SCOVT affirms ruling that Vermont has personal jurisdiction over Meta for consumer protection claims brought by State .

State v. Meta Platforms, Inc., 2025 VT 51 [8/29/2025]

 CARROLL, J.   This interlocutory appeal requires us to evaluate the constitutionality of a Vermont court’s exercise of personal jurisdiction over nonresident defendants who allegedly violated the Vermont Consumer Protection Act (VCPA) through their design and operation of an online application.  We affirm. 

 

Broadly, the complaint alleges Meta intentionally designed Instagram to be addictive to teens, that Meta did so to increase advertisement revenue despite knowing the resulting negative effects on teens, and that Meta failed to take meaningful action to mitigate these harms while both actively minimizing and withholding its relevant internal research findings to maintain teens’ engagement with the application.  

Meta moved to dismiss the complaint for lack of personal jurisdiction under Vermont Rule of Civil Procedure 12(b)(2).  The court denied Meta’s motion on the ground that Vermont has specific jurisdiction over Meta for these claims. The court granted permission to appeal its ruling on personal jurisdiction, and we accepted the appeal of this issue.  See V.R.A.P. 5(b)(1), (6).  

 

On appeal, Meta maintains that Vermont lacks specific personal jurisdiction over Meta and that the State’s complaint must be dismissed.  Specifically, Meta argues that specific personal jurisdiction is lacking because Meta’s contacts with Vermont were not purposefully directed at Vermont, none of the misrepresentations were made in or aimed at Vermont, and that the State’s claims do not arise out of or relate to any of the alleged connections Meta has with Vermont.  

 

We first address whether, taking the facts in the State’s complaint as true and considering them in the light most favorable to the State, there is a basis to demonstrate that Meta has sufficient minimum contacts with Vermont.

Here, the State is not relying solely on Instagram’s accessibility in Vermont.  Rather, Meta has purposefully availed itself of the Vermont market, including studying Vermont teen users to increase engagement with the application and engaging with Vermont businesses to sell targeted advertising space to target Vermonters.  See Burger King Corp., 471 U.S. at 473 (“[A] forum legitimately may exercise personal jurisdiction over a nonresident who ‘purposefully directs’ [its] activities toward forum residents.”).

 

Having concluded that the complaint provides enough facts to demonstrate that Meta has sufficient minimum contacts with Vermont, we address whether the claims arise out of or relate to Meta’s connections to Vermont.

Here, the State’s claims are related to Meta’s Vermont contacts.  The State asserts that Meta has cultivated and purposefully availed itself of the Vermont market for social media and that the use of Meta’s product and subsequent misrepresentations about such use has caused injury to Vermonters.   Meta argues that the State’s claims are not related to its contacts with Vermont because the State is not claiming that viewing advertisements is causing Vermonters to be addicted to Instagram. However, the relatedness requirement does not demand such a strict causal showing. While there may not be a direct causal relationship between the advertisements and the State’s claim, the State is claiming that Meta designed Instagram in a way to increase Vermont user engagement.  Thus, there is a sufficient relationship between the State’s claims and Meta’s connections to Vermont

 

Having established that Meta has minimum contacts with Vermont and those contacts relate to this cause of action, “these contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with fair play and substantial justice.”  Atl. Richfield Co., 2016 VT 22, ¶ 27 Meta’s only argument that asserting jurisdiction over it in this case would be unreasonable is that it “would blur the distinction between general and specific jurisdiction, subjecting Meta to personal jurisdiction in every forum in the country.”   Surely, a company cannot avoid jurisdiction in one state just because it avails itself of another, or many others, in the same way.  The State has undoubtedly met its burden of demonstrating sufficient facts to support jurisdiction in this case.

 

In sum, the civil division did not err in concluding that the allegations in the State’s complaint support a prima facie case for specific jurisdiction over Meta in Vermont.  Accordingly, we affirm the court’s decision to deny Meta’s motion to dismiss for lack of personal jurisdiction.

 

Affirmed.  

SCOVT affirms Rule 12(b)(6)dismissal of fraud and negligent misrepresentation claims; as to fraud holding opinions and broken promises are not actionable and any misrepresentations of fact were not plead with the particularity required by Rule 9; as to negligent misrepresentation holding justifiable reliance was not adequately plead because no specific factual allegation supported the conclusory allegation that plaintiff took “reasonable steps to determine” the facts.

 Lynn v. Slang Worldwide, Inc. , 2025 VT 30 [June 13, 2025.]

EATON, J. Plaintiff Shayne Lynn appeals the trial court's dismissal of plaintiff's complaint for failure to state a claim. Plaintiff argues that his complaint, which alleges fraud and negligent misrepresentation by defendants, is sufficient to meet Vermont's pleading standards and that the trial court erred when it held otherwise. We affirm.

 

We will uphold a motion to dismiss for failure to state a claim only if it is beyond doubt that there exist no facts or circumstances that would entitle the plaintiff to relief.  However, the Court is not required to accept conclusory allegations or legal conclusions masquerading as factual conclusions.

 

Fraudulent-Inducement Claim

 

To maintain a claim for fraudulent inducement, the plaintiff must show "an intentional misrepresentation of existing fact, affecting the essence of the transaction," where "the misrepresentation was false when made and known to be false by the maker, was not open to the defrauded party's knowledge, and was relied on by the defrauded party to his damage." Statements of opinion cannot be fraud unless the misrepresentation of opinion is part of a scheme to defraud. Promises to act in the future cannot constitute the requisite misrepresentation of existing fact unless there is a present intention to act contrary to the promise.

 

Plaintiff alleges that Miller and Driessen misrepresented that Slang was "financially sound," had a "bright economic future," and that its finances were "in excellent shape"; promised Slang would invest $18 million in High Fidelity; and provided  documents to plaintiff that were "intentionally and materially misleading" and "did not reflect that the company was about to fail."

