North Hero Marina v. Melanson, No. 607-02 CnC (Katz, J., July 30, 2004)



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STATE OF VERMONT                                     SUPERIOR COURT
Chittenden County, ss.:                           Docket No. 607-02 CnCv



NORTH HERO MARINA

v.

JAMES MELANSON




                        FINDINGS OF FACT
                       CONCLUSIONS OF LAW
                      AND NOTICE OF DECISION




       This matter was tried to the court January 13, 2004. On the basis
of the evidence presented, the following decision is announced.
                           FINDINGS OF FACT

1.      Plaintiff is a business operating a marina on Pelot’s Point, North
Hero. The business is a corporation, with all stock held by Brett Kernoff
and his wife. The two of them also own the real estate, outside the
corporation.

2.       Plaintiff contracted with defendant Melanson for electrical work
on a store on the site, as well as to lay underground cable to provide
power on a dock. In the process of forming that contract, Melanson
misrepresented himself as a licensed, master electrician. He is not. He is
experienced as an electrician, and was at one time licensed in Maine, but
not at that level, and never in this state.

3.       Although there may have been some confusion regarding the
“person” for whom the work was done, defendant did bill the job to North
Hero Marina, and North Hero Marina, Inc. issued the checks which paid
for it. There was never any communication, or even any uncommunicated
thought, suggesting that the work was being done for any party but the
marina business.

4.       As the work was to be done on a commercial location, requiring a
licensed master electrician to be in charge, the permit was obtained under
the name of Dwayne Cormier, who is such a person. Melanson planned to
do the job with Cormier, in which case it could have been done in only
two days, as originally envisioned. Unfortunately, Cormier became ill,
was hospitalized, and was not available to work on the job. Melanson did
virtually the entire job, alone and unsupervised.
5.     Plaintiff paid Melanson $4,000. Defendant maintains $355
remains unpaid.

6.       After the job was virtually completed, plaintiff’s officer, Kernoff,
became aware that Melanson was not licensed. He had already thrown
Melanson off the site, ordering him not to return, because Melanson tried
to collect his bill in front of marina customers.

7.      Cormier actually completed a very small amount of the work,
such as hanging light fixtures from boxes installed and wired by
Melanson.

8.       Melanson may never have arranged for a rough-in inspection of
his work, before walls were enclosed, thereby hiding the new wiring.
There is no proof, however, either that the marina has been harmed by the
lack of such an inspection or that any of the interior wiring is improper.
Department records suggest there was such a rough-in inspection.

9.       The most serious problem raised by the evidence was of an
underground cable running from a box on the shed, to a panel closer to the
lakeshore. William Bissell, whom the court found to be a creditable
witness, testified that the source box had a 100 amp breaker, serving a line
rated for only 90 amps. Hence, the line is insufficiently protected,
although not by a large margin. What troubled Bissell more is that the
other end of the line revealed only a 65 amp line coming up out of the
snow. When he learned in court that this buried line was installed within
conduit, he felt it must be an improper installation. Bissell infers this
because, although underground splices are permitted, splices within
conduit are not, for pulling the line through the conduit would place undue
stress on the splice. He therefore infers that Melanson improperly spliced
an insufficient line served by too large a breaker.
        Although we find Bissell a reliable witness, he only went to the site
this morning, and saw what he could with snow on the ground. This is
also a line running past a subsequent installation of fuel tanks with electric
pumps. In the seven years since the line was originally installed, what
was done to the line or the breaker serving it? We can’t know.
Particularly when the “popping” of breakers has been a problem for the
marina. Whatever Melanson’s faults, he had little reason to splice
insufficient cable to complete this job, which was always one paid on the
basis of time and materials. If he had to buy heavier line, he probably
would have slightly increased his margin. He has no incentive to splice
improper line and thereby save the customer money.
        We do not know why there is a 65 amp line emerging from the
snow, but we are unable to find, by a preponderance of the evidence that it
is because Melanson put it there.

10.      This line to the lakeshore ultimately services eight slips on the
west dock at the marina. Eight slips should be served by 216 amp
capacity, under the National Electrical Code. At present, this is served by
100 amp breakers with possibly a portion of 65 amp cable, as indicated
above. We have previously indicated why we are unable to find that the
insufficient cable is the fault of Melanson.
        This was a job without any written specifications. Melanson
testified that the line to the dock was only to serve the owner’s boat. The
marina manager, Kernoff, denied any such limitation. But without any
written specs for the job we are unable to find that the original installation
was specified, even if orally, for the eight slips which now have power
outlets running off the line.
11.       Kernoff was satisfied with Melanson’s work. He threw Melanson
off the site only because of the latter’s efforts to collect the balance of the
bill in front of customers. On August 26, 1997 Kernoff wrote Melanson
that he considered the bill fully paid, at $4,000; that he “enjoyed working
with [Melanson;] and [that he] would have preferred an ongoing
relationship.” On September 20, it having come to Kernoff’s attention
that Melanson had not been licensed, he threatened a treble damage
lawsuit if the entire price of the job were not returned. Having had both
an incentive to argue over whether the last eight per cent of the bill was
actually owing, and whether he should get the price back because of
licensing, Kernoff could still find nothing wrong with the work. While we
recognize that he is not an electrician, we conclude that this dispute had its
origin in legalistic considerations, rather than workmanship.

