2014 VT 33


Lasek v. Vermont Vapor, Inc., and
Downing Properties, LLC (2013-143)
 
2014 VT 33
 
[Filed 11-Apr-2014]
 
NOTICE:  This opinion is
subject to motions for reargument under V.R.A.P. 40 as well as formal revision
before publication in the Vermont Reports.  Readers are requested to
notify the Reporter of Decisions by email at: JUD.Reporter@state.vt.us or by
mail at: Vermont Supreme Court, 109 State Street, Montpelier, Vermont
05609-0801, of any errors in order that corrections may be made before this
opinion goes to press.
 
 

2014 VT 33

 

No. 2013-143

 

Johnathan Lasek


Supreme Court


 


 


 


On Appeal from


     v.


Superior Court, Rutland Unit,


 


Civil Division


Vermont Vapor, Inc. and


 


Downing Properties, LLC


January Term, 2014


 


 


 


 


William
  D. Cohen, J.


 

Kaveh S. Shahi of Cleary, Shahi & Aicher, P.C., Rutland,
for Plaintiff-Appellant.
 
Andrew B. Delaney of Martin & Associates, P.C., Barre,
for Defendant-Appellee 
  Vermont Vapor, Inc.
 
Allan R. Keyes of Ryan Smith & Carbine, LTD., Rutland,
for Defendant-Appellee Downing
  Properties, LLC.
 
 
PRESENT:  Reiber, C.J., Dooley, Skoglund, Robinson and
Crawford, JJ.
 
