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. 

Divided Court denies motion to dismiss appeal from administrative agency, holding that tolling provision of Appellate Rule 4(b) is triggered by post-judgment motions that are “substantively indistinguishable” from a Rule 59 motion.

 

1.    Procedure. Administrative Appeals. 

     In re  VT Real Estate Holdings 1 LLC, 2026 VT 13 [4/17/2026]

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

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

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

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

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

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

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

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

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

Rule 41 gives claimant absolute right to dismiss if no answer or summary judgment is filed.

Sheryl Weitz v. Theodore Weitz , 2019 VT 35 [filed 5/24/2019]

CARROLL, J. In this divorce proceeding, husband appeals an order denying his motion to reopen the case after wife’s notice of voluntary dismissal, filed pursuant to Vermont Rule of Civil Procedure 41(a)(1)(i). On appeal, husband argues that: (1) Rule 41(a)(1)(i) “is in direct conflict” with the Vermont Rules for Family Proceedings and is therefore inapplicable to the Family Division; (2) Rule 41(a)(1)(i) was not intended to apply in cases where significant resources have been expended; and (3) that it is inequitable to apply Rule 41(a)(1)(i) in this case due to alleged bad faith and bad acts by wife. We affirm.

The interpretation of a procedural rule is a question of law which we review de novo. State v. Amidon, 2008 VT 122, ¶ 16, 185 Vt. 1, 967 A.2d 1126. The plain, ordinary meaning of a rule controls when it is unambiguous. See State v. Villar, 2017 VT 109, ¶ 7, 206 Vt. 236, 180 A.3d 588 (“In construing a procedural rule, we look first to the rule's plain language, just as with statutory construction.”); McClellan v. Haddock, 2017 VT 13, ¶ 13, 204 Vt. 252, 166 A.3d 579 (“Our task . . . is to ascertain and implement the Legislative intent . . . . In determining that intent, our principal source, at least initially, must be the language of the statute itself.” (quotation omitted)).

Rule 41(a)(1)(i) states that an action “may be dismissed by the plaintiff without order of court by filing a notice of dismissal at any time before service by the adverse party of an answer or of a motion for summary judgment.” V.R.C.P. 41(a)(1)(i). This language is unambiguous: if an adverse party has not served either an answer or a motion for summary judgment on the plaintiff, then the plaintiff may choose to dismiss the case3 by filing a notice of dismissal. Use of the permissive term “may” shows that a V.R.C.P. 41(a)(1)(i) dismissal is at the plaintiff’s option. And no court order is necessary to effectuate such a dismissal because the case is to be dismissed “by the plaintiff without order of [the] court.” Id.; Fed. Nat’l Mortg. Ass’n v. Johnston, 2018 VT 51, ¶ 5, __Vt.__, 189 A.3d 567 (“The language . . . ‘without order of court’ connotes that as long as a plaintiff makes the filing and the requisite facts are present . . . then the case is dismissed.”)

Generally, Vermont Rule 41(a)(1)(i) does not permit consideration of how far a case has advanced where no answer or motion for summary judgment has been served by an adverse party.  The reason for a voluntary dismissal, whether to forum shop, avoid sanctions, or simply seek a more convenient (or advantageous) forum, is irrelevant.

The Rules of Civil Procedure apply to “actions for divorce” except as “otherwise provided” in the Vermont Rules for Family Proceedings. V.R.F.P. 4.0(a)(1)-(2)

Here, husband never filed an answer nor moved for summary judgment. Therefore, wife retained the option to voluntarily dismiss the case by filing a notice of dismissal. We therefore affirm the trial court’s decision to deny husband’s motion to reopen. This result is plainly required by the text of the rule.

SCOVT reverses "judgment on the pleadings" for failure to serve because the court lacked sufficient evidence to determine whether service was completed.

Messier v. Bushman, 2018 VT 93 [filed 8/24/2018]

EATON, J. On January 16, 2014, Michael Messier and Kay Bushman were involved in an auto accident in Berlin. Both were the drivers of their respective vehicles and were then-alleged to be Vermont residents. On January 13, 2017, shortly before the statute of limitations was to expire, Messier filed suit against Bushman for negligence. The trial court granted a motion for judgment on the pleadings filed by Bushman on the basis that neither personal nor substituted service had been accomplished on Bushman.. We reverse and remand .