                         CONCLUSIONS OF LAW

12.      Plaintiff marina asserts violations of the Vermont Consumer
Fraud Act, 9 V.S.A. § 2453 et seq., against Melanson. The Consumer
Fraud Act authorizes two types of civil actions. 9 V.S.A. §§ 2460, 2461.
The first is initiated and run by the Attorney General or a State’s Attorney,
and the second is a private right of action limited to consumers as defined
in 9 V.S.A. § 2451a(a). Plaintiff marina seeks damages against Melanson
under this second type of action. Originally, a corporation was not
permitted to bring such a claim since it fell outside the definition of
“consumer.” Int’l Collection Serv., 156 Vt.540, 542–45 (1991). That
definition, however, was amended in 1997 by Act No. 42 of the Vermont
General Assembly. 1997 Vt. Acts & Resolves No. 42, § 1. The purpose
of the amendment was to overrule Int’l Collection Serv. and “create a
private cause of action for businesses under Vermont’s consumer fraud
statute . . .” H. 226, 1997 Gen. Assem., Reg. Sess. (statement of purpose).
As such, North Hero may bring a private action under 9 V.S.A. § 2461(b).

13.     We conclude that Melanson engaged in a deceptive and unfair act
in misrepresenting himself to the customer.

14.      We also conclude that plaintiff has failed to prove any harm or
cognizable injury resulting from improper workmanship on the part of
Melanson; since the Consumer Fraud Act does apply, we are faced with
the question of what, if any, damages to award. Compare Greene v.
Stevens Gas Co., 2004 VT 67, ¶ 13 (“Although we read broadly the
requirement that there be injury, there must be some cognizable injury
caused by the alleged consumer fraud.”) (citation omitted); with Peabody
v. P.J.’s Auto Village, Inc., 153 Vt. 55, 57 (1990) (actual damages are not
necessary for a plaintiff to prevail in a consumer fraud action).

15.      North Hero is eligible for any appropriate equitable relief such as
the amount of damages suffered or the consideration. 9 V.S.A. § 2461(b).
As we previously concluded, North Hero did not suffer any damages as a
result of Melanson’s misrepresentations. Melanson’s violations, while
more than mere technical violations of the Consumer Fraud Act, do not
require the disgorging of consideration. Cf. D.J. Painting v.
BarawEnters., 172 Vt. 239, 242, 246 (2001) (no equitable relief where
contract dispute did not lead to either unjust enrichment or quantum
meruit). Melanson provided a valuable service to North Hero, for which
he was compensated. There has been no causal link between the damages
claimed by North Hero and the work done. Therefore, we decline to
extend any type of equitable relief to North Hero.
16.      Since North Hero has not proven injury, there is no violation of
the Consumer Fraud Act. Greene, 2004 VT 67, ¶ 13. By extension, North
Hero is not entitled to attorneys’ fees. However, even if Melanson’s
deceptive act were to somehow trigger the reasonable attorneys’ fees
portion of the Consumer Fraud Act, see Gramatan Home Investors Corp.
v. Starling, 143 Vt. 527, 535–36 (1983), the defendant’s complete lack of
damages coupled with the nature of Melanson’s consumer fraud would
require that we interpret “reasonable” in this case to be very low. See
Samuel-Bassett v. KIA Motors America, Inc., 357 F.3d 392 (3d Cir. 2004)
(“The term reasonable does impart a sense of proportionality between an
amount of damages and an award of attorneys’ fees”) (citation omitted);
Branigan v. Level on the Level, Inc., 740 A.2d 643, 646–47 (N.J. Super.
Ct. App. Div. 1999) (granting only limited attorney’s fees for a mere
technical violation of consumer fraud laws); Tibbetts v. Sight ‘n’ Sound
Appliance Centers, Inc., 77 P.3d 1042, 1051–54 (Okla. 2003) (“For a
private action to succeed the plaintiff must prove damages. Nowhere in
[the Consumer Fraud Statute] is it indicated that attorneys are entitled to
be compensated for merely showing some violation of the OCPA that
caused no damages to their clients.”); see also Pitchford v. Oakwood
Mobile Homes, Inc., 212 F. Supp. 2d 613, 620–21 (W.D. Va. 2002)
(damage award essential to meaning of “prevail” for attorneys’ fees).
This position is supported by the statute, which does not create a “private
attorney general,” but rather vest in the real Attorney General the power to
pursue nominal offenders. Tibbetts, 77 P.3d at 1051 (citing Alyeska
Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975)
(rejecting private attorney generals as a disfavored encroachment on the
American Rule)). Due to the mandatory nature of attorneys’ fees under
the Consumer Fraud Act, we would be compelled to award plaintiff
attorneys’ fees. Winton v. Johnson & Dix Fuel Corp., 147 Vt. 236 (1986).
But we believe that reasonable attorneys’ fees should dovetail with its
damages; such fees are appropriately awarded to prove the deception, but
not in situations where there are no actual damages..

17.      Exemplary damages require an additional finding of malicious
conduct warranting their imposition. Bruntaeger v. Zeller, 147 Vt. 247,
253–54 (1986). Despite Melanson’s misrepresentation, we find no malice
or wanton disregard in his actions. His lie, while a violation of the rules
governing electrical work, 26 V.S.A. § 881 et. seq., did not damage North
Hero. Nor does the evidence suggest that Melanson intended to provide
inferior or defective workmanship or anything less than what North Hero
wanted. We find it persuasive that Melanson did attempt to work under
the supervision of a master electrician in conformity with the rules. With
a lack of malice, no exemplary damages can be awarded. Bruntaeger, 147
Vt. at 253–54.



      Based on the foregoing, judgment is for the defendant. Motion to
re-open denied as moot.




      Dated at Burlington, Vermont, _________________, 2004.




                                            __________________________
Judge