 
¶ 1.            
CRAWFORD, J.  Plaintiff appeals the trial court’s grant of
judgment as a matter of law to defendants following a three-day jury trial in
this negligence case.  Plaintiff claims that the trial court erred in (1)
excluding the testimony of plaintiff’s expert witness on causation, (2) granting
defendants’ motion for judgment as a matter of law, (3) excluding an
eyewitness’s statements to police, (4) denying plaintiff’s motion for a new
trial, (5) awarding all deposition costs to defendants, and (6) refusing to
disqualify counsel for defendant-landlord.  We affirm the trial court’s
decision in all respects, with the exception of the award of deposition costs. 
¶ 2.            
This case arose following a fire that destroyed a commercial building in
Rutland, Vermont in April 2010.  The following facts were introduced
through plaintiff’s witnesses at trial.  Plaintiff Johnathan Lasek leased
the northern half of the building and used the space as a workshop for his
house-staining business.  He stored staining products and other equipment
and constructed a business office in the northeastern corner of the building.  The
southwestern corner of the building contained a fully enclosed room that was
occupied by another commercial tenant, Vermont Vapor Inc. (VVI).  The
remainder of the building was used by landlord Downing Properties, LLC, as
storage for ATVs, motorcycles, and snowmobiles. 
¶ 3.            
VVI used its space as a laboratory for mixing the liquid filler for
electronic cigarettes.  The process involved diluting liquid nicotine with
glycerin and other ingredients.  VVI is owned by Adam Tredwell.  Adam
hired his father, Warren Tredwell, to alter the room to Adam’s specifications.
 Warren added sheetrock and other materials to create a “clean room.”  He
also installed an eight-inch fan on the south wall of the laboratory that
vented to the outside of the building.  An industrial space heater was
suspended from the rafters of the warehouse, above the ceiling of the
laboratory.  The Tredwells connected the heater to a propane tank so that
they could heat the space in the winter months.  Warren was the last
person in the laboratory the night before the fire.  
¶ 4.            
The fire was reported at around 5:00 a.m. on April 7, 2010.  When
firefighters arrived a few minutes later, the northwest corner of the
building—plaintiff’s corner—had a large hole in the roof and was heavily
engulfed in flames.  VVI’s corner was not on fire at that
time.    
¶ 5.            
Plaintiff sued VVI for negligence and strict liability, alleging that
VVI had caused the fire by mishandling liquid nicotine.  He also sued
landlord for breach of the implied warranty of suitability for commercial use,
negligence, breach of the duty to warn, and unjust enrichment.  After
plaintiff’s presentation of his case, the trial court granted defendants’
motion for judgment as a matter of law.  This appeal followed.
I.
Exclusion of Expert Testimony on Causation
¶ 6.            
Prior to trial, defendants filed a joint motion to exclude the testimony
of plaintiff’s fire investigator about the cause of the fire.  The court
did not rule on the motion at that time.  Instead, it conducted a
mid-trial hearing on admissibility after defendants renewed their objection.[1]  The court ultimately ruled that the
fire investigator could not offer his opinion regarding the cause of the fire
because his opinion did not meet the standards of Vermont Rule of Evidence 702
and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579
(1993).  Plaintiff argues that this ruling was error. 
¶ 7.            
Under Rule 702, a qualified expert witness may testify if his or her
testimony “will assist the trier of fact to understand the evidence or to
determine a fact in issue” and “if (1) the testimony is based upon sufficient
facts or data, (2) the testimony is the product of reliable principles and
methods, and (3) the witness has applied the principles and methods reliably to
the facts of the case.”  V.R.E. 702.  Vermont Rule 702 is derived
from Federal Rule 702, and the two provisions are substantively
identical.  
¶ 8.            
In Daubert, the U.S. Supreme Court held that Federal Rule 702
superseded the traditional test for admissibility of expert testimony set forth
in Frye v. United States, 293 F. 1013, 1014 (D.C. Cir. 1923).  509
U.S. at 586, 592-93.  The Daubert decision created “a flexible
standard requiring only that expert testimony be both relevant and reliable to
be admissible.” 985 Assocs., Ltd. v. Daewoo Elecs. Am., Inc., 2008 VT
14, ¶ 6, 183 Vt. 208, 945 A.2d 381 (citing Daubert, 509 U.S. at
588-89).  Because our rules of evidence are “essentially identical” to the
federal rules, we have adopted the standards set forth in Daubert and
its progeny governing admissibility of expert testimony.  Id.
(quotation omitted).  
¶ 9.            
“[W]e review trial court decisions on the admissibility of expert
testimony only for abuse of discretion.”  Id. ¶ 9. 
However, we must “engage in a substantial and thorough analysis of the trial
