J&K Tile Co. v. Wright & Morrissey, Inc., No. 208-3-16 Cncv (Mello, J., May 31, 2018).

[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy of the text and the 

accompanying data included in the Vermont trial court opinion database is not guaranteed.]

STATE OF VERMONT

SUPERIOR COURT CIVIL DIVISION

Chittenden Unit Docket No. 208-3-16 Cncv

J&K TILE COMPANY,

Plaintiff,

v.

WRIGHT & MORRISSEY, INC,

Defendant.

RULING ON POST-JUDGMENT MOTIONS FOR ATTORNEY’S FEES

Following a bench trial in September of 2017, the court on February 23, 2018, issued its 

“Ruling on the Merits and on Pending Motions,” adjudicating the several claims and defenses 

asserted by the parties in this matter. Based on those rulings, the court also entered a 

judgment ordering:

[T]hat the Plaintiff recover of the Defendant damages in the amount of $42,000, 

plus pre-judgment interest in the amount of $12,180, for a total of $54,180 on its 

claim that Defendant breached the parties’ Memorandum of Understanding, and

[T]hat the Plaintiff also recover of the Defendant $650.22 in interest on Plaintiff’s 

claim that Defendant violated the Prompt Pay Act, and

[T]hat Defendant have judgment in its favor on its Counterclaim asserting that 

the Plaintiff had no good-faith basis for claiming that Defendant breached its 

contractual obligations by refusing to mediate, and 

[T]hat Defendant may, within fifteen days from the date hereof, apply to the 

Court for an award of attorney’s fees that Defendant reasonably and necessarily 

incurred in defending itself against Plaintiff’s claim that Defendant breached its 

contractual obligations by refusing to mediate, and 

[T]hat all other claims and counterclaims in this action be, and they hereby are 

DISMISSED with prejudice, each party to bear its own costs and, except as 

otherwise provided above, attorney’s fees.

Judgment of February 23, 2018. 
2

Presently before the court are: (1) Plaintiff J&K Tile Company’s “Motion for Extension of 

Time for a Fee Application, or in the Alternative, Request for Attorney’s Fees;” (2) Defendant 

Wright & Morrissey, Inc.’s “Motion for Entry of Judgment;” (3) Plaintiff’s “Motion to Amend 

Judgment;” and (4) Defendant’s “Cross-Request for an Award of Fees and Expenses to 

Defendant Under the Prompt Pay Act.” In these motions, each party seeks an award of its 

attorney’s fees pursuant to the Prompt Pay Act. 

Plaintiff contends that it is entitled to an award of its attorney’s fees because this 

dispute is governed by the Prompt Pay Act, the Act requires an award of attorney’s fees to the 

substantially prevailing party, and it was the substantially prevailing party in this case. 

Defendant denies that the Plaintiff’s claims in this case were covered by the Act and denies that 

the Plaintiff was the prevailing party in this case. Therefore, Defendant opposes Plaintiff’s 

request for attorney’s fees. In addition, Defendant contends that it is entitled to an award of 

the attorney’s fees it incurred in defending itself against Plaintiff’s “failure to mediate” claims 

because the court dismissed that claim and held that the claim had been filed in bad faith. 

As the name implies, Vermont’s Prompt Pay Act requires that contractors and 

subcontractors receive prompt payment for work performed under construction contracts. The 

term “construction contract” is defined broadly to mean “any agreement, whether written or 

oral, to perform work on any real property located within the State of Vermont.” 9 V.S.A. § 

4001(5). The Act provides that “[p]erformance by a subcontractor in accordance with the 

provision of its contract shall entitle it to payment from the party with which it contracts,” Id. § 

4003(a), and the Act sets forth time limits within which that payment must be made, Id. § 

4003(b) and (c). In addition, the Act provides that, if retainage is withheld from a contractor 

during the course of a construction project, then the contractor must pay to its subcontractor 

the full amount of retainage due to the subcontractor within seven days after the contractor 

receives its retainage from the owner. Id. § 4005(c). Lastly, the Act provides:

Notwithstanding any contrary agreement, the substantially prevailing party in 

any proceeding to recover any payment within the scope of this chapter shall be 

awarded reasonable attorney’s fees in an amount to be determined by the court 

or arbitrator, together with expenses.

Id. § 4007(c). 

This case was a proceeding within the scope of the Prompt Pay Act, inasmuch as the 

Plaintiff brought this suit to recover amounts alleged to be owed to it under a Memorandum of 

Understanding, which the parties entered into in the course of the construction of the RiverRun 

apartment building in Winooski, Vermont, and under the Prompt Pay Act. Defendant was the 

general contractor for that construction project, and Plaintiff was its flooring subcontractor. 

Therefore, the attorney’s fee provision of the Prompt Pay Act applies. Birchwood Land Co. v. 

