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EBWS, LLC v. Britly Corp. (2005-449)
2007 VT 37
[Filed 25-May-2007]
NOTICE: This opinion is subject to motions for reargument under
V.R.A.P. 40 as well as formal revision before publication in the Vermont
Reports. Readers are requested to notify the Reporter of Decisions,
Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
any errors in order that corrections may be made before this opinion goes
to press.
2007 VT 37
No. 2005-449
EBWS, LLC Supreme Court
On Appeal from
v. Orange Superior Court
Britly Corporation January Term, 2007
Amy M. Davenport, J.
William L. Durrell and David R. Bookchin of Benjamin, Bookchin, Colburn &
Durrell, P.C., Montpelier, for Plaintiff-Appellee/Cross-Appellant.
Thomas M. Higgins and Robin Ober Cooley of Pierson Wadhams Quinn Yates &
Coffin, Burlington, for Defendant-Appellant/Cross-Appellee.
PRESENT: Reiber, C.J., Dooley, Johnson and Skoglund, JJ., and
Allen, C.J. (Ret.), Specially Assigned
1. REIBER, C.J. This dispute arises from a construction
contract in which defendant Britly Corporation agreed to build a creamery
for plaintiff EBWS, LLC. After EBWS filed suit for alleged defects in
construction, the superior court granted summary judgment for Britly on
EBWS's claims of consumer fraud and negligence. Following a trial on the
remaining claims, a jury awarded EBWS direct and consequential damages for
breach of contract and breach of an express warranty. Both parties now
appeal. Britly claims that the superior court erred in admitting evidence
of consequential damages and by denying its motion for a new trial. In its
cross appeal, EBWS argues that the court erred in granting summary judgment
on its consumer fraud and negligence claims, and by denying its request for
attorney's fees, costs and prejudgment interest. We conclude that the
court erred in allowing consequential damages in this case, and remand for
further consideration of attorney's fees. In all other respects, we
affirm.
2. The Ransom family owns Rock Bottom Farm in Strafford, Vermont,
where Earl Ransom owns a dairy herd and operates an organic dairy farm. In
2000, the Ransoms decided to build a creamery on-site to process their milk
and formed EBWS to operate the dairy-processing plant and to market the
plant's products. In July 2000, Earl Ransom, on behalf of EBWS, met with
Britly's president, Larry Tassinari, to discuss building the creamery.
Although Tassinari has no formal training in architecture or building
design, he has been in the construction business for twenty-eight years and
over the last ten years has constructed an average of five commercial
buildings per year. After several months of negotiations, in January 2001,
EBWS and Britly entered into a contract requiring Britly to construct a
creamery building for EBWS in exchange for $160,318. EBWS contracted
directly with other entities to perform the site work, electrical, heating
and plumbing on the building. The creamery was substantially completed by
April 15, 2001, and EBWS moved in soon afterward. On June 5, 2001, EBWS
notified Britly of alleged defects in construction.
3. On September 12, 2001, EBWS filed suit against Britly for
damages resulting from defective design and construction. The complaint
included several causes of action: (1) negligent design and execution, (2)
negligent supervision, (3) consumer fraud, (4) breach of express
warranties, (5) breach of contract, (6) breach of fiduciary duty, and (7)
unjust enrichment. Britly claimed that the defects were minor and not
attributable to its work. In addition, Britly counterclaimed for breach of
contract and unjust enrichment.
4. In response to opposing motions for summary judgment, the trial
court dismissed EBWS's consumer fraud claim on January 5, 2004. The court
also issued a show cause order for EBWS to demonstrate why its negligence
claims should not be dismissed as a matter of law pursuant to the
economic-loss rule. Both parties submitted responses on the issue and, on
the first day of trial, the court dismissed the negligence claims.
5. The trial proceeded on EBWS's contract claims. EBWS and Britly
both presented expert testimony regarding which construction defects were
attributable to Britly and what the cost would be to repair the problems.
