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The Stratton Corp. v. Engelberth Construction, Inc.

Supreme Court of Vermont

May 1, 2015

The Stratton Corporation and Intrawest Stratton Development Corporation
v.
Engelberth Construction, Inc.
v.
Evergreen Roofing, LLC

On Appeal from Superior Court, Windham Unit, Civil Division September Term, 2014 Karen R. Carroll, J.

Shapleigh Smith, Jr., William Andrew MacIlwaine and Sophie E. Zdatny of Dinse, Knapp & McAndrew, P.C., Burlington, for Third-Party Plaintiff-Appellee.

Richard W. Affolter, Michael J. Gannon and Sara Moran of Affolter Gannon & Rose, Ltd., Essex Junction, for Third-Party Defendant-Appellant.

PRESENT: Reiber, C.J., Dooley and Skoglund, JJ., and Maley and Griffin, Supr. JJ., Specially Assigned

SKOGLUND, J.

¶ 1. This case stems from a condominium construction project in Stratton, Vermont. Owner and developer, Stratton Corporation and Intrawest Stratton Development Corporation (collectively “developer”), sued the project’s general contractor Engelberth Construction, Inc., who in turn filed a third-party claim against subcontractor Evergreen Roofing Company. A jury found that Engelberth Construction breached its contract with developer and breached an express warranty, which proximately caused developer to sustain damages related to roof repairs. The jury also found that Evergreen Roofing breached its subcontract with Engelberth Construction, and that Evergreen Roofing was obligated to indemnify Engelberth Construction. Evergreen Roofing appeals. It argues that the court erred in denying a pretrial motion for summary judgment filed by Engelberth Construction on various issues, including the scope of the contract between developer and Engelberth Construction and whether proof of non-insurance or lack of availability of insurance coverage was a prerequisite to developer’s recovery against Engelberth. We conclude that Evergreen Roofing failed to preserve its argument, and we therefore affirm.

¶ 2. The record indicates the following. In April 2000, developer and Engelberth Construction entered into a standard agreement outlining the scope and terms of a condominium construction project. The agreement gave developer the option of implementing a Consolidated Insurance Program (CIP), which developer did. Article 11A of the agreement, entitled “Insurance, Bonds and Indemnification, ” outlined developer’s responsibilities, as well as those of Engelberth Construction and any subcontractors, given the implementation of the CIP. Article 11A contained the following provisions related to the CIP; the term “owner” refers to developer:

11.1.2 CIP Coverage -Owner may implement a CIP to furnish certain insurance coverages as respects on-site activities. The CIP will be for the benefit of the owner, Contractor and Subcontractors of any tier (unless specifically excluded) who have on-site employees. Such coverage applies only to work performed under the Contract Documents at the Project site and the Contractor and all Subcontractors of any tier must provide their own insurance for off-site activities. Contractor and all Subcontractors of any tier will also be responsible for providing the coverages specified in Subparagraph 11.1.8. The CIP is not intended to cover consultants, suppliers, vendors, or materials dealers or others whose function is solely to supply and/or deliver materials, parts, or equipment to and from the site. The CIP is intended to cover these individuals if they remain on site (after delivery) in an advisory capacity regarding installation or use of the materials, parts or equipment delivered.
In the event it implements CIP, Owner may procure and maintain [other] types of insurance in force as part of the CIP for the Contractor and Subcontractors of any tier (unless specifically excluded).

The agreement then listed several other types of insurance, including worker’s compensation and employer’s liability insurance, commercial general liability insurance, and excess liability insurance, that developer could choose to implement as part of the CIP.

¶ 3. The agreement had the following separate provisions regarding builder’s risk insurance:

11.3 BUILDER’S RISK INSURANCE
Owner shall procure, pay for, and maintain all-risk builder’s risk insurance as follows:
11.3.1 Required Insurance -Owner shall carry all-risk builder’s risk insurance... for the full insurable value of all labor and materials incorporated into the construction of the Work, while at the construction site or staging area awaiting erection and during erection, until completion and acceptance. Insurance is to cover real and personal property after it is received at the construction site or staging area.... The policy so purchased shall insure Owner, the Contractor and Subcontractors as their interests may appear and shall be so written as to provide for reimbursement, in the event of claim for loss or damage, for the entire cost... of repairing or replacing, reconditioning, or reerecting the property lost or damaged ...

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