Justia Vermont Supreme Court Opinion SummariesArticles Posted in Consumer Law
Trevor v. Icon Legacy Custom Modular Homes, LLC, et al.
Appellants Icon Legacy Custom Modular Homes, LLC and Icon Legacy Transport, LLC challenged a series of trial court orders in favor of appellees Dagney Trevor, Merusi Builders, Inc., Osborne Construction, LLC, and Paul Osborne. This appeal arose from the sale and construction of a new modular home that suffered from significant deficiencies. Trevor purchased the modular home; Icon Legacy Custom Modular Homes, LLC (Icon Legacy) and Icon Legacy Transport, LLC (Icon Transport) manufactured and transported the home; Osborne Construction, LLC (Osborne Construction) and Paul Osborne (Osborne) were collectively the contractor involved in the assembly the home; Merusi Builders, Inc. (Merusi) was a subcontractor involved in the assembly of the home. Though not parties to this appeal, Vermont Modular Homes, Inc., David Curtis, and Blane Bovier were Icon’s Vermont-based “approved builders” and three of the defendants in the suit below. In 2015, Trevor purchased an Icon Legacy Custom Modular Home as a replacement to one she lost to fire. The home sustained significant water damage during a rainstorm when water entered the home before the roof installation was complete. Other structural defects emerged after Trevor moved into the home. Although Icon and Vermont Modular Homes repaired some of the damage, major defects relating to both the water damage and alleged improper construction remained in the home. Ultimately judgement was entered against Icon. Icon appealed, arguing multiple errors leading to the outcome against it. The Vermont Supreme Court reversed as to the trial court's thirty-percent upward adjustment of the lodestar damages calculation, and remanded for the trial court to strike that amount from Trevor's attorney fee award. The Court affirmed the trial court in all other respects. View "Trevor v. Icon Legacy Custom Modular Homes, LLC, et al." on Justia Law
Messier v. Bushman
In 2014, Michael Messier and Kay Bushman were involved in an auto accident. Both were the drivers of their respective vehicles and were then-alleged to be Vermont residents. In 2017, shortly before the statute of limitations was to expire, Messier filed suit against Bushman and her auto insurer, Travelers, for damages he claimed to have sustained in the accident. The claim against Bushman sounded in negligence, the claim against Travelers asserted breach of the Vermont Consumer Protection Act (CPA). The trial court granted a motion for judgment on the pleadings filed by Bushman and a motion to dismiss filed by Travelers. Messier appeals both decisions. The Vermont Supreme Court determined the motion filed by Bushman was one that challenged the sufficiency of service of process: the trial court, without holding an evidentiary hearing, found that Messier did not send a copy of the return of service on the Commissioner to Bushman as required by 12 V.S.A. 892(a). The Supreme Court reversed as to Bushman's motion because the issues concerning what was included in the mailing and whether the affidavit contained sufficient specificity to comply with section 892(a) were contested and needed to be resolved through factual determination by the trial court. Regarding Messier's claim against Travelers, the Supreme Court found his claim was brought under the CPA, but references unfair claims settlement practices which were part of Vermont Insurance Trade Practices Acts (ITPA). The Court found Messier did not purchase anything from Travelers- his only connection was that Bushman was insured by Travelers. Thus, Messier was not a consumer with respect to Bushman's Travelers insurance policy, and therefore had to CPA claim against them. The case was remanded for further proceedings with respect to the claim against Bushman; dismissal of the claim against Travelers was affirmed. View "Messier v. Bushman" on Justia Law
Unifund CCR Partners v. Zimmer
Unifund CCR Partners, a debt buyer, was in the business of purchasing large portfolios of charged-off debts from original debt holders in the hope of eventually collecting from the original debtors. Unifund asserted the right to judgment against defendant David Zimmer for charged-off debt in the amount of $2453.22, plus costs and statutory pre-judgment interest of 12% under 12 V.S.A. 2903, for a credit card account opened in defendant's name with Citibank. Unifund also alleged that defendant was unjustly enriched in that amount “by virtue of non-payment on an account.” At trial, Unifund asserted that it was authorized to collect the debt by a series of limited assignments, from Citibank to Pilot Receivables Management, LLC (Pilot) on June 18, 2012, and from Pilot to Unifund CCR LLC (UCL) and UCL to Unifund, both on June 1, 2013. To establish standing to enforce the underlying debt, Unifund offered testimony of Brian Billings, who spoke in support of the assignment from Citibank to Pilot, and Elizabeth Andres, who spoke in support of the assignments from Pilot to UCL and UCL to Unifund. The trial court found these documents to be inadmissible as hearsay because Unifund had failed to establish the necessary foundation for their admission. The trial court also found that, even if the assignments were admissible as a business record under Rule 803(6), Unifund had failed to establish standing. Unifund raised four arguments on appeal: (1) that documents proffered to establish the assignment of defendant’s debt were not admissible as business records; (2) that the assignment of the right to collect is itself sufficient for standing; (3) that Unifund sufficiently established the terms of the contract between defendant and Citibank, including the contractual interest rate; and (4) that Unifund demonstrated a basis to recover for unjust enrichment. Finding no reversible error in the trial court's analysis and judgment, the Supreme Court affirmed. View "Unifund CCR Partners v. Zimmer" on Justia Law
McKinstry v. Fecteau Residential Homes, Inc.
