Mortgage assignment, pooling and servicing agreement; standing. Consumer protection: no standing to sue where alleged deceptive act did not induce purchase, and no showing of injury or damages / declaratory judgment not an available private remedy.

Dernier v. Mortgage Network, Inc., 2013 VT 96 (18-Oct-2013)

 DOOLEY, J.   Plaintiffs Peter and Nicole Dernier appeal the dismissal for failure to state a claim, of their action for (1) a declaratory judgment that defendant U.S. Bank National Association cannot enforce the mortgage and promissory note for the debt associated with plaintiffs’ purchase of their house based on irregularities and fraud in the transfer of both instruments, (2) a declaration that U.S. Bank has violated Vermont’s Consumer Fraud Act (CFA) by asserting its right to enforce the mortgage and note, and (3) attorney’s fees and costs under the CFA.   We affirm in part and reverse in part.

We hold that plaintiffs do not have standing to challenge the assignments of the note and mortgage based on the perceived violations of the pooling and servicing agreement (PSA) governing the pool into which the mortgage had been assigned, because any such violations would render the assignments voidable rather than void. However the complaint also alleges that the note was fraudulently acquired by defendant, based on a fraudulent endorsement with a forged endorsement signature, that was created by defendant.  These allegations are sufficient to give plaintiffs standing.  The court erred in dismissing Counts 1 and 2 of the amended complaint for lack of standing, to the extent that these counts alleged irregularities in the transfer of the note and mortgage unconnected to the pooling and servicing agreement.

Next, we turn to plaintiffs’ consumer fraud claim.   Here, plaintiffs allege that the violation was based on the letter under which defendant stated its legal position that, as a holder of the note and mortgage, it had the right to enforce. The section of the statute providing for a private right of action is § 2461(b), which requires a “consumer” to show either (1) reliance on a deceptive act in contracting for goods or services or (2) damages or injury from an unfair or deceptive act.  If a plaintiff, in bringing a consumer fraud action, either fails to allege facts that meet the definitions of an unfair or deceptive act under 9 V.S.A. § 2453 or fails to demonstrate the prerequisites to a private action, as we have itemized above under 9 V.S.A. § 2461(b), the case is properly dismissed.    We focus on the prerequisites for a private action under 9 V.S.A. § 2461(b), and find that plaintiffs do not meet these requirements,.  Specifically, we look at the second prong of § 2461(b), because plaintiffs cannot have relied on this letter to contract for goods or services, as it was sent long after the purchase.  Our only question thus becomes: assuming that defendant’s statement regarding its belief that it had the right to enforce the mortgage and note was indeed deceptive, did plaintiffs suffer damages or injury from this act?   Plaintiffs do not offer an explanation as to what injury or damages the letter caused, as they do not address the requirements of § 2461(b) at all.  Indeed, the complaint seeks neither damages nor an injunction, the remedies authorized by § 2461(b).  Instead it seeks a declaratory judgment that defendant “violated Vermont Consumer Fraud Law.”  We read the complaint as seeking a declaratory judgment that defendant violated § 2453, without having to prove entitlement to a private remedy under § 2461(b).     Plaintiffs have not established an injury for the purposes of standing under 9 V.S.A. § 2461(b).  

Affirmed as to dismissal of Counts 3 and 4 of plaintiffs’ proposed amended complaint; Reversed and remanded with respect to dismissal of Counts 1 and 2 of plaintiffs’ proposed amended complaint for further proceedings not inconsistent with this decision

Appeals. Court rules prospectively that CHINS decision is final order that must be immediately appealed, even though disposition hearing is still pending.

  In re DD, 2013 VT 79

Vermont's child abuse and neglect proceedings have a bifurcated nature. See In re L.S., 147 Vt. 36, 38, 509 A.2d 1017, 1019 (1986).   First, there is a merits adjudication during which the State must prove the allegations in the CHINS petition, and the court must find by a preponderance of the evidence whether the child is abused or neglected. See 33 V.S.A. § 5315. Second, there is a disposition hearing, which decides the terms of the child's placement and protection. Id. § 5318(a). In this case, a merits decision was entered on July 25, 2012, a disposition order was entered on October 11, 2012, and Father filed a notice of appeal on November 8, 2011, seeking to appeal both the merits and the disposition orders. The timeliness of father's appeal depends on two questions: whether a CHINS merits decision is a final appealable order and whether failure to appeal that decision within thirty days forecloses the right to later challenge it. We conclude that the merits decision is a final order and that failure to bring an appeal of that order within thirty days bars subsequent challenges to the order. Under the circumstances of this case, however, we apply our decision prospectively and reach the merits of father's appeal.

