Sunday, September 14, 2014

Nasty Nominal

Evans v. Cote, 2014 VT 104

By Andrew Delaney

This is a case where $1 in damages carries a $22.4K attorney’s fees kicker. How the heck does that happen?

Vermont has a few statutes that apply to messing with somebody else’s trees. One of these statutes authorizes treble damages (as a musician, I think “triple” is a far-more-appropriate term, but nobody asked me); the unlawful mischief statute provides a potential route to attorney’s fees.

The parties have been neighbors since 1980. They’ve never agreed as to where the boundary line between their properties was, and they’ve been feuding about it for some time. Defendant’s deed said the middle of a discontinued road and plaintiff thought the entire road was his. Plaintiff got a default declaratory judgment against defendant in 2007, which defendant later unsuccessfully tried to have vacated.

In the midst of all that, plaintiff filed a suit against defendant based on the treble-damages-for-messing-with-trees statute; he requested attorney’s fees under the unlawful mischief statute and damages for messing with surveying monuments under another statute. Two interesting things to note here: (1) these are all criminal statutes that allow for civil penalties; and (2) this is the first time I’ve heard about the surveying-monuments statute—it’s pretty broad actually, so be careful where you cut trees, kids.

Anyway, plaintiff claimed that “between 1984 and 2008 defendant had trespassed on plaintiff’s land, and damaged plaintiff’s property by removing trees, topsoil, and a barbed wire fence.” He also went for an injunction preventing defendant from entering plaintiff’s land. Defendant responded with a motion to dismiss, arguing that the prior default judgment was garbage. The court denied the motion.

Then there was a bench trial. The court found that defendant had in fact done a bunch of stuff as alleged by plaintiff, that it was likely to happen again in the future, and granted the injunction. As to damages, the trial court found that most of the activity had taken place pre-2002, which meant that many of plaintiff’s claims were SOL—which means, uh, statue of limitations-ed.

But “in 2008 defendant had ‘knocked down one dead but standing softwood tree’ on plaintiff’s side of the boundary line.” So, the court awarded one dollar in damages and 25% of plaintiff’s attorney’s fees under the unlawful mischief statute. Defendant moved to reconsider and argued that one dollar in nominal damages couldn’t support an attorney’s fees award. The trial court rejected that argument, reasoning that “recovery of attorney’s fees is not dependent on obtaining a certain monetary amount of damages.”

So, defendant appeals.

Defendant’s primary argument is that the trial court abused its discretion in the attorney’s fee award, but there are four rationales: (1) that the permanent injunction was an abuse of discretion; (2) plaintiff failed to prove unlawful mischievousness; (3) nominal damages ain’t enough to support attorney’s fees; and (4) the attorney’s fees are disproportionate to damages.

The SCOV disposes of the first two issues easily, reasoning that because defendant failed to order a transcript, the SCOV is just going to assume that the trial court’s findings were supported by the evidence. So that’s that. The SCOV explains when a preliminary injunction is appropriate and reasons that there was enough here. The trial court found that defendant had trespassed from time to time and there was a substantial likelihood it might happen again. Likewise, the SCOV concludes that there was also enough to support a finding of unlawful mischievousness because there were findings that supported it—the SCOV isn’t going to delve into an evidentiary sufficiency analysis without a transcript.

The SCOV reasons that the central issues are whether a nominal-damages award supports an attorney’s fee award, and if so, whether the attorney’s fee award “is reasonable in light of the compensatory damages award.” This is a statutory-interpretation thing, so the SCOV goes de novo. There’s a couple fun Twitter hashtags in there somewhere.

First, the SCOV looks to the statute’s plain language. The absence of any threshold-damages or other limiting language here means that an attorney’s fee award is not dependent on the actual damages award. The SCOV notes that in some cases—when the damage is less that $250—the court filing fee itself could exceed the actual damages award. The SCOV also notes that the purpose of the statutory cost-shifting is to allow civil plaintiffs to seek a remedy for otherwise de minimus violations. In other words, if the penalty is simply actual damages, what’s to stop a defendant from doing the same thing over and over again?

Defendant attempts to argue that because plaintiff’s case didn’t serve some overarching public purpose, plaintiff shouldn’t get attorney’s fees. The SCOV considers the argument, but ultimately concludes that there was some damage, however slight, and that the plaintiff is entitled to attorney’s fees. Though defendant cites a case that involved a Consumer Fraud Act violation, but no damages, where attorney’s fees were rejected, the SCOV deftly distinguishes this case based on the actual one-dollar of damages.

Defendant’s final argument is that the disproportionality between one dollar damages and $22.4K in attorney’s fees constitutes abuse of discretion. The lodestar figure for total fees plaintiff incurred, however, was $84K+. Defendant’s argument, more or less, is that because the final result was poor—only a buck in damages—that the trial court should’ve reduced the award even more than it did.

The SCOV isn’t picking up what defendant’s putting down. Essentially, the SCOV says, “Whaddaya want? Ya got a 75% reduction.” No abuse of discretion shown here.

Those attorney’s fees' statutes can be a killer folks.  Watch out for 'em.

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