McKinstry v. Fecteau Residential Homes, Inc., 131 A.3d 1123

Background

In Nov. 2010 Janet and Mark McKinstry contracted to buy a demonstrator modular home from Fecteau Residential Homes and paid a $5,000 deposit; they began foundation work.
Seller later offered a new, identical home instead; after disagreement seller cancelled the deal and returned the $5,000.
Buyers sued under Vermont’s Consumer Protection Act claiming seller misrepresented its intent to sell the demonstrator model and that buyers incurred extra foundation/modification costs.
After summary-judgment briefing the court denied judgment; a jury found consumer fraud and awarded $1,000 in damages.
Buyers sought $69,614.17 in attorney’s fees; the trial court awarded $15,000 in fees but offset $5,000 (crediting the returned deposit), yielding $10,000 in fees plus $1,360 costs.
The Supreme Court affirmed the $1,000 damages, reversed the $5,000 offset, and modified the judgment to restore the full fee award (total judgment $17,360).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether evidence supported a consumer-fraud finding / denial of summary judgment	Buyers: seller intended not to sell the demonstrator when contracting (bait-and-switch); testimony supports inference of misrepresentation/omission	Seller: no misrepresentation existed at contracting; case required summary judgment for defendant	Court: evidence viewed favorably to buyers permitted a reasonable inference of unstated intent not to sell demonstrator; summary judgment and JMOL denied; verdict affirmed
Whether trial court abused discretion reducing attorney’s fees and considering proportionality to damages	Buyers: fee award is mandatory on a finding of Act violation; reasonableness should be based on case demands, not proportionality to damages	Seller: fees should be drastically reduced given nominal damages, excessive hours, and high rates	Court: fee awards are mandatory but reasonableness may consider results obtained; court did not abuse discretion in reducing fees, though offset issue warranted reversal
Whether lack of broader public purpose bars fees or justifies reduction	Buyers: case exposed bait-and-switch and served public purpose	Seller: little public benefit; fees should reflect limited public purpose and small recovery	Court: public-purpose factor is relevant but not required; trial court permissibly considered absence of broader public benefit in assessing reasonable fees
Whether returned $5,000 deposit must offset (i.e., election of remedies/double recovery) fee award	Buyers: they sought damages under the Act, not return of consideration; deposit return was contractual rescission by seller and should not reduce statutory fees	Seller: statute allows recovery of either damages or consideration; returned deposit should offset fees to avoid double recovery	Court: seller rescinded contract and returned deposit outside Act remedies; no genuine election-of-remedies issue presented; $5,000 offset was improper and reversed

Key Cases Cited

Bonanno v. Verizon Bus. Network Sys., 93 A.3d 146 (Vt. 2014) (deference to trial court on fee awards)
Ianelli v. U.S. Bank, 996 A.2d 722 (Vt. 2010) (nonmoving party entitled to inferences on summary judgment)
Monahan v. GMAC Mortg. Corp., 893 A.2d 298 (Vt. 2005) (standard for judgment as a matter of law)
Jordan v. Nissan N. Am., Inc., 853 A.2d 40 (Vt. 2004) (elements of consumer-fraud claim)
L’Esperance v. Benware, 830 A.2d 675 (Vt. 2003) (fee award mandatory on Act violation; reasonableness inquiry)
Perez v. Travelers Ins., 915 A.2d 750 (Vt. 2006) (reasonableness is the touchstone for fee awards)
Anderson v. Johnson, 19 A.3d 86 (Vt. 2011) (public-purpose consideration in fee awards)
Parker, Lamb & Ankuda, P.C. v. Krupinsky, 503 A.2d 531 (Vt. 1985) (trial court’s wide discretion fixing reasonable value of legal services)
Winey v. William E. Dailey, Inc., 636 A.2d 744 (Vt. 1993) (statutory consumer protection claims distinct from contract remedies)