Truhan v. Bailey, No. 152-3-03 Wncv (Katz, J., June 1, 2005)

[The text of this Vermont trial court opinion is unofficial. It has been reformatted
from the original. The accuracy of the text and the accompanying data included in
the Vermont trial court opinion database is not guaranteed.]

STATE OF VERMONT                                          SUPERIOR COURT
Washington County, ss.:                             Docket No. 152-3-03 WnCv


TRUHAN

v.

BAILEY


                                     ENTRY



       On the basis of 24 V.S.A. ' 901(a), this court, at prior term, granted
Plaintiff Truhan=s motion to dismiss the counterclaim against him and also
granted Defendant Bailey permission to amend that counterclaim to name
the Town of Barre instead of Truhan. Now, the Town seeks to have the
claims against it dismissed on the ground of municipal or sovereign
immunity.

       Initially, the court was struck by the improbability that the
Legislature had enacted a statute immunizing officers and substituting
vicarious liability on the town while the town’s liability goes for naught
because of its own immunity. That seems to be the sort of irrational
statutory interpretation that should be avoided if possible. See Rowell v.
Tunbridge, 118 Vt. 23, 27-28 (1953).

       Upon reviewing the statute and relevant caselaw, we conclude that
this case presents a more complex problem than earlier envisioned.
        The statutory language at issue – Athe action given against such
officers@ – is in fact very old. ABy the statute passed in 1817, all actions
which are given by law to the selectmen, must be brought in the name of the
town.@ Middlebury v. Case, 6 Vt. 165, 168 (1834). That particular case
dealt with a note, made payable to the selectmen; the town was seeking to
collect on the note. The court ruled that the action must be sued out in the
name of the town. This points us to the first sentence of ' 901(a) (emphasis
added): “Where an action is given to any appointed . . . municipal
officer . . ., the action shall be brought in the name of the town in which the
officer serves . . . .” Other early cases citing the statute involved a bond,
Town of Fairfax v. Soule, 10 Vt. 154 (1838), and a contract, Town of Grand
Isle v. Kinney, 70 Vt. 381 (1898). Interestingly, none of these early cases
sounded in tort or involved issues of immunity. Whether its original
purpose was to cover torts at all may be a question. See Soule, 10 Vt. at
156-57 (describing the purpose of the original enactment as distinctly
procedural in nature).

        Why should a tort victim, just for being a municipal officer, have to
give up the personal remedy and hand it over to the town? Yet, if the
second sentence of ' 901(a) requires that the officer be personally immune
from torts, with the town vicariously liable, does not the parallel language
in the first sentence suggest that the town should get symmetrical treatment
when the officer happens to be the plaintiff? That is, that the claim inures
to the benefit of the town, not the officer? This, of course, does not explain
why the Legislature would have created this statutory vicarious liability
when its intention was that the vicarious party would enjoy its own
immunity. We think the better answer is suggested by the early cases,
evincing as they do a contemporaneous understanding of the circumstances
under which the statute was enacted: This statute was enacted to ensure
that rights and liabilities of the town be preserved as such, even though
contracts or notes might be drawn in the name of incumbent selectmen.

       More recently, the statute has been applied in the context of tort
actions against municipal officers. In Holmberg v. Brent, 161 Vt. 153
(1993), the first of the contemporary tort cases addressing § 901, the
Vermont Supreme Court states without explanation that § 901 “amounts to
an assumption of the officer’s liability” and nowhere discusses that § 901
                                      2
had never before been so interpreted, at least in any cases, or acknowledges
the difficulties attending such an interpretation. The Court in Holmberg
concluded that where § 901 and 24 V.S.A. § 1313 (allowing an
incorporated village to indemnify its officers) overlap, § 1313 applies.
Having so ruled, of course, the Court was relieved of any need to explore
the meaning of § 901 further. Subsequent cases apply § 901 to immunize
municipal officers but do not mention of any these issues. Nevertheless,
consistent with the description of § 901 in Holmberg, in 1995 the
Legislature granted immunity to employees of conservation districts by
stating that they “shall be immune from liability under the provisions of
section 901 of Title 24 regarding municipal officers.” 10 V.S.A. § 747a(b).
 We have found no case or statute predating Holmberg similarly suggesting
that the purpose of § 901 is to immunize officers from torts. There have
been no cases, such as this one, in which a plaintiff municipal officer seeks
the benefit of § 901 against a counterclaim sounding in tort.

       The new statute on tort claims against municipal employees, 24
V.S.A. ' 901a, was enacted after the acts that form the basis for this civil
action, August 10, 2002, and therefore does not apply.

       Even were the old statute held to apply to Officer Truhan, and confer
on him a measure of immunity, the latter would be an extension of
municipal sovereign immunity. Section 901, as applied in Holmberg and
subsequent cases, does not per se provide a complete defense to a claim in
the nature of tort arising out of the conduct of municipal officers; it merely
requires that such an action be pursued against the town, not the town’s
officers. The town’s sovereign immunity then comes into play, as it has in
this case. In other words, § 901 brings the municipality’s officers within
the protection of the municipality’s sovereign immunity; it does not create a
variety of immunity personal to the officer and distinct from the officer’s
relation to the municipality. Consequently, when Truhan raised § 901 as a
defense to Bailey’s counterclaim, he in essence was using the
municipality’s sovereign immunity as a sword in this litigation in aid of his
own claim against Bailey.

      Sovereign immunity is a shield, however, not a sword. United States
v. Bankers Ins. Co., 245 F.3d 315, 320 (4th Cir. 2001) (“Sovereign
                                       3
immunity does not permit the Government to sue a third party and then pick
and choose the judicial constraints . . . with which it will abide.”). When an
entity entitled to sovereign immunity commences an action, it waives that
immunity for any compulsory counterclaim arising out of the same
occurrence or transaction. See Ruppenthal v. State of Wyoming, 849 P.2d
1316, 1321 (Wyo. 1993) (collecting cases and other authorities). Although
the Vermont Supreme Court has never had occasion to rule on such a
waiver of immunity by initiating the litigation, we are persuaded it is fully
congruent with our court’s statements on immunity. The purpose of
according officials with immunity from suit is “to prevent exposing state
employees to the distraction and expense of defending themselves in the
courtroom.” Cook v. Nelson, 167 Vt. 505, 509 (1998). Here, of course, it
is Officer Truhan who made the decision to involve himself in the
distraction and expense of litigation. While that is certainly his right, the
underlying reason for affording him immunity is vitiated. To afford him
immunity on the counterclaim would therefore not only be unfair it would
elevate form over substance.

       On the basis of the foregoing, we think dismissal of the counterclaim
against Officer Truhan, personally, based on ' 901(a), was ill considered.

      The counterclaim against the Town of Barre is dismissed. The
counterclaim against Officer Truhan is reinstated.



       Dated at Montpelier, Vermont, _______________________, 20___.


                                   __________________________
                                   Judge




                                      4