court’s decision and order to ensure that the trial judge’s decision was in
accordance with Daubert and our applicable precedents.”  USGen
New Eng., Inc. v. Town of Rockingham, 2004 VT 90, ¶ 24, 177 Vt. 193,
862 A.2d 269.
¶ 10.        
The proffered opinion of plaintiff’s fire investigator was that vapors
from liquid nicotine in the lab came into contact with the pilot light of the
overhead industrial space heater, causing a flash fire.  During the Daubert
hearing, he admitted that he was not a chemical engineer and did not know how
much of any chemical was present in the VVI lab the night of the fire.  He
further admitted that he did not know the volume of air circulating through the
lab because he did not know the size of the vent or the filter fabric that was
used.  When asked what methodology he used to determine how chemical
vapors got out of the lab and reached the space heater overhead, he responded:
There may have been penetrations in that
ceiling. With having a supposed vent in the door you’re saying that you mixed
the chemicals within the room, we know that. The chemicals may or may not have
been being drawn out by an exhaust fan. We know that the fumes and the vapor
given off from these chemicals will fill the room, come out and rise. 
The court asked, “How do we know
that?”  The fire investigator responded that “if you look at the [material
safety data] sheets . . . some of those chemicals that
were . . . used in this process were lighter than
air.”  Landlord’s attorney then asked how the fire investigator had
calculated that the concentration of these chemicals in the air was high enough
to be ignited by the pilot light from the space heater.  Plaintiff’s fire
investigator responded that he was not an engineer, but that this was the
“commonsense” approach for this type of investigation.  He opined
that if there were containers without lids that contained solutions of the
chemicals used by VVI in the lab, the lab likely would have been saturated with
fumes, and the fumes would have escaped through a hole in the ceiling or
through the door, and made their way up to the space heater where they ignited.
 On cross-examination, he agreed that nicotine is much heavier than
air and that its vapors would have gone down, not up.  He thought
that mixing the nicotine with other chemicals, perhaps alcohol, created a
flammable vapor that reached the pilot light:
[M]y thoughts and the process through
this is, [with] this being mixed with other chemicals—all the
properties . . . go out the window because we don’t know
what type of chemical this is now because we’ve mixed alcohol, we’ve mixed a
couple other different chemicals with it. And they all have properties that
will burn. . . . No, I don’t know how else to explain it to
you. I’m not a chemical engineer to break that all down. 
¶ 11.        
The court excluded plaintiff’s fire investigator’s testimony pertaining
to causation.  The court explained that the fire investigator was not
trained in chemistry, and did not know what chemicals were present, what their
flammability or other characteristics were, or how they would interact with
each other or flow through the air.  The court noted that nicotine was
present, but nicotine has a low flammability rating and is heavier than air.
 Even accepting that nicotine’s properties could have been modified by a
combination of other chemicals, there was no evidence of what the other
chemicals were or how they would behave.  The court concluded that the
fire investigator could not offer his opinion regarding the cause of the fire because
it did not meet the standards of Daubert and Rule 702. 
¶ 12.        
“Proposed testimony must be supported by appropriate validation—i.e.,
‘good grounds,’ based on what is known.”  Daubert, 509 U.S. at
590.  The trial court properly excluded the fire investigator’s testimony
because it was based on speculation.  Although the evidence showed that
VVI used nicotine and other chemicals in the course of its business, there was
no evidence that these chemicals were present in the lab in a quantity sufficient
to ignite a flame at a space heater above and outside of the room on the night
of the fire.  Furthermore, the fire investigator was unable to offer a
reliable explanation of how any nicotine vapors that were present would be able
to travel up to the space heater because, as he conceded, nicotine vapors are
heavier than air and would therefore tend to sink rather than rise.  He
opined that the combination of various chemicals might cause the vapors to
rise, but admitted that he did not have a chemical engineering background and
could not explain what mixture of chemicals might cause that to happen or
whether it was likely to have occurred in this case.  We agree with the
trial court that the fire investigator’s opinion about causation was not “based
on sufficient facts or data,” and was therefore unreliable.  V.R.E.
702.  
¶ 13.        
Plaintiff argues that in his motion for a new trial he provided the
