Sheldrake v. Skyline Corp., No. S1269-01 CnC (Norton, J., June 23, 2005) 

[The text of this Vermont trial court opinion is unofficial. It has been 

reformatted from the original. The accuracy of the text and the 

accompanying data included in the Vermont trial court opinion database is 

not guaranteed.] 

STATE OF VERMONT SUPERIOR COURT 

Chittenden County, ss.: Docket No. S1269-01 CnC 

SHELDRAKE 

v. 

SKYLINE CORP. 

ENTRY 

 Following the denial of their application for class action status, 

Plaintiffs Roger and Holly Sheldrake have moved for partial summary 

judgment based on the defendant’s lack of cooperation with the 

Sheldrakes’s discovery requests. Defendant Skyline Corporation has also 

moved for partial summary judgment on the Sheldrakes warranty and 

negligence claims. As there are no issues of material fact in either request, 

summary judgment is appropriate at this time. Donnelly v. Guion, 467 F.2d 
290, 293 (2d Cir. 1972) (“A summary judgment motion is intended to 

‘smoke out’ the facts so that the judge can decide if anything remains to be 

tried.”) 

 This is a leaky roof case. The Sheldrakes purchased their mobile 

home from the Skyline Corporation in November 1995 through a local 

Vermont dealer. Soon thereafter the couple noticed ice forming on the roof 

and water leaking into the house. They began complaining to the Vermont 

dealer, who made some minor repairs, but soon began contacting Skyline 

directly about ice build-up on the roof, inadequate blocking and anchoring 

of the home, leaking ceiling, leaking skylight, electrical problems, rotting 

roof, and clogged drains. These calls began in early 1996 and continued 

throughout the year into 1997. Along with their mobile home, the 

Sheldrakes received a homeowners’ manual, which contained a warranty 

for any manufacturing defects up to one year and ten days. The manual 

also included a registration card that, if returned, would extend the Skyline 

Warranty for more three months. It is not clear , however, from the 

evidence and affidavits whether or not the Sheldrakes returned this 

registration card. 

 On October 25, 2001, the Sheldrakes filed their complaint against. 

Skyline, the dealer who sold them the mobile home, and individual 

corporate officers of Skyline. The Sheldrakes also filed for class action 

status claiming that their claims were indicative of a wider defects 

indicative to Skyline mobile homes and render them unsuitable for sale and 

use in New England. On December 2, 2002, this court dismissed the claims 

against the individual defendants. On March 29, 2004, this court also 

denied Plaintiffs’ class action petition. 

 Presently, the parties have competing motions for summary 
judgment, as well as several discovery issues, pending. Many of these 

discovery issues stem from a lack of clarity over the fate of the competing 

summary judgment motions. To that, this court hopes to resolve some of 

the confusion and clear the path for the parties to resolve their pre-trial 

disputes. 

 

 The first argument that Skyline raises concerns the economic loss 

rule and the plaintiffs’ claims of negligence. The remedy that the 

Sheldrakes seek in this case is only the cost of either their mobile home or 

its replacement. They do not, or have not, claimed physical injuries or 

specified personal property that was damaged as a result of the alleged 

negligence. They are also raising the claims of negligence within a 

relationship that was primarily commercial as the parties were buyer and 

seller (and seller’s dealer) in a consumer transaction. These issues raises 

the economic loss rule as a potential bar to the Sheldrakes’ recovery in 

negligence. This rule works to keep tort law out of commercial or 

consumer transactions where contract law controls. See, e.g., S. Gardner & 

M. Sheynes, The Moorman Doctrine Today: A Look at Illinois’ Economicloss Rule, 89 Ill. B.J. 406, 406 (2001) (“The practical application of this 

rule bars consequential damages not necessarily intended by the parties at 

the time of making the contract, as well as punitive damages, which 

typically are not recoverable in contract, unless the conduct allegedly in 

breach can be characterized as an independent tort.”); E. Ballinger, Jr. & S. 

