Court Opinion

ID: 9774704
Source: CourtListenerOpinion
Date Created: 2023-08-29 18:31:05.121248+00
Date Added: 2024-06-11T07:32:14.163150
License: Public Domain

Zonay, District Judge,
¶ 17. Specially Assigned, concurring and dissenting. While I concur with the majority opinion as it relates to the timeliness of the attorney’s fee request, and the denial of Burton’s Rule 58 motion, I dissent as to the remaining issues. The majority fails to address whether the attorney’s fee provision of the Prompt Payment Act (the Act), 9 V.S.A. § 4007(c), ejqjired on June 30, 1996, instead concluding that Burton failed to preserve this legal issue for our review. I believe the issue was preserved and that 9 V.S.A. § 4007(c) expired on June 30, 1996. Even if § 4007(c) is in effect, however, I do not agree that contractor is the substantially prevailing party Accordingly, I would vacate the award of attorney’s fees under the Act.
¶ 18. The majority reasons that because Burton did not raise his statutory argument in his initial opposition to contractor’s motion for attorney’s fees, he did not preserve it for our review. This approach misapplies both the rules of civil procedure and our rules on preservation.3 The record indicates that contractor requested attorney’s fees in a November 2008 motion, which Burton opposed. The court granted contractor’s motion in a March 2009 entry order, finding that contractor was the substantially prevailing party under § 4007(c). The court ordered contractor to submit an affidavit detailing the fees so that Burton could be heard on their reasonableness, following which Burton would have ten business days to file written objections to the fee request. Contractor filed its affidavit on March 27. Burton responded on April 14, and again on April 22. This later filing raised and briefed the statutory sunset issue, asking the court in relevant part to reconsider its initial ruling on the merits of contractor’s motion.
¶ 19. The majority construes Burton’s April 22 filing as a motion to alter or amend under Vermont Rule of Civil Procedure 59(e), and concludes that the filing was untimely because it was not filed within ten days “after the entry of the judgment.” This is error because no judgment within the meaning of the rules had yet been entered. Rule 59(e) applies to final appealable judgments, not to interlocutory orders. It is designed to allow parties to “take advantage of the court’s power to correct a judgment in order to avoid an appeal and its attendant delay” Osborn v. Osborn, 147 Vt. 432, 433, 519 A.2d 1161, 1163 (1986). Consistent with this purpose, a timely filed Rule 59 motion “suspends the finality of the judgment,” id., and tolls the running of the appeal period, V.R.A.P. 4(b).
¶20. The trial court’s ruling in this case, by its own terms, was not a final judgment that set forth the actual award but merely an interlocutory order from *590which no appeal could be taken. See Morissette v. Morissette, 143 Vt. 52, 58, 463 A.2d 1384, 1388 (1983) (holding that for a judgment to be final it must make a final disposition of the subject matter before the court); see also V.R.C.P. 54(d)(2)(C) (stating that trial court shall enter “a separate judgment” as provided in Rule 58 in ruling on motion for attorney’s fees); V.R.C.P. 54(a) (“ ‘Judgment’ as used in these rules includes a decree and any order from which an appeal lies.”). As this Court has held, “until final decree the court always retains jurisdiction to modify or rescind a prior interlocutory order.” Kelly v. Town of Barnard, 155 Vt. 296, 307, 583 A.2d 614, 620 (1990) (quotation omitted); see also Dudley v. Snyder, 140 Vt. 129, 131, 436 A.2d 763, 764-65 (1981) (although defendant labeled his motion as one for relief from judgment under Rule 60, motion was in substance a request to revise an interlocutory order, and, as such, it was within the trial court’s plenary power to revise its decision and afford such relief as justice requires); Brown v. Tatro, 136 Vt. 409, 411, 392 A.2d 380, 382 (1978) (“[A]n interlocutory order or judgment is left within the plenary power of the court that rendered it to afford such relief as justice requires ....”). Burton was not required under Rule 59 to file his opposition to the award of attorney’s fees within ten days, and the trial court retained its ability to consider the legal issue raised in his filing.
