch list item request—merely restating the Agency’s generalized and conclusory arguments.

Without more findings or analysis of the Agency’s reasoning, “we are left to speculate as to the basis of the trial court’s decision” which we decline to do.  Bonanno, 148 Vt. at 251. We reverse and remand to allow the Environmental Division to make adequate factual findings and any additional conclusions as may be necessary on the disputed restitution claims.

 

 Reversed and remanded for further proceedings consistent with this opinion.

SCOVT overrules Kuhling v. Glaze, 2018 VT 75, ¶ 11, as to the standard of review of conclusions of law, holding de novo review is limited to “pure questions of law” and that a trial court's conclusions will be affirmed where they are "reasonably drawn from the evidence presented."

Jackson v. Jackson , 2025 VT 29 [June 6, 2025.] (Affirms superior court merits ruling and fee award on appeal from probate court in dispute between beneficiaries and a trustee, holding the record supports the findings and the findings support the court's conclusions, including the award of attorney’s fees for work in both courts under 14A V.S.A. § 1004 of the Vermont Trust Code,)

EATON, J.   Petitioners Anne and Jeffrey Jackson sought to remove their father Willard Jackson as trustee of two trusts for which Willard is an income beneficiary and they are remainder beneficiaries.  Petitioners sought to terminate Willard’s beneficial interest in the income of the trusts, terminate the trusts, and distribute the trust assets to the beneficiaries based on an allegation of breach of trust.  Petitioners also sought to have Willard pay restitution to the trust from his personal assets to restore the value of the trust assets that they argued were improvidently spent.  Petitioners initiated their action in the probate division in April 2021 against Willard individually and in his capacity as trustee.  The probate division granted their request to remove Willard as trustee and granted petitioners’ request for attorney’s fees from Willard personally under 14A V.S.A. § 1004.  Willard appealed to the civil division, which considered the matter de novo.  Following a five-day bench trial, the civil division rejected petitioners’ arguments and granted judgment to Willard.  The court also granted Willard’s request for attorney’s fees from petitioners pursuant to 14A V.S.A. § 1004.  Petitioners appeal, arguing that the court erred in rejecting their claims and in awarding attorney’s fees to Willard.  We affirm.

 

Petitioners ask this Court to consider the probate decision as persuasive. We decline to do so. The trial court here conducted a de novo bench trial and the trial court's decision is the only decision before this Court on appeal.

 

The arguments here involve fact-specific inquiries, appropriately subject to a deferential standard of review:

“This Court's review of a trial court's findings . . . following a bench trial is limited. A trial court's factual findings will not be disturbed on appeal unless clearly erroneous when viewed in the light most favorable to the prevailing party. A finding will not be disturbed merely because it is contradicted by substantial evidence; rather, an appellant must show there is no credible evidence to support the finding. This Court gives due regard . . . to the opportunity of the trial court to judge . . . the credibility of the witnesses, and will accordingly defer to the court's determinations regarding the credibility of witnesses and . . . the persuasive effect of the evidence. Finally, a trial court's conclusions will be affirmed where they are reasonably drawn from the evidence presented.”

Lofts Essex, LLC v. Strategis Floor & Décor Inc., 2019 VT 82, ¶ 17 

 

This case does not present pure questions of law subject to de novo review. To the extent that we suggested otherwise in Kuhling v. Glaze, 2018 VT 75, ¶ 11, 208 Vt. 273, 196 A.3d 1125 (“On appeal, we review the trial court's findings of fact for clear error, and its legal conclusions de novo”), the language to that effect conflicts with Lofts Essex, LLC and is overruled.

Petitioners fail to show that the court's findings are clearly erroneous. Petitioners essentially challenge the trial court's assessment of the weight of the evidence and the credibility of witnesses and we do not reweigh the evidence on appeal. While petitioners disagree with the trial court's conclusions, they do not demonstrate error. The court applied the appropriate legal standard. Its findings are supported by the record, and the findings in turn support the court's conclusions. We therefore affirm the court's merits decision in Willard's favor.

