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

Town is equitably estopped from enforcing its zoning regulations, even though third party rights at stake.

In re Langlois, 2017 VT 76 [filed 8/25/2017]


EATON, J. This appeal involves a dispute between two neighbors—Gary Langlois and Michael Heller—over the construction of an open structure called a pergola on the shore of Lake Champlain in Swanton. The Environmental Division consolidated three related proceedings concerning this dispute and concluded that the Town of Swanton was equitably estopped from enforcing its zoning regulations and that the pergola, which did not comply with those regulations, could remain. We affirm.

The equitable estoppel doctrine has four elements: (1) the party being estopped must know the relevant facts; (2) the party being estopped must intend that his or her conduct be acted upon; (3) the party asserting estoppel must be ignorant of the true facts; and (4) the party asserting estoppel must rely to his or her detriment on the estopped party's representations.

Additionally, where, as here, the party against whom estoppel is sought is the government, the party asserting estoppel must also demonstrate that "the injustice that would result from denying the estoppel outweighs the negative impact on public policy that would result from applying estoppel." The doctrine must be applied with great caution when the party against whom estoppel is sought is the government, but when a government agent acts within that agent's authority, it is a defense that must be available. Vt. N. Props., 2014 VT 73, ¶ 26.

The court below reasoned that although estoppel against the government is rarely an appropriate remedy, it was justified in this case because the zoning administrator knew sufficient facts to make an informed and correct decision about whether a permit was needed, the zoning administrator intended his opinion to be acted upon, Langlois did not know a zoning permit was required, and Langlois acted to his detriment on the information he received.

The court further concluded that to not estop the government would result in an injustice.

We agree with the trial court that the zoning administrator had knowledge of the facts sufficient to know that a zoning permit was required for the pergola and that he gave his opinion knowing that Mr. Langlois would act upon it, that Langlois did not know the true facts and that Langlois relied to his detriment on the zoning administrator's advice

Where the elements are shown we have permitted estoppel against the government in a variety of circumstances See Vt. N. Props., 2014 VT 73, ¶ 34 (holding that injustice would result if government were not estopped from revoking permit where village made representations to property development that village was holding necessary water in reserve for development); Lyon, 2005 VT 63, ¶ 23 (holding that permit applicant made sufficient showing to estop ANR from revoking wastewater permit); Stevens v. Dept. of Soc. Welfare, 159 Vt. 408, 421-23, 620 A.2d 737, 744 (1992) (government estopped from denying retroactive application of benefits where agent provided patients inaccurate information about healthcare billing); My Sister's Place, 139 Vt. at 609, 433 A.2d at 279-80 (city estopped from enforcing building code regulations where City Fire Marshall acting within his authority invited citizen to rely on an inaccurate interpretation of regulations).

We agree with the Environmental Division that the equities weigh in favor of estopping the Town's enforcement of the zoning regulations., Langlois reasonably relied on information Kilburn provided to him and he spent over $33,000 based upon that information. Kilburn was the proper person to whom Langlois should have directed his questions. The inquiry itself was reasonable. Were we to not estop the government in this instance, we would be hard-pressed to tell Langlois, or any other citizen in the Town, what Langlois was required to do differently than what he did here.


SKOGLUND, J., dissenting. I cannot agree that Langlois’s monetary damages outweigh Heller’s reliance on the proper administration of the Town of Swanton’s zoning laws, which were enacted to prevent the harm. If the harm to Heller’s property and, by extension, the Town’s citizens’ faith in their zoning laws does not outweigh or, at the least, equal the cost of removing a pergola, this Court should remove the fifth factor from the test for asserting equitable estoppel against the government, for that factor is all bark and no bite. I dissent. I do not believe that the application of equitable estoppel should injure an innocent third party, particularly where the third party relies on proper municipal governance of the laws. I am authorized to state that Justice Robinson joins this dissent.

Statute of limitations bars claim for roof defects as a matter of law, even if claimant did not yet understand the full extent of the problem, where undisputed facts show claimant had notice that something was wrong with the roof more than six years prior to suit.

Abajian v.TruexCullins, Inc., 2017 VT 74 [filed 8/25/2017]


EATON, J. Plaintiffs had a new roof installed on their home in 2001. In 2014, after the roof turned out to be defective, plaintiffs sued the architecture and construction firms that designed and installed the roof for negligence and breach of contract. The trial court granted summary judgment to defendants on the ground that the action was barred by the statute of limitations. The court ruled no reasonable jury could find that plaintiffs “were not on inquiry notice of some roof defect by 2005.” We now affirm.

