The Clients’ Waiver of Their Rights Under Regulation BI of the Securities and Exchange Commission

TAMAR FRANKEL

BU Law emerita professor Tamar Frankel discusses the Securities and Exchange Commission (SEC)’s Regulation Best Interest (BI), which imposes on broker-dealers a commitment to act in the best interests of their clients. Specifically, Frankel addresses the SEC’s treatment of client waivers of the Regulation BI, which goes even further than general fiduciary law to prohibit any waiver of the broker-dealer’s conflicting interests.

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Brillman v. New England Guaranty Insurance Company, Inc.

Citation: 2020 VT 16

Opinion Date: February 21, 2020

Judge: Beth Robinson

Areas of Law: Civil Procedure, Contracts, Insurance Law

At issue in this case before the Vermont Supreme Court was the meaning of “date of loss” for the purpose of an insurance policy’s condition that any action be commenced within one year after the “date of loss.” The trial court concluded that the insurance provision requiring that an action be brought “within one year after the date of loss” was ambiguous and had to be interpreted against insurer to mean that the one-year period began to run when insurer breached its obligations (i.e., at the time homeowner received final, allegedly insufficient, payment from insurer). The court accordingly denied insurer summary judgment and granted partial summary judgment to homeowner. After its review, the Supreme Court concluded the provision was unambiguous in requiring suit to be brought within one year of the date of the occurrence giving rise to coverage and reversed the partial summary judgment for homeowner.

Jackson Gore Inn, Adams House v. Town of Ludlow

Citation: 2020 VT 11

Opinion Date: February 21, 2020

Judge: Carroll

Areas of Law: Civil Procedure, Government & Administrative Law, Real Estate & Property Law, Tax Law

The Town of Ludlow appealed a Property Valuation & Review Division (PVR) hearing officer’s decision lowering the fair market value of two quartertime-share condominium properties, Jackson Gore Inn and Adams House, located at the base of Okemo Ski Resort. On appeal, the Town argued that the time-share owners in Jackson Gore Inn and Adams House failed to overcome the presumption of validity of the Town’s appraisal. The Town also argued that hearing officer incorrectly interpreted 32 V.S.A. 3619(b) and failed to properly weigh the evidence and make factual findings. After review of the PVR hearing officer’s decision, the Vermont Supreme Court first held that the hearing officer correctly determined that the time-share owners met their initial burden of producing evidence to overcome the presumption of validity by presenting the testimony of their expert appraiser. Second, the Supreme Court conclude that the hearing officer correctly determined that section 3619 addressed who receives a tax bill when time-share owners were taxed but said nothing about how to value the common elements in condominiums. Finally, the Supreme Court concluded the hearing officer made clear findings and, in general, provided a well-reasoned and detailed decision. Accordingly, the decision was affirmed.

In re Snyder Group, Inc. PUD Final Plat

Citation: 2020 VT 15

Opinion Date: February 21, 2020

Judge: Paul L. Reiber

Areas of Law: Civil Procedure, Government & Administrative Law, Zoning, Planning & Land Use

Applicant, the Snyder Group, Inc., which initially obtained approval from the City of South Burlington Development Review Board (DRB) to construct a planned unit development (PUD), appealed an Environmental Division’s grant of summary judgment in favor of the City, that the City’s governing zoning bylaw concerning the transfer of development rights (TDRs) with respect to PUD applications did not comply with two subsections of the enabling statute and was unconstitutionally vague. Neighbors, as interested parties opposing the PUD, cross-appealed with respect to the Environmental Division’s rulings that the TDR bylaw complied with three subsections of the enabling statute. After review, the Vermont Supreme Court upheld the rulings challenged by neighbors, reversed the rulings challenged by applicant, and remanded the matter for Environmental Division to enter summary judgment in favor of applicant.

Theberge v. Theberge

Citation: 2020 VT 13

Opinion Date: February 21, 2020

Judge: Eaton

Areas of Law: Family Law

This appeal arose from the denial of defendant Mary Ann Theberge’s post-judgment motion to enforce the cost-of-living adjustment (COLA) to a spousal-maintenance award made in her favor in the parties’ divorce action. The trial court found that the parties agreed to a modification of the maintenance award eliminating the yearly COLA and that, consequently, plaintiff Gerald Theberge’s maintenance payments - which continued after the alleged agreement, absent the COLA - were not in arrears. Accordingly, the court denied the enforcement motion. The Vermont Supreme Court held that a tuition agreement between the parties was a valid contract such that, if plaintiff agreed to waive defendant’s obligation thereunder in connection with a second agreement, he would have given up a legal right he was otherwise free to exercise. As a result, remand was necessary for the trial court to determine whether the parties entered an agreement with corrected factual findings. In connection with this remand, the Court noted that the trial court considered defendant’s receipt of ten years of maintenance payments without COLA to constitute “waiver by performance.” However, it was unclear whether the trial court was referring to waiver in the context of evidence that defendant made an oral agreement to waive the COLA, or whether it was referring to waiver as the relinquishment of a known right through defendant’s failure to seek enforcement of the COLA sooner than she did. Upon remand, the trial court was asked to clarify its conclusion regarding defendant’s “waiver by performance.”

In re Grievance of Jacob Carnelli

Citation: 2020 VT 12

Opinion Date: February 21, 2020

Judge: Beth Robinson

Areas of Law: Government & Administrative Law, Labor & Employment Law

The State appealed a Labor Relations Board decision that grievant Jacob Carnelli, a former correctional officer who was eligible for mandatory reemployment pursuant to the applicable collective bargaining agreement (CBA), met the minimum qualifications for a position at the Department of Motor Vehicles requiring at least two years of “office clerical experience.” The Vermont Supreme Court concluded that the Board overstepped its authority by failing to apply the minimum qualifications as established by the DMV, and therefore reversed.