court with data showing that the density of liquid nicotine equals that of air
at sixty-eight degrees Fahrenheit, so it was not “junk science” to conclude
that vapor from liquid nicotine could reach the space heater.  The fact
remains, however, that plaintiff’s fire investigator was unqualified to explain
this information to the jury.  He was also unable to say what amount of
liquid nicotine had to be present in the open in order for the vapors to escape
the lab in a sufficient concentration to ignite, or whether that concentration
of vapors was present on the night of the fire.  The trial court therefore
did not abuse its discretion in excluding his testimony.
II.
Rule 50 Motion
¶ 14.        
After plaintiff rested his case, the trial court granted judgment as a
matter of law to defendants on all of plaintiff’s claims pursuant to Vermont
Rule of Civil Procedure 50.  Rule 50(a)(1) permits the court to grant
judgment as a matter of law against a party that has been fully heard on an
issue where “there is no legally sufficient evidentiary basis for a reasonable
jury to find for that party on that issue.”  In evaluating the trial
court’s grant of judgment as a matter of law to defendants, we “consider the
evidence in the light most favorable to the nonmoving party, excluding the
effect of modifying evidence.”  Foti Fuels, Inc. v. Kurrle Corp.,
2013 VT 111, ¶ 10, __Vt.__, __A.3d__ (quotation omitted).  “If
evidence exists that may fairly and reasonably support all elements of the
nonmoving party’s claim, judgment as a matter of law is improper.”  Brueckner
v. Norwich Univ., 169 Vt. 118, 122, 730 A.2d 1086, 1090 (1999). 
A.    
Negligence Claims Against VVI and Landlord
¶ 15.        
The trial court properly granted judgment as a matter of law in favor of
defendants on plaintiff’s claims of negligence against VVI and landlord. 
Without expert testimony on the issue of causation, plaintiff was unable to
prove that VVI’s use of liquid nicotine in its laboratory caused the
fire.  Without establishing that VVI caused the fire, plaintiff also could
not prove that landlord was negligent in leasing the space to VVI or in maintaining
VVI’s leased space.   
¶ 16.        
Plaintiff argues, however, that the trial court should have allowed the
negligence claims to be decided by the jury because the doctrine of res ipsa
loquitur applied to his case.  The doctrine “allows the plaintiff to
escape a directed verdict without directly establishing negligence,
and . . . allows the jury a permissive inference of
negligence.”  Cyr v. Green Mountain Power Corp., 145 Vt. 231, 235,
485 A.2d 1265, 1268 (1984).  For the doctrine to apply, a plaintiff must
demonstrate the following elements: 
  1. A legal duty owing from the
defendant to exercise a certain degree of care in connection with a particular
instrumentality to prevent the very occurrence that has happened. 
  2. The subject instrumentality at
the time of the occurrence must have been under the defendant’s control and
management in such a way that there can be no serious question concerning the
defendant’s responsibility for the misadventure of the instrument. 
  3. The instrument for which the
defendant was responsible must be the producing cause of the plaintiff’s
injury. 
  4. The event which brought on the
plaintiff’s harm is such that would not ordinarily occur except for the want of
requisite care on the part of the defendant as the person responsible for the
injuring agency.
Id. at 235-36, 485 A.2d at
1268. 
¶ 17.        
The doctrine of res ipsa loquitur allows an inference of negligence
in certain cases, not causation.  Established causation is a prerequisite
to the application of the doctrine.  As discussed above, plaintiff’s
expert was unable to present reliable testimony linking VVI’s activities in the
lab to the fire.  Furthermore, plaintiff failed to show that a fire in a
commercial warehouse is the sort of accident that ordinarily does not occur
without negligence.  See Metro. Prop. & Cas. v. Harper, 7 P.3d
541, 551 (Or. Ct. App. 2000) (“[R]es ipsa loquitur is not commonly applied to
fires, because the cause of a fire is generally unknown [and] fires commonly
occur where due care has been exercised as well as where due care was wanting.”
(quotation omitted)).  The cause and origin of this fire were genuinely
disputed.  It was therefore appropriate for the court to decline to apply
res ipsa loquitur in this case.  
B.    
Unjust Enrichment Claim Against Landlord
¶ 18.        
Plaintiff also argues that the trial court erred in granting judgment as
a matter of law to landlord on plaintiff’s claim of unjust enrichment.
 “Under the doctrine of unjust enrichment, a party who receives a benefit
must return the benefit if retention would be inequitable.  Unjust
enrichment applies if in light of the totality of the circumstances, equity and
good conscience demand that the benefitted party return that which was given.”
 Kellogg v. Shushureba, 2013 VT 76, ¶ 22, __Vt.__, 82 A.3d 1121
(quotations and alteration omitted).  Plaintiff claims that he spent over
