Court Opinion

ID: 4267044
Source: CourtListenerOpinion
Date Created: 2018-04-24 00:00:44.018489+00
Date Added: 2024-06-11T14:31:18.738444
License: Public Domain

MFW Assocs., LLC v. Snowdance LLC, No. 175-3-08 Wrcv (Cohen, J., Aug. 3, 2012)

[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                                                                                         CIVIL DIVISION
Windsor Unit                                                                                           Docket No. 175-3-08 Wrcv

MFW Associates, LLC
    Plaintiff

v.

Snowdance LLC, Snowdance Realty Co.,
Snowdance Ski Co., Snowdance Hotel Co.,
Steven Plausteiner, Susan Plausteiner,
Richard Frary, Joel Mael, and Textron Financial Corp.
       Defendants

                                                   Decision on Pending Motions

        At issue is the identification and prioritization of liens on the proceeds from the sale of
the Garaventa CTEC High Speed Quad Chairlift to Peak Resorts for the price of $1.35 million
dollars. Both parties have filed the equivalent of cross-motions for summary judgment. Messier
v. Metropolitan Life Ins. Co., 154 Vt. 406, 409 (1990); 10A Wright, Miller & Kane, Federal
Practice and Procedure: Civil 3d § 2720.

        The main contest in this struggle for control over the remaining assets of the Ascutney
Mountain Resort is between Steven and Susan Plausteiner and Dan Purjes and Myles
Wittenstein. The two sides first became involved in the resort in 1998, when the Plausteiners
became the majority owners of the company that operated the resort (Snowdance LLC) and Mr.
Purjes and Mr. Wittenstein became the leading figures among the minority owners. Over the
next decade, both sides invested additional funds in the resort by way of capital contributions,
unsecured loans, or secured loans until the resort started defaulting on its obligations in 2008. At
that time, Mr. Purjes and Mr. Wittenstein formed a new company called MFW Associates and
bought its way into a more secured position on the resort assets. By July 2010, MFW Associates
had taken control of the resort. All of these transactions are explained in more detail later in this
opinion.

       Other assets at the resort are owned by three other entities known as Snowdance Realty
Company, Snowdance Hotel Company, and Snowdance Ski Company. All three of these entities
are now and have always been owned and controlled by Steven Plausteiner and Susan
Plausteiner. The present struggle for control is taking place between Snowdance Realty
Company (Plausteiners) and Snowdance LLC (now controlled by MFW Associates).

       The first ripples of the dispute began in 2000 when Snowdance LLC became interested in
purchasing a high-speed quad chairlift for the ski resort. Snowdance LLC principal Steven
Plausteiner negotiated the purchase of a new chairlift from a manufacturer known as Garaventa
CTEC for the price of $2.4 million dollars. Snowdance LLC financed the purchase with a $1.4
million dollar secured loan from CIT Group and a $1 million dollar unsecured loan from
minority Snowdance investor Dan Purjes.

        The terms of the secured loan from CIT Group are important. CIT Group agreed to
provide the purchase-money financing in exchange for a first-priority secured position on the
chairlift plus a promise that the chairlift would be “kept free” from any junior liens. Snowdance
LLC was also required to assign its rights under the purchase-and-sale agreement for the chairlift
to CIT Group. Snowdance LLC thereafter obtained possession of the chairlift and CIT Group
filed a UCC financing statement to perfect its security interest in the high-speed quad chairlift.

        In 2001, Snowdance LLC sought additional financing for general resort operations. It
obtained two lines of credit from Textron Financial Corporation in exchange for security
interests on condominiums, a hotel, and certain timeshare receivables.

        In 2005, Snowdance LLC sought additional financing for general resort operations. It
obtained another line of credit for up to $4.5 million dollars from a mezzanine lender known for
purposes of this case as PRIF Ascutney in exchange for terms including a high interest rate,
ownership pledges, and security interests in what can fairly be described as all of the property
“now owned or hereafter acquired” by Snowdance LLC. Among the collateral described in the
security agreement was all of the real estate, all of the improvements, and all of the equipment
including the “ski tows and ski lifts.”

