## Facts

- Defendants operated a Vermont inn through business entities and owned an adjacent cottage separately.
- Plaintiff Carl Follo sought to buy the inn business and the cottage and requested financial and occupancy information to evaluate the purchase.
- Defendants provided records including profit-and-loss statements, tax returns, guest-information forms, and room-assignment books.
- Relying on these materials, Follo agreed to pay about $1,245,000 for the inn and cottage.
- After closing, Follo discovered actual sales were far below what the provided records suggested.
- Further investigation produced evidence that multiple categories of records were false, inconsistent, or contradicted actual performance.

## Issues

1. Whether the evidence supported the jury’s findings of common-law fraud and violations of the Vermont Consumer Fraud Act arising from the sale.
2. Whether alleged errors in jury instructions on fraud and consumer fraud required reversal.
3. Whether the trial court abused its discretion by excluding defendants’ expert witnesses while permitting plaintiffs’ expert testimony, including valuation treating the inn and cottage as a single economic unit.
4. Whether certain appellate challenges—particularly to consumer-fraud liability—were forfeited for failure to preserve them under Vermont Rule of Civil Procedure 50.
5. Whether the trial court erred by (a) ordering remittitur reducing compensatory damages and (b) refusing to submit punitive damages to the jury.

## Decision

- The Vermont Supreme Court affirmed the judgment against defendants on liability for fraud and consumer-fraud violations.
- The Court affirmed the trial court’s evidentiary and procedural rulings challenged by defendants, including exclusion of defendants’ experts and acceptance of plaintiffs’ valuation approach.
- The Court affirmed the remittitur reducing the jury’s compensatory award from $645,000 to $295,000.
- The Court reversed the ruling that removed punitive damages from the jury and remanded for further proceedings limited to punitive damages.

## Legal Principles

- A fraud verdict may be sustained where materially false business and financial representations are shown and the purchaser reasonably relied on them in paying the purchase price.
- Participation in generating misleading operational records and involvement in the selling entities can support individual liability even if a defendant did not personally prepare every false document.
- Appellate review of challenges to the sufficiency or legal basis of a verdict is limited when the appellant fails to preserve the claim through Rule 50 motions.
- Trial courts have discretion to enforce disclosure and admissibility requirements for expert testimony; exclusion of experts may be upheld absent an abuse of discretion.
- Remittitur is proper when the evidence cannot support the full verdict amount but supports a lesser compensatory award consistent with proven loss.
- Punitive damages in fraud cases must be submitted to the jury when, viewing the evidence favorably to the plaintiff, a reasonable jury could find the level of culpability required under Vermont law.

## Conclusion

The court upheld liability and the reduced compensatory award for fraud and consumer fraud arising from misrepresentations about the inn’s performance, but held the evidence could permit punitive damages and remanded for a jury determination on that issue.


Follo v. Florindo, 185 Vt. 390 (2009)