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 by email at: JUD.Reporter@vermont.gov or by mail at: 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.

2019 VT 71

No. 2018-158

Antony Sutton, et al. Supreme Court

On Appeal from

 v. Superior Court, Lamoille Unit,

Civil Division

Vermont Regional Center, et al. April Term, 2019

Thomas Carlson, J.

Russell D. Barr, Chandler W. Matson and Benjamin E. Novogroski of Barr Law Group, Stowe,

for Plaintiffs-Appellants.

Thomas J. Donovan, Jr., Attorney General, and Benjamin D. Battles, Solicitor General, 

 Montpelier, for Defendants-Appellees.

PRESENT: Reiber, C.J., Skoglund, Robinson, Eaton and Carroll, JJ.

¶ 1. ROBINSON, J. Plaintiff investors appeal the dismissal of their claims against the 

Vermont Agency of Commerce and Community Development (ACCD) and current and former

state employees arising from the operation of a federally licensed regional center in the United 

States Customs and Immigration Services (USCIS) EB-5 program. We reverse the dismissal of 

plaintiffs’ claims of negligence and negligent misrepresentation against ACCD, gross negligence 

against defendants Brent Raymond and James Candido, and breach of contract and the implied 

covenant of good faith and fair dealing against ACCD. We affirm the dismissal of plaintiffs’ 

remaining claims. 
2

¶ 2. At this stage in the litigation, we assume for the purpose of evaluating defendants’ 

motion to dismiss that the allegations in plaintiffs’ complaint are true.1 Plaintiffs have alleged as 

follows. The employment-based fifth preference visa, or EB-5, program, which is run by USCIS, 

is intended to stimulate the U.S. economy and create jobs through capital investment from foreign 

investors. Through this program, foreign investors and their spouses and children can become 

eligible for green cards if they make the required investment in a commercial enterprise in the 

United States and plan to create at least ten permanent full-time jobs for U.S. workers. Under the 

Immigrant Investor Program, a certain number of EB-5 visas are designated for foreign nationals 

who invest $500,000 in commercial enterprises associated with regional centers approved by

USCIS based on proposals promoting economic growth. There are hundreds if not thousands of 

regional centers throughout the United States, and virtually all of them are private ventures. Some 

regional centers provide little more than administrative services such as submitting information to 

USCIS for a project and its investors. Others take a more active role in administration, oversight, 

auditing, and consultation to ensure investment projects comply with USCIS EB-5 regulations, 

immigration law, and securities laws. 

¶ 3. USCIS designated ACCD as a regional center in 1997, and ACCD began operating 

the Vermont Regional Center (VRC).

2 The VRC held itself out as a regional center that took a 

more active role in administration, oversight, auditing, and consultation. It was not the only stateaffiliated regional center, but it was the only one that represented that it was a “state-run agency.” 

The VRC billed itself as an attractive option for development and foreign investment due to its 

1 We emphasize that in this opinion we take no position as to the accuracy of plaintiff’s 

allegations. 

2 The VRC is not a distinct legal entity but, rather, is a moniker for the regional-center 

program operated by ACCD through its employees. In describing the actions of ACCD and its 

employees relating to operation of the regional center, we sometimes refer to the VRC. Plaintiffs 

have named both ACCD and the VRC as defendants. For the purposes of our analysis, we do not 

treat the VRC and ACCD as separate defendants. 
3

superlative “oversight powers,” the overwhelming investor confidence that came from its “stamp 

of approval,” and the State of Vermont’s backing that would result in a “faster path to approval.”

¶ 4. In 2006, the VRC partnered with a series of projects led by Ariel Quiros and 

William Stenger (referred to as the “Jay Peak Projects”). The phased series of eight proposed 

projects included building a hotel, indoor water park, ice rink, golf club house, medical center, and 

other facilities in Jay, Vermont; a biomedical research facility in Newport, Vermont; and a hotel, 

conference center, aquatic center, tennis center, and mountain bike facility in Burke, Vermont.

¶ 5. ACCD entered into a memorandum of understanding (MOU) with the Jay Peak 

Projects for each project. Each recited that “ACCD desires to obtain assistance in the planning 

and management of the Jay Peak EB-5” project “to assure the project’s compliance with U.S. 

immigration law and regulations . . . and, thereby, to have greater assurance of its compliance with 

regional center requirements.” Accordingly, the parties agreed that the Jay Peak Projects would, 

among other things, “support ACCD’s compliance with regional center requirements by providing 

on a quarterly basis formal written progress reports” which would “set forth for the preceding 

quarter and year-to-date the number of investors, the status of alien investor capital (in escrow, 

transfers from escrow to the limited partnership) and activity of the limited partnership in 

furtherance of the project.”3 These MOUs were included in the offering documents for the Jay 

Peak Projects. Offering documents were issued to each investor.

¶ 6. Employees of ACCD—including James Candido and Brent Raymond, both former 

executive directors of the VRC, and John Kessler, general counsel for ACCD—traveled with Jay 

Peak representatives to EB-5 tradeshows, at which they would share a table and jointly solicit 

investors and promote the Jay Peak Projects.

3

 Because plaintiffs rely on the MOUs in the complaint, we will consider the MOUs in 

deciding the motion to dismiss. “When the complaint relies upon a document . . . such a document 

merges into the pleadings and the court may properly consider it under a Rule 12(b)(6) motion to 

dismiss.” Kaplan v. Morgan Stanley & Co., 2009 VT 78, ¶ 10 n.4, 186 Vt. 605, 987 A.2d 258 

(alteration in original) (quotation omitted). 
4

¶ 7. ACCD employees represented to prospective investors, including plaintiffs, that the 

added protections of state approval and oversight made the Jay Peak Projects a particularly sound 

investment. They told prospective investors that the VRC conducted quarterly reviews to ensure 

that projects complied with all applicable laws and regulations and “engag[ed] in the financial 

monitoring and auditing of projects to ensure legitimacy,” and they represented that the MOUs 

imposed “strict covenants and obligations on the project to ensure compliance with all applicable 

laws and regulations.”

¶ 8. Plaintiffs reasonably relied on these statements by ACCD employees in investing 

in the Jay Peak Projects.

¶ 9. Unbeknownst to the investors, but known to the VRC officials, no such state 

oversight by the VRC existed. The VRC never issued any of the quarterly reports contemplated 

in the MOU. Brent Raymond, in fact, eventually confirmed that the VRC “does not prepare 

quarterly reports on projects.” 

¶ 10. Defendants and the Jay Peak Projects worked with a consulting firm that helped 

solicit potential investors. In early 2012, the firm’s owner raised concerns with the VRC that the 

Jay Peak Projects were illegally misappropriating funds. His attorney requested financial 

documents for the Jay Peak Projects. The firm’s owner held a conference call with VRC

employees to discuss potential fraud in the Jay Peak Projects. That February, the firm ended its 

business dealings with the Jay Peak Projects and announced it had lost confidence in the finances 

and representations of the Jay Peak Projects and ACCD. The VRC effectively prevented the 

consulting firm from doing further work in Vermont.

¶ 11. James Candido then conducted an “audit-visit” to the Jay Peak Projects. He 

reported finding “no issues” with the Projects’ financials, but made no record of his findings. He 

also coordinated with an immigration attorney—who plaintiffs allege had a long-standing referral 

relationship with the Jay Peak Projects and thus a financial stake in them—to inspect the Projects 

and issue a report responding to the consulting firm’s claims. Plaintiffs allege that the attorney 
5

spent “an extravagant weekend” at the Jay Peak Projects, after which he issued a report “painting 

a glowing picture of a successful EB-5 project” that “highlight[ed] the first-class amenities at the 

Jay Peak Projects, its high sale figures, and the ‘particularly careful’ oversight” by the VRC. That 

report also said that James Candido inspected the Jay Peak Projects’ financial records quarterly 

and that the Projects’ records would also be audited by an independent accounting firm. 

¶ 12. The VRC, and in particular James Candido, used this report to assure prospective 

and existing immigrant investors that the consulting firm’s concerns about misappropriation of 

funds within the Jay Peak Projects were unfounded. They said the consulting firm made the 

allegations because of a “business dispute.” James Candido reassured investors that he had 

investigated the Jay Peak Projects and it was safe to invest in them, and investors accordingly 

relied on these statements in investing in the Projects. Plaintiffs allege this was an intentional 

misrepresentation.

¶ 13. At least one other individual also contacted John Kessler and James Candido in 

2012 to inform them that the Jay Peak Projects might be committing securities violations and 

misusing investor funds.

¶ 14. Plaintiffs allege that “the VRC responded not by engaging in . . . audit and 

oversight” but rather “by stepping up promotion of the Jay Peak Projects,” and that Brent Raymond 

and James Candido “deflected investor complaints.” 

¶ 15. In 2014, about twenty investors, including plaintiff Antony Sutton, sent complaints 

to Brent Raymond alleging that the Jay Peak Projects was misappropriating investor funds. They

specifically alleged that the Jay Peak Projects had conducted fraudulent sales of penthouse suites, 

converted their equity interests into an unsecured promissory note, and had not made available any 

financials showing the source and use of investor funds. 

