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jurisdictionattorneylawyerappealtrialtestimonymalpracticecorporationexpert witness
plaintiffdefendantjurisdictionattorneylawyertrialtestimonymalpracticecorporation

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Russo v. Griffin, 147 Vt. 20, 510 A.2d 436

Facts

Joseph Russo established a paving business in Rutland, Vermont, which he later turned over to his sons, Anthony and Francis. They sought legal assistance from attorney H. Vaughn Griffin, Jr. to incorporate the business and facilitate a stock transfer. During the process, Griffin failed to advise them on the importance of a noncompete agreement, which allowed Frank to compete directly with the corporation shortly after the transaction. Expert witnesses testified on the standard of care expected from attorneys in Vermont, leading to the malpractice claim against Griffin.

At no time during the meeting did defendant Griffin inform the corporation or Tony Russo, the sole remaining shareholder, of the desirability of obtaining a covenant not to compete or explain the implications thereof. Three months after the stock transfer, Frank went back into the paving business in Rutland in direct competition with the plaintiff corporation. A properly drafted noncompetition covenant would have prevented this from occurring.

Issue

Did attorney H. Vaughn Griffin, Jr. breach the standard of care required of attorneys in Vermont by failing to advise J.A. Russo Paving, Inc. about the necessity of a covenant not to compete during the buy-out transaction?

The question for determination was clearly whether defendant Griffin's conduct violated the attorney standard of care as it existed at the time of the alleged breach.

Rule

The appropriate standard of care for attorneys 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 the jurisdiction where the attorney is licensed.

Accordingly, we hold that the appropriate standard of care to which a lawyer 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.'

Analysis

The court determined that the trial court had incorrectly applied the locality rule, which limited the standard of care to what was customary in the Rutland area. Instead, the court emphasized that the standard should reflect the expectations of attorneys across the state of Vermont. The court found that Griffin's failure to advise on the noncompete agreement constituted a breach of the standard of care expected from attorneys in Vermont, as both sides presented conflicting expert testimony regarding the adequacy of Griffin's actions.

In this case, defendant Griffin, in advising a family-held business on how to structure a buy-out and drafting the documents necessary to the transaction, failed to inform his clients of the possible need for, and implications of, a covenant not to compete. Both sides presented expert testimony addressing whether this failure constituted attorney malpractice. In answering this question, the trial court erroneously applied the locality rule in defining the applicable standard of care.

Conclusion

The Supreme Court of Vermont reversed the trial court's decision and remanded the case for a new trial, concluding that the locality rule was improperly applied and that the standard of care should be based on state-wide expectations.

Accordingly, the decision of the superior court is reversed and the cause is remanded for a new trial.

Who won?

J.A. Russo Paving, Inc. prevailed in the appeal because the Supreme Court found that the trial court had erred in applying the locality rule instead of the appropriate state standard of care.

We cannot agree. In ruling for the defendants, the court found the relevant standard of care to be limited to what a careful and prudent practitioner in the Rutland area would do under the circumstances.

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