Thumma, The History, Evolution and Implications of Arizona's Economic 

Loss Rule, 34 Ariz. St. L.J. 491, 492–93 (2001) (“[T]he economic loss rule 

is one of several principles that have evolved to define the boundaries of 

both contract and tort and to ensure a proper and vital role for both bodies 

of law.”); T. Yocum & C. Hollis, III, The Economic Loss Rule in 

Kentucky: Will Contract Law Drown in a Sea of Tort?, 28 N. Ky. L. Rev. 

456, 459 (2001) (“[Kentucky’s Economic Loss Rule] recognizes a mutual 
exclusivity between claims sounding in contract and tort, encouraging 

sophisticated parties entering into contracts to bargain now rather than sue 

in tort later.”); S. Tourek, et al., Bucking the “Trend”: The Uniform 

Commercial Code, the Economic Loss Doctrine, and Common Law Causes 

of Action for Fraud and Misrepresentation, 84 Iowa L. Rev.875 (2001) 

(“The Economic Loss Doctrine is a judicially created doctrine that provides 

commercial purchasers of goods cannot recover damages that are solely 

economic losses from manufacturers of those goods under ‘tort’ theory.”). 

The purpose is to prevent plaintiffs from using negligence or strict liability 

to do an end-run around the tighter requirements of contract and warranty 

law, where parties can predict and shift their risk of loss accordingly. In 

other words, the economic loss rule is a stabilizing principle to keep the 

“soft” analysis of policy and duty under tort law away from parties who 

have had the opportunity to bargain for the risk or who can rely on a set of 

rules to supply any missing terms in a predictable manner. See, e.g., 9A 

V.S.A. §§ 2-313–2-316 (U.C.C. warranty law).1

 

 

 Similarly, the major Vermont cases enunciating the Economic Loss 

Rule have involved parties whose primary relationship was contractual. 

Springfield Hydroelectric Co. v.Copp, 172 Vt. 311, 314 (2001) (“As our 

caselaw makes clear, claimants cannot seek, through tort law, to alleviate 

losses incurred pursuant to a contract.”); Gus’ Catering v. Menusoft, 171 

 

1

 Historically, the Economic Loss Rule developed as a judicial check on § 

402A strict liability. Springfield Hydroelectric Co. v.Copp, 172 Vt. 311, 314–15 

(2001). In such situations, a contract was always involved because the defendant 

was the seller or manufacturer whose connection to the plaintiff was through a 

sale. While the Rule has since spread to areas of tort law such as negligence, id., 

it has in nearly all cases kept this initial and significant connection to contract 

law. 
Vt. 556 (2000) (mem.) (refusing damages for negligence to customer who 

bought software which was negligently installed); Paquette v. Deere & Co., 

168 Vt. 258, 260–64 (1998) (applying the doctrine to a strict liability claim 

for a defective motor home purchased from defendant manufacturer); 

Breslauer v. Fayston Sch. Dist., 163 Vt. 416, 421–22 (1995) (denying 

negligence claim for economic losses for breach of employment contract); 

see also East River Steamship Corp. v. Transamerica Delaval, 476 U.S. 

858, 870–71 (1986) (limiting damages to the cost of the product and not 

consequentials “[w]hen a product injures only itself.”). In each of these 

cases, the courts had the separation of contract and tort law as an 

underlying interest. 

 Here the Sheldrakes’ claims are classic economic losses. They are 

claiming damages for harm caused by and to the very product which they 

negotiated for, contracted about, and purchased from Skyline. The source 

and object of their claim, like East River Steamship, is the very same object 

of their agreement. It does not involve personal injury or damage to other 

property. Moreover, this claim is about alleged defects and product 

failures, not an accident or unexpected losses such as traditional tort and 

negligence law covers. See, e.g., People Express Air., Inc. v. Consol. Rail 

Corp., 495 A.2d 107, 111–12 (N.J. 1985) (refusing to apply the Economic 

Loss Rule in a pure accident situation). This leaves the Sheldrakes’ 

negligence claims squarely within the purview and purpose of the 

Economic Loss Rule. 

