Shahi v. Donnelly, No. 496-9-06 Wrcv (Eaton, J., Ap r. 14, 2010)

[The text of this Vermont trial court opinion is un official. It has been reformatted from the origina l. The accuracy of the text and the accompanying data included in the Vermont trial cou rt opinion database is not guaranteed.] STATE OF VERMONT

WINDSOR COUNTY

KAVEH SHAHI and LESLIE SHAHI ) ) Windsor Superior Court v. ) Docket No. 496-9-06 Wrcv ) DEIRDRE DONNELLY )

DECISION RE: CROSS-MOTIONS FOR PARTIAL SUMMARY JUDG MENT

Plaintiffs Kaveh and Leslie Shahi recovered a subs tantial jury verdict in 2006 against defendant’s husband, Daniel Madden, for a v ariety of torts including timber trespass and invasion of privacy. Plaintiffs now s eek to establish that defendant Deirdre Donnelly is liable for the same harm under theories of conspiracy, negligent supervision, and agency. The present question before the court is whether the 2006 jury verdict has any preclusive effects in this case.

Both parties have filed cross-motions for partial summary judgment. Plaintiffs seek a ruling that Donnelly is precluded from relit igating any of the issues that were decided adversely to her husband in the 2006 jury t rial. Plaintiffs concede that Donnelly was not a named party in the jury trial but neverth eless argue that the verdict settled both the amount of damages and the fact that Madden comm itted the underlying torts. In plaintiffs’ view, the only issue in this case is wh ether Donnelly should be held liable for

the same harm. 1

Donnelly argues that she was not a party to the 20 06 jury trial. She points out that plaintiffs filed two different motions seeking to j oin her as a party to that proceeding, but that plaintiffs withdrew both motions before jury d raw. She therefore seeks application of the general rule that “one is not bound by a jud gment in personam in a litigation in which [s]he is not designated as a party or to whic h [s]he has not been made a party by service of process.” Taylor v. Sturgess , 128 S.Ct. 2161, 2166–67 (2008) (quoting Hansberry v. Lee , 311 U.S. 32, 40 (1940)). Donnelly also argues th at the 2006 judgment precludes plaintiffs from pursuing any of their cur rent claims against her because plaintiffs should have raised these claims during t he previous lawsuit.

For the following reasons, the court rules first t hat plaintiffs are not entitled to the application of issue preclusion in this case since Donnelly was neither a named party nor in privity with a party during the 2006 jury trial; the policy interests against duplicative litigation are outweighed here by the more general and “deep-rooted historic tradition that everyone should have his own day in court.” 18A Wr ight, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 4449. Th e court then concludes that the

1 There are two other claims in the complaint (fraud ulent conveyance and a request for declaratory judgment) that do not depend upon establishing Donn elly’s liability for the underlying torts. Those c laims

are not relevant to this decision.2

doctrine of claim preclusion does not prevent plain tiffs from bringing consecutive lawsuits against separate parties under the circums tances presented here.

I.

The first issue is whether plaintiffs are entitled to the application of issue preclusion in this lawsuit. Plaintiffs argue that the 2006 jury verdict resolves both the amount of damages and the fact that Madden committe d the underlying torts. Plaintiffs acknowledge that defendant was not a named party du ring the jury trial but nevertheless contend that she participated in the case to such a n extent that she became bound by the

verdict.

The following facts are taken as true for the purp oses of plaintiffs’ motion for summary judgment. 2 Donnelly and Madden used to live at a townhouse i n West Woodstock. During their time there, they were issu ed a no-trespass order preventing them from engaging in timber trespass in the common areas. There were also several incidents that resulted in complaints and criminal allegations against Madden. Donnelly

was aware of the incidents and even went so far as to sue one of the complainants.

Donnelly and Madden then purchased the Densmore Hi ll property. Donnelly

financed the work and Madden oversaw the constructi on. Madden’s presence on the property resulted in damage to plaintiffs and the f iling of two different lawsuits. The first, referred to here as Shahi I , settled out of court. Madden and Donnelly were represented by the same attorney in that lawsuit.