Ormond Bushey & Sons, Inc., 2013 VT 60, ¶ 21, 194 Vt. 478 (“The purpose of the prompt 

payment act is to provide protection against nonpayment to contractors and subcontractors.”). 
3

Defendant contends that Plaintiff cannot be awarded attorney’s fees under the Act 

because the Act only applies to construction contracts. According to the Defendant, the only 

construction contract the parties ever entered into was their “Standard Form of Agreement 

Between Contractor and Subcontractor” dated December 11, 2014 (Exhibit 1A). Defendant 

contends that the Memorandum of Understanding of April 16, 2015 (Exhibit 4), upon which 

Plaintiff based the claim on which it obtained a judgment for $42,000 plus interest in its favor, 

was not a construction contract. Therefore, Defendant concludes that Plaintiff cannot be 

awarded attorney’s fees under the Act. 

Defendant’s contention is without merit. The Memorandum of Understanding was 

entered into at a point in the construction project when Defendant was considering whether to 

exercise its right under the Subcontract to “suspend, delay or interrupt” Plaintiff’s flooring work 

for some period of time. Under the Subcontract, if Defendant invoked that right, then Plaintiff 

was entitled to “an equitable adjustment of the Subcontract Time and Subcontract Sum” 

(Exhibit 1A, § 7.3.1). The purpose of the Memorandum of Understanding was to establish what 

that equitable adjustment would be under various potential scenarios. The Memorandum of 

Understanding clearly qualifies as a “construction contract,” which is defined by the Act as “any 

agreement ... to perform work on any real property within the State of Vermont.” 9 V.S.A. § 

4001(5). Therefore, Plaintiff is entitled to an award of its attorney’s fees under § 4007(c) of the 

Act, if it was the “substantially prevailing party” in this case.

The Vermont Supreme Court has held that a trial court should employ the “common 

core of facts” analysis in deciding whether a party substantially prevailed in a construction 

contract dispute. Nystrom v. Hafford, 2012 VT 60, ¶ 24, 192 Vt. 300 (“We reaffirm our prior 

holding that a fee award should not be apportioned among claims that arise from a common 

core of fact.... However, as a threshold matter, trial courts must consider and determine which 

claims do, in fact, arise from a common core of facts insofar as the evidence relevant to those 

claims is the same.” (citing The Electric Man, Inc. v. Charos, 2006 VT 16, ¶ ¶ 10 and 17, 179 Vt. 

351)).

Employing the ”common core of facts” analysis, there were three distinct groups or 

categories of claims and defenses asserted in this case. The first group consisted of the 

following claims that Plaintiff asserted against Defendant: Plaintiff’s claim for $8,150 to cover 

expenses allegedly incurred to remobilize its forces after Defendant imposed its April 22, 2015 

work suspension; and Plaintiff’s claim for $42,000 to cover its expenses allegedly incurred for 

working 21 days beyond May 21, 2015. Both of those claims arose out of the Memorandum of 

Understanding, and both were triggered by Defendant’s suspension order. These claims fall 

within § 4003(a) of the Prompt Pay Act, which, as noted earlier, provides that “[p]erformance 

by a subcontractor in accordance with the provisions it its contract shall entitle it to payment 

from the party with which it contracts.” 

The second group or category of claims consisted of Plaintiff’s claim that Defendant 

violated § 4005 of the Prompt Pay Act by allegedly delaying Plaintiff’s payment of its retainage. 
4

That claim arose out of an entirely separate set of facts, and an entirely separate provision of 

the Prompt Pay Act, from the first group of claims.

The third group or category of claims consisted of Plaintiff’s claim that Defendant 

breached the parties’ Subcontract by allegedly refusing to mediate, and Defendant’s 

counterclaim contending that Plaintiff had no good-faith basis for asserting such a claim. That 

claim and counterclaim arose out of an entirely separate set of facts from the first two 

categories of claims.

Plaintiff was clearly the substantially prevailing party on the first group or category of 

claims. Plaintiff succeeded in establishing that the Memorandum of Understanding was an 

enforceable contract, Plaintiff defeated Defendant’s counterclaim, which alleged that Plaintiff 

had been overpaid for its work on the construction project, and Plaintiff prevailed on its claim 

that it was entitled to an additional $42,000 for having to work 21 days beyond May 21, 2015. 

Although Plaintiff did not prevail on its claim for an additional $8,150 in “remobilization” costs, 

a party need not succeed on all of its claims in order to quality as the “substantially prevailing 

party.” Reed v. Zurn, 2010 VT 14, ¶ 16, 187 Vt. 613 (mem.). Therefore, the Plaintiff is entitled 

to recover its attorney’s fees necessarily and reasonably incurred litigating that group or 

category of claims.1 

As to the second group or category of claims (Plaintiff’s late payment of retainage 

claim), neither party substantially prevailed. Although Plaintiff succeeded in showing that 

Defendant had wrongfully demanded a waiver of claims before it would pay Plaintiff’s 

undisputed retainage, Defendant succeeded in showing that it cured the violation by 

withdrawing its demand for a release, and paying the retainage in full, less than four months 

later and well before Plaintiff filed this lawsuit. The court awarded Plaintiff interest for the 

nearly four-month delay in the payment of Plaintiff’s retainage, but the court denied Plaintiff’s 

request for statutory penalties or attorney’s fees because Defendant had already cured its 

default well before this suit was filed. See “Ruling on the Merits and on Pending Motions, p. 16. 