 The Sheldrakes argue that notwithstanding their contractual 

relationship with Skyline and the warranty-nature of their claims the court 

should apply a risk-of-harm analysis that was discussed as dicta in the 

Paquette case. 168 Vt. at 261–63. Risk-of-harm analysis is essentially an 

exception to the economic loss rule where, notwithstanding the contractual 
nature of the underlying relationship and claims, plaintiffs can seek a 

remedy in negligence or products liability under certain circumstances. 

Traditionally courts look to three factors: “the nature of the defect, the type 

of risk, and the manner in which the injury arose” when applying the 

analysis. Id. at 262 (quoting East River Steamship, 476 U.S. at 869-70). 

In East River Steamship, the United States Supreme Court rejected this 

analysis at least in the context of maritime law. 476 U.S. 858, 869–70 

(1986). But in Paquette, the Vermont Supreme Court refused to adopt the 

higher court’s reasoning and left the door open to risk-of-harm analysis 

where it might be needed. 168 Vt. at 263. 

 From the Paquette court’s reasoning, however, a strong pattern 

emerges. In each case cited by the court to support some future risk-ofharm analysis, the defect involved a risk of death or serious personal injury 

and a potential tort-like accident. Id. at 262–63 (citing to Alaska and 

Washington cases with plane crashes and fire dangers); see also R. Fox & 

P. Loftus, Riding the Choppy Waters of East River: Economic Loss 

Doctrine Ten Years Later, 64 Def. Couns. J. 260, 262–63 (1997) (“Several 

jurisdictions permit recovery in tort if the defect creates a serious risk of 

death or personal injury.”). 

 Such qualities are not met in the present case. Paquette does not 

stand for the proposition that risk-of-harm analysis should be expanded to 

any case involving the economic loss rule. Rather the Paquette court’s 

reasoning recommends reserving risk-of-harm analysis for more tort-like 

factual scenarios where the relationship of the parties would be secondary 

to imminent harm posed by the danger of the defect. Such an analysis is 

not merited by either the nature of the harm or the threat of danger in this 

case. Therefore, the court declines to apply risk-of-harm analysis and will 

apply the economic loss rule to dismiss the Sheldrakes’ negligence claims 
against Skyline.2

 Skyline’s second argument is that the statute of limitations has run 

on the Sheldrakes’ warranty claims. Under the Uniform Commercial Code, 

warranty claims must be brought within four years within the time the 

cause of action accrues. 9A V.S.A. § 2-725(1). The Sheldrakes purchased 

their mobile home on November 21, 1995. Their problems began almost 

immediately, and they contacted the Vermont dealer and Skyline on a 

regular basis over the next few months. This is important because the 

defects that the Sheldrakes cite in their warranty claims became clear 

during this period. That is the Sheldrakes “discovered” most, if not all, of 

the defects in their mobile home within the first few months of ownership. 

They do not cite to any specific defect that did not appear during this period 

or was not “discoverable” given the problems they claim to have had in 

early 1996. Rodrigue v. VALCO Enters., 169 Vt. 539, 541 (1999) (mem.). 

 

2

 The court acknowledges that this “refusal” to apply risk-of-harm analysis 

may in a sense be a risk-of-harm analysis. This is a fine distinction, but the facts 

of this case are fairly clear. Regardless of the exact defect, the problems with the 

mobile home at issue here did not threaten the Sheldrakes’ lives or pose serious 

physical harm. Additionally, the court is generally not persuaded that this 

exception to the economic loss rule applies at all here since the cases that discuss 

risk-of-harm have been limited to products liability and not negligence claims. 

The difference is important since courts have traditionally limited negligence 

claims to cases with a physical or distinct property injury while allowing greater 

leeway for product liability claims that inherently tend to encompass or encroach 

on warranty claims. Compare 1 D. Dobbs, The Law of Torts § 110, at 258–59 

(2001), with 2 id. at § 352, at 972 (discussing the different sources and limitations 

on economic loss in negligence and products liability). The inevitable conclusion 

is the risk-of-harm analysis is a limited counterbalance to the economic loss rule 

in products liability cases where the larger policies of consumer protection may 

supercede the importance of separating tort from contract law. 
 The Sheldrakes argue that their warranty claims were tolled because 

they did not “discover” the defects in their mobile home until much later. 