 

Two weeks after the merits decision in his favor, Willard moved for attorney's fees under 14A V.S.A. § 1004 of the Vermont Trust Code, which is based on the Uniform Trust Code. Section 1004 provides:

In a judicial proceeding involving the administration of a trust, the Probate Division of the Superior Court, as justice and equity may require, may award costs and expenses, including reasonable attorney's fees, to any party, to be paid by another party or from the trust that is the subject of the controversy.

 The court granted Willard's motion in the full amount requested.   On appeal petitioners argue that there is no basis in "justice or equity" for the award and that the court did not make sufficient findings to support its award. While the court's findings are not extensive, it provided a reasoned basis for its decision and acted within its discretion in awarding fees. We can discern from the court's decision "what was decided and why," which is the purpose of findings. Petitioners did not object below to the time spent by counsel or the rates charged. Petitioners do not show where in the record they argued that the court should not award fees associated with the probate proceeding. The court acted within its discretion in awarding attorney's fees to Willard and we find no grounds to disturb its decision

Affirmed.

SCOVT NOTE 1. Attorney's fees under 14A V.S.A. § 1004.

Compare Curran v. Building Fund of the United Church of Ludlow, 2013 VT 118 ) (where beneficiaries successfully defended settlor's capacity to execute trust trial court did not abuse its discretion in determining “justice and equity” did not require an award of attorney’s fees under 14A V.S.A. § 1004.)

SCOVT NOTE 2: STANDARD OF REVIEW OF "LEGAL CONCLUSIONS"

The statement in Kuhling v. Glaze (EATON, J.), which is here overruled - that a trial court's legal conclusions are reviewed de novo - derives from N.A.S. Holdings, Inc. v. Pafundi, 169 Vt 437 (1999). Pafundi was an adverse possession case where the Court said the trial court's own findings established a different outcome as a matter of law. The Court reversed a ruling that the appellant had established title only to the floor of a slate quarry but not to its walls and held the appellant established adverse possession of the entire quarry on the basis of facts found by the trial court. The Court reviewed the trial courts' conclusions de novo, stating:

Adverse possession is a mixed question of law and fact . . .When reviewing the factual findings of a trial court, . . .findings will stand if there is any reasonable and credible evidence to support them. Review of conclusions of law, however, is nondeferential and plenary. See State v. Pollander, 167 Vt. 301, 304, 706 A.2d 1359, 1360 (1997) (questions of law reviewed de novo); State v. Madison, 163 Vt. 360, 371, 658 A.2d 536, 543 (1995) ("review de novo" commonly used to describe nondeferential on-the-record standard of review that appellate courts apply to lower court determinations regarding questions of law or mixed questions of law and fact)

169 Vt. at 438-39 (Citations omitted.).

The standard in Lofts Essex quoted by the Jackson Court-- that a trial court's conclusions will be affirmed where they are "reasonably drawn from the evidence presented." -- derives from tax appeal cases. E.g. Dewey v. Town of Waitsfield, 2008 VT 41 ¶ 3. But it also   appears in other contexts. E.g..In re Burton Corp. Conditional Use/Act 250, 2024 VT 40 ¶ 18 (" The Environmental Division's legal conclusions are reviewed de novo but will be upheld 'if they are reasonably supported by the findings.'"); Hirchak v. Hirchak, 2024 VT 81 ¶ 15 ("'Where the trial court has applied the proper legal standard, we will uphold its conclusions of law if reasonably supported by its findings.' . . . However, we review pure questions of law de novo")

SCOVT declines remittitur and affirms substantial damage awards for emotional distress (PTSD), without physical impact, holding such damages may be recovered from an employer for negligent supervision of an employee who commits intentional or other torts for which emotional-distress damages are available

Kilburn v. Simmon, 2025 VT 32 [filed 6/20/2025]