$40,000 improving his portion of the warehouse.  Because landlord’s
insurance proceeds covered the total loss of the building, he seeks some share
of the payment.  Assuming without deciding that Vermont law recognizes an
unjust enrichment claim by a tenant against a landlord to recover the value of
improvements made by the tenant, plaintiff’s claim fails because he did not
show that landlord received a benefit from his improvements.[2]  There was no evidence that the
improvements resulted in a higher insurance settlement for landlord or
increased the value of the warehouse.  The trial court accordingly did not
err in dismissing plaintiff’s unjust enrichment claim.
C.    
Remaining Claims
¶ 19.        
The trial court granted judgment as a matter of law on plaintiff’s
strict liability claim against VVI on the grounds that there was no
ultrahazardous activity being conducted.  It dismissed plaintiff’s
breach-of-warranty-of-suitability claim against landlord on the ground that no
such action has been recognized in Vermont.  Finally, it dismissed
plaintiff’s duty-to-warn claim against landlord on the ground that landlord did
not owe a duty to warn plaintiff about VVI’s activities.  Plaintiff’s
brief does not challenge the court’s rulings on these counts, and we will not
disturb them.  See Catlin v. Town of Hartford, 138 Vt. 1, 2, 409
A.2d 596, 597 (1979) (declining to disturb trial court’s ruling where appellant
failed to challenge it in appellate brief).   
III. 
Exclusion of Warren Tredwell’s Statements to Police
¶ 20.        
Plaintiff argues that the trial court erred in excluding two statements that
Warren Tredwell made to police the morning of the fire and a few days later.
 He argues that the statements were admissible nonhearsay evidence
pursuant to Vermont Rule of Evidence 801(d)(2)(D).  That rule provides
that a statement offered against a party is not hearsay if it is “a statement
by his agent or servant concerning a matter within the scope of his agency or
employment, made during the existence of the relationship.”  V.R.E.
801(d)(2)(D). 
¶ 21.        
The first statement was contained in the report written by a state
police investigator who interviewed Warren the morning of the fire:
  [Warren] stated there was a five
gallon pail of glycerin and approximately 800 bottles of pre-made electronic
cigarette material inside the shop.  He advised each bottle of the product
contained approximately 70% glycerin, and the rest was propylene glycol,
distilled water and a “small dosage of nicotine.”  He further advised the
refrigerator in the shop held containers of 99.9% nicotine.  [Warren] advised
his son was the only one who handled the nicotine and diluted it down to what
they called a “base liquid,” before he himself entered the process of bottling,
labeling and capping the product for sale. 
The second statement was contained
in the report written by the investigator hired by landlord’s insurer. 
Warren told the investigator that he was the last person in the warehouse the
night of the fire, that he left at 2:00 a.m. “after completing an order of
electronic cigarettes to be shipped out the next day,” and that he worked for
his son. 
¶ 22.        
The court agreed with plaintiff that Warren was an agent of VVI, but
excluded the statements because plaintiff had not established that they were made
within the scope of Warren’s agency or employment.  The court allowed
plaintiff to use the statements for purposes of impeachment, which he
ultimately did not do.  
¶ 23.        
The trial court based its ruling on this Court’s decision in Westinghouse
Electric Supply v. B.L. Allen, Inc., 138 Vt. 84, 94, 413 A.2d 122, 129
(1980), in which we stated that it is “only when an agent is acting within the
scope of his authority and his admission relates to an act or negotiation
connected therewith that it is admissible against his principal.”  Id.
(quoting Jones v. Gay’s Express, Inc., 110 Vt. 531, 534, 9 A.2d 121, 123
(1939)).  The rule stated in Westinghouse has since been modified
by Rule 801(d)(2)(D).  See Reporter’s Notes, V.R.E. 801(d)(2)(D)
(explaining that in contrast to “traditional view” expressed in Westinghouse
and other cases, “[t]he present rule adopts the broader view allowing
statements about matters within the scope of employment in order to prevent
loss of valuable evidence”); see also Contractor’s Crane Serv., Inc. v. Vt.
Whey Abatement Auth., 147 Vt. 441, 451, 519 A.2d 1166, 1173 (1986)
(explaining that “[s]tatements made by an [agent] concerning a matter within
his employment may be admissible against the party retaining the [agent]”
(quotation omitted)).  It was therefore error to require plaintiff to show
that Adam Tredwell authorized Warren Tredwell to make his statements to the
police and the investigator.  Under Rule 801(d)(2)(D) and our case law, an
agent’s statements are not hearsay if they concern a matter within the scope of
the agent’s agency or employment.  Contractor’s Crane Serv., 147
Vt. at 451, 519 A.2d at 1173.  Warren’s employment in the lab provided a