Madden was the only defendant named in the origina l complaint in the second lawsuit, known as Shahi II . Donnelly eventually entered an appearance in the case, however, in order to oppose plaintiffs’ discovery r equests for the couple’s mortgage records. Donnelly was represented by a lawyer who also entered an appearance on behalf of Madden (even though Madden had previously repres ented that he was without funds to hire an attorney). Donnelly’s attorney filed disco very motions, and she was treated in the

2 Plaintiffs’ motion for partial summary judgment wa s accompanied by a request for enlargement

of time based on claimed deficiencies in defendant’ s responses to discovery. The background here is a s follows. The case was commenced by filing in 2006. After a number of lengthy delays, the parties agr eed to file any substantive motions on the preclusion i ssues by September 1, 2009. Both parties then file d cross-motions for partial summary judgment on the i ssue as well as responsive pleadings. Numerous other motions concerning discovery matters were also file d, and plaintiffs now contend that the discovery disputes have prevented them from establishing cert ain facts relevant to their arguments on the issue of privity. Plaintiffs accordingly seek a ruling that the present cross-motions should be denied as prem aturely

filed. See Poplaski v. Lamphere , 152 Vt. 251, 254–55 (1989) (explaining that summa ry judgment motions should be decided after there has been “an adequate time for discovery”). Plaintiffs have set forth t he facts that they wanted more time to support, however, and it does not appear to the court that these facts w ould change the outcome of the cross-motions even if pla intiffs had more time to develop factual support fo r the allegations. The court has therefore assumed the a llegations to be true for the purposes of the cross

motions. Plaintiffs’ motion to enlarge the time fo r discovery is accordingly denied. See Al Baraka Bancorp (Chicago), Inc. v. Hilweh , 163 Vt. 148, 155 (1994) (summary judgment rulings were not premature where it was not shown that additional di scovery would have changed the outcome). It has be en more than three years since the case was filed. It is time to move this case forward.3

case as an “interested party” on some pleadings and court notices. She was deposed. But she was not added as a party-defendant.

Plaintiffs filed two different motions seeking to join Donnelly as a party defendant. Donnelly opposed both motions, and plai ntiffs subsequently withdrew both motions before the jury draw. The case was tried a gainst Madden alone. The jury returned a verdict against Madden and the verdict w as affirmed on appeal.

More than two years after the jury verdict, plaint iffs sought an injunction in the same docket that would have prevented Madden from c oming within a certain distance of them or their property. Donnelly intervened in the se proceedings and participated in evidentiary hearings in which she questioned the fa cts as they were found by the jury. She eventually appealed from the final order granti ng injunctive relief to plaintiffs.

Taken together, plaintiffs argue that these facts show that Donnelly participated in the underlying litigation either as an interested p arty or as an intervenor, and that she controlled the defense in the underlying trial by f inancing the litigation. Plaintiffs are presently seeking more information about the couple ’s finances in order to prove the extent of Donnelly’s financial contributions to the Shahi II litigation. In the end, plaintiffs seek a ruling that Donnelly was either a de facto party or in privity with her husband during the Shahi II litigation.

The general principles of issue preclusion are wel l settled. Application of the doctrine requires proof that (1) preclusion is bein g “asserted against one who was a party or in privity with a party in the earlier action; ( 2) the issue was resolved by a final judgment on the merits; (3) the issue is the same a s the one raised in the later action; (4) there was a full and fair opportunity to litigate t he issue in the earlier action; and (5) applying preclusion in the later action is fair.” Scott v. City of Newport , 2004 VT 64, ¶ 8, 177 Vt. 491 (mem.) (quoting Trepanier v. Getting Organized, Inc. , 155 Vt. 259, 265 (1990)). Of these elements, the most important for purposes of the present case is whether preclusion is being asserted against one wh o was a party or in privity with a party during the earlier action.

