Divided Court reverses, as abuse of discretion, dismissal of foreclosure action under Rule 41 for failure to prosecute in the name of the real party in interest, holding Rule 25 governs transfers of interest pending litigation and that real-party- in-interest rule applies only at the time the action commences.

 Ditech Financial LLC v. Brisson, 2025 VT 54 [9/18/2025]

CARROLL, J.   In this foreclosure action, plaintiff Ditech Financial LLC appeals the trial court’s order dismissing the case with prejudice and vacating the foreclosure judgment for plaintiff’s failure to prosecute.  We agree with plaintiff that the court abused its discretion in dismissing the case for want of prosecution and thus reverse the court’s order, reinstate the judgment of foreclosure, and remand for further proceedings consistent with this opinion.

 

In July 2024, the court concluded the parties agreed that US Bank Trust National Association was not the real party in interest, but that “a glaring question” remained “as to who the real party in interest is.”  The court set a hearing for the parties to present evidence on the real party in interest stating that “the action w[ould] be dismissed for failure to prosecute” if plaintiff “fail[ed] to prove who the real party in interest is at the hearing.”

 

A hearing was held in August 2024, following which the court dismissed the case.  The court concluded “Ditech no longer exists” and had gone through bankruptcy, that plaintiff failed to prove that it, or Shellpoint, emerged from bankruptcy with continued control in the foreclosure judgment and that plaintiff  failed to prove who the real party in interest is.”  Accordingly, the court dismissed the case with prejudice and vacated the foreclosure judgment.

 

On appeal, plaintiff argues that the court lacked authority to dismiss the case with prejudice or vacate the foreclosure judgment under the applicable civil rules. 

 

Rule 17

 

We begin our discussion with the applicable rules governing the real party in interest.  Civil Rule 17(a) requires that an action “be prosecuted in the name of the real party in interest.”  Rule 17(a) applies at the time the action commences.  Hilbrands v. Far E. Trading Co., 509 F.2d 1321, 1323 (9th Cir. 1975); see also Smedberg v. Detlef’s Custodial Serv., Inc., 2007 VT 99, ¶ 30,(noting  V.R.C.P. 17(a) “must be construed to the same effect” as “identical” federal rule); Reporter’s Notes, V.R.C.P. 17 (“This rule is based on Federal Rule 17, as modified in Maine Rule 17.”). 

 

 In her 2023 motion to dismiss plaintiff’s motions, defendant did not challenge plaintiff’s standing at the time the action commenced, nor did the court consider whether plaintiff was the proper plaintiff to have commenced the suit.  Thus, Rule 17 was inapplicable.

 

Rule 25

 

 Rather, to the extent a transfer occurred during the pendency of the proceedings, Civil Rule 25(c) governs.  Rule 25(c) provides “[i]n case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party.”

 

Rule 25 “expressly permits parties to continue in an action, even if they do not remain the real party in interest, as long as the cause of action itself survives the transfer to the new party.”  ELCA Enters., Inc. v. Sisco Equip. Rental & Sales, Inc., 53 F.3d 186, 191 (8th Cir. 1995) 7 C. Wright & A. Miller, Federal Practice & Procedure § 1958 (3d ed. 2025) (explaining Federal Rule 25(c) “does not require that anything be done after an interest has been transferred”).  Accordingly, to the extent there was a transfer of interest, the action could continue in plaintiff’s name, unless upon motion the court required otherwise.

Rule 41

 

The court did not rely on Rule 25 in dismissing the action, however.  Rather, it dismissed the case and vacated the foreclosure judgment for failure to prosecute because plaintiff failed to comply with the court’s August 2024 order to prove, after a hearing, who the real party in interest was.  Although it did not cite the rule, the court was plainly referring to Civil Rule 41(b)(2).

 

Rule 41(b)(2) provides: “For failure of the plaintiff to prosecute or to comply with [the Vermont Rules of Civil Procedure] or any order of court, a defendant may move for dismissal of an action or of any claim against the defendant.”

This “general power” of the court to dismiss a case for want of prosecution “is limited by several important considerations” including that “the law favors disposition of cases on their merits,” that “sanctions against litigants should be proportionate to their offenses” and “appropriate to the circumstances,” and that “courts must be wary of imposing sanctions on a party without notice and an opportunity to be heard.”  Ying Ji, 2013 VT 81, ¶¶ 6-7 (quotation omitted); cf. John v. Med. Ctr. Hosp. of Vt., Inc., 136 Vt. 517, 519 (1978) (requiring “findings . . . that 10 there has been bad faith or deliberate and willful disregard for the court’s orders, and . . . the party seeking the sanction has been prejudiced thereby” for “the ultimate sanction of dismissal” under Civil Rule 37(b)(2)). 

