Justia Vermont Supreme Court Opinion Summaries

Defendant Junior's Pizza, Inc. appealed a superior court decision that confirmed an arbitration award and awarded attorney's fees to Plaintiff UniFirst Corporation. The Superior Court held that Junior's waived its right to object to arbitration by failing to challenge the award within thirty days of receiving notice. In June 2009, pursuant to the arbitration clause in the parties' contracts, UniFirst filed a demand for final and binding arbitration. Junior's declined to submit to arbitration, stating that it would reconsider if UniFirst produced a valid agreement. UniFirst subsequently provided copies of the contract provision to both Junior's and the arbitrator. In July 2009, the arbitrator notified the parties that UniFirst had met all filing requirements and arbitration would proceed absent a court order staying the matter. Junior's never sought a court order staying arbitration. UniFirst did not seek a court order compelling Junior's to participate. Notice of the arbitration hearing was provided to both parties, and the hearing took place. Junior's did not participate. UniFirst was awarded damages and attorney's fees, and Junior's was ordered to reimburse UniFirst in administrative fees associated with conducting the arbitration. The next day, the arbitrator notified Junior's of the award by email and certified mail. On appeal to the Supreme Court, Junior's argued (1) it did not waive its right to object to the arbitration award, (2) UniFirst was required to petition to compel arbitration prior to engaging in arbitration without Junior’s participation, and (3) the arbitration was not conducted in strict accordance with the terms of the contracts. Finding no error, the Supreme Court affirmed the arbitration award. View "UniFirst Corp. v. Junior's Pizza, Inc." on Justia Law

In 2006, Defendants Tristan Vaughan and Grace Zambon purchased all outstanding shares of defendant Northland Specialties, Inc., from Plaintiffs Philip and Patricia Pierce.  Under the terms of the promissory note, Defendants would repay $30,000 in three installments, due annually on the first day of April. In 2007, Plaintiffs filed suit against Defendants.  The complaint alleged that Defendants had entered into two verbal agreements following the sale of the business whereby Defendants allegedly agreed to buy a specified list of materials and hardware for $20,000, with payments to be made over time as the materials were used.  The suit alleged Defendants had failed to make any payments under either of these verbal agreements and therefore owed Plaintiffs for breach of contract and damages.  The first payment of $10,000 came due on the promissory note.  Defendants were not able to make this payment on time, nor did they communicate with Plaintiffs regarding when the payment would be made. Three days later, Plaintiffs filed a motion for default judgment.  Grace Zambon prepared a response which was received by Plaintiffs' attorney but was not filed with the court. Plaintiffs' attorney allegedly "interpreted this documents [sic] as an offer to settle."  Despite the response, he moved forward with a motion for default judgment, which the superior court granted. Two months later, Plaintiffs filed a second suit against Vaughan and Zambon, this time to recover the balance of the purchase price under the original stock purchase agreement.  After exchanging settlement offers, the parties reached a settlement agreement.  Roughly three years later, Plaintiffs filed a motion for trustee process in order to collect on the default judgment entered in the first lawsuit.  Defendants filed a Rule 60(b) motion seeking relief from the default judgment.  In 2010, the superior court held a hearing on this motion and granted the relief from judgment as sought by Defendants.  In early 2011, the Supreme Court granted Plaintiffs permission to take an interlocutory appeal on the issue of whether the superior court erred in granting the 60(b) motion. More specifically, the issue was whether the court could grant the motion beyond the one-year limitations period for mistake or inadvertence when the parties had reached an agreement after the default judgment entered. The Supreme Court concluded that the superior court's grant of Defendants' 60(b) motion was in error, and reversed the lower court's decision. View "Pierce v. Vaughan" on Justia Law