 

Miller and Driessen's opinions about Slang's financial outlook were not actionable misrepresentations of material fact sufficient to create a claim of fraudulent inducement.

 

Miller and Driessen's alleged promise to invest in High Fidelity cannot support a fraud claim, absent an express allegation of present intent to renegotiate on the promise. See V.R.C.P. 9(b) (requiring allegations of fraud to be stated with particularity)

 

The general assertion that that Plaintiff was provided with misleading data is not pled with particularity. Sutton v. Vt. Reg'l Ctr., 2019 VT 71A, ¶ 73, ("Rule 9(b) requires that plaintiffs identify the particular statements . . . that they claim were fraudulent.")

 

Plaintiff argues that  opinion and broken promises can be the basis of a fraud claim if part of a scheme to defraud, citing  Winey v. William E. Dailey, Inc.,  161 Vt. 129,  133,  and  Fayette v. Ford Motor Credit Co.,  129 Vt. 505, 510 (1971).

 

 In cases where an opinion or a promise was sufficient to support a fraud claim, there was also a material misrepresentation of existing facts or a present intent not to follow through on the promise. See, e.g., Harponola Co. v. Wilson,  96 Vt. 427, 433-34 (1923 (considering promise in combination with "the original fraud" of factually misrepresenting product's value); Proctor Trust Co. v. Upper Valley Press, Inc., 137 Vt. 346, 351,   (1979)(considering opinions "which [plaintiffs] knew were extremely likely to turn out to be false" combined with income projections based on highly unreliable data which "closely resemble misrepresentations of existing fact"); Fayette,129 Vt. at 510, (considering promise combined with steps taken by defendant indicating no intention of following through on promise). Without such allegations here, plaintiff fails to state a claim for a fraudulent scheme.

 

Plaintiff's complaint is insufficient as a matter of law to support a claim of a scheme to defraud. None of the statements alleged by plaintiff are fraudulent misrepresentations of material fact. They are puffery, trade talk, and an unspecified allegation of misleading data. Plaintiff cannot create a fraudulent scheme by combining an unsubstantiated promise with puffery and a general allegation of misleading financial data. Plaintiff has failed to allege fraudulent inducement.

 

Negligent-Misrepresentation Claim

 

Justifiable reliance is a key aspect of a claim of negligent misrepresentation, and any complaint must plead facts that support such reliance. In McGee v. Vermont Federal Bank, FSB, we held that the plaintiffs did not state a claim for negligent misrepresentation because they failed to adequately allege justifiable reliance. 169 Vt. 529, 531(1999) (mem.). Specifically, "[no]owhere in the [plaintiff's] pleadings do they indicate that they could not verify the information" provided to them. Id. Similarly, in Burgess v. Lamoille Hous. P'ship,  we held that the plaintiff failed to demonstrate justifiable reliance where the evidence showed that there was relevant information readily available that demonstrated the falsity of the information provided by the defendant. 2016 VT 31, ¶ 23.

 

Plaintiff argues that he has sufficiently pled justifiable reliance for the purposes of the notice pleading standards by alleging that "the financial data made available to him was intentionally materially misleading," that "he took reasonable steps to determine the financial status of [Slang]," and that had he "known the true financial status of [Slang], he would never have agreed to merge with it."  Plaintiff's allegations that the documents and information were "false," not "true," and "misleading," and that plaintiff acted "reasonably" to ascertain their veracity are mere restatements of the legal elements required for a claim of negligent misrepresentation. Without specific factual allegations to support these conclusory statements, they are insufficient to prevent dismissal of his claim.

 

Furthermore, justifiable reliance requires both that the plaintiff is unaware of the truth and that the truth is "not within the knowledge of" the plaintiff.  Burgess, 2016 VT 31, ¶ 22  We decline to infer the missing element—that he was unable to learn Slang's real financial situation—into plaintiff's complaint. Plaintiff therefore failed to state a claim for negligent misrepresentation.

Affirmed.

How cited

SCOVT NOTE: In the view of the drafters of the current Restatement, "justifiable" reliance is no longer an element of a claim of negligent misrepresentation. The Third Restatement replaces the requirement that the plaintiff's reliance be “justifiable” with statement that the conventional rules of comparative responsibility apply. See Reporter's Note, Restatement (Third) of Torts: Liability for Economic Harm § 5 (2020). 

As a matter of first impression SCOVT recognizes tort of intentional interference with expectation of inheritance, but a Divided Court holds the claims in this case of IIEI, constructive fraud and unjust enrichment involve trust administration within the exclusive jurisdiction of probate.

 Dewdney v. Duncan, 2025 VT 26 [5/23/2025]

COHEN, J.   Plaintiffs Berol and Cordelia Dewdney appeal the civil division’s decision granting summary judgment to defendant Ralph Duncan, IV on plaintiffs’ claims for intentional interference with expectation of inheritance (IIEI), breach of contract, promissory estoppel, unjust enrichment, and constructive fraud.  We affirm.

In October 2011, Anna created a revocable inter vivos trust to receive the royalty income from her books.  Anna designated plaintiffs and defendant as beneficiaries of the trust with 40% of the income assigned to each plaintiff and 20% assigned to defendant.  At the same time, defendant executed his last will and testament in which he designated plaintiffs as his sole heirs if Anna predeceased defendant. Thereafter, Anna amended the trust and changed the distribution of the trust income to 25% for each plaintiff and 50% to defendant.  Plaintiff’s complaint in the civil division sought the creation of a constructive trust entitling them to all distributions exceeding defendant’s original 20% share and restitution of any amounts previously distributed to defendant that exceeded 20%.