Under the similar federal rule, courts recognize that dismissal for lack of prosecution “is a harsh remedy to be utilized only in extreme situations.”  Minnette v. Time Warner, 997 F.2d 1023, 1027 (2d Cir. 1993)

  

We agree with plaintiff that there was no failure on its part to prosecute the case, and thus, conclude the court exceeded its discretion by dismissing the case with prejudice

Here, the trial court made no findings that plaintiff failed to pursue the case, caused undue delay, or demonstrated continued noncompliance with the court’s orders.  Nor does the record demonstrate inaction by plaintiff such as failure to attend a hearing or respond to repeated requests from the court, or that plaintiff unreasonably delayed its response to the court’s order to prove the identity of the real party in interest. Plaintiff attended the hearing and complied with the court’s order to provide proof of the real party in interest, although the court was unpersuaded.  The court therefore exceeded its discretion by dismissing the case with prejudice for plaintiff’s failure to comply with the court’s order.

 

Reversed.  The judgment of foreclosure is reinstated, and the matter is remanded for further proceedings consistent with this opinion.

 

COHEN, J., dissenting.   I cannot agree with the majority that the trial court abused its discretion in dismissing this foreclosure proceeding.  Plaintiff’s incompetent recordkeeping, its shifting representations to the trial court, its sale of a mortgage and note that it now claims no longer legally exist, and its failure to provide adequate proof that it was the party entitled to enforce the foreclosure judgment, together support the sanction of dismissal here.  Accordingly, I dissent.  

 

What the trial court described as dismissal for failure to prosecute can be viewed as dismissal for failure to comply with the court’s July 2024 order directing plaintiff to provide proof that plaintiff was the entity that owned the right to enforce the judgment.  See V.R.C.P. 41(b)(2).

 

The facts of this case justify the court’s decision. Plaintiff was on notice that it faced dismissal if it did not demonstrate that it owned the right to enforce the foreclosure judgment, yet it did not seriously address the trial court’s concerns.  Plaintiff’s failure to adequately respond to the court’s order, coupled with its slipshod recordkeeping and its sale of a mortgage and note that it now claims no longer exists—which undoubtedly caused real confusion and anxiety for the pro 15 se defendant here—lead me to conclude that the court acted within its discretion in dismissing the action.

 

The sanction of dismissal with prejudice was not disproportionate to the actions and inaction that caused it.  Dismissal under these circumstances would serve both as a penalty and an important deterrent to future similar conduct by foreclosure plaintiffs.  See  John v. Med. Ctr. Hosp. of Vt., Inc., 136 Vt. 517, 520 (1978) (noting that sanction of dismissal is sometimes warranted, and can serve “not only as a penalty, but as a deterrent as well”)

 

For that reason, I would affirm the trial court’s decision.

How cited

 

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

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

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

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

 

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

 

 Intentional Interference with Expectation of Inheritance

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 Unjust Enrichment

 

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

 

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

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

 

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

 

 Constructive Fraud

 

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

 

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

 

Promissory Estoppel

 

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

 

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

 

 

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

 

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

 

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

 

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

How cited

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

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

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

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

 

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

 

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

 

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

 

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

 

Affirmed.

 

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

 

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

 

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

 

  How cited

SCOVT reverses judgment that declined to enforce a life insurance provision in a divorce order and remands for further proceedings, holding that – because it was stipulated – the life insurance provision is valid and enforceable; Court divided on whether plaintiff entitled to judgment to proceeds of policy purchased after the divorce that named another beneficiary.

 diMonda v. LincolnNational Corp , 2025 VT 45  [8/8/2025]

REIBER, C.J.   This appeal concerns entitlement to the proceeds of two life insurance policies.  Plaintiff Victoria diMonda claims an equitable interest in a portion of the proceeds based on her stipulated divorce agreement with decedent, which was adopted as a final order by the family division.  The civil division denied plaintiff’s motion for summary judgment and granted defendants’ motions for summary judgment and judgment on the pleadings.  We affirm the judgment granting interpleader relief to defendant USAA Life Insurance Co., but otherwise reverse and remand for further proceedings. 

 

The primary issue on appeal is whether the trial court correctly held that the life-insurance provision in the 2011 divorce order was invalid and as an attempt to secure postmortem maintenance.

 

The 2011 stipulated order provided that “[Decedent] shall maintain in place his present life insurance policy with SGLI with a payable on death benefit of $400,000, or a policy which has the same minimum death benefit, at his option [and] shall name Plaintiff as primary, 100% beneficiary on this life insurance policy for at least the next fifteen (15) years…”

 

Decedent retired from the military in April 2021, making him ineligible for the SGLI policy, and he did not thereafter obtain a new policy with the same minimum death benefit that named plaintiff as sole beneficiary.

 

However, when decedent died in December 2023, he held two other policies. In 2015, he obtained a $400,000 life insurance policy from USAA Life Insurance Co. and named Barrows as the sole beneficiary on this policy.  In 2020, he obtained a $250,000 life insurance policy from Lincoln National Life Insurance Co. and also named Barrows as the primary beneficiary. 

 

In January 2024. plaintiff filed this action against Lincoln, USAA, and Barrows, seeking a declaration that she was entitled to be paid $400,000 under the terms of the final divorce order. 

