Editor’s note: This analysis of a recent Vermont Supreme Court ruling is by Attorney Jeff Thomson, a contributor to SCOV Law Blog.
Some cases should never go to trial. Many disputes are better suited for the mediation table than the courtroom. Small disputes between neighbors often belong in this category, because mediation can help maintain neighborly relations and prevent significant legal fees. Unfortunately, some neighbors are unable to see the forest for the trees.
In today’s case, Joseph and Carolyn Bove’s decision to remove a row of white cedar trees along their property line led to the initiation of a lawsuit by their neighbor, Leonard Knappmiller, who believed that the trees were located on his property. Knappmiller not only sued the Boves, but also included as co-defendant Vaillancourt Tree and Landscape Service, the company hired to remove the trees. This led to Vaillancourt bringing a cross-claim against the Boves for negligence, breach of contract, and indemnity.
Vaillancourt’s cross-claim alleged that it had entered into a contract with the Boves, and that the Boves should have informed Vaillancourt about tree ownership issues with Knappmiller before the trees were cut down and removed.
After a two-day trial and many billable hours, the jury found for the defendants. The jury found that Knappmiller had not proven the trees were wrongfully cut. Therefore, Vaillancourt’s cross-claim against the Boves was never reached.
This result was not adequate for Vaillancourt, which was left on the hook for its legal expenses. Vaillancourt filed a post-trial motion seeking litigation expenses, including attorney’s fees, under a theory of implied indemnity from the Boves. The trial court denied Vaillancourt’s motion, stating that indemnity was not available absent any finding of wrongdoing on the part of the Boves.
This unfortunate string of events leads us to the issue on appeal to the SCOV. Vaillancourt argues that the trial court’s ruling is inconsistent with Windsor School District v. State, 2008 VT 27, and that Vermont case law does not require a finding of wrongdoing before attorney’s fees and litigation expenses may be awarded based on a theory of implied indemnity.
Vermont normally requires parties to bear their own attorney’s fees and costs of litigation, absent a statutory or contractual provision to the contrary. The SCOV has recognized an exception to the rule when “the wrongful act of one person has involved another in litigation with a third person or has made it necessary for that other person to incur expenses to protect his interests.” Albright v. Fish, 138 Vt. 585, 591, 422 A.2d 250, 254 (1980). The SCOV explains that some underlying culpability must appear from the record before attorney’s fees can be awarded under this exception and the burden is on the party seeking indemnity to prove culpability.
In the end, the SCOV finds that Vaillancourt’s claim is too vague to meet its burden of proving that the Boves were culpable. In exploring Vaillancourt’s claim, the SCOV discusses the Windsor case, in which the town of Windsor bought land that was previously owned and polluted by the Vermont Department of Corrections (DOC). The town sued the DOC, seeking reimbursement for money spent investigating and remediating the pollution. The trial court concluded that both the town and the DOC were strictly liable under the Vermont Waste Management Act, and therefore both were liable for cleanup.
On appeal, the SCOV found that the DOC was liable for Windsor’s expenses based on common-law indemnification under Albright, under which the Court may consider the “kind and quality of the conduct.” Because the DOC alone polluted the property and the town was a mere purchaser, the town was potentially subject to great financial liability for the costs incurred during remediation. Therefore, the “kind or quality of conduct” was such as to trigger the Albright exception.
The SCOV explains: “Contrary to Vaillancourt’s contention, Windsor does not abandon the wrongful act element, but merely explains the rationale behind prior case law and notes that a finding of fault is not a necessary predicate to an award of attorney’s fees in the context of that case with its distinct premise of strict liability…We do not extend Windsor to cases such as this where the jury specifically found no fault, no liability, and no underlying responsibility.”
The SCOV focuses on the “kind and quality of the parties’ conduct” to distinguish Windsor with the facts in question in the Vaillancourt’s case. In Windsor, the trial court found that the DOC polluted the land, while the town merely purchased it. Because the court found that the DOC wholly caused the pollution and the town “played virtually no role,” there was a basis under Albright for an award of attorney’s fees. However, in the dispute in question, the jury specifically found neither the Boves nor Vaillancourt liable for any wrongful act. Therefore, the SCOV finds that the Boves are not on the hook for Vaillancourt’s expenses.
In the end, a relatively minor dispute turns into an expensive headache for all involved. Sometimes everyone loses when disputes are brought to trial. In the end, Knappmiller has no tree line and all parties have legal expenses to cover. These sorts of disputes require creative resolutions. Imagine if Knappmiller had simply hired Vaillancourt to plant trees on his side of the property line rather than sue. Maybe the Boves cover some of the cost. While this “what if” scenario may not have been possible, it seems clear that a little creativity would have led to a better resolution.