COHEN, J. This is an appeal from a jury verdict awarding damages to plaintiffs Ciara and Brona Kilburn for negligent supervision by defendant Vermont Community Access Media, Inc. (VCAM) of its employee, defendant Bill Simmon. In 2012, Simmon used VCAM's video cameras to secretly record plaintiffs while they were changing clothes, then shared the videos online, where they have been viewed more than a million times. The jury found that Simmon invaded plaintiffs’ privacy and recklessly caused plaintiffs severe emotional distress. It found that VCAM negligently supervised Simmon. It awarded each plaintiff compensatory damages of $1.75 million against Simmon and $1.75 million against VCAM. It awarded each plaintiff $2 million in punitive damages against Simmon. On appeal, VCAM argues that the trial court erred in admitting evidence that in 2011, a VCAM manager found child pornography on a hard drive used by Simmon but took no action. VCAM further argues that the trial court erred in allowing the jury to award damages for emotional distress because there was no evidence that plaintiffs were physically injured. Finally, VCAM argues that the court should have granted its request for remittitur because the damage award was duplicative and excessive. In their cross-appeal, plaintiffs claim that the trial court erred in denying their request to hold VCAM jointly and severally liable for Simmon's share of compensatory damages. We affirm.

Availability of Emotional-Distress Damages for Negligent Supervision

VCAM's primary argument on appeal is that the trial court erred in instructing the jury that it could award compensatory damages to plaintiffs for emotional distress resulting from VCAM's negligent supervision of Simmon even though there was no evidence that plaintiffs were physically injured. Below, Plaintiffs argue, and the trial court apparently agreed, that this Court should recognize a new exception to the Vincent rule that applies to their case because the nature of Simmon's acts guarantees the genuineness of their emotional distress.


The general rule of Vincent is that "[a]bsent physical contact, one may recover for negligently caused emotional distress only when the distress is accompanied by substantial bodily injury or sickness." Vincent v. DeVries, 2013 VT 34, ¶ 10

Further, Zeno-Ethridge v. Comcast Corp., recently held that "PTSD is a mental or emotional harm, not a physical one," and therefore "a PTSD diagnosis alone is insufficient to satisfy the `actual injury' requirement of a negligence claim." 2024 VT 16, ¶ 35

In this case, plaintiffs did not allege or show that there was any physical contact between Simmon and themselves, or any other "physical impact" resulting from VCAM's negligence. Nor does this case involve either of the exceptions to the general rule identified in Vincent for "special circumstances where the nature of the tortious act guarantees the genuineness of the claim." Id. ¶ 13 (recognizing mishandling of bodily remains or negligent transmission of message announcing death as exceptions).

We conclude that it is unnecessary to decide whether to recognize a new exception because emotional-distress damages are are available as a matter of course for VCAM's breach of its duty to prevent its employee from using its equipment and premises to commit intentional torts for which emotional-distress damages are available. The Restatement (Second) of Agency § 213 (1958) and cases from other jurisdictions do not limit liability for negligent supervision to physical harm. Instead, the underlying tort or wrongful conduct determines the compensability of the injury. If a negligent-supervision claim is premised on an employee's commission of a tort for which emotional-distress damages are available even without physical impact, then such damages are available for the negligent-supervision claim as well.

In this case, plaintiffs' negligent-supervision claim against VCAM was premised on invasion of privacy and IIED—both intentional torts for which pure emotional distress damages are recoverable. Therefore the court properly instructed the jury that it could award compensatory damages to plaintiffs for emotional distress resulting from VCAM's negligent supervision of Simmon in this case.

We emphasize the limited nature of our holding. Emotional-distress damages may be assessed against VCAM in this case because plaintiffs met the difficult burden of proving both (1) that Simmon committed the underlying intentional torts of IIED and invasion of privacy and (2) that VCAM breached its duty to prevent Simmon from committing those torts using its premises and chattels, thereby causing harm to plaintiffs.[5] Our ruling in this case should not be interpreted to alter the Vincent rule, or to suggest that pure emotional-distress damages are automatically available for all negligent-supervision claims.

