Rule 54.Judgments; costs

Reporter’s Notes—2022 Amendment: Rule 54(d)(2)(C) is amended to replace the reference to V.R.C.P. 78 (Motion Day), which was abrogated by order of June 7, effective August 9, 2021, with a reference to V.R.C.P. 7(b)(4)-(6) added by that order and embodying its relevant provisions in revised form. See Reporter’s Notes to 2021 amendment of V.R.C.P. 7(b) and abrogation of V.R.C.P. 78.

Reporter’s Notes—1996 Amendment: Rule 54(d) is amended by renumbering the existing rule as paragraph (1) and adopting paragraph (2) to incorporate the provisions of the 1993 amendment of Federal Rule 54(d). A related amendment is made simultaneously to Rule 58. The purpose of the amendments is to provide a standardized procedure for those cases in which the prevailing party is entitled to attorneys’ fees by law or in which fees are to be awarded by the court from a common fund. See, generally, Advisory Committee’s Note to 1993 Amendment of Federal Rule 54(d). Former Rule 54(d) is now numbered as Rule 54(d)(1), with an amendment to make clear that the general costs provisions of the rule do not apply to awards of attorneys’ fees. Rule 54(d)(2) establishes a new procedure by motion in a pending action for recovery of attorneys’ fees and related litigation expenses incurred in connection with the pending action and available by law, whether or not denominated “costs.” The rule is only procedural in its effect. It creates no new substantive right to recover attorneys’ fees, and it does not determine whether attorneys’ fees are to be considered “costs” in other contexts such as the calculation of the amount to be paid by an offeree who has not accepted an offer of judgment under Rule 68. Existing law continues to govern these matters. There are two situations in which existing procedures for the award of attorneys’ fees will continue to govern. (1) Rule 54(d)(2)(A) makes clear that the procedure under the rule does not apply to fees that are to be pleaded and proved as an element of substantive damages, either in the pending action or in a separate action. For example, when sought under a mortgage pursuant to Rule 80.1(b)(1) and (f), or as suit money under 15 V.S.A. § 607 after a divorce judgment, fees must be claimed and proved as therein provided. (2) Subparagraph (E) excludes fees awarded as sanctions for violations of the rules. See, e.g., Rule 37(a)(4). Rule 54(d)(2)(B) provides that a motion for fees must be made within 14 days after entry of judgment. The period is designed to assure that the opposing party is aware of the claim before the time for appeal has run and to allow the court in a nonjury case to act on the claim immediately after rendering its judgment on the merits, when the matters in issue are still fresh. The period may be extended by the court, or a longer period may be allowed by statute in a particular case. The motion does not affect the finality of the judgment for appeal purposes except as provided in the simultaneous amendment of Rule 58. When an appeal on the merits has been taken, the trial court may rule or defer decision on the motion for fees, or may by order permit a new motion to be filed within a specified time after resolution of the appeal. Entry of a new judgment on remand or under Rule 59 automatically begins a new period for filing. See federal Advisory Committee’s Note. The final sentence of Federal Rule 54(d)(2)(B), permitting the court to order that the motion disclose any agreement concerning the fees claimed, has been omitted. The trial courts may develop such a practice in the future under the rule if circumstances warrant. Rule 54(d)(2)(C) assures that the parties have an adequate opportunity to present argument and evidence on all matters pertaining to the award of fees. Subparagraph (D), however, is intended to discourage extensive evidentiary hearings and to make clear that any necessary factual investigation may be conducted by a master. Subparagraph (C) also provides for findings of fact and conclusions of law under Rule 52 and a separate judgment under Rule 58 to facilitate appellate review of the award of fees.

