Naylor v. Cusson, 2007 VT 108

Summary

The Vermont Supreme Court affirmed a superior court judgment awarding a contractor the unpaid final installment, interest, penalties, and other relief under Vermont's Prompt Payment Act. The court upheld findings that the contractor performed the contracted work in a good and workmanlike manner and rejected the homeowners' defenses based on alleged defects and the Act's good-faith-dispute safe harbor. The court held that the trial court violated Vermont Rule of Civil Procedure 54(d)(2) by including attorney's fees in the main judgment, but found no prejudice and remanded the contractor's request for additional appellate and post-judgment attorney's fees.

Holdings

1. The superior court's finding that the contractor performed every element required by the contract in a good and workmanlike manner was supported by the evidence and was not clearly erroneous.
2. The homeowners could not rely on the Prompt Payment Act's safe-harbor provision because they withheld more than the value of any asserted good-faith claims and neither sought nor obtained a finding that they acted in good faith.
3. The superior court's general finding that the contractor performed in a good and workmanlike manner was sufficient under the circumstances and was not impermissibly conclusory.
4. The superior court violated Vermont Rule of Civil Procedure 54(d)(2) by including attorney's fees in the principal damages judgment instead of entering a separate judgment, but the violation did not warrant disturbing the judgment because the homeowners demonstrated no prejudice.
5. Requests for attorney's fees incurred on appeal or in post-judgment activity must be made in the trial court; the contractor's request for additional fees was therefore remanded to the superior court.

Questions Presented

1. Whether the superior court clearly erred in finding that the contractor performed all contract obligations in a good and workmanlike manner.
2. Whether the homeowners could withhold the final payment under the Prompt Payment Act's safe-harbor provision for good-faith claims.
3. Whether the superior court's general workmanship finding was impermissibly conclusory because it did not separately address each alleged construction defect.
4. Whether the superior court violated Vermont Rule of Civil Procedure 54(d)(2) by including attorney's fees in the main damages judgment rather than entering a separate post-judgment fee judgment, and, if so, whether that violation required reversal.
5. Whether the contractor could seek additional attorney's fees for the appeal and post-judgment bankruptcy-related activity in the appellate court.

Disposition

remanded