Lay v. Pettengill

• Decision Date: 19 December 2011
• Docket Number: No. 10–185.,10–185.
• Citation: 38 A.3d 1139,2011 VT 127,33 IER Cases 311
• Parties: David M. LAY v. William J. PETTENGILL, Elizabeth F. Novotny, David W. Gartenstein, Daniel K. Troidl, the Commissioner of Department of Public Safety and State of Vermont.
• Court: Vermont Supreme Court

2011 VT 127

33 IER Cases 311

38 A.3d 1139

David M. LAY

v.William J. PETTENGILL, Elizabeth F. Novotny, David W. Gartenstein, Daniel K. Troidl, the Commissioner of Department of Public Safety and State of Vermont.

No. 10–185.

Supreme Court of Vermont.

Nov. 23, 2011.Motion for Reargument Denied Dec. 19, 2011.

Herbert G. Ogden of Ogden Law Offices, P.C., Danby, for Plaintiff–Appellant.

William H. Sorrell, Attorney General, and Jon Jeffrey Tyzbir and David Groff, Assistant Attorneys General, Montpelier, for Defendants–Appellees.

Present: REIBER, C.J., DOOLEY, JOHNSON, SKOGLUND and BURGESS, JJ.

DOOLEY, J.

¶ 1. Plaintiff David M. Lay appeals from the superior court's order granting summary judgment to defendants William J. Pettengill, Elizabeth F. Novotny, and Daniel K. Troidl on his complaint. Lay's claims stem from an internal investigation into his behavior as a state trooper and his subsequent resignation from the Vermont State Police (VSP). Lay argues that the superior court erred in granting judgment to defendants on his claims of fraudulent nondisclosure, retaliatory prosecution, malicious prosecution, and negligent referral. He also challenges several discovery rulings made by the court. We affirm.

¶ 2. The superior court found the following facts undisputed. Lay worked as a state trooper for the VSP. On June 29, 2004, he was suspended from duty due to ongoing investigations by the Internal Affairs Unit (IAU). Lay's access to the police barracks was revoked, and he was ordered to turn in his badge, identification, weapon, cruiser, and keys. On July 8, Lay contacted a fellow trooper and asked to meet. The parties met at a local eating establishment. According to the fellow trooper, Lay asked him to surreptitiously remove certain items from Lay's desk and police cruiser that Lay believed could be used against him in the IAU investigation. Lay told the trooper not to make any notes about their conversation. The trooper understood Lay to be referring to marijuana paraphernalia, marijuana, and pills. He had seen Lay seize at least some of these items from a residence several months earlier in connection with a next-of-kin notification. Lay apparently did not intend to use these items in any criminal prosecution.

¶ 3. Lay does not contest telling the fellow trooper to get rid of items in his desk, although he challenges that there was marijuana in his desk. He also does not dispute telling the trooper that he wanted the items removed because “they,” presumably IAU, would “like to make something ugly out of it.”

¶ 4. Lay's fellow trooper informed his supervisors of Lay's request. Captain Pettengill informed the IAU, and these allegations were included as part of an investigative report authored by Lieutenant Troidl, Director of Internal Affairs. The report also detailed numerous other items found in Lay's desk that indicated neglect of duty, as well as a lack of attention and follow-through with various aspects of his work. This included twenty-seven items of evidence, some of which dated back to 2001, that should have been included with case files or been submitted to the lab.

¶ 5. In August 2004, the IAU report was sent to the Windham County State's Attorney's Office pursuant to statute. See 20 V.S.A. § 1923(b) (IAU must investigate allegations of misconduct and the head of IAU “shall immediately report all allegations to the state's attorney of the county in which the incident took place, to the attorney general and to the governor, unless the head of the unit makes a determination that the allegations do not include violation of a criminal statute”). In a cover letter accompanying the report, Lieutenant Troidl stated that, after the conclusion of the IAU investigation, Novotny, a staff attorney with the Department of Public Safety (DPS),¹ “pointed out that Trooper Lay's conduct may rise to the level of a criminal complaint, specifically Title 13 VSA 3006 and/or Title 13 VSA 3009.” ² The letter asked the prosecutors to review and advise whether they intended to pursue criminal charges.

¶ 6. In September 2004, DPS Commissioner Kerry Sleeper preferred charges against Lay alleging thirty-six counts of various infractions of the code of conduct governing VSP members. These included charges of falsification and misuse of property and evidence; making a false statement; failing to follow-up or make reports in numerous cases; and abuse of authority for conducting a warrantless search. Commissioner Sleeper also reserved the right to amend the charges to add any appropriate charges of criminal conduct if an investigation revealed that Lay violated any criminal laws. The commissioner indicated that he intended to dismiss Lay absent extenuating or mitigating circumstances. Included with the preferred charges was a copy of the IAU report.

