Divided Court upholds charter amendment allowing noncitizens to vote in the City of Burlington’s school board and school budget elections

 

Vermont Constitution. Noncitizen Voting 

Morin  v. City of Burlington , 2026 VT 17 [5/15/2026]

WAPLES, J.   In this appeal, we consider whether a Burlington charter amendment allowing noncitizens to vote in the City of Burlington’s school board and school budget elections violates the voter-eligibility requirements set forth in Chapter II, § 42 of the Vermont Constitution.  Plaintiffs sought declaratory and injunctive relief to this effect below and challenge the trial court’s dismissal of their complaint for failure to state a claim upon which relief can be granted.  We extend our discussion in Ferry v. City of Montpelier, 2023 VT 4, 217 Vt. 450, 296 A.3d 749, to clarify the distinction between local and statewide elections.  We conclude that plaintiffs’ complaint failed to demonstrate that school elections are statewide elections that implicate § 42.  See Ferry, 2023 VT 4, ¶ 1 (explaining § 42 “does not apply to local elections”).  We affirm the trial court’s dismissal.  

Chapter II, § 42 of the Vermont Constitution.  provides: Every person of the full age of eighteen years who is a citizen of the United States, having resided in this State for the period established by the General Assembly and who is of a quiet and peaceable behavior, and will take the following oath or affirmation, shall be entitled to all the privileges of a voter of this state.    In Ferry, we held that § 42 applies to statewide elections but does not apply to municipal elections.  2023 VT 4, ¶¶ 9, 36.

We distinguish local and statewide elections as follows: when the question voted on has been (1) delegated to the locality, and (2) such delegation is lawful, the election is properly a local election.  On the other hand, when the question either  (1) has not been delegated or (2) cannot lawfully be delegated to local governments, the election is properly a statewide election.   Plaintiffs argue that although Burlington’s school board and school budget elections may appear to be local elections, under Vermont’s current school-funding mechanisms, they are properly categorized as statewide elections subject to § 42

We reject plaintiffs’ arguments.  While we are “particularly wary of dismissing novel claims,” like the one before us, on a motion to dismiss for failure to state a claim because “[t]he legal theory of a case should be explored in the light of facts as developed by the evidence,” factual development of the complaint’s legal claims would not change our conclusion here.  Montague, 2019 VT 16, ¶ 11 (quotation omitted).  Given plaintiffs’ complaint did not present a sufficient basis to allow this Court to evaluate whether statewide school-funding mechanisms make the local-voting provisions of Title 16 an unconstitutional delegation of authority, it does not satisfy the rigorous standard necessary  for us to nullify an act of the Legislature.

ZONAY, Supr. J., Specially Assigned, concurring and dissenting.   The majority concludes that plaintiffs failed to demonstrate that school-board and school-budget 19 elections are statewide elections subject to the voter-eligibility requirements of Chapter II, § 42 of the Vermont Constitution.  I concur in part because I agree that a vote to elect members of the Burlington School District’s Board of School Commissioners is, as a matter of law, a local election.  Plaintiffs’ argument that the Burlington City Charter amendment violates § 42 as applied to votes to ratify the District’s education budget, however, demands an answer to the question left open in Ferry v. City of Montpelier—how do we distinguish between local and statewide issues where a vote is “municipal in name” but allegedly statewide in character?  2023 VT 4, ¶ 50, 217 Vt. 450, 296 A.3d 749.  In my view, the text of our state Constitution supplies a complete answer to that question: § 42 provides that its voter-qualification requirements apply to votes “touching any matter that concerns the State of Vermont.”  Vt. Const. ch. II, § 42.  It is undisputed that under Vermont’s current education-funding structure, a vote on the District’s annual education budget has statewide effects.  That being the case, I would reverse the trial court’s dismissal of plaintiffs’ claim that the Burlington City Charter amendment violates § 42 as applied to the District’s education-budget vote. 

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). 

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 definition of Restatement (Second) of Torts § 552 for claims of negligent misrepresentation. Glassford v. Dufresne & Assocs. P.C., 2015 VT 77. It should now be beyond question that the economic loss "rule" does not preclude recovery under § 552. Id,; Sutton v. Vermont Regional Center, 2019 VT 71 ¶ 36 (amended and superceded by 2019 VT 71A) ("The economic-loss rule is not an impediment to this claim, and the Restatement (Second) provision describing the tort applies, by its own terms, to "pecuniary loss""); But see PeakCM, LLC v. Mountainview Metal Systems, LLC , 2025 VT 50 (to use the duty outlined in negligent-misrepresentation claims to establish a "special- relationship" exception would drastically expand the exception to the point of swallowing the economic-loss rule.)