Plaintiffs argue first that Donnelly had notice of the 2006 litigation and should have intervened in the case as a party-defendant if she wanted to contest the facts that were decided therein. This argument rests upon the murky assertion that nonparties may sometimes have a duty to intervene in lawsuits in w hich they may potentially be liable, and that preclusion is a consequence of a breach of that duty. It also bucks the “basic premise of preclusion” that “parties to a prior act ion are bound and nonparties are not bound.” 18A Federal Practice and Procedure, supra , at § 4449.

Intervention, of course, is a permissive procedure that “permits a nonparty to become a party when it wishes .” 18 Federal Practice and Procedure, supra , at § 4452 (emphasis added). There are no civil procedural ru les that require mandatory intervention under any circumstances (the rules pro vide for mandatory joinder instead) and there are similarly no common-law rules that im pose upon any person “the burden of4

voluntary intervention in a suit to which he is a s tranger.” Chase National Bank v.

Norwalk , 291 U.S. 431, 441 (1934). As such, attempts to b lend preclusion doctrines with a theory of mandatory intervention are both awkward and fraught with due-process concerns. It is better to conclude that “a nonpart y is not precluded from relitigating matters decided in a prior action simply because it passed by an opportunity to intervene.” 18A Federal Practice and Procedure, supra , at § 4452; Perez-Guzman v.

Gracia , 346 F.3d 229, 237–38 (1st Cir. 2003). “Joinder a s a party, rather than knowledge of a lawsuit and an opportunity to intervene, is th e method by which potential parties are subjected to the jurisdiction of the court and boun d by a judgment or decree.” Martin v.

Wilks , 490 U.S. 755, 765 (1989). 3 For these reasons, the court does not accept plai ntiffs’ invitation to forge a new rule of mandatory interve ntion that would bind Donnelly to the results of the 2006 jury trial.

Plaintiffs argue next that Donnelly should be boun d by the judgment because she participated as an “interested person” during the p retrial discovery phase. The general rule, however, is that preclusion does not apply to persons who make appearances in lawsuits for the purposes of discovery or who testi fy as witnesses, because such limited participation does not equate to “a full and fair o pportunity to litigate the claims and

issues settled in that suit.” Taylor v. Sturgess , 128 S.Ct. 2161, 2171 (2008). Formal designation as a party is usually the prerequisite, 18A Federal Practice and Procedure,

supra , at § 4449, and here it is undisputed that Donnell y was not formally named as a party-defendant at the trial. As such, Donnelly’s participation as an interested person alone does not support a finding of preclusion.

Plaintiffs also argue that Donnelly should be boun d by the judgment because she did in fact intervene in the proceedings regarding the post-judgment injunction. Yet those proceedings occurred more than two years afte r the jury verdict was returned and after the appeal from the trial was completed. The post-judgment injunction also involves a wholly different facet of the case than the questions that were resolved in the jury trial. As such, the court is not persuaded th at it would be fair to bind Donnelly to the judgment based on her intervention at such a late d ate. Indeed, it is the lateness of the intervention that distinguishes this case from Watergate West, Inc. v. Barclays Bank, S.A.

, 759 A.2d 169 (D.C. 2000), upon which plaintiffs rel y. That case stands for the proposition that a party may become bound by a judg ment when it intervenes in the case shortly after judgment is issued, requests reconsid eration of the judgment, files briefs with the trial court, appeals from the judgment, an d actively participates in post-judgment enforcement proceedings. Id . at 179–80. It seems to the court that the hotel’ s involvement in Watergate West was materially more relevant to the underlying jud gment than Donnelly’s participation in the injunction pro ceedings here. As a result, the court

does not find Watergate West to be persuasive support for the contention that D onnelly’s participation was enough to bind her to the jury ve rdict.

