SCOVT reverses trial court denial without reasons of beneficiary’s request to amend complaint to seek removal of trustee, but affirms denial of request for information, holding beneficiary has no right to information about a revocable trust even though the settlor is incapacitated.

 

1.    Procedure. Amending Pleadings. Trusts.   

     In re Trust of Marsha Milot, 2026 VT 7 [3/6/2026] 

    REIBER, C.J. Petitioner Jennifer Milot appeals the denial of her petition to open a trust action to obtain information about the administration and assets of a revocable trust whose settlor, Marsha Milot, is still alive. Petitioner claims the probate division erred by: failing to apply the correct legal standard when deciding to dismiss petitioner's action; failing to consider whether petitioner's information requests were "unreasonable under the circumstances" as required by statute; and concluding that under 14A V.S.A. § 603, co-trustees Valerie Wiederhorn and Curtis Hennigar owed no duty to provide information regarding the trust and co-trustees' administration to petitioner. We conclude that while the trust remains revocable, petitioner is not entitled to the information she seeks under § 813 of the Vermont Trust Code. However, we hold that the probate division erred by failing to consider petitioner's request to amend her complaint to seek removal of co-trustee Wiederhorn, and therefore reverse and remand for it to do so.

V   Vermont Rule of Probate Procedure 15(a) provides that leave to amend a petition "shall be freely given when justice so requires."  Petitioner asked for permission to amend her complaint to seek removal of co-trustee Wiederhorn under 14A V.S.A.§ 706. 14A V.S.A. § 706. Section 706 provides that "[t]he settlor, a cotrustee, or a beneficiary" may seek to have a trustee removed or replaced for "a serious breach of trust," a "lack of cooperation among cotrustees," or other enumerated reasons. The Official Comment to § 706  indicates that if a settlor is incapacitated, a beneficiary has the right to petition for trustee removal under § 706. The probate division dismissed the petition without addressing petitioner's request, effectively denying it. 

      Both Rule 15 and Vermont's common-law tradition "encourage liberality in allowing amendments to pleadings" when doing so will not prejudice the other party. Bevins v. King, 143 Vt. 252, 254, 465 A.2d 282, 283 (1983). While the trial court may deny an amendment if it would prejudice another party or is frivolous or made in bad faith, the court did not consider those factors here. Instead, it simply did not address the request, which was an abuse of discretion. See PeakCM, LLC v. Mountainview Metal Sys., LLC, 2025 VT 50, ¶ 18 (explaining that failure to exercise discretion is abuse of discretion). 

In sum, we hold that petitioner was not entitled to receive trust information under § 813 because the trust remains revocable while settlor is alive. However, we reverse and remand the dismissal order for the probate division to consider petitioner's request to amend her petition. In so holding, we take no position on whether settlor is in fact incapacitated, whether petitioner is a qualified beneficiary, or any other factual questions raised by this appeal. Those matters are for the probate division to resolve in the context of any further proceedings that occur on remand.

Reversed and remanded for the probate division to address petitioner's request to amend her petition to seek removal of co-trustee(s).

SCOVT Note re: "failure to exercise discretion is abuse of discretion" See Foman v. Davis, 371 U.S. 178 (1962) (Marshall, J, ):

Rule 15 (a) declares that leave to amend "shall be freely given when justice so requires"; this mandate is to be heeded . . .  Of course, the grant or denial of an opportunity to amend is within the discretion of the District Court, but outright refusal to grant the leave without any justifying reason appearing for the denial is not an exercise of discretion; it is merely abuse of that discretion and inconsistent with the spirit of the Federal Rules.

371 U.S. at 182. 

SCOVT reverses denial of post- judgment motion to reopen case for leave to file a second amended complaint, holding as a matter of first impression that curing a pleading deficiency is a possible basis for relief under Rule 59(e) (following Foman v. Davis, 371 U.S. 178 (1962).)

  

Stowe Aviation, LLC v. Agency of Commerce, 2024 VT 11 [February 23, 2024]

CARROLL, J. Plaintiffs appeal from an order denying their motion to reopen this breach-of-contract case and for leave to file a second amended complaint. Plaintiffs assert that Rule 59(e) is a viable means to reopen the pleadings, and the trial court abused its discretion in denying relief under that rule. We agree that plaintiffs can potentially obtain Rule 59(e) relief, and therefore reverse the order denying plaintiffs' Rule 59(e) motion and remand for further proceedings to evaluate plaintiffs' request to replead consistent with this opinion.