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 (amended and superceded by 2019 VT 71A) (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)) 

As now set forth in Restatement (Third) of Torts: Liability for Economic Harm  § 5(3) (2020) the liability for pecuniary loss due to negligent misrepresentation by 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."

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

Vitalev. Bellows Falls Union High School, 2023 VT 15 

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

 

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

 

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

 

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

 

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

 

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

 

Affirmed.

How cited

SCOVT affirms, under Rule 12(b)(6), order dismissing complaint on motion made under 12(b)(3) based on violation of forum selection clause where plaintiff did not raise any issue as to the reasonableness of the forum selection clause or convenience of the agreed forum; holding that defendant’s alleged anticipatory repudiation of its contractual obligations did not discharge plaintiff’s obligation to comply with forum-selection clause..

Margolis v. Daily Direct LLC, 2023 VT 20


EATON, J. In this contract dispute, plaintiff Gary Margolis appeals the trial court’s grant of defendant Daily Direct LLC’s motion to dismiss plaintiff’s complaint. We affirm.

The complaint alleged breach of contract, violation of the Vermont Consumer Protection Act, and unjust enrichment. Defendant moved to dismiss pursuant to Vermont Rule of Civil Procedure 12(b)(3), arguing that the forum-selection clauses in the contracts were valid and required the complaint should be dismissed for plaintiff to refile in an appropriate court in Milwaukee. The trial court granted defendant’s motion.

On appeal, plaintiff argues that dismissal was improper because defendant’s anticipatory repudiation of its contractual obligations discharged plaintiff of performing any obligation to comply with the forum-selection clauses. Defendant argues that a forum-selection clause survives anticipatory repudiation of a contract unless the repudiation is directed at the forum-selection clause itself.

Venue and forum selection are separate legal questions. The proper mechanism to challenge the legal effect of a forum-selection clause is through a Rule 12(b)(6) motion to dismiss for failure to state a claim, not a challenge to venue under Rule 12(b)(3), and we will review under that standard. The complaint did not include copies of the contracts or mention the forum-selection clauses; however, we may properly consider the contracts themselves, even though they were outside plaintiff’s complaint, because “when the complaint relies upon a document . . . such a document merges into the pleadings and the court may properly consider it under a Rule 12(b)(6) motion to dismiss.” Kaplan v. Morgan Stanley & Co, 2009 VT 78, ¶ 10 n.4, 186 Vt. 605, 987 A.2d 258 (mem.).

Plaintiff’s argument is narrow and accordingly so is the scope of the issue presented to this Court. We are not presented with the issue of whether the forum-selection clause is unreasonable and should not be enforced. Nor are we presented with the doctrine of forum non conveniens as a basis for dismissal. This case is about the construction of a clause in a contract. Accordingly, we do not address the procedure or legal standards for forum non conveniens and unreasonableness challenges. We are exclusively presented with the narrow question of whether anticipatory repudiation of a contract discharges the nonbreaching party’s duty to comply with the contract’s forum-selection clause.

Based on the purpose of forum-selection clauses, our respect for freedom of contract, and the persuasive precedent available on this topic, we conclude that a forum-selection clause survives repudiation of a contract unless the repudiation is directed at the forum-selection clause itself, which is not the case here. For these reasons, we conclude that dismissal was appropriate for failure to state a claim under Vermont Rule of Civil Procedure 12(b)(6) and affirm on that basis.

Affirmed.

COHEN, J., concurring. I agree with the majority on the preservation issue, but I am troubled by the trial court’s one-line order dismissing the case without any review of the fundamental fairness of the forum-selection clause. Vermont law is clear: although they are prima facie enforceable, forum-selection clauses are not absolute. Enforcement of a forum selection clause is not automatic, and courts may disregard such clauses. Under this precedent, I view Vermont courts as needing to engage in some level of assessment of fundamental and procedural fairness when requiring Vermonters to litigate claims in a location at a significant expense and inconvenience to them. Although the majority is correct that the parties did not raise the question of the fairness of enforcement, it should be noted that courts in Vermont must apply appropriate equitable principles when mandated.