3 The holding of Martin was abrogated by Congress in 1991 as applied to em ployment discrimination actions filed pursuant to federal la w. See 18A Federal Practice and Procedure, supra , at § 4452 (explaining legislative changes to the emplo yment discrimination statutes and other statutes wh ere the right to bring a qui tam action is terminated when a government action is b rought). None of these statutory modifications affect the common-law princ iple discussed in Martin and applied here.5

Plaintiffs argue last that Donnelly should be boun d by the judgment because she was in privity with Madden during the trial. See Lamb v. Geovjian , 165 Vt. 375, 380 (1996) (“A privity relationship generally involves a party so identified in interest with the other party that they represent one single legal ri ght.”) (quotation omitted). Plaintiffs contend that Madden and Donnelly had identical inte rests in the matter by virtue of their marriage and the fact that they hold title to the D ensmore Hill property as tenants by the entirety. Plaintiffs also argue that Madden and Do nnelly were represented by the same attorney throughout the underlying case, that Donne lly financed the litigation, and that Donnelly participated as essentially a de facto par ty during the underlying litigation.

The primary thrust of these arguments is that Donn elly should be bound by the judgment because she “assumed control” over the lit igation. This is an exception to the general rule that permits preclusion to be asserted against a nonparty who has already enjoyed a full and fair opportunity to litigate the claims asserted in the case. See 18A Federal Practice and Procedure, supra , at § 4451 (explaining that “a nonparty may participate in such a way as to become a de facto p arty, tacitly if not formally treated as such by all parties”). The general requirements fo r application of the exception are that the nonparty must have had adequate control of the litigation—i.e., “the opportunity to present proofs and argument”—and a sufficient inter est in the result. Taylor , 128 S.Ct. at

2173.

The degree of control expected from the nonparty i s “effective choice as to the legal theories and proofs to be advanced in behalf of the party to the action.” Restatement (Second) of Judgments § 39, cmt. c. Th is exception normally applies in those situations in which a nonparty actually assum es control of the defense, as in the case of liability insurers, for example.

It is well-settled that “[l]esser measures of part icipation without control do not suffice.” 18A Federal Practice and Procedure, supra , at § 4451. As such, “it is not enough that the nonparty supplied an attorney or is represented by the same law firm; helped to finance the litigation; appeared as an am icus curiae; testified as a witness; participated in consolidated pretrial proceedings; undertook some limited presentations to the court; or otherwise participated in a limited w ay. Even a nonparty who was ‘heavily involved’ may remain free from preclusion.” Id . Thus, privity under the nonpartycontrol exception is not established merely because a nonparty paid the expenses of litigation, Martin v. American Bancorp. Retirement Plan , 407 F.3d 643, 652–53 (4th Cir. 2005), had the same attorney as the party and parti cipated to a limited extent in the earlier litigation, Benson & Ford, Inc. v. Wanda Petrol. Co. , 833 F.2d 1172, 1174–75 (5th Cir. 1987), shared the same interests in the litigation as the named party, White v. Kelsey , 935 F.2d 968, 969–70 (8th Cir. 1991), or even had a clo se family relationship with the party. 18A Federal Practice and Procedure, supra , at § 4459. “It is essential that the nonparty

have actual control.” Benson & Ford , 833 F.2d at 1174.

The lead example of nonparty control is Montana v. United States , 440 U.S. 147 (1979). There, a federal contractor brought suit i n state court contending that a state6

gross receipts tax unconstitutionally discriminated against the federal government and the companies with which it dealt. The litigation was directed and financed by the federal government to the extent that the federal governmen t told the contractor to file the complaint, reviewed and approved the complaint, pai d the attorney’s fees and costs, directed the appeal, and submitted briefs on appeal . After the state court affirmed the constitutionality of the tax, the federal governmen t then filed the same lawsuit in federal court under its own name. It was accordingly held there that issue preclusion applied because the federal government had a sufficient “la boring oar” in the conduct of the statecourt litigation. Id . at 155.

Here, plaintiffs have simply not adduced evidence showing that Donnelly was the one rowing the oars of the Shahi II litigation. Restatement (Second) of Judgments § 3 9. Plaintiffs have instead offered allegations—which, again, the court takes to be true for the purposes of this decision—that Donnelly shared Madd en’s interests in the litigation, paid for his attorney’s fees, intervened in later procee dings on a restraining order, and had sued his adversaries in her own name in the past. Even if these allegations are taken together and viewed in their entirety, they simply do not sustain the contention that Donnelly was the one presenting “proofs and argumen ts” in the Shahi II litigation. Taylor , 128 S.Ct. at 2173. The allegations do not add up to the conclusion that she has already had her day in court on the claims asserted in the complaint. As a result, the court cannot conclude that Donnelly is bound to the judgment by virtue of privity.

