Williams v. Campbell, No. S0920-01 Cncv (Katz, J., Mar. 12, 2004)



[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
Chittenden County, ss.:



MICHAEL WILLIAMS and
RONALD PUMA

v.

DENNIS CAMPBELL, ET AL.



                                 ENTRY
                       (Motion for Reconsideration)

        Following our previous entry granting defendants’ motion for
attorney’s fees and costs, plaintiffs have requested reconsideration arguing
that the language of the contract requires a different interpretation. The
provision at issue is part of a purchase and sale agreement between
plaintiffs and defendants for a building on Main Street in Burlington.
Within the agreement, paragraph 29 is entitled “Default.” As Black’s
defines it, default is “the omission or failure to perform a legal or
contractual duty.” Black’s Law Dictionary 376 (5th ed. 1979). In other
words, the paragraph details the rights and remedies available to both
parties stemming from a failure or breach of the purchase and sale
agreement. Indeed, the paragraph begins by detailing the sellers’ position
should purchasers default and continues with the purchasers’ position
should the sellers default. The paragraph ends with the following disputed
sentence: “In the event legal action is instituted arising out of a breach of
this contract, the prevailing party shall be entitled to reasonable attorney’s
fees and court costs.”

        When defendant sellers terminated this agreement based on the
plaintiff purchasers’ failure to meet a material provision, the purchasers
filed suit and based their claim on breach of the agreement, specifically in
paragraphs 16, 18, 20, 21, and 26 of their complaint. (Pl. Compl. July 31,
2001). Thus the first part of the sentence was activated. Purchasers had
instituted legal action arising out of they characterized as a breach of the
purchase and sale agreement. As detailed in our previous order, defendants
prevailed in this action and were therefore eligible for attorney’s fees and
costs.

        Plaintiffs argue that the sentence requires a slightly different
interpretation. According to plaintiffs, the sentence requires a party to
prove that the other breached the contract before attorney’s fees can be
awarded. Aside from the fact that the language of the sentence and its
paragraph do not make this distinction between remedies if breach is
proven and remedies if it is not, the plaintiffs’ interpretation would leave
the sellers in a position where they would be liable for attorney’s fees if
they had the lost the case but are not eligible for them if they prevail. Such
a one-sided provision, however, would give dissatisfied parties incentive to
sue for breach when they became dissatisfied. See, e.g., U.S. for Use of
West v. Peter Kiewit & Sons’ Co., 235 F. Supp. 500, 503 (D. Alaska 1964).
Clearly, the provisions of the default are not meant to encourage litigation
or reward one side. In fact the provisions take some pains to be even-
handed and not punitive. The language of the sentence and the default
paragraph simply does not support this second interpretation. See
Morrisseau v. Fayette, 164 Vt. 358, 366–67 (1995) (“Unless it is
ambiguous, the construction of a contract is for the court as a matter of
law.”). The first part of the sentence is triggered when a party asserts
breach of contract. The second part entitles the prevailing party to
attorney’s fees. In this case plaintiffs sued for breach of the agreement, but
it was defendants who prevailed.

        While the “American Rule” does mean that parties bear their own
litigation expenses, this “Rule” may be modified by statute, contract, or
equity. D.J. Painting Inc. v. Baraw Enters., Inc., 172 Vt. 239, 247 (2001).
In this situation, the parties included a contractual provision that provided
attorney’s fees to the prevailing party in a legal action arising out of breach
of the agreement. As this agreement was freely signed by both parties and
contained consideration, it is legally enforceable. Plaintiffs triggered the
provision by filing a complaint for breach of contract.

       Plaintiffs’ motion for reconsideration is dismissed.



       Dated at Burlington, Vermont________________, 2004.