How cited

SCOVT Affirms Rule 12 (b)((6) dismissal of wrongful death action against landlord, holding a landlord not in possession of defective property and with no “legal relationship” to injured person invited by tenant, has no liability for injuries regardless of foreseeability of harm

Fleurrey v. Department of Aging and Independent Living, 2023 VT 11 (filed 2/24/2023)

EATON, J. Plaintiff appeals from the civil division’s dismissal of her negligence claim against defendant landlord which alleged that landlord was responsible for the drowning death of a fifty-four-year-old man with developmental disabilities on the property that landlord leased to decedent’s caretakers.  Count III of the complaint alleged that landlord failed to fence the pond, thereby negligently failing to keep the property free of unreasonably dangerous conditions which it knew to exist. Landlord filed a Rule 12(b)(6) motion to dismiss Count III, arguing that it owed decedent no duty to fence the pond at the  property. The question on appeal is whether the civil division properly dismissed plaintiff’s claim. We conclude that it did and therefore affirm.

The purpose of a dismissal motion is to test the law of the claim, not the facts which support it. “[W]hether there is a cognizable legal duty that supports a particular tort action depends on a variety of public policy considerations and relevant factors.” Deveneau v. Wielt, 2016 VT 21, ¶ 8. The court considers “the relationship of the parties, the nature of the risk, . . . the public interest at stake, and the foreseeability of the harm.” Id. The existence of a duty is” primarily a question of law” and “[a]bsent a duty of care, an action for negligence fails.” Id.

More than a century ago we held that a suit could not be sustained against a landlord by a tenant’s invitee, explaining that “[l]iability for an injury due to defective premises ordinarily depends upon power to prevent the injury by making repairs, and therefor rests primarily upon him who has control and possession of the premises.” Beaulac v. Robie, 92 Vt. 27, 32 108 A. 88, 90 (1917).   This decision applies to this case. Here, plaintiff must seek redress from those who invited decedent to the property because the property was in their possession and under their control. Vermont law has recognized this rule for more than a century, and we find no reason to disturb this longstanding precedent now.

Plaintiff argues on appeal landlord owed decedent a duty to protect, relying mainly on §§ 343 and 343A of the Restatement (Second) of Torts. Sections 343 and 343A of the Restatement (Second) of Torts, covering duties that land possessors owe to their invitees. do not apply here because plaintiff did not allege that landlord was the “possessor” of the Elmore Road property. “Possessor” is  defined in Restatement (Second) of Torts § 328E as, ordinarily, “a person who is in occupation of the land with intent to control it.”

We reject Plaintiff’s further argument that a duty arises from foreseeability of harm and that this is jury issue.  Alleging foreseeable harm cannot sustain a negligence action where no legal relationship is alleged to have existed between parties. While Vermont courts consider foreseeability in determining whether one party owed a duty to another party in a negligence suit,  “[f]oreseeability of injury, in and of itself, does not give rise to a duty.” ¶ 8,2016 VT 21,¶ 8, ¶ 18.   Instead, a legal relationship must be alleged between parties before a court may reach the question of duty, See Haupt v. Triggs, 2022 VT 61, ¶ 12, (holding that no indemnification duty can arise where no legal relationship is alleged to have existed between parties).  Courts reach the duty question, where they may properly consider foreseeability, only where a legal relationship linking one party to the other is alleged because legal duties are dependent upon and coextensive with legal relationships. Haupt, 2022 VT 61, ¶ 12; Deveneau, 2016 VT 21, ¶ 18

Lastly, plaintiff argues that the civil division erred in drawing three inferences favorable to landlord: “[f]irst, the court made an inference that the landlord would not have reason to expect that Scott Fleurrey would nevertheless suffer physical harm from the pond because he lived with a caretaker at the property”; second, the civil division inferred “that the care provider would have Scott Fleurrey under her immediate supervision at all times”; and third, the civil division inferred “that the pond is a ‘natural’ pond.”  This Court “review[s] the trial court’s disposition of a motion to dismiss de novo, and may affirm on any appropriate ground.” Bock v. Gold, 2008 VT 81, ¶ 4, 184 Vt. 575, 959 A.2d 990 (mem.).The inferences were harmless because plaintiff’s claim would not survive a dismissal motion in their absence.

Plaintiff’s claims cannot survive a dismissal motion, because (1) our precedents require an invitee to seek redress for injuries sustained on negligently maintained property from the land possessor who invited them to the defective property, rather than from the absentee landlord; (2) §§ 343 and 343A are inapplicable because plaintiff did not allege that landlord was the possessor of the Elmore Road property; and (3) no duty can arise where, as here, no legal relationship is alleged to have linked the parties.

Affirmed.

How cited

SCOVT NOTE: The rule of Beaulac v. Robie is codified in the First and Second Restatements as §354. This section and its exceptions in §§ 355 to 362  have been replaced by the  Restatement (Third) of Torts: Phys. & Emot. Harm  §§ 7 & 53 (2012), the latter of which is  titled “Duty of Lessors.”