        Yet there is a question of fact as to whether PRIF Ascutney intended to take a security
interest in the high-speed quad chairlift in 2005. The factual question arises because of
Snowdance LLC’s earlier promise to keep the chairlift free from junior encumbrances, taken
together with several ambiguous references in the security agreement. (The court does not mean
to suggest that CIT Group could have kept other creditors from taking a security interest in the
chairlift; only that Snowdance LLC’s earlier promise is relevant to a consideration of its intent in
entering into the later security agreement, owing to the general desirability of harmonizing
contractual agreements whenever possible.) One of those references describes the CIT Group
security interest as a “permitted encumbrance”; another describes the chairlift as property that
was “leased” from CIT Group rather than “owned” by Snowdance LLC. Yet another ambiguity
arises from the UCC financing statement, which seems to omit the lift entirely, at least so long as
the lift was not viewed as “after-acquired” property of Snowdance LLC. Viewing these
ambiguities in the light most favorable to defendants, the court assumes for purposes of this
opinion that PRIF Ascutney meant to take a security interest in the chairlift only at such time as
the chairlift became owned by Snowdance LLC free and clear of the CIT Group note and lien.

        At about the same time, PRIF Ascutney entered into a “subordination and intercreditor
agreement” with Textron in which they agreed upon the priority to be accorded their respective
security interests in the shared collateral. In pertinent part, the parties agreed as between
themselves that PRIF Ascutney would have the first priority on the “ski tows and ski lifts,”
without further specificity, and that Textron would have the second priority on those items.
Although there are numerous other terms in the agreement, the court has not found any specific

                                                 2
mention in the intercreditor agreement of the CIT Group note and security interest that would
prevail over the general description of “ski tows and ski lifts.”

       Snowdance LLC defaulted on most of its obligations in 2008. Majority owners Steven
and Susan Plausteiner thereafter began exploring the possibility of restructuring the company.
They eventually generated an understanding that Mr. Purjes and Mr. Wittenstein would form a
new company called MFW Associates and buy the PRIF Ascutney loan for the reduced price of
$1.85 million dollars. It was understood that MFW Associates would then grant Snowdance
LLC forbearances and release the Plausteiners from certain personal guaranties they had given.
Snowdance LLC would then pay off the lift loan from CIT Group and obtain a release of the CIT
Group lien in exchange for a settlement price of $250,000.

        As the deals were coalescing in September 2008, however, the bottom fell out of the
financial markets. Citing the uncertain marketplace, MFW Associates withdrew from the
tentative deal to purchase the PRIF Ascutney loan. In an effort to save the deal, the Plausteiners
rounded up $1 million dollars in financing from “family and friends” in exchange for preferred
shares in Snowdance LLC. Snowdance LLC then used the cash as a partial pay-down of the
PRIF Ascutney loan, and MFW Associates purchased the remaining PRIF loan and security
interests for the reduced price of $850,000. MFW Associates also granted forbearances to
Snowdance LLC and released the personal guaranties given by the Plausteiners.

        Snowdance LLC then turned its attention to saving the chairlift from repossession—an
issue that became suddenly acute when CIT Group filed an action for replevin on October 8th,
2008. Mr. Plausteiner decided to save the asset from repossession by personally contributing the
$250,000 needed, but he was uncomfortable making another capital contribution to Snowdance
LLC. He preferred instead to purchase the loan from CIT Group through one of the other
companies he owned—Snowdance Realty Company—and to take an assignment of CIT Group’s
secured interest in the chairlift.