Generally, the test for finality is whether an order has disposed of all matters before the court by settling the rights of the parties. See In re A.D.T., 174 Vt. 369, 373, 817 A.2d 20, 24 (2002); In re Petition No. 152 by Cent. Vt. Ry., Inc., 148 Vt. 177, 178, 530 A.2d 579, 580 (1987). Although a CHINS determination does not permanently resolve the child-neglect proceeding, finality in juvenile proceedings is measured differently from other types of cases.  Because the policy of resolving the child's status as quickly as possible, we hold the merits adjudication is a final appealable order.  In this case, father appealed beyond the thirty-day time frame, and therefore his appeal of the CHINS decision was untimely.

Father argues that this Court has routinely allowed appeals of the merits after disposition, and that he should not be punished for relying on those cases. We recognize that our jurisprudence regarding the appropriate time to appeal CHINS determinations has not been consistent and that the obligation to immediately appeal the decision was not evident. In these circumstances it would be fundamentally unfair to foreclose father from appealing the merits decision where important rights are at stake. See In re A.D.T., 174 Vt. 369, 375, 817 A.2d 20, 25 (2002) (reaching merits of parent’s untimely appeal of termination order given important rights at stake). We, therefore, apply our decision prospectively only, and reach the merits of father's appeal.

Rule 75 review of termination of retirement benefits not precluded by “final say” provision of ordinance.

Preston v. Burlington City Reitrement System, 2013 VT 56 (12-Jul-2013)

BURGESS, J. Defendant City of Burlington Retirement System appeals from a superior court judgment reversing the City’s decision to terminate the disability retirement of plaintiff, a former City firefighter. The City contends  the trial court lacked subject matter jurisdiction. We affirm.

Plaintiff appealed the decision to the superior court under Vermont Rule of Civil Procedure 75(a), which provides for review of government action not otherwise expressly appealable by statute under Rule 74, “if such review is otherwise available by law.” The City moved for summary judgment, asserting that the court lacked subject matter jurisdiction, citin a provision in the City’s retirement ordinance to the effect that “[t]he retirement board shall have the final say as to all decisions required to be made pursuant to the provisions of this section.” Burlington Code of Ordinances § 24-23(j) (emphasis added). The court rejected the City’s jurisdictional argument.  The court acknowledged our holding in Mason v. Thetford School Board that a statute may preclude judicial review of an administrative decision by providing that the decision “shall be final.” 142 Vt. 495, 498, 457 A.2d 647, 649 (1983). The court relied, however, on our subsequent ruling in Campbell v. Manchester Board of School Directors, which reaffirmed the principle that “an otherwise final decision may be amenable to review by writ of certiorari . . . where the decision was made by one acting in a judicial or quasi-judicial position.” 152 Vt. 643, 644, 565 A.2d 1318, 1318 (1989) (mem.). Because the Board’s decision was quasi-judicial in nature subject to review under the traditional writ of certiorari, the court concluded it was subject to appeal under Rule 75. We agree there was jurisdiction for different reasons.

Our Constitution generally affords “[e]very person within this state . . . a certain remedy, by having recourse to the laws,” Vt. Const. ch. I, art. 4. We thus have cautioned that courts should be “hesitant to interpret arguably ambiguous legislation as foreclosing judicial review of administrative agency decisions.” Vincent v. Vt. State Ret. Bd., 148 Vt. 531, 534 n.2, (1987), We have acknowledged, to be sure, that judicial review of government agency actions may be precluded where a statute or ordinance unequivocally bars review. See, e.g., Handverger v. City of Winooski, 2011 VT 130, ¶¶ 4, 13, ­191 Vt. 556, 38 A.3d 1153 (mem.) (upholding dismissal of Rule 75 complaint by former city manager under charter provision specifically providing that city council’s “action . . . in suspending or removing the manager shall not be subject to review by any court or agency”). No such explicit expression of intent to preclude judicial review is evident here. Although “final” may have broader meaning in other contexts, in this context it is reasonable to expect that, had the City actually intended to deprive its employees of the same opportunity for judicial review enjoyed by other public-sector employees in Vermont, it would have expressed that intent in clear and unmistakable terms. We thus hold that the trial court correctly construed the City’s ordinance to mean that the Board’s decision shall constitute final administrative action, and correctly concluded that it had jurisdiction under Rule 75 to review the Board’s decision terminating plaintiff’s disability retirement.

Zoning. Right to farm. “Farm structure” exemption extends to buildings used to process timber into lumber.

