978-1285770178 Case Printout Case CPC-27-05 Part 1

Vt.,2009.

DeYoung v. Ruggiero

228IV By Default

228IV(A) Requisites and Validity

228k110 Operation and Effect of Default

228k111 k. In General. Most Cited Cases

Judgment 228 134

228 Judgment

228IV By Default

228IV(A) Requisites and Validity

228k134 k. Construction and Operation. Most Cited Cases

A default judgment is a judgment on the merits that conclusively establishes the defendant’s liability.

228k111 k. In General. Most Cited Cases

Judgment 228 134

228 Judgment

ents’ funds, though the order granting default judgment stated that the only facts disputed by the lawyer related to the

extent of punitive damages, where the order further stated that the issue of damages was not before the court, and

that damages would be considered by a jury at a later hearing.

[4] Attorney and Client 45 129(4)

money and then lied to them about the theft for years, demonstrated “bad motive” and “malice” as a matter of law,

as required in order for clients to be entitled to an award of punitive damages in their breach of fiduciary duties, mis-

representation and misappropriation action, even if lawyer did not intend to harm clients and always intended to

return the money, and thus the jury was not required to determine that the lawyer‘s motive in stealing the funds was

to harm clients rather than to enrich himself in order to award clients punitive damages.

228IV By Default

228IV(A) Requisites and Validity

228k110 Operation and Effect of Default

228k112 k. Matters Admitted. Most Cited Cases

When plaintiffs obtain a default judgment, the factual allegations of their complaint, except those relating to the

115k193 Inquest on Default or Interlocutory Judgment

115k193.1 k. In General. Most Cited Cases

Judgment 228 112

are deemed admitted and supported by evidence, and punitive damages may be awarded in a case of default judg-

ment.

[7] Damages 115 91.5(1)

reckless or wanton disregard of one’s rights.

[8] Damages 115 91.5(1)

115 Damages

gages in deliberate and outrageous conduct that is not necessarily motivated by ill will toward any particular person.

[9] Damages 115 91.5(1)

115 Damages

115V Exemplary Damages

115k91.5 Grounds for Exemplary Damages

115k91.5(1) k. In General. Most Cited Cases

Malice necessary to support an award of punitive damages may arise from deliberate and outrageous conduct aimed

at securing financial gain or some other advantage at another’s expense, even if the motivation underlying the outra-

geous conduct is to benefit oneself rather than harm another.

[10] Attorney and Client 45 129(4)

[11] Appeal and Error 30 979(3)

30 Appeal and Error

30XVI Review

275 New Trial

275II Grounds

275II(F) Verdict or Findings Contrary to Law or Evidence

275k67 Verdict Contrary to Evidence

115 Damages

115X Proceedings for Assessment

115k208 Questions for Jury

115k208(8) k. Exemplary Damages. Most Cited Cases

115 Damages

115X Proceedings for Assessment

115k208 Questions for Jury

115k208(8) k. Exemplary Damages. Most Cited Cases

115X Proceedings for Assessment

115k208 Questions for Jury

115k208(8) k. Exemplary Damages. Most Cited Cases

A plaintiff is entitled to punitive damages only after the jury, in the exercise of its untrammeled discretion, has made

the award.

388k267 Modification or Substitution by Court

388k267(1) k. In General. Most Cited Cases

A court can select its own language in crafting a jury charge, and the degree of elaboration lies within the sound

discretion of the trial judge.

30k840 Review of Specific Questions and Particular Decisions

30k840(4) k. Review of Questions of Pleading and Practice. Most Cited Cases

Supreme Court reviews a jury charge to determine whether the instructions convey the true spirit and doctrine of the

law.

Trial court did not abuse its discretion, in breach of fiduciary duties, misrepresentation, and misappropriation action

brought by clients against lawyer for misappropriating clients’ funds, by instructing the jury that it could include an

amount to compensate for any emotional harm or anguish clients had suffered, rather than specifically instructing

jury that clients could recover compensatory damages for insult, humiliation, and indignity, as the instruction was

not inaccurate or misleading, and trial court decided to leave the elaboration to the argument of counsel.

[18] Appeal and Error 30 242(1)

30 Appeal and Error

30V Presentation and Reservation in Lower Court of Grounds of Review

30V(B) Objections and Motions, and Rulings Thereon

30k242 Necessity of Ruling on Objection or Motion

30k242(1) k. In General. Most Cited Cases

There was not a definitive ruling by the trial court regarding the “value given” by the clients that the Supreme Court

51(b).

*629 James A. Dumont of Law Office of James A. Dumont, P.C., Bristol, for Plaintiffs-Appellants.

Robert F. O’Neill and Ross A. Feldmann of Gravel and Shea, Burlington, for Defendants-Appellees/Cross-

Appellants.

ents. The complaint sought the funds, additional compensatory damages, and punitive damages on multiple theories.

The lawyer failed to answer the complaint, and the superior court entered a default judgment in favor of plaintiffs.

