7ermont Superior Court Filed 04/05/24

Lamoille Unit

VERMONT SUPERIOR COURT

Lamoille Unit 154 Main Street Hyde Park VT 05655 802-888-3887 www.vermontjudiciary.org

CIVIL DIVISION

Case No. 22-CV-03530

Mariah Mitchell v.TVT, LLC

ENTRY REGARDING MOTION

Title: Motion to Dismiss; Motion Third-Party Complaint; for Leave to File Surreply

(Motion: 3; 4) Filer: Gillian A. Woolf; Gary Michael Burt Filed Date: February 13, 2024; March 29, 2024

The motion is DENIED.

Third-Party Defendant Mountain Village School, LLC ("School") seeks to dismiss the thirdparty complaint

filed againstit for breach of contract by Defendant and Third-Party PlaintiffJIVT, LLC ("Landowner"). School's motion is built on two theories. First, School contends that

decision bythe Vermont District Federal Court on parallel Declaratory Judgment action has

preclusive effect on the present claims. Second, School contends that Landowner's claims are

insufficient and premature. For the reasons laid out below, the Court finds that Landowner has

established sufficient showingto survive motion to dismiss, but that the claims, which survive

ate narrowlyfocused within limited range.! Third-Party Defendant School's Motion to Dismiss is Denied."

Factual and Procedural Background

For the purposes of the present motion, the facts have been well-established bythe parties'

pleadings as well as the decision of the Federal Court to which this Court may take judicial notice without converting

the present motion to dismiss into motion for summary judgment. Sxsfon v.

Purzycki, 2022 VT 56, 20. The Court will also take notice of the parties' commercial lease that was

Plaintiff Mariah Mitchell consented to the joinder of School and the third-party complaint but took no position on

the present motion.

Landowner's motion to file sur-reply is Granted.

Entry Regarding Motion Page of 22-CV-03530 Mariah Mitchell v. LLC
Entry Regarding Motion Page 2 of 7

22-CV-03530 Mariah Mitchell v. JTVT, LLC

attached to the third-party complaint. Davis v. Am. Legion, 2014 VT 134, ¶ 13 (“Where pleadings rely 

upon outside documents those documents merge into the pleadings and the court may properly 

consider them under a Rule 12(b)(6) motion to dismiss.”) (quoting Kaplan v. Morgan Stanley & Co., 

2009 VT 78 ¶ 10 n.4 (mem.)) (internal quotations omitted). 

In 2015, Landowner leased a commercial building and grounds at 192 Thomas Lane in 

Stowe, Vermont. This agreement was memorialized by the parties in a Commercial Lease 

Agreement (the “Lease”). It is not clear from the copy of the Lease filed with the Court how much 

of Landowner’s property was turned over to School’s control and possession. The Lease refers to 

an Attachment A that is not included in the filings. The Lease also states in section A of the Recitals 

and again at section 24 that Landowner would be retaining portions of the property and would be 

actively developing the property during the course of School’s occupancy. Under section 5.2 of the 

Lease, Landowner was responsible for “. . . grounds maintenance, and other such services.” Exhibit 

A to Third-Party Complaint at 4–5. 

The Lease also contains a provision requiring School to obtain liability insurance and to have 

Landowner named as an additional insured. This clause reads:

11. Insurance. Lessee covenants and agrees that it will procure and maintain at all 

times at Lessee’s sole cost insurance in such amounts and with such coverage as are 

necessary or advisable to protect against loss arising from damages, hazards, and 

liabilities pertaining to or resulting from Lessee’s use and occupancy of the Leased 

Property. Such insurance coverage shall include, but not be limited to, fire and 

casualty coverage for all Leasehold Improvements; comprehensive general public 

liability insurance to cover any and all liabilities for bodily injury or death to any 

person or persons, and damage or destruction of property; so-called Dram Shop 

liability insurance, if applicable, and such other liability and damage insurance in such 

amounts as are necessary or advisable to the full reasonable satisfaction of Lessor, 

for incidents, events, or omissions occurring in the Leased Property or in connection 

with use of the related facilities and areas appurtenant thereto. Lessee shall name 

Lessor as an additional insured under all policies required herein, and shall provide 

Lessor with copies of all insurance policies upon request and at least annually, and 

more frequently in the event of any changes in coverage or conditions.