The parties in this case separately appealed the trial court order that awarded damages in excess of $78,000 to Plaintiff SEC America (SEC). Defendant Marine Electric Systems, Inc. (MES) contended the court erred in: (1) failing to reduce the damage award for partial payment; (2) granting an award for lost profits; and (3) relying on inadmissible evidence. SEC asserts the court erred in concluding that it acted unreasonably in failing to mitigate damages. This case arose out of a transaction to supply an electrical component for installation in jamming devices to be used by NATO forces in Afghanistan to disrupt the remote detonation of improvised explosive devices (IEDs). MES placed an order for power converters for its devices. SEC made a partial shipment of the converters, and continued working on the remaining units. MES' contract with NATO had collapsed, and MES' customer who promised to purchase the completed jammers reneged on its promise. MES sued its client and ultimately reached a settlement. None of the proceeds from the settlement went to SEC. Subsequently SEC filed suit against MES for breach of contract. Following a bench trial, the court found in SEC's favor. MES appealed, and SEC filed a cross-appeal. MES argued on appeal to the Supreme Court that the trial court erred in arriving at the proper amount of damages owed to SEC. Finding "no clear error to compel reversal of the judgment," the Court affirmed the trial court. View "SEC America, LLC v. Marine Electric Systems, Inc." on Justia Law

Plaintiffs James and Heidi Glassford, who brought suit to obtain compensation for an allegedly negligent home inspection, appealed a superior court’s order granting summary judgment in favor of home inspector Defendants The BrickKicker and GDM Home Services, Inc. (a franchisee of BrickKicker) based on the terms of a binding arbitration agreement in the parties' contract. In this appeal, the issue before the Supreme Court was whether the superior court erred in rejecting Plaintiffs' contention that the terms of the home inspection contract were unconscionable under the common law and unfair and deceptive under Vermont’s Consumer Fraud Act (CFA). Upon review of the contract in question, as well as the superior court record, the Supreme Court found the contractual provisions limiting liability to the cost of the inspection and yet requiring arbitration that would necessarily cost more than the amount of the liability limit unconscionable. Accordingly, the Court reversed the superior court’s decision and remanded the matter for further proceedings. View "Glassford v. BrickKicker" on Justia Law

Defendant AT&T Mobility, LLC appealed a trial court’s denial of its motion to compel arbitration. AT&T claimed the trial court erred by ruling that AT&T had not been assigned Plaintiff Pike Porter’s cell phone contract before sending him unsolicited text messages and erred in failing to hold an evidentiary hearing on this issue. AT&T also argued that even if Plaintiff's claims arose before AT&T purchased his contract, the trial court erred as a matter of law in holding that AT&T cannot enforce the binding arbitration agreement in Plaintiff's original cell phone contract. The court also noted that the arbitration agreement could not bind Plaintiff "with regard to events between him and AT&T that took place at a time when his only contract was with Unicel, not AT&T." AT&T highlighted four pieces of evidence it submitted along with its motion to amend and reconsider as "undisputed" proof that it purchased Plaintiff's contract in December 2008. Upon review of AT&T's evidence, the Supreme Court concluded the document did not establish that Plaintiff's contract was one of the 100,000 to 150,000 contracts sold, nor did it suggest that "certain Unicel assets" included all of the wireless contracts Unicel held in Vermont. Accordingly, the Court affirmed the trial court's decision in favor of Plaintiff. View "Porter v. AT&T Mobility, LLC" on Justia Law

This appeal stemmed from a written agreement between the City of Rutland and the Vermont Swim Association (VSA) that granted VSA the right to host its annual swim meet at a facility in a city park. VSA appealed the trial court's award of attorney's fees to the City. Because the plain language of the parties' contract did not require VSA to pay attorney's fees incurred by the City in pursuing either indemnity from VSA or other third-party actions, the Supreme Court reversed the trial court's ruling and remanded the case for further proceedings. View "Southwick v. City of Rutland" on Justia Law

