King v. Bishop

King v. Bishop et. al., No. 131-4-12 Bncv (Wesley, J., Nov. 12, 2013).
[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy of the text and the
accompanying data included in the Vermont trial court opinion database is not guaranteed.]
STATE OF VERMONT
SUPERIOR COURT
VERNON KING │
Plaintiff │
│ BENNINGTON UNIT, CIVIL DIVISION
v. │ Docket No. 131-4-12 Bncv
Brian Bishop & Courtney Bishop │
Defendant │
│
FINDINGS OF FACT, CONCLUSIONS OF LAW
& ORDER
At the trial to the court on Sept. 16, 17, and 24, 2013 on the merits of the
complaint and counterclaims, Plaintiff Vernon King appeared self-represented.
Defendants, Brian and Courtney Bishop, appeared and were represented by Patrick
Bernal, Esq.
Count I of Plaintiff’s complaint seeks damages for breach of a construction
contract, invoking relief under the Vermont Prompt Payment Act. Count II seeks
damages for conversion. Count III seeks damages for fraud. Count I of Defendants’
counterclaim seeks damages under Vermont’s Consumer Fraud Act. Count II seeks
damages for defamation. Count III seeks damages for breach of contract. Count IV
seeks damages for breach of express warranty.
At the close of the evidence, the Court allowed the parties until Oct. 4 to file post-
trial memoranda and proposed findings. Based on the evidence at trial, the Court makes
the following findings and conclusions.
Findings of Fact
1. In 2010, Mr. and Ms. Bishop owned a parcel of unimproved land in Wells, Vt. They
contracted to place a modular home on the property. Knowing Mr. King had
performed some carpentry for Mr. Bishop’s father, they consulted with him regarding
construction anticipated in connection with readying the modular home for their
occupancy as their family’s primary residence.
2. The Bishops understood that, after being delivered from the factory, the modular
home would need completed siding, as well as soffits, facia, and a chimney. They
also wished to have it appointed with a “farmer’s porch.” They met with Mr. King to
discuss these projects.
3. Mr. King informed the Bishops that he was familiar with the installation of vinyl
siding, and that he employed workmen experienced in that aspect of the construction
trades. While Mr. King expected to supervise any construction, the parties
understood that he would employ others to do the construction tasks due to his
physical impairments.
4. Mr. King has been afflicted with muscular dystrophy since age 18. He is now 44 and
has required the use of a wheelchair for the past six years. Within the past two years,
he has been found eligible for social security benefits as a result of his disability.
5. For the purpose of Mr. King’s preparation of an estimate, the Bishops provided him
with a preliminary blueprint showing the dimensions of a model of a modular home
similar to the one they expected to purchase. Ms. Bishop credibly maintains that Mr.
King understood that the blueprint did not contain exact specifications representing
the home as it would be actually installed.
6. On April 10, 2010, the parties executed a written contract prepared by Mr. King for
“vinyl siding & farmer’s porch.” The “scope of work” described by the contract
provided: “Contractor will install vinyl siding and metal trim for soffits & fascia on
exterior of house & garage. Contractor will build a farmer’s porch, 44 x 8, on front
entry side of house. Farmer’s porch will be built to plan specs. Home owners will
supply vinyl siding, metal trim, and shingles for roof of farmer’s porch. Home
owners will be responsible for garbage, demo, scrap wood, etc. Contractors will
supply materials for farmer’s porch, decking, post, railing, wainscoting, spindles and
steps and framework. Labor and materials are in this price.”
7. The contract provided that the Bishops would pay Mr. King $10,000 for the work
specified, payable as follows: “4,000 deposit, Halfway 3,000, Job Completion,
3,000.” Mr. King included a 5 year warranty on all work.
8. The Bishops had arranged construction financing through People’s United Bank.
For any disbursements to contractors other than the modular home company, and who
were not directly supervised by the modular home company, People’s required the
participation of a “general contractor” to make disbursement of loan proceeds to other
sub-contractors. This was reflected in the testimony of Dawn Hood, the People’s
Bank supervisor involved with the Bishops’ loan, as well as correspondence in
evidence.
