Kayla Eaton and Robert Eaton v. Cleary, Shahi & Aicher, Attorneys and David Cleary and Thomas Aicher, Individually

Note: Decisions of a three-justice panel are not to be considered as precedent before any tribunal.
ENTRY ORDER
SUPREME COURT DOCKET NO. 2013-172
OCTOBER TERM, 2013
Kayla Eaton and Robert Eaton } APPEALED FROM:
}
} Superior Court, Rutland Unit,
v. } Civil Division
}
}
Cleary, Shahi & Aicher, Attorneys and } DOCKET NO. 100-2-12 Rdcv
David Cleary and Thomas Aicher, Individually }
Trial Judge: Nancy Corsones
In the above-entitled cause, the Clerk will enter:
Plaintiffs Kayla and Robert Eaton’s lawsuit against Ms. Eaton’s former employer for
sexual assault was dismissed for lack of prosecution. Plaintiffs then filed a complaint against the
attorneys who represented the employer in the underlying action, defendants David Cleary and
Thomas Aicher, alleging fraud, negligence, and other misconduct. The trial court dismissed the
complaint, finding no duty of care, and also denied a motion to amend the complaint generally
and to add a claim of defamation. Plaintiffs have filed a pro se appeal. We affirm.
This is the second appeal to reach the Court in this matter. Eaton v. Prior, 2012 VT 54,
192 Vt. 249, concerned a lawsuit by plaintiffs against Leroy Prior, the licensed polygraph
examiner who was retained to conduct a polygraph examination of plaintiff Kayla Eaton and her
former supervisor in plaintiffs’ underlying action for sexual assault. We affirmed the trial
court’s dismissal of plaintiffs’ claims against Prior for emotional distress as barred by the three-
year statute of limitations applicable to actions for personal injuries, but reversed and remanded
to determine whether the complaint stated a claim for economic harm governed by the six-year
statute of limitations. Id. ¶ 23.
In addition to their lawsuit against the polygraph examiner, plaintiffs also filed two other
complaints following the dismissal of the underlying action, one against their former attorney,
and this action against the attorneys who represented the defendant employer in the underlying
action. Although the claims in the pro se complaint are difficult to parse, with many repetitive
and overlapping allegations, plaintiffs’ complaint essentially alleged that defendants intentionally
and fraudulently, or negligently, failed to disclose certain information about the selection of the
polygraph examiner, the appropriateness of the use of a polygraph in a case involving sexual
assault, the procedures to be followed and the use of the polygraph result.
Defendants moved to dismiss for failure to state a claim. The trial court held a hearing in
October 2012, and issued a written decision granting the motion on January 16, 2013. The court
ruled that defendants, as the lawyers for plaintiffs’ adversary in the underlying action, owed no
duty of care or duty to disclose to plaintiffs. The court also ruled that if it viewed plaintiffs’
allegations as alleging fraud, defendants also had no duty to disclose the information plaintiffs
allege was withheld. Further, the court concluded that plaintiffs had failed to show any causal
connection between defendants’ alleged fraud or negligence and the dismissal of the underlying
suit.
On January 30, 2013, two weeks after the order granting defendants’ motion to dismiss,
the court entered a judgment of dismissal. On the same day, plaintiffs filed a combined motion
for reconsideration and motion to amend the complaint, generally rewording the language and
adding theories based on prior allegations and adding a claim for defamation against attorney
Aicher. The proposed amendment was supported by an affidavit from plaintiffs’ former
attorney, prepared several months earlier in October 2012, recounting a conversation in which
attorney Aicher made the alleged defamatory statements. The trial court denied both motions,
concluding that plaintiffs failed to identify any new facts or law warranting reconsideration, and
that the motion to amend was untimely. This pro se appeal followed.
Like the complaint, plaintiffs’ arguments are difficult to fully itemize. They appear to be
in three basic categories: (1) the court erred in granting the motion to dismiss; (2) the court
issued the judgment order prematurely; and (3) the court erred in denying the motion to amend.
Starting with the arguments in the first category, in reviewing a Rule 12(b)(6) motion to
dismiss, we assume that all factual allegations in the complaint are true, and will not uphold a
dismissal unless it is beyond doubt that there exist no facts or circumstances that would entitle
the plaintiff to relief. Wharton v. Tri-State Drilling & Boring, 2003 VT 19, ¶ 10, 175 Vt. 494
(mem.). The bulk of the complaint alleges fraudulent non-disclosure or negligence. In either
case the existence of a duty of care is an essential element of such claims, and its existence is
generally a question of law for the court to resolve in the first instance. Hedges v. Durrance,
2003 VT 63, ¶ 6, 175 Vt. 588 (mem.). The trial court here was correct in finding the absence of
such a duty. The general rule “is that an attorney owes a duty of care only to the client, not to
third parties,” Bovee v. Gravel, 174 Vt. 486, 487 (2002) (mem.), and we have held that this rule
applies with particular force “where, as here, the third party is the client’s adversary who is also
represented by her own counsel in the proceedings.” Hedges, 2003 VT 63, ¶ 6; see also Lay v.
