Lombardi v. Duncan

Lombardi v. Duncan, No. 731-9-10 Rdcv (Teachout, J., Feb. 18, 2011)
[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 CIVIL DIVISION
Rutland Unit Docket No. 731-9-10 Rdcv
Patrick Lombardi
Plaintiff
v.
Nancy Duncan
Defendant
SMALL CLAIMS APPEAL
DECISION
Plaintiff Patrick Lombardi appeals from a judgment of the Small Claims Court dated
August 25, 2010. The Small Claims Court entered judgment for Mr. Lombardi against Defendant
Nancy Duncan for $4,145 in unpaid rent and court costs, to be paid at a rate of $25 per month.
On appeal, Mr. Lombardi argues that the Small Claims Court erred by using improper
procedures, misapplying the law of prejudgment interest, and improperly deciding ability to pay.
It is not the function of the Superior Court to substitute its own judgment for that of the
Small Claims Court Judge. Rather, the role of the Superior Court is to determine whether or not
the evidence presented at the hearing supports the facts that the Judge decided were the credible
facts, and whether or not the Judge correctly applied the proper law and procedure.
Proceedings Before Small Claims Court
Mr. Lombardi filed his small claims complaint on May 10, 2010, alleging that Ms.
Duncan, his tenant, owed him $5,000 in unpaid rent. Ms. Duncan filed an answer disputing the
amount of rent she owed.
The Small Claims Court held a hearing on August 12, 2010. At the start of the hearing,
the Judge indicated that the court would expedite the hearing because Ms. Duncan had to leave
to go to work. She then stated, “So what I would like to do is clarify some issues and see if we
can resolve this right here and now.” She began by questioning Ms. Duncan, the Defendant,
about the terms of her lease with Mr. Lombardi and the amount of rent owed. After taking all of
Ms. Duncan’s testimony, the Judge turned to Mr. Lombardi and asked him if he disputed any of
the Defendant’s testimony regarding her rent payments. Throughout the hearing, the Judge
directed the testimony through questioning. At a few points, Mr. Lombardi stated that he wished
to present his case, or asked if he was going to have the chance to do so. At no point was Mr.
Lombardi allowed to cross-examine Ms. Duncan or pose cross-examination questions.
Ms. Duncan testified that she ceased making the full monthly rent payment to Mr.
Lombardi in May 2009. Based on the amounts Ms. Duncan testified that she paid each month,
supported by receipts, the Judge calculated the amount she owed Mr. Lombardi. Ms. Duncan
also testified that, based on the calculations of the Rutland Housing Coalition, she would be able
to afford a payment of $25 per month toward her unpaid rent. The Judge then turned to Mr.
Lombardi and questioned his accounting based on the figures provided by Ms. Duncan.
The Judge and Mr. Lombardi also had a conversation about prejudgment interest. Mr.
Lombardi believed he was entitled to prejudgment interest. The Judge did not believe he was but
stated she would look up the law on that point before issuing a written decision.
Finally, the Judge offered Mr. Lombardi the choice to accept payments in the amount of
$25 per month, with the potential for modification if Ms. Duncan’s income increased, or to seek
a separate financial disclosure hearing. Although Mr. Lombardi stated that he did not like either
of those options, he eventually elected to accept the $25 per month payments.
The Judge took the matter under advisement and issued a written decision on August 25,
2010. She found the testimony of Ms. Duncan as to how much rent she owed to be credible and
calculated the amount to be $4,545. She then reduced that amount by $575, the amount of Ms.
Duncan’s unreturned security deposit, and found that to be $4,070 (although $4,070 – 575 =
$3,970). She added $75 in court costs for a total amount of $4,145 ($3,970 + 75 = $4,045). The
written decision does not mention prejudgment interest. The written decision establishes a
repayment plan of $25 per month as determined at the hearing.
Appeal
On appeal, Mr. Lombardi begins by pointing out the procedural irregularities of the small
claims hearing. He notes specifically that the Judge allowed the Defendant to present her side of
the case first, and that he was not allowed to cross-examine her. He claims three bases of error:
1) the Judge did not allow him full opportunity to present his case and consequently
miscalculated the amount of rent Ms. Duncan owed him, 2) the Judge did not allow for
prejudgment interest despite his claim that he was entitled to it, and 3) the Judge erred in setting
the repayment rate at $25 per month.