Plaintiffs complained in count one that they executed an MOU with defendant based on its representations that it provided "gold standard" oversight of EB-5 projects, when in fact a significant fraud had been perpetrated on its watch. In count two, plaintiffs alleged that defendant’s misrepresentations about its oversight of other EB-5 projects breached the implied covenant of good faith and fair dealing.

The trial court granted defendant's motion to dismiss for failure to state a claim on both counts. It concluded that the MOU did not contain any provision promising oversight of the Jay Peak projects for the benefit of plaintiffs. The court found the claim of breach of the implied covenant of good faith and fair dealing arising from the same allegations suffered from the same deficiency. The court did find that plaintiffs had alleged a separate basis for a breach-of-contract claim but did not, however, adequately plead damages related to this alleged breach, and therefore failed to state a claim. The court dismissed the complaint pursuant to Vermont Rule of Procedure 41(b) and closed the case the same day.

Plaintiffs moved under Vermont Rule of Civil Procedure 15 to amend the complaint in response to the court's identification of a potential basis for plaintiffs' two claims. The defendant opposed the motion, arguing ,because the court had closed the case, plaintiffs had to first move the court to reopen or vacate judgment under Vermont Rules of Civil Procedure 59 or 60. Plaintiffs then timely filed a restyled motion seeking relief under either Rule 59 or 60, and submitted a proposed second amended complaint attempting to cure the deficiencies the court identified in its final order.

The court concluded that for plaintiffs to prevail under Rule 59(e), the court had to have made a mistake, not plaintiffs. It found that plaintiffs' failure to request leave to amend was not a fault or mistake of the court, but of plaintiffs. It found that the proposed second amended complaint contained new arguments that plaintiffs could have pleaded before it closed the case. It concluded that it had not made a clerical mistake in failing to sua sponte grant leave to amend. The court accordingly denied the motion. Plaintiffs appealed this order.

The first question presented is whether plaintiffs can prevail on a Rule 59(e) motion to replead where plaintiffs did not seek leave to amend their complaint prior to the court's merits decision and where the court dismissed with prejudice and closed the case. We have never addressed whether the court's power includes granting Rule 59(e) relief to cure a pleading deficiency.

In Mitec, we held that the right to amend provided by Rule 15 no longer attached after entry of judgment.  N. Sec. Ins. Co. v. Mitec Electronics, Ltd.,   2008 VT 96, ¶ 39. And while we ultimately reversed the post-judgment grant of leave to amend in Mitec, our decision was based on the specific facts of that case, and we did not express or imply that the rules never allow repleading after the court closes the case or enters judgment.

We are persuaded that curing a pleading deficiency is a possible basis for relief under Rule 59(e). Relief to amend pleadings under Rule 59(e)  is available in most if not all the federal circuits. As we noted in Equinox, "[f]reedom of amendment is a fundamental principle of our rules." State v. Equinox House, Inc.,  134 Vt. 59 , 62 (1975); see also Foman v. Davis, 371 U.S. 178, 181-82 (1962)  (stating that Rule 59 motion to amend should have been granted because purpose of civil rules, including Rule 15, is that "[i]f the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claims on the merits").

In Williams v. Citigroup Inc. , 659 F.3d 208 (2d Cir. 2011) (per curiam), the Second Circuit encountered facts similar to the present dispute. There, the district court dismissed the plaintiff's complaint and entered final judgment the following day. The plaintiff timely moved to reopen the judgment and sought leave to cure defects in the original complaint that the court identified in its dismissal order. The Second Circuit reversed, concluding that the court abused its discretion in denying the motion for reconsideration. The court held that the U.S. Supreme Court in Foman makes unmistakably clear there is no such rule requiring litigants to request leave to amend with their opposition papers or to do so before the court enters judgment.

We similarly hold that the trial court's denial of plaintiffs' motion in this case was an abuse of discretion. The court's conclusion that relief was unavailable because plaintiffs should have requested leave to amend in their opposition papers cannot be squared with Equinox, Mitec, or the federal cases addressing the topic including Foman. The rules do not require it.

