109 A.3d 400
Vt.2014Background
- Plaintiffs Stroup sued Doran and Doran Landscape Design for breach, fraud, and consumer fraud; obtained judgment in Bennington Superior Court.
- Trustee process attached funds held by Brattleboro Savings and Loan Association (BSL) in a defendant’s checking account.
- BSL disclosed a small amount of funds; parties stipulated to release $750 and discharge trustee; defendants allegedly owed remaining debt.
- BSL paid $750; plaintiffs claimed the balance remained unpaid.
- On July 22, 2013, plaintiffs served BSL with a trustee summons; BSL did not respond within 30 days; plaintiffs moved for default and judgment against BSL.
- BSL filed a trustee disclosure on September 16 indicating it had no assets for the benefit of the defendant; court denied default judgment to avoid inequity; plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether default should be entered when trustee fails to disclose assets timely | Stroup argues default is mandatory under 12 V.S.A. § 3062 and Rule 4.2(f). | BSL argues the court properly extended the deadline to avoid inequitable results. | Court may extend time; no mandatory default when late disclosure filed before hearing. |
| Whether the trial court abused its discretion by accepting late disclosure | Late disclosure should not defeat default; it should be deemed defaulted absent extension. | Extension was appropriate to prevent unjust result where trustee holds no assets. | No abuse of discretion; liberal application to avoid unjust result affirmed. |
| Whether Maine trustee cases are controlling or persuasive | Maine decisions show rigid rules against retroactive extensions. | Maine authority supports treating timely extensions and avoiding default. | Maine decisions discussed; Vermont court distinguished but considered proper extension under Rule 4.2(f). |
Key Cases Cited
- First Wisconsin Mortg. Trust v. Wyman’s, Inc., 139 Vt. 350 (VT 1981) (trustee may be defaulted for failing to disclose; trustee’s assets may be liable)
- Ying Ji v. Heide, 2013 VT 81 (VT 2013) (liberal construction to avoid unjust results; excusable neglect standard)
- Levine v. KeyBank Nat’l Ass’n, 2004 ME 131 (ME 2004) (good cause required for relief from default under Maine rule)
- R.C. Moore, Inc. v. Les-Care Kitchens, Inc., 2007 ME 138 (ME 2007) (system failures insufficient without good cause to excuse default)
- Butler v. D/Wave Seafood, 2002 ME 41 (ME 2002) (good cause required for relief from trustee default in Maine)