¶ 16. In response, Brent Raymond told the investors that the VRC had no legal authority 

to conduct financial reviews. In an email to Antony Sutton, he chastised “Mr. Sutton and the Jay 

Peak Investors for ‘how farfetched’ their expectations were for the VRC to monitor, oversee, or 
6

otherwise review financial documents relating to the Jay Peak Projects.” He said the VRC had 

“not been auditing [the Jay Peak Projects’] financials—nor are we required to, or ever represented 

that we were.” (alteration in plaintiffs’ complaint.)

¶ 17. In early 2015, Brent Raymond and the VRC approved the Jay Peak Projects to 

solicit investors for additional projects. Plaintiffs allege that one of those projects, a proposed 

biomedical research facility, was a “total fraud.”

¶ 18. In April 2016, the U.S. Securities and Exchange Commission filed a lawsuit 

alleging securities fraud, wire fraud, and mail fraud against the Jay Peak Projects developers, Ariel 

Quiros and William Stenger. The Vermont Department of Financial Regulation also filed suit 

against Quiros and Stenger, alleging similar claims.4

¶ 19. On the basis of these and other allegations, plaintiffs, all foreign nationals who 

invested in the Jay Peak Projects, filed a multi-count claim against ACCD and several individual 

defendants. The trial court granted plaintiffs’ motion to amend their complaint for a third time to 

a Fourth Amended Complaint, and then dismissed all thirteen counts on various grounds. Plaintiffs

appealed. 

¶ 20. We review a trial court’s decision on a motion to dismiss without deference, using 

the same standard as the trial court. In determining whether a complaint can survive a motion to 

dismiss under Vermont Rule of Civil Procedure 12(b)(6), we bear in mind that Vermont Rule of 

Civil Procedure 8(a) simply requires that a complaint present “a short and plain statement of the 

claim showing that the pleader is entitled to relief.” We assume that the facts pleaded in the 

4

 Plaintiffs submitted a July 3, 2018 Notice of Termination from USCIS sent to ACCD as 

an appendix to their briefing. Defendants requested that, “to the extent the Court considers the 

July 3, 2018 Notice of Termination from the United States Citizenship and Immigration Services 

(USCIS) terminating the Vermont Regional Center’s status under the Immigrant Investor Program, 

the Court also take judicial notice of the State’s appeal of the Notice of Termination.” We do not 

consider the July 3, 2018 Notice of Termination because it is outside the record on appeal. 

V.R.A.P. 10(a). See also In re 75,629 Shares of Common Stock of Trapp Family Lodge, Inc., 169 

Vt. 82, 89, 725 A.2d 927, 933 (1999) (documents not filed with trial court are not part of record 

on appeal). As the Court is not considering the Notice of Termination, the request for judicial 

notice is denied. 
7

complaint are true and make all reasonable inferences in the plaintiffs’ favor and will only dismiss 

a claim if “it is beyond doubt that there exist no facts or circumstances that would entitle the 

plaintiff to relief.” Montague v. Hundred Acre Homestead, LLC, 2019 VT 16, ¶ 10, __ Vt. __, 

208 A.3d 609 (quotation and alteration omitted). The rule that a complaint need only “provide[] 

the defendant with notice of the claims against it” is an attempt to strike a balance between 

“encouraging valid, but as yet underdeveloped, causes of action and discouraging baseless or 

legally insufficient ones,” mindful that the complaint’s “purpose is to initiate the cause of action, 

not prove the merits of the plaintiff’s case.” Colby v. Umbrella, Inc., 2008 VT 20, ¶ 13, 184 Vt. 

1, 955 A.2d 1082. 

¶ 21. We conclude that plaintiffs have stated claims of negligence by the State; gross 

negligence by Brent Raymond and James Candido; and breach of contract and of the covenant of 

good faith and fair dealing by the State. We affirm the dismissal of plaintiffs’ remaining claims. 

I. Negligence (Count 11) and Negligent Misrepresentation (Count 5)5

¶ 22. Plaintiffs allege that ACCD and the individual defendants had a special relationship 

with them that gave rise to a duty to exercise due care in the performance of its duties. In particular, 

they contend that ACCD undertook a duty to them to oversee and monitor the Jay Peak Projects

to ensure compliance with all applicable laws, and that defendants breached this agreement to 

plaintiffs’ detriment by failing to conduct any such oversight and monitoring. Plaintiffs also allege 

that they relied on numerous misrepresentations made by ACCD and the individual defendants 

concerning the projects and ACCD’s oversight practices with respect to the projects. We affirm 

the dismissal of the negligence claims against the individually named defendants. However, we 

conclude that plaintiffs have stated claims for negligence and negligent misrepresentation against 

ACCD and that the Vermont Tort Claims Act waives the State’s sovereign immunity with respect 

to these claims.

5 We discuss the gross negligence claims against the individual defendants in Section II, 

below. See infra, ¶¶ 48-60.
8

A. Negligence Claim Against Individual Defendants

¶ 23. The negligence claims against the individually named defendants, all current or 

former employees of the State, were properly dismissed. Under 12 V.S.A. § 5602(a), in suits 

alleging injury caused by the acts or omissions of a state employee acting within the scope of their 

employment, “the exclusive right of action shall lie against the State of Vermont; and no such 

action may be maintained against the employee or the estate of the employee.” Plaintiffs do not 

appear to contend for the purposes of 12 V.S.A. § 5602(a) that the individually named defendants 

were acting outside the scope of their employment. Accordingly, their claims for negligence lie 

solely against the State. 

B. Negligence Claims Against ACCD

¶ 24. The State contends that plaintiffs have failed to assert viable negligence claims and 

that plaintiffs’ claim against the State is barred by sovereign immunity. We reject both positions.

1. Viability of Plaintiffs’ Negligence Claims

a. Negligence

¶ 25. We conclude that plaintiffs have stated a claim for negligence based on ACCD’s 

undertaking, and that the economic nature of their losses is not an impediment to such a claim. 

We reject plaintiffs’ alternate theory of negligence predicated on federal law. 

¶ 26. Common-law negligence has four elements: a legal duty owed by the defendant to 

the plaintiff, a breach of that duty, injury to the plaintiff, and a causal link between the breach and 

the injury. Montague, 2019 VT 16, ¶ 14. Existence of a duty is primarily a legal question. LeClair 

v. LeClair, 2017 VT 34, ¶ 10, 204 Vt. 422, 169 A.3d 743. In determining whether a duty exists, 

we consider “a variety of public policy considerations and relevant factors. It is a question of 

fairness that depends on, among other factors, the relationship of the parties, the nature of the risk, 

the public interest at stake, and the foreseeability of the harm.” Deveneau v. Wielt, 2016 VT 21, 

¶ 8, 201 Vt. 396, 144 A.3d 324 (quotation and alteration omitted). Underlying “these 

considerations is the basic tort rule that duty is measured by undertaking.” Id. (quotation omitted).
9

¶ 27. This Court has recognized that a legal duty may arise when a person “undertakes, 

gratuitously or for consideration, to render to another services that the person should recognize as 

necessary to protect the other.” Sabia v. State, 164 Vt. 293, 302-03, 669 A.2d 1187, 1194 (1995) 

(quoting Restatement (Second) of Torts § 323 (1965)). Little more than a gratuitous promise is 

necessary to find an undertaking. Id. at 303, 669 A.2d at 1194. We have recognized before that a 

person “is subject to liability for physical harm resulting from negligent performance of the 

undertaking if (1) the negligence increases the risk of harm, or (2) the harm results from the other’s 

reliance upon the undertaking.” Id. (citing Restatement (Second) of Torts § 323 cmt. a). This 

“applies whether the harm results from the defendant’s negligent performance of the undertaking, 

or from the defendant’s failure to exercise reasonable care to complete the undertaking or to protect 

the other person when the undertaking is discontinued.” Id. “[T]he undertaking may not be 

discontinued when the danger of harm to the other person increased as a result of the undertaking, 

or because the other person, in reliance upon the undertaking, was induced to forego other 

opportunities of obtaining assistance.” Id. 

¶ 28. For example, in Langlois v. Town of Proctor, we held that a factfinder could find 

the Town of Proctor liable for negligent undertaking where a Town employee promised the 

plaintiff he would shut off water service to her building; Town workers were aware that harm to 

the building could result if the water was not disconnected; the plaintiff relied on the employee’s 

promise to disconnect the water when she turned off the heat in the building; and the Town failed 

to shut off the water, causing damage to the building when the pipes froze and split, flooding the 

first floor and basement. 2014 VT 130, ¶¶ 1, 14-15, 198 Vt. 137, 113 A.3d 44. 

¶ 29. Plaintiffs’ allegations, if true, would likewise establish liability for negligent 

undertaking. When ACCD employees induced prospective investors, including plaintiffs, to invest 

in the Jay Peak Projects by representing that ACCD would provide an unusually high level of 

oversight over those projects, including quarterly reviews to ensure that projects complied with all 

applicable laws and regulations, ACCD knew that harm could come to plaintiffs if it failed to 
10

follow through on its promises. Plaintiffs reasonably relied on these representations in investing 

in the Jay Peak Projects. After inducing plaintiffs to invest in the Jay Peak Projects by promising 

to provide the “extra safeguard of state oversight,” ACCD had a duty to provide that promised 

oversight. By allegedly failing to provide the promised oversight or compliance monitoring, 

ACCD increased the risk of harm to plaintiffs. Plaintiffs allege that this failure harmed them by 

leading them to “turn[] over their life savings to the fraud at the Jay Peak Projects,” which they 

allege they lost as a result, and by causing them to be “displace[d] from their home countries by 

false promises of permanent residency in the United States.” Accordingly, plaintiffs have made 

out a facial claim of negligence by ACCD.