9. Ms. Bishop sought clarification of this requirement in March 2010, “because the
house is coming 85% completed and we only have to hire an excavator, well driller,
and plumber and electrician to hook up the house”. Thus, she thought “that we didn’t
have to have a ‘GC’ per se.” If the bank would require it, Ms. Bishop indicated that
“[w]e do have to hire a builder to attach a porch and the siding – maybe they will act
as a ‘GC’”.
10. By email dated March 1, 2010, Robin Mowrey, the People’s representative, notified
Ms. Bishop that “generally we will not allow you to be the GC.”
11. The Bishops and Mr. King agreed that he would function as the general contractor,
not only for disbursement of loan proceeds for the siding and porch, but also for
payments to other subcontractors.
12. During trial, both Mr. King and Ms. Bishop confirmed each other’s understanding
that Mr. King’s role as “general contractor” was limited; in fact, neither disputed that
the expectation of the parties was that Mr. King’s role was strictly to fulfill the
Bank’s requirement that someone other than the borrower be formally named in
connection with approval of funds designated for various subcontractors.
13. On April 11, 2010, Mr. King signed People’s Bank’s form disbursement agreement as
general contractor, which was also approved by the Bishops. Mr. King acknowledged
that disbursement would be authorized after an inspection by a project management
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company, and would be based “on the percentages completed as verified by the
inspection report.”
14. On April 23, 2010, Mr. King and the Bishops executed People’s Bank’s form
acknowledgement of construction loan procedures, further supplementing the
disbursement agreement.
15. In May 2010, the Bishops informed Mr. King that the modular home had been
ordered. Based on the time necessary for construction in the factory, and shipping the
home to the site, Mr. King and the Bishops understood that work under their contract
likely would not begin until sometime in July 2010.
16. Work associated with site preparation by other subcontractors began in June 2010.
Mr. King was not involved with the supervision of these efforts.
17. Mr. King and the Bishops agreed that, notwithstanding the Bank’s disbursement
agreement, the Bishops would deal directly with other sub-contractors, and would pay
them once the Bank approved the disbursement request.
18. Based on the Bishops’ June request for disbursement for the payment of the
subcontractors who did site construction, including building the driveway and
installing the foundation, Ms. Bishop testified that she arranged to meet Mr. King so
that he could execute a payment request and a release and waiver.
19. Based on the payment request and waiver, the Bank issued a check for $26, 600 on
June 8, 2010 made out to Brian and Courtney Bishop and Vernon King Builders.
20. According to Ms. Bishop, and pursuant to the understanding she had reached with
Mr. King, she met Mr. King in her mother’s driveway where he endorsed the check.
She then deposited the check and used the proceeds to pay the subcontractors.
21. Mr. King disclaims that he executed the payment request, or the release and waiver,
or that he endorsed the June 8 check. He maintains that the signatures on those
instruments purporting to be his were forgeries. He claims not to have learned about
any of the transactions until he began making inquiries of the Bank in Sept. 2010 after
the parties had entered into a dispute over performance under the contract.
22. Mr. King does not claim, nor is there any evidence to support, that he was entitled to
proceeds from the June 8 check. He was a payee solely as a result of his designation
as general contractor.
23. As with the June 8 check, Ms. Bishop testified that she again arranged to meet Mr.
King to have him approve another payment request for further site work, including
excavation, foundation, crane expenses, set crew costs, partial siding costs and
expenses for roughing in basement plumbing.
24. After submission of the payment request and waiver dated July 20, the Bank issued a
check for $28,800 made out to the Bishops and Mr. King.
25. By Ms. Bishop’s account, after securing Mr. King’s endorsement, she attempted to
make a deposit into her account at Bank of Bennington, where the check was not
accepted because the Bank of Bennington did not believe it could properly be
deposited to a personal account as opposed to a business account.
26. After consulting with People’s, a check for $20,000 was reissued. According to Ms.
Bishop, the lesser amount as compared to the original check for the amount of
$28,800 was due to a teller error. This was subsequently adjusted by means of a wire
transfer directly to the Bishops’ account for the balance of the $8,800.