Fecteau Residential Homes, Inc. (seller) was in the business of selling manufactured modular homes. In early November of 2010, Janet and Mark McKinstry (buyers) entered into a written contract with seller for the purchase of a demonstrator modular home on seller's lot. Buyers tendered a $5000 deposit toward the purchase price, obtained financing, and engaged a contractor to lay the necessary footings and foundation for the home. Shortly thereafter, however, seller's owner Vic Fecteau called buyers to offer them a new, identical modular home at the same price instead of the demonstrator model for which they had contracted for reasons related to financial difficulties in obtaining a replacement floor model from that particular manufacturer. Buyers rejected the offer, the parties argued, and Fecteau cancelled the deal and subsequently returned the $5000 deposit. Buyers purchased a slightly larger modular home from a different dealer, which required modifications to the partially completed foundation to install. Buyers then filed this action under the Consumer Protection Act, alleging that seller misrepresented its intention to sell them the demonstrator model for which they had contracted; that they relied to their detriment on the misrepresentation, in part by paying for a foundation "to meet the dimensions of the home sold to them by [seller]"; and that they incurred additional expenses when forced to install a different model. Buyers sought damages, exemplary damages, and attorney's fees. Seller moved for summary judgment, asserting that buyers had failed to establish an essential element of consumer fraud by showing a misrepresentation or omission of material fact at the time of contracting, failed to establish that they were "consumers" within the meaning of the Act, and failed to mitigate their damages. The trial court denied the motion. Following a two-day trial, the jury returned a special verdict in favor of buyers, finding that there consumer fraud, and awarded $1,000 in damages. Seller moved to offset any attorney's fee award by the $5000 deposit refunded to buyers in order to a "preclude double recovery" under the Act. The trial court found, "Given the minimal recovery, the fact that recovery was questionable from the start, and the lack of any public purpose served by this case," a reasonable fee award for recovery was $15,000. The court granted buyers' request for costs for a total of $1360. Turning to the $5000 offset, the court concluded that, under the Act, buyers were not entitled to both a return of their consideration and an award of damages, and determined that "the $5000 will be treated as a credit toward the attorney's fees." Seller subsequently moved for judgment notwithstanding the verdict to overturn the entire judgment. Buyers opposed the motion, and also moved for reconsideration of the attorney's fee award, asserting that the $5000 offset was improper. The Supreme Court found that the evidence was sufficient to find a misrepresentation or omission of material fact, and that the return of the deposit had nothing to do with buyers' claim that seller violated the Act. It found no basis for the $5000 set-off against attorney's fees ordered by the trial court. The $1000 damage award was affirmed. The attorney's fee award was modified to eliminate the $5000 set off, resulting in a total judgment of $17,360. View "McKinstry v. Fecteau Residential Homes, Inc." on Justia Law
Glassford v. Dufresne & Associates, P.C.