Reporter’s Notes—1981 Amendment: Rule 54(a) is amended in conjunction with the simultaneous amendment of Rule 69. The latter amendment clarifies the procedure for computing and levying execution for post-judgment interest. Amended Rule 54(a) makes clear that the amount of a judgment includes prejudgment interest and costs. Prejudgment interest may be of two kinds: (1) Interest expressly provided for in a contract or note, which is recoverable as an element of the indebtedness sued upon. This interest runs for the period and at the rate agreed. See Willard v. Pinard, 65 Vt. 160, 26 A. 67 (1892) (parties may stipulate for interest on each item in a book account). See, generally, McCormick, Damages 205-06 (1935). (2) Interest awarded as damages for detention of money due for breach or default. This interest is awarded as of right when the principal sum recovered is liquidated or capable of ready ascertainment and may be awarded in the court’s discretion for other forms of damage. The interest is calculated at the statutory legal rate in effect at the time of calculation (currently 12% simple annual interest under 9 V.S.A. § 41a(a)). The interest ordinarily runs from the time of maturity or demand for payment or the time of default, which may be the time that the action is commenced. See Pillsbury v. Taylor, 117 Vt. 399, 93 A.2d 102 (1952) (maturity of note); VanVelsor v. Dzewaltowski, 136 Vt. 103, 385 A.2d 1102 (1978) (commencement of suit and counterclaim in action on construction contract); Potwin v. Tucker, 128 Vt. 142, 259 A.2d 781 (1969) (establishment of right in suit to recover consideration); Norman v. American Woolen Co., 117 Vt. 28, 84 A.2d 125 (1951) (date of workmen’s compensation award in suit on award); Lash v. Lash Furniture Co. of Barre, Inc., 130 Vt. 517, 296 A.2d 207 (1972) (interest in trier’s discretion in stockholder’s derivative suit against majority stockholder); Tyrrell v. Prudential Ins. Co. of America, 109 Vt. 6, 17, 192 A. 184, 189 (1937) (interest begins at time of jury verdict because that would prove death under the insurance policy and put the insurer in default).

Reporter’s Notes: This rule is substantially similar to Federal Rule 54, with some modifications and additions taken from the Maine rule and prior Vermont practice. Rule 54(a), defining “judgment” generally to include a decree and any appealable order, is a necessary part of the merger of law and equity under the rules. The term as thus defined is used throughout the rules, especially those pertaining to entry of judgment, post-judgment proceedings, and appeals, and applies not only to what formerly were chancery decrees but to any appealable order of an administrative agency. The rules do not undertake to determine what is an appealable order, this being a matter left to case law. See, e.g., Woodard v. Porter Hospital, Inc., 125 Vt. 264, 214 A.2d 67 (1965). Note that the second sentence of Rule 54(a) is similar to former Chancery Rule 34, making clear that a judgment is not an extended record of the proceedings. Rule 54(b), requiring the court to state expressly when a judgment as to less than all of multiple claims or parties is final, is necessary in light of the free joinder permitted by Rules 18 and 20 to make clear in such a situation when a partial judgment is appealable. See 3 Barron & Holtzoff, Federal Practice and Procedure § 1193 (Supp. 1969). The rule changes Vermont practice. See Beam v. Fish, 105 Vt. 96, 163 A. 591 (1933) (judgment not appealable where rights of one or more parties still pending below); see also In re Moody’s Estate, 115 Vt. 1, 49 A.2d 562 (1946). Practice under the rule is analogous to severance under Rule 42(b). It does not affect finality of judgment, because any claim as to which the court directs entry of judgment must independently meet the tests of finality. See 3 Barron & Holtzoff § 1193.1. Rule 54(c) balances fairness to the defaulted defendant with the same kind of flexibility as to issues actually tried that is provided in Rule 15(b) for amendments to conform to the evidence. The provision as to default is generally in accord with prior Vermont practice. Note that the amount of damages demanded may be changed by amendment even after default in a proper case. See 3 Barron & Holtzoff § 1216; Santerre v. Sylvester, 108 Vt. 435, 189 A. 159 (1937). The provision for judgments other than by default provides for all cases the flexibility inherent in the general prayer for relief formerly permitted in chancery. See former Chancery Rule 6; Bell’s Estate v. St. Johnsbury & L. C. R. Co., 85 Vt. 240, 81 A. 630 (1911). Rule 54(d) is based on Federal and Maine Rules 54(d). The provision confirms that costs are awarded as of course, but makes clear the court’s power to direct otherwise—for example, where costs are used in a punitive fashion. Cf. former Chancery Rule 51. Except for the provisions of Rule 54(f), (g), for trustee cases and depositions, most items of costs are statutory. See 32 V.S.A. § 1471. The provision for costs against the State incorporates either statutory or decisional law allowing such costs. Rule 54(e) is identical to former County Court Rule 32. Unlike Federal Rule 54(d), it requires notice only when the other party has appeared. Rule 54(f) is taken virtually verbatim from former County Court Rule 39. Rule 54(g) is identical to Maine Rule 54(g). There is no equivalent provision in the federal rule, but the rule reflects the practice in the better-considered federal cases. See 3 Barron & Holtzoff § 1197. In Maine, the provision has almost never been used, but it is nevertheless an important safeguard against abuse of discovery, particularly in state practice where amounts in controversy are smaller than in federal court. A similar provision has been adopted as Rhode Island Rule 54(f). See also proposed Massachusetts Rule 54(f).