 

The trial court ruled that IIEI was a cognizable cause of action in Vermont but that plaintiffs were required to first seek a remedy in the probate division.  The court determined that plaintiffs failed to establish their remaining claims

 

 Intentional Interference with Expectation of Inheritance

 

The Third Restatement, states that a defendant is liable for IIEI when: (a) the plaintiff had a reasonable expectation of receiving an inheritance or gift;  (b) the defendant committed an intentional and independent legal wrong;  (c) the defendant’s purpose was to interfere with the plaintiff’s expectancy;  (d) the defendant’s conduct caused the expectancy to fail; and (e) the plaintiff suffered economic loss as a result. Restatement (Third) of Torts: Liab. for Econ. Harm § 19(1) (2020).  The Third Restatement, however, also provides that an IIEI claim “is not available to a plaintiff who had the right to seek a remedy for the same claim in a probate court,”  Id. § 19(2) (the probate exhaustion rule.)

 

While we have not previously recognized the tort of IIEI, we conclude that the Third Restatement definition of IIEI, with its probate exhaustion requirement, is the appropriate definition to adopt.

 

Plaintiffs argue that the Third Restatement and cases from other jurisdictions distinguish between wills and inter vivos trusts for purposes of the probate-exhaustion rule.

 

Under Vermont law, the probate division is vested with exclusive jurisdiction over claims brought by a trustee or beneficiary concerning trust administration.  14A V.S.A. § 203(a)(“ The Probate Division of the Superior Court has exclusive jurisdiction of proceedings in this State brought by a trustee or beneficiary concerning the administration of a trust”); 4 V.S.A. § 35 (“The Probate Division shall have jurisdiction of . . .(3) the administration of trusts pursuant to Title 14A”)

 

Other jurisdictions do not have statutory mandates vesting the probate division with exclusive jurisdiction over the administration of trusts as we do in Vermont. Accordingly, we hold that an IIEI claim is not available to a plaintiff who had the right to seek a remedy for the same claim in probate court.

 

Plaintiffs argue that they did not have the right to make their claim in the probate division because their claim does not concern the administration of the trust, but instead seeks a remedy for defendant’s undue influence, duress, and fraud in inducing Anna to amend the trust. In Collins v. Collins. 2017 VT 70, we held that the was the probate division was the proper forum for challenging the settlor’s capacity to make a trust Challenging the settlor’s ability to change the beneficiary necessarily implicates the administration of the trust because the trustee must know to whom to administer the trust property.  Collins, 2017 VT 70, ¶ 15. Similarly, plaintiffs challenge whether Anna was unduly or fraudulently influenced to change the trust distributions between beneficiaries involves the administration of the trust and therefore falls within the exclusive jurisdiction of the probate division.

 

Plaintiffs were barred from bringing their IIEI claim in the civil division because they did not first pursue it in the probate division.  We therefore affirm the court’s decision to grant summary judgment for defendant on this claim.

 

 Unjust Enrichment

 

We conclude that plaintiffs were required to bring their unjust enrichment claim in the probate division. 

 

To succeed on a claim for unjust enrichment, a plaintiff must prove three things: "(1) a benefit was conferred on defendant; (2) defendant accepted the benefit; and (3) defendant retained the benefit under such circumstances that it would be inequitable for defendant not to compensate plaintiff for its value." Beldock v. VWSD, LLC, 2023 VT 35, ¶ 68. A recipient of a donative transfer may be liable to a claimant for unjust enrichment if the recipient diverted the donative transfer by fraud, duress, or undue influence; this includes a transfer through an inter vivos trust. See Restatement (Third) of Restitution and Unjust Enrichment § 46 (2011)

Plaintiffs asserted their claim for unjust enrichment under the theory that defendant induced Anna to amend the trust and increase his share of trust distributions through fraud and undue influence, thus reducing their expected shares and making it inequitable for defendant not to compensate them.

 

Like plaintiffs’ IIEI claim, this claim challenges the administration of the trust because plaintiffs, the trust’s beneficiaries, seek to challenge the amended distribution of the trust property, and the distribution of the trust is a main function of trust administration.  Therefore, plaintiffs were required to bring their claim in the probate division.  14A V.S.A. § 203(a); Collins, 2017 VT 70, ¶ 15.  Our holding should not be interpreted to mean that claims of unjust enrichment relating to trusts will always be under probate jurisdiction.  Here, however, plaintiffs’ underlying allegations of fraud and undue influence over the amendment to the trust distributions fall within the probate’s exclusive jurisdiction over administration of trusts

 

 Constructive Fraud

 

Similarly. Plaintiffs’ constructive fraud claim implicates the administration of the trust, which the Legislature has placed in the exclusive jurisdiction of the probate division.  Our holding should not be interpreted to mean that claims of unjust enrichment relating to trusts will always be under probate jurisdiction.  Here, the underlying allegations of fraud and undue influence over the amendment to the trust distributions fall within the probate’s exclusive jurisdiction over administration of trusts.   

 

 Plaintiffs’ argument that they should be allowed to amend their complaint to plead actual fraud based on these same facts is moot because plaintiffs were required to seek a remedy in the probate division in the first instance for this type of challenge.   

 

Promissory Estoppel

 

  A plaintiff must show the following for a promissory estoppel claim: “(1) defendant made a promise to [the promisee] that defendant should have reasonably expected to induce action or forbearance; (2) [the promisee] relied on the promise to [the promisee’s] detriment; and (3) injustice can be avoided only by enforcement of the promise.”  Pettersen v. MonaghanSafar Ducham PLLC, 2021 VT 16, ¶ 11. Implicit to a promissory estoppel claim is a showing that the defendant breached a promise.  See Dillon v. Champion Jogbra, Inc., 175 Vt. 1, 9 (2002).

 

Here, a reasonable jury could conclude from the evidence that defendant made a promise to Anna to make plaintiffs his sole heirs. However, defendant did not break this promise because defendant has not positively and unequivocally revoked his promise, nor has he removed plaintiffs from his will.  Accordingly, plaintiffs cannot show detrimental reliance, because Anna was not harmed by any breach of the promise.  We therefore affirm the court’s decision to grant defendant summary judgment on this claim.