In re Moore Accessory Structure Permit, 2013 VT 54 (19-Jul-2013)

BURGESS, J. Neighbors appeal a decision of the Superior Court, Environmental Division that certain buildings used to process timber into lumber qualify as “farm structures” exempt from local zoning regulation under 24 V.S.A. § 4413(d)(1). We affirm.

24 V.S.A. § 4413(d)(1)-(d)(2) provides that zoning bylaws “shall not regulate . . . the construction of farm structures” and defining the latter to mean a building “for housing livestock, raising horticultural or agronomic plants, or carrying out other practices associated with . . . farming practices . . . as ‘farming’ is defined in 10 V.S.A. § 6001(22).” A “farm structure” is defined as “a building, enclosure, or fence for housing livestock, raising horticultural or agronomic plants, or carrying out other practices associated with accepted agricultural or farming practices, including a silo, as ‘farming’ is defined in § 6001(22), but excludes a dwelling for human habitation.” Id. § 4413(d)(1). “Farming” under 10 V.S.A. § 6001(22) is defined, in turn, to mean a number of activities, including “(A) the cultivation or other use of land for growing food, fiber, Christmas trees, maple sap, or horticultural and orchard crops,” “(B) the raising, feeding, or management of livestock, poultry, fish, or bees,” or “(D) the production of maple syrup.” The trial court found that lumber produced from timber harvested on the farm had been used for the construction, maintenance, and repair of buildings and structures on the farm properties. Slab wood created as a byproduct from the sawing had been used to fuel the sugar making operation and to heat other farm buildings; sawdust and shavings from the sawing and planing had been used as livestock bedding. Accordingly, the court concluded that the buildings at issue qualified as “farm structures” exempt from local zoning regulation under 24 V.S.A. § 4413(d), that the Newman-planer building therefore did not require a local zoning permit, and that the sawmill and kiln buildings could not therefore be found in violation of the local zoning ordinance.

The operative language of the statute, exempts buildings used for carrying out “practices associated with” farming. Id. (emphasis added). Experts testified that appellees’ wood processing activities represent “the epitome” of sustainable agriculture, and are common practices long associated with agricultural farming.now part of a broader larger movement toward a more sustainable agricultural economy, reflected in Vermont’s “right-to-farm” law, 12 V.S.A. § 5751. The record evidence, fully supports the trial court’s conclusion that appellees’ wood-processing activities constitute “practices associated with” farming, and that the structures used for carrying out these activities are exempt from local zoning regulation under 24 V.S.A. § 4413(d)(1).

Spoliation: mistaken destruction of independent blood sample is no statutory or constitutional grounds for dismissal of DUI charges.

State v. Gentes, 2013 VT 14 (21-Feb-2013) (mem.)   

Defendant entered a conditional guilty plea to the charge of driving while intoxicated (DWI). He argues on appeal that the superior court’s criminal division erred by denying his motion to dismiss both the criminal charge and the civil suspension of his license.  Defendant argued for dismissal based his claim that the Vermont Department of Health’s negligence deprived him of his statutory right to obtain an independent blood test result.  We affirm.

It was the Department that failed to correctly label the sample, resulting in it being misfiled and eventually destroyed.  Because defendant’s inability to obtain an independent test was not “prevented or denied by the enforcement officer,” there is no basis in the statute for suppression of the remaining evidence, and no call in the statute for dismissal.  21 V.S.A. § 1203a(a).

Defendant maintains that the department’s negligent handling of his blood sample deprived him of his constitutional right to “call for evidence in his favor” as set forth in Chapter I, Article 10 of the Vermont Constitution.  Under the applicable Bailey test, “if a defendant shows a reasonable possibility that the lost evidence would be exculpatory,” then the proper sanction for its absence depends upon a pragmatic balancing of the following three factors: “(1) the degree of negligence or bad faith on the part of the government; (2) the importance of the evidence lost; and (3) other evidence of guilt adduced at trial.”  Id. (quotation omitted).  Essentially, defendant argues that the trial court erred in failing to dismiss the charge against him based on an application of the Bailey test.  Having weighed the Bailey factors, we find no constitutional violation and agree with the trial court that dismissal of the charge against defendant was not an appropriate remedy for the mistakenly destroyed evidence in the context of this particular case.

Torts. Hospital had no duty to prevent assault on patient by police; but nurse committed battery if nurse drew blood at police request without patient consent.

O'Brien v. Synnott, 2013 VT 33 (17-May-2013)(Robinson, J.)  