Plaintiffs Heidi and James Glassford appealed a superior court decision denying their motion for summary judgment and granting it to defendant Dufresne & Associates, P.C. on plaintiffs' claims of negligent misrepresentation and violation of the Vermont Consumer Protection Act (CPA). Plaintiffs were homeowners who purchased their home direct from the builder, D&L Homes by Design, LLC (D&L). D&L hired defendant to certify that the on-site mound sewage disposal system constructed for the home satisfied state permitting requirements. On April 19, 2005, the Vermont Agency of Natural Resources issued a Wastewater System and Potable Water Supply Permit for construction of the sewage disposal system on the property, subject to receiving a certification pursuant to 10 V.S.A 1973(e). On October 20, 2005, defendant's employee sent the certification required by the statute. On December 20, 2005, plaintiffs signed a purchase-and-sale agreement to purchase the home from D&L. Although the seller represented that the home and property had received all the necessary permits, plaintiffs never saw the certificate or the letter from the Agency stating that the certification requirement was satisfied. Sometime thereafter, plaintiffs hired an attorney in connection with the closing. On January 13, just prior, plaintiffs' attorney prepared a certificate of title that noted the wastewater and water supply permit. In February 2006, the sewage disposal system failed. In November 2008, plaintiffs hired defendant to investigate the system's failure because they knew defendant had inspected the system prior to their purchase. Defendant prepared a report stating that he had "completed the original" inspection in 2005 and found the system had been installed according to the permitted design. Plaintiffs received other opinions about the disposal system's failure both before and after hiring defendant to inspect the system. Plaintiffs filed a complaint in superior court alleging pecuniary losses from defendant's failure to properly inspect the sewage disposal system and subsequent misrepresentation about the construction of the system in the certification to the Agency. Upon review of the superior court decision, the Supreme Court found that the completion and filing of defendant's certificate was a prerequisite to D&L's ability to sell the home, the certificate was unrelated to the sale. The law required that it be sent only to the government agency that issued the permit. Furthermore, there was no allegation that D&L used the certificate as part of its sales pitch, and no allegation that defendant had any part in the sales. The standard for CPA liability required that a person be directly involved in the transaction that gave rise to the claimed liability. That standard was not met here. Accordingly, the Court affirmed the superior court's decision. View "Glassford v. Dufresne & Associates, P.C." on Justia Law
PH West Dover Property, LLC. v. Lalancette Engineers
Plaintiffs appealed the grant of summary judgment in favor of defendant realtor who represented the seller in the sale of an inn. Plaintiffs argued that the trial court erred in concluding that defendant's alleged misrepresentation and omission were immaterial as a matter of law. Defendant Barbara Walowit Realty, Inc. was the listing agent for the inn. The prior-prospective purchaser claims she told defendant during their conversation that she had witnessed flooding in the parking lot and had learned of "major problems with the roof and that there was a possibility of collapse." Based on statements made by defendant, and a report prepared by the seller with regard to the condition of the inn, plainitffs entered into a purchase-and-sale agreement with the seller in December 2007. The agreement contained an inspection contingency. At the recommendation of defendant, plaintiffs then hired engineers to perform a pre-purchase structural inspection of the property, and received an inspection report in late January 2008. The sale closed in May 2008. In September, after encountering various problems relating to the condition of the inn, plaintiffs sued defendant for negligence and consumer fraud for defendant's alleged misrepresentations and omissions concerning the condition of the inn. Plaintiffs and defendant filed cross-motions for summary judgment. On the claim of negligence, the trial court granted summary judgment to defendant. As to the claim of consumer fraud, the court considered, among other things, defendant's alleged failure to disclose the contents of her conversation with the prior-prospective purchaser and to disclose the estimate of roof repair costs that was in her files. The court concluded that the statements from the prior-prospective purchaser were "simply too vague and foundationless to give rise to knowledge of specific material facts that [defendant] would have a duty to disclose" under the Consumer Fraud Act. The court further concluded that defendant's failure to disclose the roof-repair estimate was not a material omission because plaintiffs "already knew the roof needed repairs" from the engineer's report, and disclosure "would have left them in the same position in which the report placed them; needing to make further inquiry." Thus, the court concluded that the estimate "cannot be considered material as a matter of law," and granted judgment to defendant. Plaintiffs appealed. Finding no reversible error in the trial court's decision with regard to the consumer protection claim, the Vermont Supreme Court affirmed. View "PH West Dover Property, LLC. v. Lalancette Engineers" on Justia Law
Stroup v. Doran