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27. Ms. Bishop testified that she arranged for Mr. King’s signature of the replacement
check at a hot dog stand in Manchester. Although her verified answer and
counterclaim represent that the transaction took place at 1805 Sawmill Hill Road in
Wells, Vt., Ms. Bishop testified that this was an error she did not notice in reviewing
the pleading.
28. Ms. Bishop subsequently deposited the check in Mr. Bishop’s business account, and
used the proceeds to pay the subcontractors for the work itemized in the payment
request.
29. As with the June 8 check, Mr. King disclaims any knowledge or involvement with the
payment request, the release and waiver associated with it, or the endorsement of
either the check for $28,800 or the replacement check for $20,000.
30. Also similarly to the earlier disbursement, although Mr. King denies endorsing
the check, he does not claim, nor does any other evidence establish, that he was
entitled to any of its proceeds. He was a payee solely as a result of his designation as
general contractor.
31. Around the third week of July 2010, Mr. King began to perform the work specified
by his April 10 contract with the Bishops. Mr. King claims that the modular home
had not been adequately prepared by the company’s prep crew.
32. The modular units came from the factory with a certain amount of siding installed;
however, by Mr. King’s assessment, most of that had to be removed. As he explained
to the Bishops, the siding that had already been installed was not anchored to corner
components that he would need to install as part of his work. In Mr. King’s opinion,
the remaining siding could not be properly installed, together with the corners,
without first taking down what came from the factory, and beginning the installation
from the bottom up.
33. Mr. King informed the Bishops that the complications arising from the delivery of an
inadequately prepped modular home had resulted in the need for more time and labor
on his part than their original contract had anticipated.
34. Mr. King demanded that the Bishops execute a second contract, which they did with
extreme reluctance on Aug. 7, 2010. The new contract recited that it was: “For extra
work on home, this is results of poor workmanship of set crew that set home. These
poor workmanship has created much more extra work for the Generale Contractor
Vernon C. King” (sic).
35. The new contract increased the price by $4,000, to $14,000. It acknowledged a prior
deposit of $3,000, a further deposit on the new contract of $2,500, with $8,500 as the
“balance on the job”. It further recited: “This is a attachment to first proposal sign by
both parties” (sic).
36. Although Mr. King initially employed two workers on the Bishops’ project, within a
few days the only person performing labor under the contract was Robert Jaworski.
By Ms. Bishop’s credible testimony, shortly after work began, no one appeared to
work on the project for a week.
37. In early September 2010, under the belief that the work was approximately 50%
accomplished, Mr. King made an oral demand for another payment from the Bishops
in the amount of $1,500.
38. Ms. Bishop did not believe there had been sufficient progress toward completion to
justify a further advance. She informed Mr. King that the matter could be discussed
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again if significant additional progress was made during the next week, and if the
materials for the construction of the porch had been delivered.
39. At that point, significant work remained to be accomplished to complete the
installation of the vinyl siding. The installation of soffits and facia required by the
contract was incomplete as well. No work had been commenced on the construction
of the porch, nor had Mr. King ordered any materials.
40. The evidence does not support Mr. King’s claim that the total work anticipated by
the contract was approximately 50% complete. It was no more than 1/3 complete,
and aspects of what was claimed as completed eventually proved unworkmanlike.
41. After Ms. Bishop informed Mr. King that she would not honor his request for an
immediate additional payment of $1,500, he informed her that he would not continue
working without payment. Thereafter, neither Mr. King nor Mr. Jaworski returned to
the job site to perform any additional work.
42. Mr. King never submitted a written invoice to the Bishops informing them of a claim
for work that had been performed, and a demand for payment. Except for his oral
demand for payment, Mr. King never provided the Bishops with any other
explanation for a claim that the Bishops were in breach of the contact.
43. Ms. Bishop made several attempts over the days immediately following Mr. King’s
demand to have further conversations. She left him messages by voicemail and
email. Mr. King did not return the messages.