sufficient foundation for the admission of his statement.
¶ 24.        
However, the court’s error was harmless because plaintiff has not shown
that admission of the testimony would have changed the outcome of the case.[3]  V.R.C.P. 61.  The statements
did contradict Warren’s testimony that he never took part in bottling and
capping the e-cigarette material.  Nonetheless, even if he had been
handling the pre-mixed material on the night of the fire, there was no showing
that the vapors from that material were flammable or present in sufficient concentrations
to escape the lab and come into contact with the pilot light.  Warren’s
statements would not have solved the problem of establishing causation. 
Thus, their exclusion did not affect the outcome of this case. 
IV.
Motion to Alter Judgment and for a New Trial
¶ 25.        
Plaintiff argues that the court should have granted his motion for a new
trial because its dismissal of the case was based on incorrect scientific
reasoning.[4]  He
argues that his motion for a new trial provided the court with evidence that
“density depended on temperature, and that indeed liquid nicotine was lighter
than air at temperatures above 68 degrees.”  According to plaintiff, this
evidence demonstrated that at a temperature of seventy degrees liquid nicotine
would evaporate and the vapors would rise and reach the pilot light of the
heater.  We review the trial court’s denial of a motion for a new trial
for abuse of discretion.  Gregory v. Poulin Auto Sales, Inc., 2012
VT 28, ¶ 17, 191 Vt. 611, 44 A.3d 788 (mem.). 
¶ 26.        
The trial court acted within its discretion in denying plaintiff’s
motion for a new trial.  The court’s decision to grant judgment as a
matter of law in favor of defendants was not based on its own scientific conclusions. 
Rather, it was based on plaintiff’s failure to provide reliable evidence at
trial to prove that VVI’s activities caused the fire.  The information
plaintiff offered in his motion was available to him prior to the judgment and
could have been offered through a qualified expert witness at trial.  His
failure to provide admissible evidence in support of causation led to the Rule
50 motion being granted.  Plaintiff has failed to demonstrate that the
court’s denial of his motion for a new trial was an abuse of discretion. 
See Gardner v. Town of Ludlow, 135 Vt. 87, 91, 369 A.2d 1382, 1385
(1977) (explaining that Rule 59 is directed at preventing a “miscarriage of
justice” and is not a device for putting “merely dilatory” evidence before the
court). 
V. 
Deposition Costs
¶ 27.        
Vermont Rule of Civil Procedure 54(g) allows the court to award “costs
in the taking of depositions” to the prevailing party in its discretion.
 The depositions must have been “reasonably necessary,” whether or not
they were actually used at trial.  V.R.C.P. 54(g).  The rule provides
that deposition-related costs “may include the cost of service of subpoena upon
the deponent, the reasonable fee of the officer before whom the deposition is
taken, the stenographer’s reasonable fee for attendance, and the cost of the
original transcript of the testimony or such part thereof as the court may
fix.”  Id.  
¶ 28.        
Plaintiff argues that the trial court improperly awarded defendants the
costs of obtaining copies of transcripts of depositions that they did not take
themselves.[5] 
We disagree.  The trial court has broad discretion to award the prevailing
party the costs of obtaining copies of the transcripts provided that the
depositions were “reasonably necessary” to prepare for the litigation. 
V.R.C.P. 54(g); Peterson v. Chichester, 157 Vt. 548, 553, 600 A.2d 1326,
1329 (1991) (“The trial court has discretion in awarding costs.”); see also Maurice
Mitchell Innovations, L.P. v. Intel Corp., 491 F. Supp. 2d 684, 686 (E.D.
Tex. 2007) (stating that trial court has “great discretion to tax the costs of
taking, transcribing, and reproducing depositions”).  All of the
depositions for which defendants requested costs—with the exception of that of
Lieutenant James Cruise, which is addressed below—were of witnesses who
testified at trial or were essential to the case.  While plaintiff
correctly points out that the rule mentions only “the cost of the original
transcript,” the list of costs is nonexclusive and the trial court may, in its
discretion, award other deposition-related costs if it sees fit.  V.R.C.P.
54(g). 
¶ 29.        
The court abused its discretion, however, in ordering plaintiff to pay
defendants for the cost of concurrently videorecording the depositions. 
Rule 30(b)(4)(B) provides that “[a]ny party or witness may at his or her own
expense concurrently record a deposition by a method other than that being
used by the party taking the deposition.”[6] 
(Emphasis added.)  Although this provision applies to parties who are not
conducting the deposition, the principle also applies to parties who opt to
preserve the testimony by more than one means.  Defendants recorded their