¶ 21. While the rules did not impose a ten day requirement, the trial court’s March 23 ruling itself contained such a requirement. Notably, however, the trial court did not decline to consider the sunset issue on the basis of the date of Burton’s filing. Rather, in its July 31,2009 ruling granting the motion for attorney’s fees, the trial court acknowledged Burton’s filing and wrote: “Treating those objections as a motion to reconsider, they are denied.” While I agree with the majority that the trial court was not required to reach the merits of the motion for reconsideration, I do so on the basis of the time limit set forth in the March 23 ruling, not Rule 59. Regardless, I cannot agree that the trial court’s order can be fairly read as an indication that it did not consider the merits of the opposition.
¶ 22. That the trial court may not have been obligated to consider the opposition under its March 23 ruling does not mean that it did not have the ability to consider it on its merits, or that it did not actually consider it. Without a clear indication that the trial court was declining to address the merits of the opposition as a sanction for the late filing, I cannot read its decision as one where it did not consider it. Given that a trial court reaches the merits of motions to reconsider filed under Rule 59, the language used by the trial court here necessarily means that the merits were considered, but that they did not alter the court’s decision.4
¶ 23. It is clear that the sunset issue was directly raised before the trial court and, in my view, was properly preserved. As this Court has held, “[t]he purpose of the [preservation] rule is to ensure that the original forum is given an opportunity to rule on an issue prior to our review.” In re Entergy Nuclear Vt. Yankee, LLC, 2007 VT 103, ¶ 9, 182 Vt. 340, 939 A.2d 504 (quotation omitted). “The preservation rule is satisfied when the trial court had a fair opportunity to consider, evaluate and rule upon the question raised on appeal.” Vt. Built, Inc. v. Krolick, 2008 VT 131, *591¶ 10, 185 Vt. 139, 969 A.2d 80 (quotation omitted). Burton’s opposition clearly advanced the argument about the sunset provision, and the trial court had a fair opportunity to “consider, evaluate and rule upon” this question in its July 31, 2009 ruling. Thus, I believe the issue is properly before this Court and must be addressed on its merits. Cf. ante, ¶ 6 n.1 (citing Reed v. Zurn, 2010 VT 14, ¶ 12, 187 Vt. 613, 992 A.2d 1061 (mem.) (holding that issue not preserved for this Court’s review where party did not raise legal argument at trial with specificity, but instead attempted — in a one-sentence argument — to raise issue post-judgment by citing to vague trial testimony)).
¶ 24. Burton correctly asserts that the attorney’s fee provision is no longer in effect. The Act, as originally enacted, stated that “[t]he provisions of 9 V.S.A. § 4007(b) and (e) shall expire on June 30, 1996.” See 1991, No. 74, § 2 (effective Jan. 1, 1992). The Legislature attempted to strike this language in 1996. See 1995, No. 66 (Adj. Sess.), § 1. The bill passed by the Legislature, and signed by the Governor in April 1996, did not specify an effective date, however. Thus, the revision became effective on July 1, 1996, after the statutory provisions had expired. See 1 V.S.A. § 212 (“Laws enacted by the general assembly shall take effect on July 1 next following the date of their passage, unless it is otherwise specifically provided.”).
1125. The problem with this is simple: one cannot repeal the sunset provision on July 1,1996, when the statute had already expired on June 30,1996. While I recognize the clear legislative intent to repeal the sunset provision and to have the statutory provisions continue in effect after June 30,1996, this is not a case of the courts interpreting an ambiguous statute to effectuate legislative intent. See, e.g., Dep’t of Corr. v. Human Rights Comm’n, 2006 VT 134, ¶ 7, 181 Vt. 225, 917 A.2d 451 (stating that the paramount goal of statutory interpretation is to effectuate the intent of the Legislature and that this requires examining not only statutory language and legislative history, but also the legislative policies that the statute was designed to implement). Rather, the Court is obligated to enforce statutes as they are in effect or — in the instant case — not in effect. To conclude that 9 V.S.A. § 4007(b) and (c) somehow saw the light of dawn after they expired on June 30,1996 would effectively serve as the Court enacting a statute — a role reserved exclusively for the Legislature.
¶ 26. It also bears noting that, in declining to address the issue, the majority is leaving the validity of these statutory provisions for a future case. In my view, this imparts unnecessary uncertainty between those whose relationships are thought to fall within the Act, leads to legislative uncertainty since there is no determination from the Court as to whether the statutory provisions exist, and, most importantly, fails to address a properly preserved legal issue between the parties to the dispute now pending before the Court.