        Mr. Plausteiner therefore made an offer to CIT Group for Snowdance Realty Company to
purchase the loan and the security interest for the amount of $250,000. At the arbitration
hearing, Mr. Plausteiner testified that CIT Group “didn’t mind” how the deal was done so long as
it received $250,000. In a more recent affidavit, Mr. Plausteiner refined his testimony to be that
CIT Group “agreed” to this offer. For purposes of this decision, the court assumes that the
evidence would be sufficient at trial to show an oral agreement on this point.

         Yet CIT Group then mailed an integrated written agreement to Mr. Plausteiner containing
the following terms: Snowdance LLC would pay $250,000 by a wire transfer to CIT Group as
“payment in full” of the outstanding balance, and in exchange, CIT Group would “fully release”
Snowdance LLC from all of its obligations under the note. CIT Group also agreed to “release”
its security interest in the high-speed quad chairlift. The integrated written agreement
furthermore included provisions stating that it was “the entire agreement between the parties,”
that it “supersede[d] any and all prior agreements” between the parties “whether oral or written,”
and that no modifications to the agreement would be effective unless made in writing.

                                                3
        Mr. Plausteiner signed the agreement on behalf of Snowdance LLC on October 14th. He
now says that he signed the agreement even though it reflected “prior discussions” he had had
with CIT Group and that it did not represent his “ultimate agreement” with CIT Group to do the
deal as an assignment of the note and security interest to Snowdance Realty Company.

        Mr. Plausteiner thereafter wired the money from a personal account. Mr. Plausteiner has
since tried to suggest that the wire was untimely under the terms of the written agreement, but
there is no evidence in the record that CIT Group rejected the payment as untimely.

       Several weeks later, CIT Group mailed Snowdance Realty Company a UCC financing
statement reflecting an assignment of the security interest from CIT Group to Snowdance Realty
Company. Mr. Plausteiner also caused the books of Snowdance LLC to be updated around this
time to show that the secured loan obligation had been assigned from CIT Group to Snowdance
Realty Company.

       About one month later, the Plausteiners arranged for Snowdance LLC to “sell” the high-
speed quad chairlift to Snowdance Realty Company for the price of $10. In the bill of sale, Mr.
Plausteiner represented that Snowdance LLC was the “lawful owner” of the lift and that
Snowdance LLC had the right to sell it. The sale was allegedly done to make Snowdance LLC a
more attractive applicant for a loan from the Vermont Economic Development Authority, but the
VEDA loan was never consummated.

        At around the same time, Snowdance Realty Company purchased the Textron note and
security interest. Textron had accelerated its note in 2008 and had been collecting money from
the secured timeshares receivables and applying those amounts to the outstanding amount due.
After purchasing Textron’s position, Snowdance Realty Company has been collecting the
receivables.

      In July 2010, MFW Associates took control of Snowdance LLC by virtue of the
ownership pledges given as a term of the mezzanine loan.

        At about the same time, the parties began an arbitration hearing in New York pursuant to
an arbitration provision in the Snowdance LLC operating agreement. Mr. Purjes and Mr.
Wittenstein filed an amended arbitration demand in which they claimed, inter alia, that the
Plausteiners breached contractual obligations and fiduciary duties of loyalty by purchasing the
CIT Group note on behalf of Snowdance Realty Company and by “selling” the lift to Snowdance
Realty Company. Mr. Purjes and Mr. Wittenstein sought remedies including declarations that
the assignment of the CIT Group note was void and that Snowdance LLC was the record title
owner of the high-speed quad chairlift “free and clear” from any claims by the Plausteiners or
Snowdance Realty Company. At the arbitration hearing, the parties litigated these issues.

       After the hearing, however, Mr. Purjes and Mr. Wittenstein filed a memoranda in which
they advised the arbitrator that many of their claims were now “moot” or were “going to be
decided by the Vermont courts in connection with the liquidation of Snowdance’s assets.” Mr.
Purjes and Mr. Wittenstein therefore asked the arbitrator to decide only the question of the
ownership of the high-speed quad chairlift (and the question of whether to cancel two unrelated

                                               4
promissory notes allegedly given by Snowdance LLC). Mr. Purjes and Mr. Wittenstein
expressly asked the arbitrator not to make any rulings about the validity of the purported
assignment of the note and security interest. In their own post-hearing memorandum, Steven and
Susan Plausteiner asked the arbitrator to rule that Snowdance Realty Company had a valid lien
on the high-speed quad chairlift by virtue of its purchase of the CIT Group note.

