CWS Invs. v. Dydo

• Court: Superior Court of Vermont
• Writing for the Court: Alexander N. Burke, Superior Court Judge
• Citation: 2024 Vt Super 102803
• Docket Number: 24-CV-01714
• Decision Date: 28 October 2024
• Parties: CWS Investments, Inc. v. William Dydo, Jr.

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2024 Vt Super 102803

CWS Investments, Inc. v. William Dydo, Jr.

No. 24-CV-01714

Superior Court of Vermont, Civil Division, Rutland Unit

October 28, 2024

ENTRY ORDER

Alexander N. Burke, Superior Court Judge

On October 16, 2024, Plaintiff moved for default judgment on their claim for foreclosure of a judgment lien. As part of the motion, Plaintiff requested a clerk's accounting of amounts due from Defendant. The request for accounting was supported by a filing entitled "Affidavit of Attorney's Expenses," to which was attached an exhibit allegedly showing an itemized list of discrete expenditures- describe by type or purpose of expenditure amount, and date-which Plaintiff claimed were allowable or should be found by the clerk in its accounting of amounts due. On October 17, 2024, the Court granted the motion for default on the foreclosure claim, but construed the claim for "attorney's expenses" as not one for "[c]osts other than attorneys' fees," V.R.C.P 54(d)(1), but rather, as a claim for "attorneys' fees . . . and related nontaxable expenses," V.R.C.P 54(d)(2). Finding that Plaintiff had failed to "specify the judgment and statute, rule or other grounds entitling the moving party to the award" of attorneys' fees and related nontaxable expenses, V.R.C.P. 54(d)(2)(B), the Court denied Plaintiff s request for an accounting to the extent it sought an allowance of attorneys' fees and related nontaxable expenses.

On October 17, 2024, Plaintiff submitted a new filing, entitled "Renewed Affidavit of Attorney's Costs" (emphasis added).^[1] The filing is supported by the same exhibit listing itemized expenditures, but which Plaintiff now clarifies should be considered allowable "costs." Indeed, Plaintiff clarifies in its Renewed Affidavit that "Plaintiff is not requesting attorney's fees for this action, . . . [but] Plaintiff should be entitled to costs."^[2] The total amount of the claimed costs is $1,108.60, and Plaintiff avers that they "were necessary expenses to effectuate this foreclosure action."

Rule 54 provides that "[c]osts other than attorneys' fees shall be allowed as of course to the prevailing party, as provided by statute and by these rules, unless the court otherwise specifically directs." V.R.C.P. 54(d)(1) (emphasis added). Whether claimed costs are authorized "as provided by statute and by these rules" is a question of law that the Court would have discretion to review de novo. Cf. Whitfield v. Scully, 241 F.3d 264, 269 (2d Cir. 2001) (district court “exercises its own discretion to ‘decide the cost question [it]self,'” and whether court “has the authority to award costs presents a question of law subject to de novo review” on appeal (quoting Farmer v. Arabian Am. Oil Co., 379 U.S. 227, 233 (1964)), abrogated on other grounds by Bruce v. Samuels, 577 U.S. 82 (2016).

The fact that Defendant has failed to appear and presumably will not appear to object to Plaintiff's claim for costs, as well as the fact that Defendant has been adjudicated liable on the underlying claim for foreclosure, do not negate the Court's authority or obligation to ensure that any costs allowed and included in the decree of foreclosure are proper as a matter of law. A defaulted defendant “is deemed to have admitted only the well-pleaded allegations of fact contained in the complaint,” and “is not deemed to have admitted conclusions of law and the entry of ‘default is not treated as an absolute confession by the defendant of his liability and of the plaintiff's right to recover.'” J & J Sports Prods., Inc. v. Romenski, 845 F.Supp.2d 703, 705 (W.D. N.C. 2012) (emphasis added; quoting, with citations omitted, Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001)); see 10A M.K. Kane, et al., Fed. Prac. & Proc. Civ. (Wright & Miller) § 2688.1 (4th ed., June 2024 update) at n.11 & related text (same; citing Romenski and numerous other cases); Nishimatsu Constr. Co., Ltd. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (“The [defaulting] defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law.” (citing Thomson v. Wooster, 114 U.S. 104, 113 (1884)).

Applying such principles here means that, although Defendant has been adjudicated liable on the underlying claim for foreclosure, and has admitted to the well-pled facts as set forth in the complaint and in Plaintiff's Rule 55(c)(1) affidavits, Defendant has not admitted or confessed to his liability for Plaintiff's claimed costs. A defaulting defendant cannot admit to conclusions of law, which conclusions must be made by the Court, and the grant of default judgment did not adjudicate the Defendant liable for the "costs" claimed by Plaintiff. Accordingly, the Court must determine the legal question. Given Defendant's non-appearance and lack of objections, Court will proceed on the presumption that the well-pled facts set forth in Plaintiff's Renewed Affidavit and the accompanying exhibit are admitted. The Court will deem admitted, and accept as true and accurate, Plaintiff's descriptions of the purposes or types of expenditures, and Plaintiff's assertions that they were actual!}' incurred or borne by Plaintiff (or its attorneys, on Plaintiff's behalf) in the various amounts stated.