EBWS's expert estimated the repairs would cost $38,020 and would require
the creamery to cease operations for three weeks. Amy Huyffer, the CEO of
EBWS, testified that during a three-week shut-down, the creamery would
suffer losses of $35,711. She explained that loss would come from two
sources: milk the creamery would be required to purchase and dump, and
employee wages it would be obligated to pay. Britly's principal,
Tassinari, testified that Britly was not responsible for the plumbing,
heating and site work of the building and that many of the drainage problems
were attributable to work done by others. He further testified
that EBWS owed $16,785 for work and materials in unpaid change orders.
Britly's expert testified that to fix the ponding and mold problems, the
floor and walls could be cut and patched with concrete mortar. He
estimated the repairs would take three to four days and cost between $7,000
and $8,500.
6. Following a three-day trial, the jury found Britly had
breached the contract and its express warranty, and awarded EBWS: (1)
$38,020 in direct damages, and (2) $35,711 in consequential damages. The
jury also awarded Britly $3,500 in damages on its counterclaim. Britly
filed a motion for judgment as a matter of law or alternatively for a new
trial. EBWS filed a motion for attorney's fees. The trial court denied
the motions, and both parties appealed.
I.
A. Consequential Damages
7. We begin by addressing Britly's claim that consequential
damages are not available as a matter of law. "A motion for judgment as a
matter of law is granted only where there is no legally sufficient basis
for a reasonable jury to find for the nonmoving party." Perry v. Green
Mountain Mall, 2004 VT 69, 7, 177 Vt. 109, 857 A.2d 793. The relevant
facts pertaining to this issue are not in dispute and thus, our review of
the court's legal conclusion is nondeferential and plenary. N.A.S.
Holdings, Inc. v. Pafundi, 169 Vt. 437, 438-39, 736 A.2d 780, 783 (1999).
8. The jury's award to EBWS included compensation for both direct
and consequential damages that EBWS claimed it would incur while the
facility closed for repairs. Direct damages are for "losses that naturally
and usually flow from the breach itself," and it is not necessary that the
parties actually considered these damages. A. Brown, Inc. v. The Vt.
Justin Corp., 148 Vt. 192, 196, 531 A.2d 899, 901 (1987). In comparison,
special or consequential damages "must pass the tests of causation,
certainty and foreseeability, and, in addition, be reasonably supposed to
have been in the contemplation of both parties at the time they made the
contract." Id., 531 A.2d at 902.
9. In this case, the trial court concluded that EBWS was not
entitled to future lost profits, but did allow EBWS to present evidence of
costs it would incur during a three-week closure-specifically, ongoing
payments for milk and staff wages. On appeal, Britly contends that these
damages are not available as a matter of law because the payments are
prospective and voluntary and thus neither certain nor foreseeable. EBWS
counters that Britly failed to properly preserve this argument below. We
conclude that Britly properly preserved its objection and that the court
erred in submitting these elements of damages to the jury.
10. Although EBWS agrees that Britly generally objected to the
inclusion of consequential damages, EBWS argues that Britly should have
presented a clearer statement of its objection, specifically, that the
damages for milk and wages were not recoverable because they were
uncertain and voluntary. The stated objections were adequate to meet our
standard. A motion for judgment as a matter of law may be made at any time
prior to submission of the case to the jury and must specify the judgment
sought and the law and facts upon which the moving party relies. V.R.C.P.
50(a)(2). The purposes of this requirement is to allow the trial court to
determine if sufficient evidence exists to submit the issue to the jury,
and to allow the nonmoving party an opportunity to cure any defects in
proof, if possible. Cooper v. Cooper, 173 Vt. 1, 11, 783 A.2d 430, 438-39
(2001).
11. It is evident from the transcript that the trial court
understood Britly's objection and responded to it, and that EBWS had an
opportunity to rectify any deficiencies in proof. On the second day of
trial, at the close of EBWS's evidence, Britly objected to submitting
evidence of consequential damages to the jury, based on its theory that
lost profits for a new business are inherently speculative. The court
deferred its ruling until the following morning. At the beginning of the
second day of trial, the court ruled that EBWS could not recover for lost
profits because it was not a going concern at the time the contract was
entered into, and profits were too speculative. The court concluded,
however, that EBWS could submit evidence of other business losses,
including future payment for unused milk and staff wages. At the close of
the evidence, defendant again moved for judgment as a matter of law on
consequential damages. See Maynard v. Travelers Ins. Co., 149 Vt. 158,
160, 540 A.2d 1032, 1033 (1987) (requiring moving party to renew objection
at the close of the evidence where the trial court defers ruling at the
close of opponent's case). The court reiterated its ruling that lost
profits were not recoverable, but reasoned that it was up to the jury
whether damages for milk and wages were certain and foreseeable. After the
court read the jury instructions, Britly again restated its objection. See
V.R.C.P. 51(b) (requiring objection to jury instructions to be made before
jury retires to consider verdict).