 

Barrows moved for judgment on the pleadings.  She argued that the life-insurance provision in the final divorce order was invalid because it would violate this Court’s caselaw prohibiting courts from awarding postmortem spousal maintenance. Lincoln also moved for judgment on the pleadings. It argued that even if the provision were enforceable, the plain language of the order did not apply to Lincoln’s $250,000 policy.  USAA moved for interpleader relief in the form of an order requiring it to deposit its policy’s death benefit with the court and dismiss USAA from the action.  Finally, plaintiff moved for summary judgment, arguing that the life-insurance provision was enforceable both because it was not tied to the spousal-maintenance provision and because decedent agreed to it.

 

The civil division granted defendants’ motions and denied plaintiff’s motion.  The court agreed with defendants that the life-insurance provision in the final order was intended to secure spousal maintenance beyond death and was therefore invalid and unenforceable.  The court held that Barrows was entitled to retain the $250,000 death benefit paid by Lincoln.  It ordered USAA to pay the $400,000 death benefit on its policy into escrow.

 

Our decisions make clear the family division does not have authority to order spousal maintenance to continue beyond the obligor’s death or to require the obligor spouse to name the obligee as a beneficiary on a life insurance policy for the purpose of securing unpaid maintenance.

 

 However, these decisions do not support the trial court’s conclusion that the life insurance provision in this case was unenforceable, for two reasons. First, it is not clear that the life-insurance provision was actually intended to secure post-mortem maintenance. 

 

Second, the provision was not imposed sua sponte by the family division.  Rather, the parties agreed to it as part of their stipulated property settlement. Because, as  we acknowledged in Justis and Meier, the parties can agree to postmortem maintenance, it follows that they may agree to secure a maintenance obligation with life insurance. Justis v. Rist, 159 Vt. 240, 244  (1992) (“[T]he courts have no authority to order maintenance to continue beyond the life of the obligor spouse unless the parties have agreed otherwise.” (emphasis added)).; Meier v. Meier, 163 Vt. 608, 610 (1994) (mem.)(  “the parties may agree to maintenance following the death of the obligor.” )

We reverse the trial court’s judgment, except for the portion of the order granting interpleader relief to USAA. No party challenges the court’s award of interpleader relief to USAA and our holding does not affect this aspect of the judgment.   

We remand for the court to consider whether plaintiff is equitably entitled to recover $400,000 or some other amount from the proceeds of either of the policies at issue in this case, and whether her claim takes priority.

The court should also address defendants’ claims that the life insurance provision does not entitle plaintiff to the proceeds of either the USAA or Lincoln policies because neither existed at the time of the divorce.

 

Affirmed as to the judgment granting interpleader relief to defendant USAA Life Insurance Co.; otherwise, reversed and remanded for further proceedings consistent with this opinion.

TEACHOUT, Supr. J. (Ret.), Specially Assigned, joined by EATON, J., dissenting in part.   I dissent as to that portion of the instructions on remand concerning distribution of the $400,000 USAA insurance proceeds.  Equity is the basis for plaintiff’s entitlement to life insurance for the reasons set forth in the majority opinion, but once plaintiff is entitled to receive life insurance, enforcement of the parties’ negotiated stipulation calls for her to have the full USAA policy proceeds, as that $400,000 amount was specifically provided for in the stipulation.

 

 Under both the court order and the contract created by the stipulation, plaintiff was guaranteed to be the “100% beneficiary” of $400,000 in life insurance for fifteen years. Decedent died within fifteen years of the stipulation.  Equitable enforcement of the insurance provision does not extend to giving the trial court the discretion to divide up the funds between plaintiff and other parties whose claims arose later.

 

I would order the trial court on remand to award plaintiff the $400,000 proceeds of the USAA insurance policy, award Barrows the full amount of proceeds of the Lincoln policy.

Divided Court reverses denial of motion to suppress breath test, holding officer may not require DUI suspect to elect whether to take a second test before providing results of first test.

 

Statev. Ettore, 2024 VT 52 [filed 8/30/2024]

 

COHEN, J. In this interlocutory appeal, defendant Eileen Ettore challenges the trial court’s denial of her motion to suppress an evidentiary breath-alcohol test, which she filed in both her criminal and civil dockets. We agree with defendant that, under the plain language of 23 V.S.A. §§ 1202(d)(5) and 1203(c), law enforcement must provide a suspect with the results of their first breath test before requiring the suspect to elect whether to take a second test. We reverse the court’s decision and remand for additional proceedings in the criminal case and for entry of judgment in defendant’s favor in the civil suspension proceedings.

Defendant argued below that the officer violated her implied-consent rights by asking her if she wanted a second test before informing her of the results of the first test. The relevant language in the informed-consent statute is as follows:

At the time a test is requested, the person shall be informed of the following statutory information: . . .

 A person who is requested by a law enforcement officer to submit to an evidentiary test administered with an infrared breath-testing instrument may elect to have a second infrared test administered immediately after receiving the results of the first test.

23 V.S.A. § 1202(d)(5). Section 1203(c) provides that “[a] person tested with an infrared breath-testing instrument shall have the option of having a second infrared test administered immediately after receiving the results of the first test.”  