In a variation on the same theme, plaintiffs conte nd that the cases of In re Curtis

, 2006 VT 9, 179 Vt. 620 (mem.), and In re St. Mary’s Church Cell Tower , 2006 VT 103, 180 Vt. 638 (mem.), support their contention that D onnelly is bound by the judgment

because she had identical interests as Madden and w as represented by the same attorney. Those cases were materially and legally different, however. There, a group of neighbors challenged a land-use permit issued to a wireless t elephone company to install a cellphone tower inside a local church steeple. After t he courts upheld the permit, the same group of neighbors tried again by challenging the c onditional-use permit issued to the local church itself. The Vermont Supreme Court hel d that the second challenge was barred by the doctrine of claim preclusion because the neighbors were challenging essentially the same permit. See 2006 VT 103, ¶ 3 (differentiating between claim preclusion and issue preclusion). In other words, the ruling there was that the neighbors

“lost their chance to raise the conditional use iss ue when they decided not to raise it in the first appeal.” Id ., ¶ 10.

Plaintiff’s motion for summary judgment is about i ssue preclusion, not claim preclusion. If this court were to apply the holdin g of St. Mary’s Church Cell Tower here, it would be saying that Donnelly lost her chance to have her own day in court when she opposed plaintiffs’ attempts at joinder in the unde rlying case. This brings plaintiffs’ arguments back to their fundamental flaw: plaintiff s voluntarily withdrew their motion to join Donnelly in the underlying litigation but are now acting as though their motion had been granted.7

Plaintiffs contend essentially that Donnelly shoul d have jumped in once she got her toes wet in the underlying litigation. But pre clusion does not apply to nonparties with wet feet. Rather, preclusion applies only when lit igants dive all the way in or are otherwise dragged into the water by someone who is already a party. Here, it is undisputed that no one dragged Donnelly into the wa ter, and the record does not show anything more than that she stood on the side and p ut her toes in. As a result, plaintiffs are not entitled to the application of issue preclu sion in this case.

The end result is that plaintiffs will have to pro ve anew in this lawsuit that

Madden committed one or more torts and that Donnelly should be held liable for the

commission of those torts under one of the theories articulated in the complaint and that plaintiffs are entitled to damages in some amount t o be determined by the finder of fact. In proving these propositions, plaintiffs will not be permitted to introduce the Shahi II judgment as evidence of the facts found in that cas e. 18A Federal Practice and Procedure, supra , at § 4449 & n.28. The judgment is hearsay, and t he rule is simply that

“the facts found in one case are not evidence of th ose same facts in another case.” United States v. Joyce , 511 F.2d 1127, 1132 (9th Cir. 1974); Mackay v. Easton , 86 U.S. (19 Wall.) 619, 632 (1873). If plaintiffs’ claims are to be proven, they will be proven here based on the evidence presented here, and not based on the evidence presented at some other time in another case. No other procedure wou ld give effect to Donnelly’s right to have her own day in court.

Obviously there are inefficiencies in this procedu re. It is duplicative, and there is a risk of inconsistent judgments. But it was plain tiffs who brought this upon themselves by choosing not to join Donnelly the first time aro und. Since it was plaintiffs who made that choice, it should be plaintiffs—and not Donnel ly—who bear the consequences in this proceeding.

II.

Donnelly contends that the doctrine of claim precl usion prevents plaintiffs from bringing any claims against her arising out of the same harm as the 2006 judgment. Her argument is that plaintiffs elected their remedy wh en they chose to proceed against Madden alone, and that they are barred from litigat ing claims in the present case which they already had a full and fair chance to litigate in Shahi II

.