12. Although Britly's objections were not phrased with exactly the
same terminology it uses on appeal, the objections were clear enough to
allow both EBWS to cure defects in proof and the court to rule on the
objection. See Cooper, 173 Vt. at 11, 783 A.2d at 438-39 (explaining that
purpose of requiring an objection on sufficiency of the evidence at the
close of the evidence is to allow the nonmoving party an opportunity to
cure defects in proof). The trial court understood Britly's objection and
responded to it by excluding lost profits, but allowing other expenses.
Cf. Roberts v. Chimileski, 2003 VT 10, 14, 175 Vt. 480, 820 A.2d 995
(mem.) (limiting issues on appeal to those that trial court had an
opportunity to evaluate). Under these circumstances, we conclude that
Britly adequately preserved the issue for appeal.
13. Having decided that the issue was properly preserved, we turn
to the substance of the dispute. At trial, Huyffer, the CEO of EBWS,
testified that during a repairs closure, the creamery would be required to
purchase milk from adjacent Rock Bottom Farm, even though it could not
process this milk. She admitted that such a requirement was self-imposed
as there was no written output contract between EBWS and the farm to buy
milk. In addition, Huyffer testified that EBWS would pay its employees
during the closure even though EBWS has no written contract to pay its
employees when they are not working. The trial court allowed these
elements of damages to be submitted to the jury, and the jury awarded EBWS
consequential damages for unused milk and staff wages.
14. On appeal, Britly contends that because there is no
contractual or legal obligation for EBWS to purchase milk or pay its
employees, these are not foreseeable damages. EBWS counters that it is
common knowledge that cows continue to produce milk, even if the processing
plant is not working, and thus it is foreseeable that this loss would
occur. We conclude that these damages are not the foreseeable result of
Britly's breach of the construction contract and reverse the award.
15. In assessing EBWS's claim, we draw upon our past cases as a
basis for comparison. Particularly instructive is Norton & Lamphere
Constr. Co. v. Blow & Cote Inc., 123 Vt. 130, 183 A.2d 230 (1962). In
Norton, the plaintiff contracted to perform part of a highway construction
project for the defendant. Id. at 131-22, 183 A.2d at 232. The defendant,
however, never provided the plaintiff with an opportunity to complete the
work, and the plaintiff sued for breach of contract. Following a trial, the
jury awarded damages to the plaintiff for wages, costs to alter equipment,
and financing costs for a loader and crusher. On appeal, the defendant
argued that these elements of damages were not foreseeable and were
therefore unavailable as a matter of law. We concluded that the first two
items were recoverable as consequential damages, but the costs relating to
the loader and crusher were not. In affirming the award for wages, we
emphasized that the plaintiff had paid workmen in anticipation of the
contract, and that the payments were made "solely for the purpose of
performing the contract." Id. at 136, 183 A.2d at 235. Similarly, the
equipment was altered specifically for performance of the contract and was
"made with the full knowledge of the defendant." Id. at 137, 183 A.2d at
235.
16. In contrast, we reversed the trial court's inclusion of
damages relating to a loader and stone crusher. Although the plaintiff had
purchased these items in connection with its work under the contract and
had to pay to finance the purchase, "it was not a circumstance known to the
defendant, nor one which could reasonably be supposed to have been in its
contemplation at the time it contracted with the plaintiff." Id. at 138,
183 A.2d at 236. Consequently, costs relating to the crusher and loader
were not recoverable.