The trial court concluded in relevant part that defendant’s right to be informed about the ability to elect a second breath test matured at the time the officer requested an evidentiary breath sample under and that the officer properly informed defendant of her implied-consent rights, including her right to request a second breath test upon receiving the results of the first, before she took the first test.

We disagree and conclude, based on the plain language of the laws, that the Legislature intended that suspects possess the necessary information to make an informed decision about the exercise of their statutory rights. The officer asked defendant if she wanted a second test before she was provided the results of the first test. Without the test results, defendant could not make a fully informed decision about whether to request a second test. The process laid out by statute was not followed.

Mindful of the important rights at stake, and the critical need for informed decisionmaking recognized by the Legislature, we reverse the trial court’s decision in this case. Defendant is therefore entitled to judgment in her favor in the civil-suspension proceedings and we remand the civil matter for entry of such judgment. Granting the motion to suppress does not dispose of the two pending criminal charges against defendant, however, and the criminal case is thus remanded for additional proceedings

Reversed and remanded for additional proceedings

 

CARROLL, J., (Joined by Waples,J.) dissenting. Contrary to the majority’s holding, neither statute requires an officer to ask a suspect after the first test is administered if they would like to take a second test. The verb “elect” in § 1202(d)(5) gives the suspect the choice to take another test but puts no duty on the police officer to prompt the suspect to make that choice. See 23 V.S.A. § 1202(d) (“At the time a test is requested, the person shall be informed of the following statutory information.” (emphasis added)). Section 1203(c)’s “shall have the option of having a second infrared test administered immediately after receiving the results of the first test”  means that a law-enforcement officer must instead not intentionally deprive a suspect of the option at the appropriate time.

In sum, § 1202(d)(5) and § 1203(c) required that Officer Perkins advise defendant of her right to take a second test when Officer Perkins requested the first evidentiary test. There is no dispute Officer Perkins advised defendant of this right. But now, for the first time, the majority holds that appropriately disclosing the implied-consent warnings under the statute is not enough. Moreover, for the first time, the majority does not require a showing of bad faith or prejudice to suppress a breath test. Indeed, the majority no longer requires a defendant to even argue bad faith or prejudice to suppress a breath test. Instead, for the first time, suppression is mandatory if the officer deviates in the slightest way from reminding a defendant what was already disclosed to the defendant and to which the defendant already affirmatively acknowledged. I submit that this result goes beyond the relevant statutes, our precedents, the trial court’s credibility determinations, and defendant’s own arguments on appeal.

 I must respectfully dissent.

 

Divided Court affirms confirmation of arbitration award against employer without deciding whether “manifest disregard" of the law is an appropriate standard of review. The law did not manifestly require employer to discipline employee for HIPAA violation in this case.

 

Howard Center v. AFSCME Local 1674,  2023 VT 6 

 

REIBER, C.J. . Employer Howard Center appeals from a trial court order that confirmed an arbitration award in favor of grievant Daniel Peyser and AFSCME Local 1674. Employer asks this Court to adopt "manifest disregard" of the law" as a basis for setting aside an arbitration award and to conclude that the arbitrator violated that standard here. We do not decide whether to adopt the manifest-disregard standard because, assuming arguendo it applies, employer fails to show that its requirements are satisfied. We therefore affirm.

Employer issued a written reprimand to grievant for sharing client records with his union representative without redacting confidential information. The arbitrator concluded employer should have instead used informal counseling and directives rather than formal discipline, and that employer thus lacked just cause to reprimand grievant. Employer argues the arbitrator manifestly disregarded HIPAA, which it contends required it  to discipline grievant by imposing an "appropriate sanction[]" and it therefore had just cause to reprimand him.

"Vermont has a long history of upholding arbitration awards whenever possible." Shahi v. Ascend Fin. Servs., Inc. , 2006 VT 29, ¶ 10,  Review is limited to "whether there exist statutory grounds for vacating or modifying the arbitration award" and "whether the parties were afforded due process." Id. See 12 V.S.A. § 5677(a)(1)-(5). We have not yet decided whether to recognize "manifest disregard of the law" as an additional basis for vacating an arbitration award, although other courts have done so. See Masseau v. Luck, 2021 VT 9, ¶ 30  (recognizing that this "remains an open question" under VAA and under Federal Arbitration Act (FAA)

 We review de novo whether the arbitrator manifestly disregarded the law in this case. The HIPAA Privacy Rule mandates that covered entities "must . . . [e]nsure the confidentiality, integrity, and availability of all electronic protected health information" and "[e]nsure compliance with this subpart by its workforce." 45 C.F.R. § 164.306(a)(1), (4). In accordance with § 164.306, a covered entity "must" implement a sanction policy and "[a]pply appropriate sanctions" against employees who fail to comply with patient-confidentiality policies and procedures. Id. § 164.308(a)(1)(ii)(C)

 Neither the HIPAA statute nor regulation define the term "appropriate sanction" and there is no case law interpreting the term. The arbitrator found that grievant did not engage in "intentional misconduct" and, at worst, he "made an error in judgment." Because  the HIPAA Privacy Rule does not clearly require a certain type of sanction for violations, Employer fails to show that this case presents an "exceedingly rare instance[]" of "egregious impropriety," Masseau, 2021 VT 9, ¶ 31  that rises to the level of manifest disregard,

We conclude, as in Masseau, that "even assuming that courts are empowered to vacate an arbitrator's decision based on manifest disregard of the law -- which we do not decide -- the asserted legal error in the arbitrator's decision here does not rise to the level of manifest disregard." 2021 VT 9, ¶ 32.