In 2007, plaintiffs Sylvia and Stanley Stroup sued defendants Peter Doran and Peter Doran Landscape Design, LLC for breach of contract, fraud, and consumer fraud after defendants failed to perform landscaping for plaintiffs. Plaintiffs obtained a judgment against defendants. Defendants failed to pay the judgment. Plaintiffs obtained a writ of execution, and the court approved plaintiffs’ motion for trustee process to attach funds owned by defendants and held by Brattleboro Savings and Loan Association (BSL). BSL disclosed to plaintiffs that it held a balance of $2,853.05 in a checking account titled in the name of one of the defendants. A few days later, the parties stipulated that BSL would release $750 to plaintiffs, and that BSL would then be discharged as a trustee and defendant’s account would be free of any lien or charge benefitting plaintiffs. Defendants further agreed to pay $3,500 to plaintiffs before January 31, 2008. BSL paid plaintiffs $750. Plaintiffs claim that defendants never paid the remainder of their debt. In 2013, plaintiffs served BSL with another trustee summons. BSL did not reply within thirty days, and on August 27 plaintiffs moved for default against BSL and entry of judgment against it as trustee for $24,155.12, the balance due under the judgment. The court ordered the clerk to schedule a hearing on plaintiffs’ motion, and directed that a copy of plaintiffs’ motion and the notice of hearing be served on BSL. On September 16, BSL filed a trustee disclosure indicating that it did not have any of defendants’ property in its possession. The court subsequently entered an order denying plaintiffs’ motion for default judgment against BSL. The court stated that “[a]lthough Trustee failed to make a timely disclosure, its disclosure now made in response to Plaintiff[s’] motion for default shows that it holds no assets for the benefit of Defendant[s]. Default judgment under these circumstances would be inequitable.” Plaintiffs appealed. Plaintiffs argued that the trial court erred in denying their motion for default because applicable Vermont law makes default mandatory when a trustee fails to serve a disclosure within thirty days. Plaintiffs did not contest the information contained in the trustee’s disclosure form or request an evidentiary hearing below. See V.R.C.P. 4.2(g) (stating that party who intends to contest information contained in trustee’s disclosure is entitled to evidentiary hearing upon written request). Nor do they contest the information on appeal. Their sole argument before this Court is that default was mandatory under 12 V.S.A. § 3062 and V.R.C.P. 4.2(f). Finding no reversible error, the Supreme Court affirmed. View "Stroup v. Doran" on Justia Law
Knutsen v. Dion
Plaintiff Janet Knutsen appealed a superior court decision to deny her motion for summary judgment and and for granting defendant Vermont Association of Realtors, Inc.'s (VAR) motion for summary judgment on her consumer fraud claim arising out of her purchase of a home in Moretown. Plaintiff argued that VAR's form purchase and sale agreement, which was used in her real estate purchase (to which VAR was not a party) violated the Vermont Consumer Fraud Act (CFA) in that two provisions of the form were unfair and deceptive, and that she was therefore entitled to damages under section 2461(b) of the CFA. Upon review of the facts of this case, the Supreme Court concluded that the trial court correctly held that 'VAR's sole connection to this case was its drafting of the template clauses that [plaintiff] and her buyer's broker used for the purchase of the house, and that could not support a consumer fraud claim. View "Knutsen v. Dion" on Justia Law
Dernier v. Mortgage Network, Inc.
Plaintiffs Peter and Nicole Dernier appealed the dismissal of their action for: (1) a declaratory judgment that defendant U.S. Bank National Association could not 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. They also appealed the trial court's failure to enter a default judgment against defendant Mortgage Electronic Registration Systems, Inc. (MERS). Plaintiffs fell behind on their mortgage, and brought suit against two parties: Mortgage Network, Inc. (MNI), which is in the chain of title for both the note and the mortgage, and MERS, which is in the chain of title for the mortgage as a "nominee" for MNI. Plaintiffs sought a declaratory judgment that the mortgage was void, asserting that: (1) MERS, as a nominee, never had any beneficial interest in the mortgage; (2) MNI had assigned its interest in both instruments to others without notifying plaintiffs; and (3) no party with the right to foreclose the mortgage had recorded its interest. MNI responded that plaintiffs had named MNI as a party in error, because MNI did "not own the right to the mortgage in question." MERS did not respond. Around this time, plaintiffs received a letter in which U.S. Bank represented that it possessed the original promissory note and mortgage and that it had the right to institute foreclosure proceedings on the property. The trial court denied plaintiffs' motion to amend and dismissed plaintiffs' case for failure to state a claim. Plaintiffs appealed. After careful consideration of the trial court record, the Supreme Court concluded the trial court erred in dismissing Counts 1 and 2 of plaintiffs' 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. The Court affirmed as to dismissal of Counts 3 and 4 of plaintiffs' proposed amended complaint. The case was remanded for further proceedings. View "Dernier v. Mortgage Network, Inc." on Justia Law
First Quality Carpets, Inc. v. Kirschbaum
Appellants Warren and Wynne Kirschbaum appealed a trial court's ruling in favor of Appellee First Quality Carpets, Inc. arising from a dispute they had over carpet installed in 2007. The Kirschbaums argued that the civil division erred in awarding First Quality attorney's fees under 9 V.S.A. 4007(c) of the Prompt Pay Act because that section of the statute authorizing attorney's fees recovery effectively expired in 1996 pursuant to a sunset provision included in the Act. Alternatively, the Kirschbaums argued that because they withheld payment to First Quality in good faith, they were entitled to a directed verdict and that First Quality should not have been awarded attorney's fees under 4007(c). Finally, the Kirschbaums argued that the court erred in denying their counterclaim under the Consumer Fraud Act. Upon review, the Supreme Court affirmed the trial court in all respects. View "First Quality Carpets, Inc. v. Kirschbaum" on Justia Law