This case concerns a construction contract dispute between contractor Trombly Plumbing & Heating and homeowners Edward Quinn, Thomas Quinn, and Regina Gority ("Homeowners"). In the summer of 2007, Trombly and the Homeowners agreed that Trombly would perform services relating to the heating and hot water systems of Homeowners' residential vacation property. Between November 2007 and February 2008, Homeowners experienced a number of problems with the home that they attributed to Trombly's work, such as pipes freezing and furnaces shutting down and leaking.  Trombly brought an initial action for breach of contract and violation of the Prompt Payment Act (9 V.S.A. 4001-4009) seeking the balance due plus the cost of collection.  The Homeowners counterclaimed for breach of contract, negligence, intentional misrepresentation, negligent misrepresentation, fraudulent misrepresentation, and consumer fraud.  They sought actual and punitive damages, as well as litigation costs. The trial court ultimately decided that Trombly could not recover from the Homeowners and the Homeowners could not recover from Trombly, and each party would bear its own costs and fees.  The court found that the Homeowners were not liable to Trombly for anything beyond what they had already paid because the work "was not well done," there were many problems with the work, and the problems were not resolved until another plumber came to fix them.  The court thus found the Homeowners to be the prevailing parties on Trombly's claims because Trombly did not prove its case by a preponderance of the evidence.  As Trombly did not prevail on the merits of the case, the court found there could be no award of attorney's fees.  The court also dismissed all of the Homeowners' counterclaims.  It found that the evidence submitted was insufficient, given that there was no testimony from anyone who did repair work about the problems that had to be corrected or whether the amounts paid for corrective work were fair and reasonable. On appeal, Trombly argued the trial court erred by: (1) improperly placing the burden of proof on contractor with respect to homeowners' defenses and making insufficient findings to support its decision, and (2) improperly applying the "substantially prevailing party" standard under the Prompt Payment Act.  Homeowners cross-appealed, arguing the trial court erred in finding that homeowners were not qualified to offer testimony as to damages for the corrective work performed.  Upon review of the trial record and the applicable legal authority, the Supreme Court affirmed the trial court's decision with regard to all issues brought on appeal. View "Trombly Plumbing & Heating v. Quinn" on Justia Law

Defendant Applejack Art Partners, Inc., appealed a trial court enforcing an arbitration award and entered judgment in Plaintiff Albert Stephens, III's favor for $1,538,164.50 plus interest. Plaintiff began working with the company in September 2006 and subsequently invested $1,125,000 in the company in exchange for stock shares.  In April 2008, Applejack terminated plaintiff's employment.  Plaintiff filed suit against Defendants Applejack, Jack P. Appelman, Aaron S. Young, and William Colvin (collectively, Applejack) and Applejack counterclaimed.  Applejack also sought an order enforcing its right to repurchase Plaintiff's stock.  The parties engaged in binding arbitration and following four days of evidentiary hearings, the arbitrator issued his decision.  He found that in October 2006, plaintiff executed an employment contract, stock purchase agreement, and shareholders' agreement.  Pursuant to the stockholder's agreement, the executive stockholders had the right to buy out plaintiff's shares in the event that plaintiff's employment was terminated.  The agreement identified a specific formula for valuing the stock shares and allowed for Applejack to either pay for the stock in full or provide a 10% down payment and a promissory note for payment of the balance in three equal annual installments, plus interest. Plaintiff refused to sell his stock, in part because he misunderstood the terms of the stock purchase agreement.  An arbitrator concluded that Applejack had the right to buy the shares, and it ordered Plaintiff to transfer his stock into an escrow account, pending full performance of all payment obligations. Applejack did not meet its obligation on the first payment and Plaintiff brought an enforcement action.  Plaintiff sought both a judgment confirming the arbitration award as well as an immediate judgment for all amounts awarded by the arbitrator due to Applejack's default.  The court granted Plaintiff's request.  It found that Applejack's default went to the essence of the arbitrator's award and that Applejack could not now resort to the terms of the promissory note to delay its payments. Applejack argued on appeal that the court should have remanded this case to the arbitrator for clarification, although it was not clear what part of the award Applejack believed was ambiguous.  Applejack also suggested (apparently for the first time on appeal) that notwithstanding the arbitrator's decision Plaintiff should simply keep the stock shares because Applejack was unable to pay for them.  Finally, Applejack asserted that the court erred in ordering full payment of the award suggesting that by doing so, the court modified the arbitration award under Vermont Rule of Civil Procedure 60(b) without authority to do so.  It also argued that there was no clear basis for accelerating the payments due. Upon review of the arbitration record and the applicable legal authority, the Supreme Court found no abuse of discretion by the trial court nor from the arbitration proceedings and affirmed the decision against Applejack: [t]he court imposed an appropriate remedy for Applejack's default, and there was no error." View "Stephens III v. Applejack Art Partners, Inc." on Justia Law