         In his arbitration award, the arbitrator accepted the request by Mr. Purjes and Mr.
Wittenstein to withdraw the claims that had become moot or that had become “the proper subject
of litigation in the state courts of New York and Vermont.” The arbitrator therefore clarified that
he was deciding only three issues in his award: the ownership of the chairlift (which he awarded
to Snowdance LLC) and the two unrelated promissory notes. The arbitrator did not make any
other substantive rulings, except that he did say, at the end of his award, in what appears to be
boilerplate language, that the award was “in full and complete settlement and satisfaction of any
and all claims, counterclaims, defenses and set-offs properly submitted to the jurisdiction of this
Arbitrator and any claim or counterclaim not specifically granted herein is nonetheless deemed
denied.” Snowdance Realty Company now argues that this last sentence amounted to a ruling
that it has taken a valid assignment of the CIT note and security interest.

        At around the same time as the arbitration hearing, Snowdance Realty Company failed to
file a continuation statement in order to extend the effectiveness of the original UCC financing
statement on the chairlift. The parties now dispute the legal effect of the lapse.

         Finally, during this litigation and in anticipation of the sale of the high-speed quad
chairlift to Burke Mountain, the parties entered into a February 2011 stipulation in which
Snowdance Realty Company and the Plausteiners agreed to withdraw their objections to the sale
of the chairlift in exchange for promises that the proceeds from the sale would be placed into
escrow and that “regardless of the priorities in any documents and any claims by any parties, the
amounts due under the promissory note from Snowdance [LLC] to Textron subsequently
assigned to, and now held by, [Snowdance Realty Company] shall have first priority to all funds
in the Escrow Account.” As it happened, the proposed sale to Burke Mountain fell through, and
the lift was instead recently sold the Peak Resorts. The sale has now closed, the lift is gone, and
the sale proceeds are in an escrow account. The parties dispute whether the stipulated agreement
remains valid as to the promise that Snowdance Realty Company will have first priority to the
escrowed funds for the amounts due under the Textron note.

                                                 I
        The issue is identifying which parties have a security interest in the high-speed quad
chairlift. It makes sense to begin the analysis with the question of whether the original chairlift
lien that was held by CIT Group as security for its purchase-money financing was assigned to
Snowdance Realty Company in October 2008 or whether the note and security interest were
instead released.

                                         A
       Snowdance Realty Company argues first that the arbitrator has already ruled that the
purported 2008 assignment was valid.

                                                5
        An arbitration award “has the same force and effect of an adjudication in terms of
precluding the same parties from relitigating the same subject.” Agway, Inc. v. Gray, 167 Vt.
313, 316 (1997). An arbitration award is different from a judgment, however, because
arbitration is a creature of contract. Parties are generally “free to arbitrate some parts of their
dispute while setting other matters aside.” In re Shelburne Supermarket, Inc., 2010 VT 30, ¶ 20,
187 Vt. 514. Application of preclusion principles to an arbitration award therefore requires a
finding that the claim to be precluded was “within the scope of the reference to arbitration.” Id.
(quoting Restatement (Second) of Judgments § 84 cmt. d (1982)).

        Here, the evidence shows that Mr. Purjes and Mr. Wittenstein filed a post-trial
memoranda in which they specifically withdrew their request that the arbitrator decide the
validity of the 2008 assignment. In response, the arbitrator agreed not to decide the issue, noting
that it had become the “proper subject” of state-court proceedings in Vermont. The best
interpretation of this exchange is that the arbitrator agreed to let the claimants withdraw the issue
from the scope of the reference to arbitration. As such, no preclusion attaches. Shelburne
Supermarket, 2010 VT 30, ¶ 21; see also 18 Wright & Miller et al, Federal Practice and
Procedure: Juris. 2d §§ 4413 & 4420 (explaining that preclusion should not attach to issues that
were “withdrawn before decision”).

