Court Opinion

ID: 9756630
Source: CourtListenerOpinion
Date Created: 2023-08-28 21:43:12.49969+00
Date Added: 2024-06-11T07:28:27.445485
License: Public Domain

Teachout, Supr. J.,
¶ 30. Specially Assigned, dissenting in part. I dissent from that portion of the decision in which the majority *410declines to rule on the use of the actual innocence rule and affirms the trial court judgment using a different rationale. I do not join the majority for three reasons. First, the case is decided on grounds of which neither party had notice or an opportunity for briefing or argument. Second, the legal principle on which the decision is founded is unclear. Finally, the application of the actual innocence rule is overly broad on the facts of this case. I would remand for a factual finding on whether defendant’s negligence proximately caused harm to plaintiff.
I. Sua sponte grounds for the decision
¶ 31. In this case, the trial court made detailed findings of fact and concluded that defendant was negligent in failing to object to a faulty jury instruction on reasonable doubt and failing to challenge the instruction on appeal. The court did not make a factual finding on whether the negligence proximately caused harm to plaintiff. Instead, the trial court applied an actual innocence rule developed in other jurisdictions to preclude plaintiff from recovering any damages for defendant’s negligent acts. Both parties devoted all of their written and oral arguments in this portion of the case to the merits of applying the actual innocence rule as a matter of law. The majority affirms the trial court, but specifically declines to address the arguments on the use of the actual innocence rule, and instead decides the case on an alternative rationale raised sua sponte by the Court.
¶ 32. The appellate process normally calls for the Court to decide legal issues raised by the appellant after both sides have had adequate notice of the issues and opportunity for briefing and argument. State v. Jewett, 146 Vt. 221, 222-23, 500 A.2d 233, 234-35 (1985); State v. Taylor, 145 Vt. 437, 439, 491 A.2d 1034, 1035 (1985) (“It is only in the rare and extraordinary case that this Court will consider, sua sponte, issues not properly raised on appeal before us.”); State v. Settle, 141 Vt. 58, 61, 442 A.2d 1314, 1315 (1982) (“We have held, and we reiterate here that, in all but a few exceptional instances, matters which are not briefed will not be considered on appeal.”); see also V.R.A.P. 28(a) (appellant’s brief should explain what the issues are, how they were preserved, and what appellant’s contentions are on appeal, with citations to the authorities, statutes, and parts of the record relied on); V.R.A.P. 30(a) (appellant must file printed case that contains extracts from record below as are necessary to present fully the questions raised).
*411¶ 33. The opportunity to present arguments on the legal issue upon which a case is to be decided is fundamental to sound legal process, and it is important to public confidence in the judiciary. See generally A. Milani & M. Smith, Playing God: A Critical Look at Sua Sponte Decisions by Appellate Courts, 69 Tenn. L. Rev. 245, 271-79 (2002). Milani and Smith argue that sua sponte decisions by appellate courts are: (1) inconsistent with the fundamental principles of due process that parties should have notice and opportunity to be heard on the determinative issue in the case; (2) inconsistent with the American judicial system’s reliance on the adversary process because they are contrary to its (a) central premise that the adversarial clash provides a court with the best arguments and analysis on an issue; (b) emphasis on neutral and passive decision makers; and (c) commitment to party presentation of evidence and arguments; and (3) an abuse of judicial discretion. Id. at 262-90.
¶ 34. The Court occasionally departs from the usual process and decides cases on legal grounds not raised or briefed by the parties or decided by the trial court, invoking authority to decide cases on any legal ground shown by the record. See, e.g., In re Handy, 171 Vt. 336, 764 A.2d 1226 (2000). In some cases, the practice has been justified because the parties were on notice of the issue and the Court heard “‘reasoned arguments’ from the party against whom [it] decide[d] the question.” Harris v. Town of Waltham, 158 Vt. 477, 479 n.1, 613 A.2d 696, 697 n.1 (1992). The practice has also been justified when the parties were provided the opportunity for supplemental briefing. Merrilees v. Treasurer, 159 Vt. 623, 623-24, 618 A.2d 1314, 1315-16 (1992) (mem.). In other cases, the Court has simply decided an issue without benefit of notice and briefing or argument, and without explaining why it has dispensed with briefing. See, e.g., Larkin v. City of Burlington, 172 Vt. 566, 772 A.2d 553 (2001) (mem.); In re Handy, 171 Vt. at 337, 764 A.2d at 1230.