 On remand, plaintiffs must first convince the court to reopen the case under Rule 59(e) before they can file their second amended complaint. The standard to prevail on a Rule 59(e) motion in this context is more exacting, because the presumption to grant leave to amend under Rule 15 "disappears after judgment has been entered."  Plaintiffs must demonstrate one of the "four basic grounds" for granting a Rule 59 motion. Mitec,  2008 VT 96, ¶ 42.*

 If plaintiffs sufficiently demonstrate a basis for relief under Rule 59(e), the inquiry proceeds to whether plaintiffs' second amended complaint meets the ordinary Rule 15 standard. Colby v. Umbrella, Inc., 2008 VT 20, ¶ 4 (identifying factors to evaluate whether to allow party to amend pleadings under Rule 15 including undue delay, bad faith, futility, and prejudice); Bevins v. King, 143 Vt. 252, 254-56(1983). Plaintiffs can only file their second amended complaint if they prevail on both Rule 59(e) and Rule 15 standards.

The order denying plaintiffs' post-judgment motion for reconsideration is reversed, and the matter is remanded for further proceedings consistent with this opinion.

How cited

_______

SCOVT Note: This was a second amended complaint. Rule 15(a) allows a party to  amend a pleading once as a matter of course “at any time before a responsive pleading is served.” The Court has held a  trial court's proper course of action when granting a Rule 12(b) motion to dismiss prior to the service of a responsive pleading is to dismiss with leave to amend.  Neal v. Brockway, 136 Vt. 119, 122, 385 A.2d 1069, 1070 (1978) (reversing dismissal of complaint for failure to state claim without affording party opportunity to amend of  right). 

In the cited case of Foman v. Davis, 371 U.S. 178 (1962) the U.S. Supreme Court held the Court of Appeals erred in affirming a District Court's denial, without any apparent reason, of petitioner's motion to vacate the judgment in order to allow amendment of the complaint to plead a new legal theory based on the same transaction. See also  Perkins  v. Windsor Hospital Corp., 145 Vt. 305, 313 (1982) (stating that a motion to amend should not be denied simply “because it stated a new cause of action.”)

Here is Justice Marshall in Foman:

 As appears from the record, the amendment would have done no more than state an alternative theory for recovery.

Rule 15 (a) declares that leave to amend "shall be freely given when justice so requires"; this mandate is to be heeded . . . If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.—the leave sought should, as the rules require, be "freely given."

 Of course, the grant or denial of an opportunity to amend is within the discretion of the District Court, but outright refusal to grant the leave without any justifying reason appearing for the denial is not an exercise of discretion; it is merely abuse of that discretion and inconsistent with the spirit of the Federal Rules.

371 U.S. at 182. 

More recently, the  U. S. Supreme Court has held is its unnecessary for a "short and plain statement of a claim" to provide a legal theory. Skinner v. Switzer, 562 US 521 (2011)  (under the Federal Rules of Civil Procedure, a complaint need not pin plaintiff's claim for relief to a precise legal theory. Rule 8(a)(2) requires only a plausible "short and plain" statement of the plaintiff's claim, not an exposition of his legal argument.); Johnson v. City of Shelby, 574 US 10 ( 2014) ( the Rules do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted). 

*The ""four basic grounds" for granting a Rule 59 motion" referred to in Mitec, are from Wright & Miller:

First, the movant may demonstrate that the motion is necessary to correct manifest errors of law or fact upon which the judgment is based.  

Second, the motion may be granted so that the moving party may present newly discovered or previously unavailable evidence.

Third, the motion will be granted if necessary to prevent manifest injustice.

Fourth, a Rule 59(e) motion may be justified by an intervening change in controlling law.

 11 Fed. Prac. & Proc. Civ. § 2810.1 (3d ed.)

” 

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 / new legal theories

 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 too late for possible corrective amendment of a complaint. Foman held it was an abuse of discretion to deny a post judgment  motion seeking to amend a complaint to plead a new legal theory based on the same transaction. See also  Perkins  v. Windsor Hospital Corp., 145 Vt. 305, 313 (1982) (stating that a motion to amend should not be denied simply “because it stated a new cause of action.”)