(1) Conduct of Hearing
Mr. Lombardi’s first argument on appeal is intimately connected with his claims that the
Judge did not follow proper procedure. He contends that the Judge did not allow him to present
his evidence in such a way as to support his full claim, including unpaid rent from prior to May
of 2009, or to challenge Ms. Duncan’s arrearage figures. He also notes that he was never allowed
to cross-examine Ms. Duncan.
Although 12 V.S.A. § 5531 states that small claims cases are to follow a “simple,
informal, and inexpensive procedure,” there is some limit on the Small Claims Court Judge’s
ability to simplify the proceedings. Clark’s Truck Ctr. v. Smith, 2009 VT 80, ¶ 8, 186 Vt. 284.
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Specifically, “parties must have a full and fair opportunity to present competent evidence.” Id.
(citation omitted). Parties are explicitly allowed under the rules to conduct cross-examination to
supplement the judge’s examination of witness. V.R.S.C.P. 6(a). This procedure was not
followed in this case. The Judge was concerned about moving the hearing along so that Ms.
Duncan could get to work, but the desire to reach a speedy conclusion cannot trump the litigants’
rights to a fair trial.
This case also followed the unusual procedure of taking evidence from the Defendant
before taking evidence from the Plaintiff. Although the Judge is empowered to conduct the
hearing “in a summary manner” and to ask questions, the reverse procedure used in this case
shifted the burden of proof and deprived Mr. Lombardi of a full and fair opportunity to present
his claim. V.R.S.C.P. 6(a). He claims the Judge was unwilling to look at the totality of the back
rent Ms. Duncan owed because the Judge presumed Ms. Duncan’s testimony as to when the
arrearage started to be credible and was unwilling to consider his opposing testimony. He was
never given an opportunity to present his full claim, even though he was the plaintiff.
This Court agrees with Plaintiff that the procedure used deprived him the opportunity to
present the full extent of his claim and the basis for it, and to cross-examine Defendant. The case
must be remanded for a new properly conducted trial.
(2) Prejudgment Interest
Mr. Lombardi argues that the Judge improperly refused to award him any prejudgment
interest. The Judge stated at the hearing that she did not believe Mr. Lombardi was entitled to
any prejudgment interest under the law, but she would research the issue after the hearing. There
is no award or mention of prejudgment interest in the written decision, so she either failed to
address this aspect of his claim or she concluded that Mr. Lombardi was not legally entitled to an
interest award.
In either circumstance, the court erred. Prejudgment interest is allowed in an action where
monetary relief is awarded. V.R.C.P. 54(a). If a defendant has contractually obligated herself to
pay interest, the trial court has no discretion to refuse an award of prejudgment interest. Roy v.
Mungford, 161 Vt. 501, 514 (1994). Mr. Lombardi testified that his lease with Ms. Duncan
allowed for interest at the legal rate. This provision would entitle him to an award of
prejudgment interest.
(3) Repayment Plan
Finally, Mr. Lombardi challenges the repayment rate of $25 per month. Although Mr.
Lombardi did eventually agree to this payment amount, he explicitly objected to such a low
amount, and objected to the fact that it was determined by an absent third party and accepted by
the court without a factual basis and without cross-examination. He was given the choice of
accepting it or seeking a separate hearing; sounding defeated by the experience of the
proceeding, he accepted it. His acceptance of the $25 per month figure was made after he had
been denied the opportunity to cross examine on any issue, including ability to pay.
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In light of the procedural irregularities at the hearing and the misapplication of the law of
prejudgment interest necessitating remand, the case will be remanded for a new hearing on all
issues, including whether a payment schedule will be established, and if so, the Defendant’s
ability to pay.
Conclusion
On all three issues, the procedure followed by the Small Claims judge operated to deny
Plaintiff the legal process to which he was entitled. The case is reversed and remanded to the
Small Claims Court for a new properly conducted hearing.
ORDER
The Judgment of the Small Claims Court dated August 25, 2010, is reversed and
remanded for a new hearing.
Dated at Rutland, Vermont this 16th day of February, 2011.
________________________
Hon. Mary Miles Teachout
Superior Judge
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