17. In comparison, we conclude that EBWS's claims for
consequential damages are more like the finance charges, in that it is not
reasonable to expect Britly to foresee that its failure to perform under
the contract would result in this type of damages. While we are
sympathetic to EBWS's contention that the cows continue to produce milk,
even when the plant is closed down, this fact alone is not enough to
demonstrate that buying and dumping milk is a foreseeable result of
Britly's breach of the construction contract. Here, the milk was produced
by a separate and distinct entity, Rock Bottom Farm, which sold the milk to
EBWS. There was no output contract between EBWS and Rock Bottom Farm at
the time the parties entered their construction contract, and a contractor
could not have reasonably anticipated this expense. See Berlin Dev. Corp.
v. Vt. Structural Steel Corp., 127 Vt. 367, 372, 250 A.2d 189, 192 (1968)
(explaining that where premises were leased several months after building
contract was entered into, contractor could not have foreseen that faulty
construction would result in damage to tenant's interest).
18. Similarly, EBWS maintained no employment agreements with its
employees obligating it to pay wages during periods of closure for repairs,
dips in market demand, or for any other reason. Any losses EBWS might
suffer in the future because it chooses to pay its employees during a plant
closure for repairs would be a voluntary expense and not in Britly's
contemplation at the time it entered the construction contract. It is not
reasonable to expect Britly to foresee losses incurred as a result of
agreements that are informal in nature and carry no legal obligation on
EBWS to perform. "[P]arties are not presumed to know the condition of each
other's affairs nor to take into account contracts with a third party that
is not communicated." Id. at 371, 250 A.2d at 192. While it is true that
EBWS may have business reasons to pay its employees even without a
contractual obligation, for example to ensure employee loyalty, no evidence
was introduced at trial by EBWS to support a sound rationale for such
considerations. Under these circumstances, this business decision is
beyond the scope of what Britly could have reasonably foreseen as damages
for its breach of contract. See Wyatt v. Palmer, 165 Vt. 600, 602-03, 683
A.2d 1353, 1357 (1996) (mem.) (reversing trial court's award of damages for
lost opportunity to refinance a mortgage in breach of a construction
contract); Albright v. Fish, 138 Vt. 585, 590, 422 A.2d 250, 254 (1980)
(rejecting claim for interest on loans and future property taxes on land
purchased resulting from breach of a restrictive land covenant).
19. In addition, the actual costs of the wages and milk are
uncertain. Unlike the wages in Norton that were paid in anticipation of
the contract, the milk and wages here are future expenses, for which no
legal obligation was assumed by EBWS, and which are separate from the terms
of the parties' contract. We note that at the time of the construction
contract, EBWS had not yet begun to operate as a creamery and had no
history of buying milk or paying employees. See Berlin Dev. Corp., 127 Vt.
at 372, 250 A.2d at 193 (explaining that profits for a new business are
uncertain and speculative and not recoverable). Thus, both the cost of the
milk and the number and amount of wages of future employees that EBWS might
pay in the event of a plant closure for repairs are uncertain. Cf. Norton,
123 Vt. at 136, 183 A.2d at 235 (allowing consequential damages for wages
already paid in anticipation of contract).
B. Motion for a New Trial
20. Britly also contends that the trial court erred in denying
its motion for a new trial because the jury's verdict was against the
substantial weight of the evidence. Britly argues that there was evidence
that the defective construction was attributable to work performed by
contractors employed directly by EBWS and not within Britly's control.
Specifically, Britly points to testimony that defects in the work performed
by the site worker and the plumber, who were outside of Britly's control,
contributed to the drainage problems with the floor. Because the jury
awarded the full amount of the repair costs to EBWS, Britly concludes that
the jury's verdict was against the substantial weight of the evidence. We
affirm.
21. On a motion for a new trial, the trial court must view the
evidence in the light most favorable to the jury verdict. V.R.C.P. 59;
Pirdair v. Med. Ctr. Hosp. of Vt., 173 Vt. 411, 416, 800 A.2d 438, 442-43
(2002). On appeal, from denial of a motion for a new trial, we will
reverse only if the court has abused its discretion. Hardy v. Berisha, 144
Vt. 130, 134, 474 A.2d 93, 95 (1984). Viewing the evidence in the light
most favorable to EBWS, we conclude that there was sufficient evidence to
support the jury's verdict in its favor and find no abuse of discretion.
