Notarial Negligence, the Economic-Loss Rule, and the Boundaries of the “Special Relationship” Exception
Commentary on Aleksandra Veljovic v. TD Bank, N.A., 2025 VT 38 (Vt. July 11, 2025)

1. Introduction

The Vermont Supreme Court’s decision in Veljovic v. TD Bank, N.A. adds an important chapter to the State’s evolving economic-loss jurisprudence. Aleksandra Veljovic sued TD Bank and its former employee, Zlata Cavka, claiming Cavka negligently notarised a forged power-of-attorney that enabled Plaintiff’s ex-husband to win a competing Serbian divorce decree and thus seize marital property. Plaintiff sought recovery for the value of that lost property under theories of negligence, negligent supervision, and respondeat superior. The trial court dismissed the complaint, holding that Vermont’s economic-loss rule barred recovery because Plaintiff alleged only monetary loss and could not establish the narrow “special relationship” exception. The Supreme Court now affirms in full, refining Vermont law in three critical respects:

• A notary’s public duties, standing alone, do not create a per se special relationship with unknown signatories.
• Merely being a bank customer does not transform ordinary contractual dealings into the heightened trust and reliance required for tort recovery of pure economic loss.
• Post-judgment amendment of a complaint is futile when the proposed facts still cannot pierce the economic-loss bar.

2. Summary of the Judgment

Sitting en banc, the Court (Reiber, C.J., writing) conducted a de novo review of the Rule 12(b)(6) dismissal. It held that:

1. All alleged damages were purely economic—the loss of Serbian real property interests—and fell squarely within the economic-loss rule.
2. No “special relationship” existed between Plaintiff and either Defendant because:
   • Plaintiff had never met the notary nor relied on her services; and
   • Plaintiff’s status as a TD Bank account-holder, even if pled, would create only contractual, not tort, obligations.
3. Arguments that a notary owes a generalized public duty were unpreserved and, even if considered, would not satisfy Vermont’s stringent special-relationship test.
4. The trial court soundly exercised its discretion in denying post-judgment amendment; the new allegations would be legally futile.

The dismissal with prejudice was therefore affirmed.

3. Analysis

3.1 Precedents Cited and Their Influence

• Long Trail House Condo. Ass’n v. Engelberth Constr., Inc., 2012 VT 80. The Court reiterated Long Trail’s dual policy goals—preserving the contract-tort boundary and limiting indefinite liability. Long Trail’s articulation of the “special relationship/professional service” exception framed the entire Veljovic analysis.
• EBWS, LLC v. Britly Corp., 2007 VT 37 & Springfield Hydroelectric Co. v. Copp, 172 Vt. 311 (2001). Both cases stress that professional licensing alone does not suffice; the focus is the parties’ relational dynamics. Veljovic extends this reasoning to notaries, rejecting a license-based shortcut.
• Sutton v. Vermont Regional Center, 2019 VT 71A. Sutton provided a three-factor test (initiation, targeted solicitation, reliance) to locate a special relationship. The Court applied each factor and found all absent.
• Gus’ Catering, Inc. v. Menusoft Sys., 171 Vt. 556 (2000) (mem.) and Bock v. Gold, 2008 VT 81. These authorities cement the baseline: no tort duty to prevent abstract economic loss absent physical harm or a special relationship.
• Procedural authorities—Stowe Aviation, LLC v. ACCD, 2024 VT 11; Colby v. Umbrella, 2008 VT 20; Vasseur v. State, 2021 VT 53
manage amendment futility and Rule 59(e) standards, underpinning the Court’s refusal to allow post-judgment revision.

3.2 The Court’s Legal Reasoning

The opinion unfolds in two analytical stages:

1. Application of the Economic-Loss Rule. The Court confirmed that Plaintiff’s damages—lost overseas real estate—constitute “economic loss” because no allegation of personal injury or property damage in Vermont existed. Under Vermont precedent, such loss is ordinarily unrecoverable in tort.
2. Interrogating the Special-Relationship Exception. The Court systematically evaluated whether Defendants owed Plaintiff a duty “independent of any contractual obligations.” Key findings:
   • No direct dealings or trust: Plaintiff never met Cavka, never asked her to notarise anything, and did not even know of the notarisation until after the fact.
   • Notary’s public office insufficient: Treating a notary’s statutory duty as automatically giving every member of the public a tort cause of action would eviscerate the economic-loss rule. The Court emphasised that Vermont defines “special relationship” narrowly—public–at-large obligations do not qualify.
   • Bank–customer relationship ordinary, not special: Even had Plaintiff pled account-holder status initially, the relationship sounds in contract (deposit agreement) and lacks the targeted reliance seen in attorney-client or doctor-patient contexts.

3.3 Anticipated Impact of the Decision

• Notaries and Financial Institutions: The ruling provides comfort that negligent-notarisation suits by strangers seeking only economic loss will face a steep barrier in Vermont absent direct reliance.
• Expansion of the Economic-Loss Rule: Veljovic clarifies that “professional service” does not automatically mean “special relationship.” The exception remains tethered to concrete, individualised reliance.
• Cross-border family and property disputes: Parties harmed by foreign fraud cannot circumvent the rule by framing claims against U.S. intermediaries in tort; contractual or statutory remedies (e.g., notarial bonds or disciplinary proceedings) may be the proper avenues.
• Pleading Strategy: Plaintiffs must plead reliance facts at the outset; courts will scrutinise post-judgment amendments for futility, especially where the economic-loss doctrine looms large.

4. Complex Concepts Simplified

Economic-Loss Rule

A doctrine that bars tort recovery (negligence, strict liability, etc.) for purely financial damages unaccompanied by personal injury or property damage. The rationale is to keep contract and tort in their lanes.

Special Relationship Exception

An exception allowing recovery for economic loss when the defendant occupies a position of trust and the plaintiff reasonably relies on the defendant’s expertise (e.g., lawyer–client). Courts require proof of individualized dealings and justifiable reliance.

Professional Services Exception

A shorthand for the special relationship exception when the defendant is a professional. Vermont insists that licensing alone is insufficient; the plaintiff must still show the requisite trust and reliance.

Respondeat Superior

A doctrine making employers vicariously liable for employees’ torts committed within the scope of employment. In Veljovic, it failed because the underlying tort claim (negligent notarisation) was barred.

Rule 12(b)(6) Dismissal

A procedural mechanism to test the legal sufficiency of a complaint. Courts assume all well-pled facts are true but disregard conclusions of law.

Rule 59(e) & Rule 15(a)

Rule 59(e) allows a party to ask the court to alter or amend a judgment; Rule 15(a) governs amendment of pleadings. After judgment, a plaintiff must first win under Rule 59(e) before any amendment is allowed, and amendments that would be futile are denied.

5. Conclusion

Veljovic v. TD Bank, N.A. fortifies Vermont’s economic-loss architecture, holding that notaries and their employers owe no tort duty for strangers’ monetary losses absent demonstrable reliance or a bespoke relationship of trust. By rejecting a broad public-duty theory and emphasising relational nuance, the Court preserves the integrity of contract–tort boundaries, signals caution to would-be plaintiffs, and provides clearer liability contours for professionals whose work product circulates far beyond their immediate clientele. Future litigants seeking recovery for purely economic damages must now reckon with this precedent and craft pleadings that establish the narrow factual predicates for a “special relationship”—or pursue alternative statutory or contractual remedies instead.