depositions stenographically and had already recovered the costs of those
transcripts.  They were not entitled to be reimbursed for the additional
costs they incurred in videorecording the same depositions.  We remand
this portion of the case for the trial court to adjust its award of costs.
¶ 30.        
Plaintiff argues that he should not have to pay for the costs of the
deposition of Lieutenant Cruise, who did not testify at trial.  The trial
court did not address whether Lieutenant Cruise’s deposition was “reasonably
necessary.”  V.R.C.P. 54(g).  We accordingly remand so that the trial
court may make that determination in the first instance. 
¶ 31.        
Contrary to plaintiff’s claim, landlord’s insurer is not precluded from
recovering its deposition-related costs because it defended the suit instead of
landlord.  “Ordinarily, an insurer who defends and indemnifies on behalf
of its insured will be subrogated to the rights of its insured.”  Jefferson
Ins. Co. v. Travelers Ins. Co., 159 Vt. 46, 49, 614 A.2d 385, 387
(1992).  As a prevailing party in this common-law action, landlord’s
insurer—acting on landlord’s behalf—was entitled to recover litigation costs
related to the defense, including deposition costs.  V.R.C.P. 54; Murphy
v. Sentry Ins. Co., 2014 VT 25, ¶ 53, ___Vt.___, ___A.3d___.  
VI. 
Motion to Disqualify Landlord’s Attorney
¶ 32.        
Prior to the commencement of this suit, in October 2010, plaintiff
placed a lien on the property involved in the fire that was owned by landlord.
 Plaintiff’s attorney Kaveh Shahi advised the court in December 2011 that
plaintiff was withdrawing the lien.  In May 2012, landlord’s attorney
Harry Ryan wrote a letter to Attorney Shahi stating that his client “went into
some sort of shock and required medical attention” after discovering that
plaintiff’s lien was still in the land records.  The letter stated
“[y]ou are now on notice that [landlord] may suffer additional significant
personal injury if you do not take appropriate action to make sure that the
lien is removed,” and requested that plaintiff’s attorney write to the town
clerk’s office and ask them to remove the lien. 
¶ 33.        
Following receipt of the letter, plaintiff sought to disqualify Attorney
Ryan and his firm, Ryan Smith & Carbine, Ltd. (RSC), from defending
landlord in this case.  At the time that Attorney Ryan wrote the letter to
Attorney Shahi, RSC was retained as counsel by the malpractice insurer for
Attorney Shahi’s firm, Cleary Shahi & Aicher, P.C. (CSA) to defend a
separate suit against Attorney Shahi’s partners.[7]  Plaintiff argued that
Attorney Ryan’s letter was a threat to bring suit against Attorney Shahi. 
He argued that RSC therefore had a concurrent conflict of interest because it
was asserting a claim against Attorney Shahi while simultaneously defending his
firm against another malpractice action.  
¶ 34.        
Following a hearing, the trial court denied plaintiff’s motion for
disqualification.  We review the trial court’s ruling for abuse of
discretion. See Stowell v. Bennett, 169 Vt. 630, 631, 739 A.2d 1210,
1211 (1999) (mem.) (“A motion to disqualify counsel is a matter that rests
within the sound discretion of the trial court, and its ruling will not be
disturbed absent an abuse of discretion.”).
¶ 35.        
We affirm the trial court’s decision for two reasons.  First,
plaintiff has not produced a transcript of the hearing below, which would allow
us to determine whether the trial court had an appropriate factual basis for
making its ruling.  See Cody v. Cody, 2005 VT 116, ¶ 16, 179
Vt. 90, 889 A.2d 733 (holding that evidentiary hearing was necessary to resolve
motion to disqualify attorney where material facts were in dispute).  
¶ 36.        
Second, plaintiff has failed to show that disqualification was warranted. 
Rule 1.7 of the Vermont Rules of Professional Conduct prohibits an attorney
from representing a client:  
if the representation involves a
concurrent conflict of interest. A concurrent conflict of interest exists if: 
  (1) the representation of one
client will be directly adverse to another client; or 
  (2) there is a significant risk
that the representation of one or more clients will be materially limited by
the lawyer’s responsibilities to another client, a former client or a third
person or by a personal interest of the lawyer.
V.R.Pr.C. 1.7(a).  RSC’s
representation of landlord was not directly adverse to CSA. 
Representation is directly adverse where a lawyer “act[s] as an advocate in one
matter against a person the lawyer represents in some other matter, even when
the matters are wholly unrelated.”  V.R.Pr.C. 1.7 cmt. 6.  RSC
was not acting as an advocate against Attorney Shahi or his firm, but rather
against one of Attorney Shahi’s clients.  Attorney Ryan’s letter cannot
reasonably be interpreted as threatening a claim of litigation against Attorney
Shahi personally.  The letter simply asked Attorney Shahi to do what he
had already claimed to have done: remove plaintiff’s lien from the land
records.[8] 
   