 

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 punitive damage award against landlord; reverses and remands compensatory award for further findings

Soon K. Kwon v. Eric Edson and Dina Well, 2019 VT 59 [filed 8/23/2019]

CARROLL, J. In this landlord-tenant dispute, following a bench trial, the court granted tenant Edson damages to compensate him for work he performed on landlord’s properties and tenant Well compensatory and punitive damages for breach of the implied warranty of habitability and illegal eviction.

Landlord appeals, arguing that the court erred in (1) finding that there was an oral rental agreement between the parties and that defendants were tenants; (2) awarding rent for only a portion of the period tenants occupied the property; (3) awarding tenant Edson damages because the claim was not properly pled; and (4) awarding tenant Well punitive damages.

Tenants cross appeal, arguing that the court abused its discretion in finding there was an agreement to pay rent once the building was compliant with the housing code and erred in awarding landlord back rent based on a theory of unjust enrichment. We affirm in part and reverse and remand in part.

  Unjust enrichment is “based on an implied promise to pay when a party receives a benefit and the retention of the benefit 10 would be inequitable.”  DJ Painting, Inc. v. Baraw Enters., Inc., 172 Vt. 239, 242 (2001).  Recovery under this theory depends on “whether, in light of the totality of circumstances, it is against equity and good conscience to allow defendant to retain what is sought to be recovered.”  Id. at 243 (quotation omitted).  The existence of a contract does not preclude recovery pursuant to an unjust-enrichment claim, but the existence of a contract and the terms of that contract are “highly relevant in determining whether denying further payment . . . is unjust.”  Id.

  

We conclude that the evidence supports the court’s finding that the parties entered an oral agreement allowing tenants to stay in landlord’s apartment rent-free for some portion of time. However, because the court’s findings as to the terms of the contract are not supported by the evidence, we cannot determine if a remedy for unjust enrichment would be appropriate in this case. Therefore, the award of back rent and electricity to landlord is reversed and the matter is remanded for the court to make new findings based on the evidence presented at trial as to the terms of the parties’ agreement. Based on these findings, the court can determine if damages are appropriate either pursuant to an oral contract or as an equitable remedy for unjust enrichment.

  

We affirm the court’s award of damages to tenant Edson for the work he performed for landlord, concluding that the issue was tried by implied consent. Under the circumstances, the breach-of-contract claim was tried by “implied consent of the parties” and therefore should be treated as if it “had been raised in the pleadings.”  V.R.C.P. 15(b)

Finally, we conclude that an award of punitive damages was allowable as damages for breach of the warranty of habitability and affirm the award of punitive damages to tenant Well. There was sufficient evidence of willful and wanton conduct for the court to make an award of punitive damages.

• The trial court found that after being notified about habitability issues in the apartment, landlord took far more than a reasonable time to address those issues. See 9 V.S.A. § 4458(a) (allowing tenant to recover damages where landlord fails to make repairs “within a reasonable time”).
•  Landlord took seven days to fix the heat issue when a reasonable amount of time was two days.
• Landlord took nine days to address the lack of water when a reasonable time was twenty-four hours.
• Moreover, landlord did not offer to pay for tenant Well to stay in a hotel room while the apartment was not habitable until he was told by code enforcement that he had to do so.
• Landlord also used propane heaters in the basement of the apartment, which posed a serious fire hazard and a risk of carbon-monoxide poisoning.
• Landlord fraudulently represented to the city that the apartment was not occupied so he could avoid providing tenant with lead-paint notices.
•  Finally, landlord resorted to self-help by having Well’s car towed on two occasions to force her out of the premises without a court eviction order while the eviction proceedings were pending.

These facts are sufficient to show willful and wanton conduct and support an award for punitive damages

How cited

Abuse of discretion to deny motion to amend complaint made after summary judgment motions, where issues were already implicit in the case

LeClair v. LeClair, 2017 VT 34, ¶¶ 27-35 (May 12, 2017)

DOOLEY, J. Plaintiff appeals from the trial court's grant of summary judgment to defendant in this negligence action. Plaintiff argues that the trial court abused its discretion by denying his motion to amend his complaint to add a new liability theory. We reverse and remand.

