Cressy v. Proctor

15-4123-cv
Cressy v. Proctor
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION ASUMMARY ORDER@). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 12th day of December, two thousand sixteen.
PRESENT:
PETER W. HALL,
DEBRA ANN LIVINGSTON,
Circuit Judges.
NICHOLAS G. GARAUFIS,
District Judge.*
_____________________________________
Ronald Cressy,
Plaintiff-Counter-Defendant – Appellee,
v. Docket No. 15-4123-cv
Kevin Proctor,
Defendant-Counter-Claimant – Appellant.
_____________________________________
FOR PLAINTIFF-APPELLEE: DEVIN MCLAUGHLIN, Langrock Sperry
& Wool, LLP, Middlebury, VT.
FOR DEFENDANT-APPELLANT: MARK P. SCHERZER, Law Office of Mark
P. Scherzer, New York, NY, Richard
Thomas Cassidy, Hoff Curtis,
Burlington, VT.
* Judge Nicholas G. Garaufis, United States District Court for the Eastern District of New York, sitting by
designation.
Appeal from a judgment of the United States District Court for the District of Vermont
(Sessions, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court is AFFIRMED.
Following a bench trial, defendant-appellant Kevin Proctor appeals the district court’s award
of quantum meruit restitution to plaintiff-appellee Ronald Cressy. We assume the parties’
familiarity with the underlying facts, the procedural history of the case, and the issues on appeal.
I. Standard of Review
The parties dispute the proper standard of review with respect to the district court’s decision to
award quantum meruit restitution. Proctor argues that “[w]hether quantum meruit damages were
properly awarded in the circumstances presented is a question of law reviewed de novo.”
Appellant’s Brief, 27. Cressy argues that “[u]nder both Vermont law and the law of this Circuit,
review of this type of decision is limited to abuse of discretion.” Appellee’s Brief, 9. Proctor cites
no authority in support of his position, and we can find none. We are convinced that, under both
Vermont law and Second Circuit precedent, review is for abuse of discretion, and to the extent that
the decision under review relies on findings of fact, those findings are reviewed for clear error. See,
e.g., Amara v. Cigna Corp., 775 F.3d 510, 519 (2d Cir. 2014) (“The district court’s award of
equitable relief also may be reversed only for an abuse of discretion or for a clear error of law.
Where the district court’s determinations regarding . . . equitable remedies are supported by
findings of fact, such findings are reviewed under the ‘clearly erroneous’ standard.”); Weed v.
Weed, 968 A.2d 310, 315 (Vt. 2008) (“We review equitable remedies…for a trial court’s abuse of
discretion.”).
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With respect to the district court’s rejection of the equitable affirmative defenses raised by
Proctor, the parties agree that review on appeal is for abuse of discretion. With respect to the
district court’s computation of damages, the parties agree that review is for clear error.
“A district court has abused its discretion if it based its ruling on an erroneous view of the law
or on a clearly erroneous assessment of the evidence, or rendered a decision that cannot be located
within the range of permissible decisions.” In re Sims, 534 F.3d 117, 132 (2d Cir. 2008) (internal
citations, quotation marks, and alterations omitted). “A finding of fact is clearly erroneous only if,
after reviewing all of the evidence, this Court is left ‘with the definite and firm conviction that a
mistake has been committed.’” United States v. Cramer, 777 F.3d 597, 601 (quoting Anderson v.
City of Bessemer City, 470 U.S. 564, 573 (1985)).
II. Quantum Meruit Restitution
The central dispute in this case is whether Cressy was entitled to equitable restitution for the
benefit his labor conferred on Proctor’s business while the parties were in a domestic relationship.
Under Vermont law, equitable restitution is “based on an implied promise to pay when a party
receives a benefit and the retention of the benefit would be inequitable.” DJ Painting, Inc. v.
Baraw Enters., Inc., 776 A.2d 413, 417 (Vt. 2001). The proper inquiry is “whether, in light of the
totality of circumstances, it is against equity and good conscience to allow defendant to retain what
is sought to be recovered.” Legault v. Legault, 459 A.2d 980, 984 (Vt. 1983). Quantum meruit
restitution is awarded when the appropriate measure of damages is the reasonable value of the
claimant’s labor, regardless of its value to the claimee. See In re Estate of Elliott, 542 A.2d 282,
285 n.2 (Vt. 1988) (distinguishing quantum meruit and unjust enrichment measures of restitution).
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Having reviewed the district court’s decision and the record below, we are satisfied that the
district court did not abuse its discretion in ruling that quantum meruit restitution was appropriate.
