## Facts

- Kathleen Langlois owned a mixed-use building in Proctor, Vermont, supplied with municipal water by the Town of Proctor.
- Langlois became delinquent on her water bill, and the Town began its shutoff/collection process.
- Langlois alleged she arranged with a Town representative for the Town to turn off her water so she would not incur further charges.
- Langlois claimed she relied on the promised shutoff and discontinued heating the building during winter.
- The Town did not shut off the water when Langlois expected.
- With the building unheated, pipes containing water allegedly froze and split, flooding the property and causing substantial damage.
- Langlois sued alleging negligence, breach of contract, consumer fraud, and negligent misrepresentation.
- A jury found a contract existed regarding turning off the water but found no breach; the jury also found the Town negligent and awarded $64,918.44 in damages.
- The trial court did not instruct the jury on comparative negligence.

## Issues

1. Whether the Town owed an independent tort duty, apart from any contract, to use reasonable care in turning off water service after undertaking to do so and knowing of Langlois’s reliance.
2. Whether the trial court erred by failing to instruct the jury on comparative negligence in light of evidence that Langlois may have contributed to the loss.
3. Whether property damages could be measured by cost of repair, and which party bears the burden to show repair costs are disproportionate to diminution in value.
4. Whether the jury instructions adequately allowed a finding that the Town breached the implied covenant of good faith and fair dealing despite no express breach of contract.

## Decision

- The Vermont Supreme Court held the Town could owe a tort duty under Restatement (Second) of Torts § 323 based on undertaking and reliance, even if a related contract existed and even though the jury found no contract breach.
- The Court held the trial court erred by omitting a comparative-negligence instruction because the evidence could support a finding that Langlois was partially at fault.
- The Court stated cost-of-repair damages are generally permissible unless disproportionate to diminution in value, and the party challenging repair costs bears the burden of proving disproportionality.
- The Court held the jury instructions did not adequately present Langlois’s implied-covenant theory and required correction on remand.
- The Court reversed and remanded for a new trial consistent with these rulings.

## Legal Principles

- Under Restatement (Second) of Torts § 323, a party that undertakes to render services can be liable for physical harm caused by failure to exercise reasonable care when harm results from the other party’s reliance or increased risk.
- The existence of a contract does not necessarily bar an independent tort duty where the undertaking involves foreseeable physical harm and reliance.
- Comparative negligence must be submitted to the jury when evidence would allow reasonable jurors to attribute some fault to the plaintiff.
- For repairable property damage, cost of repair is an acceptable measure of damages unless it is disproportionate to diminution in value; the opponent of repair costs bears the burden of showing disproportionality.
- Every contract includes an implied covenant of good faith and fair dealing; jury instructions must permit the jury to consider breach of that covenant where supported by the evidence.

## Conclusion

The court recognized an undertaking-based tort duty to use reasonable care when a municipality agrees to shut off water and the customer relies on that agreement, but ordered a new trial because the jury was not instructed on comparative negligence and was not properly instructed on the implied covenant of good faith and fair dealing; it also clarified that repair costs are presumptively recoverable unless the defendant proves they are disproportionate to diminution in value.


Langlois v. Town of Proctor, 2014 VT 130, 198 Vt. 137, 113 A.3d 44 (Vt. 2014)