44. When Mr. King left the work site at the Bishops’ home for the last time, he left
certain tools behind. It is undisputed that he later retrieved most of the tools with the
assistance of law enforcement. No charges were brought against the Bishops in
connection with Mr. King’s claim that they were illegally withholding his tools.
45. Although Mr. King claims that even with law enforcement assistance he had been
unable to retrieve certain tools, there is no credible evidence that the Bishops retained
them.
46. Shortly after telling Ms. Bishop that he would not continue work on the contract
without another payment, Mr. King contacted Peter O’Brien, a vice president at TD
Bank in Granville, NY to make inquiry about the $20,000 check issued by People’s
Bank on July 30.
47. Mr. O’Brien had previously communicated with Mr. King on August 2 concerning
the check. When Ms. Bishop deposited the check in Mr. Bishop’s business account at
TD Bank, its loss prevention specialists questioned whether Mr. King was authorized
to endorse the check on behalf of Vernon King Builders. Mr. O’Brien had contacted
Mr. King to verify his authority with respect to Vernon King Builders.
48. As a result of Mr. O’Brien’s conversation with Mr. King, Mr. King executed an
affidavit describing his relationship to Vernon King Builders and delivered it to TD
Bank. As a result of the delivery of the affidavit, TD Bank accepted the $20,000
check for deposit in Mr. Bishop’s account.
49. Mr. O’Brien does not recall that, during their conversations in early August, Mr. King
claimed that the endorsement of his name on the $20,000 check was a forgery. Mr.
O’Brien similarly disclaims any such statement having been made during his
subsequent conversation on or about Sept. 10, 2013.
50. Mr. King sought and obtained from People’s Bank copies of all documents associated
with the Bishops’ project bearing a signature purported to be his.
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51. After reviewing the documents, Mr. King consulted with an attorney regarding his
concern over his contractual relations with the Bishops, including his belief that his
signature had been forged. There was some contact between Mr. King’s attorney, and
an attorney retained by the Bishops during the period shortly after communication
between the principals terminated. The evidence did not examine the nature of the
contacts between counsel.
52. Mr. King made a report to the Manchester Police alleging that Mr. and/or Ms. Bishop
had forged his name on the checks, as well as the requests for disbursement and
waivers and release.
53. The Manchester Police declined to refer Mr. King’s complaint for prosecution. Mr.
King filed a civil suit claiming that the refusal to prosecute was a violation of his civil
rights.
54. Acting as his own legal representative, Mr. King also filed suit against the
Bennington State’s Attorney and the Vermont Attorney General similarly based on
his claim that his civil rights had been violated due to the refusal of those two offices
to bring criminal charges against the Bishops.
55. The four suits filed by Mr. King alleging civil rights violations eventually were either
withdrawn or dismissed.
56. Mr. King acknowledges having filed other suits that he later dismissed. He described
this tactic as “sending a warning shot, a cease and desist”, insisting that “there is
nothing in the law that says I can’t.”
57. As a result of Mr. King’s claim to People’s Bank that his signature had been forged,
the Bishops were unable to draw on their construction loan until sometime in the
spring of 2011. In order to pay for the installation of a furnace, they had to delay
until February 2011 when they had saved enough to pay for it, while still waiting to
resolve access to the remaining proceeds of their construction loan.
58. In summer, 2011, once the ability to make further draws against the loan proceeds
had been confirmed, the Bishops retained Paul Getty to assess work which remained
uncompleted under their contract with Mr. King.
59. Mr. Getty is an experienced builder, with considerable expertise in the installation of
vinyl siding, including such installation in connection with finishing the siding on
pre-fabricated modular homes on which siding had been partially installed.
60. According to Mr. Getty’s credible testimony, very little of the work supervised by
Mr. King met expected standards of workmanlike construction.
61. Mr. King should not have removed the factory-installed siding, the claimed defects in
which was the reason Mr. King gave the Bishops for the second contract calling for
an increase in price by $4,000.
62. Had Mr. King been sufficiently knowledgeable as to the proper techniques for
installing siding, no removal would have been necessary in order to install corners,
and in order to continue proper and weather-tight installation above the factory-
installed level.