The court heard conflicting testimony regarding the materiality of the benefit conferred by
Cressy’s labor at Synergy, and, in its role as fact finder at a bench trial, resolved these factual
conflicts with its findings that Cressy was a full-time employee with administrative and clerical
responsibilities who ran the day-to-day operations of the company. The evidence adduced at trial
permitted this interpretation. “Where there are two permissible views of the evidence, the
factfinder’s choice between them cannot be clearly erroneous.” United States v. Murphy, 703 F.3d
182, 188 (2d Cir. 2012) (quoting United States v. Iodice, 525 F.3d 179, 185 (2d Cir. 2008)). It was
not clear error for the district court to find that Cressy’s labor rendered a material benefit to
Proctor.
Proctor puts much emphasis on the undisputed facts showing that Cressy enjoyed an affluent
lifestyle in the parties’ shared household during the time he was working for Synergy. He argues
that Cressy, though not compensated by paycheck, was richly compensated by this lifestyle, paid
for by Proctor. The district court rejected that argument, however, and ruled that whatever lifestyle
benefits Cressy enjoyed were part of the normal exchange of domestic benefits in a domestic
relationship. We agree with the district court. As Proctor’s domestic partner, Cressy would have
expected to enjoy those sorts of lifestyle benefits, regardless of whether he contributed to Proctor’s
business. By contrast, Cressy’s labor as a full-time employee of Synergy was not within the scope
of the normal exchange of domestic benefits; Proctor could not have reasonably expected to enjoy
the benefits of Cressy’s labor as a matter of course by virtue of the fact of their relationship alone.
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The controlling case under Vermont law is Harman v. Rogers, 510 A.2d 161, 165 (Vt. 1986),
which also involved an unmarried couple, one of whom ran the day-to-day operations of a business
owned by the other and was not compensated. There, the Vermont Supreme Court ruled that “[t]he
only conclusion that can be fairly and reasonably drawn is that plaintiff’s services in this regard
materially benefitted the defendant” and directed the Superior Court to make a determination of
the appropriate amount of restitution. Id. Proctor points to no relevant distinction between the facts
before us and those in Harman. We see no abuse of discretion in the district court’s decision to
award restitution for Cressy’s labor.
III. Laches and Estoppel
The district court correctly rejected Proctor’s assertion of laches. “Laches is the failure to
assert a right for an unreasonable and unexplained period of time when the delay has been
prejudicial to the adverse party, rendering it inequitable to enforce the right.” Chittenden v.
Waterbury Ctr. Cmty. Church, Inc., 726 A.2d 20, 30 (Vt. 1998) (quoting In re Vermont Elec.
Coop., 687 A.2d 883, 884-85 (Vt. 1994)). As the district court noted, Cressy had no reason to raise
his restitution claim prior to the dissolution of the parties’ domestic relationship. It was not
unreasonable or inexplicable for him not to assert his right to restitution before the parties ended
their relationship. The district court did not abuse its broad equitable discretion in rejecting laches.
Proctor’s assertion of estoppel by acquiescence rests on essentially the same grounds as his
assertion of laches. It, too, was correctly rejected by the district court for the same reasons it
rejected the assertion of laches. Cressy had no reason to raise his claim while the parties were still
in a domestic relationship. There was no abuse of discretion in the district court’s rejection of
estoppel.
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IV. Computation of Damages
The district court computed damages based on an earnings period from the middle of 1994
through February 2008, the period during which Cressy was a full-time employee of Synergy, and
a base yearly salary of $40,000 in 1994, with annual salary growth. The parties stipulated that this
would yield an award of $107,957. Proctor challenges the validity of the earnings period and the
yearly salary figures the district court used.
We see no clear error in the earnings period used by the district court. The district court found
that the benefit of Cressy’s full-time labor began accruing to Proctor when Cressy became a
full-time employee in 1994, and it continued to accrue until Cressy ceased his labor in February
2008. These findings were supported by the evidence presented at trial. It was not clear error for
the district court to compute damages using an earnings period that accurately reflected the benefit
accrued to Proctor.
Proctor also argues that his expert’s $30,000 salary starting point was more appropriate than
the $40,000 figure provided by Cressy’s expert. The district court’s election of the figure provided
by Cressy’s expert was its choice between two views both supported by evidence, and was not
clear error. See, e.g., Murphy, 703 F.3d at 188.
Finally, Proctor reiterates his argument that he was entitled to an offset for the value of the
lifestyle benefits that he provided to Cressy after Synergy closed in 2008. Again, though, the
district court did not err in ruling that Cressy’s labor was qualitatively distinct from the normal
domestic benefits customarily exchanged in the context of a domestic relationship, and that the
various lifestyle benefits for which Proctor seeks an offset were within the scope of the normal
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domestic exchange between the parties. The district court’s decision not to offset damages was not
clear error.
We have considered all of Proctor’s remaining arguments and find them to be without merit.
The judgment of the district court is AFFIRMED.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
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