¶ 30. The “economic-loss rule” is not a bar to plaintiffs’ claim in this case. In its most 

general sense, with certain exceptions, the economic-loss rule prohibits recovery in tort for purely 

economic losses. See Long Trail House Condo. Ass’n v. Engelberth Constr., Inc., 2012 VT 80, 

¶ 10, 192 Vt. 322, 59 A.3d 752; see also Gus’ Catering, Inc.v. Menusoft Sys., 171 Vt. 556, 558, 

762 A.2d 804, 807 (2000) (mem.) (“Negligence law does not generally recognize a duty to exercise 

reasonable care to avoid intangible economic loss to another unless one’s conduct has inflicted 

some accompanying physical harm, which does not include economic loss.” (quotation omitted)). 

¶ 31. But courts have recognized a host of exceptions to this general principle.

6 See, 

e.g., Long Trail House Condo. Ass’n, 2012 VT 80, ¶ 13 (recognizing that there “might be recovery 

6 Because of the plethora of exceptions to the broad formulation of the economic-loss rule, 

the Tentative Draft of the Restatement (Third) of Torts: Liability for Economic Harm articulates 

“a more limited principle: not that liability for economic loss is generally precluded, but that duties 

of care with respect to economic loss are not general in character; they are recognized in specific 

circumstances.” Restatement (Third) of Torts: Liab. for Econ. Harm § 1 cmt. b (Tentative Draft 

No. 1, 2012) (“Stating the absence of a duty as a general rule can create confusion by seeming to 

threaten well-established causes of action, by leaving behind an uncertain and unwieldy number 

of exceptions, and by implying a needless presumption against the existence of a duty on facts not 

yet considered. The rule of this Section creates no such presumption. It merely means that duties 

to avoid causing economic loss require justification on more particular grounds than duties to avoid 

causing physical harm.”). See also id. § 1 Reporter’s Note a (describing “economic loss” as “potent 

source of confusion” within law of liability for negligence). The economic-loss provisions of the 

Restatement (Third) of Torts: Liability for Economic Harm cited in this opinion were approved at 

the 89th Annual Meeting of the American Law Institute. 89th Annual Meeting: 2012 Proceedings, 
11

for purely economic losses in a limited class of cases” involving parties who have “a special 

relationship, which creates a duty of care independent of contract obligations,” such as the 

obligation to avoid violating a “professional duty” (quotations omitted)); Springfield Hydroelectric 

Co. v. Copp, 172 Vt. 311, 316, 779 A.2d 67, 71 (2001) (“[C]ourts have permitted recovery for 

economic loss [where there is] a special relationship between the alleged tortfeasor and the 

individual who sustains purely economic damages sufficient to compel the conclusion that the 

tortfeasor had a duty to the particular plaintiff and that the injury complained of was clearly 

foreseeable to the tortfeasor.” (quotation omitted)); cf. Limoge v. People’s Tr. Co., 168 Vt. 265, 

268-69, 719 A.2d 888, 890 (1998) (quoting Restatement (Second) of Torts § 552(1) (1977) and 

recognizing that one who, in the course of business, fails to exercise reasonable care and “supplies 

false information for the guidance of others in their business transactions, is subject to liability for 

pecuniary loss caused to them by their justifiable reliance upon the information”).

¶ 32. The rationale underlying the economic-loss rule, which shapes the scope of and 

exceptions to that rule, rests on two main considerations. First, “[e]conomic losses proliferate 

more easily than losses of other kinds,” leading to indeterminate and disproportionate liability. 

Restatement (Third) of Torts: Liab. for Econ. Harm § 1 cmt. (c)(1) (contrasting impact of badly 

driven car, causing physical harm only to others nearby, with potential impact of single negligent 

utterance, causing economic loss to thousands of people who rely on it, in addition to those who 

relied on first round of victims). Second, “[r]isks of economic loss tend to be especially well suited 

to allocation by contract.” Id. cmt. (c)(2) (explaining that “[a] contract that settles responsibility 

for such a risk [is] preferable in most cases to a judicial assignment of liability after harm is 

Discussion of Restatement of the Law Third, Torts: Liability for Economic Harm, 89 A.L.I. Proc. 

22, 46-47 (2012). The A.L.I. states that “[o]nce it is approved by the membership at an Annual 

Meeting, a Tentative Draft . . . represents the most current statement of the American Law 

Institute’s position on the subject and may be cited in opinions or briefs until the official text is 

published.” Am. Law Inst., Torts: Liability for Economic Harm (2018),

https://www.ali.org/projects/show/torts-liability-economic-harm-3rd/ [https://perma.cc/GV9G9MY8].
12

done).”7 Courts have recognized duties to prevent economic loss when these rationales are weak 

or absent. Id. cmt. d. So, for example, those who, in the course of their business, profession, or 

employment, perform services for the benefit of a limited group of persons may be subject to 

liability for pecuniary loss caused to those who relied upon the service by a failure to exercise 

reasonable care in performing the service. Id. § 6.

¶ 33. Here, plaintiffs have alleged sufficient facts to make out a special relationship 

between defendants and plaintiffs such that they may recover for their purely economic losses. 

ACCD initiated a close relationship with the plaintiffs by recruiting them to invest their life savings 

in the Jay Peak Projects by promising exceptional oversight and management of the investment. 

As discussed above, ACCD demonstrated awareness of the risk that it was inducing plaintiffs to 

undertake—a risk it represented it would minimize—when it told plaintiffs it would provide a 

safeguard for their investments. ACCD did not simply endorse the Jay Peak Projects to members 

of the public generally; it personally solicited individual investors, and entered into individualized 

relationships with each of the plaintiffs, who paid substantial fees directly to the VRC in 

connection with that relationship. It intended to influence a narrow class of identified people—

prospective investors in the Jay Peak Projects—and those who actually invested relied on their 

representations and promised oversight. This is the kind of relationship that can give rise to 

liability for purely economic harms.

¶ 34. For the purposes of subsequent proceedings in this case, we note that we do not 

embrace plaintiffs’ theory of negligence resting on defendants’ alleged violation of federal 

regulations that impose a duty of care on defendants for plaintiffs’ benefit. We conclude that the 

7 For this reason, if the factfinder ultimately concludes that defendants entered into a 

contract with plaintiffs, the economic-loss rule may preclude recovery in tort rather than contract. 

See Walsh v. Cluba, 2015 VT 2, ¶¶ 26-32, 198 Vt. 453, 117 A.3d 798. The tort theory of liability 

we acknowledge here “typically serves as a substitute for a contract between two parties who 

cannot conveniently write one, and whose affairs will be made simpler and more efficient if the 

party who invites the reliance has enforceable obligations to the party who accepts the invitation.” 

Restatement (Third) of Torts: Liab. for Econ. Harm § 1 cmt. (d)(2).
13

regulations to which plaintiffs point do not support that theory. Plaintiffs rely on Denis Bail Bonds, 

Inc. v. State, in which we held that, in determining whether a governmental body has undertaken 

a duty of care toward certain individuals, we may consider:

(1) whether an ordinance or statute sets forth mandatory acts clearly 

for the protection of a particular class of persons, rather than the 

public as a whole; (2) whether the government has actual knowledge 

of a condition dangerous to those persons; (3) whether there has 

been reliance by those persons on the government’s representations 

and conduct; and (4) whether failure by the government to use due 

care would increase the risk of harm beyond its present potential. 

159 Vt. 481, 487, 622 A.2d 495, 499 (1993). Plaintiffs argue that 8 C.F.R. § 204.6(m)(6) 

imposes such “mandatory acts clearly” set out “for the protection of a particular class of 

persons,” but in fact this regulation simply requires regional centers to explain how they will 

increase economic growth within their targeted region:

Each regional center wishing to participate in the Immigrant 

Investor Pilot Program shall submit a proposal to the Assistant 

Commissioner for Adjudications, which:

 (i) Clearly describes how the regional center focuses on a 

geographical region of the United States, and how it will promote 

economic growth through increased export sales, improved regional 

productivity, job creation, and increased domestic capital 

investment;

 (ii) Provides in verifiable detail how jobs will be created indirectly 

through increased exports;

 (iii) Provides a detailed statement regarding the amount and source 

of capital which has been committed to the regional center, as well 

as a description of the promotional efforts taken and planned by the 

sponsors of the regional center;

 (iv) Contains a detailed prediction regarding the manner in which 

the regional center will have a positive impact on the regional or 

national economy in general as reflected by such factors as increased 

household earnings, greater demand for business services, utilities, 

maintenance and repair, and construction both within and without 

the regional center; and

 (v) Is supported by economically or statistically valid forecasting 

tools, including, but not limited to, feasibility studies, analyses of 

foreign and domestic markets for the goods or services to be 

exported, and/or multiplier tables.
14

8 C.F.R. § 204.6(m)(3). We reject plaintiffs’ contention that this regulation imposed on ACCD 

mandatory duties for plaintiffs’ protection. The focus of these federal regulations is ensuring that 

regional centers promote the economic growth and job creation they are charged with fostering. 