In the view of the Third Restatement, “foreseeability” is an element in the determination of negligence but not  the determination of duty. Restatement (Third) of Torts: Phys. & Emot. Harm §7, comment j (2010) See Kuligoski v. Rapoza, 2018 VT 14 (Reiber CJ, dissenting)

 

Legal malpractice. Successor attorney who committed alleged errors in resolving case not liable to predecessor attorney for indemnity or contribution

 

Haupt v. Triggs , 2022 VT 61 [filed December 16, 2022]

REIBER, C.J. This appeal stems from third-party claims in a legal-malpractice action. Plaintiffs filed suit against defendant, attorney Daniel S. Triggs, who represented plaintiffs in a property dispute for allowing 12 V.S.A. § 501’s statute of limitations for recovery of lands to run without filing an ejectment suit against neighbors. Triggs filed a third-party complaint for contribution and indemnification against the attorneys who succeeded Triggs as counsel to plaintiffs in the matter. The third-party complaint for indemnity and contribution, alleges that the underlying adverse-possession suit against plaintiffs was meritless and that third-party defendants should have obtained a merits judgment instead of settling the dispute. Third-party defendants filed a motion to dismiss Triggs’s complaint, and the civil division granted their motion. Triggs appeals this dismissal and urges this Court to overturn its longstanding precedent regarding contribution and indemnity. We decline to do so and affirm the civil division’s dismissal

In granting Third-party defendants filed a Vermont Rule of Civil Procedure (12)(b)(6) motion to dismiss the civil division concluded that Triggs had failed to allege any relationship between himself and third-party defendants that might give rise to an implied right of indemnity, and that his claim “is at best a claim for contribution among joint tortfeasors, which Vermont law does not recognize.”

“[A]lthough we are not ‘slavish adherents’ to [the doctrine of stare decisis], neither do we lightly overturn recent precedent, especially where the precedent could be changed easily by legislation at any time.” O’Connor v. City of Rutland, 172 Vt. 570, 570, 772 A.2d 551, 552 (2001) (mem.). To overturn precedent, “we generally require more than mere disagreement.” State v. Berini, 167 Vt. 565, 566, 701 A.2d 1055, 1056 (1997) (mem.

Triggs argues that Vermont’s no-contribution rule should not apply to claims brought by prior counsel against successor counsel in legal-malpractice suits. He cites cases from California, Illinois, Maine, Massachusetts, Maryland, Washington, and Wisconsin, where courts allowed contribution claims under similar circumstances, and he discusses the public-policy concerns underlying these cases. Unlike Vermont, however, those jurisdictions recognized contribution, either by statute or at common law, at the time these cases arose.

We have for decades declined to revisit our no-contribution rule, preferring not to substitute judicial fiat for legislative action. Triggs cites no Vermont authority supporting his argument that this Court should overturn its well-settled precedent regarding contribution, and, even if he did so, we are not inclined to weigh the comparative merits of competing public-policy arguments, which is a matter best left to the Legislature.

Because Triggs does not allege that third-party defendants expressly agreed to indemnify him, his indemnity claim will survive only if implied by a legally cognizable relationship. It is axiomatic that a party seeking implied equitable indemnity may recover only where its potential liability is vicariously derivative of the acts of the indemnitor and it is not independently culpable. Heco v. Foster Motors, 2015 VT 3, ¶ 10, 198 Vt. 377, 114 A.3d 902. Triggs does not allege that any legal relationship—contractual or otherwise— existed between him and third-party defendants. Instead, Triggs alleges that third-party defendants’ independent actions caused plaintiffs’ injury. This is not a basis for implied indemnity. Triggs has alleged no legally cognizable relationship linking him to third-party defendants and, therefore, his indemnification claim must fail as a matter of law.

Affirmed

How cited

SCOVT note: 

Stare decisis. Compare Whippie v. O'Connor, 2011 VT 97 (mem.)(cotenant who excludes his cotenants from possession and enjoyment of the jointly owned property is entitled to contribution for necessary maintenance costs such as mortgage, taxes and insurance during the period of ouster, overruling Massey v. Hrostek, 2009 VT 70, as based on an incorrect statement of prior law).

