Post and Beam Equity Group, LLC and Post and Beam of Mt. Snow, LLC
Sunne Village Development Property Owners Association.
On Appeal from Superior Court, Windham Unit, Civil Division Karen R. Carroll J.
Amanda T. Rundle and Christopher M. Rundle of Rundle & Rundle, PLLC, Springfield, for Plaintiffs-Appellees/Cross-Appellants.
Allen C. B. Horsley of Barr Lajoie Goldfine, Stowe, for Defendant-Appellant/Cross-Appellee.
Carl H. Lisman, Burlington, Amicus Curiae.
PRESENT: Reiber, C.J., Dooley, Skoglund and Robinson, JJ., and Morris, Supr. J. (Ret.), Specially Assigned.
¶ 1. This case involves a dispute between a residential subdivision property owners’ association and the owner of commercial property both in and adjacent to the subdivision concerning access to property over a subdivision roadway. It also involves the conduct of the property owners’ association. Defendant, Sunne Village Development Property Owners Association (“the POA”), appeals the trial court’s judgment that it created a nuisance affecting the commercial landowner; the court’s calculation of compensatory damages arising from the nuisance; and the court’s award of punitive damages and attorney’s fees. Plaintiffs, Post and Beam Equities Group, LLC, and Post and Beam of Mt. Snow, LLC (collectively “P&B”),  cross-appeal, challenging the trial court’s conclusion that its deeded easement over the subdivision’s road does not extend to its patrons’ use for access to its restaurants. We affirm with respect to the judgment for nuisance and the award of punitive damages and attorney’s fees, but reverse the award of compensatory damages to P&B. In connection with the cross-appeal, we affirm the court’s judgment relating to interpretation of the deeded easement.
¶ 2. P&B owns two adjacent parcels of property in the Town of West Dover. P&B operates two restaurants, The Last Chair and Fiddleheads, on Parcel 1. Parcel 1 also includes some space for parking. Parcel 2 consists of three lots used for parking for the restaurants on Parcel 1. P&B acquired both parcels by warranty deed in 2010.
¶ 3. The restaurant buildings are located on Parcel 1, which is bounded by Route 100 on one side and Sunne Village Lane on an adjacent side. At the time that P&B purchased Parcel 1, cars could enter the parking lot for the restaurants in two ways: from Route 100 or from Sunne Village Lane. Route 100 is a narrow, busy road, with heavy traffic during ski season, and prior to the events described below, Sunne Village Lane provided the primary access to the parking lot.
¶ 4. Parcel 2, the parking-lot property, is bounded by Sunne Village Lane on one side, and No Name Road on an adjacent side. Parcel 2 is part of the Sunne Village Development subdivision. The three lots that make up Parcel 2 are subject to the subdivision’s 1981 declaration of covenants, which provide, among other things, for a perpetual right of way and easement for lot owners over Sunne Village Lane. By virtue of its ownership of those lots, P&B is a member of the POA. Parcel 1 is not part of the subdivision.
¶ 5. The following schematic depicts the general relationship of the roads and parcels in question. 
¶ 6. The events that gave rise to this lawsuit, as found by the trial court, are as follows.  In 2010, when the POA believed that P&B had plans to close the entry onto P&B’s property from Route 100 and to use the Sunne Village Lane entrance exclusively, the parties negotiated informally. In the summer of 2011, P&B and the POA reached a verbal agreement that allowed P&B to close the Route 100 entrance.
¶ 7. The terms of the written agreement that the POA presented to P&B, however, contained terms to which P&B had never agreed. Among other things, the proposed written agreement required P&B to give up its easement over Sunne Village Lane and replace it with a revocable license. P&B refused to assent to these new terms, and reopened the Route 100 access while negotiations resumed.
¶ 8. In negotiations, the POA took the position that the deeded right of access for Parcel 2 was limited to residential purposes, and that P&B had no right to commercial access from Sunne Village Lane to the restaurant parking lots. Throughout this period, the POA permitted a different restaurant, Dover Joe’s, located directly across Sunne Village Lane from the P&B restaurants, to use an access path off Sunne Village Lane for access to its property. In the fall of 2011, after the negotiations failed, the POA placed-without notice or warning to P&B-large boulders across the Sunne Village Lane entrance to P&B’s restaurants. P&B removed the boulders after consulting with the police department.
¶ 9. Almost one year later, in the late summer of 2012, the POA installed a guardrail in the same location, again without notice to P&B. The guardrail prevented access to P&B’s property from Sunne Village Lane. The POA also put up numerous “Private Lane-Residents Only” signs on the entrance to Sunne Village Lane from Route 100. The barricades erected by the POA had a significant adverse impact on P&B’s business.