Plaintiffs may benefit indirectly from this duty, but we cannot agree that their financial protection 

is the target of these regulations. We reach the same conclusion with respect to the directives in 

the USCIS forms approving ACCD’s designation as a regional center. 

b. Negligent Misrepresentation

¶ 35. We conclude that plaintiffs have stated a claim for negligent misrepresentation. We 

have adopted the Restatement (Second) of Torts definition of negligent misrepresentation, which 

imposes liability on those “who, in the course of [their] business, profession or employment, or in 

any other transaction in which [they have] a pecuniary interest, [supply] false information for the 

guidance of others in their business transactions,” if the others suffer pecuniary loss caused by 

their justifiable reliance upon the information. Limoge, 168 Vt. at 268-69, 719 A.2d at 890 (citing 

Restatement (Second) of Torts § 552(1)). In the absence of a public duty to supply the information, 

liability for negligent misrepresentation is limited to loss suffered by, among others, “the person 

or one of a limited group of persons for whose benefit and guidance” the supplier intends to supply 

the information, and only in connection with reliance on the information in a transaction that the 

supplier intends the information to influence. Restatement (Second) of Torts § 552(2). 

¶ 36. That plaintiffs’ allegations fit this definition is not seriously in dispute. The 

economic-loss rule is not an impediment to this claim, and the Restatement (Second) provision 

describing the tort applies, by its own terms, to “pecuniary loss” rather than physical harm. Id. 

§ 552(1); see also id. cmt. a (explaining that rule applies only to pecuniary loss, and adopting more 

restricted rule of liability than negligent misrepresentation that results in physical harm). 
15

2. Sovereign Immunity

¶ 37. Sovereign immunity protects the State and its components from suit unless it is 

expressly waived by statute. Jacobs v. State Teachers’ Ret. Sys. of Vt., 174 Vt. 404, 408, 816 

A.2d 517, 521 (2002). The Vermont Tort Claims Act waives the State’s immunity with respect to 

suits for injury to persons caused by the negligent acts of employees of the State acting within the 

scope of their employment “under the same circumstances, in the same manner, and to the same 

extent as a private person would be liable to the claimant.” 12 V.S.A. § 5601(a). The Act contains 

a number of exceptions, including that it does not waive immunity for claims “based upon the 

exercise or performance or failure to exercise or perform a discretionary function.” Id. 

§ 5601(e)(1). We conclude that plaintiffs’ claims are comparable to recognized causes of action 

against private persons and that the discretionary function exception to the State’s waiver of 

sovereign immunity in the Tort Claims Act does not apply to these allegations.

a. Applicability of Plaintiffs’ Claims to a Private Person

¶ 38. Under the Tort Claims Act, “the State waives its immunity only to the extent a 

plaintiff’s cause of action is comparable to a recognized cause of action against a private person.” 

Sabia, 164 Vt. at 298, 669 A.2d at 1191 (citation omitted). On this basis, we have concluded that 

the Tort Claims Act did not waive the State’s sovereign immunity with respect to a suit against the 

State based on the Office of Child Support’s (OCS’s) alleged negligent failure to enforce a childsupport order because no private analog to this claim existed. Powers v. Office of Child Support, 

173 Vt. 390, 398, 795 A.2d 1259, 1265 (2002). We explained that OCS’s duties were “uniquely 

governmental” in that its enforcement actions are “ ‘broadly discretionary’ and serve[] a variety of 

state policies and interests wholly apart from the collection of debts.” Id. at 396-97, 795 A.2d at 

1264 (quoting Noble v. Office of Child Support, 168 Vt. 349, 353, 721 A.2d 121, 124 (1998)). 

¶ 39. On the other hand, we concluded that the State waived its sovereign immunity as a 

defense to a suit based on the failure of a state agency to perform its statutory duty to assist children 

seeking protection from reported and substantiated abuses because a private analog existed under 
16

the facts of that case. Sabia, 164 Vt. at 300, 669 A.2d at 1192. In particular, we explained that the 

tort claim was analogous to a claim based on negligent performance of a gratuitous undertaking 

where the negligence increases the risk of harm or the harm results from the other’s reliance upon 

the undertaking—the exact claim plaintiffs have made in this case. Id. at 302-03, 669 A.2d at 

1193-94. Significantly, we explained that a private analog existed in that case even though the 

acts and omissions at issue were performed by state social workers in the context of their childprotection duties—functions for which there is no apparent direct analog. Id. at 301-02, 669 A.2d 

at 1193. See also Kennery v. State, 2011 VT 121, ¶ 29, 191 Vt. 44, 38 A.3d 35 (“Because the duty 

of care in this case arises from common law, and is the same whether or not the tortfeasor is a 

private individual or a public employee, the [private-analog] requirement is inapplicable.”). 

¶ 40. As in Sabia and Kennery, plaintiffs’ negligent-undertaking theory of negligence 

here is based on a common-law theory of negligence that is equally applicable to government 

employees and private individuals. Likewise, plaintiffs’ negligent-misrepresentation claim is a 

well established common-law claim. 

¶ 41. Moreover, this is an even stronger case than Sabia in that there was nothing 

uniquely governmental about ACCD’s alleged acts and omissions upon which plaintiffs base their 

claims. As noted above, plaintiffs have alleged that there are hundreds if not thousands of regional 

centers throughout the United States, and virtually all of them are private ventures. Plaintiff’s 

claim is emphatically not a claim against ACCD for negligent enforcement of state laws or 

regulations within its purview; it is a claim based on ACCD’s promises and undertakings in 

connection with a generally, although not exclusively, private activity—operating a regional 

center. For these reasons, we conclude that, unless an exception applies, the Vermont Tort Claims 

Act waives the State’s sovereign immunity with respect to plaintiffs’ claims. 

b. Discretionary Function Exception

¶ 42. Plaintiffs’ allegations, viewed in the light most favorable to them, support a 

conclusion that their claims are not excluded from the State’s waiver of sovereign immunity in the 
17

Vermont Tort Claims Act on the basis that they relate to discretionary functions. See 12 V.S.A. 

§ 5601(e)(1) (establishing that waiver of sovereign immunity does not apply to claims “based upon 

the exercise or performance or failure to exercise or perform a discretionary function or duty on 

the part of a State agency or an employee of the State”). 

¶ 43. We use a two-part test, adopted from United States v. Gaubert, 499 U.S. 315, 322-

25 (1991), to determine whether a challenged act or omission is discretionary. Estate of Gage v. 

State, 2005 VT 78, ¶ 5, 178 Vt. 212, 882 A.2d 1157 (explaining that this Court has adopted 

Gaubert’s two-part test for determining applicability of discretionary function exception). The 

first prong asks “whether a statute, regulation, or policy mandates certain acts, or whether 

performance of a duty involves an element of judgment or choice.” Ingerson v. Pallito, 2019 VT 

40, ¶ 13, __ Vt. __, __ A.3d __. An act is discretionary “where there is no specifically dictated 

course of action for the employee to follow.” Amy’s Enters. v. Sorrell, 174 Vt. 623, 625, 817 A.2d 

612, 617 (2002) (mem.). Acts furthering policy decisions are shielded by the discretionary 

function exception only if there is “a range of discretion to exercise in deciding how to carry out” 

that decision. Gaubert, 499 U.S. at 325. The government’s acts or omissions in carrying out—or 

failing to carry out—policy decisions are otherwise not considered discretionary: “[W]hile the 

discretionary function exception shields the State from liability for administrative and 

policymaking decisions, it will not excuse the State from liability for failure to act when required 

or for failure to use reasonable care when executing ministerial tasks in furtherance of a 

discretionary undertaking.” Ingerson, 2019 VT 40, ¶ 17.

¶ 44. If the first prong is met, we proceed to the second prong, which asks whether the 

judgment involved in the challenged act or omission was “based on public policy considerations; 

decisions not related to public policy are not immune from suit.” Id. ¶ 14. The second prong 

ensures that the discretionary function exception applies only where it serves its purpose of 

“assur[ing] that the courts do not invade the province of coordinate branches of government by 

passing judgment on legislative or administrative policy decisions through tort law.” Searles v. 
18

Agency of Transp., 171 Vt. 562, 563, 762 A.2d 812, 813 (2000) (mem.) (quotation omitted). If 

the challenged action “involves negligence unrelated to any plausible policy objectives, then the 

second prong of the test is not satisfied, and the discretionary function exception does not apply.” 

Ingerson, 2019 VT 40, ¶ 14 (quotation omitted).

¶ 45. Here, the first prong of the Gaubert test—that the challenged acts or omissions

involved discretionary decisions—is not met. 499 U.S. at 325. The challenged omission is the 

failure to conduct oversight of the Jay Peak Projects in the manner the VRC undertook to—and 

represented to the investors that it would—oversee them. This includes the VRC’s failure to 

conduct the quarterly compliance reviews and “financial monitoring and auditing of projects to 

ensure legitimacy” that ACCD employees represented to plaintiffs that the State conducted. Once 

the State had undertaken to conduct such compliance reviews, conducting them was no longer a 

discretionary function: There was a “specifically dictated course of action for the employee[s] to 

follow.” Amy’s Enters., 174 Vt. at 625, 817 A.2d at 617. While some discretionary decisions as 

to how to carry out the reviews, monitoring, and auditing may have remained once the State 

committed to doing them, the State’s alleged failure to conduct any such reviews, monitoring, or 

auditing was a ministerial failure—a failure to follow a specifically dictated course of action. On 

the facts as alleged here, the Vermont Tort Claims Act waives the State’s sovereign immunity. 