Because neither party substantially prevailed on that claim, neither party is entitled to an award 

of attorney’s fees incurred in litigating that claim. Birchwood Land Company, 2013 VT 60, ¶ 36

(“[T]he trial court may decide that neither party substantially prevailed.... Contractor’s status as 

the net victor – both in terms of number of claims and monetary award – does not compel a 

conclusion that it substantially prevailed under the statute.”). 

 

1 As noted on page 1 of this decision, the court in its Judgment of February 23, 2018, ordered “each party to bear 

its own costs and, except as otherwise provided above, attorney’s fees.” Plaintiff is concerned that that language 

was intended to deny it the opportunity to apply for an award of attorney’s fees under the Prompt Pay Act. 

Therefore, Plaintiff included in one of its pending post-judgment motions a request that the court alter, amend or 

clarify its Judgment on this issue. The court grants the request. It was not the court’s intent to deny either party 

the opportunity to apply for an award of attorney’s fees under the Act. Because an award of fees to the 

substantially prevailing party is mandatory under the Act, the court agrees that a supplementary judgment is 

needed and appropriate. To the extent that the court’s Judgment is unclear on that issue, this footnote provides 

the required clarification. 
5

On the third and last group or category of claims (Defendant’s alleged refusal to 

mediate), the Defendant clearly was the substantially prevailing party. The court not only 

rejected Plaintiff’s contention that Defendant had wrongfully refused to mediate, but also held 

that Plaintiff had had no good-faith basis for asserting the claim in the first place. Ruling, p. 16. 

Therefore, Defendant is entitled to an award of the attorney’s fees it reasonably and 

necessarily incurred in defending against that claim. 

The first group or category of claims, related to the Memorandum of Understanding, 

comprised by far the largest part of this case in terms of factual and legal complexity. The great 

majority of the time spent by the attorneys was, therefore, devoted to those claims and 

defenses. Based upon the court’s review of Attorney Hall’s time and billing records, the court 

finds that these claims necessitated 135 hours of Attorney Hall’s time on the case, and about 

$3,500 of the expenses incurred by his firm. The court also finds that Attorney’s Hall’s hourly 

rate of $275 is reasonable, in light of his experience, the complexity of the issues, and the 

outcome achieved. Therefore, the court will award Plaintiff $37,125 in attorney’s fees plus 

$3,500 in expenses under 9 V.S.A. § 4007(c), for a total of $40,625.

The issue on which the Defendant prevailed (i.e., Plaintiff’s refusal to mediate claim), by 

contrast, comprised a very small part of this case. The issue was not complicated, either 

factually or legally. No more than 15 hours of Attorney Clapp’s time was needed to address 

that issue. The court finds that Attorney Clapp’s hourly rate of $300 is reasonable in light of his 

experience, particularly in construction disputes, and the outcome achieved. Therefore, the 

court will award Defendant $4,500 under § 4007(c) for attorney’s fees incurred in successfully 

defending itself against that discrete claim.

Plaintiff argues that the Defendant cannot be awarded attorney’s fees because 

Defendant failed to file its request for attorney’s fees within the 14-day time limit set forth in 

V.R.C.P. 54(d)(2)(B). For two reasons, the court rejects Plaintiff’s contention. First, the 14-day 

deadline in Rule 54 does not apply because the court in its Judgment gave Defendant 15 days to 

file its fee request. Secondly, while it is true that the Defendant missed that deadline by one 

day, the court accepts Attorney Clapp’s explanation that he came to the courthouse to file the 

fee application on the day it was due, but arrived just minutes after the court had closed for the 

day. In light of the fact that Attorney Clapp had tried to file the application on time but was 

unable to do so because the clerk’s office had just close, and because he returned to the court 

again the next day to file the application, the court will retroactively extend the 15-day deadline 

by one day pursuant to V.R.C.P. 6(b). 

Plaintiff raises a second reason for denying attorney’s fees to the Defendant. Plaintiff 

contends that Defendant’s claim, that it is entitled to an award of fees incurred in defending 

against a claim that should never have been brought in the first place, is governed by Rule 11. 

Because Defendant failed to comply with Rule 11’s so-called safe-harbor requirement, Plaintiff 

contends that the Defendant cannot be awarded any fees. The court does not need to address 

whether the Defendant can recover its fees under Rule 11, however. Because the court has 
6

determined that Defendant is entitled to an award of fees as the “substantially prevailing party” 

under the Prompt Pay Act, Rule 11 is irrelevant. Therefore, Plaintiff’s objection is overruled.

In light of the foregoing, the court will enter a supplementary judgment in Plaintiff’s 

favor for the net difference of $36,125 (i.e, the $40,625 awarded above to Plaintiff minus the 

$4,500 awarded above to the Defendant). 

SO ORDERED this 31ST day of May, 2018

______________________

Robert A. Mello

Superior Court Judge