Turning to the merits, the range of litigation expenditures that may be allowed as recoverable costs is far narrower than Plaintiff claims. The Vermont Supreme Court has held:

The term "costs" has a plain and well-established meaning in the context of a civil action for damages. Rule 54 provides that "[c]osts other than attorneys' fees shall be allowed as of course to the prevailing party, as provided by statute and by these rules, unless the court otherwise specifically directs." V.R.C.P. 54(d)(1). By statute, the prevailing party is entitled to recover filing fees, service fees, and "witness fees" of $30 per day for attendance before a court or at a deposition, plus mileage for in-state travel. 32 V.S.A. §§ 1471(a), 1551, 1553. Additionally, the court may in its discretion award deposition fees and mediation fees as costs. See V.R.C.P. 54(g) (permitting court to award costs incurred in taking of reasonably necessary depositions); V.R.C.P. 16.3(c)(1)(C) (giving court discretion to award mediation fees to prevailing party).

Epsom v. Crandall, 2019 VT 74, ¶ 35, 211 Vt. 94.^[3] Thus, in Epsom, a case for damages for timber trespass under 13 V.S.A. § 3606, the Supreme Court affirmed the trial court's decision awarding the prevailing plaintiffs their filing fees, deposition costs, and mediation fees, but denying their request for other costs, including copying costs, postage fees, surveyor's fees, and expert witness fees.

As for Rule 80.1(f), which pertains exclusively to foreclosure actions, including actions to foreclose on a judgment lien, see V.R.C.P. 80.10, the Court finds no separate or supplemental definition of allowable costs, or any other terms within the Rule that would authorize an award of costs in addition to or different than those authorized under the statute and the rules identified above.

The federal rules also have some bearing on this issue since V.R.C.P. 54(d) "is based on both Maine Rule of Civil Procedure 54 and Federal Rule of Civil Procedure 54." Murphy, 2014 VT 25, ¶ 49 (citing Reporter's Notes, V.R.C.P. 54). Significantly, federal courts hold that the scope of costs authorized, or subject to allowance, under Rule 54(d)(1) of the Federal Rules of Civil Procedure are quite limited. See Whitfield, 241 F.3d at 269 (the phrase "costs other than attorneys' fees" in Rule 54(d)(1) means "only the specific items enumerated in 28 U.S.C. § 1920" (citing Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 444 (1987)).^[4] As explained in the Wright & Miller treatise:

Although "costs" has an everyday meaning synonymous with "expenses," the concept of taxable costs under Rule 54(d) is more limited and represents those expenses, including, for example, court fees, that a court will assess against a litigant. . . .

[C]osts are expenses but by no means constitute all of them. For example, absent a special statute or an exceptional exercise of judicial discretion, items such as attorney's fees, travel expenditures, and investigatory expenses will not qualify either as statutory fees or reimbursable costs. These expenses must be borne by the litigants.

10 M.K Kane, et al., Fed. Prac. & Proc. Civ. § 2666 (4th ed.).

Thus, allowable “costs” in a civil action are limited to the specific items of expenditure that are expressly enumerated in statute (32 V.S.A. §§ 1471(a), 1551), or in the Civil Rules (e.g., Rules 54(g) (deposition costs), 54(f) (trustee process costs) 16.3(c)(1)(C) (mediation fees), or 68 (costs incurred by offeror after offer of judgment)). As Justice Dooley has stated, allowable costs in a civil case are “basic costs." Brisson, 2016 VT 56, ¶ 43 (Dooley, J., dissenting); accord Reporter's Notes, V.R.C.P. 54 ("Except for the provisions of Rule 54(f), (g), for trustee cases and depositions, most items of costs are statutory. See 32 V.S.A. § 1471.")).

Given those limitations, the majority of the expenses claimed by the Plaintiff are not "costs" within the meaning of the rule. The only expenses claimed by the Plaintiff that meet the definition of "costs" are as follows:

(1) "Complaint filing fee" on 5/1/24 in the amount of $317.93.

(2) "Rutland Sheriff service" on 8/6/24, in the amount of $81.95.

(3) "APS service" on 6/21/24, in the amount of $187.50.

With regard to third item, the Court construes it as amounts paid to a private process server for attempted efforts to serve process on the Defendant in New York state. See Pl.'s Mot. for Extension of Time To Serve Defendant (filed June 26, 2024), at ¶¶ 4-5 (indicating that Plai...