Indemntiy: The opinion contains a restatement of Vermont law of implied indemnity, which it characterizes as requiring "a legally cognizable relationship" linking indemnitee and indemnitor:

According to our precedents, “indemnity is a right accruing to a party who, without active fault, has been compelled by some legal obligation, such as a finding of vicarious liability, to pay damages occasioned by the negligence of another.” Morris v. Am. Motors Corp., 142 Vt. 566, 576, 459 A.2d 968, 974 (1982). “Unlike contribution in which liability is shared by joint tortfeasors, the right of indemnity shifts the entire loss upon the real wrongdoer.” Peters, 159 Vt. at 428, 620 A.2d at 1270. In Vermont, indemnity arises in two ways: (1) through “an express agreement by one party to indemnify the other, or (2) [because] the circumstances are such that the law will imply such an undertaking.” Id. at 427, 620 A.2d at 1270. The latter, “[i]mplied indemnity[,] will apply only when the party seeking indemnity is vicariously or secondarily liable to the third person because of a legal relationship with the third person or because of the party’s failure to discover a dangerous condition caused by the indemnifying party.” Hemond v. Frontier Commc’ns of Am., Inc., 2015 VT 67, ¶ 11, 199 Vt. 272, 123 A.3d 1176 (quotation omitted). “[I]ndemnity is imputed only when equitable considerations concerning the nature of the parties’ obligations to one another or the significant difference in the kind or quality of their conduct demonstrate that it is fair to shift the entire loss occasioned by the injury from one party to another.” Hemond v. Frontier Commc’ns of Am., Inc, 2015 VT 66, ¶ 9, 199 Vt. 259, 122 A.3d 1205 (quotation omitted). Lastly, “[i]t is axiomatic that a party seeking implied equitable indemnity may recover only where its potential liability is vicariously derivative of the acts of the indemnitor and it is not independently culpable.” Heco v. Foster Motors, 2015 VT 3, ¶ 10, 198 Vt. 377, 114 A.3d 902. Because Triggs does not allege that third-party defendants expressly agreed to indemnify him, his indemnity claim will survive only if implied by a legally cognizable relationship. Triggs has alleged no legally cognizable relationship linking him to third-party Triggs has alleged no legally cognizable relationship linking him to third-party defendants and, therefore, his indemnification claim must fail as a matter of law.

Haupt v. Triggs , 2022 VT 61 ¶¶ 10, 11.

Divided Court affirms Rule 12(b)(6) dismissal of wrongful termination complaint alleging retaliation for whistleblowing.

Dawn Boynton v. ClearChoice MD, MSO, LLC and ClearChoiceMD, PLLC, 2019 VT 49 [filed August 2, 2019]

CARROLL, J. Plaintiff appeals the trial court’s dismissal of her wrongful termination complaint against her former employer. In her amended complaint, plaintiff alleges that she was terminated from her employment as a medical assistant at defendants’ medical office in Rutland in September 2017 in violation of the covenant of good faith and fair dealing and contrary to whistleblower protections. We affirm.

Because plaintiff was an at-will employee and she has admitted on appeal that the handbook does not modify her status as an at-will employee, her argument that defendants violated the covenant of good faith and fair dealing by terminating her for a pretextual reason fails.

An at-will employee may not be terminated for reasons that violate “a clear and compelling public policy.” Payne v. Rozendaal, 147 Vt. 488, 492, 520 A.2d 586, 588 (1986) An employee seeking to invoke the public-policy exception to at-will employment must demonstrate that her employer’s conduct was “ ‘cruel or shocking to the average [person’s] conception of justice.’ Whether an activity violates public policy is a question of law. Madden v. Omega Optical, Inc., 165 Vt. 306, 314 n.3, 683 A.2d 386, 391 n.3 (1996). Here, the allegations in the complaint do not demonstrate that defendants’ conduct was “cruel or shocking to the average [person’s] conception of justice.” Payne, 147 Vt. at 493, 520 A.2d at 589 (quotation omitted).

Plaintiff cannot state a claim grounded in the facts and allegations of the complaint that defendants violated the handbook’s whistleblower provision, which protects an employee who, in good faith, reports threats to patient safety. The employer’s’ alleged comment cannot reasonably be viewed as having endangered anyone’s health or safety given the timing of the statement. Plaintiff did not f make such an allegation in her complaint.

We conclude that plaintiff has not stated a claim for a violation of a clear and compelling public policy. Dulude v. Fletcher Allen Health Care, Inc., 174 Vt. 74, 82, 807 A.2d 390, 397 (2002) (affirming summary judgment in favor of employer where plaintiff failed to show that termination was “so contrary to society’s concern for providing equity and justice that there is a clear and compelling public policy against it”). Nor has she stated a claim under the handbook’s whistleblower policy. The trial court therefore properly dismissed this claim as well. Affirmed.

