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Stratton Corp. and Intrawest Stratton Development Corp. v. Engelberth Construction, Inc.

Supreme Court of Vermont

May 29, 2015

The Stratton Corporation and Intrawest Stratton Development Corporation
v.
Engelberth Construction, Inc.
v.
Morgan’s Roofing and Construction, et al.

On Appeal from Superior Court, Windham Unit, Civil Division Karen R. Carroll, J. (Motion for Summary Judgment); John P. Wesley, J. (Final Judgment)

Shapleigh Smith, Jr., and Wm. Andrew MacIllwaine of Dinse, Knapp & McAndrew, P.C., Burlington, for Third-Party Plaintiff-Appellant Engelberth Construction, Inc.

Kaveh S. Shahi of Cleary Shahi & Aicher, P.C., Rutland, for Third-Party Defendant/Appellee Orwell Construction Company.

John Paul Faignant of Miller Faignant & Fabian, P.C., Rutland, for Third-Party Defendants- Appellees Morgan’s Roofing & Construction and S.D. Ireland Concrete Construction.

Richard Windish and Susan J. Manley of Hayes & Windish, Woodstock, for Third-Party Defendant/Appellee NBJ Construction, Inc., and Hans G. Huessy of Murphy Sullivan Kronk, Burlington, for Third-Party Defendant Appellee Leggett & Son Contracting.

PRESENT: Reiber, C.J., Skoglund, J., and Johnson and Morse JJ. (Ret.), and Morris, Supr. J. (Ret.), Specially Assigned

SKOGLUND, J.

¶ 1. This appeal stems from a condominium construction project in Stratton, Vermont. Owner and developer The Stratton Corporation and Intrawest Stratton Development Corporation (collectively “Stratton”) sued Engelberth Construction, Inc., the project’s general contractor, seeking to recover for alleged construction defects and faulty workmanship that resulted in water damage to the project. Engelberth filed third-party complaints for indemnification against its subcontractors. The trial court granted summary judgment to Engelberth on Stratton’s claims, finding the claims barred by the statute of limitations. Given its summary judgment ruling, and without objection, the court dismissed Engelberth’s third-party claims as moot. Engelberth later sought to amend the dismissal order to provide that the third-party claims were dismissed without prejudice. The court denied its request, and Engelberth appeals. We affirm.

¶ 2. The record indicates the following. In March 1998, Stratton hired Engelberth as its general contractor to build a 143-unit condominium complex. The parties entered into a standard agreement with modified general conditions. Stratton also hired architects to design the project and a construction engineering firm to consult on the waterproofing details. Construction began in 1998, and was substantially completed in 2000. The complex began showing signs of water leakage as early as November 1998, and leakage problems persisted throughout the remainder of the construction. In 2007, Stratton settled a water-damage claim brought by the condominium association for approximately $7 million.

¶ 3. As noted, in June 2007, Stratton sued Engelberth for negligence, breach of contract, and breach of warranty based on construction defects and faulty workmanship. Engelberth raised the statute-of-limitations as an affirmative defense. Engelberth also filed third-party complaints against its subcontractors, seeking indemnification to the extent that any liability for damages to Stratton was imposed on Engelberth.

¶ 4. In December 2012, Engelberth moved for summary judgment against Stratton on statute-of-limitations grounds. The court granted its motion on May 15, 2013, finding as a matter of law that Stratton had been placed on notice sufficient to warrant further inquiry as to its injuries and their cause more than six years before filing suit against Engelberth. One week later, the court issued an entry order stating: “The Court has granted defendant Engelberth’s motion for summary judgment on plaintiff Stratton’s claims against it. The Court believes that this makes all third-party claims moot. These claims will be dismissed by the Court on June 1, 2013 unless any party files an opposition to this entry order.” No party filed any opposition, and in August 2013, the court dismissed Engelberth’s third-party claims.

¶ 5. Meanwhile, in June 2013, Stratton appealed the trial court’s summary judgment decision. In light of Stratton’s appeal, Engelberth moved in September 2013 to amend the trial court’s third-party dismissal order to state that the dismissal was “without prejudice” and conditioned on the Vermont Supreme Court affirming the trial court’s summary judgment ruling. Engelberth argued that although its claims against the third-party defendants currently appeared moot, if the Supreme Court reversed or remanded the summary judgment decision, it would need to re-file its third-party claims and it could do that only if the dismissal was “without prejudice.”

¶ 6. At the request of Stratton and Engelberth, the trial court stayed all pending matters until mid-February 2014 in light of settlement discussions. On February 12, 2014, Engelberth moved for a hearing on its motion to amend. Several days later, Engelberth filed notice that it had reached an accord and satisfaction with Stratton as to all claims asserted in this matter pursuant to a settlement agreement and mutual release. [*] The trial court consequently issued an entry order on February 24, 2014 dismissing all claims of whatever sort asserted by any party in this matter.

¶ 7. In early March 2014, Engelberth moved to clarify the February 24, 2014 dismissal order. It asserted that its third-party claims had never been adjudicated and again asked the court to confirm that its dismissal of these claims was “without prejudice.” Engelberth stated that its third-party claims were based on express indemnity provisions in the subcontract agreements of the third-party defendants, which created claims separate from those asserted by Stratton in the original complaint. In other words, according to Engelberth, the third-party claims were not strictly contingent upon the outcome of Stratton’s original claims. Instead, they were contingent upon a loss or injury to Engelberth arising out of the project work. Engelberth maintained ...


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