¶ 27. In sum, I would hold that 9 V.S.A. § 4007(b) and (c) expired and, as such, there was no legal basis to make a statutory award of attorney’s fees in favor of contractor. Further, though the contract may have contained a provision for attorney’s fees, the trial court’s conclusion that contractor breached the construction contract precludes any award of attorney’s fees under the contract. See Fletcher Hill, Inc. v. Crosbie, 2005 VT 1, ¶ 8, 178 Vt. 77, 872 A.2d 292. Accordingly, I would vacate the award of attorney’s fees.
¶28. Even assuming that 9 V.S.A. § 4007(c) was in force and applicable to the parties’ contractual relationship, I cannot agree with the majority that contractor was the “substantially prevailing party.” Under the Act, a homeowner is allowed to withhold “payment in whole or in part under a construction contract in an amount equaling the value of any good *592faith claims against an invoicing contractor . . . , including claims arising from unsatisfactory job progress, defective construction, disputed work or third-party claims.” Id. § 4007(a). “An amount shall not be deemed to have been wrongfully withheld to the extent it bears a reasonable relation to the value of any claim held in good faith by the owner . .. against which an invoicing contractor ... is seeking to recover payment.” Id. § 4007(b). Finally, the Act provides that “the substantially prevailing party in any proceeding to recover any payment within the scope of this chapter shall be awarded reasonable attorneys’ fees in an amount to be determined by the court . . . , together with expenses.” Id. § 4007(c).
¶ 29. In this case, Burton not only brought two claims in good faith equal to the amount he withheld from contractor, but he actually recovered on those claims — overbilling and faulty construction — to the point where contractor owed him money. The amount that Burton withheld bore a reasonable relation to the value of the claims he held in good faith; thus, the amount was not “wrongfully withheld.” See id. § 4007(b). Under the Act, it was Burton’s right to withhold this money, as § 4007(a) states that “[njothing in this chapter shall prevent an owner” from doing so in good faith.
¶ 30. Finally, contractor could not have been the substantially prevailing party in the proceeding because he did not actually recover any payment from Burton. Because of contractor’s overbilling and faulty construction work, Burton had already overpaid the contractor by $566. Contractor was never owed anything.
¶ 31. Under the majority’s reasoning, a contractor who overbills a client and provides faulty construction work may recover attorney’s fees even if the homeowner proves that all money withheld was withheld in good faith, as the statute allows. A contractor can accomplish this outcome as long as a homeowner simply brings too many claims against the contractor which cannot be proven (even if they were brought in good faith), despite the fact that the homeowner has not withheld any money for the nonprovable claims. Thus, while the purpose of the Act was to give a contractor a statutory right to recover for payments “wrongfully withheld,” the majority’s holding will allow a contractor to recover attorney’s fees even if he was not only never owed one cent, but in fact owed his client money.
¶ 32. The problem is even more apparent if the party roles of the homeowner and contractor are reversed, as it should not matter for prevailing-party status who was the plaintiff and who was the defendant. Take, for example, a case where a plaintiff-contractor brings a breach-of-contract claim for nonpayment against a defendant-homeowner. The defendant-homeowner brings counterclaims for overbilling, faulty construction, consumer fraud, and various other claims. Many of the homeowner’s claims survive summary judgment. At trial, the plaintiff-contractor wins on his claim of breach of contract. However, the defendant-homeowner wins on his claims of overbilling and faulty construction. The plaintiff-contractor had overbilled and provided faulty construction to the homeowner in an amount that was more than the defendant-homeowner withheld in breach. The plaintiff-contractor ends up owing the defendant-homeowner money. I fail to see how the plaintiff-contractor can be a substantially prevailing party in this situation. Yet, this was the situation in the instant case, only with the parties’ roles reversed.