¶ 35. The fact that the Court engages in this practice does not ensure that it has considered all meritorious arguments on the issue decided. The cases cited show that our Court, like others, has not yet developed consistent standards for when briefing should be invited and when it is unnecessary. See S. Cravens, Involved Appellate Judging, 88 Marq. L. Rev. 251, 257-65 (2004). Cravens recognizes that “[t]here is no apparent agreement on a practical course of action” when the parties arguably “miss the point” in their briefs, and she discusses the extent to which appellate courts should recast issues sua sponte when, among other circumstances, “the court sees *412a completely different framework in which to view the case.” Id. at 262, 251. Unlike Milani and Smith, Cravens advocates an activist approach based on the premise that the purpose is to reach “the most correct resolution” of an issue.6 Id. at 294. Even accepting this premise, the question is whether dispensing with briefing in a particular case will achieve this result.
¶ 36. Vigorous dissents are not uncommon when cases are decided on unbriefed grounds, and these dissents highlight the important policies underlying the practice of notice and briefing. See, e.g., Harris, 158 Vt. at 484, 613 A.2d at 700 (Allen, C.J., dissenting). As Chief Justice Allen explained in Harris, “[a] principal reason for not considering issues not presented by the parties at trial or in their briefs is the great risk of deciding important issues without hearing reasoned arguments on both sides of the question, especially a novel question.” Id. at 485, 613 A.2d at 700; see also Favreau v. Miller, 156 Vt. 222, 233, 591 A.2d 68, 75 (1991) (Dooley, J., dissenting) (stating that the majority should not decide an issue where “[w]e have not had the benefit of briefing and argument on that issue”).
¶ 37. In a case where the majority found a legislative act unconstitutional without a constitutional challenge having been raised, the dissent faulted the majority for deciding the case without argument on the legal basis for the decision, which it noted had been subject to scholarly criticism. In re Handy, 171 Vt. at 351-52, 764 A.2d at 1240 (Johnson, J., dissenting). According to the dissenting justices, the majority’s decision to strike down the statute by asserting its authority to “affirm on any grounds” stretched the maxim beyond its breaking point. Id. at 352, 764 A.2d at 1240.
¶ 38. In this case, the majority concludes that because attorney’s fees would have been charged even if there had been no negligence, defendant’s negligence was not the proximate cause of the payment of attorney’s fees, and therefore it cannot be the proximate cause of damages in a malpractice case seeking return of payment. This theory, which is case-dispositive, appears for the first time in the majority decision. The trial court’s approach to the entire issue of causation was to apply the actual innocence rule: plaintiff’s guilt alone formed the basis of the ruling on causation, and no other aspect *413of causation was considered.7 The approach taken by the majority was not addressed by the trial court or by the parties in their briefs or at oral argument. The approach is not so obvious that the parties should have foreseen it as important and addressed it. Indeed, it is absent from most if not all of the many decisions from other states that have addressed the applicability of the actual innocence rule. See Part III, infra.
¶ 39. The parties had no reason to suspect that the Court would decide the case on any grounds other than the one on which the trial court clearly based its decision, and on which plaintiff based his appeal. Neither party has had the opportunity to consider or present argument on the analysis underlying the majority’s ruling, nor challenge its conclusion, based on a 1972 Louisiana case, that plaintiff cannot recover attorney’s fees paid to defendant as long as “defendant took some action ‘for which plaintiff[] received some value.’ ” See ante, ¶ 27 (citing Ramp v. St. Paul Fire & Marine Ins. Co., 269 So. 2d 239, 246 (La. 1972)).
¶ 40. The Court has been deprived of the benefit that comes from a full airing of the legal issues, including analysis and arguments presented by advocates, and dialogue that would be helpful in evaluating the wisdom of a proposed rule of law.8 As the Court has previously stated, a “broad new doctrine of lawyer malpractice liability” should not be “based on a record that is wholly inadequate to make this decision.” Roberts v. Chimileski, 2003 VT 10, ¶ 18, 175 Vt. 480, 820 A.2d 995 (mem.).
