Brennan-Centrella v. Ritz-Craft Corp.

• Decision Date: 05 November 2019
• Docket Number: 18-867-cv(XAP),Docket Nos. 18-729-cv(L),August Term, 2018
• Parties: Mary BRENNAN-CENTRELLA, Carmine Centrella, Plaintiffs-Counter-Defendants-Appellees-Cross-Appellants, v. RITZ-CRAFT CORP. OF PENNSYLVANIA, Defendant-Cross-Claimant-Appellant-Cross-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

942 F.3d 106

Mary BRENNAN-CENTRELLA, Carmine Centrella, Plaintiffs-Counter-Defendants-Appellees-Cross-Appellants,

v.RITZ-CRAFT CORP. OF PENNSYLVANIA, Defendant-Cross-Claimant-Appellant-Cross-Appellee.¹

Docket Nos. 18-729-cv(L)

18-867-cv(XAP)

August Term, 2018

United States Court of Appeals, Second Circuit.

Argued: April 15, 2019

Decided: November 5, 2019

STEPHANIE DIVITTORE, Barley Snyder LLP (Matthew S. Borick, Downs Rachlin Martin PLLC, on the brief), Harrisburg, PA, for Defendant-Cross-Claimant-Appellant-Cross-Appellee.

JOSHUA L. SIMONDS, The Burlington Law Practice, PLLC (Kathryn G. Kent, Lewis Kent, LLP, on the brief), Burlington, VT, for Plaintiffs-Counter-Defendants-Appellees-Cross-Appellants.

Before: KEARSE, WINTER, and POOLER, Circuit Judges.

POOLER, Circuit Judge:

Following a jury trial in the United States District Court for the District of Vermont (John M. Conroy, M.J. ), Mary Brennan-Centrella and Carmine Centrella were awarded damages against Ritz-Craft Corp. of Pennsylvania after a jury found that the company violated the Vermont Consumer Protection Act in selling and constructing a modular home that the couple purchased for their retirement, and Ritz-Craft appealed. After trial, the Centrellas moved to alter the judgment to include prejudgment interest. The district court denied their motion, and the Centrellas cross-appealed. The cross-appeal raises a novel question of state law: whether a court may grant prejudgment interest to private litigants who are awarded compensatory damages under the Vermont Consumer Protection Act, Vt. Stat. Ann., tit. 9, § 2461(b). Because this question presents a determinative issue of state law on which there is no clear and controlling precedent, we certify this question to the Vermont Supreme Court.

We resolve the remaining claims in this appeal and cross-appeal by a separate summary order filed today.

BACKGROUND

Mary Brennan-Centrella and Carmine Centrella purchased a modular home that was constructed in Isle La Motte, Vermont, where the couple intended to retire. The Centrellas were particularly interested in purchasing an energy-efficient home that would meet Vermont's energy code, and they approached their search for a modular home builder with this concern at the fore. After researching options, the Centrellas entered into a contract with Mountain View Modular Homes, Inc. ("Mountain View"). Mountain View was an affiliated builder for Ritz-Craft Corporation of Pennsylvania, Inc. ("Ritz-Craft"), meaning that, among other things, Ritz-Craft supplied modular units for Mountain View's builders.

The Centrellas thoroughly researched Ritz-Craft construction before purchasing their home and discovered that Ritz-Craft represented that its modular homes were energy efficient. In particular, the Centrellas reviewed information about Ritz-Craft on Mountain View's website, which included several sections detailing Ritz-Craft homes.² In one such section, Ritz-Craft represented that it was an Energy Star partner that was "committed to using energy efficient building methods and materials" to create environmentally friendly homes. Supp. App'x at 12. Energy Star-qualified new homes are substantially more energy efficient than homes built to the minimum code. The website further represented that a Ritz-Craft home would be "built to ALL applicable Local and State codes and verified by a 3rd party prior to shipment." Supp. App'x at 14. Ritz-Craft's own website informed consumers that "it is important to note that all Ritz-Craft homes are inherently Green and energy efficient due to our detailed construction methods." Ex. F to Def.'s Mot. Summ. J. at 1, Centrella v. Ritz-Craft Corp. of Pa. , No. 2:14-cv-111 (D. Vt. Feb. 16, 2016), ECF No. 63-7.³

Ritz-Craft representatives made similar statements to the Centrellas in person. Mary Brennan-Centrella testified that she and her husband toured a Ritz-Craft factory, where a representative "explained to me that whatever I purchased from [Ritz-Craft] was going to have to meet Vermont building codes. So this would be okay." App'x at 52.