¶ 46. Likewise, with respect to the negligent misrepresentation claim, even if ACCD 

employees had some discretion as to what representations to make to plaintiffs, satisfying the first 

prong of the Gaubert test, we cannot discern any state policy they could have been furthering by 

misrepresenting ACCD’s oversight role and practices.

¶ 47. For these reasons, the trial court erred in dismissing Count 5—the negligent 

misrepresentation claim—and Count 11—the negligence claim—to the extent that they are

directed against the State rather than the individual defendants. 
19

II. Gross Negligence Against Individual Defendants (Count 6)

¶ 48. Plaintiffs allege that the named defendants—James Candido, John Kessler, 

Lawrence Miller, Eugene Fullam, Patricia Moulton, and Brent Raymond—are liable for gross 

negligence because they induced plaintiffs to rely on them, and knew or should have known 

plaintiffs were relying on them, “to oversee, manage, administer, and ensure the regulatory 

compliance of the investments entrusted to the Jay Peak Projects,” and then grossly failed to 

exercise due care in conducting such oversight and management, leading to plaintiffs’ loss of their 

investments in the Jay Peak Projects, displacement from their home countries, and “the 

endangerment of [p]laintiffs’ permanent residency in the United States.”

¶ 49. As an initial matter, we note that the Vermont Tort Claims Act does not bar claims 

against state employees for gross negligence. Although under 12 V.S.A. § 5602(a) the exclusive 

right of action for harm to people or property done by state employees who were acting within the 

scope of their employment is against the State, § 5602(b) creates an exception for claims based on 

“gross negligence or willful misconduct.” Accordingly, plaintiffs harmed by state employees’ 

gross negligence may sue those employees for damages, even if the employees’ actions were

undertaken within the scope of their employment. We consider whether the respective defendants 

are protected from liability by immunity and, to the extent they are not, whether plaintiffs’ 

allegations can establish gross negligence.

A. Immunity

¶ 50. We recognize two forms of immunity for government employees: absolute 

immunity and qualified immunity. Kennery, 2011 VT 121, ¶ 43. Absolute immunity protects 

judges, legislators, and “the highest executive officers” from suit “where the acts complained of 

are performed within their respective authorities.” O’Connor v. Donovan, 2012 VT 27, ¶ 6, 191 

Vt. 412, 48 A.3d 584 (quotation omitted). Such officers are entitled to absolute immunity even 

when their acts fall within the “outer perimeter of [their] authority and discretion.” Id. ¶ 9

(quotation omitted). The State’s other officers, employees, and agents are entitled to qualified 
20

immunity from suit, but only if, when undertaking the challenged acts, they were “1) acting during 

the course of their employment and within the scope of their authority; 2) acting in good faith; and 

3) performing discretionary, as opposed to ministerial acts.” Id. ¶ 6 (alteration and quotation 

omitted).

¶ 51. For the reasons set forth below, we conclude that defendants Lawrence Miller and 

Patricia Moulton, former Secretaries of the ACCD, are absolutely immune from suit. Plaintiffs’ 

claim against Eugene Fullam fails because plaintiffs have not alleged conduct by him that would 

overcome qualified immunity. We need not decide whether John Kessler is entitled to qualified 

immunity because we conclude plaintiffs have not made out a claim of gross negligence against 

him. Plaintiffs have adequately alleged that Brent Raymond and James Candido are not shielded 

by qualified immunity and have made allegations that could establish gross negligence. 

1. Absolute Immunity—Defendants Miller and Moulton

¶ 52. Patricia Moulton and Lawrence Miller are entitled to absolute immunity because 

they are being sued for alleged actions undertaken when they were Secretaries of ACCD, and the 

actions at issue fell within the general authority of their office. Plaintiffs do not dispute that as the 

highest executive officer in ACCD, the Secretary is entitled to absolute immunity for actions 

undertaken within the office’s general authority. Plaintiffs contend, however, that Moulton and

Miller were not acting within the scope of their office’s general authority “because they had no 

state authority to run a federal immigration program in this manner.” Plaintiffs’ complaint, 

however, does not bear out their contention that Moulton and Miller’s involvement in promoting 

EB-5 projects was outside the realm of their office’s general authority. The complaint says that 

“ACCD is charged with . . . enhancing Vermont’s business climate, marketing Vermont to 

businesses and individuals, along with facilitating, promoting and creating business opportunities 

within Vermont to contribute to the economic viability and growth of the State.” It says ACCD 

operated as a regional center, and regional centers “provide a pathway for the flow of billions of 

dollars in investor funds within the United States” by performing administrative functions for EB-
21

5 projects. Operating a regional center was thus not “run[ning] a federal immigration program,” 

but rather was in line with ACCD’s mission of “promoting and creating business opportunities,” 

and so fell at least within the “outer perimeter of [Miller and Moulton’s] authority and discretion.” 

O’Connor, 2012 VT 27, ¶ 9. 

2. Qualified Immunity—Defendants Fullam, Kessler, Raymond and Candido

¶ 53. Government employees who are not entitled to absolute immunity may still be 

eligible for qualified immunity if, when undertaking the challenged acts, they were, in good faith, 

performing discretionary acts within the course of their employment and the scope of their 

authority. Id. ¶ 6. The test for good faith is “the objective reasonableness of the official’s 

conduct.” Amy’s Enters., 174 Vt. at 625, 817 A.2d at 617. We have held that “acts are objectively 

reasonable if an officer of reasonable competence could have made the same choice in similar 

circumstances.” Id. If “plaintiffs cannot show” that a defendant was acting outside the course of 

their employment and scope of their authority or “that defendant’s conduct . . . was ministerial 

rather than discretionary in nature or that defendant acted in bad faith or violated clearly 

established law, [the] defendant is immune from their lawsuit.” Baptie v. Bruno, 2013 VT 117, 

¶ 16, 195 Vt. 308, 88 A.3d 1212. We review the allegations against each individual defendant in 

light of this test. 

a. Defendant Fullam

¶ 54. Plaintiffs’ sole allegation regarding Eugene Fullam, a former executive director of 

the VRC, is that he marketed and solicited investors for the Jay Peak Projects. Plaintiffs have thus 

not alleged any facts to show that he was not “1) acting during the course of [his] employment and 

within the scope of [his] authority; 2) acting in good faith; and 3) performing discretionary, as 

opposed to ministerial acts.” O’Connor, 2012 VT 27, ¶ 6 (alteration and quotation omitted). 

Accordingly, Fullam is entitled to qualified immunity.8 

8

 Moreover, we note that the allegations in the complaint would be insufficient to establish 

gross negligence by Fullam. 
22

b. Defendant Kessler

¶ 55. Plaintiffs allege that John Kessler, who is general counsel for the ACCD, marketed 

and solicited investors for the Jay Peak Projects, in the course of which he made misrepresentations 

as to the VRC’s oversight, and that he disregarded warnings of securities violations. We do not 

reach the question of whether he is entitled to qualified immunity because we conclude plaintiffs 

could not make out claims of gross negligence against him on these facts, as we discuss further 

below. See infra, ¶¶ 60.

c. Defendant Raymond

¶ 56. Plaintiffs have alleged that Brent Raymond, another former executive director of 

the VRC, marketed and solicited investors for the Jay Peak Projects, and in doing so, 

“misrepresented that the VRC acted as an independent overseer of the Jay Peak Projects with duties 

of tracking investor funds to-and-from escrow, the status of investor capital, and requiring 

quarterly reports from the Jay Peak Projects.” They claim that in May 2014, about twenty investors 

sent Raymond “complaints about the Jay Peak Projects’ misappropriation of investor funds,” and 

he “deflected investor complaints and continued to provide the necessary cover for the Jay Peak 

Projects and the VRC Team’s involvement.” They further allege that when they “were unable to 

elicit a response from” the Jay Peak Projects about issues including “proof of the source-and-use 

of Jay Peak Investor funds, they approached the state overseers—the VRC’s Executive Director, 

Brent Raymond, and the VRC Team—to make good on their prior representations and voluntarily 

assumed duties of state oversight of the Jay Peak Projects and extract the relevant documents.” 