They blame this delay on Skyline because it misrepresented the quality of 

its homes and their general unfitness for New England climates. These 

misrepresentations are drawn primarily from Skyline’s promotional 

material that the Sheldrakes received prior to purchasing their mobile 

home. This language of quality, however, has less to do with an affirmative 

promise and is more about marketing and advertising. 

 While perhaps more than a mere puffing of the product, the language 

should have stood in sharp contrast to the problems that the Sheldrakes 

began experiencing almost immediately after moving in. More to the point 

of fraudulent concealment, for which the statute of limitation may be tolled, 

the Sheldrakes do not produce any affirmative statements or promises made 

by Skyline that prevented them from discovering the alleged defects in their 

home or to recognizing that their actual home differed substantially from 

Skyline’s pre-sale statements. Troy v. Am. Fidelity Co., 120 Vt. 410, 423–

24 (1958) (“[T]he fraudulent concealment of a cause of action which will 

postpone the running of the statute of limitations must consist of some 

affirmative act.”). To toll the statute for the Sheldrakes based on such 

vague sales representations by Skyline would be the same as giving every 

customer at McDonald’s a cause of action when their Big Mac invariably 

failed to live up to its airbrushed promotions. Skyline committed no 

affirmative act that stopped or should have stopped the Sheldrakes from 

realizing the defects in their mobile home. 

 

 At the very latest, the Sheldrakes’ warranty claims did not run past 

March 3, 1997, fifteen months and ten days after their purchase when their 

explicit warranty from Skyline expired. By that time, the Sheldrakes had 
experienced every defect claimed; had contacted Skyline and the Vermont 

dealer; and had affirmative notice through their owners manual that their 

express warranty had expired. While the Sheldrakes cite to their 

communication with Skyline as the source of additional warranty promises, 

they cannot show any evidence that either Skyline or the Vermont dealer 

made explicit promises that would rise to the level of a future performance 

warranty. South Burlington School Dist. v. Calcagni-Frazier-Zajchowski 

Architects, 138 Vt. 33, 48 (1980) (“[C]ourts will not lightly infer from the 

language of express warranties terms of prospective operation that are not 

clearly stated.”). 

 Rather these communications are best characterized as promises and 

attempts to fix the Sheldrakes individual problems. Such actions do not toll 

the statute of limitations. Gus’ Catering, Inc. v. Menusoft Sys., 171 Vt. 

556, 558 (2000) (mem.). Therefore, the clock on the Sheldrakes’ statute of 

limitations under § 2-725 began running no later than March 3, 1997 and 

expired four years later, March 3, 2001, seven months before the 

Sheldrakes filed this action. 

 The Sheldrakes’ main argument for tolling § 2-725 is that between 

April 2000 and October 2001, they were part of a potential class action for 

these claims. This Cahee case, in which the Sheldrakes were not a named 

party but only part of the potential class, was filed in federal court on April 

25, 2000. Two weeks later, it was voluntarily dismissed by the plaintiffs 

and re-filed with the Rutland Superior Court. That court dismissed the 

petition for class certification and the plaintiffs’ case on December 10, 

2001. Two months before that dismissal, however, the Sheldrakes 

voluntarily dropped out of the potential class and filed this action. Now the 

Sheldrakes want to take advantage of the tolling provisions that accompany 

class action petitions. 
 The rule that a class action tolls the statute of limitations for 

individual potential class members comes from two United States Supreme 

Court opinions. Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 350 

(1983) (“Once the statute of limitations has been tolled, it remains tolled for 

all members of the putative class until class certification is denied. At that 

point, class members may choose to file their own suits or to intervene as 

plaintiffs in the pending action.”); American Pipe & Construc. Co. v. Utah, 

414 U.S. 538, 554 (1974) (“[T]he commencement of a class action 

suspends the applicable statute of limitations as to all asserted members of 

the class who would have been parties had the suit been permitted to 

continue as a class action.”). The purpose behind these cases was to 

discourage a rush of individual cases when plaintiffs feared a class would 

not be certified, which would result each time in “a needless multiplicity of 

actions.” Crown, Cork & Seal, 462 U.S. at 351. By tolling the statute for 

any individual member, the Court reasoned would support the purpose of 

Rule 23 (class actions) allowing economy and efficiency win out over the 

chaotic potential of hundreds of plaintiffs instituting actions designed to 

preserve their rights against the possibility that the class might not be 

certified. Moreover, it serves another purpose of Rule 23, by uniting the 

fate and interests of the class and treating potential members equal to the 

representative plaintiffs. 