The pleadings were not closed when the motion was filed, and the service issues were not apparent from the face of the pleadings. Although styled as a motion for judgment on the pleadings, the gravamen of the motion was that service of process had not been accomplished on Bushman. Thus, the motion was akin to one seeking dismissal under V.R.C.P. 12(b)(5). This is a distinction with a difference. Judgment on the pleadings, as the name suggests, results in a judgment and is an adjudication on the merits. A dismissal for failure to properly serve the summons and complaint results in a dismissal and is not a merits adjudication.

.We do not agree with Messier that Bushman waived the  defense of improper service  by failing to raise it by motion or answer within the time allowed for answer under V.R.C.P. 12(a) following actual notice. An answer filed a few days late, if this one was, which raised the defense of insufficient service of process  did not  waive the defense. 

On a motion to dismiss for lack of subject matter jurisdiction, lack of personal jurisdiction, or insufficiency of service of process, consideration of matters outside the pleadings is permissible. Here, the court lacked sufficient evidence to determine whether Messier completed § 892(a)’s requirements by providing Bushman with a copy of the return showing service on the Commissioner. The failure to at least acknowledge Messier’s assertion that the affidavit was referring to the Commissioner’s return suggests that the court did not consider all the evidence it had before it.

Civil Procedure. Court affirms voluntary dismissal by plaintiff, despite “two-dismissal “ rule, because the effect of the dismissal is not ripe until a third action is filed.

Federal National Mortgage Association v. Johnston, 2018 VT 51 [filed May 4, 2018] 

EATON, J. Defendants Marjorie Johnston and Kamberleigh Johnston appeal the voluntary dismissal without prejudice filed by plaintiff bank Federal National Mortgage Association in this eviction action. On appeal, defendants argue that because a prior eviction action filed by bank had been dismissed, this case should have been dismissed with prejudice. Defendants also contend that the court erred in denying their motion to reconsider without a hearing and not dismissing the case on mootness grounds. We conclude that the effect of the voluntary dismissal is not ripe until a third action is filed and affirm.

Under Vermont Rule of Civil Procedure 41(a), a plaintiff can dismiss a case “without order of court” by filing a notice of dismissal if it is before the adverse party files an answer. A voluntary dismissal is usually without prejudice, “except that a notice of dismissal operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in any court.” V.R.C.P. 41(a)(1). This is known as the two-dismissal rule.

Because the dismissal is effective upon filing and without court order, there is a question whether the court retains authority after the dismissal to decide whether the two-dismissal rule applies.  We have held in a different context, that “[i]n general, a court should not dictate preclusion consequences at the time of deciding a first action.”

We conclude that defendants’ argument concerning the two-dismissal rule was not properly before the trial court and will become ripe only when and if a third action is filed. If a third action is filed, at that point, the court can determine the facts of the prior two actions and decide if the two-dismissal rule applies.

Civil procedure. Sanctions. SCOVT reverses sanction against mortgagee for repeatedly filing foreclosure actions and failing to prosecute them to completion.

Provident Funding Associates, LP v. Campney, 2017 VT 120  [filed 12/22/2017]

REIBER, C.J. Senior mortgagee appeals the trial court’s order dismissing junior mortgagee as a defendant from senior mortgagee’s fourth foreclosure action against mortgagors. The trial court determined that junior mortgagee was entitled to dismissal as an equitable remedy because senior mortgagee had imposed unnecessary costs on junior mortgagee by repeatedly filing foreclosure actions against defendants and failing to prosecute them to completion. The court’s order had the effect of reordering the priority of mortgages, making senior mortgagee’s interest second in priority to that of junior mortgagee. We reverse and remand for the court to consider monetary sanctions, such as attorney’s fees, as an alternative sanction.

The central question posed by this appeal is whether the court appropriately invoked equitable authority to dismiss junior mortgagee as a defendant as a penalty for senior mortgagee’s conduct in the prior foreclosure actions. The power to impose dismissal as a sanction must be exercised sparingly. This is because “the law favors disposition of cases on their merits.”. Furthermore, “sanctions against litigants should be proportionate to their offenses.” For this reason, we have held that “[t]he use of a dismissal sanction is proper only if the court finds that the defendant would be prejudiced by anything less than dismissal.”

