## Facts

- A family paving business was incorporated and transferred to J.A. Russo Paving, Inc., with an attorney retained to form the corporation and handle related corporate work over several years.
- One shareholder (Frank) decided to sell his interest to pursue another business venture; the buyout negotiations and closing occurred at the attorney’s office.
- The attorney prepared documents that emphasized securing payment to the departing shareholder, including a corporate promissory note, personal guarantees by the remaining shareholder and his spouse, and collateral security.
- The attorney did not advise the corporation or the remaining shareholder about obtaining a covenant not to compete or explain the consequences of proceeding without one.
- Shortly after the buyout, the departing shareholder reentered the paving business locally in direct competition with the corporation; evidence indicated a properly drafted noncompetition agreement would have prevented that competition.
- At trial, plaintiffs’ experts testified the failure to advise regarding a noncompetition covenant fell below the standard of care for Vermont lawyers; defendants’ experts testified the conduct was consistent with what was expected of lawyers practicing in the local community.

## Issues

1. Whether the standard of care in a Vermont legal malpractice action should be measured by a locality-based rule tied to the community where the lawyer practices or by a statewide standard applicable to Vermont lawyers generally.
2. Whether the trial court committed reversible error by treating conformity with local community practice as the dispositive benchmark for professional negligence.

## Decision

- The Vermont Supreme Court reversed the defense judgment and remanded for a new trial.
- The Court held that a locality rule is not appropriate for determining the standard of care for legal malpractice in Vermont.
- The proper measure is the conduct of a reasonable, careful, and prudent lawyer practicing in Vermont, not the customary practices of a single local community.
- Because the trial court evaluated the attorney’s conduct primarily through a local “Rutland” standard, it applied an incorrect legal standard requiring a new trial.

## Legal Principles

- In Vermont legal malpractice actions, an attorney’s conduct is judged by the common degree of care, skill, diligence, and knowledge exercised by reasonable lawyers practicing within Vermont.
- Local practices may be relevant as factual context, but they do not define or control the governing standard of care.
- A locality rule, developed in other professional-negligence contexts to address resource and knowledge disparities, is not justified for Vermont lawyers operating under statewide professional rules.
- A statewide standard prevents local custom from insulating substandard legal work from liability; limited exceptions may exist for specialized practice areas where broader reference standards are appropriate.

## Conclusion

The Vermont Supreme Court required a statewide professional negligence standard for attorneys and ordered a new trial because the fact-finder had been directed to evaluate the lawyer’s conduct under an improper locality-based measure.


Russo v. Griffin, 147 Vt. 20, 510 A.2d 436 (Vt. 1986)