Daniels v. Vermont Center for Crime Victims Services
Annotate this Case
Daniels v. Vermont Center for Crime Victims Services (2000-574); 173 Vt. 521;
790 A.2d 376
[Filed 17-Dec-2001]
ENTRY ORDER
SUPREME COURT DOCKET NO. 2000-574
NOVEMBER TERM, 2001
Elizabeth E. Daniels } APPEALED FROM:
}
}
v. } Bennington Superior Court
}
Vermont Center for Crime }
Victims Services }
} DOCKET NO. 277-8-00 Bncv
Trial Judge: John P. Wesley
In the above-entitled cause, the Clerk will enter:
Plaintiff Elizabeth Daniels appeals from the Bennington Superior
Court's Rule 12(b)(6) dismissal of her declaratory judgment action.
Plaintiff, a crime victim, was compensated by the defendant, Vermont
Center for Crime Victims Services (CCVS), under the Compensation to Victims
of Crime Act, 13 V.S.A. §§ 5351-5361. Thereafter, she recovered
substantial damages from the perpetrator's employer in the settlement of a
personal injury action, and offered to repay CCVS only if CCVS bore a
proportionate share of attorney's fees under the common fund exception to
the American Rule on attorney's fees. In dismissing the action, the
superior court held that plaintiff must reimburse CCVS without deducting
the attorney's fees. We agree and affirm.
The facts are derived from plaintiff's complaint. In March 1998,
plaintiff suffered serious injury as a result of an attack. Her attacker
was later charged and convicted for his criminal conduct. Approximately
two weeks after the attack, plaintiff applied to CCVS for compensation
under the Compensation to Victims of Crime Act, 13 V.S.A. §§ 5351-5361.
She received $10,000 from CCVS, upon condition that she subrogate her
interest in any recovery from a person liable for her injuries to CCVS to
the extent of the payment, as required by the Act, 13 V.S.A. § 5357. Part
of the payment was made to healthcare providers with the remainder going
to plaintiff directly.
In March 2000, with the aid of counsel, plaintiff settled a civil
action against her attacker's employer for an amount exceeding the $10,000
payment to her from CCVS. Rather than pay the full $10,000 back to CCVS,
plaintiff's attorney put it in escrow and filed a complaint for declaratory
judgment with the Bennington Superior Court. Based on the common fund
exception to the American rule on attorney's fees, plaintiff maintained
that CCVS is not entitled to full reimbursement of the $10,000, but rather
must pay from it a proportionate share of the one-third contingency fee she
incurred in settling the claim. Defendant filed a motion to dismiss for
failure to state a claim upon which relief can be granted, V.R.C.P.
12(b)(6), which plaintiff opposed. The
superior court granted defendant's motion, ruling that the plain language
of the subrogation statute, 13 V.S.A. § 5357, precludes plaintiff from
relief. The court bolstered its conclusion by finding that the
considerations of equity and policy behind the common fund doctrine "weigh
heavily" against its application in this case.
On appeal, plaintiff argues that (1) the plain meaning of the
subrogation statute does not preclude application of the common fund
exception to the American Rule on attorney's fees, (2) under the common
fund exception, CCVS should be required to pay a proportionate share of
plaintiff's lawyer's one-third contingency fee, and (3) the trial court
struck too early by dismissing plaintiff's declaratory judgment action
without leave to amend.
The purpose of a motion to dismiss for failure to state a claim upon
which relief can be granted is to test the law of the claim, not the facts
which support it. Levinsky v. Diamond, 140 Vt. 595, 600, 442 A.2d 1277,
1280 (1982), overruled on other grounds in Muzzy v. State, 155 Vt. 279, 583 A.2d 82 (1990). Our review of conclusions of law is nondeferential and
plenary. See Thompson v. Dewey's South Royalton, Inc., 169 Vt. 274, 276,
733 A.2d 65, 67 (1999).
Plaintiff's claims are based on the common fund doctrine, which we
adopted in the context of insurer subrogation for some cases in Guiel v.