22. At trial, EBWS's expert testified that the construction
defects in the creamery, specifically the drainage problems, were a result
of Britly's work. The expert averred that the floor of the creamery failed
to conform to the specifications in the contract and fell below the
industry standard because it did not properly slope to the drains. This
caused ponding in several areas on the floor and mold to develop on the
walls. In the expert's opinion, the floor's drainage and ponding problems
were caused by drains set too high and an improperly installed concrete
slab. The expert explained that it is industry practice to insure that
drains are set at the correct height before pouring concrete.
23. In response, Tassinari, Britly's principal, testified that the
plumber, who was working directly for EBWS and outside of Britly's control,
set the drains too high and caused the drainage problems. Tassinari
further opined that "it is not an industry standard for the concrete guy to
check the elevation of floor drains."
24. Viewing this evidence in the light most favorable to EBWS, we
conclude that there was enough evidence to support the jury's verdict that
Britly was responsible for the construction defects. Although Britly
presented evidence that the plumber failed to properly install the drains,
there was additional evidence on the issue of whether Britly was
responsible for the resulting defects in the floor. EBWS's expert
testified that Britly had a responsibility to check the plumber's work and
insure the floor sloped properly to the drains before pouring the concrete.
See Lapoint v. Dumont Constr. Co., 128 Vt. 8, 10-11, 258 A.2d 570, 571
(1969) (explaining that even where contractor did not personally make
faulty connection, he was ultimately responsible and thus liable). The
jury was free to credit the testimony of EBWS's expert over Britly's.
II.
A. Consumer Fraud
25. We turn to EBWS's claims in its cross appeal. EBWS first
argues that the trial court erred in dismissing its consumer fraud and
negligence claims on summary judgment. Summary judgment is appropriate
where there are no genuine issues of material fact and the moving party is
entitled to judgment as a matter of law. V.R.C.P. 56(c)(3); O'Donnell v.
Bank of Vt., 166 Vt. 221, 224, 692 A.2d 1212, 1214 (1997). On appeal, we
apply the same standard as the trial court. Id. In addressing these
claims, we assume as true all allegations presented by EBWS. Hodgdon v.
Mt. Mansfield Co., 160 Vt. 150, 158-59, 624 A.2d 1122, 1127 (1992).
26. EBWS's claim arises under 2453(a) of Vermont's Consumer
Fraud Act. See generally Consumer Fraud Act, 9 V.S.A. 2451. To survive
summary judgment, EBWS must demonstrate: (1) that Britly made a
representation or omission that was likely to mislead; (2) that EBWS
interpreted the message reasonably under the circumstances; and (3) that
the misleading effects were material. See Jordan v. Nissan N. Am., Inc.,
2004 VT 27, 5, 176 Vt. 465, 853 A.2d 40 (listing elements of a consumer
fraud claim).
27. EBWS argues that at their first meeting Britly's president,
Tassinari, made five statements that constituted negligent
misrepresentation and consumer fraud. When EBWS first inquired as to
whether Britly could build the creamery, Tassinari responded, "No problem,
I can do that." He claimed that he had built buildings "substantially more
complex" and that "this is an easy building." Finally, he remarked that
the creamery would take "two months start to finish" and that he could have
EBWS "in the building by the end of January."
28. We agree with the trial court that "there is no evidence that
the [Tassinari's] statements were false or misleading in any material way."
The court reasoned that none of the allegations regarding poor
construction, including failure to properly slope the concrete floor,
revealed an inability to design and build a creamery. Thus, the first
three statements were not inaccurate or likely to mislead because there was
no evidence that Britly was incapable of building a creamery or that
building a creamery was uniquely demanding. Moreover, Britly's statements
regarding the length of time it would take to complete the creamery did not
amount to fraud because the statements were not likely to mislead. By the
time that EBWS entered into its contract with Britly, it was already
January and more than two months had elapsed since the parties' first
meeting. Therefore, when it entered the construction contract, EBWS knew
that the building would not be completed in two months and that it would
not be in the building by the end of January.