The primary support for Donnelly’s position derive s from Raymond v. Capobianco , 107 Vt. 295 (1935). In that case, the plaintiff successfully sued the driver of an automobile for personal injuries sustained in a car accident. The plaintiff then sued the owner of the car on the grounds that the driver had been acting as the owner’s agent at the time of the accident, and that the owner was th erefore liable under a theory of respondeat superior. The question thus presented w as whether the plaintiff elected to proceed solely against the driver in this first sui t and was therefore barred from maintaining an action against the principal. Id . at 298.8

The Raymond

court reviewed several approaches from other juris dictions before concluding that, in cases where the principal is li able only under a theory of respondeat superior, the principal and agent are only severall y liable (rather than jointly and severally liable). It followed from that conclusio n that the plaintiff elected his remedy when he chose to sue only the agent in the first la wsuit, and that the subsequent lawsuit against the principal was barred. Id . at 303. Donnelly contends that the same conclusi on should apply here.

The problem is that the forcefulness of the Raymond holding has been eroded by the passage of time. The Vermont Supreme Court its elf has described Raymond as based

on “a doctrine which was out-moded at the time of i ts acceptance and which experience has shown is increasingly ill-adapted to the needs of modern practice.” See Daniels v.

Parker , 119 Vt. 348, 354–55 (1956) (expressly overruling Raymond ). The rule in Vermont is now simply that “[w]here liability is jo int and several, . . . a verdict in favor of one will not discharge the others.” Plante v. Johnson , 152 Vt. 270, 274 (1989) (quotation omitted).

In other words, “[a] judgment against one person li able for a loss does not terminate a claim that the injured party may have a gainst another person who may be liable therefor.” Restatement (Second) of Judgment s § 49. It is thus well-settled that a plaintiff may file separate and consecutive lawsuit s against different persons liable for the same loss, and that the “entry of a judgment in the prior action does not bar the claims against other potentially liable parties.” Central Hudson Gas & Elec. Corp. v. Empresa

Naviera Santa S.A. , 56 F.3d 359, 367 (2d Cir. 1995); 18 Wright, Mille r & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 4 407. The theory of “election of remedies” announced by Raymond is now considered to be “obsolete.” Restatement (Second) of Judgment § 49, cmt. a.

There are still slightly different rules in cases involving vicarious liability, but there is no longer a complete bar against the maint enance of separate and consecutive lawsuits against agent and principal. The general rules applicable here are that (1) a judgment against the injured person in the first ac tion bars him from reasserting his claim against the second defendant and (2) a judgment in favor of the injured person is conclusive upon him as to the amount of his damages . Restatement (Second) of Judgments § 51. The exceptions to these general st atements are not applicable here.

Under the Restatement approach, therefore, the onl y preclusive effect in this case is that the amount of damages recovered in the Shahi II trial limits the amount of damages that plaintiffs can recover in this trial. Thus, plaintiffs are not precluded from bringing their present claims against Donnelly, but they cannot recover more here than they did in the first trial, and Donnelly is free t o argue for less. Id ., cmt. d.

Donnelly argues more generally that the elements o f defensive claim preclusion should apply here because Vermont abandoned the mut uality doctrine in Trepanier v. Getting Organized, Inc. , 155 Vt. 259, 264–65 (1990), and thus she may asse rt preclusion against plaintiffs even though she was not a party to the earlier judgment. The flaw here9

is that defensive claim preclusion is usually appli ed against parties who “litigated and lost” in the earlier proceeding. Id . Plaintiffs won. To the extent that the claim wa s decided in the earlier proceeding, any preclusion s hould run in plaintiffs’ favor, rather than against them.

Donnelly is really arguing that plaintiffs should have joined her in the earlier litigation. But there is no requirement under the prevailing procedural rules that a plaintiff join every possible defendant in the same action. The rules regarding joinder of claims are mandatory, but the applicable rules gove rning joinder of parties are permissive. Accordingly, while injured plaintiffs often have strong incentives to bring actions against two or more potentially-liable defe ndants at the same time (because doing so reduces their litigation costs), it remains perm issible to bring successive actions against different defendants for the same harm. “[ N]either the rule against ‘splitting’ a claim nor the usual rules of joinder of parties req uire that [claims against separate defendants] be maintained in a single action.” Re statement (Second) of Judgments § 51,

cmt. b.

