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VT: Legal Malpractice On Malice and Punitive Damages

DeYoung v. Ruggiero, 185 Vt. 267 (2009).

VT: Wills, Trusts & Estates

Student Contributor: Peter J. Jannace

FACTS: Plaintiffs hired defendant to close on the purchase of a house in Vermont. Plaintiffs later inherited a substantial amount; due to a communication breakdown between the decedent and the plaintiffs, plaintiffs hired defendant to ensure that plaintiffs received their inheritance. Defendant advised plaintiffs to invest in defendant’s real estate business, plaintiffs rejected defendants advice. Defendant received a partial distribution of the estate funds, and then transferred the funds into his own account for investment purposes. Plaintiffs made repeated inquiries as to when the funds would become available; defendant lied to cover up his theft. Plaintiffs found out that the funds had already been distributed, plaintiffs filed suit against defendant. Defendant entered a default judgment against himself; the trial court did not find “malice” which is an antecedent to an award of punitive damages, plaintiffs appealed.

ISSUE(s):  Does the “malice” requirement to an award of punitive damages require “ill will” towards the victim of the “malicious” behavior?

RULING(s): No. “Malice may arise from deliberate and outrageous conduct aimed at securing financial gain or some other advantage at another’s expense, even if the motivation underlying the outrageous conduct is to benefit oneself rather than harm another.”

LESSON(s): A lawyer is in a fiduciary relationship with his/her client, so if that lawyer steals money from the client and then takes steps to cover it up, there is basically a presumption in Vermont that the behavior is “malicious”, and the only issue for the jury is the amount of punitive damages. As if there wasn’t enough incentive not to engage in this type of activity; by the way, the attorney was disbarred as well. 

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Posted in: Damages, Vermont