The Centrellas also learned of Ritz-Craft's representations that it engaged in an integrated process with approved builders and oversaw the entire building process of its modular units. For example, Ritz-Craft provided consumers with "a list of steps" that the company takes to "ensure your home buying process runs smoothly." Supp. App'x at 13. One of the items on that list states, "Approximately 6-8 weeks after placing the order for your home, it is delivered to your site. We will then place the home on its foundation, and complete all outstanding facets of the process —from completing the heating & plumbing systems, to building the front porch & garage if desired." Supp. App'x at 13 (emphasis added). The Centrellas also relied on a corporate video that Ritz-Craft produced that, according to Carmine Centrella's testimony, left the impression that Ritz-Craft would "guarantee" and "stand[ ] behind th[e] home" it sold. Supp. App'x at 101.

The Centrellas decided to contract with Mountain View for a Ritz-Craft modular home. However, soon after they moved into the house, they began to experience issues from the home's poor construction. Specifically, the problems with the home included that if one turned on the heat downstairs, the upstairs would be heated instead; water leaked onto the upstairs floor and the first floor; a plumbing inspection revealed code violations in the plumbing and heating systems, as well as elevated carbon monoxide levels; the upstairs pipes froze; and the insulation was not installed properly.

Seeking to recoup their losses from purchasing the faulty home, the Centrellas brought this action against Mountain View and Ritz-Craft for violations of, inter alia, the Vermont Consumer Protection Act ("VCPA"), Vt. Stat. Ann., tit. 9, § 2461(b), and breach of express and implied warranties. The Centrellas claimed that Mountain View's and Ritz-Craft's representations that the modular home would be energy efficient and compliant with local energy codes and that Mountain View and Ritz-Craft would cooperatively ensure proper construction of the home were materially misleading. The couple sought three types of damages on their VCPA claim: (1) judgment "in the amount of the consideration paid of $246,673 attributable to Defendant or the damages attributable to Defendant if greater, and occasioned by Defendant's violation of the Consumer Protection Act," (2) "damages suffered by Plaintiffs due to inconvenience, time and expense for coordinating necessary repairs, excessive heating costs, mental anguish, for a reasonable sum for the loss of enjoyment for the use of the home and for time and expense in prosecuting this action," and (3) treble damages. Am. Compl. at 13-14, ECF No. 77.

Mountain View defaulted while the case was still in the discovery phase, leaving Ritz-Craft as the only remaining defendant.

In preparation for trial, the parties submitted a joint trial memorandum, which included the Centrellas' statement of damages. The Centrellas sought "the consideration provided to Ritz-Craft of approximately $97,000 for its violation of the VCPA." Joint Trial Mem. at 32, ECF No. 92. The parties ultimately stipulated that if the jury found that Ritz-Craft had violated the VCPA, the Centrellas would be entitled to $94,262 in damages, which was the amount of consideration the Centrellas paid to Ritz-Craft for the modular home. After a five-day trial, a jury found that Ritz-Craft had violated the VCPA and awarded the Centrellas the stipulated $94,262 in damages. The jury found in favor of Ritz-Craft on the Centrellas' warranty claims.

Thereafter, Ritz-Craft moved for post-trial relief under Federal Rules of Civil Procedure 50 and 59, seeking to challenge the jury verdict on a number of grounds. That same day, the Centrellas moved to alter the judgment to include prejudgment interest and for an award of costs and attorneys' fees.⁴

As relevant to this opinion, the district court denied the Centrellas' motion for prejudgment interest. The court first observed that "it is at least noteworthy that although the VCPA contains a provision for an award of ‘reasonable attorney's fees,’ it does not contain such a provision for prejudgment interest." Centrella v. Ritz-Craft Corp. of Pa., Inc. , No. 2:14-cv-111, 2018 WL 840041, at *12 (D. Vt. Feb. 12, 2018). The district court did not wrestle with whether prejudgment interest might nonetheless be available on VCPA damages awards because it concluded that "the amount of damages was not reasonably ascertainable" and declined to award prejudgment interest. Id. This cross-appeal followed.

DISCUSSION

Vermont Rule of Appellate Procedure 14(a) permits a federal court to certify a question of Vermont law to the Vermont Supreme Court "if the answer might determine an issue in pending litigation and there is no clear and controlling Vermont precedent." Vt. R. App. P. 14(a). Reciprocally, Second Circuit Local Rule 27.2 provides that this "court may certify a question of state law to that state's highest court." 2d Cir. L.R. 27.2. This Court may certify a question to afford the state court "the first opportunity to decide significant issues of state law," and we have done so when a question "presents purely state law issues, controls the outcome of th[e] case, and lacks controlling precedent." Preseault v. City of Burlington , 412 F.3d 96, 102 (2d Cir. 2005) (internal quotation marks omitted).⁵

The case before us presents a dispositive question of pure state law for which there is no clear and controlling Vermont precedent: whether a court may grant prejudgment interest to private litigants who are awarded compensatory damages under the Vermont Consumer Protection Act, Vt. Stat. Ann., tit. 9, § 2461(b).

I. Prejudgment Interest in Vermont

Vermont Rule of Civil Procedure 54(a) creates a right to prejudgment interest as a component of a judgment in certain circumstances. In relevant part, Vermont...