EATON  J. dissenting. The majority's decision essentially transforms our limited review of arbitration decisions into no review. The arbitrator here recognized that the law required employer to sanction grievant for disclosing confidential patient information but the arbitrator chose to disregard that law and reverse employer's decision. The majority's refusal to adopt the manifest-disregard standard is harmful generally because it erodes confidence in arbitration awards and provides an incentive for arbitrators to avoid explaining the bases for their decisions. It is also detrimental under the circumstances of this case because it punishes employer for carrying out its obligations under federal law and ignores the harm to patients whose information was improperly disclosed. Because employer's decision to sanction grievant was supported and required by law and the arbitrator disregarded the law in overturning it, I would reverse and remand for the trial court to vacate the arbitration order. Therefore, I dissent.

I agree with Employer that the arbitrator manifestly ignored the law in concluding that employer lacked just cause to discipline grievant for violating patient confidentiality. I would adopt the manifest-disregard standard and allow courts to vacate an arbitration award when they find that (1) the arbitrator knew the governing law but refused to follow it or ignored it, and (2) the applicable law was well defined, explicit, and clearly applicable to the case.  Although mere legal error will not suffice to vacate an award, this Court should not turn a blind eye to intentional disregard of the law.

Here the arbitrator purposely ignored applicable law to excuse an unnecessary and unlawful breach of patient confidentiality by grievant who deliberately accessed and shared private health information of his patients solely for his own purposes. While the arbitrator did not find any malicious intent, there is no question grievant acted deliberately. The majority's failure to adopt the manifest-disregard doctrine in this case is essentially a rejection of it.

How cited

Divided Court affirms, as discretionary, a “pet allocation” that factored the husband’s denial of visitation during separation. in disregard of “Zola’s emotional attachment to wife”

 LaRiviere v. Shea, 2023 VT 33 

CARROLL, J.  Husband appeals a final order granting wife ownership of the family dog in this divorce action. We affirm.

Section 751 of Title 15 gives the family division authority to order an equitable division of marital property after considering all relevant factors.15 V.S.A. § 751(b) ("In making a property settlement the court may consider all relevant factors, including [statutory criteria]."); Hament .v. Baker, 2014 VT 39 , ¶ 7.

On appeal Husband argues  that the trial court  misapplied the pet-allocation factors set out in Hament and authorized by § 751(b).

Because  few of the statutory factors apply to pets, Hament held that  § 751(b) “permits the consideration of additional relevant factors.” Id. ¶ 12. We outlined two factors not in the statute that were appropriate for courts to consider in this context: “[1] the welfare of the animal and [2] the emotional connection between the animal and each spouse.” Id. ¶¶ 12- 13  The family division enjoys wide discretion when dividing property and must only “provide a clear statement as to what was decided and why” Id.

The court found the parties adopted a dog together before their marriage, which they named Zola. Zola appeared to be emotionally attached to both parties. Each regularly spent time with Zola and maintained a strong emotional bond to Zola They shared equally in the expenses and care for Zola until the spring of 2021. When the parties first separated, each agreed to have Zola every other week on an alternating basis. After moving out of state, however,  husband  unilaterally and without explanation cut off wife from contact with Zola.

The trial court correctly identified 15 V.S.A. § 751 and Hament as the appropriate authority and provided a clear explanation about what it decided and why. Applying the two Hament factors, the court found that husband and wife were each able to meet Zola’s needs, including providing play time and medical care. The court found that each party had strong emotional bonds with Zola, although wife’s bond seemed to be greater. The court was troubled by at husband’s unilateral and unexplained decision to cut off contact between wife and Zola, stating it “call[ed] into question his regard for the emotional attachment that Zola feels toward [wife].” On balance, it concluded that the two factors favored assigning Zola to wife. 

This satisfies  Hament, which merely requires a clear statement about what it decided and why. Id. ¶ 7,  ¶ 20. 

The dissent mischaracterizes a single finding—husband’s disregard for wife’s emotional connection to Zola—as engaging in a custodial best-interests analysis, which would be unlawful in this context See Hament, 2014 VT 39, ¶ 10 (“In contrast to a child, a pet is not subject to a custody award following a determination of its best interests.”). Neither party raised the question the dissent focuses on, and the trial court did not consider it. Husband’s disregard for wife’s emotional connection to Zola is inherently a finding relating to Hament’s factor regarding “the emotional connection between the animal and each spouse.” Id. ¶ 13

Even if we were to find that disregard for Zola’s feeling toward wife does not neatly fit into either Hament factor -- though it plainly relates to both -- we would affirm the court’s decision. Nothing in Hament  limits the family division’s discretion to certain factors  As discussed, § 751(b) and Hament both permit the court to fashion an appropriate order based on “all relevant factors.” The trial court has considerable discretion in this posture and, absent entirely withholding its discretion or exercising it for clearly untenable or unreasonable reasons, we will affirm.