Motion for Remittitur.

VCAM argues the court should have granted its request for remittitur because the verdict was duplicative and excessive. VCAM first argues that by awarding each plaintiff $1.75 million against Simmon and $1.75 million against VCAM, the jury gave plaintiffs a double recovery for the same injury. “[A] plaintiff is generally not permitted to recover twice for the same injury.” Will v. Mill Condo. Owners’ Ass’n, 2006 VT 36, ¶ 7, 179 Vt. 500, 898 A.2d 1264. VCAM has failed to demonstrate that this occurred here, however. The identical awards do not by themselves prove that the jury improperly compensated plaintiffs twice for the same injuries. An equally plausible explanation is that the jury found each plaintiff suffered $3.5 million in damages and Simmon and VCAM were each responsible for one-half of the injuries the verdict form, expressly asked the jury to indicate whether it was awarding the same damages to be shared by the two defendants. The jury did not so indicate, and instead awarded separate damages for each defendant We are unpersuaded that there was double recovery in this case.

Further, we are unpersuaded that the award here was grossly excessive. “We are in the field of unliquidated damages, where judgments may vary widely and yet be within permissible range.” English v. Myers, 142 Vt. 144, 148, 454 A.2d 251, 253 (1982). Recordings of plaintiffs are practically impossible to remove from the internet. As the trial court noted, plaintiffs will have to live their lives knowing that friends, neighbors, colleagues, employers, and others may have seen them partially naked and that viewers might incorrectly assume that plaintiffs posted the pictures themselves. These acts caused plaintiffs severe and continuing emotional distress. Cf. State v. VanBuren, 2018 VT 95, ¶¶ 56-57 (noting substantial harm that victims of nonconsensual pornography may suffer, and observing that “[t]he personal consequences of such profound personal violation and humiliation generally include, at a minimum, extreme emotional distress”). Given the ongoing invasion of plaintiffs’ privacy and the proof presented of the attendant effects on their mental and emotional health, we cannot say that the award was excessive. See English, 142 Vt. at 147-48 (affirming “somewhat high” verdict because defendant presented no evidence of passion or prejudice on part of jury); In re Estate of Peters, 171 Vt. 381, 393, 765 A.2d 468, 478 (2000) (“Calculating damages is the jury’s duty, and considering [decedent’s] humiliation and emotional suffering, the size of the verdict alone does not show that the award was “entirely excessive.”). The cases cited by VCAM involve different factual scenarios and legal claims and are not helpful comparators. We therefore affirm the jury’s award of damages against VCAM.

Joint and Several Liability

Finally, we consider plaintiff’s claim, made following the verdict in a proposed judgment, that the trial court improperly declined to hold VCAM jointly and severally liable for Simmon’s share of compensatory damages. The court declined to make VCAM jointly liable for Simmon’s damages, stating: “The proposed judgment is not the place to raise legal issues that should have been addressed prior to or during the trial. The judgment must reflect the verdict of the jury,”reasoning that plaintiffs had agreed to have the jury allocate damages to each defendant and could not subsequently seek to recover the entire award against VCAM. We agree with the trial court that plaintiffs implicitly waived their joint-and several-liability claim by failing to object to the jury instructions or the verdict form.

Plaintiffs assert that notwithstanding the jury verdict, they were legally entitled to joint and several liability under Vermont law and the Restatement (Third) of Torts: Apportionment of Liability § 14 (2000), which makes a negligent tortfeasor, who had a duty to protect the plaintiff from the specific risk of an intentional tort, jointly and severally liable for the share of compensatory damages allocated against the intentional tortfeasor.

This Court has never addressed the Restatement provision cited by plaintiffs, which is complicated by 12 V.S.A. § 1036 applies. Given the apparent uncertainty surrounding whether joint and several liability applied in this situation, and plaintiffs' reliance on a Restatement provision that has not previously been adopted by this Court, the question of apportionment of liability should have been raised with the court before the jury was instructed and given the verdict form above. We conclude that plaintiffs waived their claim that VCAM is liable for the damages awarded against Simmon.