Id. at 7. Following the execution of the Lease, School purchased an insurance policy through the 

Markel Insurance Company. It is not clear if this policy or any other policies were presented to 

Landowner and what if any approval Landowner gave to the policies. 
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22-CV-03530 Mariah Mitchell v. JTVT, LLC

On November 1, 2019, a pine tree growing on the property fell on Mariah Mitchell, a 

teacher at School. It is not clear from the parties’ pleadings if the tree that fell on Mitchell was 

located on the leased portion of the premises or on property controlled exclusively by Landowner. 

Mitchell filed the present negligence action against Landowner. 

In December 2022, Landowner filed a declaratory judgment action against School and 

Markel Insurance seeking a ruling that Markel was obligated under the terms of its policy to 

indemnify and defend Landowner in the Mitchell negligence action. Markel removed this action to 

federal district court on diversity jurisdiction grounds, where the parties adopted a discovery 

schedule and conducted briefing on the preliminary issue of jurisdiction under 28 U.S.C. § 1332. 

On November 16, 2023, the federal court issued a preliminary decision on this issue of 

jurisdiction. In that decision, Judge Crawford dismissed School from the action on the basis that it 

was a nominal party to the declaratory judgment action. Judge Crawford also re-affirmed the 

diversity jurisdiction of the Court. JTVT, LLC v. Markel Insurance Co., Order on Motion to Dismiss, 

Motion to Remand and Motion to Stay Discovery, 2:23-cv-42, at 7 (D.Vt. Nov. 16, 2023). The express 

terms of the November 16, 2023 decision marks it as an interim order and not a final decision on 

the merits. Id. at 8 (“The next step in this case will be the substantive motions for summary 

judgment on the coverage issue following completion of discovery.”). In reaching the conclusion 

regarding jurisdiction and dismissal of School, however, the Court does make a series of findings 

and legal conclusions to which School cites in its present motion. Judge Crawford’s analysis centers 

on whether Landowner can state a claim against School in state court that would make it more than 

a nominal party to the declaratory judgment action. Id. at 5. The decision then notes that School 

has not been named as a defendant in Mitchell’s negligence action (as of November 2023) and 

cannot be named as one because (1) there was no allegation that School acted in a negligent manner 

in regard to grounds maintenance; (2) no claim was filed within the statute of limitations; and (3) 

even if she had, Mitchell’s employment relationship with School would yield an exclusive remedy 

under workers’ compensation, not tort, law. Id. at 5, 6 (citing 12 V.S.A. § 512 and 21 V.S.A. § 622). 

Given the federal court’s determination that there were no valid, direct liability claim against 

School, the federal court, then looked to whether there was an active claim by Landowner against 

School. The federal court found that no such claim was pending and that for purposes of the 

federal court’s jurisdictional analysis none could be pending. Specifically, Judge Crawford found 

that the policy itself concerned the term an “additional insured,” which courts have traditionally 
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22-CV-03530 Mariah Mitchell v. JTVT, LLC

interpreted to extend coverage for vicarious liability, not for the additional insured’s own negligence. 

Id. at 5. Judge Crawford also found that Landowners’ claims for breach of contract against School 

had not been filed at the time the federal court was reviewing the matter and fell outside of the 

deadlines within the discovery calendar set for the declaratory judgment action. Given these 

findings, Judge Crawford determined that Landowner had no basis to maintain an action against 

School within the scope of the declaratory judgment, and by extension, it had no place in the action 

as anything other than a nominal party which was insufficient to defeat Markel’s claim of diversity 

for purpose of on-going federal court jurisdiction. Id. at 7, 8.

Legal Analysis

To determine whether a complaint survives a motion to dismiss, the Court assumes the 

factual allegations in the complaint are true. Colby v. Umbrella Inc., 2008 VT 20, ¶ 5. The Court will 

only grant the motion if there are no facts or circumstances that would grant plaintiff relief. Id. 