B. Negligence Claims
29. EBWS appeals the trial court's dismissal of its claims for
negligent design and execution. The trial court issued a show cause order
for EBWS to explain why its negligence claims should not be dismissed
pursuant to the economic-loss rule because EBWS alleged solely economic
damages. EBWS responded that Britly's work was an exception to the
economic-loss rule because it was a professional service. In an oral
ruling on the first day of trial, the court concluded that the
professional-services exception to the economic-loss rule required some
kind of special relationship between the parties, which was absent in this
case. Consequently, the court dismissed EBWS's negligence claims because
any alleged negligence caused purely economic damages. On appeal, EBWS
claims that designing and building the creamery was a professional service
akin to architecture that should fall within a professional-services
exception to the economic-loss rule. Britly counters that because it was
not a licensed architect, it was not providing professional services within
the meaning of the exception. We affirm the court's decision that Britly's
work did not fall within an exception to the economic-loss rule.
30. The economic-loss rule prohibits recovery in tort for purely
economic losses. Springfield Hydroelec. Co. v. Copp, 172 Vt. 311, 314, 779
A.2d 67, 70 (2001). The rule strives to maintain a separation between
contract and tort law. In tort law, duties are imposed by law to protect
the public from harm, whereas in contract the parties self-impose duties
and protect themselves through bargaining. See id. Thus, negligence
actions are limited to those involving unanticipated physical injury, and
"claimants cannot seek, through tort law, to alleviate losses incurred
pursuant to a contract." Id. In Springfield, we recognized that there
might be recovery for purely economic losses in a limited class of cases
involving violation of a professional duty. Id. at 316, 779 A.2d at 71-72.
We did not specify which services would fall into such an exception, but
explained that although the appellees in that case "maintained complex and
highly specialized responsibilities," they "did not hold themselves out as
providers of any licensed professional service." Id. at 316-17, 779 A.2d
at 72.
31. Purely economic losses may be recoverable in professional
services cases because the parties have a special relationship, which
creates a duty of care independent of contract obligations. Id. at 316,
779 A.2d at 71-72. Thus, the key is not whether one is licensed in a
particular field, as the parties have focused upon; rather, the determining
factor is the type of relationship created between the parties. See
Business Men's Assurance Co. v. Graham, 891 S.W.2d 438, 453 (Mo. Ct. App.
1994) (allowing party to sue for purely economic damages in tort "if the
party sues for breach of a duty recognized by the law as arising from the
relationship or status the parties have created by their agreement").
Although a license may be indicative of this relationship, it is not
determinative.
32. No such relationship existed in this case. Britly presented
itself as a construction contractor and not as a provider of a specialized
professional service. EBWS did not rely on Britly to provide it with a
professional service, and, consequently, it paid for the services of a
contractor not a professional architect. See Berschauer/Phillips Constr.
Co. v. Seattle Sch. Dist. No. 1, 881 P.2d 986, 992 (Wash. 1994) (noting
that fees "charged by architects, engineers, contractors, developers,
vendors, and so on are founded on their expected liability exposure as
bargained and provided for in the contract"); see also Moransais v.
Heathman, 744 So.2d 973, 976 (Fla. 1999) (explaining the difference between
a general contractual duty to deliver services in a workmanlike manner and
the professional duty to use standard of care used by similar
professionals). Thus, we conclude there was no special duty of care
created beyond the terms of the construction contract and no exception to
the economic-loss rule applies.
C. Attorney's Fees & Prejudgment Interest
33. Finally, we address EBWS's request for attorney's fees,
expenses and prejudgment interest. Following the verdict, EBWS filed a
motion requesting attorney's fees both as due under the contract and
pursuant to statute. The construction contract states that in a suit to
recover damages for breach of contract, "the prevailing party shall be
entitled to recover reasonable attorneys' fees, costs, charges, and
expenses expended or incurred therein." In addition, Vermont's
construction contracts statute requires an award of reasonable attorney's
fees to "the substantially prevailing party." 9 V.S.A. 4007(c). The
trial court denied EBWS's request in a motion response form, without any
explanation. We conclude that EBWS properly requested attorney's fees and
that the court erred in summarily denying the request.