Plaintiff Kelley S. O’Brien sued defendants Fletcher Allen Health Care (FAHC) and FAHC nurse Catherine Synnott for injuries he suffered when allegedly assaulted by police officers after defendants negligently allowed those officers unrestricted access to him in the hospital while he was recovering from surgery, and for drawing his blood at the request of law enforcement officers and without his consent. The trial court granted defendants summary judgment, concluding that it was not reasonably foreseeable that the police officers would harm plaintiff if allowed unsupervised access, and that nurse had plaintiff’s apparent consent to draw the blood. We affirm in part and reverse in part.

Defendants’ duty to protect plaintiff does not extend to protecting him from attacks by third parties that are not reasonably foreseeable. See also Restatement (Second) of Torts § 314A cmt. e (1965) (stating that defendant is “not required to take precautions against a sudden attack from a third person which [the defendant] has no reason to anticipate”); id. § 320 (explaining that actor has duty to control conduct of third persons only when actor “knows or should know of the necessity and opportunity for exercising such control”). Considering the facts in the light most favorable to plaintiff, a law enforcement officer requested an evidentiary sample of his blood in the emergency room, and plaintiff refused. The officer said he would get a warrant. Plaintiff was taken from the emergency room for emergency surgery. While he was in the post-anesthesia care unit (PACU) recovering from the surgery, his nurse left the area, allowing a group of police officers the opportunity to access plaintiff’s room. The officers asked plaintiff for a blood sample. When plaintiff refused, they held him down, covered his mouth, and tried, unsuccessfully, to take his blood by force. We agree with the trial court that plaintiff has not identified any evidence that defendants should have anticipated that the police officers would attack plaintiff if left unsupervised.

A provider commits battery if the provider performs a procedure without the patient’s consent. Christman v. Davis, 2005 VT 119, ¶ 6, 179 Vt. 99, 889 A.2d 746. Later, nurse returned and drew plaintiff’s blood. Nurse did not disclose to plaintiff her purpose for drawing blood, or that the blood draw was not in connection with medical treatment for plaintiff’s benefit. Nurse drew the blood for the purpose of providing a sample of plaintiff’s blood to the police. Plaintiff did not object to her drawing the blood, but also did not consent to her drawing his blood for a nonmedical purpose. In the absence of undisputed evidence that plaintiff knew or should have understood the nonmedical purpose of the blood draw, the fact that he did not object does not support the conclusion that his conduct amounted to apparent consent. Defendants argument relies on inferences in defendants’ favor that we cannot draw at the summary judgment stage.

We reject Defendant’s policy argument that medical providers should be immune from civil liability for battery when they draw a blood sample from an individual suspected of driving under the influence at the request of law enforcement officers without regard to whether the individual consents to the blood draw. The Legislature has expressly limited the liability of medical providers in certain circumstances related to blood draws and individuals suspected of driving under the influence, inapplicable here, but has not expressly required medical personnel to comply with law enforcement requests to draw blood, and has not immunized those providers from liability for complying. Without legislative action we conclude that when a patient is conscious and the authority to draw blood depends upon actual consent, the police officers’ request does not protect defendants from liability for drawing the blood without plaintiff’s consent.

Post Conviction Relief denied because “not in custody under sentence.” SCOVT divided whether in custody without bail on other charges counts.

In re Russo (2011-004)(24-May-2013)(Skoglund, J.)(Robinson, J., joined by Dooley J., dissenting.)
SKOGLUND, J.  Petitioner appeals a civil division order dismissing his post-conviction relief (PCR) petition for lack of jurisdiction.  Petitioner sought to attack convictions for which his sentences had been completed, and the court concluded that petitioner was not “in custody under sentence” as required by 13 V.S.A. § 7131.  Petitioner argued that he satisfied the custody requirement because, although his sentences were completed, they were used by the criminal division to hold him without bail pending trial on a different charge.  Because petitioner has failed to allege that his pretrial incarceration was sufficiently linked to the convictions he seeks to attack, we conclude that petitioner failed to meet the jurisdictional requirements of the PCR statute, and affirm.

ROBINSON, J., dissenting.   I don’t doubt that petitioner faces a steep uphill battle in showing the necessary causal relationship between the convictions he challenges and his hold-without-bail status, but I believe the court’s dismissal of his case on the pleadings, and prior to referral to counsel, was premature. Before closing the door to the possibility of post-conviction relief for petitioner, I believe we ought to allow for the possibility that petitioner may qualify for counsel and that counsel may present evidence or may identify and brief the issues more persuasively. For these reasons, I respectfully dissent.  I am authorized to state that Justice Dooley joins this dissent.