 

 

WAPLES, J., dissenting.   I agree with the majority that Vermont should recognize claims for intentional interference with an expectation of inheritance (IIEI) and adopt the definition of such claims from the Restatement (Third) of Torts: Liability for Economic Harm § 19 (2020).  I disagree, however, that defendant was entitled to summary judgment on this claim.  The undisputed facts do not establish that plaintiffs “had the right to seek a remedy for the same claim in a probate court.”  Id. § 19(2).  I would reverse the trial court’s decision on the IIEI claim and remand for additional proceedings.  I therefore respectfully dissent. 

 

 I do not find Collins persuasive on the question of whether plaintiffs’ claim here “implicates the administration of the trust.” The Restatement’s explicitly recognizes that a probate court “is unable to provide a remedy for wrongful conduct in relation to a nonprobate transfer, such as a transfer by inter vivos trust.”  Id. § 19 cmt. c.    In a similar vein, the UTC’s reference to the probate division’s “exclusive jurisdiction of proceedings . . . brought by a trustee or beneficiary concerning the administration of a trust” in 14A V.S.A. § 203(a) should not be read to conflict with the UTC’s express direction that “[a]n action against a beneficiary or other person for intentional interference with an inheritance or gift” is not a trust contest.  Id. § 604, official cmt. 

 

It is not clear from the undisputed facts that plaintiffs’ “challenge to the trust amendment implicates the administration of the trust,”  as opposed to falling into the category of “other proceedings involving a trust” for which the probate court “has concurrent jurisdiction with other courts of this State,” 14A V.S.A. § 203(b).  As plaintiffs explain, they are not seeking to hold a trustee liable for misconduct or mishandling of trust assets in their capacity as a trustee.

 

I believe we should draw a distinction between trusts and wills for purposes of determining the viability of an IIEI claim.  I would reverse the trial court’s summary judgment decision in defendant’s favor and I therefore respectfully dissent.  

How cited

SCOVT, distinguishing LeClair v. LeClair, affirms discretionary denial of motion to amend complaint made before the close of discovery.

 

PeakCM, LLC v. Mountainview Metal Systems, LLC, 2025 VT 50 [8/22/2025] (part one of two)

EATON, J.  In 2019, multiple siding panels fell off a newly constructed hotel in St. Albans, Vermont.  Plaintiff, PeakCM, LLC, the general contractor responsible for the hotel’s construction, sued the siding-panel installer, Mountainview Metal Systems, LLC..  Plaintiff amended its complaint to add a product-liability claim against the siding-panel manufacturer, ATAS International, Inc. On appeal, plaintiff argues that the court abused its discretion when it denied plaintiff’s further motion to amend the complaint. We affirm.

Under Vermont Rule of Civil Procedure 15(a), once a responsive pleading is served, “a party may amend the party’s pleading only by leave of court or by written consent of the adverse party; and leave to amend shall be freely given when justice so requires.”  We have stated that “trial courts are to be liberal in permitting amendments to the pleadings.”  Lillicrap v. Martin, 156 Vt. At 170 (citing V.R.C.P. 15(a)).

When a party moves to amend its pleading, the trial court has discretion to determine whether an amendment should be permitted.  Id.  On review, “[t]he issue is not whether we would have granted the motion to amend had we been similarly situated; nor is it whether the lower court could have granted the motion to amend in the proper exercise of its discretion.”  Gauthier v. Keurig Green Mountain, Inc., 2015 VT 108, ¶ 47 Instead, “[w]e will reverse the action of the trial court on such rulings only where there is an abuse of discretion.”  Lillicrap v. Martin, 156 Vt. at 170.

 An abuse of discretion exists where a court “failed to exercise its discretion, or . . . its discretion was exercised on reasons clearly untenable, or to an extent clearly unreasonable.”  In re Burke, 2019 VT 28, ¶ 46.   When applying its discretion, the court should consider the policies behind our liberal amendment standard:  “(1) to provide maximum opportunity for each claim to be decided on its merits rather than on a procedural technicality, (2) to give notice of the nature of the claim or defense, and (3) to enable a party to assert matters that were overlooked or unknown to him at an earlier stage in the proceedings.”     

We have held that a trial court may deny a motion to amend based on considerations of undue delay, bad faith, futility of amendment, and prejudice to the opposing party. Colby v. Umbrella, Inc. 2008 VT 20, ¶ 4; Perkins v. Windsor Hosp. Corp., 142 Vt. 305, 313 (citing Foman v. Davis, 371 U.S 178, 182 (1962)).  

However, “[w]hen there is no prejudice to the objecting party, and when the proposed amendment is not obviously frivolous nor made as a dilatory maneuver in bad faith, it is an abuse of discretion to deny the motion.”  LeClair v. LeClair, 2017 VT 34, ¶ 28; Bevins v. King, 143 Vt. 252, 254-55 (1983) (citing Foman, 371 U.S. at 182). 

 

We conclude the court acted within its discretion in denying plaintiff’s motion to amend based on undue delay and prejudice to ATAS. After ATAS moved for summary judgment arguing that the economic-loss rule barred the product liability claims plaintiff moved to amend its complaint to add over 100 new allegations and four new claims against ATAS: breach of contract, breach of warranty, indemnity, and negligence. At that time, the discovery schedule was due to close six days later.

The record supports the court’s conclusion that there was undue delay because the new claims were based on facts and theories of which plaintiff had been aware since it originally filed its complaint against ATAS. See Hickory v. Morlang, 2005 VT 73, ¶ 6, 178 Vt. 604, 878 A.2d 318 (mem.) (Holding undue delay existed when party had opportunity to bring forward claim or amend complaint at earlier time but elected not to.)