34. A request for attorney's fees and related expenses must be
made by motion no later than fourteen days after entry of judgment.
V.R.C.P. 54(d)(2)(B). Under the rule, once a party requests fees, the
court "shall find facts and state its conclusions of law." V.R.C.P.
54(b)(2)(C). The trial court has discretion in crafting the amount of an
award, but where fees are due by law, it is an abuse of discretion to deny
all fees. See Perez v. Travelers Ins., 2006 VT 123, 8-9, __ Vt. __, 915
A.2d 750 (explaining that an award is mandatory when fees are due pursuant
to a statutory fee-shifting provision). But see Fletcher Hill Inc. v.
Crosbie, 2005 VT 1, 12, 178 Vt. 77, 915 A.2d 292 (holding that the
question of whether a party substantially prevailed within the meaning 9
V.S.A. 4007(c) is a matter for the trial court's discretion).
35. Here, EBWS complied with Rule 54(d)(2) and submitted a motion
for attorney's fees to the court following the jury's verdict. Following
this request, the court made no findings concerning whether EBWS was
entitled to fees under the contract as the "prevailing party," or whether
it was entitled to fees pursuant to statute as the "substantially
prevailing party." Thus, without any findings or conclusions to support
its decision, we conclude the court erred in denying fees. See Murphy v.
Stowe Club Highlands, 171 Vt. 144, 163-64, 761 A.2d 688, 702 (2000)
(explaining that generally the jury must determine whether attorney's fees
are due pursuant to a contract, but fees may be awarded without a jury
finding if due by law); Bonanno v. Bonanno, 148 Vt. 248, 251, 531 A.2d 602,
604 (1987) ("On review, the trial court's findings will be deemed
insufficient when we are left to speculate as to the basis of the trial
court's decision."). We remand for the court to make findings and
conclusions pertaining to attorney's fees.
36. EBWS also requests prejudgment interest as a mandatory award
because it contends that the direct damages were reasonably ascertainable.
As with the attorney's fees, the court denied prejudgment interest without
explanation. Prejudgment interest is awarded as of right when damages are
liquidated or reasonably certain. Vt. Agency of Natural Res. v. Glens
Falls Ins. Co., 169 Vt. 426, 435, 736 A.2d 768, 774 (1999). The rationale
is that "the defendant can avoid the accrual of interest by simply
tendering to the plaintiff a sum equal to the amount of damages." Id.
(quoting Johnson v. Pearson Agri Sys., Inc., 350 N.W.2d 127, 130 (Wis.
1984)). In those cases where the amount of damages is uncertain or
disputed, the trial court may award prejudgment interest in a discretionary
capacity. Estate of Fleming v. Nicholson, 168 Vt. 495, 501, 724 A.2d 1026,
1029 (1998).
37. We conclude that prejudgment interest was not mandatory in
this case. Although EBWS claims that the amount of direct damages is
certain, there was much controversy at trial as to what repairs were
necessary and how much it would cost to complete repairs. EBWS and Britly
presented conflicting expert testimony about how to correct the drainage
problems. EBWS's expert recommended removing and replacing the floor and
interior walls of the creamery, explaining that this was the only solution
that would work in the long-term. The expert testified the repairs would
take three weeks and cost $38,020. In contrast, Britly's expert testified
that to fix the ponding and mold problems, the floor and walls could be cut
and patched with concrete mortar. He estimated the repairs would take
three to four days and cost between $7,000 and $8,500. Thus, the amount of
damages was not reasonably certain, Winey v. William E. Dailey, Inc., 161
Vt. 129, 141, 636 A.2d 744, 752 (1993) (noting that where there is
conflicting expert testimony, the amount is not reasonably certain), and it
was within the court's discretion to deny prejudgment interest in this
case. Estate of Fleming, 168 Vt. at 501, 724 A.2d at 1030 (deferring to
trial court's determination of whether prejudgment interest is available in
cases where the amount of damages is not reasonably ascertainable).
Award for consequential damages is reversed, and the case is remanded for
consideration of attorney's fees; otherwise, affirmed.
FOR THE COURT:
_______________________________________
Chief Justice |