For these reasons, the court did not err in awarding Zola to wife.

 Affirmed.

 COHEN, J., dissenting. I would reverse and remand on the grounds that the trial court’s decision exceeded the scope of the factors identified in Hament, ¶ 13 for determining pet ownership in divorce proceedings. The court applied a best-interests standard appropriate when determining child custody but inappropriate for pet allocation.

It is inappropriate and an abuse of discretion to allow best-interests factors to seep into a property-division analysis beyond the two pet allocation factors this Court has already indicated are appropriate. See Hament, ¶ 13. Whether or not husband has regard for the emotional connection between Zola and wife is irrelevant to the pet-allocation analysis.

This Court already held in Hament that a property-division proceeding cannot end in shared ownership of a pet; it would be logically inconsistent to then rely on compliance (or lack thereof) with a shared-ownership agreement as evidence weighing in one party’s favor in such a proceeding. Id. ¶ 6.

Further, regard for the emotional connection between the pet and the other party is categorically unnecessary when considering pet ownership.

The trial court impermissibly considered factors beyond the scope of Hament. I would therefore remand for the court to reconsider the evidence under the correct legal standard.  I am authorized to state that Justice Waples joins this dissent.

How cited

SCOVT NOTE.  Hament held the welfare of the animal may be considered in final disposition, also noting, "Like most pets,[a dog's] worth is not primarily financial, but emotional; its value derives from the animal's relationship with its human companions."  

In addition to confirming that the statute expressly permits consideration of relevant factors other than those enumerated in § 751(b), Hament  held the Family Division has no authority to impose an enforceable joint custody or visitation order for a dog. An order of "pet allocation" is a final property division order not subject to modification. Even if submitted by stipulation, an agreement to share custody of the family dog or other pet would be unenforceable in the family division:

Divorce has few concrete advantages for the parties, but one of the greatest is that they are no longer compelled to be in contact over the care and use of their property or the way they spend their time.

Hament ¶ 19. (Crawford, J.)

Divided Court reverses judgment on the pleadings and rules that allegations of contamination by SARS-CoV-2 was sufficient to trigger coverage as “direct physical loss or damage to property” under a business interruption policy and to survive a Rule 12(c) motion.

Huntington Ingalls Industries, Inc. v. Ace American Insurance Co.,  2022 VT 45 (filed 9/23/2022)

EATON, J. Insured Huntington Ingalls Industries, Inc. and insurer Huntington Ingalls Industries Risk Management LLC seek a declaratory judgment stating there is coverage under a property insurance policy for certain losses incurred by Huntington Ingalls Industries due to the COVID-19 pandemic. The trial court concluded that the complaint did not allege facts that would trigger coverage under the policy and granted judgment on the pleadings in favor of reinsurers. We reverse.

In September 2020, insured and insurer sued reinsurers seeking a declaratory judgment that they are entitled to coverage under the policy for property damage, business interruption, and other losses suffered as a result of SARS-CoV-2, the pandemic, and civil authority orders. The complaint alleges the pandemic caused “direct physical loss or damage to property” when the virus adhered to surfaces for several days and lingered in the air for several hours at the shipbuilding yards. The alleged losses include disruption in orderly construction and repair of vessels, schedule impacts in the construction and repair of vessels, expenses—including increased labor and information technology costs—incurred to continue as near to normal operations as practicable, loss of profit.

Before any discovery, insured and reinsurers filed cross-motions for judgment on the pleadings pursuant to Vermont Rule of Civil Procedure 12(c). Reinsurers sought complete judgment on the pleadings, arguing that insured had not sufficiently alleged that “direct physical loss or damage to property” had occurred. Insured filed three motions for partial judgment on the pleadings. In the first motion, it argued that reinsurers’ affirmative defense that the presence of SARS-CoV-2 in or on property cannot constitute “direct physical loss or damage to property” was incorrect as a matter of law.The trial court granted reinsurers’ motion for judgment on the pleadings and consequently denied all of insured’s motions. The inquiry below focused on the meaning of “direct physical loss or damage to property” under the policy. The trial court t concluded that insured did not experience loss of property but instead suffered an uncovered loss of income because the shipbuilding yards remained in operation despite the presence of the virus.

On appeal, the overarching issue remains the same: how do we interpret “direct physical loss or damage to property” in this insurance policy?

The phrase “direct physical loss or damage to property” is unambiguous, and the common meaning of these terms therefore controls the interpretation of the property insurance policy in this case The phrase “direct physical loss or damage to property” includes two distinct components, either of which will trigger coverage unless an exclusion applies: “direct physical damage” and “direct physical loss.” “Direct physical damage” requires a distinct, demonstrable, physical change to property. “Direct physical loss” means persistent destruction or deprivation, in whole or in part, with a causal nexus to a physical event or condition. Purely economic harm will not meet either of these standards.