Allstate Ins. Co., 170 Vt. 464, 756 A.2d 777 (2000). The common fund
doctrine "permits a prevailing party - whose lawsuit has created a fund
that is intended to benefit not only that party but others as well - to
recover, either from the fund itself or directly from others enjoying the
benefit, a proportional share of the attorney's fees and costs incurred in
the lawsuit." Id. at 468, 756 A.2d at 780. We held in Guiel that "under
appropriate circumstances, the common fund doctrine may be applied to
require an insurer to pay a proportionate share of the attorney's fees
incurred by its insured in obtaining a judgment or settlement that
satisfies the insurer's subrogated interest." Id. at 469, 756 A.2d at
781. The American Rule, on the other hand, requires parties to pay their
own attorney's fees absent statutory authority, contractual agreement of
the parties, or an equitable exception, as in Guiel. See id. at 468, 756 A.2d at 780.
Plaintiff acknowledges that if the governing statute requires her to
reimburse the full amount she received from CCVS, the common fund doctrine
cannot apply. See Aylward v. Dragus, 402 N.E.2d 700, 702 (Ill. App. Ct.
1980) (common fund doctrine does not apply to reimbursements to victims
compensation agency absent statutory authorization); Victims of Crime Fund
v. Barry, 792 P.2d 26, 27-28 (Nev. 1990) (same); Dep't of Labor and
Industries v. Dillon, 626 P.2d 1004, 1006 (Wash. Ct. App. 1981) (same).
Thus, we first consider the superior court holding that the statutory
language precludes application of the common fund doctrine. The statute
provides, in relevant part:
The state shall be subrogated to the rights of the victim . . . to
whom cash payments are granted to the extent of the cash payments
granted, less the amount of any fine imposed by the court on the
perpetrator of the crime.
13 V.S.A. § 5357. In construing a statute, "our principal goal is to
effectuate the intent of the Legislature." Tarrant v. Dep't of Taxes, 169
Vt. 189, 197, 733 A.2d 733, 739 (1999). In
determining legislative intent, we look first at the plain meaning of the
statutory language. If the legislative intent is clear from the language,
we enforce the statute "according to its terms without resorting to
statutory construction." Id. "We presume that all language in a statute
was drafted advisedly, and that the plain ordinary meaning of the language
used was intended." State v. Brennan, ____ Vt. ____, ____, 775 A.2d 919,
921 (2001) (citations omitted).
Section 5357 grants a right of subrogation to CCVS "to the extent of
the cash payments granted." The wording clearly means that if the victim,
as in this case, receives damages from a party responsible for her injury
in an amount greater than the payment from CCVS, she must pay the full
amount of the CCVS payment back. The language of § 5357 makes no provision
for CCVS to pay any of a victim's attorney's fees in a civil action to
recover damages in connection with the crime. We note that other courts
have reached the same conclusion on identical or similar language. See
Victims of Crime Fund, 792 P.2d at 27-28; Dillon, 626 P.2d at 1006.
Plaintiff asks us, in effect, to read into § 5357 a requirement that
CCVS pay a proportional share of attorney's fees expended in obtaining her
recovery as a matter of fairness. We are, however, constrained by the
language of the statute. We note that in comparable situations dealing
with indigent accident victims and medicaid recipients, the Legislature
made specific provision for the payment of attorney's fees. In 18 V.S.A.
§ 2251, the Legislature granted a lien to any hospital furnishing medical
care to an accident victim upon any recovery for damages. The statute has
a specific attorney's fee provision: the "lien shall not attach to
one-third of said recovery or $500.00 whichever shall be the lesser and in
addition said lien shall be subordinate to an attorney's lien." Id.
Similarly, 33 V.S.A. § 1910 grants the Agency of Human Services a lien for
Medicaid expenditures incurred in connection with an accident on a
recipient's recovery of damages in a civil action. Again showing that it
knows how to account for attorney's fees, the Legislature specifically
provided in § 1910(i) that "the attorney for the recipient may withhold
the agency's pro rata share of reasonably necessary costs and expenses
incurred in asserting the claim." Where the Legislature has demonstrated
that it knows how to provide explicitly for the requested action, we are
reluctant to imply such an action without legislative authority. See In
re Spencer, 152 Vt. 330, 340, 566 A.2d 959, 965 (1989) (under Act 250,
automatic issuance of permit in one part of statute and absence of same
provision in another part of the statute shows that Legislature did not
intend automatic issuance in the latter); see also Aylward, 402 N.E.2d at
702 (legislative allowance of use of common fund doctrine to allow
collection of attorney's fees in public aid collection cases shows
legislative silence in victim compensation fund cases does not authorize
common fund doctrine).