The original complaint, filed in August 2014, included a single negligence claim, in which he alleged that defendant owed a duty of reasonable care in the design, condition, and maintenance of his premises to those lawfully on his property; that the frost-covered roof presented an unreasonable risk of harm; and that defendant breached his duty of care by demanding that plaintiff work on the roof when it presented an unreasonable risk.  Defendant pled as affirmative defenses that there was no privity between plaintiff and defendant.

The parties agreed by stipulation to conclude all discovery by November 13, 2015, and to present any legal challenge to liability by motions for summary judgment to be filed on or before December 31, 2015. Defendant filed a motion for summary judgment on January 4, 2016.

Three days after filing his response to defendant's motion for summary judgment, plaintiff filed a motion to amend his complaint to add distinct counts entitled premises liability and negligence/safe workplace. The court denied plaintiff's motion to amend his complaint based on three factors: (1) the claim in the amendment was entirely new and based on different facts; (2) the plaintiff did not show good cause for the delayed timing of the amendment; and (3) the case had been pending for eighteen months, discovery had closed, and defendant had filed a motion for summary judgment.

We have summarized the limit on the trial court's discretion to deny a motion to amend: "When 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." Bevins v. King, 143 Vt. 252, 254-55, 465 A.2d 282, 283 (1983). We conclude by this standard that  the trial court abused its discretion by denying plaintiff's motion to amend his complaint.

We recognize that we have previously affirmed a trial court's decision not to allow an amendment to pleadings after the other party has filed for summary judgment. Gauthier v. Keurig, 2015 VT 108, 200 Vt. 125, 129 A.3d 108.. But in Gauthier, the amendment's timing was not dispositive.

The absence of good cause for the delay is not a ground under Bevins to deny the motion to amend. The trial court did not find the proposed amendment to be "obviously frivolous" or "a dilatory maneuver in bad faith." Thus, the question comes down to whether granting the amendment would prejudice defendant.

There was no prejudice. Although the theory that defendant was plaintiff's employer was formally introduced in plaintiff's motion to amend, its genesis lies in defendant's answer, discovery, and motion for summary judgment. By the time the trial court considered the motion to amend, the issue of who was plaintiff's employer, and the effect of that determination, was squarely at issue in the case. It is clear from the summary judgment record that defendant did extensive discovery on the issue so the fact that discovery was closed when the court considered the motion to amend the complaint should not have weighed in favor of denying the motion.

Because plaintiff's claim in the motion to amend was addressed at length in defendant's own summary judgment motion, the court’s ruling on the motion to amend was governed by the policy in Rule 15(b) for claims "tried by express or implied consent of the parties." When a party, such as defendant here, impliedly consents to trial of issues not raised in the pleadings, Rule 15(b) states that "amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time." 

 We hold that when an issue enters a case during the summary judgment phase in part through the party later opposing its consideration, as here, the issue is effectively being tried based on the implied consent of the parties, and thus a contemporaneous motion to amend a pleading to include that issue should be freely granted.



SCOVT NOTE. Rule 15.

It has long been settled that it is error to deny a motion to amend on the grounds that  the proposed complaint states a "new cause of action."  Perkins v. Windsor Hosp. Corp., 142 Vt. 305, 313, 455 A.2d 810, 815 (1982) The oft-cited test in Perkins  requires the trial court to consider the propriety of a motion to amend by examining four factors: (1) undue delay; (2) bad faith; (3) futility of amendment; and (4) prejudice to the opposing party. Id. 

Leclair's explicit rejection of “absence of good cause for delay” as a basis to deny amendment means Perkins' "undue delay" now has either no or limited meaning independent of the issues of bad faith and prejudice,  as stated in Bevins v. King, (“[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.")

Compare  Ferrisburgh Realty Investors v. Schumacher, 2010 VT 6 (proper to deny an amendment that would require a continuance to accommodate additional discovery); Colby v. Umbrella, Inc., 2008 VT 20, ¶ 4, 184 Vt. 1, 955 A.2d 1082 (denial of a motion under Rule 15(a) may be justified based upon a consideration of undue delay, among other factors).

