Case Title: Plaintiff v. Defendant

Citation: 2007 VT 83

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2007-08-31T00:00:00Z

Document:
Lamell Lumber Corp. v. Newstress International, Inc. (2005-567)

2007 VT 83

[Filed 31-Aug-2007

  NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40
  as well as formal revision before publication in the Vermont Reports. 
  Readers are requested to notify the Reporter of Decisions, Vermont Supreme
  Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
  order that corrections may be made before this opinion goes to press.


                                 2007 VT 83

                                No. 2005-567


  Lamell Lumber Corporation                      Supreme Court

                                                 On Appeal from
       v.                                        Chittenden Superior Court


  Newstress International, Inc.                  February Term, 2007


  Ben W. Joseph, J.

  Lisa B. Shelkrot and Clara F. Gimenez of Langrock Sperry & Wool, LLP,
    Burlington, for Plaintiff-Appellee.

  Carrie J. Legus of Legus and Bisson PLC, Montpelier, for
    Defendant-Appellant.


  PRESENT:  Reiber, C.J., Dooley, Johnson and Skoglund, JJ., and 
            DiMauro, D.J.,  Specially Assigned

        
       ¶  1.   SKOGLUND, J.   Plaintiff Lamell Lumber Corp., a lumber
  wholesaler and retailer based in Essex Junction, Vermont, entered into a
  contract with defendant Newstress International, Inc., a New Hampshire
  corporation, requiring defendant to fabricate a number of precast concrete
  panels and to "design, manufacture, truck, and erect these components" into
  a concrete kiln for plaintiff to use in the drying of lumber.  After the
  kiln was completed, plaintiff detected an increasing number of cracks and
  holes in the concrete, which resulted in this lawsuit against defendant for
  breach of contract, breach of implied warranty, and negligence. (FN1)  The
  jury returned a special verdict in favor of plaintiff, finding defendant to
  be liable on all three counts, and awarded damages of $100,000. On appeal,
  defendant contends the trial court erred in: (1) exercising subject matter
  jurisdiction despite the presence of an arbitration clause in the contract;
  (2) failing to dismiss the action as untimely under the four-year statute
  of limitations applicable to the sale of goods; (3) submitting the
  negligence claim to the jury; (4) instructing on damages; (5) excluding the
  testimony of defendant's expert witnesses; and (6) imposing sanctions
  against defendant.  We affirm.

       ¶  2.  The basic facts may be briefly summarized.  Additional material
  facts will be set forth in the discussion which follows.  In November 1993,
  the parties entered into a contract calling for defendant to "design,
  manufacture, truck, and erect" a number of precast, prestressed concrete
  panels into a structure to be used by plaintiff as a kiln for drying lumber
  at its mill in Essex Junction.  The kiln was completed in late 1993 or
  early 1994.  Although the parties dispute the extent of defendant's
  participation in the design of the project, plaintiff adduced evidence at
  trial that defendant designed the concrete panels, the panel connections,
  the arrangement and location of the insulation materials inside the panels,
  and the building footings.
   
       ¶  3.  Plaintiff first noticed cracks in the kiln and reported them
  to defendant in the spring of 1998.  Efforts over the next several years to
  repair the disintegrating concrete were unsuccessful, resulting in the
  filing of this lawsuit in April 2003.  Following a series of pretrial
  motions, discussed more fully below, the case proceeded to trial in October
  and November 2005.  Plaintiff's engineering expert, David Mitchell,
  testified that the building had not been properly designed to withstand the
  heat of the kiln, and that the deterioration of the concrete was caused by
  the improper arrangement of the insulation blocks inside the concrete
  panels and the improper connection of the panels to each other.  As noted,
  the jury returned a special verdict in favor of plaintiff, awarding damages
  of $100,000.  This appeal followed.
   
                                     I.


       ¶  4.  Defendant first claims that the superior court lacked subject
  matter jurisdiction over this action. The basis of the claim is a clause in
  the parties' contract providing that all disputes arising out of the
  agreement shall be decided by arbitration.  Although defendant raised the
  arbitration clause as an affirmative defense in its answer to the
  complaint, filed in June 2003, it proceeded to actively litigate the case
  over the next two years, responding to plaintiff's discovery requests and
  propounding requests of its own, attending depositions and other court
  proceedings,  scheduling and canceling a mediation, and seeking several
  continuances of the jury draw.  In early July 2005, however, about one
  month before trial was scheduled to commence, defendant filed a motion for
  summary judgment, arguing that the arbitration clause in the agreement
  deprived the court of subject matter jurisdiction and "estopped" plaintiff
  from pursuing its claims.   Although plaintiff's counsel thereafter agreed
  to submit to arbitration, defendant rejected the offer on the ground that
  "any effort on the part of [plaintiff] to initiate arbitration at this time
  on its claims would be time-barred."  Plaintiff thereupon filed an
  opposition to the motion, disputing defendant's claim that the court lacked
  subject matter jurisdiction and arguing that, by actively engaging in the
  litigation process for over two years, defendant had waived the arbitration
  agreement.(FN2) 
                 
       ¶  5.  The court issued a decision in October 2005, rejecting
  defendant's claim that it lacked subject matter jurisdiction and agreeing
  with plaintiff that defendant had waived the right to arbitration. 
  Defendant contends the court erred, arguing that where, as here, a dispute
  is subject to an arbitration agreement, the Vermont Arbitration Act, 12
  V.S.A. §§ 5651 to 5681 (VAA) confines the court's jurisdiction to certain
  statutorily defined proceedings and excludes civil actions based on the
  contract.  As explained below, the claim is unpersuasive. 
   
       ¶  6.  "Subject matter jurisdiction" refers to the power of a court
  to hear and determine a general class or category of cases.  See In re
  B.C., 169 Vt. 1, 7,