¶ 33. As if the implications of the majority’s holding here were not serious enough at the superior court level, they are even more concerning at the small claims level, where a homeowner is more likely to appear pro se. Under the majori*593t/s reasoning, a pro se homeowner who withholds money from a contractor in good faith, and in fact recovers from the contractor, will have to pay the contractor’s attorney’s fees if the homeowner brought too many claims or counterclaims which he could not prove. Even if the homeowner can prove overbilling and faulty construction, as in this case, the contractor can still recover attorney’s fees if represented by counsel. A pro se homeowner, who believed he or she had won at trial, may end up owing the contractor many times more in attorney’s fees. This creates an incentive for contractors to overbill their clients and hope that the client brings too many claims that he or she cannot prove. The result is a chilling effect on plaintiffs not to bring otherwise good faith claims or counterclaims against a contractor whenever a contractor has asserted a prompt payment claim or counterclaim.
¶ 34. Reversing the attorney’s fee award in this case is consistent with previous decisions addressing the attorney’s fee issue. See, e.g., Fletcher Hill, 2005 VT 1; DJ Painting, Inc. v. Baraw Enters., Inc., 172 Vt. 239, 247, 776 A.2d 413, 420 (2001) (affirming decision that contractor was the “substantially prevailing party” where all of plaintiffs claims against it were dismissed on summary judgment). The Court’s decision in Fletcher Hill stands only for the proposition that the “net victor” in a construction contract dispute will not automatically be entitled to attorney’s fees as the “substantially prevailing party.” 2005 VT 1, ¶ 14. The Court did not hold, as the majority states, ante, ¶ 8, that the trial court should focus on determining which side achieved a comparative victory on the issues actually litigated or the greater award proportionally to what was actually sought. The holding of Fletcher Hill is much more limited.
1135. In Fletcher Hill, a jury rendered a split decision in a construction contract dispute, awarding $15,067 to the contractor for breach of contract, and $4,000 to the homeowner based on the contractor’s failure to perform in a workmanlike manner. The trial court found that no party had substantially prevailed and declined to award attorney’s fees under 9 V.S.A. § 4007(c). The contractor appealed, arguing that it was entitled to attorney’s fees because there was a net award in its favor. This Court rejected the argument that the net victor was always entitled to attorney’s fees, reasoning that such an approach would effectively read the word “substantially” out of the statute. Id. ¶ 17. The Court did not consider whether the net-loser — in that case, the homeowner — could be considered the “substantially prevailing party.” In other words, the Court held that it is not enough under 9 V.S.A. § 4007(c) to simply “prevail” by obtaining a net judgment in one’s favor; a party must instead “substantially prevail.” In the instant case, Burton was the “net victor,” and Fletcher holds only that he was not automatically entitled to attorney’s fees as a result. It does not follow from the Court’s holding in Fletcher that a contractor who owes his client money for breach of contract can be considered a “substantially prevailing party” under 9 V.S.A. § 4007(c).
¶ 36. With one exception, the remaining cases cited by the majority do not involve the construction of statutory language similar to 9 V.S.A. § 4007(c) and, thus, are not controlling. See Fletcher, 2005 VT 1, 1Í16 (cases involving different statutory language do not control this Court’s interpretation of 9 V.S.A. § 4007(c)). In Matthews v. Candlewood Builders, Inc., 685 S.W.2d 649 (Tex. 1985) (per curiam), for example, the court applied a provision in the state’s consumer protection act, which allowed consumers who prevail on claims brought under the Texas Deceptive Trade Practices-Consumer Protection Act to be awarded court costs and reasonable and necessary attorney’s fees. *594Id. at 650 (citing McKinley v. Drozd, 685 S.W.2d 7, 8-9 (Tex. 1985)). The Drozd court held that this provision must be liberally construed in light of the remedial purpose of the consumer protection act, and concluded that consumers could recover attorney’s fees “incurred in the successful prosecution of a claim for damages under the Act, even though the claim might be entirely offset by a claim of an opposing party.” 685 S.W.2d at 9. The Matthews court merely reiterated this conclusion and applied this standard to the case before it. 685 S.W.2d at 650. The fact that one can “prevail” when one recovers damages on a Texas consumer-protection claim says nothing about when a party should be considered a “substantially prevailing party” for purposes of 9 V.S.A. § 4007(c). The remaining cases cited by the majority are similarly unavailing. See Trytek v. Gale Indus., Inc., 3 So. 3d 1194, 1196, 1201-02 (Fla. 2009) (to evaluate parties’ entitlement to attorney’s fees as the “prevailing party,” trial court should look to which party prevailed on the “significant issues,” and fact that claimant recovers a net judgment is a significant, though not controlling, factor); Keystone Elevator Co. v. Johnson & Wales Univ., 850 A.2d 912, 918-19 (R.I. 2004) (construing phrase “prevailing party” in attorney’s fee provision and adopting Florida “significant issues” test); A.K. & R. Whipple Plumbing & Heating v. Guy, 2004 UT 47, ¶ 11, 94 P.3d 270 (interpreting meaning of phrase “successful party” for purposes of recovering attorney’s fees, and stating that a good starting point for analysis is which party won a “net judgment” in its favor).