A motion during trial is not necessarily too late. In Bevins v. King,the Court reversed the trial court's denial of a motion to amend an answer made on the day of trial. In Lillicrap v. Martin 156 Vt. 165, 591 A.2d 41(1991) the Court affirmed the trial court’s discretion in allowing an amended answer on the sixth day of trial.

With stronger force, the pendency of a summary judgment motion is no barrier to amendment. In Gauthier v. Keurig the appellant argued and LeClair implicitly recognizes "[t]here simply is no rule… that requests to amend must be denied when the opposing party has filed a summary judgment [motion]"  Leclair statesthat in Gauthier the amendment's timing was not dispositive.

(Yet more recent authority erroneously suggests in dictum that implied consent was key to LeClair, and is required whenever a motion to amend is made after summary judgment is pending. Bonk v Bonk, 2018 VT 15 ¶ 12.)  

Note that under Rule 15(b) a motion to amend to conform to the evidence may be made “at any time, even after judgment.” By case law, the right of to amend under Rule 15(a) terminates only when judgment is entered. See Felis v. Downs Rachlin Martin, PLLC, 2015 VT 129, ¶¶ 26-27.

Standards for denial of a Rule 15 motion to  amend pleadings

Under the rules of civil procedure, leave to amend the complaint "shall be freely given when justice so requires." V.R.C.P. 15(a); Lillicrap v. Martin, 156 Vt. 165, 170, 591 A.2d 41, 43-44 (1989). The principal reasons underlying the liberal amendment policy are (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. Id. (quoting  Bevins v. King, 143 Vt. 252, 255, 465 A.2d 282, 283 (1983)).

 In rare cases, denial of a motion under Rule 15(a) may be justified based upon a consideration of the following factors: "(1) undue delay; (2) bad faith; (3) futility of amendment; and (4) prejudice to the opposing party." Colby v. Umbrella, Inc., 2008 VT 20, ¶4, 184 Vt. 1, 955 A.2d 1082. (quoting Perkins v. Windsor Hosp. Corp., 142 Vt. 305, 313, 455 A.2d 810, 815 (1982).

This means that "[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." Bevins v. King, 143 Vt. 252, 254-55, 465 A.2d 282, 283 (1983)).

Other factors may not be considered.  For example, the Court recently held “the absence of good cause for the delay [] does not implement a requirement under Bevins and it is not a ground to deny the motion to amend.” LeClair v. LeClair, 2017 VT 34 ¶ 29

Procedure. Judgment terminates right under V.R.C.P. 15(a) to amend complaint to add new theory.

Felis v. Downs Rachlin Martin, PLLC, 2015 VT 129, ¶¶ 26-27 [filed October 16, 2015]

DOOLEY, J. Plaintiff appeals a decision granting defendant’s motion to dismiss plaintiff’s claims of fraud and breach of fiduciary duty. We affirm

On appeal plaintiff argues as am alternative that his complaint states a cause of action for prima facie tort. Under the law of several states, a harm intentionally inflicted on another without justification is prima facie actionable. See, Restatement (Second) of Torts § 870 (“One who intentionally causes injury to another is subject to liability to the other for that injury, if his conduct is generally culpable and not justifiable under the circumstances. This liability may be imposed although the actor’s conduct does not come within a traditional category of tort liability.”).

Although other state courts have adopted prima facie tort liability under § 870, this Court has yet to do so. See Fromson v. State, 2004 VT 13 29, ¶ 20, 176 Vt. 395, 848 A.2d 344 (observing that this Court has never decided whether to recognize prima facie tort liability). Plaintiff argues that we should adopt it here.

Plaintiff never argued below that defendants could be found liable on a theory of prima facie tort. He therefore waived it on appeal. Plaintiff , however, urges us to remand to allow him to add a new count to his complaint alleging prima facie tort pursuant to V.R.C.P. 15(a).

We held in Desrochers v. Perrault, 148 Vt. 491, 494, 535 A.2d 334, 336 (1987), that Rule 15(a) did not allow “a post-judgment amendment which brings in an entirely extrinsic theory.” More recently, in Northern Security Ins. Co. v. Mitec Electronics, 2008 VT 96, ¶ 39, 184 Vt. 303, 965 A.2d 447, we held that the right of plaintiff “to amend the complaint under Rule 15 terminated when judgment was entered.”