But “Raymond claimed that the VRC had no legal authority to conduct financial reviews” and told 

one plaintiff that the VRC had “not been auditing [the Jay Peak Projects’] financials—nor are we 

required to, or ever represented that we were.” (Alteration in original.) He “lambasted” plaintiffs

for “ ‘how farfetched’ their expectations were for the VRC to monitor, oversee, or otherwise 

review financial documents relating to the Jay Peak Projects.” He then told a Jay Peak investor 

that “the VRC does not prepare quarterly reports on projects so we have no reports to provide 
23

you.” (Alterations omitted.) Raymond then “used the Jay Peak Investors’ inability to acquire the 

Jay Peak Projects’ source-and-use of investor funds as an obstacle to investigate their claims” by 

telling them that until the investors supplied evidence to “support their allegations of fraud,” the 

VRC “would not investigate.” Because “the Jay Peak Investors were asking the VRC for help in 

acquiring such evidence, it became apparent that the VRC would not be investigating.” Plaintiffs 

allege that Raymond did this to “protect the VRC’s Jay Peak partners.” Finally, they allege that 

in January 2015, even after receiving complaints about the Jay Peak Projects’ misappropriation of 

investor funds, he approved the Jay Peak Projects to solicit investors for further projects. These 

allegations—that Raymond made misrepresentations to investors about the financial oversight that 

the VRC provided over the projects, then later said the VRC could not and would not provide 

financial oversight and would not investigate the claims of fraud; acted to protect the Jay Peak 

Projects instead of the investors; and then even in the face of complaints alleging that the Projects 

were misappropriating funds, approved the Projects to solicit more investors—are sufficient to 

show that his conduct fails the good-faith prong, as no “officer of reasonable competence could 

have made the same choice in similar circumstances.” Amy’s Enters., 174 Vt. at 625, 817 A.2d at

617. For that reason, at this stage in the litigation we cannot conclude that defendant Raymond is 

protected by qualified immunity.

d. Defendant Candido

¶ 57. Plaintiffs allege that James Candido, another former executive director of the VRC, 

marketed and solicited investors for the Jay Peak Projects, and in doing so, “misrepresented that 

the VRC acted as an independent overseer of the Jay Peak Projects with duties of tracking investor 

funds to and from escrow, the status of investor capital, and requiring quarterly reports from the 

Jay Peak Projects.” When meeting with investors, he “touted the VRC’s unique state oversight as 

a reason to choose an EB-5 project overseen by the VRC.” At one point, an EB-5 industry 

professional and registered broker-dealer “alerted the VRC to various securities violations by the 

Jay Peak Projects by sending detailed emails” to employees including James Candido and John 
24

Kessler. When a consulting firm that had helped solicit potential investors raised concerns with 

the VRC that the Jay Peak Projects were illegally misappropriating funds, Candido “conducted a 

supposed . . . audit-visit to the Jay Peak Projects and purportedly found ‘no issues’ with the Jay 

Peak Projects’ financials. However, no record or report of [the] ‘audit-visit’ was produced.” 

During that visit, plaintiffs allege that Candido coordinated with an attorney with financial ties to 

the Projects to inspect the Projects and issue a report responding to the consulting firm’s claims. 

Plaintiffs allege that the attorney spent “an extravagant weekend” at the Jay Peak Projects, after 

which he issued a report “painting a glowing picture of a successful EB-5 project” that 

“highlight[ed] . . . the ‘particularly careful’ oversight” by the VRC. That report also said Candido 

inspected the Jay Peak Projects’ financial records at least four times a year and that the Projects’ 

records would also be audited by an independent accounting firm, although neither actually 

happened. Moreover, as the investors became aware of the consulting firm’s concerns, plaintiffs 

allege that Candido made intentional misrepresentations to investors by telling them that the firm 

made the allegations “due to a business dispute,” and “that he had investigated and reviewed 

everything and that it was safe to make an investment.” As with Raymond, these allegations—

essentially, that Candido made intentional misrepresentations to potential investors about the 

financial oversight the VRC provided and covered up the fraud occurring within the Projects—if 

true could show that Candido’s conduct also fails the good-faith prong. Amy’s Enters., 174 Vt. at 

625, 817 A.2d at 617.

B. Sufficiency of Allegations

¶ 58. Plaintiffs have stated sufficient claims of gross negligence against Brent Raymond 

and James Candido, although not against John Kessler. “Gross negligence is negligence that is 

more than an error of judgment; it is the failure to exercise even a slight degree of care, owed to 

another.” Kennery, 2011 VT 121, ¶ 41 (quotation omitted). In other words, to establish gross 

negligence, a plaintiff must show a defendant “heedlessly and palpably violated a legal duty owed 

to plaintiff.” Amy’s Enters., 174 Vt. at 624, 817 A.2d at 616 (quotation omitted); see also Kane 
25

v. Lamothe, 2007 VT 91, ¶ 13, 182 Vt. 241, 936 A.2d 1303 (reciting that “wholesale absence of 

care or indifference to duty owed . . . is necessary to state a viable claim for gross negligence”). 

Whether the defendant’s conduct rose to the level of “[g]ross negligence is ordinarily a question 

of fact for the jury, and an allegation of gross negligence may be dismissed by the court only if 

reasonable minds cannot differ.” Kennery, 2011 VT 121, ¶ 41. We have held that where an elderly 

woman’s daughter asked state troopers to check that her mother, who lived alone, was safe, and 

the troopers searched the wrong house—and so failed to find the mother, who had collapsed in her 

backyard and ultimately became hypothermic—the troopers’ failure to use reasonable care could 

rise to the level of gross negligence. We noted in particular that the troopers’ “multiple errors in 

judgment in performing a straightforward task” where the need for care was particularly great 

could together justify a jury finding that the troopers’ conduct went beyond simple incompetence 

or questionable decisions and entered the realm of gross negligence. Id. ¶ 42.

¶ 59. A jury could likewise find gross negligence by Raymond and Candido here. 

Plaintiffs’ claims of gross negligence are structurally similar to their claims of negligence: 

plaintiffs allege that defendants intentionally misrepresented to plaintiffs that the State provided 

financial oversight of the Jay Peak Projects in order to induce them to invest, and then, knowing 

that the investors were relying on them to conduct such oversight, failed to ensure that any was 

actually conducted, which contributed to plaintiffs’ injuries, including losing their investments in 

the Projects and having their residency in the United States endangered. But beyond simply failing 

to ensure that any real oversight was conducted, plaintiffs also allege that Raymond and Candido 

actively worked to protect the Jay Peak Projects from oversight and investigation and covered up 

fraud within the Projects. If evidence bears out these claims, a jury could find that Raymond and 

Candido “heedlessly and palpably violated” the legal duty they assumed when they represented to 

investors that they should invest in the Jay Peak Projects because the State would protect their 

investments by providing financial oversight. Amy’s Enters., 174 Vt. at 624, 817 A.2d at 616

(quotation omitted). 
26

¶ 60. A jury could not, however, find gross negligence by John Kessler on the facts 

alleged by plaintiffs. Plaintiffs allege that he marketed and solicited investors for the Jay Peak 

Projects, and in doing so, “misrepresented that the VRC acted as an independent overseer of the 

Jay Peak Projects with duties of tracking investor funds to-and-from escrow, the status of investor 

capital, and requiring quarterly reports from the Jay Peak Projects.” Plaintiffs also allege that an 

EB-5 industry professional and registered broker-dealer sent Kessler detailed emails regarding 

securities violations by the Jay Peak Projects. These allegations suggest questionable judgment 

but do not demonstrate “failure to exercise even a slight degree of care, owed to another.” 

Kennery, 2011 VT 121, ¶ 41 (quotation omitted).

III. Breach of Contract and Covenant of Good Faith and Fair Dealing (Counts 3 and 4)

¶ 61. We conclude that plaintiffs have made out claims against ACCD for breach of 

contract and breach of the implied covenant of good faith and fair dealing.

9

 Plaintiffs have alleged 

sufficient facts to support their claim that ACCD, hoping to gain the benefits of investments in the 

Jay Peak Projects, offered to undertake “specific oversight obligations” if plaintiffs invested, and 

then, after plaintiffs performed by investing, which caused a contract to form, ACCD breached 

that resulting contractual obligation. Although plaintiffs have argued that this contract was created 

by the MOUs—which we conclude it was not—we hold that plaintiffs have nonetheless made out 

a claim for breach of contract and of the implied covenant of good faith and fair dealing sufficient 

to meet our lenient notice-pleading standards. 

¶ 62. The essential requirements for a contract are “a bargain in which there is a 

manifestation of mutual assent to the exchange and a consideration.” Restatement (Second) of 

Contracts § 17(1) (1981). A unilateral contract will form where an offeror makes an offer that can 

be accepted by performance, and the offeree performs. Ragosta v. Wilder, 156 Vt. 390, 394, 592 

9

 Plaintiffs initially at least nominally pled breach-of-contract and breach-of-the-covenantof-good-faith-and-fair-dealing claims against all defendants, but on appeal address only the claims 

against the State. Accordingly, we consider only the breach-of-contract and breach-of-covenant 

claims against the State. 
27

A.2d 367, 370 (1991) (stating that “under a unilateral contract . . . the offeree must accept, if at all, 

by performance, and the contract then becomes executed” (quoting Multicare Medical Center v. 

State Soc. & Health Servs., 790 P.2d 124, 131 (Wash. 1990) (superseded by statute))). 

