Burton v. Jeremiah Beach Parker Restoration and Const. Mgmt. Corp.

• Citation: 6 A.3d 38,2010 VT 55
• Decision Date: 22 July 2010
• Docket Number: No. 09-312.,09-312.
• Parties: Al BURTON v. JEREMIAH BEACH PARKER RESTORATION AND CONSTRUCTION MANAGEMENT CORP. and Jeremiah Beach Parker.
• Court: United States State Supreme Court of Vermont

6 A.3d 38

2010 VT 55

Al BURTON

v.JEREMIAH BEACH PARKER RESTORATION AND CONSTRUCTION MANAGEMENT CORP. and Jeremiah Beach Parker.

No. 09-312.

Supreme Court of Vermont.

June 21, 2010.

Motion for Reargument Denied July 22, 2010.

Present: DOOLEY, JOHNSON, SKOGLUND, BURGESS, JJ., and ZONAY, District Judge, Specially Assigned.

ENTRY ORDER

¶ 1. Al Burton, the homeowner in this construction-contract dispute, appeals from a superior court order awarding attorney's fees to the contractor, Jeremiah Beach Parker Restoration and Construction Management Corporation. Burton contends the trial court erred in awarding attorney's fees because: (1) the attorney's fee provision of the Prompt Payment Act, 9 V.S.A. § 4007(c), had expired; (2) the contractor was found to be in breach of contract; (3) the contractor was not the "substantially prevailing party" under the Act; (4) the attorney's fee motion was untimely; and (5) Burton was not afforded a reasonable opportunity to be heard. In addition, Burton contends the court erred in denying a motion to extend the appeal period for the underlying judgment. For the reasons set forth below, we affirm.

¶ 2. The basic facts of this dispute may be briefly summarized. Additional material facts will be set forth in the discussion which follows. In February 2002, Burton entered into an agreement with contractor for substantial renovations to Burton's property in Benson, Vermont. Contractor began work, but disputes over certain changes in the renovation plans led to a breakdown in the relationship, and Burton ultimately filed this lawsuit seeking damages for breach of contract, breach of the implied covenant of good faith and fair dealing, common law fraud, breach of fiduciary duty, violation of the Consumer Fraud Act, and negligent misrepresentation. Contractor counterclaimed for breach of contract, claiming that Burton had wrongfully hired other contractors to perform work specified in the contract, and failed to pay invoices in a timely manner.

¶ 3. The trial court (Judge Katz presiding) granted contractor's pretrial motion to dismiss several of the counts, and the remaining claims were tried before the court (Judge Toor presiding) over several days in March and July 2008. In August 2008, the court issued written findings and conclusions, ruling in favor of Burton on his breach-of-contract claims for defectiveworkmanship on a "ridge beam," for which it awarded damages of $2,000, and overbilling, for which it awarded damages of $6,627, but found no evidence to support Burton's remaining claims for which he had sought extensive additional damages. The court ruled for contractor on its counterclaim, awarding damages of $4,901 plus interest (later calculated to total about $3,160), and directed the parties to submit a proposed judgment order. Thereafter, on October 20, 2008, the court issued a written judgment order which, after deducting contractor's award, resulted in a net judgment to Burton of $566. Burton did not appeal.

¶ 4. Contractor then moved for an award of attorney's fees under the Prompt Payment Act, which provides that, "[n]otwithstanding any contrary agreement, 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 or arbitrator, together with expenses." 9 V.S.A. § 4007(c). The court granted the motion in March 2009, finding that contractor was the substantially prevailing party, and ordered contractor to submit an affidavit detailing its fees "so that Burton may be heard on their reasonableness." Thereafter, with the exception of several minor charges, the court found the amounts claimed to be reasonable and awarded contractor attorney's fees totaling $81,043 plus costs of $8,124. In the same order, the court denied Burton's motion to permit an appeal from the underlying judgment. This appeal followed.

¶ 5. Burton first contends the trial court lacked statutory authority to award attorney's fees because the fee provision of the Prompt Payment Act, 9 V.S.A. § 4007(c), had expired under a "sunset" provision prior to the effective date of an amendment repealing the expiration clause. Burton did not raise this issue with the trial court in his opposition to the motion for attorney's fees and therefore did not preserve it for review on appeal. Progressive Ins. Co. v. Brown, 2008 VT 103, ¶ 6, 184 Vt. 388, 966 A.2d 666 (to rely upon an argument on appeal, appellant must properly preserve it by raising it with the trial court in a timely manner and with specificity and clarity).