Affirmed.

REIBER, C.J. joined by Justice Waples, concurring. The majority determines that plaintiffs' mental and emotional harm, as well as physical effects arising from that harm, does not establish the "substantial bodily injury or sickness" necessary for recovery of emotional-distress damages in a negligence case. Vincent v. Devries, 2013 VT 34, ¶ 10, 193 Vt. 574, 72 A.3d 886 (quotation omitted). While that is true under current Vermont law, I write separately to underscore the substantial impacts of serious mental and emotional injuries and to draw attention to an unfairness in how these injuries are treated under our tort law.

This Court said in Zeno-Ethridge v. Comcast Corp., 2024 VT 16, ¶ 35 that PTSD alone is "insufficient to satisfy the `actual injury' requirement of a negligence claim." But this case illustrates that such a limitation imposes an actual unfairness on these plaintiffs. I respectfully encourage development of this aspect of tort law to incorporate our growing understanding of PTSD when we meet the facts of this and similar matters that come before us. We should take the next step by making it unequivocally clear that PTSD is a legitimate and recoverable injury in tort law.

SCOVT affirms Rule 12(b)(6) dismissal and denial of later motion to amend complaint for losses due to negligent notarization of fraudulent document, holding pleading and argument below failed to show a “special relationship” justifying exception to economic loss rule.

Veljovic v. TD Bank, N.A., 2025 VT 38 [filed 7/11/2025]

 REIBER, C.J.   Plaintiff Aleksandra Veljovic appeals from the dismissal with prejudice of her negligence, negligent supervision, and respondeat superior claims against TD Bank, N.A. and its former employee, Zlata Cavka.  Plaintiff alleged that the employee negligently notarized a fraudulent document that was ultimately used by plaintiff’s ex-husband to secure a divorce order in Serbia leading to her loss of marital property.  She argued that TD Bank should be held liable under the legal theories cited above.  The court dismissed plaintiff’s complaint, concluding that plaintiff could not recover for purely economic losses and she failed to show the existence of a special relationship between the parties.  It also denied plaintiff’s post-judgment request to amend her complaint.  We agree with the court’s conclusions and therefore affirm.

Plaintiff’s complaint lacked any allegations indicating that she had any relationship, much less a close or “special” relationship, with Cavka or that she relied on Cavka’s notarial services.  The only connection plaintiff alleges between herself and Cavka was that Cavka notarized a document purportedly containing plaintiff’s signature, allegedly presented to Cavka by plaintiff’s ex-husband.  Without facts that establish a relationship of trust, confidence, or reliance between plaintiff and Cavka, plaintiff’s claims are barred by the economic-loss rule.   

Plaintiff argues that the notary’s services qualify under the professional services exception to the economic loss rule because a notary is a public officer who owes a duty to the public to perform her service with diligence.  Plaintiff raised this argument in the trial court for the first time in her V.R.C.P. 59(e) motion to reconsider.  However, a “Rule 59(e) motion may not be used to relitigate old matters, or to raise arguments or present evidence that could have been raised prior to the entry of judgment.”  11 C. Wright & A. Miller, Federal Practice and Procedure § 2810.1 (3d ed. 2024)  Because plaintiff did not raise this argument in the trial court prior to judgment, it is not preserved for appeal.