We conclude that the litigation approach employed by senior mortgagee warranted sanction, but the court’s dismissal of senior mortgagee’s claim against junior mortgagee was erroneous. The court should have considered imposing monetary or other less drastic sanctions before proceeding to the extreme sanction of dismissal.

Because mortgagors did not cross-appeal, we do not reach their argument raised in their brief that the trial court should revise its judgment decree for foreclosure and recompute any sums due.. See See Huddleston v. Univ. of Vt., 168 Vt. 249, 255, 719 A.2d 415, 419 (1998) (“An appellee seeking to challenge aspects of a trial court’s decision must file a timely cross-appeal …”).

The trial court was within its discretion in deciding to impose some form of sanction. However, the trial court’s dismissal of senior mortgagee’s action against junior mortgagee was an unsustainable exercise of its inherent authority to discipline litigants and attorneys for their conduct. We therefore reverse the trial court’s order dismissing junior mortgagee as a defendant and remand the action for the trial court to consider monetary sanctions against senior mortgagee

Dismissal as discovery sanction affirmed.

Synecology Partners, L3C v. Business RunTime, Inc., 2016 VT 29 ( March 4, 2016)

EATON, J.. In this dispute between two computer software companies, SynEcology Partners, L3C challenges the trial court's order dismissing its complaint against Business RunTime, Inc. stemming from its failure to comply with Business RunTime's discovery requests. For the reasons stated herein, we affirm.

We have held that "where the ultimate sanction of dismissal is invoked it is necessary that the trial court indicate by findings of fact that there has been bad faith or deliberate and willful disregard for the court's orders, and further, that the party seeking the sanction has been prejudiced thereby." Med. Ctr. Hosp. of Vt., Inc., 136 Vt. at 519, 394 A.2d at 1135. "The imposition of the dismissal sanction cannot be imposed merely as punishment for failure to comply with the court's order." Id. Rather, the party's failure must evidence "flagrant bad faith" and "callous disregard of responsibilities counsel owe to the court and to their opponents." Id. at 520, 394 A.2d at 1135

SynEcology's contention that the circumstances called for a less drastic sanction than dismissal is incorrect because the trial court's order includes findings that describe a pattern of conduct that satisfies the standard articulated in Med. Ctr. Hosp. of Vt., Inc., and therefore warrants dismissal. The trial court reviewed the thirty-four month long discovery process, which included multiple requests for supplemental production by Business RunTime and two motions to compel. In drawing the conclusion that SynEcology acted in bad faith, the trial court specifically noted SynEcology's repeated insistence that it had produced all emails from the Comcast account, which it later retracted, without explanation, when that insistence was shown to be false. With regard to its finding that SynEcology acted with deliberate and willful disregard for the court's orders, the trial court noted SynEcology's failure to produce a privilege log, despite promising to do so on at least three occasions and being compelled to do so by a court order. Further, the trial court found Business RunTime was prejudiced by this behavior because: (1) the case was delayed for more than two years; (2) it was required to engage in unneeded motion practice to obtain materials it was properly entitled to; and (3) it suffered increased attorneys' fees. Considering this, combined with SynEcology's repeated failures to comply with the production requests, including its failure to produce a privilege log, its numerous unmet promises to do so, and the production of additional emails without explanation, the trial court properly concluded that SynEcology "purposefully and knowingly, and in bad faith, failed to provide accurate responses to the document requests

We disagree with SynEcology's claim that the dismissal of the action without a hearing on the motion for contempt was error.As reflected by the record, neither party requested a hearing with respect to the motion for contempt pursuant to Rule 78(b)(2).the trial court informed Synecology that before ruling upon the contempt motion, it would allow time for substitute counsel and supplemental pleading. This is exactly what the trial court did. Synecology's new counsel filed the supplemental pleading, but did not request a hearing on the motion. Rule 78(b)(2) authorizes a court to dispose of a motion without argument, and the decision to do so is within the discretion of the court. Bandler v. Cohen Rosenthal & Kramer, LLP, 2015 VT 115, ¶ 11, ___ Vt. ___, ___ A.3d ___

Placing product in stream of commerce is a basis for personal jurisdiction.

