38 A.3d 1139
Vt.2011Background
- Lay, a Vermont State Police trooper, was suspended on June 29, 2004 and stripped of access to police premises and equipment during an Internal Affairs Unit investigation.
- Lay asked a fellow trooper to remove items from his desk/cruiser that he believed could be used against him, telling him not to take notes.
- The IAU prepared a report detailing Lay’s desk items and neglect of duty, and informed Windham County prosecutors of possible criminal conduct.
- In September 2004, the Commissioner of the Department of Public Safety, Kerry Sleeper, preferred charges against Lay for numerous code-of-conduct violations, with reservation to amend for criminal acts.
- Lay resigned under a severance agreement on October 20, 2004 after negotiations with DPS staff attorney Novotny, with no explicit discussion of criminal resolution.
- In late 2004–2005, a criminal prosecution ensued, including obstruction of justice charges based on Lay’s alleged destruction of evidence; Lay later sued defendants in April 2008, asserting fraudulent nondisclosure, retaliatory and malicious prosecution, and negligent referral; the superior court granted summary judgment for defendants, which Lay appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Lay's fraudulent nondisclosure claim survives summary judgment | Lay asserts Novotny owed a duty to disclose her criminal-liability opinion | Novotny did not owe a duty to disclose in arm’s-length negotiations | No; no duty to disclose in settlement negotiations; no fraudulent nondisclosure |
| Whether Lay’s retaliatory prosecution claim requires proof of lack of probable cause | Lay claims prosecutions were retaliatory for his civil-rights actions | Probable cause exists; there was a valid obstruction charge | Summary judgment affirmed; probable cause supports retaliatory prosecution claim defenses |
| Whether Lay’s malicious prosecution claim fails due to collateral estoppel on probable cause | Miscarriage of justice due to lack of probable cause | Probable cause upheld in criminal proceeding; precludes relitigation | Preclusion applies; the motion to dismiss probative issue precludes malicious prosecution claim |
| Whether the IAU report forwarding to the State’s Attorney complied with 20 V.S.A. § 1923(b) | Troidl’s forwarding was negligent absent determination of criminal violation | statute requires immediate reporting unless no criminal statute involved; there was potential criminal liability | Compliant with statute; no error in forwarding the report |
| Whether the discovery rulings warranted reversal | Lay sought additional discovery to test probable-cause affidavits | Discretionary limits on discovery; evidence already supported probable cause | Affirmed; no abuse of discretion |
Key Cases Cited
- In re Estate of Alden, 2011 VT 64 (Vt.) (fraud elements require clear and convincing evidence)
- Silva v. Stevens, 156 Vt. 94 (Vt.) (duty to disclose arises from confidential relations or trust; arm’s-length neg. lacks duty)
- White v. Pepin, 151 Vt. 413 (Vt.) (relation of trust/knowledge governs disclosure duties)
- State v. Stearns, 159 Vt. 266 (Vt.) (collateral estoppel between civil and criminal actions regarding probable cause)
- S_thresh Siliski v. Allstate Ins. Co., 174 Vt. 200 (Vt.) (favorable termination analysis for malicious prosecution; restatement guidance)