A civil action must “be commenced within six years after the cause of action accrues.” 12 V.S.A. § 511. A cause of action accrues upon discovery of facts constituting the basis of the cause of action or the existence of facts sufficient to put a person of ordinary intelligence and prudence on inquiry which, if pursued, would lead to the discovery.

Plaintiffs contend that the issue of when their claims accrued was a question of fact that was for the jury rather than the trial court to decide, and that a jury could find there was nothing to put them on inquiry notice regarding the condition of the roof until they experienced major leaks during the winter of 2012-13.

However, the question here is not when plaintiffs discovered the true nature of the roof defect, but when sufficient facts existed that would have led a reasonable person to begin the investigation that would lead to the discovery. Courts have not hesitated to grant summary judgment where the undisputed facts show that plaintiffs were aware of sufficient facts to put them on inquiry notice of a roof defect, even if they did not yet understand the full extent of the problem.

We agree with the trial court that, by 2005, plaintiffs were aware of facts sufficient to lead any reasonable homeowner to investigate the condition of the roof. At that point, they had already experienced a major, unprecedented leak that was severe enough for them to file an insurance claim. Rust spots had begun to appear. The ice damming problem, which the metal roof was supposed to mitigate, was worse than ever. Plaintiffs themselves stated that by 2005, the roof was not living up to their expectations and was “failing”.

There is no genuine dispute regarding these facts, which were sufficient to place a reasonable person on notice that something was wrong with the roof. These facts were sufficient as a matter of law for plaintiffs’ claims against defendants to accrue at that time.

Affirmed.

Untimely appeal accepted under 4 V.S.A. § 2(b) as “necessary to the furtherance of justice,” due to failure of court to assign counsel.

In re M.T. , 2017 VT 104 ¶ 3   [filed November 3, 2017]

Parents arguments on appeal attack the court’s decision denying their July 12 Rule 60(b) motions for relief from judgment. In fact, parents did not appeal the denial of the Rule 60(b) motion; rather, parents filed a subsequent motion to reopen thirty days after the denial of the Rule 60(b) motion. The trial court dismissed this motion as untimely. See V.R.C.P. 59(e) (setting ten day deadline on filing motion to alter or amend). Because the second motion to reopen was untimely, it could not toll the appeal period. V.R.A.P. 4(b) (providing that timely post-judgment motions toll appeal period); see In re Beach Props., 2015 VT 130, ¶ 8, 200 Vt. 630, 133 A.3d 854 (explaining that untimely motion to reconsider did not toll appeal period and therefore Court lacked jurisdiction over appeal).

In very rare cases with analogous circumstances, we have exercised our authority to issue “orders that may be necessary to the furtherance of justice” under 4 V.S.A. § 2(b)[1] “to protect or create a right of appeal that would otherwise have been lost.” In re Babson, 2014 VT 105, ¶ 3, 197 Vt. 535, 107 A.3d 339 (reinstating petitioner’s appeal where a petitioner lost his ability to timely appeal due to the ineffective assistance of counsel, and identifying other cases in which this Court has done so); see also In re A.D.T., 174 Vt. 369, 375, 817 A.2d 20, 25 (2002) (invoking Court’s authority under 4 V.S.A. § 2(b) to review mother’s untimely appeal of judgment terminating her parental rights where mother asked her counsel to appeal and counsel missed the appeal deadline)

Parents’ procedural failings following the court’s denial of their request for counsel were shaped in substantial part by the court’s error in declining to assign them counsel. Competent counsel would have preserved parents’ appeal rights. Given the unique facts of this case, we assert our jurisdiction to review the June 12, 2017 denial of parents’ February 9 Rule 60(b) motion.


SCOVT NOTE: 4 VSA § 2, Supreme Court established; jurisdiction, provides:

(a) The Supreme Court shall have exclusive jurisdiction of appeals from judgments, rulings, and orders of the Superior Court, administrative agencies, boards, commissions, and officers unless otherwise provided by law.

(b) The Supreme Court shall have original jurisdiction, concurrent with the Superior Court, of proceedings in certiorari, mandamus, prohibition and quo warranto and shall have jurisdiction to issue all writs, processes, and orders that may be necessary to the furtherance of justice and the regular execution of the law.