Finally, plaintiff argues that the statutory language applicable in
Guiel, where we applied the common fund doctrine, is indistinguishable
from that before us. In Guiel, we held that a statute that specified
required conditions of liability policies, including a condition providing
a right of subrogation "to the amount of such payment [of loss or expense
under this policy]," did not prevent application of the common fund
doctrine requiring the subrogated insurance carrier to pay a pro-rata
share of attorney's fees. Guiel, 170 Vt. at 469-70, 756 A.2d at 781. We
concluded that the language "merely sets a limit on the extent of the
right of subrogation and is not intended to preclude application of the
common fund doctrine in insurance cases involving subrogation rights." Id.
at
470, 756 A.2d at 781. We stress that the context of Guiel was different
from that before us. In Guiel, we were interpreting a regulatory statute
that specified the required content of an insurance policy; here, the
statute governs the reimbursement rights of a governmental agency.
Particularly in this different context, we do not believe that 13 V.S.A. §
5357 can be read in the same way as we read the statute in Guiel.
Even if the statute allowed us to employ the common fund doctrine
here, we would not do so. Thus, we reject plaintiff's second argument.
The common fund doctrine is a judicially-created equitable exception to
the rule that attorney's fees cannot be collected from another party, and
we will apply it only where principles of equity and policy require it.
We applied it for the first and only time in Guiel. There, the insured
obtained a damage settlement in connection with an automobile accident.
Under her insurance policy, the insurer was subrogated to the insured's
right to recover from third parties up to the amount paid out under the
insured's medical coverage. After obtaining the settlement, the insured
filed a declaratory judgment action requesting that the subrogated insurer
pay a proportionate share of the insured's attorney's fees. We upheld a
lower court judgment granting the requested relief based on the court's
conclusion that the insured sought to benefit from the services of the
insured's counsel without paying for them.
We need not decide whether we will extend the common fund doctrine
beyond the insurance context present in Guiel to determine that we would
not apply it here. The subrogation right in Guiel arose out of a
commercial transaction in which the insured paid for medical coverage under
which she collected. Here, the plaintiff is a government agency created
for the public purpose of helping victims of crime recover from their
victimization. The repayment amounts go into the victim compensation fund
to be used to help other victims. See 13 V.S.A. §§ 5356(b), 7282(a). To
the extent recoveries go to pay attorney's fees, and not to pay the fund,
fewer victims can be helped. In addition, as the Nevada Supreme Court
held in a similar case under the Nevada victim compensation statute, the
victim compensation fund is not unjustly enriched by receiving full
compensation. See Victims of Crime Fund, 792 P.2d at 27.
Plaintiff finally argues that the trial court should not have
dismissed the case, but instead should have given plaintiff leave to amend
her complaint. We agree that a Rule 12(b)(6) motion ordinarily should not
be granted "unless it is beyond doubt that there exist no facts or
circumstances that would entitle the plaintiff to relief." Richards v.
Town of Norwich, 169 Vt. 44, 48, 726 A.2d 81, 85 (1999) (citation
omitted). Plaintiff argues that because the application of the common fund
doctrine depends upon the facts and circumstances of each case, she was
entitled to develop a record that application of the doctrine was
appropriate in this case. There are, however, no relevant facts in
dispute in this case. In view of our ruling that 13 V.S.A. § 5357
precludes application of the common fund doctrine, no facts or
circumstances could make a difference in the outcome.
We agree with plaintiff that the better method of resolution of the
controversy would be to issue a declaratory judgment, albeit one that
declares that plaintiff owes the full amount she received from CCVS.
Nevertheless, the dismissal of plaintiff's complaint accomplished the same
purpose.
Affirmed.
BY THE COURT:
_______________________________________
Jeffrey L. Amestoy, Chief Justice
_______________________________________
John A. Dooley, Associate Justice
_______________________________________
James L. Morse, Associate Justice
_______________________________________
Denise R. Johnson, Associate Justice
_______________________________________
Marilyn S. Skoglund, Associate Justice
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