¶ 37. The Pennsylvania Superior Court’s decision in Zavatchen v. RHF Holdings, Inc., cited by the majority, ante, ¶ 8, supports a conclusion opposite to that reached by the majority here. 2006 PA Super 240, 907 A.2d 607. In Zavatchen, a claimant filed suit against several contractors, seeking damages of approximately $90,000. The contractors denied liability and requested reimbursement of their attorney’s fees under the state’s Contractor and Subcontractor Payment Act (CSPA). The court entered a verdict in favor of claimant for $300. The contractors then requested attorney’s fees, arguing that they were the “substantially prevailing party” under the CSPA given the claimant’s small recovery in proportion to his claimed damages. Zavatchen, 2006 PA Super 240, ¶ 5; see also Fletcher Hill, 2005 VT 1, ¶ 17 (noting that Pennsylvania statute allowing for recovery of attorney’s fees in construction-contract disputes is identical to Vermont statute). The trial court denied the contractors’ request, and the superior court affirmed its decision on appeal. The court rejected the contractors’ argument that they “substantially prevailed” because the claimant was awarded less than one percent of the damages sought in his complaint, as well as their assertion that “determining whether a party substantially prevails turns on a simple mathematical comparison of the parties’ respective recoveries.” Zavatchen, 2006 PA Super 240, ¶ 6. It found that the contractors “did not clearly prevail in the sense that a judgment was entered in their favor,” nor had they shown that the claimant’s claim was “groundless or frivolous.” Id. ¶ 11. The same can be said in the instant case.
¶ 38. It simply makes no sense to conclude that contractor substantially prevailed in its quest to recover payment within the scope of the Act, as required by 9 V.S.A. § 4007(c), where contractor recovered no payment whatsoever. This conclusion ignores the plain language of the statute, and it does not serve the purpose of the Act. See Elec. Man, Inc. v. Charos, 2006 VT 16, ¶ 12, 179 Vt. 351, 895 A.2d 193 (“The purpose of the prompt payment act is to provide protection against nonpayment to contractors and subcontractors.”). Indeed, the Court cau*595tioned against this very result in Electric Man, explaining that if the attorney’s fee provision were construed too narrowly, “owners who demonstrate that they should not have to pay a contractor’s bill because of nonperformance or poor-quality work may end up ... paying attorneys’ fees that exceed the amount of their nonpayment.” Id. In this case, Burton has been ordered to pay approximately $90,000 in attorney’s fees and costs to contractor, despite the fact that he withheld payment in good faith and prevailed in the proceedings below. The award of attorney’s fees and costs is unfounded both statutorily and logically, and it should be vacated.
¶39. I am authorized to state that Justice Johnson joins in this dissent.
Motion for reargument denied July 22, 2010.

 The majority cites Progressive Insurance Co. v. Brown, 2008 VT 103, ¶ 6, 184 Vt. 388, 966 A.2d 666, as support for the proposition that to preserve an issue an appellant must raise it with the trial court “in a timely manner and with specificity and clarity.” Ante, ¶ 5. In fact, Brown holds only that a party must present the issue to the trial court “with specificity and clarity.” 2008 VT 103, ¶ 6 (quotation omitted). Obviously, an argument must be “timely” in the sense that it was raised before the trial court, but, as discussed below, this requirement was plainly satisfied here.

 The majority reasons that, even if the trial court’s first ruling was interlocutory, the court acted within its authority in concluding “that Burton’s subsequent argument relating to the ‘sunset’ provision of the Prompt Payment Act was unrelated to [the question of the reasonableness of the attorney’s fees], dilatory, and not properly raised.” Ante, ¶ 6 n.1. In fact, the trial court made no such findings in this case.