State v. Atlantic Richfield Co.,2016 VT 22 (filed February 12, 2016)

REIBER, C.J.This interlocutory appeal requires us to examine the contours of the "stream-of-commerce" doctrine of personal jurisdiction, which was introduced by the U.S. Supreme Court in a 1980 decision but later divided the Court with respect to its scope. Defendant Total Petrochemicals & Refining USA, Inc. (TPRI) challenges a decision of the superior court, civil division, denying its motion to dismiss for lack of personal jurisdiction, a complaint alleging that TPRI, along with twenty-eight other defendants, contaminated the waters of the state by introducing into those waters a gas additive called methyl tertiary butyl ether (MTBE). We affirm.

The superior court "has discretion to decide a pretrial motion to dismiss for lack of personal jurisdiction on the basis of affidavits alone, to permit discovery, and to conduct an evidentiary hearing." Godino v. Cleanthes, 163 Vt. 237, 239, 656 A.2d 991, 992 (1995). If, as in this case, "a court chooses to rule on a motion to dismiss for lack of personal jurisdiction on the basis of affidavits alone, the party opposing [the] motion need make only a prima facie showing of jurisdiction, or, in other words, demonstrate facts which would support a finding of jurisdiction." Id. The nonmoving party's prima facie showing must go beyond the pleadings and rely upon specific facts set forth in the record. Schwartz v. Frankenhoff, 169 Vt. 287, 295, 733 A.2d 74, 81 (1999). "In assessing the submitted materials, the [trial] court eschews fact finding and simply accepts properly supported proffers of evidence as true and rules on the jurisdictional question as a matter of law." Id.

The crux of TPRI's argument on appeal is that recent controlling U.S. Supreme Court case law-specifically J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 1058, 131 S. Ct. 2780 (2011) and Walden v. Fiore, ___ U.S. ___, 134 S. Ct. 1115 (2014)-preclude Vermont courts from exercising personal jurisdiction over it in this case. According to TPRI, those cases stand for the propositions, respectively, that a defendant cannot be subjected to personal jurisdiction based on either the mere foreseeability that its product will end up in the subject forum or the unilateral conduct of third parties. We conclude that the governing law permits the exercise of personal jurisdiction in Vermont under the circumstances of this case.

Although "`foreseeability'" alone has never been a sufficient benchmark for personal jurisdiction under the Due Process Clause," it is not "wholly irrelevant." World-Wide Volkswagen, 444 U.S. at 295, 297. "[T]he foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State," but rather "that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." Id. at 297. Therefore, "[t]he forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State." World-Wide Volkswagen, 444 U.S. at 297-98

World-Wide Volkswagen's stream-of-commerce analysis is the governing law on the stream-of-commerce doctrine, given the failure of the competing factions on the U.S. Supreme Court since that decision to garner a majority of votes to limit or expand the doctrine. Accordingly, we reject TPRI's argument that both the plurality and concurring opinions in McIntyre preclude the exercise of personal jurisdiction over a defendant based solely on the defendant's introduction of its product into a national distribution system aimed at bringing the product into the forum state among others. Given the facts of this case as they have been developed thus far, we conclude that the superior court did not err in denying TPRI's motion to dismiss for lack of personal jurisdiction.

Dismissal for failure to prosecute is an adjudication on the merits. Court will not override settled procedural rules to prevent a windfall.

Deutsche Bank v. Pinette, 2016 VT 71 (filed June 24, 2016)

DOOLEY, J. Lender appeals from a decision that dismissed lender's claims for mortgage foreclosure and a deficiency judgment on the ground that they were barred by claim preclusion, as lender had previously instituted an identical action against borrower in 2013, which had been dismissed for failure to prosecute. On appeal, lender argues that because the 2013 action did not actually adjudge the enforceability of the note and mortgage, the dismissal did not have preclusive effect. We affirm.

Under Rule 41(b)(1)(ii), a court may, by its own motion, dismiss any action where "all parties against whom a judgment for affirmative relief is sought have failed to plead or otherwise defend as provided by these rules and the lender has failed to request or apply for a default judgment within six months of the filing of the action." Rule 41(b)(3) states that "[u]nless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision (b) and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an adjudication on the merits." The plain language of Rule 41(b) is therefore exceedingly clear—by its express terms, unless a trial court specifically says otherwise in its order, a dismissal predicated on a lender's failure to seek a default judgment operates as an adjudication on the merits.