The court also reasonably concluded that “[t]he proposed amendment will inevitably result in prejudice” to ATAS.  This was so because amendment came at a time when discovery was to close in six days, and therefore, “[f]or all practical purposes, discovery was over.,” yet it was “difficult to imagine how the proposed amendment will not require additional discovery” when plaintiff “seeks to add dozens of paragraphs of additional facts and four additional claims.” The amendment would have required ATAS “to shift focus and litigate entirely different theories of contract, warranty, negligence, and indemnity” and would “almost certainly lead to yet another round of summary judgment motions.” 

 Plaintiff argues the new legal claims plaintiff sought to add were based on facts already in the case. See Lillicrap v. Martin, 156 Vt. at 171 (When analyzing potential prejudice, the court can consider whether a legal issue “has permeated th[e] case from the start” such that the opposing party has been put “on notice” of the issue in the proposed amendment); .”  Gauthier v. Keurig Green Mountain, Inc,, 2015 VT 108, ¶ 46 (explaining courts may consider whether party has already “marshaled its resources to respond to the allegations made in the existing complaint”) In this case, however, the court reasonably disagreed with plaintiff’s interpretation of the new claims. 

The court explained that the material legal issues within the new claims had not permeated the case from the start and instead would have required ATAS to shift focus and litigate entirely different theories of contract, warranty, negligence, and indemnity, and would require discovery.  See 6 Wright & Miller, Federal Practice & Procedure § 1487 (3d. ed. 2025) (“[I]f the amendment substantially changes the theory on which the case has been proceeding and is proposed late enough so that the opponent would be required to engage in significant new preparation, the court may deem it prejudicial.”) Thus, the court’s conclusion that plaintiff’s third amended complaint would result in prejudice to ATAS is supported by the record and is not made on clearly untenable grounds. 

 Plaintiff argues that the court erred in suggesting that post-summary-judgment amendments are not allowed, See LeClair v. LeClair, 2017 VT 34, ¶ 31 (“[T]he fact that the case had reached the summary judgment stage [is not] determinative.” ) But the trial court must assess the relevant factors as they apply to each particular case.    The timing of a motion to amend is certainly relevant to whether the opposing party will suffer prejudice.  See, e.g., Bevins, 143 Vt. at 256, 465 A.2d at 284 ([T]he practice of filing motions to amend pleadings on the day of trial is clearly to be avoided.  In many cases, the nonmoving party will be prejudiced by such action.”) In Gauthier, we affirmed a trial court’s decision to deny a motion to amend prior to trial—but following summary-judgment motions—because the trial court appropriately “balanced the policy objectives” outlined in Bevins with prejudice and undue delay. 2015 VT 108, ¶ 46

 In this case, the court appropriately assessed the situation.  It reasonably concluded that the inexplicably late stage that these claims were brought, combined with the prejudice that they would incur, justified denying plaintiff’s motion to amend.  Contrary to plaintiff’s arguments, the fact that a proposed amendment was filed before the discovery deadline does not automatically dictate that the amendment is not prejudicial,

 Finally, plaintiff contends that the court improperly asserted that plaintiff had to demonstrate good cause for its delay.  Plaintiff cites LeClair v. LeClair,, where this Court stated that absence of good cause for the delay was not a ground to deny a motion to amend. 2017 VT 34, ¶ 29.  We disagree with plaintiff’s characterization of the trial court’s decision.  We see no imposition of a good-cause burden on plaintiff in the court’s decision here. We have frequently stated that the court may consider undue delay when faced with a motion to amend. Thus, the court considered the appropriate factors in exercising its discretion to deny the motion to amend in this case.

Affirmed

How cited

SCOVT Note re: timeliness of amended pleadings.

 LeClair v. LeClair, reversed the denial of a motion to amend a complaint to add new liability theories made after both the close of discovery and summary judgment where the issues were already implicit in the case.

Stowe Aviation, LLC v. Agency of Commerce, 2024 VT 11, follows Foman v. Davis, 371 U.S. 178 (1962)  and confirms that entry of judgment is not to late for possible corrective amendment of a complaint. 

 

SCOVT applies economic loss rule to bar product liability claims, holding no "special relationship" existed between user and supplier and that alleged misrepresentations by supplier did not justify exception to the rule.

PeakCM, LLC v. Mountainview Metal Systems, LLC , 2025 VT 50 [8/22/2025] (part two of two)

EATON, J.  In 2019, multiple siding panels fell off a newly constructed hotel in St. Albans, Vermont.  Plaintiff, PeakCM, LLC, the general contractor responsible for the hotel’s construction, sued the siding-panel installer, Mountainview Metal Systems, LLC.  Plaintiff amended its complaint to add a product-liability claim against the siding-panel manufacturer, ATAS International, Inc.  Plaintiff appeals from the trial court’s decision to grant ATAS summary judgment.   Plaintiff argues that the trial court erred in granting summary judgment to ATAS on plaintiff’s product-liability claim because both the “other-property” and “special-relationship” exceptions to the economic-loss rule apply.  Plaintiff also argues that the court improperly granted summary judgment to ATAS on Mountainview’s implied-indemnity claim.   We affirm

Product-Liability Claim and the Economic-Loss Rule..

 

The trial court granted ATAS’s motion for summary judgment on plaintiff’s product-liability claim because it concluded that the economic-loss rule barred the  claim.  Plaintiff argues that the trial court erred in granting summary judgment to ATAS because both the “other-property” and “special-relationship” exceptions to the economic-loss rule apply. 

