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 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.

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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. Id; cf 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)) 

In Glassford the Court observed that § 552(3) identifies the specific circumstances when liability may be imposed on defendants that 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.