63. In fact, at the time Mr. Getty took over responsibility for construction, little additional
installation had been accomplished above the levels of the original factory-installed
levels, which Mr. King needlessly removed and then replaced.
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64. By Mr. Getty’s credible description, only “the gravy work” had been done. With the
exception of one section in the back of the home, no siding had been installed above
the 8-10 foot level.
65. Most soffits had not been installed. One eve soffit was installed upside down, such
that it would not have vented properly.
66. There was no sill trim under windows, and corner posts were improperly installed,
preventing proper locking of the siding components.
67. Flashing had been installed carelessly, making it likely that water would enter the
structure.
68. Mr. Getty charged the Bishops $19,000 to complete the work specified by the
contract between the Bishops and Mr. King, of which $1,500 was made necessary to
correct unworkmanlike errors by Mr. King.
69. Based on Mr. Getty’s persuasive description of the work necessary to accomplish the
remaining tasks specified by the contract, the Court finds that the amount he charged
was reasonable under all the circumstances.
70. In connection with this lawsuit, Mr. King retained Charles Roemmelt as an expert in
handwriting. Mr. Roemmelt analyzed known exemplars of Mr. King’s signature, and
compared them to the signatures on the checks for $26,600, $28,800 and $20,000,
together with the signatures on the disbursement requests and releases associated with
those checks. He cites a number of differences revealed by the comparison as
sufficiently distinctive to justify the conclusion that Mr. King did not sign the
instruments he has disclaimed.
71. Mr. Roemmelt also compared known exemplars of Ms. Bishop’s signature to the
signatures purporting to be Mr. King’s. He cites a number of similar characteristics
as justifying the conclusion that she signed the instruments, and not Mr. King.
72. Mr. Roemmelt has extensive experience in handwriting analysis, including having
been accepted as an expert witness.
73. Mr. Roemmelt was admitted to the bar in New York in 1977. In 1998, he was
convicted of federal tax fraud based on having filed a fraudulent tax return. He was
required to make restitution in the amount of $20,000.
74. Mr. Roemmelt was suspended from the practice of law in 1999, following his
conviction. He testified that he voluntarily withdrew from practice since he had
already been retired since 1992. However, he was forced to correct his claim of
voluntary acquiescence to suspension from legal practice on further cross-
examination, which included documentary proof that he had challenged the
suspension on appeal, and that the suspension was affirmed.
75. Mr. King paid Mr. Roemmelt $900 for his Oct. 2012 report, and $2,300 for his
appearance at trial as an expert witness.
Discussion and Conclusions of Law
From a modest construction contract dispute, this case has spawned a plethora of
claims for relief, most of which are not supported by the evidence. The issues associated
with the performance of the construction contract are not complex, and the evidence tilts
resolution decisively in favor of the Bishops. The other claims, particularly those bound
up with the allegations and denial of forgery, attracted more attention during the
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presentation of evidence than the issues directly framed by the terms of the contract. In
the end, however, the resolution of the allegations related to forgery is unnecessary to the
determination of breach of contract. In any event, the evidence on either side of the
forgery issue is so tangled and equivocal that neither party can be found to have met the
burden of proof with respect to his, her or their claims.
Breach of Contract, Breach of Warranty & The Prompt Payment Act
The determination of the competing claims regarding the performance of the
April 10, 2010 contract turns on the assessment of credibility, as between the testimony
of Mr. Getty, as compared to that of Mr. King and Mr. Jaworski. That does not present a
close question. Mr. Getty has significantly more experience in the installation of vinyl
siding than either Mr. King or Mr. Jaworski. His experience includes installation on
modular homes in connection with the partial installations accomplished at the factory.
His explanation of the tools and techniques associated with this specialized sub-skill of
the construction trades made evident Mr. King and Mr. Jaworski’s relative lack of
qualifications to take on the work specified by the contract. Mr. Getty’s authoritative
explanations convince the Court that he accurately described the standards of good and
workmanlike expectations in the installation of vinyl siding under the circumstances
established by the contract. See Long Trail House Condo. Ass’n v. Engelberth Constr.,
2012 VT 80, ¶ 31, 192 Vt. 322 (recognizing an implied warranty of good and
workmanlike construction). Mr. Getty’s conclusion that the work performed under Mr.
