Sunday, February 20, 2011

No harm, no Foul—and no Attorneys’ Fees Either

Anderson v. Johnson, 2011 VT 17 (mem.)

In this entry order, the SCOV says that if you don’t really “win,” you don’t get attorneys’ fees.  It might be more nuanced than that, but I’m a simple guy.  If you have a problem with that, take it up with management.  I can obfuscate with the best of ‘em if that’s what you really want.

Basically, the plaintiffs below claimed that they thought they were buying a single-family home on a 4.24-acre lot, but they were really buying a 2.38-acre parcel, which, interestingly enough, was listed as a 2.34-acre parcel.  (The confusion stems from the fact that the seller had subdivided the original 4.24-acre lot.)  Supposedly, the plaintiffs’ offer to buy the property was based on their belief that the property was larger than it was.  The real-estate company provided some confusing documentation.  The plaintiffs found out the actual size of the parcel before closing, but went ahead with the purchase anyway.  Then they sued everybody involved, including their own realtor. 

Before trial, the plaintiffs settled with their realtor.  The trial court granted partial summary judgment as to a negligent-misrepresentation claim and ruled as a matter of law that the plaintiffs were not entitled to compensatory damages because the plaintiffs knew what they were buying when they bought it.  The trial court did not go all the way and throw the case out, but allowed the plaintiffs to pursue remedies such as statutory recission and to proceed under Vermont’s Consumer Fraud Act (CFA).

At trial, plaintiffs argued that they only would’ve offered $200K for the 2.38-acre property because that was its assessed value.  Thus, they claimed that they were screwed out of the extra $35K they paid for it.  The realty company said, more or less, wait just a gol’-danged second—the pre-buy appraisal valued the property at more than $235K!  Obviously, the SCOV phrased this exchange in more erudite terms, but like I said, I’m a simple guy.

The jury found that the realty company violated the CFA, but that there were no real damages.  Plaintiffs moved for attorneys’ fees, which the realty company “vigorously” opposed.  The trial court issued a written decision, finding that attorneys’ fees are mandatory whenever the CFA is violated, and awarding attorneys’ fees of over $50K.  Real-estate company appealed.

The SCOV began its analysis with a review of the purpose of the attorneys’ fees provision in the CFA.  The SCOV noted that fees need not necessarily be proportionate to damages—that the purpose of the provision is to help consumers to enforce their rights and that the damages at stake may often be comparatively limited.  The SCOV also noted the many situations in which attorneys’ fees may be warranted even when there is little in the way of actual damages, but an attorneys’ fees award advances a public purpose.

And then the SCOV laid the hammer down.  Noting that the jury found that the plaintiffs were entitled to “no relief of any kind,” the SCOV reasons that there has to be some injury of some kind in order to justify an attorneys’ fees award.   The SCOV reasons that, at most, the real-estate company made a later-corrected mistake that resulted in no harm to plaintiffs.  Accordingly, the SCOV found that the attorneys’ fee award was erroneous and reversed the attorneys’ fees award.

Interesting to note that the Court didn’t address the real-estate company’s argument that the jury verdict finding that it violated the CFA was erroneous.  Seeing as the SCOV reasoned that there was no reliance and that there were no damages, was there really a “technical statutory violation” in the first place?  Is it possible to violate consumer fraud law and incur neither damages nor attorney's fees?

You tell me.  Like I said, I’m a simple guy.    

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