¶ 37.        
As we have noted in the past, “disqualification of counsel is only one
of several avenues available to a court . . . and it is a
drastic measure which courts should hesitate to impose except when absolutely
necessary.”  Cody, 2005 VT 116, ¶ 23 (quotation omitted).  The
trial court could have reasonably concluded that any potential for conflict in
this situation was outweighed by landlord’s right to choose its own counsel.
 Stowell, 169 Vt. at 630, 739 A.2d at 1212 (explaining that in
considering whether to disqualify attorney, court must be “solicitous of a
client’s right freely to choose his counsel” and mindful that client may suffer
loss of time and money in finding new counsel, as well as benefit of counsel’s
familiarity with case (quotation omitted)).  It therefore did not err in
denying plaintiff’s motion to disqualify RSC from the case.
           
The case is affirmed in all respects except for the award of deposition
costs, which is reversed and remanded for recalculation consistent with this
decision. 
 
 
 

 


 


FOR THE COURT:


 


 


 


 


 


 


 


 


 


 


 


Associate
  Justice

 





[1] 
Plaintiff’s fire investigator was permitted to testify regarding his
investigation of the fire’s source, and to offer his opinion that the fire
originated in the southwest corner of the building, near the space heater.  Defendants
renewed their objection when he began to testify regarding causation.  


[2] 
In the absence of an agreement to the contrary, a tenant is generally not
entitled to compensation by the landlord for improvements made to the leased
premises.  Commercial Trust & Sav. Bank v. Christensen, 535
N.W.2d 853, 858 (S.D. 1995).  Courts in several states have recognized an
equitable exception permitting a tenant to recover under an unjust-enrichment
theory where there is a breach of the lease or other inequitable conduct by the
landlord.  See, e.g., Hertz v. Fiscus, 567 P.2d 1, 2 (Idaho 1977); Christensen,
535 N.W.2d at 858.  Vermont so far has not recognized this exception.
 Even if we were to adopt such a doctrine, however, plaintiff’s claim
would still fail because there is no evidence of inequitable conduct by
landlord.  See In re Estate of Vangen, 370 N.W.2d 479, 480 (Minn.
Ct. App. 1985) (holding that tenant failed to state a claim for unjust
enrichment for value of improvements he made to landlord’s property where
landlord “had done nothing illegal or inequitable”). 
 


[3] 
Plaintiff actually managed to get the first statement into evidence anyway
through the testimony of the police officer who took the statement.  


[4] 
Although plaintiff moved to “alter” the judgment in this case under Vermont
Rule of Civil Procedure 59(e), the relief he sought was a new trial and we
therefore review the denial of the motion under the standard applicable to Rule
59(a) motions. 


[5] 
VVI requested the costs of electronic copies of depositions of Johnathan Lasek,
Adam and Warren Tredwell, and Jan and Hartford Downing. It also requested half
the costs of obtaining the original and a copy of the transcript of the
deposition of plaintiff’s fire investigator William May, as well as the cost of
videorecording Mr. May’s deposition. 
 
Landlord requested the costs of original and
electronic copies of the depositions of Mr. Lasek, the Tredwells, and the Downings,
as well as Ray Weed (plaintiff’s expert on damages), James Cruise and Timothy
Austin (defendants’ fire expert), as well as half the costs of obtaining the
original and a copy of the transcript of the deposition of Mr. May, and half
the cost of the videorecording Mr. May’s deposition.  Landlord also
requested the costs of videorecording the depositions of Mr. Lasek, Mr. Austin,
and Mr. Cruise. 
 


[6]
 By contrast, Federal Rule 30 permits any party to designate another
method of recording, and states that “that party bears the expense of the
additional record or transcript unless the court orders otherwise.” 
F.R.C.P. 30(b)(3)(B); see also 28 U.S.C. § 1920(2) (allowing federal judge
to tax as costs “[f]ees for printed or electronically recorded transcripts
necessarily obtained for use in the case”).  Unlike the federal rule,
Vermont Rule 30 contains no authorization for a court to award the prevailing
party the costs it incurred in making its own recording of a deposition by
another method. 


[7] 
RSC subsequently withdrew from representing CSA in the malpractice case with
that court’s permission.  


[8]
 Plaintiff has not argued that RSC’s representation of CSA’s insurer would
materially impact RSC’s representation of either client, so we do not reach the
second provision of Rule 1.7. 



