Northern Security v. Mitec Electronics, No. 1167-99 Cncv (Katz, J., Jan. 11,
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
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STATE OF VERMONT                                       SUPERIOR COURT
Chittenden County, ss.:                           Docket No. 1167-99 CnCiv



NORTHERN SECURITY

v.

MITEC ELECTRONICS



                                   ENTRY



        Plaintiff casualty insurer commenced this action seeking a
declaratory judgment that it was not liable to defend or indemnify Mitec or
related companies, on the basis of a policy it had issued years ago. On July
1st, this court entered a declaratory judgment on plaintiff’s behalf, granting
the relief that had been requested—a declaration that there was no such
duty. July 14th saw the filing of two papers: plaintiff’s motion to amend its
original complaint and recover already borne costs of defense in the
underlying tort action and defendant Mitec’s notice of appeal. Mitec now
disputes plaintiff’s ability to reopen a closed case to amend its complaint
and expand its requested relief. The Vermont Supreme Court has remanded
the matter, to permit our consideration of these issues.

         We first take up the question of whether the filing of the notice of
appeal divested this court of jurisdiction. We find no impediment to the
exercise of jurisdiction because the motion to amend was filed on the same
day as the notice of appeal. We cannot determine which of the two was
first filed on July 14th, but it does not make a difference. See Giddings v.
Town of Ira, 54 Vt. 346 (1882) (Vermont law disregards fractions of a day
in determining parties’ rights). If we disregard the fraction of a day by
which the notice may have preceded the motion, we cannot hold that the
notice divested this court of jurisdiction.

        Rule 59(e), V.R.C.P., authorizes a motion to vacate a judgment
rather than merely amend it. 11 C. Wright, et al., Federal Practice and
Procedure 2d §2810.1. This text cites Forman v. Davis, 371 U.S. 178, 182
(1962) for the proposition that such a motion to vacate is permissible even
if it does not specifically designate the particular provision of the Rules
under which the motion was filed. Although the present motion neither
designates the rule now under discussion, nor explicitly seeks to vacate the
judgment just issued on its behalf, we think Rule 59 jurisprudence must
govern the proper response to this present controversy. After all, “All
pleadings shall be so construed as to do substantial justice.” Rule 8(f),
V.R.C.P. Rule 59(e) covers a broad range of motions, and the only real
limitation on the type of the motion permitted is that it must request a
substantive alteration of the judgment, not merely the correction of a
clerical error. 11 Wright, et al., at 121. The trial court enjoys considerable
discretion in granting or denying the motion. Id. at 124. Of that treatise’s
“four basic grounds” upon which a Rule 59(e) motion may be granted, the
third is to prevent manifest injustice. Id. at 126. Were the court not to
permit the amendment here, plaintiff insurer may find itself in the
unwelcome position of having paid out a very substantial amount to defend
a pollution claim, having won the issue that it was not actually obligated to
have borne those expenses, and yet being barred from ever recovering them
because a res judicata defense will be interposed to a separate, later action
initiated for the purpose. That would be manifest injustice. It was an error
not to have included a prayer for recovery of those expenses, but not an
error which cost the putative insured anything in the prosecution of this
action heretofore. We, therefore, conclude that there is authority pursuant
to Rule 59(e) to vacate the judgment, even at the behest of the prevailing
party, to permit the amendment and subsequent prosecution of a claim for
restitution of advanced defense expenses in the underlying action.

       Similarly, the reasoning for amending pleadings under Rule 15(a)
echoes and supports these conclusions. Forman, 371 U.S. at 182 (“If the
underlying facts or circumstances relied upon by a plaintiff may be a proper
subject of relief, he ought to be afforded an opportunity to test his claim on
the merits.”); Bevins v. King, 143 Vt. 252, 254–55 (1983) (Rule 15(a)
permits liberal amendments “to provide maximum opportunity for each
claim to be decided on its merits rather than on a procedural technicality, to
give notice of the nature of the claim or defense, and . . . to assert matters
that were overlooked or unknown . . . at an earlier stage in the
proceedings.”). It would contradict the overall purpose of the rules to
interpret one rule as a technical roadblock to another, when their mutually
stated purpose is to reach the substance of the claim.

       Having concluded that Rule 59 applies, we also note that the motion
to amend timely triggered the jurisdiction it affords. Given the two
intervening weekends, the ten days permitted under rule 59(b) is satisfied.
Even avoiding the question of whether Monday, July 5 should have been
omitted from counting as a holiday, the 14th is only the ninth day. Hence
the motion is timely.



       The motion to amend is granted. Judgment vacated.



       Dated at Burlington, Vermont, _________________, 2005.




                                            __________________________
                                                                 Judge