 This logic, however, does not carry through when an individual 

plaintiff voluntarily chooses to leave the class prior to certification or 

dismissal of the petition. In that case, the plaintiff has voluntarily elected to 

leave the class and has divorced herself from the fate of that class. Rather 

than preserving unity, efficiency, and economy, allowing a plaintiff who 

voluntarily leaves a class prior to a determination to have the tolling benefit 

of the class would encourage more litigation and less solidarity. Instead of 
putting her fate in the same boat with the class, plaintiff could merely 

“ride” along with the class and then get out where ever she saw fit. Nearly 

every court that has considered this question has rejected a plaintiff’s right 

to the tolling provision of a class action when she voluntarily leaves the 

class prior to the court’s determination. In re Worldcom, Inc. Securities 

Litigation, 294 F.Supp.2d 431, 451 (S.D.N.Y. 2003) (citing federal circuit 

decisions); see also Catholic Social Serv., Inc. v. INS, 182 F.3d 1053, 

1060–61 (9th Cir. 1999) (discussing the limits of Crown, Cork & Seal in 

the context of successive class actions). 

 In this case, the Sheldrakes only had to wait two more months to 

learn the fate of the Cahee petition. Even if the class had been certified, the 

Sheldrakes could have opted out of the class under Rule 23 and still have 

taken advantage of the class’s tolling provision. But by opting out of the 

class earlier, the Sheldrakes may not take advantage of this tolling 

provision. They chose not to stay with their potential class. It is in 

conformance with the policies of Crown, Cork & Seal and American Pipe

to deny Rule 23's tolling provisions to the Sheldrakes. Therefore, the 

Sheldrakes’ warranty claims were filed out of time and are dismissed as a 

matter of law. 

 Turning briefly to the Sheldrakes’ argument for summary judgment 

based on Skyline’s refusal to answer their discovery request, it is important 

to note that none of the requested material touches upon the questions of 

discussed above. This discovery dispute goes more to the competing 

visions of this case held by the plaintiffs and the defendants. Much of the 

Sheldrakes’ discovery is broad and aimed at uncovering the patterns in 

Skyline’s customer service and customer response to its products. Neither 

of these facts would have changed the time-frame in which the Sheldrakes 

should have discovered the defects in their own home. Nor would this 

discovery have changed what affirmative acts the Sheldrakes could cite as a 
basis for tolling the statute of limitations. Thus, any negative inferences 

would not help the Sheldrakes’ case. 

 Moreover, it would be improper to draw negative inferences from 

Skyline’s position because much of its resistance came from a good faith 

dispute about the scope of this case. In particular, Skyline’s objections date 

from the time when the class certification petition was still pending. 

Skyline took the position that it did not have to comply with such wide 

discovery until the class was certified. Now that the case has been 

narrowed to individual action, both parties need to re-evaluate the scope of 

discovery.3

 

 At this point, the parties’ current discovery issues may or may not 

have been rendered moot. By granting Skyline’s motion for partial 

summary judgment, the plaintiffs’ claims have been reduced to a single 

count of consumer fraud. In light of this, the court will wait to make a 

determination about the parties pending discovery motions to compel and 

protect. Parties will arrange with the court for a hearing on these issues. 

 Based on the foregoing, defendant Skyline’s motion for partial 

summary judgment is granted. Plaintiffs Roger and Holly Sheldrakes’ 

cross-motion for partial summary judgment is denied. 

 

 Dated at Burlington, Vermont________________, 2005. 

 

3

 Needless to say, parties should incorporate the ramifications of this 

decision in their future discovery plans. 
 ________________________ 

 Judge