The posture would be different if plaintiffs had l ost the underlying trial. Donnelly would then have taken easy recourse in the general rule that a judgment against the injured person in the first action bars him from re asserting his claim against another

defendant liable for the same harm. See Restatemen t (Second) of Judgments § 51 (adding that there are exceptions to this general r ule). But that is not what happened here.

Donnelly finally argues that there are different r ules to be applied in cases of conspiracy. But her cases all appear to involve th e circumstance where the party asserting a conspiracy litigated and lost in an ear lier round of litigation. See, e.g., Lamb v. Geovjian , 165 Vt. 375, 380 (1996). The accepted rule inste ad seems to be that when two defendants are potentially liable for the same loss, the claims are regarded as separate, and successive suits can be maintained ag ainst the different parties even when the second suit is based upon an allegation of cons piracy. See, e.g., Taylor v. Compere

, 230 S.W.3d 606, 610 (Mo. Ct. App. 2007). The court accordingly does not find the application of claim preclusion to be warranted her e.

III.

In the course of reviewing the foregoing motions f or partial summary judgment and the numerous pending discovery motions, it has become apparent to the court that there are a number of legal issues in this case tha t may be dispositive and yet do not require further factual development. Among these i ssues are (1) whether the claim for fraudulent transfer can be sustained where Donnelly and Madden took title to the Densmore Hill property as tenants by the entirety b efore the incidents underlying this case even occurred; (2) whether the claim for agenc y can be sustained where the alleged principal and the alleged agent are both tenants by the entirety in the same property; (3) whether, on the claim for negligent supervision, th ere was a “duty to control” here within the meaning of Peck v. Counseling Serv. of Addison County, Inc. , 146 Vt. 61 (1985) and Sorge v. State , 171 Vt. 171 (2000); and (4) whether public policy would support setting10

aside the tenancy by the entirety even if Donnelly is “entirely innocent.” See Plaintiff’s Cross-Motion for Summary Judgment, filed Oct. 5, 20 09, at 27.

The issues resonate particularly in the arena of d iscovery. The fraudulent transfer claim raises questions of law about the ability of a married couple to develop a parcel of property as tenants by the entirety. It also raise s questions about the ability of a creditor to pierce the entirety through discovery requests a imed at uncovering the so-called “source” of various payments.

The pending discovery issues cannot be resolved wi thout at least beginning to answer these questions. Yet at least some, and per haps all, of these questions appear capable of resolution without further factual devel opment. They may also have dispositive effects upon the litigation.

For these reasons, the court will entertain a seco nd round of summary judgment motions, on the remaining claims in the case (and s pecifically the issues raised above), to be filed no later than May 17, 2010. Any oppositio ns must be filed by June 4, 2010. No replies, surreplies, or other pleadings will be acc epted. The stay of discovery will remain in effect pending further order of the court.

ORDER

(1) Plaintiff’s Motion for Enlargement of Time and Motion for Partial Summary Judgment on Issue Preclusion (MPR #34), fil ed September 1, 2009, is denied

.

(2) Defendant’s Motion for Summary Judgment (MPR #3 6), filed September 3, 2009, is granted in part and denied in part to the extent consistent with this decision.

(3) Plaintiff’s Motion for Summary Judgment (MPR # 41), filed October 5, 2009, is denied

.

(4) Either party may file a motion for summary jud gment on the issues discussed in Part III of this opinion no later than May 17, 2010. Any oppositions must be filed by June 4, 2010. No replies, surreplies, or other pleadings will be accepted.

(5) The stay of discovery remains in effect.

Dated at Woodstock, Vermont this ____ day of April , 2010.

_________________________________ Hon. Harold E. Eaton, Jr. Presiding Judge