¶ 41. At the very least, I would notify the parties that the Court was considering alternative grounds on this portion of the case, provide an opportunity for supplemental briefing, and schedule the ease for reargument. See Jewett, 146 Vt. at 223, 500 A.2d at 234-35. Even Cravens, who argues that judges should not be limited to the arguments raised in the briefs on appeal, recognizes that inviting *414supplemental submissions by the parties may be warranted where “there is an omitted issue or an argument that might be dispositive or highly influential in the decision.” Cravens, Involved Appellate Judging, supra, at 296. The majority has decided the case based on unexamined reasoning. Such an approach, without an explanation of why it is justified in this case, does not demonstrate respect for the contributions counsel and parties may be able to make, or promote confidence in the justness of the process or outcome. The proposed basis for the decision should be presented to the parties for briefing.
II. The legal basis of the majority’s decision
¶ 42. While I am reluctant to address the merits of the basis for the majority decision given the absence of briefing and argument by the parties, I will nonetheless set forth causes for concern about the opinion of the majority.
¶ 43. Under ordinary negligence jurisprudence, proximate causation is a fact question for the trier of fact. Roberts, 2003 VT 10, ¶ 15 (“[P]roximate cause in lawyer malpractice actions is ‘cause-in-fact.’”). Both parties agree that the trial judge did not make a finding of fact on this issue because he applied the actual innocence rule instead. The majority concludes that plaintiff cannot establish proximate cause for these fees because the attorney’s fees “were charged irrespective of the quality of defendant’s representation” and therefore not proximately caused by malpractice. Ante, ¶ 27. It is unclear whether the majority is announcing this as a rule of law, or making its own determination of fact.
¶ 44. If it is a rule of law, it is difficult to determine what the ruling is, and what its governing principle is. Is it a rule of law that no remedy for the return of any fees paid is available in a malpractice case against a criminal defense attorney as long as the lawyer “took some action ‘for which plaintiffl] received some value,”’ and the client eventually pled guilty to at least one crime? If so, how is that different from the actual innocence rule?
¶ 45. Is it a rule of law that in such a case a client is precluded from recovery only if he or she is asking for return of all fees paid? While plaintiff sought to recover the full amount he paid, the prayer for relief in his amended complaint asked for judgment “in an amount commensurate with his damages.” The trial judge recognized that the purpose of the trial was to determine whether “a part or all of the fees paid” were incurred as a result of inadequate representation. In any negligence case the trier of fact does not grant an all-or-nothing *415recovery in response to a plaintiff’s request, but is required to limit recovery to the extent of harm proved to have been caused by the negligence. It is difficult to conclude that the majority ruling means that a plaintiff will be barred if he asks for return of the full fee, but not so barred if he asks for a return of less than the full amount paid. Such a rule is not consistent with either negligence or contract law and procedure, in which a plaintiff may assert a claim for the maximum amount desired, but recovery is limited to the amount proved at trial.
¶ 46. Is it a rule of law that in any malpractice case brought against any professional a client may not sue for return of fees paid if the fees would have been charged absent negligence? If so, this is an extremely broad legal doctrine that deserves more attention. Who determines whether the fees would have been charged absent negligence? In a footnote, the majority distinguishes this case from one in which there “may be a bona fide fee dispute in the course of criminal representation that would give rise to a breach of contract claim that was not a disguised malpractice claim.” Ante, ¶ 27 n.5. It is unclear whether the majority recognizes that there could ever be a bona fide fee dispute arising from substandard attorney work in the absence of special obligations created by contract. This is an important question, since the case moves further toward treating all attorney malpractice cases as negligence cases and not contract actions in the absence of specific contractual terms. See ante, ¶ 24 (plaintiff’s claim was properly construed as a tort claim because plaintiff did not allege that defendant breached any special obligations in his employment contract with defendant, nor could he as their agreement was oral and contained no specific or special obligations).