That dismissal was with prejudice is explicitly part of Rule 41, and lender was on notice of it.

Lender argues that barring subsequent foreclosure actions in cases like those at bar would result in a "significant and unjustified windfall” for mortgagors. The consequence of a procedural default is usually a windfall to the other side. While borrower in this instance is enriched, and has kept a benefit he would otherwise be bound to relinquish, we cannot override settled procedural rules, essential to the swift and efficient administration of justice, in order to force a contrary result. See In re Verizon Wireless Barton Permit, 2010 VT 62, ¶ 21, 188 Vt. 262, 6 A.3d 713 ("[P]rocedural rules are devices to ensure fairness, uniformity and regularity of treatment to all litigants appearing before the courts, and to be meaningful, they must be enforced" (citation omitted)); Bloomer v. Gibson, 2006 VT 104, ¶ 14, 180 Vt. 397, 912 A.2d 424 ("The court does not abuse its discretion where it enforces the rules of civil procedure equitably, even against a pro se litigant." (emphasis added)).

Lender had numerous opportunities to avoid the "windfall" created by the dismissal with prejudice, either by moving for default judgment, appealing the dismissal or moving to reopen the dismissal. It would have been in a stronger position if the third complaint, the one in this case, reflected the earlier dismissal and the requested consequences of that dismissal; instead its filing of the virtually identical complaint in each action transmits a message that it expected no consequences from its default. The trial court acted well within the law, and we must uphold its decision.

Affirmed.

SCOVT NOTE: The rule announced in Pinette, that in mortgage foreclosure actions an involuntary dismissal for failure to prosecute operates as an adjudication on the merits, barring a mortgagee’s subsequent foreclosure claims based on the same default, is retroactive to pending cases. See Deutsche Bank National Trust Co, v. Watts, 2017 VT 57.

Compare Ditech Financial LLC v. Brisson, 2025 VT 54 (reversing, as abuse of discretion, dismissal of foreclosure action for failure to prosecute in the name of the real party in interest)

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.

A motion to set aside a default must establish a meritorious defense “with particularity.”

LaFrance Architect v. Point Five Development South Burlington, LLC , 2013 VT 115 (20-Dec-2013)

REIBER, C.J. Defendant appeals the trial court’s refusal to vacate a default judgment against defendant. In light of its conclusion that an internal law office failure like that claimed here did not amount to excusable neglect, the trial court declined to exercise its discretion to consider defendant’s claimed defenses. We hold that the trial court improperly declined to consider the strength of defendant’s proffered defenses to the underlying action in reviewing defendant’s motion to vacate the default judgment, but that defendant’s Rule 60(b) motion did not establish a prima facie case with sufficient particularity to support a meritorious defense. We therefore affirm the trial court.

A trial court should consider the following factors when conducting the Rule 60(b) analysis: whether the failure to answer was the result of mistake or inadvertence, whether the neglect was excusable under the circumstances, and whether the defendant has demonstrated any good or meritorious defense to the plaintiff’s claims.” With respect to the “excusable neglect” factor, courts should be particularly circumspect “when the initial fault, at least, appears to be that of a defendant’s attorney. Concerning the “meritorious defenses” factor, the trial court should give substantial weight to a meritorious defense when determining whether to vacate a default judgment.

One of the “meritorious defenses” defendant raised is a counterclaim based on alleged deficiencies in the services provided by plaintiff. Given that compulsory counterclaims are conclusively adjudicated by a default judgment, we conclude that a counterclaim arising from the same transaction as the underlying complaint, can constitute a “meritorious defense.” Defendant’s counterclaim satisfies the requirements of notice pleading under Rule 8(a), but is not detailed enough to satisfy the more exacting standards of a motion to set aside a judgment under Rule 60(b). We conclude that defendant’s Rule 60(b) motion did not plead a prima facie case of a meritorious defense arising from plaintiff’s allegedly deficient performance with sufficient particularity to warrant remand for the trial court’s consideration.