¶ 6. Burton did eventually raise the issue below, but not in a timely manner. In granting the motion for attorney's fees, the trial court ordered contractor to submit an affidavit "detailing the fees so that Burton may be heard on their reasonableness" and authorized Burton to submit within ten days "written objections" to contractor's submission. About a month later, Burton filed a response citing the sunset provision and "ask[ing] the Court to reconsider its award of attorney['s] fees." The motion to reconsider was plainly untimely, however, and the trial court properly denied it. See V.R.C.P. 59(e) (motion to alter or amend must be filed no later than ten days after entry of judgment). Burton maintains that the court's decision granting the motion for attorney's fees was not a judgment, that the court contemplated additional briefing, and that Burton's subsequent pleading was not therefore a motion to reconsider but merely a supplemental filing. The arguments are unpersuasive. The order granting contractor's motion for attorney's fees was plainly a judgment on the merits of the motion and merely authorized contractor to submit a follow-up affidavit outlining the fees reasonably incurred and Burton to register any objections thereto. Indeed, Burton's subsequent pleading in which it asked the court to "reconsider its award of attorney's fees" acknowledged as much. Accordingly, we find that Burton'schallenge to the validity of the statute was not properly raised below, and therefore decline to address it. ¹

¶ 7. Burton next contends the trial court violated public policy in awarding attorney's fees to a party in breach of contract. Burton relies on Fletcher Hill, Inc. v. Crosbie, 2005 VT 1, ¶ 8, 178 Vt. 77, 872 A.2d 292, where we upheld the trial court's finding that it would be unfair to base an award of attorney's fees on a contract which the contractor had violated. As the trial court here correctly observed, however, our holding in Fletcher Hill was based on a contractual fee provision and did not apply to the statutory fee provision of the Prompt Payment Act, which we analyzed separately. Accordingly, the claim has no merit.

¶ 8. Burton further contends the trial court erred in determining that contractor was the "substantially prevailing party" under 9 V.S.A. § 4007(c). Burton notes that, even after set-offs, he remained the recipient of a net judgment of $566. As we explained in Fletcher Hill, 2005 VT 1, ¶ 14, 178 Vt. 77, 872 A.2d 292, however, identifying which-if any-of the parties substantially prevailed under § 4007(c) "falls within the trial court's discretion, and does not flow automatically from the calculation of the net victor." Indeed, relying on the plain language of the statute and decisions from other jurisdictions, we emphatically declined "to read 'substantially' out of § 4007(c) by equating the 'substantially prevailing party' with the party holding a net judgment." Id. ¶ 17. We concluded, rather, that in determining the prevailing party a trial court has greater discretion and may essentially apply-as one court has stated-a more "flexible and reasoned approach" focused on determining which side achieved a "comparative victory" on the issues actually litigated or the greater award "proportionally" to what was "actually sought." A.K. & R. Whipple Plumbing & Heating v. Guy, 2004 UT 47, ¶¶ 12, 14, 26, 94 P.3d 270 (quotation omitted); see also Trytek v. Gale Indus., Inc., 3 So.3d 1194, 1201 (Fla.2009) (holding that obtaining a "net judgment is significant but does not necessarily control the determination of the 'prevailing party' " and that "the trial court must have flexibility to consider the equities and determine which party prevailed on the significant issues"); Zavatchen v. RHF Holdings, Inc., 2006 PA Super 240, ¶ 6, 907 A.2d 607 (rejecting the claim that "determining whether a party substantially prevails turns on a simple mathematical comparison of the parties' respective recoveries"); Keystone Elevator Co. v. Johnson & Wales Univ., 850 A.2d 912, 918-19 (R.I.2004) (rejecting the notion that determining the prevailing party is "susceptible to mathematical precision" and holding that "the fairest test to determine who is the prevailing party is to allow the trial judge to determine from the record which party has in fact prevailed on the significant issues tried before the court") (quotation omitted).

¶ 9. Assessed in light of this flexible standard, we find no basis to conclude thatthe trial court abused its discretion in finding contractor to be the substantially prevailing party. Relying expressly on Fletcher Hill, the trial court here explained its reasoning clearly and succinctly, observing that, although it had awarded some damages to both parties, it had "ruled against Burton on most of his claims" and as a result Burton had "recovered [only] a tiny fraction of what he sought." The record amply supports these findings. Although Burton asserted six separate grounds of recovery, contractor prevailed on its pretrial motion to dismiss the claims for breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, and breach of contract predicated upon contractor's alleged failure to submit the subcontract work to competitive bidding. As to the remaining claims, Burton's trial memorandum alleged five separate construction...