## Facts

- Laurent and Alicia Letourneau owned land adjacent to Michael and Susan Judd and tapped maple trees in an area claimed by both sides.
- The Judds sued in 1998 to establish the boundary line; attorney Charles D. Hickey represented the Letourneaus.
- After a two-day hearing, the court awarded the Judds title to the disputed property, rejected adverse possession, and recognized the Letourneaus’ prescriptive profit to harvest maple sap in the disputed area; no appeal was taken.
- Hickey later sued the Letourneaus for unpaid legal fees and obtained a default judgment in October 1999.
- In 2001, the Letourneaus sued Hickey for legal malpractice arising from the boundary litigation and sued the Judds for slander based on Michael Judd’s trial testimony (including a remark that the Letourneaus’ syrup “tasted like tires”).
- The Letourneaus also sought relief from the earlier boundary judgment, asserting that Hickey’s alleged malpractice undermined that result.

## Issues

1. Whether a malpractice claim arising from an attorney’s representation and fee dispute is barred as a compulsory counterclaim when not raised in the attorney’s prior fee-collection action, even if that action ended in a default judgment.
2. Whether allegedly defamatory trial testimony can support a slander claim, or is absolutely privileged, and whether the claim fails independently for lack of evidence of actual harm.
3. Whether the trial court abused its discretion by denying post-judgment relief from the boundary judgment without a hearing or findings.

## Decision

- The Vermont Supreme Court affirmed summary judgment for Hickey on the malpractice claim.
- The court held the malpractice claim was a compulsory counterclaim to Hickey’s earlier fee-collection action and was precluded by the Letourneaus’ failure to assert it, notwithstanding the default judgment.
- The Vermont Supreme Court affirmed summary judgment for the Judds on the slander claim.
- The court held the challenged testimony was absolutely privileged as statements made in a judicial proceeding and, in any event, the Letourneaus offered no competent evidence of actual harm.
- The court affirmed denial of the motion for relief from the prior boundary judgment, finding no abuse of discretion in denying relief without a hearing or findings.

## Legal Principles

- Under V.R.C.P. 13(a), a claim arising out of the same transaction or occurrence as the opposing party’s claim must be raised as a compulsory counterclaim or it is barred in later litigation.
- A client’s malpractice claim against a lawyer may be a compulsory counterclaim to the lawyer’s fee-collection suit when both arise from the representation and related fee dispute.
- Entry of a default judgment in the earlier action does not, by itself, create an exception to the compulsory-counterclaim bar.
- Statements made by witnesses in the course of judicial proceedings, when pertinent to the matter in controversy, are absolutely privileged against defamation claims.
- Summary judgment is proper where the nonmoving party fails to produce evidence sufficient to establish damages required for the claim.
- Post-judgment relief from a final judgment is discretionary and requires a strong showing; a court may deny such relief without a hearing or findings where the record does not warrant it.

## Conclusion

The court affirmed dismissal of the Letourneaus’ malpractice suit as precluded by the compulsory counterclaim rule despite the earlier default, barred the slander claim under absolute litigation privilege (and lack of proof of harm), and upheld the trial court’s discretionary denial of relief from the prior boundary judgment.


Letourneau v. Hickey, 807 A.2d 437 (Vt. 2002)