Defendant also points to the mandatory mediation and arbitration clauses in the contract between the parties as a defense to the trial court’s judgment. Given defendant’s delay in asserting its arbitration rights, however, we hold that defendant’s conduct amounted to an implicit waiver and thus does not constitute a meritorious defense for purposes of Rule 60(b).

Therefore, it is unnecessary to remand the case to the trial court, since defendant has no meritorious defenses and cannot prevail under Rule 60(b) as a matter of law.

ROBINSON, J., concurring in part, dissenting in part. I respectfully dissent from that part of the majority’s opinion relating to the question of whether we should remand this case to the trial court for consideration of the requisite factors, including the prejudice to plaintiff of setting aside the default judgment, the nature of defendant’s neglect, and the strength of defendant’s defense based on the mandatory mediation and arbitration clauses in the contract between the parties.

How cited

Real estate agreement was contract for deed, not lease option. Though a contract for deed is treated as a mortgage, foreclosure remedy is not available under Rule 54(c) without notice, and appeal is not barred by Rule 80.1(m) requiring permission.

Prue v. Royer, 2013 VT 12 (Dooley, J.) 

The parties in this case entered into a real estate agreement which the trial court held to be contract for deed giving the purchasers an equitable interest in the property in question. The court initiated a foreclosure on that interest, even though it had not been pled. Plaintiffs, the purchasers as found by the trial court, appeal from the foreclosure. Defendant, the seller as found by the court, appeals from the court’s conclusions that the contract was an enforceable contract for deed. We affirm the trial court’s rulings that the agreement was a contract for deed, that its modifications were enforceable under the Statute of Frauds, that plaintiffs had an equitable interest in the property, and that they did not abandon that interest. We also hold that this matter is properly before us, despite noncompliance with 12 V.S.A. § 4601, and affirm the conditional award for damages for waste. Because the court’s foreclosure ruling awarded a remedy that was not pled or fully litigated, however, we reverse the foreclosure decree as premature and remand for a new foreclosure proceeding.

This case arises out of the lack of clarity in the parties’ agreements. The primary agreement is completed on a realtor pre-printed contract entitled “Purchase and Sale Contract,” but “Lease-Option to Purchase” is handwritten below that title. A separate page is entitled “Financing Property Agreement.” Plaintiffs characterized the agreement as a contract for deed, such that they acquired equitable title subject to a mortgage. Defendant, in contrast, characterized the agreement as a lease-option contract, such that plaintiffs were only leaseholders until they paid the purchase price.

Unlike a contract for deed, a lease-option to purchase is a unilateral contract; its acceptance rests wholly in the discretion of the leasee -optionee. The other main way in which a lease option is distinguished from a contract for deed is that the lease payments are not applied on the purchase price. Because we find that the contract represented a bilateral agreement to purchase the property, and that the payments went towards the purchase price of the property, we affirm the finding of the trial court that the agreement was a contract for deed, rather than a lease-option agreement. The consequence of this conclusion is that defendant’s interest is as an equitable mortgagee, not as a landlord or optionor.

Vermont has consistently treated a contract for deed as an equitable mortgage. It has been one of only a small minority of states to do so, however, a trend has developed consistent with the Vermont view. Thus, the Restatement (Third) of Property: Mortgages § 3.4(b) (1997) provides that “[a] contract for deed creates a mortgage.”

Defendant argues that plaintiffs failed to seek permission to appeal within ten days as required by Rule 80.1(m). Rule 80.1(m) applies only where “the permission to appeal [is] required by law.” 12 V.S.A. § 4601 provides, “When a judgment is for the foreclosure of a mortgage, permission of the court shall be required for review.” The issue is controlled by Herrick v. Teachout, 74 Vt. 196, 202, 52 A. 432, 434 (1902) (statute applies only to mortgages which are such upon their face, or recognized as such by the parties, and not to cases where the character of the instrument is in issue.) This is not a run-of-the-mill foreclosure action, and permission was not required by law.

Vermont Rule of Civil Procedure 54(c) states “every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in the party’s pleadings.” Despite the breadth of the language of the rule, it is overriden by considerations of “substantial justice” here, where Plaintiffs were prejudiced by the court’s sua sponte introduction of foreclosure into the case.

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.)