¶ 10. P&B filed suit against the POA on September 28, 2012. In its complaint and subsequent first and second amended complaints (the latter filed May 28, 2013), P&B sought: a declaratory judgment that it has an express easement (in the deed) over Sunne Village Lane to access the restaurant property; a declaratory judgment that it has a prescriptive easement over the existing Sunne Village Lane entrance to the restaurant property; compensatory and punitive damages against the POA for nuisance in connection with the POA’s obstruction of that entrance; an order enjoining the POA from interfering with P&B’s use of the roads; an order finding that the POA had violated the declaration of covenants; a judgment that the POA had violated the Vermont Common Interest Ownership Act (VCIOA), 27A V.S.A. §§ 1-101 to 4-120; and a judgment that the POA officers and directors breached their duties of good faith, loyalty, and ordinary prudence to the POA’s members, 11B V.S.A. § 8.42(a), 27A V.S.A. § 3-103. P&B also sought attorney’s fees and costs.
¶ 11. Following a trial, the court ruled that the declaration of covenants granted P&B an express easement over Sunne Village Lane for the benefit of Parcel 2 (the parking-lot parcel), but not for the benefit of Parcel 1 (the restaurant parcel). The court concluded that the deeded easement for the benefit of Parcel 2 did not extend to this contemplated commercial use because such use would materially increase the burden on the servient estate. The court concluded, however, that P&B had acquired a prescriptive easement over Sunne Village Lane, including access to Parcel 1 through the area blocked by the guardrail installed by the POA. The court based its conclusion on evidence showing that the public had used the Sunne Village Lane entrance to access the restaurant property as far back as 1975. The court rejected the POA’s contention that this longstanding use was permissive, contingent on a broader agreement between the POA and the restaurant owner.
¶ 12. The court ruled in P&B’s favor on its claims that the POA created a nuisance claim; that the POA had violated the declaration of covenants and various provisions of the VCIOA; and that the POA board members and officers had violated their statutory duties of care and loyalty to unit owners. The court ordered the POA to remove the no-trespassing signs and the guardrail blocking access from Sunne Village Lane to P&B’s parking lot and to comply with the VCIOA and Sunne Village’s declaration of covenants and bylaws. The court awarded P&B compensatory damages of $101, 500. Finding that the POA’s conduct was intentional, malicious, and “truly reprehensible, ” the court concluded that P&B was entitled to punitive damages of $5000. Finally, the court concluded that under the fee-shifting provision of the VCIOA, P&B was entitled to an award of $100, 484.34 in reasonable attorney’s fees and $2, 947.35 in costs. Thus, the total judgment amount awarded to P&B was $209, 931.69. The court denied the POA’s motion to alter or amend judgment under Vermont Rule of Civil Procedure 59(e).
¶ 13. On appeal, the POA does not challenge the trial court’s finding that P&B has a prescriptive easement over Sunne Village Lane and the entrance to Parcel 1. It argues that (1) the evidence was insufficient to support an award of compensatory damages to P&B, and that even if compensatory damages could be awarded, the court’s calculation was erroneous; (2) the evidence does not support the court’s finding of nuisance because there was no evidence of actual harm to P&B’s business; (3) the award of certain attorney’s fees and costs was improper; and (4) the award of punitive damages was improper. P&B cross-appeals, arguing that the court erred in finding that its express easement over Sunne Village Lane created in the declaration of covenants did not extend to commercial use. 
I. Compensatory Damages
¶ 14. P&B argued, and the trial court found, that as a result of the POA’s placement of the signs and guardrail, P&B suffered losses to its business. To quantify its losses, P&B presented evidence of its general diminution in revenues after the POA installed the signs and guardrail. In 2012, P&B’s revenue was $1.3 million; in 2011, it was $1.6 million. P&B also presented more specific evidence of the drop in “covers” (the number of meals served) in September, October, and November 2012 as compared to the same months in 2011, as well as the average revenue per cover. The trial court found that the restaurants had 2500 fewer covers in September, October, and November 2012 than during the same period the year before. With average revenues per cover of $29, the court calculated a loss of $72, 500 associated with that three-month period. Due to a number of variables-including relatively good snow conditions in the 2012-13 ski season compared to the prior year, and a change in menu and increased prices-the trial court was unable to make specific findings as to the amount of loss, if any, suffered by P&B after December 2012. 
¶ 15. The POA raises a host of challenges to the trial court’s compensatory-damages calculation. It argues that there was no basis for a finding of economic injury because the restaurants had never been profitable and that the compensatory damages were calculated solely with reference to a reduction in P&B’s revenue without accounting for the associated reduction in costs. The POA also argues that if the trial court had compared the restaurants’ revenues to the preceding year for the entire seven-month period that the guardrail was in place, it would have found an increase. Finally, the POA asserts that the trial court erred in several ways in calculating damages using the method it adopted.
¶ 16. Generally, the calculation of damages is a question of fact. Birkenhead v. Coombs, 143 Vt. 167, 172-73, 465 A.2d 244, 246 (1983). As long as “sufficient evidence is introduced to permit with reasonable certainty an estimation of damages, the task of determining damages will be entrusted to the sound discretion of the fact finder. Furthermore, where an action does not permit exact computation, an ...