Landlord Downtown Barre Development appealed a trial court's denial of its request for declaratory relief. Landlord argued that Tenant GU Markets of Barre, LLC established a corporate structure that entitled it to terminate the parties' commercial lease.  Landlord claimed the trial court erred by not considering Tenant's conduct when deciding whether tenancy under the terms of their agreement could be terminated.  Upon review of the lease and the applicable legal authority, the Supreme Court concluded that the essence of Landlord's claim was for "anticipatory repudiation." Even assuming Landlord could rely on this common law principle, Tenant had not indicated to Landlord an intent to breach, nor did Tenant commit an act to render it "unable to perform." Accordingly, because the language of the lease was clear and unambiguous and Tenant's conduct did not constitute notice as required by the plain language of the lease, the Court affirmed the trial court's ruling that landlord was not entitled to terminate the agreement on this ground. View "Downtown Barre Development v. GU Markets of Barre, LLC" on Justia Law

Plaintiff US Bank National Association appealed a trial court order that granted summary judgment to Defendant Homeowner Christine Kimball and dismissed with prejudice US Bank’s foreclosure complaint for lack of standing.  On appeal, US Bank argued that it had standing to prosecute the foreclosure claim and that the court’s dismissal with prejudice was in error.  Homeowner cross-appealed, arguing that the court erred in not addressing her claim for attorney’s fees. Homeowner purchased the property in question in June 2005.  To finance the purchase, she executed an adjustable rate promissory note in favor of Accredited Home Lenders, Inc. (Accredited).  The note was secured by a mortgage deed to Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for Accredited. In 2009, US Bank filed a foreclosure complaint for Homeowner’s failure to make required payments.  The complaint alleged that the mortgage and note were assigned to US Bank by MERS, as nominee for Accredited.  Attached to the complaint was a copy of the instrument signed by a "Duly Authorized Agent" of MERS.  The promissory note was also attached to the complaint and appended to it was an undated allonge signed by a corporate officer of Accredited, endorsing the note in blank. Homeowner moved for summary judgment claiming, among other things, that US Bank failed to present sufficient evidence that it held homeowner’s note and corresponding mortgage. Because neither note submitted by US Bank was dated, the court concluded that there was no evidence that the note was endorsed to US Bank before the complaint was filed.  Therefore, the court held that US Bank lacked standing to bring the foreclosure action.  Following a hearing, the court denied the motions for reconsideration and to amend the complaint.  The court concluded that US Bank had submitted a defective complaint and the deficiencies were not mere technicalities, but essential items, without which the case could not proceed.  The court held that US Bank lacked standing when the complaint was filed, and dismissed the complaint “with prejudice.”  Upon review of the trial record and briefs submitted by the parties, the Supreme Court affirmed the trial court's decision in all respects but for the 'with prejudice': "this may be but an ephemeral victory for homeowner.  Absent adjudication on the underlying indebtedness, the dismissal cannot cancel her obligation arising from an authenticated note, or insulate her from foreclosure proceedings based on proven delinquency." The Court dismissed the foreclosure complaint and remanded the case for consideration of the parties' fees dispute. View "U.S. Bank National Association v. Kimball" on Justia Law