This is because the purpose of a motion to dismiss for failure to state a claim is “to test the law of 

the claim, not the facts which support it.” Brigham v. State of Vermont, 2005 VT 105, ¶ 11 (quoting 

Powers v. Office of Child Support, 173 Vt. 390, 395 (2002)). Courts rarely grant motions to dismiss for 

failure to state a claim. Colby, 2008 VT 20, at ¶ 5; see also Kaplan v. Morgan Stanley & Co., Inc., 2009 

VT 78, ¶ 7. Courts generally disfavor these motions. Bock v. Gold, 2008 VT 81, ¶ 4 (“Motions to 

dismiss for failure to state a claim are disfavored and should be rarely granted.”). For these reasons, 

a party seeking dismissal has a high burden to show that they are entitled to such an initial ruling. 

Bock, 2008 VT 81 at ¶ 4. 

As a preliminary matter, the Court’s analysis will begin with the comparison between the 

various claims and potential liability between the parties. As noted above, Mitchell has made a claim 

against Landowner alleging its negligence in maintaining the grounds of the property. Landowner 

has denied liability and asserted several affirmative defenses. Mitchell has not and cannot maintain a 

similar claim against School for the reasons aptly summarized in the federal court’s November 16, 

2023 decision, and therefore this case does not involve allegations of vicarious liability against 

Landowner or derivative liability against School. 

Landowner’s sole claim against School centers on section 11 of the parties’ Lease. In that 

provision there is language obligating School to obtain insurance coverage “to protect against loss 

arising from damages, hazards, and liabilities pertaining to or resulting from Lessee’s use and 
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22-CV-03530 Mariah Mitchell v. JTVT, LLC

occupancy of the Leased Property.” Exhibit A to Third-Party Complaint at 7.3 For purposes of the 

present motion, the Court understands Landowner’s claim in its third-party complaint to include a 

broader allegation than the coverage claim at issue in the declaratory judgment action pending in 

federal court. Landowner’s breach of contract claim is that School was obligated to obtain insurance 

coverage that would cover not only School’s specific actions, but the Landowner’s actions taken in 

furtherance of School’s occupancy of its portion of the property. Under this theory advanced by 

Landowner, School was obligated to obtain insurance that would not only cover Landowner for 

vicarious liability purposes but would also insure against any claims made against Landowner for 

activities arising from School’s use and occupancy of the property. 

In essence, Landowner’s argument is that section 11 functions akin to an indemnification 

clause in that it obligated School to procure a policy that would cover all activities on the premises 

and arising from the activity of School. This would necessarily include having faculty and students 

walking about the immediate campus. Whether section 11 ultimately supports such an 

interpretation is not presently before the Court and will require additional discovery and briefing.

For purposes of the present motion, the Court will presume that Landowner can establish 

that the purpose of this clause was for broader indemnification through an insurance policy that 

would cover both School’s and Landowner’s actions regarding the use and occupancy of the 

property for School’s use. The Court will also presume that the tree was located, and incident took 

place, on the portion of the property that was leased to School. If such facts and purpose are 

established, then it follows that the policy would have applied as the section would have sought shift 

the risk from the Landowner to the user of the property, albeit through an insurance policy, rather 

than through a straightforward indemnity clause. Nevertheless, such a shift in risk has been 

recognized as a legal and proper allocation between parties. See Hamelin v. Simpson Paper (Vermont) 

Co., 167 Vt. 17, 19–21 (1997) (upholding an indemnification clause that shifted the risk from 

landowner to party using the property). If Landowner prevails on its factual theory, the right to an 

insurance policy will also carry a right to defense costs under the duty to defend provisions of any 

insurance contract. City of Burlington v. Nat’l Union Fire Ins. Co., 163 Vt. 124, 127 (1994) (holding that 

a duty to defend arises when a claim is potentially covered by the policy). Given that the present 

3

 There is additional language in the section concerning “additional insured” and requiring School to provide copies 

of any and all policies to Landowner for its approval. Id.
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22-CV-03530 Mariah Mitchell v. JTVT, LLC

negligence action has arisen and is being prosecuted against Landowner, then the risk of loss and 

damages flowing from the alleged breach have begun and are accruing. 