Consideration sufficient for contract formation can include a broad range of benefits: The 

“definition of a benefit is extremely broad, and requires simply that [promisors] receive something 

desired for [their] own advantage.” Kneebinding, Inc. v. Howell, 2014 VT 51, ¶ 17, 196 Vt. 477, 

99 A.3d 612 (quotation omitted). 

¶ 63. Plaintiffs’ allegations, if true, would establish formation of a unilateral contract 

between the investors and ACCD, which ACCD breached. ACCD offered to plaintiffs that if they 

invested in the Jay Peak Projects, it would provide “oversight, administration, management, and 

regulatory compliance of the Jay Peak Projects for the specific benefit of Plaintiffs.” Plaintiffs’ 

allegations support an inference that, as part of the oversight ACCD pledged to undertake, ACCD 

promised to enforce the Jay Peak Projects’ financial-reporting requirements under the MOUs. This 

constituted an offer: ACCD wished to receive the benefit of investments in the Jay Peak Projects, 

which would serve its goal of promoting economic development in the state, so it offered to 

plaintiffs that if they made the requisite investment, it would provide financial oversight over the 

Projects. Plaintiffs accepted ACCD’s offer by performing: they invested in the Projects. At that 

point, a contract obligating ACCD to fulfill its promises formed. ACCD subsequently failed to 

provide any of the promised oversight, breaching its contractual obligations to plaintiffs.

¶ 64. Plaintiffs’ allegations could likewise support a claim for breach of the covenant of 

good faith and fair dealing. The covenant, which is implied in every contract, serves to “ensure 

that parties to a contract act with faithfulness to an agreed common purpose and consistency with 

the justified expectations of the other party.” Monahan v. GMAC Mortg. Corp., 2005 VT 110, 

¶ 36, 179 Vt. 167, 893 A.2d 298 (quotation omitted); see also Carmichael v. Adirondack Bottled 

Gas Corp. of Vt., 161 Vt. 200, 208, 635 A.2d 1211, 1216 (1993) (“An underlying principle implied 

in every contract is that each party promises not to do anything to undermine or destroy the other’s 
28

rights to receive the benefits of the agreement.”). Plaintiffs allege that “the parties were bound to 

execute their agreement for oversight, management, administration, and regulatory compliance 

services consistent with the covenant of good faith and fair dealing,” and that defendants failed to 

do so. Plaintiffs’ allegation that ACCD failed to provide the promised financial oversight 

establishes a failure by ACCD to act consistently with plaintiffs’ “justified expectations” pursuant 

to their contract for oversight, and makes out a claim for breach of the covenant of good faith and 

fair dealing. Monahan, 2005 VT 110, ¶ 36.

IV. Third-Party Beneficiary Breach of Contract (Count 8)

¶ 65. We conclude that the trial court properly dismissed plaintiffs’ claims for breach of 

contract based on a theory that plaintiffs were third-party beneficiaries of the MOUs between 

ACCD and the Jay Peak Projects because we conclude that, although ACCD assumed contractual 

obligations to plaintiffs by soliciting their investments and touting their oversight, the MOUs did 

not directly give rise to duties on the part of ACCD that are enforceable by the plaintiffs. 

¶ 66. Contracting parties may agree to create obligations to a third party, which the third 

party may enforce against the promisor—the party obligated to perform for the third party—if the 

promisor breaches. In other words, “[a] promise in a contract creates a duty in the promisor to any 

intended beneficiary to perform the promise, and the intended beneficiary may enforce the duty.” 

Restatement (Second) of Contracts § 304 (1981). Whether a party is an intended beneficiary, and 

thus has a right to enforce the contract, “is based on the original contracting parties’ intention,”

and “[a]s with any contract provision, we first look to the language of the contract provision” to 

determine what that intent was. Hemond v. Frontier Commc’ns of Am., Inc., 2015 VT 67, ¶ 20, 

199 Vt. 272, 123 A.3d 1176 (quotations omitted); see also Restatement (Second) of Contracts 

§ 302(1) (“A beneficiary of a promise is an intended beneficiary if recognition of a right to 

performance in the beneficiary is appropriate to effectuate the intention of the parties and . . . the 

circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised 

performance.”). If the contract “language is unambiguous, there is no need to consider evidence 
29

outside of the writing.” Hemond, 2015 VT 67, ¶ 20. The fact that a contract would benefit a third 

party does not mean the third party has a right to enforce it. Many contracts benefit third parties, 

but those third parties are treated as incidental beneficiaries unless the contract language 

specifically indicates an intent to benefit them. McMurphy v. State, 171 Vt. 9, 18, 757 A.2d 1043, 

1050 (2000).

¶ 67. The MOUs did not create obligations running from ACCD to plaintiffs; rather, they 

created obligations by the Jay Peak Projects to assist ACCD in administering the projects and 

reporting to USCIS, and obliged ACCD to take minor steps in aid of that goal, such as “promptly 

request[ing] that USCIS acknowledge ACCD’s designation of Jay Peak to assist in the 

management, administration and overall compliance of the Alien Entrepreneur project organized 

by Jay Peak within ACCD’s Regional Center.” Each MOU contained prefatory language 

explaining that:

 ACCD and Jay Peak desire an arrangement whereby Jay Peak . . .

will assist [in] the oversight, administration, management and 

overall compliance of the Jay Peak project with legal and regulatory 

requirements, and Jay Peak will formally report in writing not less 

than every three (3) months upon the activities of the project to 

ACCD and respond to any ongoing ACCD inquiries about the 

project and assist ACCD to comply with its obligations as a USCIS 

approved and designated regional center with respect to this 

project.10 

The Jay Peak Projects and ACCD therefore agreed, among other things, that:

 Jay Peak will provide support to ACCD including, but not limited 

to, providing investment-related and supporting documentation to 

prospective investors, supplying economic analysis and modeling 

10

 Although this language reflects that ACCD had duties including “oversight, 

administration, management and overall compliance of the Jay Peak Projects with legal and 

regulatory requirements” and that ACCD had reporting duties to USCIS, the MOU does not 

purport to obligate ACCD to perform those duties, but rather obligates the Jay Peak Projects to 

provide assistance to ACCD. Moreover, because it is mere prefatory language, not part of the 

substance of the parties’ agreement, we would only consult it to understand the substance of the 

parties’ agreement if the language of the agreement were ambiguous—which it is not. “While a 

recital in the preamble or elsewhere in a deed or contract may be consulted in aid of the 

interpretation of an ambiguity in the instrument, it cannot control the dispositive or operative 

portion, when this is clear and definite, or create a doubt which does not otherwise exist.” 

Davidson v. Vaughn, 114 Vt. 243, 248-49, 44 A.2d 144, 147 (1945).
30

reports on direct and indirect job creation, defining investment 

opportunities within the Jay Peak project, and assisting ACCD to 

comply with relevant regulatory or administrative requirements in 

support of individual petitions filed with [USCIS] by immigrant 

investors affiliated with the Jay Peak project, such as providing area 

maps, valid unemployment data, general economic data and 

demographics concerning the geographic area covered by the Jay 

Peak project. 

 Jay Peak will further support ACCD’s compliance with regional 

center requirements by providing on a quarterly basis formal written 

progress reports on its activities, overseas meetings and other 

relevant efforts . . . to promote investment . . . . The Quarterly 

reports will set forth for the preceding quarter and year-to-date the 

number of investors, the status of alien investor capital (in escrow, 

transfers from escrow to the limited partnership) and activity of the 

limited partnership in furtherance of the project.

 . . . . 

 Jay Peak will support the purpose and goals of ACCD’s Regional 

Center by encouraging investment and employment creation within 

the Regional Center through . . . establishing escrow accounts to 

assist orderly investment in the project; facilitating, on a fee basis, 

the preparation and submission of the I-526, Alien Entrepreneur 

petition and petitions for other immigration benefits to USCIS . . . 

for individual investors; providing the primary entity and related 

entities to carry out the activities of the project; structuring the 

enterprise so that it creates requisite employment prior to the 

investors seeking removal of conditions; seeing to the timely 

completion and opening of the project; providing operating 

expertise and personnel to operate the project efficiently; and, if 

requested by individual investors, making referrals to advisors who 

may assist with issues arising from relocation by the investor and 

the investor’s spouse and children to the United States.

Because this MOU language unambiguously indicates no intent to create obligations running from 

ACCD to plaintiffs, plaintiffs are at most incidental beneficiaries of the agreement between ACCD 

and the Jay Peak Projects.

¶ 68. Plaintiffs claim they are intended beneficiaries of the MOUs because they allege 

that the MOUs were attached to every offering document for the Jay Peak Projects, and offering 

documents were issued to each investor, “evincing a clear intent” by the Jay Peak Projects and 

defendants to benefit plaintiffs. Because this is a question of contract interpretation, we look first 

to the language of the MOU, and only if it is ambiguous—meaning that reasonable people could 
31

understand it differently—will we look beyond its four corners to understand its meaning. Towslee 

v. Callanan, 2011 VT 106, ¶ 5, 190 Vt. 622, 55 A.3d 240 (mem.) (reciting that “if reasonable 

people could differ as to its interpretation, a provision is ambiguous and the court should look 

beyond the plain language to discern the parties’ intent” (quotation omitted)). If the MOUs were 

ambiguous, defendants’ subsequent representations to plaintiffs about what the MOUs meant 

could be helpful in construing the ambiguous language. “In the process of interpretation of the 

terms of a contract, the court can frequently get great assistance from the interpreting statements 

made by the parties themselves or from their conduct in rendering or in receiving performance 

under it,” as this is “further expression by the parties of the meaning that they give and have given 

to the terms of their contract previously made.” Bissonnette v. Wylie, 166 Vt. 364, 371-72, 693 

A.2d 1050, 1055 (1997) (quoting 3 A. Corbin, Corbin on Contracts § 558, at 249, 251-53 (1960)). 