Plaintiff’s invocation of Rule 15(a) comes too late in the process for us to give him the relief he seeks.

Three year statute of limitations for medical malpractice applies, notwithstanding argument that cancer is a “noxious agent” with prolonged latent development.

Campbell v. Stafford , 2011 VT 11 (mem.)

The trial court concluded that plaintiff’s claim was time-barred under the three-year limitation set forth in 12 V.S.A. § 521. Plaintiff appeals the trial court’s denial of her motion for reconsideration and motion to amend.  We affirm.

 

Plaintiff filed her malpractice suit over three years of last date on which Defendant treated plaintiff without ordering additional testing or treatment for thyroid cancer.  After judgment had already been entered on statute of limitations grounds,  Plaintiff sought to amend  her complaint to allege the theory that her cancer was a noxious agent, and that the claim was actionable under 12 V.S.A. § 518..  But  this “claim” added nothing.  12 V.S.A. § 521, as opposed to 12 V.S.A. § 518(a), controls this case.

In order for 12 V.S.A. § 518(a) to apply, plaintiff’s cancer would have to be considered a “noxious agent.”  An “agent” is something that acts upon the body, causing a disease or illness such as cancer.  Though the cancer in this case may have had a prolonged development period, it was not itself a “noxious agent”. Given the failure of plaintiff’s amended complaint,  Defendants were entitled to summary judgment as a matter of law. 

Procedure: denial of motion to amend affirmed; Rule 50, punitive damage issue not preserved.

Ferrisburgh Realty Investors v. Schumacher, 2010 VT 6 (Skoglund, J.)
Developer Ferrisburgh Realty Investors (FRI) appeals from the trial court’s decision, following a jury verdict, in this contract dispute. Landowner Robert Schumacher cross-appeals.[1] FRI argues that the court erred by: (1) denying its request to allow certain claims to go to the jury; (2) refusing to allow it to amend its complaint to add a new claim; (3) reducing the jury’s award of damages; and (4) denying its request for injunctive relief. Landowner asserts that the court erred in: (1) finding an enforceable contract; and (2) upholding the punitive damages award. With the exception of a revision to the jury award for breach of contract, we affirm

FRI sought to add an abuse of process claim to its complaint. FRI argues that its request should have been granted because it could have completed discovery on this claim prior to the rescheduled jury draw. The record shows that FRI sought to add this claim in April 2007, seven months after its original complaint was filed. The jury draw had already been continued once in March 2007.and the court again postponed the jury draw to August, The court did not err in refusing to postpone the proceedings further to accommodate FRI’s desire to add a new claim. See Colby v. Umbrella, Inc., 2008 VT 20, ¶ 4, 184 Vt. 1, 955 A.2d 1082 (denial of a motion under Rule 15(a) may be justified based upon a consideration of undue delay, among other factors). While FRI now suggests that it could have completed discovery on its new claim before the August jury draw, the court implicitly concluded otherwise. The trial court offered adequate grounds for its decision in this case, and we find no error.

We turn next to the punitive damages award. Schumacher argues that his conduct was not sufficiently egregious to warrant an award of such damages Schumacher fails to demonstrate that he preserved this argument. He did not raise the issue in his motion for a directed verdict at the close of FRI’s case, and he does not show that he raised the issue at trial. Instead, Schumacher appears to have raised the issue for the first time in his post-trial motion for judgment as a matter of law. He thus waived this claim of error. See V.R.C.P. 50(a), (b) (party who believes there is no legally sufficient evidentiary basis for reasonable jury to find for opposing party on certain issue must make motion for judgment as a matter of law before case is submitted to jury, and motion must be renewed post-verdict); Lemnah, 144 Vt. at 571, 482 A.2d at 702 (where defendant first challenged punitive damages by motion for judgment notwithstanding the verdict, issue was not preserved for review); see also V.R.A.P. 28(a)(4) (appellant’s brief should explain what the issues are, and how they were preserved).

SCOVT note. Compare Beaudoin v. Feldman, 2018 VT 83 (defendant  preserved his claim for appellate review by complying with V.R.C.P. 50(a) and (b), regardless of whether or not he also objected to the jury instruction on punitive damages.)