2016 VT 56
By Amy Davis
Whenever I see a case involving a Board of Health, my mind jumps straight to those homes in Hoarders that get condemned. Have you ever watched that show? There is nothing like curling up on a Friday night with a bottle of wine and watching Hoarders. Seriously, you will feel so much better for not washing your dishes or vacuuming. Alas, this case is not so much about keeping 60 cats in your bedroom as it is about attorney’s fees.
The (lengthy) facts of this case are straightforward and really not in dispute. And since the legal analysis in this case is pretty short, the facts are really the only interesting part of this case. Defendant owned a two-story brick structure. The bottom floor housed a small bar and restaurant, the defendant lived on the second floor, and the attic was used for storage. In May 2012, the police department notified the health officer that some bricks were falling off the building and onto the sidewalk. The health officer looked at the building, said, “Yep, those bricks are falling on the sidewalk,” and issued an emergency health order condemning the building and declaring it unfit for use or occupancy. The defendant needed to hire a structural engineer to figure out what was going on, and complete all repairs within seven days.
Meanwhile, some more town and state officials came to look at the building. They installed some “Jersey barriers” to create a buffer zone, and determined that the bar/restaurant on the first floor was no longer in operation. The defendant would not allow the officials to inspect his living quarters or the attic. The state fire marshal issued a report saying the building could not be used for occupancy or public use due to the structural problems, heavy rotting in the roof, and moisture damage. The town board held its required hearing on the emergency order where the defendant acknowledged he did not do anything in response to the health officer’s order. The town board issued an order stating the brick wall collapsing endangers the passing motorists and pedestrians, which was an “immediate and substantial public health hazard.” The town board ordered the building remain uninhabited until repairs were made, that the defendant start those repairs within 24 hours, and, if he didn’t make those repairs, the building was to be demolished.
Defendant appealed to the state board of health, and, after a contested hearing, the state board affirmed the town’s order. While that appeal was pending, the town sought a preliminary injunction in the superior court to enforce the town’s order. The superior court issued such an order with multiple conditions to secure and repair the building. Two months went by, and the defendant did nothing, so the town filed for contempt. Defendant did not attend the hearing, and the superior court found him in civil contempt. Defendant had filled in new brick on one side, but had not complied with the rest of the order. The court allowed the town representative to enter and inspect the building, and awarded the town attorney’s fees, not to exceed $600 for the contempt motion.
Defendant asked for reconsideration of the court’s underlying order and the new contempt order. The court held a hearing with the defendant’s contractor testifying to the work that had been completed and what work was still left. The court indicated it might lift the attorney’s fee sanction if a visit from the town health officer went well and there was a solid plan to fix the remaining issues. It continued the contempt hearing until mid-January. In February 2013, the court denied defendant’s motion to reconsider the contempt order on the basis that the masonry repairs ordered back in June had still not been completed. It deferred any final ruling on the attorney’s fees, saying that if defendant finished the repairs in a professional manner, it is “likely” he would not have to pay those fees. But, if the work was not performed, or performed poorly, he would have to pony up the dough.
In August 2013, the court ordered that defendant needed to complete additional repairs before October 2013. When the October 2013 status conference came around, a new judge had been assigned. That judge noted several repairs had been done, but more were needed, and the specific tasks in the August 2013 order were not substantially completed. In the spring of 2014, the superior court allowed the town to conduct a more invasive structural assessment of the building. The assessment took place in June, and a detailed report filed three weeks later. The report indicated that while the brick work had been repaired, the load-bearing capacity of the second floor was below code requirements, and there was roof damage. The report concluded the building was still not fit for public use or occupancy.
In July 2014, the court held a final hearing on the town’s motion for sanctions and penalties. In December, the court issued a decision prohibiting the defendant from any and all public use of the building. It also assessed against defendant $22,256, including a civil penalty of $1,788 ($2 per day for being in violation of the health order from July 2012), $7,886 for the Town’s engineering fees, and $12,582 in attorney’s fees. The court also acknowledged that defendant had complied with specific requirements from the October 2013 order, but stated that “those items alone had never been the sole concern of the Town or the State with regard to over-all safety and risk of public injury because of the deteriorated condition of the Defendant’s building.”
So with all of that hoopla, one would thing that there is a whole bunch of stuff up for appeal, right? Nope. The only thing defendant contends is that this statute does not authorize attorney’s fees. There is an “American Rule” to attorney’s fees that means everybody bears the cost of their own litigation. But, the above-mentioned statute allows the government to get reimbursed for expenditures for the “investigation and mitigation” of a public health risk. The town contends that attorney’s fees are a governmental expenditure and included in the statute. The SCOV says, "Nope."
When the courts look at a statute, it tries its best to go with the Legislature’s intent. If there is doubt as to the intent, the court looks to the “whole and every part of the statute, the subject matter, the effects and consequences, and the reason and spirit of the law.” So if the Legislature isn’t clear, it’s really anybody’s guess. The SCOV concedes at the outset that a broad interpretation of the statute could include attorney’s fees in with “expenditures.” But, it could be interpreted narrowly to include only those involved in the investigation, mitigation, abatement, or removal of public health risks, like engineers and debris-removal folks. Because attorney’s fees are unique, the SCOV concludes that the Legislature probably did not intend to include those in the statute.
Usually, when the Legislature authorizes the award of attorney’s fees (beyond what common law permits), it explicitly does so. For instance, a tenant can recover attorney’s fees when landlords fail to fix habitability issues. Attorney’s fees are also common in worker’s compensation cases when a claimant wins in the superior or Supreme Court. Then there is some case law that says, more or less, that the Legislature knows how to say if it means attorney’s fees, so the court is reluctant to imply it. The Legislature is a big kid, it knows what it’s doing. But, it’s even more important in cases where it would establish a statutory meaning that is far apart from a common law rule – in this case, the American Rule.
The town argues that alternatively, even if the statute did not authorize an award of attorney’s fees, it was within the superior court’s discretion to award the fees based on and equitable exception to the American Rule. The SCOV again says no. There is a flexible exception to the American Rule, such as where one party acted in bad faith and this caused another to incur litigation expenses in an unnecessary judicial proceeding. The standard of review for an award of attorney’s fees is abuse of discretion. However, departure from the American Rule must only be used in exceptional cases, where justice demands an award of attorney’s fees, which is not present in this case. The superior court made no finding of bad faith, vexation or wanton conduct of defendant’s part. The record shows that defendant was a man of limited means, but nevertheless attempted to comply with the town’s health order.
Even though the SCOV gives great deference to the superior court’s discretion with respect to attorney’s fees, the record does not support a finding of bad faith warranting an award of attorney’s fees. Thus, the SCOV reverses the award of attorney’s fees, and affirms the rest of the judgment.
In his dissent, Justice Dooley with Justice Eaton joining, finds that the statutory language is actually a clear directive to authorize collection of attorney’s fees. The dissent also criticizes the SCOV for relying on a Pennsylvania opinion, despite many Vermont opinions to the contrary. The dissent’s reading of the statute is that the Legislature allowed the recovery of attorney’s fees as a “governmental expenditure.” The dissent also sees no difference between an expenditure for an engineer and an expenditure of an attorney. Each is involved in the investigation, mitigation, and abatement of the hazard, with the attorney determining what must be done legally to eliminate the hazard and require the owner to make repairs. It criticizes the majority for requiring the use of the exact language “attorney’s fees” in the statute in order for the plaintiff to recover attorney’s fees. As a practical matter, the Legislature probably decided not to itemize every time of expense, and decided to lump it together under a general term of “governmental expenditures.”
In any event, add this to list of statutes the Legislature can clarify for us in the future.