King’s supervision did not meet those standards is well-supported by the evidence.
Mr. Getty persuasively undermined Mr. King’s representation to the Bishops that
his ability to begin work under the contract was compromised by errors or sloppy work in
manufacturing or setting up the modular home. Rather, it is likely that: i) the combined
inexperience of Mr. King and Mr. Jaworski, prevented their understanding of the proper
methods for integrating the work already pre-fabricated at the factory, with the additional
tasks contemplated the scope of work described in the contract; and/or ii) Mr. King
belatedly realized that he had underbid the job based on a further assessment of the likely
scope of the work In any event, Mr. King needlessly removed the factory-installed
siding, wrongly believing it had been installed in a faulty manner. Due to this
misperception, or his re-evaluation of the amount of necessary work, Mr. King convinced
the Bishops to execute an addendum to the contract, adding $4,000 to the contract price,
representing that it was associated with the performance of entirely unnecessary work.
Because there was no consideration for the second contract raising the contract price by
$4,000, the increased price is unenforceable. See Weed v. Weed, 2008 VT 121, ¶ 14, 185
Vt. 83 (“Both parties must regard a bargained-for promise or act as consideration.”).
Similarly, Mr. Getty’s testimony established that the work contemplated by the
contract with respect to the installation of the vinyl siding, without even taking into
consideration the uncommenced construction of the porch, was no more than 1/3
completed at the time Mr. King refused to perform further. Moreover, significant aspects
of the work claimed as complete was defective, including misjoined corners, lack of sills,
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improperly installed soffits, and flashing of such poor workmanship that it would not
stand up to weather.
The original contract contemplated, after a deposit of $4,000, another payment of
$3,000 when the work was one-half completed. Under those terms, Mr. King had not yet
performed sufficiently to be entitled to the additional payment. Yet, pursuant to the
August 2 addendum, made without adequate consideration, the Bishops had paid Mr.
King an additional $2,500. That revised contact made no provision for additional
payment until the work was completed, at which time it specified that $8,500 would be
due. Whether measured against the terms of the first agreement, or the terms of the
unenforceable second agreement, Mr. King’s demand for additional payment was not
supported by any express contractual term, particularly since his performance at that
point was insubstantial and sub-standard.
By insisting that he was entitled to the extra payment in September as a condition
for performing the balance of the work under the contract, Mr. King’s actions in failing to
continue to perform placed him, not the Bishops, in breach of the contract. See McGee
Constr. Co. v. Neshobe Dev., Inc., 156 Vt. 550, 555–56 (1991) (noting that walking off
the job without sufficient justification was a breach of contract). At that point, the
Bishops were entitled to engage Mr. Getty to perform the work left uncompleted by Mr.
King. Mr. Getty’s bill for the remaining work, $19,000, including the need to correct Mr.
King’s defective performance, was reasonable under the circumstances. The Bishops’
measure of damages is the difference between the original contract price and the amount
paid to complete the contract. See id. at 557–58; see also Restatement (Second) of
Contracts § 347 (describing how to calculate contract damages). In this case, the Bishops
contracted with Mr. King to do all of the work for $10,000. By the time the work
specified by the contract was complete, the Bishops had paid $5,500 to Mr. King and
$19,000 to Mr. Getty. The total cost was $24,500, which leaves the Bishops with
damages of $14,500.
In filing his complaint, Mr. King invoked Vermont’s Prompt Payment Act, (PPA)
9 V.S.A.§ 4001 et seq. By the terms of § 4002(a), an owner must pay a contractor
“strictly in accordance with the terms of the construction contract.” The Act further
provides that, in the absence of “a term governing the terms of payment”, a contractor
“shall be entitled to invoice the owner for progress payments at the end of the billing
term”, in which case payment is due within 20 days after delivery of the invoice. §
4002(b)&(c). Notwithstanding these requirements, an owner may withhold payment
“equaling the value of any good faith claims against an invoicing contractor…including
claims arising from unsatisfactory job progress, defective construction, [or] disputed
work…§ 4007(a). With respect to claims for payment based on the PPA, § 4007(c)
provides for the award of attorneys fees to “the substantially prevailing party.”
