VT: Underlying commercial transfer
Facts: Joseph Russo had a paving business in Rutland, Vermont that he wanted to turn over to his sons, Tony and Frank. Lawyer Griffin was hired to help them with the process of incorporation, and he drew up the corporate charter, filed it with the Secretary of State, and arranged the necessary transfer of assets. Further, the annual meetings were held at Griffin’s office. Then, Frank wanted to purchase a laundromat and spoke to Tony about selling his interest in the corporation. The two, along with the elder Russo, met in Griffin’s office to discuss the arrangements. At the meeting, Tony gave a $6,000 promissory note to Frank in exchange for Frank’s resignation as president and transfer of his stock to the corporation. Three months later, Frank went back into the paving business in direct competition with his brother’s corporation. Tony then sued Griffin, arguing that a properly drafted noncompetition covenant would have prevented this from occurring. At trial, Tony introduced expert witnesses who testified that Griffin’s failure to advise the corporation to draft a covenant not to compete deviated from the standard of care required of attorneys practicing in Vermont at that time. Griffin introduced expert witnesses who testified that his conduct did in fact comport with the standard of care expected of attorneys practicing in Rutland, Vermont at that time. The trial court found for Griffin, holding that “those attorneys whose practice primarily was conducted in the Rutland, VT area prior to and during 1978 are more familiar with the standard of care then required of lawyers"..
Issue: Whether the standard of care is based on the local community, the state or is it a national standard?
Ruling: The Court noted that “the ability of the practitioner and the minimum knowledge required should not vary with geography.” Thus, the Court held that “in selecting a territorial limitation on the standard of care … the most logical is that of the state.” In Vermont, the rules governing the practice of law is consistent throughout the state, and all attorneys must complete the requirements for admission as established by this Court and administered by the Vermont Board of Bar Examiners in order to practice law.
“the appropriate standard of care to which is held in the performance of professional services is ‘that degree of care, skill, diligence and knowledge commonly possessed and exercised by a reasonable, careful and prudent lawyer in the practice of law in this jurisdiction.’”
Id. (quoting Cook, Flanagan & Berst v. Clausing, 438 P.2d 865,867 (Wash. 1968).