Following the trial court’s ruling, plaintiff sought to amend her complaint to include an allegation that she held an account at TD Bank to support her contention that she shared a special relationship with the bank.   Vermont Rule of Civil Procedure 15(a) provides that a party may amend a pleading after entry of judgment “only by leave of court or by written consent of the adverse party.”  Additionally, for the court to grant leave to amend post-judgment, the plaintiff must first succeed in having the final judgment set aside under Rule 59(e), which did not occur here. See Stowe Aviation, LLC v. Agency of Com. & Cmty. Dev., 2024 VT 11, ¶¶ 18, 21( Even if a plaintiff never moved to amend before judgment, Rule 59(e) relief is available to amend pleadings but plaintiff must demonstrates one of the basic grounds for granting a Rule 59 motion.) In certain instances, denial of a Rule 15(a) motion “may be justified based upon a consideration” of several factors, including the futility of the amendment. Colby v. Umbrella, Inc., 2008 VT 20, ¶ 4, 184 Vt. 1, 955 A.2d 1082. We review a trial court’s denial of a plaintiff’s motion to file an amended complaint for abuse of discretion. N. Sec. Ins. Co. v. Mitec Elecs., Ltd., 2008 VT 96, ¶ 34, 184 Vt. 303, 965 A.2d 447. Plaintiff fails to show an abuse of discretion here.

Plaintiff’s amendment failed to establish that she shared a special relationship with the bank to oversee notarial services offered by any of its employees.  See Shulman v. Concord Gen. Mut. Ins. Co., 618 F. Supp. 3d 165, 175 (D. Vt. 2022) (holding that plaintiffs failed to sufficiently allege “a special relationship of trust” with insurer where insurer had “made no contact with plaintiffs”).  Therefore, because plaintiff’s proposed amended complaint, like her original complaint, cannot show that an exception to the economic-loss rule applies, it cannot withstand a motion to dismiss, and amendment would therefore be futile.  The trial court did not abuse its discretion in denying plaintiff’s post-judgment motion to amend her complaint.  

Affirmed.

____

SCOVT NOTE: Economic Loss "Rule," Public Duties and Notaries Public. This case has a special irony in that the trial court denied the Rule 59(e) motion on grounds that "plaintiff raised no issues of fact or law that the court had not already considered" and the Supreme Court affirmed on the grounds that "plaintiff did not raise [the correct argument] in the trial court prior to judgment." On the merits, the economic loss rule does not preclude recovery against notaries for breach of their pubic duties.

The Vermont Supreme Court has adopted the Restatement (Second) of Torts § 552 definition for claims of negligent misrepresentation. Glassford v. Dufresne & Assocs. P.C., 2015 VT 77. It is now beyond question that the economic loss "rule" does not preclude recovery under § 552.

In Glassford the Court observed that § 552(3) identifies the specific circumstances when liability for economic loss  may be imposed on defendants who have a duty to provide information for the benefit of the public.  Restatement § 552 cmt. k. This includes:

 For example, if a notary public negligently acknowledges a signature on a deed that turns out to be a forgery and a purchaser relies on the recorded deed in purchasing land, the notary is liable to the purchaser for any pecuniary losses as a result of the invalid deed. Id. illus. 16

2019 VT 71 at ¶ 16. See also Sutton v. Vermont Regional Center, 2019 VT 71 ¶ 31 n. 6 (noting the plethora of exceptions to the broad formulation of the economic-loss rule has induced the drafters of the current restatement to propose "a more limited principle: not that liability for economic loss is generally precluded, but that duties of care with respect to economic loss are recognized in specific circumstances.") (citing  Restatement (Third) of Torts: Liab. for Econ. Harm § 1 cmt. b (Tentative Draft No. 1, 2012)) 

SCOVT Affirms dismissal of one count of environmental contamination for failure to join a necessary party, but reverses dismissal of remaining counts and remands for further consideration of municipal immunity defense

 

Belter v. City of Burlington, 2025 VT 35  [filed June 27, 2025]

Cohen J. Plaintiffs John Belter, Joyce Belter, David Belter, and the Belter Family Partnership seek to hold defendant City of Burlington liable for soil and water contamination caused by runoff from Burlington International Airport, which abuts their property in South Burlington.  Plaintiffs appeal the civil division’s order dismissing their complaint for failure to join a necessary and indispensable party, and on the basis of municipal immunity.  Plaintiffs claim the trial court erred in its analysis of Vermont Rule of Civil Procedure 19 by ignoring Vermont’s common law lack of contribution among joint tortfeasors and not considering the specific claims brought in the case below.  Plaintiffs further argue the trial court erred in its analysis of the extent of municipal immunity by failing to acknowledge the property-maintenance functions at the center of plaintiff’s claims against defendant.  We affirm in part and reverse in part.