The complaint adequately allege that the virus physically altered property in insured’s shipyards when it adhered to surfaces. That the virus “adheres” to property, thus “altering and impairing” it in a tangible way, that provides reinsurers with notice of insured’s allegations for how the virus can cause “direct physical loss or damage to property.” This description of the process of how the virus causes damage to property also raises the complaint beyond the threshold of mere “conclusory allegation[s].” Colby, 2008 VT 20, ¶ 13. 

Insured’s complaint contains sufficient allegations to survive a Rule 12(c) motion for judgment on the pleadings under Vermont’s extremely liberal pleading standards. The losses it alleges are either “direct physical loss” or “direct physical damage” to property We therefore reverse the trial court’s grant of judgment on the pleadings in favor of reinsurers and the trial court’s denial of insured’s motion for partial judgment on the pleadings on the issue of reinsurers’ affirmative defense.

To be clear, this opinion does not state that what occurred in insured’s shipyards is “direct physical loss or damage to property” under the policy. We merely conclude that insured has alleged enough to survive a Rule 12(c) motion under our extremely liberal pleading standards. See Colby, 2008 VT 20, ¶ 5 n.1 (declining to adopt heightened federal pleading standard). Reinsurers may well be correct that insured’s losses were not caused by any “direct physical loss or damage to property,” but instead from the risks employees posed to each other or some other non-covered reason; however, we cannot agree that this is an “obvious fact” that undermines the various allegations in the complaint, which, at this stage, we must accept as true.

Reversed and remanded for further proceedings consistent with this opinion.

CARROLL, J., dissenting. As a matter of law, human-generated droplets containing SARS-CoV-2 cannot cause “direct physical loss or damage to property” under this insurance policy. No future litigation can change that reality. While I agree with the majority’s conclusion that the insurance contract term in dispute is unambiguous, I cannot agree that insured’s claim survives beyond the pleadings stage. Accordingly, I respectfully dissent

The gist of insured’s allegations on this point is that virus-infected droplets have continuously landed on surfaces in its facilities, and the presence of these droplets—known as “fomites” when they land on surfaces—renders the property incapable of functioning for its intended purpose. But a fomite cannot cause damage to property if damage is defined as a “distinct, demonstrable, physical change.” SARS-CoV-2 does not “alter the appearance, shape, color, structure, or other material dimension of the property.” No matter what verb insured uses, whether “adheres,” “attaches,” or even “on,” a fomite does not physically change property. Verveine Corp. v. Strathmore Ins. Co., 184 N.E.3d 1266, 1276 (Mass. 2022) (“Evanescent presence of a harmful airborne substance that will quickly 36 dissipate on its own, or surface-level contamination that can be removed by simple cleaning, does not physically alter or affect property. “)

To sum up, insured’s allegation that fomites cause physical damage to its property cannot be proven because fomites demonstrably have no effect on the tangible, physical dimension of insured’s property. No reasonable person in insured’s position would think otherwise. It is one thing to conclude that a disputed insurance policy term is ambiguous and permit litigation to proceed in a Rule 12(c) posture. It is quite another to conclude that one phrase—“direct physical damage”—is unambiguous and accept as true the implausible claim that human-generated, infectious droplets can damage property,. Accordingly, to save valuable time and energy for both the court and the parties from litigation with a preordained outcome, I would affirm the trial court’s order granting reinsurers’ motion for judgment on the pleadings and affirm the trial court’s order of dismissal.

I am authorized to state that Judge Bent joins this dissent.

How cited

Divided Court rules a moot appeal of health insurance rates can not be decided as a case “capable of repetition yet evading review.”

 

In re Blue Cross and Blue Shield 2022 Individual & Small Group Market Filing, 2022 VT 53 (filed 11/4/2022)

CARROLL, J. Blue Cross Blue Shield of Vermont (Blue Cross) appeals from the Green Mountain Care Board’s (GMCB) decision modifying its proposed health-insurance rates for 2022. The case is moot because health-insurance rates for 2022 cannot now be changed. Because Blue Cross cannot demonstrate that this kind of case is capable of repetition yet evading review or subjects it to continuing negative collateral consequences, Blue Cross fails to meet the exceptional thresholds necessary for us to reach the merits in a moot case. We affirm.

We have recognized the mootness exception for cases that are capable of repetition yet evading review. The exception applies when two conditions are met: (1) “the challenged action must be in its duration too short to be fully litigated prior to its cessation or expiration, and [(2)] there must be a reasonable expectation that the same complaining party will be subjected to the same action again.” Price v. Town of Fairlee, 2011 VT 48, ¶ 24, 190 Vt. 66, 26 A.3d 26.