Based on this analysis, Landowner’s motion to bring School into the present action under 

V.R.C.P. 14(a) is a timely and appropriate claim as School, if Landowner’s theory is proven, would 

be liable to Landowner for all or a part of any damages that Plaintiff Mitchell may recover as well as 

Landowner’s present and actual legal costs to defend the present action. This combination of 

current and potential liability is neither too tenuous, nor premature. Sett v. Haig’s, Inc., 164 Vt. 1, 8 

(1995) (citing to the reporter’s notes for Rule 14 that emphasize that claims based on “indemnity, 

subrogation, contribution, or warranty” are the common bases for third-party joinder). 

Apart from the issues already addressed, School objects to being joined to the present action 

based on the expiration of the present discovery/ADR schedule and the extensive discovery that has 

already taken place. While these concerns are valid, they may be addressed through amendment to 

the discovery schedule. The Court in this respect seeks to balance the three priorities at issue. First, 

School’s right to fair and full discovery; second, Landowner’s right to have any legitimate third-party 

claims joined (particularly in light of the federal court’s decision regarding the Markel insurance 

policy); and for Mitchell to have a timely adjudication of her claims. The Court finds that allowing 

School to have additional time to conduct any discovery it deems necessary will be the most timeefficient approach to allow the entire litigation process to move forward in a timely manner. 

V.R.C.P. 16.2 (noting that the Trial Court has the authority to modify the discovery schedule to 

prevent manifest injustice and to determine the schedule to provide reasonable accommodation to 

litigants). 

Finally, School seeks to impose collateral estoppel from the federal district court’s 

November 16, 2023 decision on the issue of whether School breached its obligations under section 

11 of the Lease. As School notes, collateral estoppel, or issue preclusion, can apply even if a 

decision is not final if the decision and the current issue meet the five elements of (1) same party; (2) 

same issue; (3) final judgment on the merits for the issue; (4) full and fair opportunity to litigate the 

issue; and (5) applying preclusion is fair. In re Tariff Filing of Cent. Vt. Pub. Serv. Corp, 172 Vt. 14, 20 

(2001). The problem with applying issue preclusion in the present matter is that the issue is not the 

same. In the federal court decision, the question was whether the language of the Markel policy was 

reasonable interpreted by Markel. The Court indicated that Markel’s interpretation was generally 

consistent with insurance jurisprudence. JTVT, LLC, 2:23-cv-42, at 5. While there is little to 
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22-CV-03530 Mariah Mitchell v. JTVT, LLC

criticize or take issue within the federal court’s analysis, the question before this Court is different. 

It is not a matter of interpreting the Markel policy, but it is a matter of interpreting the provisions of 

section 11 of the Lease. If section 11 of the Lease required a broad policy that effectively covered 

School and Landowner as co-insureds, then it is not immediately relevant what the Markel policy 

said or how it is interpreted.4 For this reason, the federal court decision does not preclude or 

prevent Landowner from making a claim under section 11 of the Lease and does not constitute a 

final decision on School’s obligation to obtain an insurance policy that fully indemnified 

Landowner’s work on the leased property. Even if the language of the November 16, 2023 decision 

was read broadly, it does not by its express terms constitute a final decision on the merits. The 

decision envisions further briefing and process before the question of coverage an interpretation is 

definitively resolved. For these reasons, the Court denies School’s request to dismiss based on the 

theory of claim preclusion. 

ORDER

Based on the foregoing, Third-Party Defendant Mountain Valley School, LLC’s motion to 

dismiss is Denied. The Court shall set this matter for a status conference to allow the parties to 

address any changes or modifications to the present discovery schedule are necessary and whether 

any portion of the third-party complaint should be resolved before any mediation or motion practice 

regarding the primary claims in this matter. 

Electronically signed on 4/3/2024 4:55 PM pursuant to V.R.E.F. 9(d)

__________________________________ 

Daniel Richardson

Superior Court Judge 

4

 Although it does become relevant if there is an affirmative defense that Landowner reviewed and approved the 

Markel policy.