 

Plaintiff does not contest that the economic-loss rule applies generally.  The economic-loss rule generally “prohibits recovery in tort for purely economic losses.”  Veljovic v. TD Bank, N.A., 2025 VT 38, ¶ 11 The economic-loss rule functions to separate claims that should be brought under contract law from those that should be brought under tort law. “Economic loss is defined as ‘damages other than physical harm to persons or property.’ ”  Id. ¶ 10   In the construction context, “the remedy for purely economic losses resulting from the reduced value or costs of repairs of . . . construction defects  sound [s] in contract rather than tort” law.  LongTrail House Condo. Ass’n, 2012 VT 80, ¶ 11  

 

This Court recognizes two exceptions to the economic-loss rule: the “other property” exception and the “special-relationship” exception.  See Walsh v. Cluba, 2015 VT 2, ¶ 28, 198 Vt. 453, 117 A.3d 789 (recognizing other-property exception); Veljovic, 2025 VT 38, ¶ 12 (describing special-relationship exception) Plaintiff argues that one or both of the exceptions to the rule allow plaintiff to bring its product-liability claim against ATAS.  We disagree. Plaintiff failed to demonstrate that either exception to the economic-loss rule applies here; accordingly, the economic-loss rule bars plaintiff’s product liability claim.  Thus, the trial court appropriately granted ATAS’s motion for summary judgment. 

 

 

 Under the other-property exception, the economic-loss rule does not apply if there has been some “accompanying physical harm” beyond purely economic loss.  Walsh , 2015 VT 2, ¶ 28 “The physical harm may be to property rather than persons, but injury to the product or property that is the subject of a contract is generally considered a disappointed economic expectation for which relief lies in contract rather than tort law.”  Id.  In the trial court, plaintiff argued that the other-property exception to the economic loss rule applied because the hotel was damaged in addition to the splice plates, and plaintiff was required to pay for the damage.  On appeal, rather than relying on damage to the hotel as it did in the trial court, plaintiff now argues for the first time that the other-property exception applies because there was minimal damage to “abutting properties”— namely, the neighboring building’s roof. This argument was not preserved, and we decline to consider it. 

 

 Under the special-relationship exception to the economic-loss rule a plaintiff asserting a negligence claim may be able to recover for purely economic losses where there is a special relationship between the plaintiff and the defendant.  The exception  typically involves  the defendant has assumed the responsibility not to violate a professional duty owed to the plaintiff.”  Facts other than a professional relationship  may support the establishment of a special relationship  Veljovic, 2025 VT 38, ¶ 14; Sutton v. Vt. Reg’l Ctr., 2019 VT 71A, ¶ 33, 212 Vt. 612, 238 A.3d 608).   Sutton is the sole case where this Court has held that a special relationship existed sufficient for the exception to apply.  In this case, unlike in Sutton, there is no evidence that plaintiff and ATAS had a “close relationship” where “exceptional oversight and management” was promised or performed.  Id. ¶ 33.  ATAS neither “personally solicited” the work, nor did it enter into an ongoing “individualized relationship[]” with plaintiff See  EBWS,LLC v. Britly Corp, 2007 VT 37, ¶ 32 (holding no special relationship existed even when defendant designed and built creamery for plaintiff because plaintiff “did not rely on the defendant to provide it with a professional service, and, consequently paid for the services of a contractor not a professional architect”); see also Restatement (Third) of Torts: Liab. for Econ. Harm § 4 (2020) (describing special-relationship exception justified by heightened standard of care and describing construction contractors and tradesmen as nonprofessionals).   

 

We are unpersuaded by plaintiff’s argument that the relationship between itself and ATAS rose to the level of a special relationship for the purpose of this exception The purchase of the panels by plaintiff’s subcontractor, plaintiff’s brief in-person encounter and emails with ATAS representatives, and plaintiff’s reliance on web-based information produced by ATAS, did not create a special relationship between plaintiff and ATAS sufficient for the purpose of this exception to the economic-loss rule. 

 

 Plaintiff finally argues that ATAS owed plaintiff a duty to provide accurate information that plaintiff was intended to rely on, and that this intended reliance is sufficient to support the existence of a special relationship.  See Limoge v.People’s Tr. Co., 168 Vt. 265, 268-69, 719 A.2d 888, 890 (1998) (outlining requirements for negligent-misrepresentation[1]claim). 

Essentially, plaintiff attempts to use the duty outlined in negligent-misrepresentation claims to establish a special relationship between ATAS and plaintiff.  This interpretation would drastically expand the special-relationship exception to the point of swallowing the economic-loss rule.  It ignores the typical determining factor that there be a professional service provided in the relevant interaction between the parties—with a corresponding heightened standard of care

 

Implied Indemnity Claim

Finally, plaintiff argues that the trial court erred when it granted summary judgment to ATAS on Mountainview’s implied indemnity claim because equity requires implied indemnity in this case.  ATAS argues that plaintiff lacks standing to bring this claim on appeal.  We agree. “The plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties. Plaintiff does not explain how plaintiff—not Mountainview—has the right to appeal the trial court’s summary-judgment decision on Mountainview’s implied-indemnity claim.  On appeal, plaintiff does not contest the court’s ruling that nothing in the contract allows plaintiff to assume Mountainview’s claims, and plaintiff does not identify any other legal basis for it to do so.  Because plaintiff has not shown that it has the right to assert this argument on behalf of Mountainview, we decline to consider whether the trial court appropriately granted summary judgment on Mountainview’s implied-indemnity claim.  Ladd v. Valerio, 2005 VT 81, ¶ 3 (mem.) (holding “courts have no jurisdiction to grant the relief sought” when “the plaintiff lacks standing”). 

Affirmed.