Thereafter, the court held a trial on damages, and a jury awarded plaintiffs a limited amount of compensatory dam-

ages but no punitive damages. On appeal, plaintiffs contend that the court erred by: (1) granting them a default

judgment rather than summary judgment, particularly on the question*630 of whether defendant’s FN1 conduct

ages would be based, was the fee defendant said he would have charged them rather than the money he misappropri-

ated from them. Defendant cross-appeals, arguing that, in awarding attorney’s fees. the superior court erred by not

considering plaintiffs’ rejection of his settlement offers and by not comparing the total damage award plaintiffs

sought with the amount the jury actually awarded them. We conclude that the element of malice was demonstrated

as a matter of law in this case. Accordingly, we reverse the judgment in part and remand the matter for the jury to

¶ 2. Plaintiffs are a widow (mother) and her four children. In July 2001, shortly after mother’s husband committed

suicide in Massachusetts, where the family was living, mother and the children moved to Vermont to be near moth-

er’s parents. Mother hired defendant, a successful real estate attorney, to close on her purchase of a home in Ver-

mont. In early 2002, mother’s mother–in-law died and left a substantial inheritance for mother’s children. Because

money over the next two and one-half years for his real estate business, without informing plaintiffs that the funds

had been received. Some nine months later, in April 2003, defendant received a final distribution of approximately

$109,000 and paid these amounts to plaintiffs without disclosing the earlier distribution.

¶ 4. From the time mother hired defendant, she made repeated inquiries as to when the funds would be available,

bringing claims for willful breach of fiduciary duties, misrepresentation, misappropriation, negligence, breach of

contract, and deceptive acts in violation of the CFA. At the same time, disbarment proceedings were commenced

against defendant. In those proceedings, defendant filed an affidavit with the Professional Responsibility Board ad-

mitting that he “misused for my own benefit and contrary to the entitlement of my clients … funds … delivered to me

in trust for distribution to estate beneficiaries … [totaling] approximately $300,000.” Following his disbarment, de-

a discretionary default judgment against him pursuant to Rule 55 of the Vermont Rules of Civil Procedure.

¶ 7. The court granted defendant’s motion and denied that of plaintiffs. The court reasoned that entry of default

judgment “offer[ed] an expedient resolution on the question of liability.” The court noted that plaintiffs had not

agreed to entry of default judgment only because they feared that a default judgment would not allow them to have a

that the default judgment entered against defendant determined the presence of malice as a matter of law and pre-

cluded the submission of the issue of malice to the jury. In the alternative, plaintiffs argued that they had submitted

sufficient evidence of malice, as a matter of law, to require an award of punitive damages. The court rejected these

arguments and instructed the jury that plaintiffs “must establish that [defendant] acted with malice” before the jury

could award punitive damages. Towards that end, the jury was given special interrogatories in response to which

they first were to indicate whether defendant had acted with malice, and second, if so, indicate what amount of puni-

tive damages, if any, they would award.

¶ 9. At the charge conference, plaintiffs also asked the court to instruct the jury that if they were able to establish

that defendant had injured them, they were entitled to damages for emotional harms, and specifically for insult, in-

dignity, humiliation, or injury to feelings. The court refused to give plaintiffs‘ proposed instruction and instead

charged the jury that plaintiffs could be awarded damages for emotional harms suffered, but did not refer to the spe-

cific harms enumerated by plaintiffs.

¶ 11. During closing argument, defense counsel emphasized the need for the jury to find malice predicated on a

showing of bad motive. In responding to examples of obvious malice proffered by plaintiffs’ attorney, defense coun-

sel reminded the jury that the court had not instructed them that defendant’s actions demonstrated malice as a matter

of law. When plaintiffs objected to this comment, the court told the jury that “the issue of malice is going to be sub-

mitted to the jury” although “it may have been found by a Court in other circumstances.” Defense counsel then reit-

“reckless” and “recklessness” as they related to the concept of malice, and attempted to distinguish the two terms.

¶ 13. Ultimately, the jury awarded $5000 to mother and $1000 to each child in unreimbursed compensatory damag-

es, but indicated by special interrogatory that it did not find malice and thus did not award plaintiffs any punitive

damages. Plaintiffs moved for the judgment to be set aside under Rules 52, 55, 59, and 60 of the Vermont Rules of

¶ 14. The court also addressed the parties’ claims concerning costs and attorney’s fees. Defendant argued that be-

cause plaintiffs had rejected his settlement offers and because the offers exceeded the aggregate amount eventually

awarded to them, V.R.C.P. 68 precluded them from recovering attorney’s fees under the CFA. Rule 68 states in per–

tinent part that “[i]f the judgment finally obtained by the offeree is not more favorable than the offer, the offeree

must pay the costs incurred after the making of the offer.” Ruling that Rule 68 applied only to monies defined by

statute as costs, the court granted plaintiffs‘ motion for attorney’s fees in the amount they requested. The court ap-

plied Rule 68 to plaintiffs’ request for costs, however, limiting their recovery to costs accrued before defendant’s

offer of judgment. This appeal and cross-appeal followed.