In considering the first prong, “we have examined whether, in the future, the complaining party ‘would not be able to challenge [the action] effectively.’ ” In re Vt. Dep’t of Pub. Serv. (Vermont Yankee), 2008 VT 89, ¶ 11, 184 Vt. 613, 959 A.2d 564 (mem.) (quoting Hunters, Anglers & Trappers Ass’n of Vt., 2006 VT 82, ¶ 16); see also Hamamoto v. Ige, 881 F.3d 719, 723 (9th Cir. 2018) (per curiam) (“The question . . . [is] whether the underlying action is almost certain to run its course before . . . the [court] can give the case full consideration.” (quotation omitted)).

If a litigant “could have taken actions to expedite the appellate process” but did not, the matter does not fit within this exception. State v. Rooney, 2008 VT 102, ¶ 12, 184 Vt. 620, 965 A.2d 481 (mem.); see Paige v. State, 2017 VT 54, ¶¶ 4 n.*, 9, 205 Vt. 287, 171 A.3d 1011 (explaining that appellant filed motions to extend time to file main brief and reply brief and waited until long after event mooting appeal before requesting oral argument from Supreme Court); Hamamoto, 881 F.3d at 723 (concluding capable-of-repetition-but-evading-review exception was not met in case where plaintiffs did “not demonstrate[] that expedited review would have been unavailable”).

We have not established a firm period of time that is “too short” to allow judicial review, though our cases draw broad parameters. In State v. Rooney we held that less than four months was sufficient time to complete appellate review. 2008 VT 102, ¶ 12 In Vermont Yankee, we held that ten months was sufficient time to complete appellate review. 2008 VT 89, ¶ 11. However, in Price, we applied this exception where the statutes at issue created a ninety-day window to review the challenged action at both the trial and appellate levels. 2011 VT 48, ¶¶ 24-25. We also applied the exception to a six-month window for judicial review at both trial and appellate levels. In re Durkee, 2017 VT 49, ¶¶ 10-13, 205 Vt. 11, 171 A.3d 33.

In this case, the Department of Vermont Health Access (DVHA) apparently required Blue Cross to provide its final approved rates eleven days after GMCB’s August 5 approval so that it could review and certify the health insurance plans, incorporate final plan information into brochures and comparison tools, and then update, populate, and test the online exchange system in time for customers to browse plans by October 15. However, it is not clear from the record which of these events may constitute a firm deadline, if any, for completion of appellate review. Blue Cross never alerted the Court to the matter’s expedient nature. if it had immediately appealed the GMCB’s August 5 decision and requested an expedited timeline under Rule 2, the Court most likely would have had sufficient time to decide the appeal. The ten weeks which elapsed between August 5 and October 18 was enough to complete appellate review.

To prevail the second prong, Blue Cross must “show that there is a reasonable expectation” that it “will be subjected to the same action again.” The circumstances surrounding the pandemic were, as Blue Cross concedes, “extraordinary,” resulting in a “year like no other.” Accordingly, Blue Cross simply cannot demonstrate that it is more than a “theoretical possibility” it “will become embroiled again in this same situation.” Even if this case did not evade review it is also not capable of repetition.

Because Blue Cross cannot demonstrate that this kind of case is capable of repetition yet evading review or subjects it to continuing negative collateral consequences, Blue Cross fails to meet the exceptional thresholds necessary for us to reach the merits in a moot case.

COHEN, J., dissenting. I agree that this matter is technically moot because Blue Cross’s 2022 rates can no longer be changed, but I disagree with the majority’s conclusion that this case does not meet the mootness exception for matters capable of repetition but evading review.

Assuming for the sake of argument that Blue Cross should have foregone reconsideration, the review period began on August 5, 2021, when the GMCB issued its initial decision. This appeal became effectively moot on August 16—when the DVHA required insurers to provide their final rates—or very shortly thereafter.  Insofar as the majority is suggesting that appeals from the GMCB could be briefed, argued, and decided in a couple of weeks or less, and that this timetable should be the new bar for satisfying the evading-review prong, I disagree.

Because the timeline for health-insurance-rate regulation and administration remains essentially the same year to year, this case inherently evades review The fact that Blue Cross did not take steps to expedite its appeal should not be relevant because there would have been insufficient time for review even if the appeal were expedited as much as possible. The first prong of the mootness exception is met.

There is also “a reasonable expectation that [Blue Cross] will be subjected to the same action again,” and thus the second element of the mootness exception is met here. Blue Cross has presented a discrete legal question regarding a criterion that the GMCB is legally obligated to consider in every annual-rate review: whether the GMCB misinterpreted the term “excessive.” Nowhere does the GMCB claim that its interpretation of the term “excessive” depended on the pandemic’s extraordinary factual circumstances. In other words, the GMCB does not contend that the way it applied “excessive” was a one-time anomaly justified by the pandemic. Instead, the GMCB argues that , properly interpreted, its governing rules and statutes require it to consider nonactuarial evidence in determining whether a proposed rate is excessive. This legal position would be relevant in any rate year. Though the specific facts will change year to  year, our case law compels us to reach the merits of this appeal. Blue Cross has presented a novel legal issue that is nearly certain to affect future rate proceedings.

Because in my view the majority opinion effectively forecloses appellate review of a recurring issue, I respectfully dissent. I am authorized to state that Chief Justice Reiber joins this dissent.