¶ 7. Lay hired an attorney who negotiated a resolution to the preferred charges with defendant Novotny. As a result of the negotiation, Lay resigned and executed a release in exchange for eight weeks of pay and an agreed-upon process for addressing future employment referral requests. Lay and Commissioner Sleeper signed the agreement on October 20, 2004. There was no apparent discussion or inquiry between the parties' attorneys that the agreement would resolve any criminal matters.³

¶ 8. In late November 2004, the Windham County State's Attorney's Office became involved in commencing a criminal prosecution against Lay. In April 2005, Deputy State's Attorney David W. Gartenstein charged Lay with two counts of obstruction of justice in violation of 13 V.S.A. § 3015. The information alleged that Lay attempted to obstruct justice by trying to procure the destruction of evidence relevant to an IAU investigation and to procure the destruction of evidence relevant to a VSP investigation and/or the processing of potential criminal cases. The information was supported by an affidavit from a VSP detective sergeant, who had interviewed various witnesses. The affidavit recounted Lay's seizure of drug and drug paraphernalia from a residence, described above, and Lay's subsequent request that a fellow trooper remove the evidence from Lay's desk and destroy it. The affidavit also recounted the twenty-seven items of evidence found in Lay's desk—items that should have been submitted to the lab as evidence and included with case files—including some of the evidence that Lay had asked his fellow trooper to destroy.

¶ 9. A judge found probable cause to support the charge and signed a warrant for Lay's arrest. Lay was employed by a private company in Iraq at the time, and he was terminated from his job, allegedly as a result of the felony charges. Lay subsequently moved to dismiss the charges for lack of a prima facie case, and his motion was denied.

¶ 10. When Lay returned to Vermont, he was charged with numerous other crimes, including aggravated domestic assault, unlawful restraint, sexual assault, and domestic assault. He was released on conditions. In May 2006, he was charged with two counts of violating an abuse-prevention order and two counts of violating conditions of release. While these charges were pending, the court dismissed the aggravated domestic assault and sexual assault charges. In January 2007, the parties reached a plea agreement on the remaining charges. Pursuant to that agreement, the State dismissed both counts of obstruction of justice, and the unlawful restraint and domestic assault charges, and Lay pled guilty to two counts of violating an abuse-prevention order and two counts of violating conditions of release.

¶ 11. In April 2008, Lay filed suit against defendants raising numerous claims, including fraudulent nondisclosure, violation of his civil rights, and malicious process. In April 2010, the court issued the summary judgment decision from which Lay appeals. We discuss the court's decision in detail below.

¶ 12. We review the court's decision de novo, applying the same standard as the trial court. Richart v. Jackson, 171 Vt. 94, 97, 758 A.2d 319, 321 (2000). Thus, summary judgment is appropriate where there is no genuine issue as to any material fact and a party is entitled to judgment as a matter of law. V.R.C.P. 56(c)(3). As discussed below, we conclude that summary judgment was properly granted to defendants here.

¶ 13. We begin with Lay's fraudulent nondisclosure claim. Lay raised this claim against DPS staff attorney Novotny, alleging that she had a duty to inform him during the negotiation process that she had opined to Lieutenant Troidl that Lay's conduct might give rise to a criminal action. By failing to do so, Lay maintained that Novotny fraudulently induced him to resign by implying “that the settlement resolved all issues” between himself and the State. In other words, Lay suggests that he would not have resigned—notwithstanding the commissioner's indication that Lay would be fired—if Lay had known that Novotny thought that he might have violated several criminal statutes, statutes that he was never charged with violating.

¶ 14. The trial court found that Lay failed to meet his burden of proving fraudulent nondisclosure. See In re Estate of Alden, 2011 VT 64, ¶ 32, ––– Vt. ––––, 35 A.3d 950 (“The party alleging fraud has the burden of proving each of the elements by clear and convincing evidence.”). We agree. “Fraudulent concealment involves concealment of facts by one with knowledge, or the means of knowledge, and a duty to disclose, coupled with an intention to mislead or defraud.” Silva v. Stevens, 156 Vt. 94, 103, 589 A.2d 852, 857 (1991); see also Monahan v. GMAC Mortg. Corp., 2005 VT 110, ¶ 66, 179 Vt. 167, 893 A.2d 298 (same). A duty to disclose may arise “from the relations of the parties, such as that of trust or confidence, or superior knowledge or means of knowledge.” White v. Pepin, 151 Vt. 413, 416, 561 A.2d 94, 96 (1989) (quotations omitted). “In arm's-length transactions,” however, “where facts are equally within the means of...