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[1] SCOVT NOTE: Limoge  adopts Section 552(1) of the Restatement (Second) of Torts (1977), which provides:

• One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

Section 5 of the Restatement (Third) of Torts: Liability for Economic Harm is "largely identical" to Restatement Second Torts § 552; but there are three substantive changes. First, the requirement that the defendant's advice concern a “business transaction” has been eliminated. . Second, the requirement that the plaintiff's reliance be “justifiable” has been replaced with a statement that conventional rules of comparative responsibility are applicable. Third, liability under this Section has been eliminated when the plaintiff's representation comes in the performance or negotiation of a contract with the defendant. See Reporter's Notes, Restatement (Third) of Torts: Liability for Economic Harm  § 5 (2020).    Section 5, like Like § 552 (1), specifically refers to "pecuniary loss" :

• Restatement (Third) of Torts: Liability for Economic Harm  § 5:
• 
  
• (1) An actor who, in the course of his or her business, profession, or employment, or in any transaction in which the actor has a pecuniary interest, supplies false information for the guidance of others is subject to liability for pecuniary loss caused to them by their reliance upon the information, if the actor fails to use reasonable care in obtaining or communicating it.
• (2) Except as stated in Subsection (3), the liability stated in Subsection (1) is limited to loss suffered:
  • (a) by the person or one of a limited group of persons for whose guidance the actor intends to supply the information, or for whose guidance the actor knows the recipient intends to supply it; and
  • (b) through reliance upon the information in a transaction that the actor intends to influence, or that the actor knows the recipient intends to influence, or in a substantially similar transaction.
• (3) The liability of one who is under a public duty to supply the information extends to loss suffered by any of the class of persons for whose benefit the duty is created, in any of the transactions in which it is intended to protect them.
• (4) A plaintiff's recovery under this Section is subject to the same principles of comparative responsibility that apply to other claims of negligence.
• (5) This Section does not recognize liability for negligent misrepresentations made in the course of negotiating or performing a contract between the parties.

On their face, both Restatements allow recovery against professionals and non-professionals for economic loss due to negligent misrepresentation. Thus in Glassford v. Dufresne & Assocs. P.C., 2015 VT 77 the Court found it sufficient to analyze an economic loss claim under section 552, which is a self-contained rule.  The  Court has further  explained that the drafters of the current Restatement reject  "a broad rule precluding recovery for economic loss."   Sutton v. Vermont Regional Center, 2019 VT 71A ¶ 31 n. 7 (noting the "plethora of exceptions to the broad formulation of the economic-loss rule," has induced the drafters of the current restatement to articulate "'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: Liability for Economic Harm  § 1 cut. b (2020)  In other words, recovery in tort for economic loss is not exceptional; there is no geneeral rule against it, 

Given the third Restatement's approch, the text of  section 552 and the specificerecognition in I that  Section 552  is among the" host of exceptions" to the tradiional  ecoonomic loss rule, Sutton, 2019 VT 71A ¶ 31(citing  Limoge),   it is difficult to understand the PeakCM, Court’s concern that section 552 might “swallow” the economic loss rule.  

The simple truth is that section 552 states a black-letter rule imposing liability for economic loss due to  negligent misrepresentation. As stated in Sutton, 2019 VT 7 ¶ 36,(amended and superceded by 2019 VT 71A)  "The economic-loss rule is not an impediment to this claim."

Divided Court affirms disqualification of provider from food care program, rejecting due process argument that agency failed to follow its own rules and improperly considered post-hearing documentation

 In re Butterfly Kisses Child Care Center, Inc. , 2025 VT 46 [8/14/2025]

CARROLL, J.   Childcare provider Butterfly Kisses Child Care Center, Inc. and its owner Cindy Boyce1 appeal a decision of the Agency of Education (AOE) to terminate and disqualify provider from participating in the Federal Child and Adult Care Food Program (CACFP) based on provider’s failure to correct noncompliance with program requirements.  Provider argues that the recurring serious deficiencies found by AOE were de minimis and did not require termination.  Provider also argues that the AOE hearing officer committed reversible error by allowing the parties to submit post-hearing documentation.  We hold that hearing officer applied the appropriate standard in terminating and disqualifying provider from the program.  As to the post-hearing submissions, we conclude that provider did not properly preserve this argument for appeal and, in any event, has failed to demonstrate reversible error.  We therefore affirm.

“Generally, administrative agencies must follow their own regulations until they rescind or amend them.”  In re Champlain Parkway SW Discharge Permit, 2021 VT 34, ¶ 12 (collecting cases).  The U.S. Supreme Court adopted an exception in American Farm Lines v. Black Ball Freight Serv., 397 U.S. 532, 538-39 (1970), which allows an agency to waive a procedural rule “adopted for the orderly transaction of business” if the waiver does not result in “substantial prejudice.”  This Court adopted American Farm Lines as a “sound principle of state administrative law.”  Champlain Parkway, 2021 VT 34, ¶ 16.

 

“To invoke the exception, the agency action must first and foremost be consistent with governing statutes. Second, the rule at issue must be a procedural rule adopted for the orderly transaction of business to aid the agency in exercising its discretion, not one intended to confer important procedural benefits upon individuals. Third, the agency action must not substantially prejudice a complaining party. Fourth, the agency action cannot constitute a failure to exercise independent discretion mandated by regulation. Finally, the agency must apply the rule consistently, not arbitrarily, unreasonably, or discriminatorily.” Champlain Parkway, 2021 VT 34, ¶ 17. (citations omitted)

 

The hearing officer’s action to allow post-hearing submissions by both parties meets this test. The limit on post-hearing memoranda is a “procedural rule” aiding the agency in exercising its discretion and is not intended to confer “important procedural benefits upon individuals.” It allows the review process to conclude in an efficient manner.

 

 The dissent claims that the rule against post-hearing submissions is meant to ensure that centers have a meaningful opportunity to respond to AOE materials.  But the allowance of post-hearing submissions had no impact on provider’s ability to respond. The hearing officer here allowed post-hearing submissions by both parties and provider filed its own post-hearing memoranda and also responded to AOE’s filing.