ROBINSON, J., dissenting. I conclude that the allegations in plaintiff’s complaint, and the fair inferences from those allegations, are sufficient to survive a motion to dismiss with respect to plaintiff’s claims that defendants breached the covenant of good faith and fair dealing and wrongfully terminated her in violation of public policy. First, I believe the framework applied by the majority—based on its understanding that plaintiff has not argued that her at-will status has been modified to any degree—overlooks that plaintiff’s claim based on the implied covenant of good faith and fair dealing arises from defendants’ alleged violation of a specific no-retaliation provision in the handbook. Second, given the standards applicable at this stage of litigation, I believe the complaint alleges sufficient facts to support plaintiff’s claims based on retaliatory discharge under a theory based on public policy. Because I conclude that the allegations, considered in their proper light, could support the claims that plaintiff has made, I would deny the motion to dismiss and remand for further proceedings. Accordingly, I respectfully dissent.

PEARSON, Supr. J. (Ret.), Specially Assigned, dissenting. I agree with almost all of what Justice Robinson has written as to why the dismissal of the amended complaint, as a matter of law under Vermont Rule of Civil Procedure 12(b)(6), was premature at this early stage of the litigation. I write separately to emphasize the narrow claims actually made by plaintiff, and also because I believe that (a) it is unnecessary to analyze her public-policy assertions to determine whether those allegations alone state a cause of action, and (b) it is unnecessary for plaintiff to ultimately prove that the physician assistant’s remark presented any actual risk of harm (whether present or future) to defendants’ patient

SCOVT affirms dismissal of claim against residential mental-health provider for failure to warn potential victim of violence by resident where victim was neither individually identified or identifiable, nor a member of a discrete identified or identifiable class of potential victims.

Montague v. Hundred Acre Homestead, LLC, 2019 VT 16 [filed 3/8/2019] 

ROBINSON, J. This case calls for us to consider whether one who provides residential care for an individual has a tort-law duty to warn a potential victim of violence by that individual when that potential victim is neither individually identified or identifiable, nor a member of a discrete identified or identifiable class of potential victims. Plaintiff Darryl Montague sued Hundred Acre Homestead, a therapeutic residential community, after a resident of Hundred Acre shot him at the shooting range he owned. He invokes two theories of liability: first, that as the resident's mental-health provider, Hundred Acre breached a duty to take reasonable steps to protect him from the resident by warning him of the danger she posed; and second, that Hundred Acre breached a duty to him by accepting and retaining the resident for care in violation of applicable Vermont regulations. Montague has appealed the superior court's dismissal of both. We conclude that both theories of negligence fail because neither establishes that Hundred Acre had a cognizable legal duty to protect Montague enforceable through a private tort action. We thus affirm.

 On a motion to dismiss, the court must assume that the facts pleaded in the complaint are true and make all reasonable inferences in the plaintiff's favor.  A court should grant a motion to dismiss for failure to state a claim only when "it is beyond doubt that there exist no facts or circumstances that would entitle [the plaintiff] to relief.  Powers v. Office of Child Support, 173 Vt. 390, 395, 795 A.2d 1259, 1263 (2002). Because this "threshold a plaintiff must cross in order to meet our notice-pleading standard" is such a low one, "[m]otions to dismiss for failure to state a claim are disfavored and should be rarely granted." . The purpose of a dismissal motion "is to test the law of the claim, not the facts which support it." .

We are particularly wary of dismissing novel claims because "[t]he legal theory of a case should be explored in the light of facts as developed by the evidence, and, generally, not dismissed before trial because of the mere novelty of the allegations." . Nonetheless, where the plaintiff does not allege a legally cognizable claim, dismissal is appropriate. 

We conclude that Montague has not alleged facts that would place this case within the narrow exception to the general rule that there is no duty to act to prevent harm by another to a third person, and that the regulations governing licensed therapeutic communities upon which Montague relies do not support Montague's private action for damages against Hundred Acre. Although our analysis is framed with reference to the sufficiency of Montague's factual allegations, it turns on the validity of his legal theories. That is, it turns on "the law of the claim, not the facts which support it." Powers, 173 Vt. at 395, 795 A.2d at 1263.