Count 1 of the complaint alleged negligence in allowing the Guard to use firefighting foams that contaminated plaintiffs’ property with PFAS. The remaining counts alleged  trespass in the form of PFAS entering plaintiffs’ property; private nuisance due to the infiltration of PFAS into the drinking water;  a de facto taking of the property by defendant through the contamination of the property by PFAS;  violation of the Vermont Groundwater Protection Act, 10 V.S.A. § 1410(a)(4); and  direct negligence by defendant for discharging polluted water onto plaintiff’s property.   

The trial court dismissed plaintiffs’ complaint for failure to join a party under Vermont Rule of Civil Procedure 12(b)(7). This Court has not stated the standard of review for dismissal under Rule 12(b)(7).  Because our rules are modeled on the Federal Rules of Civil Procedure, we look to federal case law for guidance on the applicable standard.  We adopt the federal abuse of discretion standard for a dismissal under Rule 12(b)(7) for failure to join a party.

Rule 19(a)(2) requires joinder of a person if the person claims an interest in the action and disposition in their absence "may (i) as a practical matter impair or impede the person's ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the person's claimed interest." Plaintiffs claimed in Count 1 that “on multiple occasions [the Guard] provided firefighting services, and practiced fighting fires, at [Burlington airport] and on its Base in a negligent manner, directly and proximately causing the PFAS contamination of Plaintiffs’ property.” 

We agree with the trial court that Count 1 is entirely based in the negligence of the unjoined third parties. The Guard and the United States clearly have an interest in Count 1 and a finding on this count by a trial court could lead to inconsistent determinations of fault for the United States, which is currently involved in similar litigation in another court.  The trial court properly concluded that the United States and the Guard were necessary parties to this claim and acted within its discretion in dismissing it under Rule 12(b)(7). The dismissal of Count 1 is affirmed.

However, the remaining counts are  all based on the spread of contaminated water from defendant’s property, not the Guard’s firefighting activities.  We conclude that the Guard and the United States were not necessary parties to Counts 2-5 and 7 of the complaint under either prong of Rule 19(a)(2) and their joinder was therefore not required.  The court abused its discretion is dismissing Counts 2-5 and 7. 

  

Because we conclude that the court improperly dismissed Counts 2-5 and 7 for nonjoinder, we must consider the court’s ruling that to the extent insurance is not available to cover plaintiffs’ claims, they are barred by municipal immunity for Counts 2-3, 5, and 7.The trial court dismissed plaintiffs’ complaint on this ground  under Rule 12(b)(1) for lack of subject-matter jurisdiction. We review this decision de novo, taking all facts pled in the complaint as true and resolving all doubts in favor of the nonmoving party.  Jordan v. State Agency of Transp., 166 Vt. 509, 511, 702 A.2d 58, 60 (1997) (applying de novo standard when reviewing dismissal for lack of subject matter jurisdiction).

 Here, the trial court focused on the Guard’s firefighting function and found that activity to be shielded by municipal immunity.    It is undisputed that firefighting has long been recognized as a governmental function.  However, a determination of immunity must be based on the purpose of the activity at the root of plaintiffs’ complaint.  Vt. Gas Sys. v. City of Burlington, 153 Vt. 210, 214, (1989).  In Counts 2-3, 5, and 7, plaintiffs are not seeking to hold defendant liable for its firefighting functions, but for alleged failures of maintenance and operation of the airport that caused polluted water to run onto their land.  These broader functions are arguably proprietary. But the record before us is insufficient to allow us to make such a determination in the first instance, however.  We therefore reverse and remand for the court to consider whether municipal immunity applies to the maintenance and operation activities alleged in the surviving counts of the complaint.

   .

The dismissal of Counts 2-5 and 7 is reversed and the matter is remanded for further proceedings consistent with this opinion.

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