(Amended 1971, No. 185 (Adj. Sess.), § 5, eff. March 29, 1972; 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974; 2009, No. 154 (Adj. Sess.), § 2.)

Town entitled to summary judgment that ancient road is a public road, even though there is no certificate of opening.

Town of Granville  v. Loprete, 2017 VT 101 [filed October 20, 2017)

SKOGLUND, J. Defendant appeals from the court’s summary judgment decision in plaintiffs’ favor in this ancient road case. He argues that the undisputed facts do not support the court’s conclusion that Sabin Homestead Road is an existing town highway and public road. We affirm.

The law in effect at the time of the road’s creation “provided three legal requirements for the creation of a road: (1) an official survey to be recorded in the town clerk’s office; (2) a formal act by the selectboard; and (3) a certificate of opening.” Kirkland v. Kolodziej, 2015 VT 90, ¶ 19, 199 Vt. 606, 128 A.3d 407 (citing Laws of Vermont, 1824) (additional citation omitted).

The court first denied summary judgment based on the Town’s failure to demonstrate that it met the third requirement: that in connection with the creation of the road, the town had filed a certificate of opening. The court later ruled that the Town’s circumstantial evidence, along with the explanations provided by the Town’s affiants for the inability to locate an actual certificate of opening in the town records, supported a finding that a certificate of opening was in fact created and recorded, but had since been lost or destroyed. It thus determined that the road had been properly created and granted summary judgment to the Town.

We affirm the trial court’s decision on alternate grounds.

Section 717(a) now expressly provides that “[t]he lack of a certificate of completion of a highway shall not alone constitute conclusive evidence that a highway is not public.” Section 717(a) makes clear that the absence of a certificate-of- completion is not fatal to the Town’s claim. Pursuant to 19 V.S.A. § 717(a), the Town was not required to provide a certificate-of-opening, nor to prove that it once existed and cannot now be located. We conclude that the Town met its burden of proof, and that it was entitled to summary judgment in its favor.

Taxpayers have standing to challenge public management of federal funds used to repair a church; but preliminary injunction vacated because success unlikely on merits of claim that Compelled Support Clause of the Vermont Constitution is violated by public funding for physical repairs to a place of worship used also for secular purposes.

Taylor v. Town of Cabot, 2017 VT 92 [filed 10/6/2017]


ROBINSON, J. This case involves a challenge under the Compelled Support Clause of the Vermont Constitution to the Town of Cabot’s grant of federally derived but municipally managed funds for the purpose of repairs to a historic church. On interlocutory appeal, we consider whether plaintiffs have standing to pursue their claims and whether the trial court erred in issuing a preliminary injunction prohibiting the Town from paying the grant funds pending further order of the court. We conclude that plaintiffs do have municipal taxpayer standing, but vacate the trial court’s award of a preliminary injunction and remand for further proceedings to resolve the case on the merits.

Municipal taxpayer standing under our law encompasses claims that municipal assets have been improperly wasted, and the record in this case supports the conclusion that the grant funds here are municipal assets notwithstanding the fact that the funds originated from the U.S. Treasury. The Town has held part or all of the former federal grant funds with no requirement for accounting to HUD regarding the Town's use of the funds, and subject only to the limitation that the Town use the funds for a broad range of purposes that may supplant municipal general fund expenditures. Under these circumstances, the funds are municipal assets for the purpose of municipal taxpayer standing.

The trial court here rightly identified the main factors guiding its review under Vermont law: (1) the threat of irreparable harm to the movant; (2) the potential harm to the other parties; (3) the likelihood of success on the merits; and (4) the public interest. In re J.G., 160 Vt. 250, 255 n.2, 627 A.2d 362, 365 n.2 (1993). We do not adopt the federal test of "sufficiently serious questions as to the merits plus a balance of hardships that tips decidedly in their favor." While we affirm the preliminary injunction standard applied by the trial court, we conclude that the trial court erred in awarding the preliminary injunction because it overestimated the plaintiffs' likelihood of success on the merits, and erred in concluding that plaintiffs would suffer irreparable injury in the absence of an injunction.

Our analysis is framed by the Compelled Support Clause of Chapter I, Article Three of the Vermont Constitution and our caselaw thereunder, limitations arising from the Free Exercise Clause of the First Amendment to the U.S. Constitution, and the record in this case. In light of these considerations, plaintiffs face strong headwinds in arguing that the Compelled Support Clause embodies a categorical prohibition against any public funding for physical repairs to a place of worship, and plaintiffs have not yet presented sufficient evidence to demonstrate a high likelihood of success on a narrower claim.

