Title: EBWS, LLC v. Britly Corp.

State: vermont

Issuer: Vermont Supreme Court

Document:

EBWS, LLC v. Britly Corp. (2005-449)

2007 VT 37

[Filed 25-May-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 37

                                No. 2005-449


  EBWS, LLC                                      Supreme Court

                                                 On Appeal from
       v.                                        Orange Superior Court

  Britly Corporation                             January Term, 2007


  Amy M. Davenport, J.


  William L. Durrell and David R. Bookchin of Benjamin, Bookchin, Colburn &
    Durrell, P.C., Montpelier, for Plaintiff-Appellee/Cross-Appellant.

  Thomas M. Higgins and Robin Ober Cooley of Pierson Wadhams Quinn Yates &
    Coffin, Burlington, for Defendant-Appellant/Cross-Appellee.


  PRESENT:  Reiber, C.J., Dooley, Johnson and Skoglund, JJ., and 
            Allen, C.J. (Ret.),  Specially Assigned

        
       ¶  1.  REIBER, C.J.   This dispute arises from a construction
  contract in which defendant Britly Corporation agreed to build a creamery
  for plaintiff EBWS, LLC.  After EBWS filed suit for alleged defects in
  construction, the superior court granted summary judgment for Britly on
  EBWS's claims of consumer fraud and negligence.  Following a trial on the
  remaining claims, a jury awarded EBWS direct and consequential damages for
  breach of contract and breach of an express warranty.  Both parties now
  appeal.  Britly claims that the superior court erred in admitting evidence
  of consequential damages and by denying its motion for a new trial.  In its
  cross appeal, EBWS argues that the court erred in granting summary judgment
  on its consumer fraud and negligence claims, and by denying its request for
  attorney's fees, costs and prejudgment interest.  We conclude that the
  court erred in allowing consequential damages in this case, and remand for
  further consideration of attorney's fees.  In all other respects, we
  affirm.

       ¶  2.  The Ransom family owns Rock Bottom Farm in Strafford, Vermont,
  where Earl Ransom owns a dairy herd and operates an organic dairy farm.  In
  2000, the Ransoms decided to build a creamery on-site to process their milk
  and formed EBWS to operate the dairy-processing plant and to market the
  plant's products.  In July 2000, Earl Ransom, on behalf of EBWS, met with
  Britly's president, Larry Tassinari, to discuss building the creamery. 
  Although Tassinari has no formal training in architecture or building
  design, he has been in the construction business for twenty-eight years and
  over the last ten years has constructed an average of five commercial
  buildings per year.  After several months of negotiations, in January 2001,
  EBWS and Britly entered into a contract requiring Britly to construct a
  creamery building for EBWS in exchange for $160,318.  EBWS contracted
  directly with other entities to perform the site work, electrical, heating
  and plumbing on the building.  The creamery was substantially completed by
  April 15, 2001, and EBWS moved in soon afterward.  On June 5, 2001, EBWS
  notified Britly of alleged defects in construction. 
   
       ¶  3.  On September 12, 2001, EBWS filed suit against Britly for
  damages resulting from defective design and construction.  The complaint
  included several causes of action: (1) negligent design and execution, (2)
  negligent supervision, (3) consumer fraud, (4) breach of express
  warranties, (5) breach of contract, (6) breach of fiduciary duty, and (7)
  unjust enrichment.  Britly claimed that the defects were minor and not
  attributable to its work.  In addition, Britly counterclaimed for breach of
  contract and unjust enrichment.

       ¶  4.  In response to opposing motions for summary judgment, the trial
  court dismissed EBWS's consumer fraud claim on January 5, 2004.   The court
  also issued a show cause order for EBWS to demonstrate why its negligence
  claims should not be dismissed as a matter of law pursuant to the
  economic-loss rule.  Both parties submitted responses on the issue and, on
  the first day of trial, the court dismissed the negligence claims. 

       ¶  5.  The trial proceeded on EBWS's contract claims.  EBWS and Britly
  both presented expert testimony regarding which construction defects were
  attributable to Britly and what the cost would be to repair the problems. 
  EBWS's expert estimated the repairs would cost $38,020 and would require
  the creamery to cease operations for three weeks.  Amy Huyffer, the CEO of
  EBWS, testified that during a three-week shut-down, the creamery would
  suffer losses of $35,711.  She explained that loss would come from two
  sources: milk the creamery would be required to purchase and dump,  and
  employee wages it would be obligated to pay.  Britly's principal,
  Tassinari, testified that Britly was not responsible for the plumbing,
  heating and site work of the building and that many of the drainage problems
  were attributable to work done by others.  He further testified
  that EBWS owed $16,785 for work and materials in unpaid change orders. 
  Britly's expert testified that to fix the ponding and mold problems, the
  floor and walls could be cut and patched with concrete mortar.  He
  estimated the repairs would take three to four days and cost between $7,000
  and $8,500.  
   
       ¶  6.  Following a three-day trial, the jury found Britly had
  breached the contract and its express warranty, and awarded EBWS: (1)
  $38,020 in direct damages, and (2) $35,711 in consequential damages.   The
  jury also awarded Britly $3,500 in damages on its counterclaim.  Britly
  filed a motion for judgment as a matter of law or alternatively for a new
  trial.  EBWS filed a motion for attorney's fees.  The trial court denied
  the motions, and both parties appealed.

                                     I.

                          A. Consequential Damages

       ¶  7.  We begin by addressing Britly's claim that consequential
  damages are not available as a matter of law.  "A motion for judgment as a
  matter of law is granted only where there is no legally sufficient basis
  for a reasonable jury to find for the nonmoving party."  Perry v. Green
  Mountain Mall, 2004 VT 69, ¶ 7, 177 Vt. 109,