I

On appeal, Montague argues first, Hundred Acre was negligent because, as resident's mental-health provider, it had a duty under Peck v. Counseling Service of Addison County, Inc., 146 Vt. 61, 499 A.2d 422 (1985), and our subsequent holding in Kuligoski v. Brattleboro Retreat, 2016 VT 54A, 203 Vt. 328, 156 A.3d 436, to protect her identifiable and foreseeable victims.^[2] Montague argues he was both an identifiable and foreseeable victim because Hundred Acre knew or should have known of resident's "lengthy and significant history of violence, restraining orders, and threats of violence and mental illness, as well as that she was prohibited from purchasing or possessing firearms and had been prescribed antipsychotic medications" and because she had told Hundred Acre she wished to go target shooting to deal with her aggression

.  In prosecuting a claim of negligence against Hundred Acre, Montague must allege facts establishing that Hundred Acre, as resident's mental-health provider, had a duty to protect him from resident. There is generally no duty to protect another from the actions of a third person. One limited exception to this general rule is that mental-health professionals, by virtue of their special relationship with their patients, have a duty to take reasonable action to protect identified third parties toward whom their patients have threatened serious physical harm. Peck, 146 Vt. at 63, 499 A.2d at 423.  In  Kuligoski, decided two years ago, the Court was divided as to whether the Peck decision limits a mental-health provider's duty to protecting only specifically identified individuals who are at risk, or whether it potentially extends in some cases to individuals who have not been specifically identified.  But the Court was not divided with respect to the proposition that Peck does not support a generalized duty to protect or warn all foreseeable victims.  Even if Peck applies to identifiable (though not actually identified) members of a discrete and determinate class of people. Montague's complaint would still fail to state a claim. the allegation in Montague's complaint could support an inference that he was part of determinate and identifiable class that faced a particularized threat. Resident's claimed statements do not support the inference that she posed a risk of violence toward anyone at all, let alone a class of people that included Montague.

II.

Second, Montague argues that Hundred Acre was negligent because it violated 33 V.S.A. § 7111(d)(3) and the Licensing and Operating Regulations, which prohibit therapeutic residential communities from accepting and retaining residents whose residential care needs they cannot safely accommodate and from operating in a manner "inimical to the public health, morals, welfare, and safety," and which Montague argues were intended to protect public safety and thus define a duty of care toward third parties like him.

The parties and trial court relied on the principles set forth in § 286 of the Restatement (Second) of Torts to guide their analysis on this issue. We take this opportunity to reiterate the distinction between § 286 and § 874A.

 "Where a party has an existing legal duty to another, a safety statute may serve as rebuttable evidence that the defendant breached the applicable standard of care, thereby shifting the burden of production to the defendant." Sheldon v. Ruggiero, 2018 VT 125, ¶ 24, ___ Vt. ___, ___ A.3d ___ (citing Restatement (Second) of Torts § 286 (1965)). This is the lesson of Restatement (Second) of Torts § 286. The strand of common law reflected in § 286 does not govern the question whether a safety statute creates a privately enforceable legal duty. Id. ¶ 25. Rather, it provides that where a defendant owes a plaintiff a legal duty, safety statutes and regulations may "supply the standard of care in the face of [that] established common-law duty." Id.

By contrast, Restatement (Second) of Torts § 874A supplies the framework for evaluating whether violation of a safety statute that does not expressly include a civil remedy can support a private action for damages. See id. ¶ 16 n.5. Montague is not relying on the statutes and regulations he cites to supply the standard of care to apply in the context of an established duty of care. Rather, he invokes the statute and regulations as the source a duty enforceable through a claim for damages. For that reason, we apply the framework of § 874A in analyzing the issue

  

Further, it is  Restatement (Second) of Torts § 874A, not the standard articulated in Cort v. Ash, 422 U.S. 66 (1975), which are similar but not identical to § 874A, is the proper framework for determining whether to accord a private right of action based on a statutory violation. Under the Restatement, in order to recover in a tort action arising from a legislative provision, a plaintiff must show that (1) the plaintiff is a member of the group of people whom the legislation was intended to protect, and (2) "the interest invaded, the harm resulting to that interest and the hazard producing the harm were all within the purview of the legislative provision.

Montague is not entitled to sue Hundred Acre for damages on account of its alleged violations because it is clear from the plain language of the statute and regulations relied on that their overarching purpose is to protect the class of residents of long-term-care facilities, not members of the public generally.

  

III

We conclude that Montague has not alleged facts that would place this case within the narrow exception to the general rule that there is no duty to act to prevent harm by another to a third person, and that the regulations governing licensed therapeutic communities upon which Montague relies do not support Montague's private action for damages against Hundred Acre. Although our analysis is framed with reference to the sufficiency of Montague's factual allegations, it turns on the validity of his legal theories. That is, it turns on "the law of the claim, not the facts which support it." Powers, 173 Vt. at 395, 795 A.2d at 1263.