The focus of the Compelled Support Clause is the support for "worship" itself. The fact that the recipient of government support is a religious organization is not itself determinative under the Compelled Support Clause; whether the funds are used to support religious worship is the critical question. The grant funds in this case were undisputedly allocated for the purpose of maintenance and repairs to a building that serves as a place of worship, is available for many nonsectarian community events and gatherings, and is an important and historic building in the town. Where funding is available on a neutral and non-discriminatory basis to a broad and diverse group of potential recipients in order to promote a squarely secular goal of the broader community, there is no indication that the funds are intended to or do advantage religious organizations or activity, and the funds are used for structural repairs rather than, for example, erecting religious symbols, we cannot conclude that such funds support worship within the meaning of Article Three.

We affirm the trial court’s denial of the Town’s motion to dismiss on standing grounds, and vacate the preliminary injunction in this case. Affirmed in part, vacated in part, and remanded for further proceedings.

Legal malpractice. Causation proved as a matter of law. Attorney's fees not recoverable.

Sachs v. Downs Rachlin Martin PLLC  . 2017 VT 100 [filed 10/20/2017]

SKOGLUND, J. After a bench trial, the trial court concluded that defendant attorney’s failure to adequately inform plaintiff of the risks of delay in filing a parentage action “negligently fell short of the standard of reasonably competent legal representation.”The trial court also determined that plaintiff failed to demonstrate direct causation or measurable damages as a result of defendant’s negligent advice. On appeal, plaintiff challenges the court’s legal conclusions and contends that the court’s factual findings established both causation and damages. We agree, and so reverse.

Following a bench trial, the court determined that plaintiff failed to prove the negligent representation was a “cause-in-fact” of plaintiff’s injury and that the evidence was “equivocal” as to whether plaintiff would have decided to file immediately had she been aware of the risk. It also found insufficient evidence for nonspeculative monetary damages.

Based on factual findings made by the trial court, we conclude that plaintiff met her burden to prove that, but for defendant’s negligence advice, she would not have delayed filing. To be clear, we do not hold that the trial court’s factual findings were clearly erroneous. We do not disagree with the sufficiency of the court’s factual findings in any respect. Rather, we conclude that those findings lead inescapably to the legal conclusion that plaintiff established causation by a preponderance of the evidence. Collins v. Thomas, 2007 VT 92, ¶ 8, 182 Vt. 250, 938 A.2d 1208 (2007) (noting causation “may be decided as a matter of law where the proof is so clear that reasonable minds cannot draw different conclusions or where all reasonable minds would construe the facts and circumstances one way”)

More importantly, the alternate theory of causation advanced by defendant and apparently adopted by the trial court is not the standard for determining causation-in-fact. The trial court concluded that “[p]laintiff has not demonstrated that she likely would have made any different decision, even if properly advised of the risks of losing support.” This was not a correct statement of the law. Plaintiff merely needed to prove by a preponderance of the evidence that but for defendant’s negligence, plaintiff would not have suffered harm. Id. That is a standard plaintiff satisfied here. We remand for the court to calculate the damages.

In addition to damages, plaintiff seeks attorney’s fees she spent pursuing her malpractice action against defendant. We conclude that the American Rule prevails in this case, and therefore, each party bears its own attorney’s fees.

Reversed and remanded for calculation of damages.

CARROLL, J., dissenting. I agree with the majority that the trial court did not use the correct legal standard for causation. However, the court applied a standard more deferential to plaintiff and the factual findings made by the trial court support the conclusion that plaintiff failed to prove by a preponderance of the evidence that she would have filed her parentage complaint sooner if she had been given accurate advice concerning child support.

When defendant informed plaintiff that there were important strategic advantages in remaining out of court for at least a year and that threats to contest custody are sometimes made as negotiating ploys to limit child support, plaintiff felt that this was a “terrifying prospect.” Plaintiff also testified that a delay in filing would allow her to “enjoy the time with [her] daughter and bond with her and have that time together without contentious litigation at the forefront of it all.” She described this as a “win/win” situation. The record supports a conclusion that plaintiff failed to demonstrate that “but for” the erroneous advice concerning child support, she would have filed her parentage complaint sooner. For this reason, I respectfully dissent. I am authorized to state that Judge Harris joins this dissent.