Having based his claim for payment under the contract on the PPA, Mr. King has
failed to establish any right to relief. First, there is no evidence that Mr. King ever
presented the Bishops with an invoice, which is the threshold procedural requirement to
establish a right to the enforcement mechanisms established by the Act. More crucially,
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at the time he made his oral demand for additional payment, as discussed above, Mr.
King was not entitled to funds either by an express term of the parties’ contract, or by a
demonstration of substantial performance. In fact, even had Mr. King attempted to
perfect his PPA claim by the tender of an invoice, the Bishops would have been justified
in refusing under the protections for good faith disputes over the work as provided in §
4007(a).
With regard to Mr. King’s PPA claim, the Bishops have prevailed entirely and are
entitled to an award of their attorneys fees. See, Burton v. Jeremiah Beach Parker
Restoration and Construction Management Corp. 2010 VT 55, 188 Vt. 583; The Electric
Man v. Charos, 2006 VT 16,179 Vt. 381.
Fraud, Conversion, Consumer Fraud & Defamation
Mr. King’s counts for fraud and conversion, and the Bishops’ counterclaim for
consumer fraud and defamation, each turn on the issues arising from Mr. King’s claim
that Ms. Bishop forged his signature on certain of the checks and instruments associated
with the bank loan which financed the Bishops’ purchase of their modular home, and was
expected to finance payment of the work described by the parties’ construction contract.
The evidence is sufficiently equivocal that neither party can be said to have met the
burden of proof by a preponderance in regard to any of these claims.
It is plain the Mr. King’s fervent insistence that he was the victim of multiple
forgeries has fueled this litigation. Nevertheless, the claim is essentially tangential to the
respective obligations of the parties under the contract. Mr. King claimed to be unaware
of any forgery at the time he left the job, and refused to come back to work in the absence
of payment toward the contract price. While it is evident that Mr. King’s engagement of
the police and law enforcement in the aftermath of the parties’ rift likely precluded any
resumption of productive owner-contractor relations, it is far less obvious that the alleged
unauthorized signatures, assuming Ms. Bishop executed them, constituted breach of any
term of the construction contract. In any event, Mr. King had already repudiated any
intention to complete performance on the contract well in advance of his campaign to
engineer forgery charges against his clients.
It is also patent that Mr. King has not proved any damages, even had he
succeeded in proving one or more forgeries. There could be no conversion, because no
funds ever belonged to Mr. King. See Montgomery v. Devoid, 2006 VT 127, ¶ 12, 181 Vt.
154 (defining conversion as “an intentional exercise of dominion or control over a chattel
which so seriously interferes with the right of another to control it that the actor may
justly be required to pay the other the full value of the chattel.”). By his own description,
he was simply a designated payee in his “limited capacity” as the titular general
contractor required by People’s Bank. None of the funds authorized for disbursement as
represented by the three checks was associated with any work performed by Mr. King, as
that work had not commenced in June, and was barely under way at the end of July (and
still covered by the initial deposit). Similarly, there was no fraud. Proof of fraud requires
a misrepresentation that results in monetary harm. Restatement (Second) of Torts § 525;
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see also Winey v. William E. Dailey, Inc. See 161 Vt. 129, 133 (1993) (adopting the
Restatement). Since none of the funds belonged to him, Mr. King has no claim of injury
even if the signatures on the checks were not his.
The Bishops’ claims rest on causal connections that are almost as attenuated.
They posit a deceptive scheme arising after the breach of contract had already occurred,
ostensibly to provide Mr. King with a further justification for non-performance. Yet,
actionable deceptive acts under the Consumer Fraud Act must occur at the inception of
the sale of goods or services, and the consumer must have relied upon the deception in
entering into the consumer transaction. See Winey, 161 Vt. at 134–35. Defamation is
more plausibly made out by the allegation of a false claim of forgery, though the
connection between the publication and actual monetary injury is tenuous. The reason
for the Bank’s delay in releasing the proceeds of the construction loan was left
speculative by the evidence. Even had it been well-established that such delay resulted
directly from the claim of forgery, and was beyond prompt cure by any diligence on the
Bishops’ part, it is doubtful that the inconvenience resulting from the delay in completing
the modular home installation can be recovered as compensatory damages for
defamation.
