Monday, June 4, 2012

No Love for Thy Neighbor’s Logger

By Jeff Thomson

Knappmiller v. Bove, 2012 VT 38 (mem.).

Some cases should never go to trial.  Many disputes are better suited for the mediation table than the court room.  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, Defendants’ decision to remove a row of white cedar trees along their property line led to the initiation of a law suit by their neighbor, Plaintiff, who believed that the trees were located on his property.  Plaintiff not only sued the Neighbors, but also included as co-defendant, the landscaping company hired to remove the trees.  This led to the Landscaper bringing a cross-claim against the Defendants for negligence, breach of contract, and indemnity.  Landscaper’s cross-claim alleged that it had entered into a contract with Defendants, and that the Defendants should have informed Landscaper about tree ownership issues with Plaintiff 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 Plaintiff had not proven the trees were wrongfully cut.  Therefore, the trial court never had to reach the Landscaper’s cross-claim against the Defendants. 

Landscaper was not satisfied with this result because it left Landscaper on the hook for its legal expenses.  Landscaper filed a post-trial motion seeking litigation expenses, including attorney’s fees, under a theory of implied indemnity from Defendants.  The trial court denied Landscaper’s motion, stating that indemnity was not available absent any finding of wrongdoing on the part of Defendants.

This unfortunate string of events leads us to the issue on appeal to the SCOV.  Landscaper argued that the trial court’s ruling is inconsistent with Windsor School District v. State, 2008 VT 27, which they argue stands for the proposition 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 Landscaper’s claim is too vague to meet its burden of proving that Defendants were culpable.  In ruling on the claim, the SCOV discusses the Windsor case in some detail.  In that case, the Town of Windsor bought land that was previously owned and polluted by the State’s Department of Corrections.  The town sued the State, seeking reimbursement for money that the Town spent investigating and remediating the pollution.  The trial court concluded that both the Town and the State were strictly liable under the Vermont Waste Management Act, and therefore both were liable for cleanup.  On appeal, the SCOV found that the State was liable for the Town’s expenses based on common-law indemnification under Albright, under which the Court may consider the “kind and quality of the conduct.”  Because the State acted alone to pollute the property and the Town was a mere purchaser, the Town was subject to great financial liability for the costs it incurred during remediation.  Therefore, the “kind or quality of conduct” was enough to trigger the Albright exception.

As the SCOV explains:

Contrary to [Landscaper’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 Windsor, the trial court found that the State polluted the land, while the Town merely purchased it.  Because the court found that the State had wholly caused the pollution and the Town “played virtually no role,” there was a basis under Albright for an award of attorney’s fees. 

Here, however, the jury specifically found neither the Defendants nor Landscaper liable for any wrongful act.  Therefore, the SCOV finds that the Defendants are not on the hook for Landscaper’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.  Plaintiff has no tree line, and all parties have legal expenses to cover.  It seems obvious in retrospect that these sorts of disputes require creative resolutions. 

Imagine if Plaintiff had simply hired Landscaper to plant trees on his side of the property line rather than sue.  Maybe the Defendants would have covered some of the cost.  While this “what if” scenario may not have been possible, it seems clear the morning after that a little creativity would have led to a better resolution for all.

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