Plaintiffs lean heavily on a case that presents this scenario: After finding a contract ambiguous as 

to its intent to benefit the third-party plaintiffs, the court looked to a contracting party’s 

representations to the plaintiffs and found those representations supported the interpretation that 

the contract was intended to benefit the plaintiffs. Bayerische Landesbank v. Aladdin Capital 

Mgmt. LLC, 692 F.3d 42, 56 (2d Cir. 2012). Because the terms of the MOUs are unambiguous, 

however, we will not resort to subsequent representations by defendants to understand what they 

mean. 

¶ 69. Moreover, plaintiffs cannot maintain a third-party-beneficiary claim against ACCD 

because the MOU does not create any obligations by ACCD which plaintiffs allege ACCD 

breached. A third-party-beneficiary claim lies only against the breaching promisor. See 

Restatement (Second) of Contracts § 304 (“A promise in a contract creates a duty in the promisor

to any intended beneficiary to perform the promise, and the intended beneficiary may enforce the 

duty.” (Emphasis added)). Even if plaintiffs were intended beneficiaries of the oversight 

obligations contained in the MOU, it was the Jay Peak Projects who promised in the MOU to 

provide quarterly reports and perform other oversight and accounting activities. If plaintiffs were 
32

intended beneficiaries of that promise, they would have a claim against the Jay Peak Projects for 

breach—but not ACCD.

¶ 70. We agree with plaintiffs that by participating in offering the MOUs to prospective 

investors, including plaintiffs, ACCD could have reinforced its claims directly to them that it 

would oversee the finances of the Jay Peak Projects, including by requiring and reviewing the 

materials the Jay Peak Projects were required to supply pursuant to those MOUs. But because the 

MOUs themselves impose few actual obligations on ACCD, and contain no indication that they 

intended plaintiffs to have the right to enforce any such obligations, we conclude that plaintiffs’ 

direct contract claims provide the proper vehicle for developing plaintiffs’ arguments in this 

regard.

V. Securities Fraud Against All Defendants (Count 2)

¶ 71. The trial court properly dismissed plaintiffs’ claim of securities fraud under the 

Vermont Uniform Securities Act, 9 V.S.A. §§ 5501 and 5509, against all defendants. The claim 

falls squarely within an exception to the State’s waiver of sovereign immunity through the 

Vermont Tort Claims Act, and as to the individual defendants, it was not pled with the particularity 

required for averments of fraud under Vermont Rule of Civil Procedure 9(b).

¶ 72. Under § 5501 of the Vermont Uniform Securities Act:

 It is unlawful for a person, in connection with the offer to sell, the 

offer to purchase, the sale, or the purchase of a security, directly or 

indirectly:

 

 (1) to employ a device, scheme, or artifice to defraud;

 (2) to make an untrue statement of a material fact or to omit to state 

a material fact necessary in order to make the statements made, in 

light of the circumstances under which they were made, not 

misleading; or

 (3) to engage in an act, practice, or course of business that operates 

or would operate as a fraud or deceit upon another person.
33

Section 5509(b) provides that:

 A person is liable to the purchaser if the person sells a security in 

violation of [Section 5501], the purchaser not knowing the untruth 

or omission or deceptive nature of the conduct and the seller not 

sustaining the burden of proof that the seller did not know and, in 

the exercise of reasonable care, could not have known of the untruth 

or omission or deceptive nature of the conduct.

¶ 73. Plaintiffs’ complaint does not specify which statements or acts, by which 

defendants, they contend violate the Act. The complaint alleges that defendants “engaged in a 

common plan . . . pursuant to which they knowingly or recklessly engaged in acts . . . which 

operated as a fraud and deceit upon Plaintiffs, and made various deceptive and untrue statements 

of material facts and omitted to state material facts necessary in order to make the statements . . . 

not misleading,” the purpose of all of which was to induce plaintiffs to invest in the Jay Peak 

Projects. On appeal, plaintiffs sharpen the focus of their claims somewhat by arguing defendants 

“schemed to defraud [plaintiffs] . . . by claiming superior oversight and monitoring of the Jay Peak 

Projects.” 

¶ 74. The plaintiffs’ securities-fraud claim against ACCD is barred by sovereign 

immunity. The State’s waiver of sovereign immunity in the Vermont Tort Claims Act expressly 

excludes “[a]ny claim arising out of . . . misrepresentation, deceit, fraud, or interference with 

contractual rights.” 12 V.S.A. § 5601(e)(6). The gravamen of plaintiffs’ securities-fraud claim is 

that ACCD made misrepresentations, acted with deceit, and engaged in fraud. The State has not 

waived its sovereign immunity with respect to such claims, and the trial court properly dismissed 

the securities-fraud count against ACCD.

¶ 75. With respect to the individual defendants, plaintiffs have not pled fraud with 

sufficient particularity to survive a motion to dismiss. Because plaintiffs characterize this claim 

as one for fraud, the pleadings must meet the requirements of Vermont Rule of Civil Procedure 

9(b). Rule 9(b) requires that “[i]n all averments of fraud or mistake, the circumstances constituting 

fraud or mistake shall be stated with particularity.” V.R.C.P. 9(b). “[O]ne of the primary 
34

objectives of Rule 9(b) is to provide the defendant with sufficient information to enable [them] to 

effectively prepare a response.” Silva v. Stevens, 156 Vt. 94, 106, 589 A.2d 852, 859 (1991). It

is insufficient to broadly allege that “the defendants” made fraudulent or deceitful statements to 

induce plaintiffs to invest. Rule 9(b) requires that plaintiffs identify the particular statements or 

acts by particular defendants that they claim were fraudulent. See Eaves v. Designs for Fin., Inc., 

785 F. Supp. 2d 229, 247 (S.D.N.Y. 2011) (explaining that a plaintiff “may not lump separate 

defendants together in vague and collective fraud allegations” but must with particularity describe 

the nature of each defendant’s “alleged participation in the fraud” (quotation omitted)). Plaintiffs 

have failed to plead fraud against any individual defendants with sufficient particularity. Because 

we affirm the trial court’s dismissal of the securities-fraud count on the above bases, we need not 

address the statute-of-limitations defense the State has raised.

VI. Remaining Claims11

¶ 76. Finally, plaintiffs state in passing that the court erred in dismissing their claim of 

breach of fiduciary duty against all defendants (Count 7), aiding and abetting breach of fiduciary 

duty against all defendants (Count 9), and breach of implied contract against all defendants (Count 

13), but they offer no argument as to the specific claims. Instead, in their briefing, they lump the 

breach-of-fiduciary-duty claims together in a category of “[n]egligence-[r]elated [c]laims” and the 

implied-contract claim into a category of “contract claims.” The State likewise lumps these claims 

into broader categories, and has not offered specific arguments for dismissal of these particular 

claims other than asserting that plaintiffs have waived these claims, either by conceding them 

below or by failing to brief them in their principal brief. 

¶ 77. Plaintiffs lump their breach-of-fiduciary-duty claims together with their negligence 

claims, but the claims are distinct from ordinary negligence claims and rest on different elements 

11 On appeal, plaintiffs do not purport to challenge the trial court’s dismissal of Counts 1 

(fraud against all defendants), 10 (aiding and abetting fraud against all defendants), and 12 

(consumer fraud against all defendants). We accordingly do not address the trial court’s dismissal 

of those claims.
35

of proof. See Restatement (Second) Torts § 874 (“One standing in a fiduciary relation with another 

is subject to liability to the other for harm resulting from a breach of duty imposed by the 

relation.”); id. cmt a (“A fiduciary relation exists between two persons when one of them is under 

a duty to act for or to give advice for the benefit of another upon matters within the scope of the 

relation.”). Consistent with our general policy of not addressing claims on appeal that are not 

briefed, we do not address these claims. See In re Dunnett, 172 Vt. 196, 203, 776 A.2d 406, 412 

(2001); Bishop v. Town of Barre, 140 Vt. 564, 579, 442 A.2d 50, 57 (1982) (“This Court will not 

search the record for errors inadequately briefed.”).

¶ 78. Likewise, plaintiffs claim that their arguments in support of their breach-ofcontract, breach-of-implied-covenant-of-good-faith-and-fair-dealing, and third-party-beneficiary 

claims support their implied-contract claim, but this misunderstands the fundamentally different 

nature of implied contracts. The implied-contract doctrine provides an equitable remedy “based 

on an implied promise to pay when a party receives a benefit and the retention of the benefit would 

be inequitable. Liability in such cases arises from the doctrine of unjust enrichment.” Sweet v. 

St. Pierre, 2018 VT 122, ¶ 18, __ Vt. __, 201 A.3d 978 (quotation omitted). An implied-contract 

claim is not a contract claim at all. There was thus no briefing on appeal specifically addressing 

the implied-contract claim. For the reasons noted above, we thus affirm the trial court’s dismissal 

of the implied contract claim. 

Affirmed, except that the dismissal of the following claims is reversed: negligence against 

ACCD; negligent misrepresentation against ACCD; gross negligence against defendants Brent 

Raymond and James Candido; and breach of contract and the implied covenant of good faith and 

fair dealing against ACCD. The matter is remanded for further proceedings consistent with this 

opinion. 

FOR THE COURT:

Associate Justice