 

The  hearing officer allowed post-hearing submissions for a valid procedural reason and with fairness to both sides.  Allowing post-hearing submissions in this instance was not arbitrary or discriminatory and did not prejudice provider.  The hearing officer’s decision thus fell within the American Farm Lines exception.  

 

Affirmed.

 

 COHEN, J., joined by Chief Justice Reiber, dissenting.   The Vermont Agency of Education (AOE) terminated and disqualified petitioners Butterfly Kisses Child Care Center, Inc., and its owner, Cindy Boyce, from participation in the federal Child and Adult Care Food Program (CACFP) based on a hearing officer’s finding that, although there was no evidence of intentional dishonesty or fraud, petitioners nonetheless failed to fully and permanently correct certain “serious deficiencies” by stringently satisfying each of the procedural commitments in their corrective-action plan.  Ironically, however, AOE failed to adhere to its own administrative-review procedures in reaching this decision because the hearing officer summarily waived a rule barring post-hearing submissions.

 

 The majority concludes that petitioners did not preserve their challenge to this ruling, but nonetheless proceeds to analyze the issue, reasoning—in what I view as dicta—that the agency had discretion to waive this rule under the exception first articulated by the U.S. Supreme Court and adopted by this Court in In re Champlain Parkway SW Discharge Permit, 2021 VT 34.

 

I would instead conclude that petitioners’ argument is preserved, and that the Champlain Parkway exception does not apply because AOE’s bar on post-hearing submissions confers an important procedural benefit on those facing termination and disqualification from CACFP participation: it secures the fundamental requirement of due process, which is the right to be heard at a meaningful time and in a meaningful manner.  I conclude that the hearing officer lacked discretion to waive the rule and would reverse and remand for a fresh hearing. I therefore respectfully dissent.

 

  How cited

SCOVT affirms denial of plaintiff’s motion for new trial in medical malpractice case, holding the court acted within its discretion in ruling the verdict was not against the weight of the evidence.

 

Watrous v. Porter Medical Center, 2025 VT 47 

COHEN, J.   Plaintiff Arthur G. Watrous, the administrator of the Estate of Arthur H. Watrous, appeals the denial of his motion for a new trial after a jury found for defendant Porter Medical Center on plaintiff’s claims of negligence and wrongful death by special verdict verdict form that asked, “Did [plaintiff] prove the standard of care?”  Plaintiff argues the trial court abused its discretion in denying him a new trial because the jury’s conclusion that plaintiff failed to prove the standard of care was against the weight of the evidence.  We affirm.

The sole issue in this case is whether the trial court abused its discretion in denying plaintiff’s motion for a new trial.

In denying plaintiff’s motion the court reasoned that the jury heard conflicting evidence regarding the components of a standard of care and there was no undisputed evidence regarding the specific standard of care applicable to decedent’s circumstances.

A trial court may only exercise its discretion to set aside the verdict if “the verdict is shown to be clearly wrong and unjust because the jury disregarded the reasonable and substantial evidence, or found against it, because of passion, prejudice, or some misconception of the matter.”  Pirdair v. Med. Ctr. Hosp. of Vt., 173 Vt. 411, 416, 2002) We give the trial court’s “all presumptive support similar to that owed the jury verdict.”  Id. We will hold a trial court abused its discretion only when “such discretion was exercised on grounds or for reasons clearly untenable or to an extent clearly unreasonable.”  Weeks v. Burnor, 132 Vt. 603, 606 (1974).  

 

The parties presented conflicting evidence as to the proper standard of care. We agree with the trial court that the evidence of the applicable standard of care was not so clear that the jury erred in concluding that plaintiff had failed to establish that element.  The court acted within its discretion in denying a new trial given the state of the record. 

 

Affirmed.

How cited

____

SCOVT NOTE. Cases reversing the denial of a motion for new trial based on the weight of the evidence of liability.

No Vermont medical malpractice case reverses the denial of plaintiff’s motion for new trial based on the weight of the evidence. The  Court in both  Chater v. Central Vermont Hospital, 155 Vt. 230 (1990) and Pirdair v. Medical Center. Hospital, 173 Vt 411 (2002) affirmed the denial of a plaintiff’s motion. In Lockwood v. Lord, 163 Vt. 210, (1994) the Court reversed the grant of plaintiff’s motion.

The standard of review from denial of the motion is strict. In substance, the reviewing court must affirm unless the moving party shows it is clearly entitled to judgment as a matter of law. Otherwise, there is a presumption in favor of the jury verdict. It has been decades since the Court in any type of case has affirmed the grant of a weight-of-the-evidence motion to a party with the burden of proof. Weeks v. Burnor, 132 Vt. 603, 609 (1974); Grow v. Wolcott, 123 Vt. 490 (1963)(divided court).[i] Apparently the only Vermont cases of any type that proport to reverse the denial of a plaintiff’s motion, as requested in Watrous v. Porter Medical Center, are AI hallucinations.

An important caveat is that the trial court must exercise discretion. It can be reversible error to deny a plaintiff’s motion for new trial “as a matter of law” where the motion calls for the exercise of discretion. Russell v. Pilger, 113 Vt. 537, 543–44 (1944) (“We have repeatedly held that when the trial court is properly called upon to exercise its discretion it must do so and to withhold it is error . . . It is error to rule, as the trial court did in this instance, as a matter of law upon a question which requires discretionary action.”); accord, Krupp v. State Highway Bd., 125 Vt. 25, 29 (1965)

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·         [i]  The Court has affirmed the grant of new trial to a plaintiff based on the insufficiency of evidence of a defense.  Blondin v. Milton Town School District, 2021 VT 2, ¶ 31 (affirming grant of  new trial  to plaintiff because it was error to instruct on comparative negligence.); McKenna v. May, 134 Vt. 145 (1976) (affirming grant of  new trial to plaintiff where by defendant’s own testimony he used more than necessary force in ejecting the plaintiff from his home).