Nevertheless, the root of each party’s problems with the claims related to the
alleged forgery is the lingering doubt as to whether or not someone substituted a false
signature for Mr. King’s. Mr. Roemmelt’s analysis, supported by his extensive
experience, cast a degree of suspicion upon the signatures. However, his credibility as an
expert was badly damaged by his tax fraud conviction, and his attempt to minimize the
significance of the New York disbarment proceedings. Based on his description of his
methodology, when coupled with his tarnished reputation and the incentives associated
with his fees, the Court is skeptical that his conclusions should be granted the imprimatur
of science. Meanwhile, Mr. King is a tenacious and prolific self-represented litigator,
who admits he believes he is entitled to use legal proceedings to “fire a warning shot” in
order to compel a “cease and desist”, and that nothing in the law precludes such an
approach. With such little apparent knowledge of, or regard for, the strictures of V.R.C.P.
11,1 Mr. King’s alliance with an expert with a fraud conviction warrants a very cautious
approach to their joint theory of the case.
1
V.R.C.P. 11(b) provides: By presenting to the court (whether by signing, filing, submitting, or later
advocating) a pleading, written motion, or other document, an attorney or unrepresented party is certifying
that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under
the circumstances:
(1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or
needless increase in the cost of litigation;
(2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a
nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of
new law;
(3) the allegations and other factual contentions have evidentiary support, or, if specifically so identified,
are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery;
and
(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are
reasonably based on a lack of information or belief.
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On the other hand, the Court acknowledges that Ms. Bishop’s recollection of
where one of the endorsements occurred differs from the account she gave in her verified
answer and counterclaims. Furthermore, as evidenced by the early communications with
her loan officer, Ms. Bishop felt burdened by having to engage a general contractor as an
intermediary for the disbursement of modest funds. It requires little imagination to
conceive that she might have felt justified in assuming the authority to endorse
instruments on behalf of Mr. King, whose function in the transactions was acknowledged
by both of them as limited by his agency as a pass-through. While she might have
assumed initially that this exercise of presumed authority was inherent in her
understanding with Mr. King as to his role as “general contractor”, by the time these
proceedings commenced that assumption had become manifestly untenable. These are all
inferences regarding motive that might have made a stronger impact in light of the
arguable anomalies described by Mr. Roemmelt, but for the credibility deficits just
discussed. In addition, considering their testimony as a whole, Ms. Bishop was far more
credible than Mr. King.
In sum, in light of these vagaries in the evidence, the scales of justice hang even
as to the genuineness of Mr. King’s signatures on the challenged documents. Neither
party’s evidence suffices to make downweight against the other. See In re Grievance of
Muzzy, 141 Vt. 463, 472 (1982) (indicating plaintiffs in civil cases must prove their
claims by a preponderance of the evidence). For the reasons just discussed, judgment for
the Bishops must enter as to Mr. King’s claims of fraud and conversion, and judgment for
Mr. King must enter as to the Bishops’ claims of consumer fraud and defamation.
WHEREFORE it is hereby ORDERED: Judgment is entered for Defendants as
to Plaintiff’s complaints for breach of contract, recovery under the Prompt Payment Act,
fraud and conversion. Judgment is entered for Defendants in the amount of $14,500 as to
their counterclaims for breach of contract and breach of warranty, together with
attorney’s fees under 9 V.S.A.§ 4007(c). Defendants shall submit an itemized claim for
attorneys fees within 20 days of this order. Judgment is entered for Plaintiff on
Defendants’ claims for Consumer Fraud and defamation.
Dated and signed electronically at Bennington, Vermont this 12th day of
November, 2013.
_____________________________
John P. Wesley
Civil Division Judge
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