¶ 47. Thus, it is difficult to discern not only what the rule is, but what the governing principle underlying that rule is, so that it may be applied in variant factual circumstances in the future. For example, imagine a plaintiff who is convicted of driving under the influence (DUI) after a trial in which his privately retained counsel performed competently prior to trial but made numerous errors at trial, or perhaps slept through it, to use plaintiff’s example. The plaintiff, with different counsel, obtains a reversal on appeal. To avoid a retrial, he subsequently pleads guilty to the lesser charge of *416negligent operation with the same fíne amount he previously paid.9 Can he assert a malpractice claim for that portion of the fees paid to the first trial attorney for incompetent work in the trial portion of the case? It is work that would have been charged for, whether it was competent or not. If he is barred from such a recovery by the holding in this case, how does the rule of law differ from the actual innocence rule? If he is not, what is the basis for the difference?
¶ 48. In the broadest application of the majority decision, it would insulate all professionals from malpractice suits in which clients seek a return of fees paid where there are no special contractual obligations. In its narrowest application, it appears indistinguishable from the actual innocence rule. Because of the lack of clarity, it is not helpful to either attorneys or trial judges, and .carries the risk of inconsistent interpretation.
¶ 49. Alternatively, the conclusion that “plaintiff cannot establish proximate cause for these fees” may be read as a determination of fact. Determination of proximate cause requires a finding by the trier of fact except in rare circumstances. Roberts, 2003 VT 10, ¶¶ 14-15; Fritzeen v. Trudell Consulting Eng’rs, Inc., 170 Vt. 632, 635, 751 A.2d 293, 297 (2000) (mem.) (“Proximate cause is ordinarily an issue to be resolved by the jury unless the proof is so clear that reasonable minds cannot draw different conclusions or where all reasonable minds would construe the facts and circumstances one way.”) (quotations and citations omitted). Thus, it is the fact-finder’s task to find proximate cause, especially where there are various possible causal contributors to an event, such that “[t]he proof and facts ... do not lend themselves to ... singular clarity.” Fritzeen, 170 Vt. at 635, 751 A.2d at 297.
¶ 50. If the Court is making a factual determination, it is not based on a review of the evidence, as the nature of the appeal did not call for a review of evidence presented at trial. The trial judge as fact-finder never made such a determination based on the trial evidence because he applied the actual innocence rule. Therefore, I would remand to the trial court for a factual finding of whether defendant’s negligence was the proximate cause of any harm to plaintiff in relation to fees paid for services.
*417III. The actual innocence rule
¶ 51. I turn last to the issue presented for appellate review: “Did the Superior Court err by adopting an ‘actual innocence’ rule?” The majority states that it chooses to leave this issue deliberately undecided. I would hold that the rule is not applicable in this case because the policy reasons underlying the rule have little weight in a fee case such as this one.
¶ 52. In general, the actual innocence rule precludes a criminal defendant from recovering money damages in a malpractice action against his trial attorney for effects of conviction, such as time spent incarcerated, unless he can establish his “actual innocence” in relation to the subject matter of the legal representation. See generally 3 R. Mallen & J. Smith, Legal Malpractice §§ 26.13-26.17, at 912-77 (2006 ed.). Some courts view “actual innocence” as an additional element required to sustain a criminal malpractice action; others view a criminal defendant’s guilt as relevant to the element of proximate cause inherent in any legal malpractice proceeding. Compare Wiley v. County of San Diego, 966 P.2d 983, 985 (Cal. 1998) (proof of “actual innocence” is required as additional element in criminal malpractice action) with Peeler v. Hughes & Luce, 909 S.W.2d 494, 498 (Tex. 1995) (criminal defendant cannot establish proximate cause in criminal malpractice action, as a matter of law, unless his conviction has been overturned because it is the illegal conduct rather than the negligence of his counsel that is the cause-in-fact of any injuries flowing from the conviction). The line between the “actual innocence” rule and proximate cause can be difficult to discern. Thus, in Krahn v. Kinney, 538 N.E.2d 1058, 1060-62 (Ohio 1989), the Ohio Supreme Court declined to adopt an “actual innocence” requirement for criminal malpractice actions but recognized that, in most cases, the failure to secure a reversal of the underlying criminal conviction may bear upon and even destroy a plaintiff’s ability to establish proximate cause for damages.10