Pettengill, 2011 VT 127, ¶ 17, 191 Vt. 141 (finding no basis to impose duty of disclosure on
opposing counsel). Although there are some exceptions to this rule, they generally involve
situations where the plaintiff “is an intended third-party beneficiary” of the attorney-client
relationship. Hedges, 2003 VT 63, ¶ 7. Such a relationship was neither alleged nor shown in
plaintiffs’ complaint. Accordingly, we find no error in the order of dismissal based on the
absence of a duty of care.
We note that we must find a duty to disclose even if we view the action as one of
intentional fraud or deceit. Sutfin v. Southworth, 149 Vt. 67, 69-70 (1987). Plaintiffs’ complaint
describes defendants’ actions as a fraud on the court, apparently because of the stipulation that
the polygraph examination results could be offered in evidence. We have set a very high bar for
what can be considered a fraud on the court: “egregious misconduct evidencing . . . an
unconscionable and calculated design to improperly influence the court.” Godin v. Godin, 168
Vt. 514, 519 (1998). In this case, we need not decide whether defendants’ alleged misconduct
could have reached that level because the polygraph evidence was never offered in court, as the
underlying case was dismissed for failure to prosecute.
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Plaintiffs also appear to argue that the court failed to address their allegation that
defendants breached the covenant of good faith and fair dealing implied in every contract,
Carmichael v. Adirondack Bottled Gas Corp., 161 Vt. 200, 208 (1993), or tortiously interfered
with contract. Absent any contractual relationship in this case, we find no merit to the allegation
of breach of covenant. To the extent we can understand the allegation of tortious interference
with contract, the contract was between plaintiffs and their lawyer, who withdrew after the
polygraph examination. While the withdrawal may have occurred as a result of the polygraph
report, there is no allegation that defendants intentionally and improperly brought about this
result, as required for the tort. See Kollar v. Martin, 167 Vt. 592, 593 (1997) (mem.).
In addition, plaintiffs appear to suggest that they stated a valid claim for intentional
infliction of emotional distress. Such a claim “can be sustained only where the plaintiff
demonstrates outrageous conduct, done intentionally or with reckless disregard of the probability
of causing emotional distress, resulting in the suffering of extreme emotional distress, actually or
proximately caused by the outrageous conduct.” Colby v. Umbrella, Inc., 2008 VT 20, ¶ 10, 184
Vt. 1 (quotation omitted). Although the standard for sustaining a dismissal motion is liberal,
plaintiffs’ complaint provides no coherent factual basis for sustaining such a claim; indeed, the
claim is difficult even to discern, which may explain the trial court’s failure to consider it. In
their brief, however, under the caption “intentional infliction of emotional distress,” plaintiffs
state that “polygraphing a victim would retraumatize a victim reliving the event as not truthful.”
To the extent that this is the theory underlying the claim, we note that it is undisputed that the
polygraph examination came as a result of an agreement, and not a direction from defendants.
Accordingly, we find no error.
As to the second category of claims, we recognize that the court entered judgment before
the time for filing objections to the “form of judgment” had expired under V.R.C.P. 58(d)
(providing for the filing of objections within five days of service). However, we discern no
prejudice to plaintiffs as a result. Beyond plaintiffs’ argument that the court should not have
dismissed the complaint, there is no substantive objection to the form of judgment. Although the
court denied the motion to amend as untimely, having been filed after the entry of judgment, the
same result would have followed based on the fact that it was filed weeks after the order of
dismissal and was predicated on an affidavit executed months earlier. See Perkins v. Windsor
Hosp. Corp., 142 Vt. 305, 313 (1982) (observing that, although amendments are generally to be
liberally allowed, courts may properly consider “undue delay” in seeking amendment).
This is also a large part of the answer to the third category of claims—that the court erred
in denying the motion to amend the complaint. As we have affirmed the court’s dismissal of the
complaint, the motion was meritless. We recognize that the amended complaint would have
better stated plaintiffs’ claims—for example, the claim for intentional infliction of emotional
distress—but we see no difference in the result. The addition of the defamation claim was
untimely because it was based on an affidavit that was dated before the hearing on the motion to
dismiss. Accordingly, we find no abuse of discretion in denying the motion to amend.
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Affirmed.
BY THE COURT:
_______________________________________
John A. Dooley, Associate Justice
_______________________________________
Marilyn S. Skoglund, Associate Justice
_______________________________________
Brian L. Burgess, Associate Justice (Ret.),
Specially Assigned
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