Katherine, Bradley and Jordan Lawson v. Brown's Day Care Center, Inc., et al.

Summary

The Vermont Supreme Court reviewed a $2,000 sanction imposed on defense counsel Duncan Kilmartin for filing confidential mediation materials with the trial court. The court held that sanctions based on the court's inherent powers required a finding of bad faith and that counsel lacked fair warning that his disclosure, which he claimed was required by professional-responsibility rules, could result in a punitive sanction. The court reversed and remanded for a determination of Kilmartin's motivation.

Holdings

1. A finding of bad faith is essential to the court's inherent power to impose the punitive sanction imposed here; the superior court erred by imposing the sanction without finding improper motive or bad faith.
2. An attorney may not receive a punitive sanction without fair warning that the conduct could subject the attorney to that sanction; a finding of bad faith would have addressed the lack of fair warning in these circumstances.
3. The superior court erred by ignoring Kilmartin's asserted justification for disclosure and by failing to determine whether he acted from an improper motive or in bad faith.

Questions Presented

1. Whether a court may impose a punitive monetary sanction under its inherent powers for disclosure of confidential mediation materials without finding bad faith.
2. Whether due process requires fair warning that the conduct may subject an attorney to a punitive sanction.
3. Whether Kilmartin's asserted duty to report opposing counsel's possible misconduct required consideration before sanctions were imposed.

Disposition

reversed_and_remanded