*418¶ 53. Those courts that have adopted the “actual innocence” rule generally identify compelling public policy reasons for its use, including prohibiting criminal defendants from profiting financially where their underlying conduct may have been wrongful. See, e.g., Wiley, 966 P.2d at 985-87 (adopting actual innocence rule and finding rule justified by public policies against allowing an individual to profit by his own fraud, or to take advantage of his own wrong, or to found a claim upon his iniquity, or to acquire property by his own crime, and stating that “allowing civil recovery for convicts impermissibly shifts responsibility for the crime away from the convict”). These policy considerations are most relevant where: (1) a criminal defendant’s conviction is reversed or vacated due to the attorney’s error; (2) the client subsequently pleads guilty or no contest to the same criminal charge and receives a sentence with credit for time served; and (3) the client then seeks money damages from the trial attorney for the first conviction. See, e.g., Brown v. Theos, 550 S.E.2d 304, 306 (S.C. 2001). In such cases, the effect of the rule is consistent with the requirements of proof of proximate causation: the defendant has little prospect of being able to prove causation between the negligence and the claimed harm of imprisonment. Either the underlying criminal conduct, or the guilty plea in which the defendant accepts responsibility for criminal conduct, is seen as the cause of incarceration, eclipsing the attorney’s negligence as the proximate cause.
¶ 54. The policy reasons underlying the actual innocence rule lose their force in the context of a fee dispute. They are outweighed by competing policy considerations, such as the basic principle of professional accountability through civil liability. The facts of this case illustrate the disjunction between the purposes for the rule and its effect in fee cases. Here, the trial court found that defendant was negligent because he failed to object to a faulty jury instruction on reasonable doubt and he failed to raise the issue on direct appeal. This issue is fundamental to representation of a client at a criminal jury trial. Although defendant acted negligently, the court denied plaintiff’s claim for relief because he could not establish his “actual *419innocence.” The court cited to Wiley, 966 P.2d at 986, indicating its approval of the public policy reasons expressed in the decision.
¶ 55. The policy considerations cited by the trial court in support of its decision have little relevance to plaintiff’s claimed harm — loss of money paid for substandard work. While it may be reasonable for a fact-finder to conclude that a plaintiff who seeks money damages for incarceration cannot establish causation unless he can show the incarceration was wrongful, the use of the actual innocence rule in this case is overbroad as plaintiff seeks only return of fees paid for negligent work and not compensation for incarceration. Cf. Wiley, 966 P.2d 983 (court adopted “actual innocence” rule in case where criminal defendant sued public defender for malpractice after his conviction was vacated and jury awarded him $162,500 in damages for effects of conviction; appeals court overturned award because Wiley could not establish his “actual innocence”). Plaintiff may or may not have presented sufficient evidence below to show a causal link between the negligence and an amount of unjustified attorney’s fees paid. The trial court should evaluate all of the evidence, including plaintiff’s guilty plea and the effect of defendant’s negligence on the fees charged, to determine if cause-in-fact has been proved, rather than rely on a rule of thumb developed for different factual circumstances.
¶ 56. Applying an actual innocence rule as a matter of law on these facts deprives a client who pays value for a competent legal defense of even the opportunity to make a showing of proof of causation. See Lynch v. Warwick, 115 Cal. Rptr. 2d 391, 398-400 (Ct. App. 2002) (McDonald, J., dissenting) (asserting that policy concerns underlying actual innocence rule are inapplicable where plaintiff claims that he incurred attorney’s fees for services that were either not performed or inadequately performed, and stating that “[a] criminal defendant’s guilt should not deprive him or her of the right to recover money paid to his or her attorney for legal representation that was not provided.”); see also Bird, Marella, Boxer & Wolpert v. Superior Ct., 130 Cal. Rptr. 2d 782, 786-89 (Ct. App. 2003) (distinguishing Lynch, and holding that fee dispute between client and former counsel does not entail policy considerations that arise from malpractice suits that invoke actual innocence rule); Saffer, 670 A.2d at 533-35. Moreover, because the client is deemed unable to show the element of causation, the client never has the opportunity to show negligence. The result is a complete denial of any remedy for having paid a professional for negligent work.