Rule 12(b)(6) dismissal of suit against attorney by non-client affirmed. Attorney owes no duty in contested proceeding to the adverse party. Elements of fraud not alleged with particularity.

Felis v. Downs Rachlin Martin, PLLC, 2015 VT 129 [filed October 16, 2015]

DOOLEY, J. This case arises out of a divorce proceeding between plaintiff and his former wife. DRM represented wife in the divorce proceeding. Plaintiff claims that “DRM knowingly submitted false material evidence” or “participated in the submission of false material evidence” to the court with the intent and effect of improperly influencing the outcome of the trial, causing damage and injury to plaintiff. Plaintiff appeals the court’s decision granting defendant’s motion to dismiss plaintiff’s claims of breach of fiduciary duty and fraud. We affirm

The court granted defendants’ Rule 12(b)(6) motions, concluding that: (1) DRM owed no duty to plaintiff on which he could base a claim for breach of fiduciary duty; and (2) plaintiff failed to allege the necessary elements of fraud in his complaint. With respect to the fiduciary duty claim, the court stated that a party to litigation cannot assert negligence or breach of fiduciary duty against opposing counsel. With respect to the fraud claim, the court found that the plaintiff failed to allege that DRM directed the false statements to plaintiff, rather than the court, that he was unaware the statements were false, or that he relied on any allegedly false statements.

1.

It is well established that an attorney owes no duty to an adverse party.  Hedges v. Durrance, 2003 VT 63, ¶ 6. “This privity rule ensures that ‘attorneys may in all cases zealously represent their clients without the threat of suit from third parties compromising that representation.’ ” Id. (quoting  Bovee v. Gravel,, 174 Vt. 486, 487, 811 A.2d 137, 140 (2002) (mem.)). The rationale behind this policy is particularly salient “where, as here, the third party is the client’s adversary who is also represented by her own counsel in the proceedings.” Id.

To maintain such an action against another party’s attorney, the third party must demonstrate that “the primary purpose and intent of the attorney-client relationship itself was to benefit or influence the third party.” Hedges, 2003 VT 63, ¶7. (quotation omitted).  As in Hedges, we will not review DRM’s alleged duty of care to the marital estate “independently of the larger adversarial context.” Id. We therefore affirm the judgment of the superior court that plaintiff has failed to state a claim for breach of fiduciary duty

2.

To maintain a cause of action for fraud, plaintiff must demonstrate five elements: “(1) intentional misrepresentation of a material fact; (2) that was known to be false when made; (3) that was not open to the defrauded party’s knowledge; (4) that the defrauded party act[ed] in reliance on that fact; and (5) that thereby harmed.”  Estate of Alden v. Dee 2011 VT 64, ¶ 32, 190 Vt. 401, 35 A.3d 950. Failure to prove any one of the five elements defeats the fraud claim. Id. We focus on the third and fourth elements, which were central to the superior court’s discussion. We conclude, as did the superior court, that plaintiff has failed to allege facts to support these two elements.

With respect to the third element, plaintiff’s knowledge of the alleged falsity, the statements in his complaint directly contradict the presence of this element. Drawing all reasonable inferences from these statements, plaintiff was fully aware of DRM’s discovery practices early on.

With respect to the fourth element, we find no allegation to support a claim that plaintiff relied on defendants’ alleged misrepresentations. Plaintiff acknowledges that his complaint does not explicitly allege reliance. In essence, plaintiff asks us to assume reliance, but reliance is a required element of fraud that plaintiff has the burden to plead and prove “with particularity.” V.R.C.P. 9(b).  Allegations about defendants’ intent in making the alleged misrepresentations says nothing about plaintiff’s justifiable reliance, a required element of fraud. See  Sugarline Assocs. v. Alpen Assocs.., 155 Vt. 437, 445, 586 A.2d 1115, 1120 (1990) (stating that “with any action in fraud” plaintiff is required to show “justifiable reliance upon the misrepresentation” (quotation omitted)); Restatement (Second) of Torts § 531 (1977) (requiring justifiable reliance for recovery under fraudulent misrepresentation)

In other contexts third-party reliance, without direct reliance by the plaintiff, is insufficient to satisfy the reliance requirement. Glassford v. Dufresne & Assocs.., 2015 VT 77, ¶¶ 22-23. A party cannot bring a private cause of action for tort under a theory of fraud on the court. We can find no case where a court has accepted a third-party reliance claim on the basis that the reliance was by the court and the plaintiff was a litigant who had a full opportunity to respond to the allegedly fraudulent evidence. We need not determine whether we ever would accept a third-party reliance theory in a fraud case to hold that we would not accept it on the factual situation here.