*420¶ 57. This is particularly true in light of the trend in Vermont, illustrated by this case, of treating attorney malpractice cases as sounding in negligence rather than contract, absent specific contract terms.11 See ante, ¶ 24. If the actual innocence rule precludes a person who has paid a privately retained attorney for competent professional services from having a negligence remedy for malpractice, and there is no ability to pursue a breach-of-contract claim, then there is no remedy available for malpractice at all in fee cases. The salutary effect of promoting professional competence through civil liability is lost.
¶ 58. The Court stated in Roberts that it was “not prepared to eliminate the causation requirement” from the tort of legal malpractice. 2003 VT 10, ¶ 16. The application of the actual innocence rule to the facts of this case would have an opposite but equally significant effect: it would eliminate the tort itself as applied to private criminal defense attorneys, at least as to claims for return of fees paid to that attorney. As long as their clients enter a plea of guilty to even one criminal act, however minor in relation to the original charged conduct, such attorneys are essentially immunized and their clients would not even have the opportunity to meet the burden of proof. This effect is not consistent with generally applicable principles of negligence law. As applied to fee dispute cases, there is no apparent social policy that would justify it. I would remand for the trial judge to make a factual finding on proximate cause on the basis of the evidence presented at the trial below.

 Cravens calls upon judges to think carefully about what course to take when confronted with the question, and notes that her research has shown that the issue “has not yet attracted the kind of attention that it merits.” Id. at 297.

 Any discussion of the actual innocence rule necessarily encompasses issues of proximate causation, but not all discussions of proximate causation in negligence cases involve the actual innocence rule. Compare ante, ¶ 26, with discussion infra, ¶ 52.

 The issue of whether a negligent attorney may retain all or a part of fees paid is complex, as illustrated by the numerous cases from other jurisdictions discussed in Saffer v. Willoughby, 670 A.2d 527, 533-35 (N.J. 1996) (addressing whether lawyer facing malpractice claim should be precluded from recovering any fee that was proximately related to alleged negligence, and holding that “[ojrdinarily, an attorney may not collect attorney fees for services negligently performed.”).

 A person may be motivated to plea to the lesser charge to eliminate the risk of significant collateral effects of a DUI conviction as well as limit expense and delay.

 Other courts have similarly recognized the close relationship between the actual innocence rule and an analysis of proximate cause. See, e.g., Wiley, 966 P.2d at 991 (Werdegar, J., concurring) (arguing that court should not add a new element to tort of malpractice because ordinary principles of tort law typically offer other paths to the conclusion that persons found guilty of crimes may not obtain damages from their defense attorneys, and explaining that “[t]he doctrine of proximate cause, for example, generally makes it difficult or impossible ... to show that any ensuing consequences can fairly be attributed to an attorney’s negligent representation”); Canaan v. Bartee, *41872 P.3d 911, 920-21 (Kan. 2003) (adopting exoneration requirement as additional element of criminal malpractice action but stating that adoption of the rule “could be construed simply as a recognition that a plaintiff has no cause of action until he or she can establish the causation element of his or her claim,” i.e., until a plaintiff has been exonerated, his or her criminal conduct and not his or her attorney’s negligence is the proximate cause of his or her incarceration).

 Plaintiff did not appeal the trial court’s ruling that a legal malpractice case, whether framed as a negligence or contract claim, sounds in negligence absent specific contract terms. Thus, the issue was not before the Court for decision. Cf. Lynch, 115 Cal. Rptr. 2d at 400 (McDonald, J., dissenting) (challenging majority’s treatment of contract claim against attorney as negligence claim subject to actual innocence requirement, and stating that majority’s conclusion that a claim was a tort claim even though only a contract remedy was sought was “bizarre and without cited authority,” and concluding that “[t]he proof of tort causation problem posited by the majority does not exist when the claim, as in this ease, is limited to the reasonable value of services rendered.”).