        Snowdance Realty Company responds by citing two Vermont cases from the mid-1800s
for the position that an award has a preclusive effect as to matters that were “withheld” from the
arbitrator as opposed to formally withdrawn. See Barker v. Belknap’s Estate, 39 Vt. 168, 181
(1866); Briggs v. Brewster, 23 Vt. 100, 102 (1850). Snowdance Realty Company appears to be
arguing that claimants’ withdrawal was not effective because they failed to file a formal motion,
but the answer here is that the withdrawal was formal enough for the arbitrator to have accepted
it. No reason exists why preclusion should attach to an issue that was originally submitted to
arbitration but then withdrawn before the final decision with the approval of the arbitrator. 18
Federal Practice and Procedure, supra, at §§ 4419–20; Wolf v. Gruntal & Co, Inc., 45 F.3d 524,
529 & n.6 (1st Cir. 1995) (citing Conforti & Eisele, Inc. v. William J. Scully, Inc., 469 N.Y.S.2d
400, 400–01 (N.Y. App. Div. 1983)). And to the extent that Snowdance Realty is suggesting that
the old cases draw a distinction between the words “withheld” and “withdrawn,” the passages
from which those words are taken merely describe the ordinary rule that claim preclusion
attaches to issues that should have been raised in an earlier proceeding but were not. Neither
Barker nor Briggs hold that preclusion should attach when a judge or arbitrator allows an issue to
be withdrawn from a case before final decision.

        Snowdance Realty Company finally argues that the arbitrator nevertheless ruled on the
validity of the purported assignment by denying all of the claims and counterclaims not
specifically granted in the award. Snowdance Realty Company argues that this statement
amounted to a denial of every claim asserted in the amended arbitration demand that was not
expressly ruled on in the award. Such an interpretation cannot be squared with the arbitrator’s
express statement that he was deciding only the three identified issues. The boilerplate language
should not be interpreted as expanding the scope of the arbitrator’s decision beyond what he
expressly said he was deciding. For these reasons, the court concludes that the parties have not
yet obtained a final ruling on the issue of the validity of the purported assignments of the CIT
Group note and lien.

                                                 6
                                                B
        The next question is whether CIT Group discharged its note and released its lien on the
chairlift, or whether CIT Group instead endorsed the note and assigned the lien to Snowdance
Realty Company. The fulcrum of the dispute is whether the terms of the October 2008
transaction were defined by an integrated written agreement between CIT Group and Mr.
Plausteiner as a representative for Snowdance LLC or instead by an oral agreement between CIT
Group and Mr. Plausteiner as a representative for Snowdance Realty Company.

        As a threshold matter, the parties have argued whether Vermont law or New Jersey law
governs the interpretation of the integrated written agreement. The court will accept for
purposes of argument that New Jersey law applies, but the answer really does not matter because
the approaches of the two states are identical for purposes of this case. Both states agree that
extrinsic evidence is admissible for the purposes of understanding the circumstances under which
a contract was made and shedding light upon the meaning of the contract. Downtown Barre
Development v. C&S Wholesale Grocers, Inc., 2004 VT 47, ¶ 8, 177 Vt. 70; Conway v. 287
Corporate Center Assocs., 901 A.2d 341, 346–47 (N.J. 2006). More importantly, both states
also agree that extrinsic evidence cannot be used for the purpose of repudiating a written
agreement or varying its unambiguous terms. As the New Jersey Supreme Court wrote:

               Evidence of the circumstances is always admissible in aid of the
              interpretation of an integrated agreement. This is so even when the
              contract on its face is free from ambiguity. The polestar of
              construction is the intention of the parties to the contract as
              revealed by the language used, taken as an entirety; and, in the
              quest for intention, the situation of the parties, the attendant
              circumstances, and the objects they were thereby striving to attain
              are necessarily to be regarded. The admission of evidence of
              extrinsic facts is not for the purpose of changing the writing, but to
              secure light by which to measure its actual significance. Such
              evidence is adducible only for the purpose of interpreting the
              writing—not for the purpose of modifying or enlarging or
              curtailing its terms, but to aid in determining the meaning of what
              has been said. So far as the evidence tends to show, not the
              meaning of the writing, but an intention wholly unexpressed in the
              writing, it is irrelevant. The judicial interpretive function is to
              consider what was written in the context of the circumstances
              under which it was written, and accord to the language a rational
              meaning in keeping with the expressed general purpose.

Conway, 901 A.2d at 347 (quoting Atl. N. Airlines v. Schwimmer, 96 A.2d 652, 656 (N.J. 1953));
accord Downtown Barre Development, 2004 VT 47, ¶ 8 (explaining that extrinsic evidence “may
not be used to vary the terms of an unambiguous writing”) (quoting Kipp v. Chips Estate, 169 Vt.
102, 107 (1999)).

                                                7
        In this case, the extrinsic evidence shows that Mr. Plausteiner originally negotiated a deal
on behalf of Snowdance LLC with CIT Group for the discharge of its note and release of its lien
in exchange for a discounted payment of $250,000. After the PRIF Ascutney deal fell through,
however, Mr. Plausteiner no longer wanted to put up $250,000 as an additional unsecured capital
contribution to Snowdance LLC. He instead wanted to take an assignment of the note and the
security interest on the chairlift, so he asked CIT Group to assign its note and security interest to
Snowdance Realty Company instead of discharging the note and releasing the lien. CIT Group
either actually agreed to this proposal or did not care how the deal was done so long as it
received a timely payment.

        As the payment deadline approached, however, CIT Group sent Mr. Plausteiner a written
settlement agreement in which CIT Group agreed to discharge the note and release the lien upon
timely payment. No mention was made of any assignments or endorsements. Mr. Plausteiner
signed the integrated agreement on behalf of Snowdance LLC even though he did not think that
it represented his “ultimate agreement” with CIT Group.

        Mr. Plausteiner then wired the $250,000 from a personal account. He made accounting
entries in Snowdance LLC’s books to show that the debt and the security interest had been
assigned to Snowdance Realty Company. He also filed a UCC financing statement that showed
that the security interest had been assigned to Snowdance Realty Company. He has testified that
CIT Group prepared this financing statement and sent it to him.

        Snowdance Realty Company is not arguing that the written agreement was ambiguous or
that the meaning of the written agreement was something other than what was written in the
document. Snowdance Realty Company is arguing instead that the written agreement was not
the actual agreement between it and CIT Group: that when Mr. Plausteiner wired the money to
CIT Group, he was doing so pursuant to the alleged oral contract between Snowdance Realty
Company and CIT Group rather than pursuant to the written agreement.

        There are a number of problems with Snowdance Realty Company’s “follow the money”
approach. The first is that the terms of the payment were defined in the written agreement: the
money would be paid on behalf of Snowdance LLC in exchange for the release of the note and
security interest. As a matter of contract interpretation, therefore, the use of extrinsic evidence to
provide a different term of payment would be directly contrary to the parol-evidence rule.1 See
Tilley v. Green Mountain Power, 156 Vt. 91, 93 (1991) (a prior oral agreement cannot be used to
contradict the terms of a later writing); Conway, 901 A.2d at 347 (extrinsic evidence cannot be
used to show a contractual intention “wholly unexpressed in the writing”).

        The second problem is that there is no evidence that the written agreement somehow
“failed” between the time of contract formation and the time of payment. Mr. Plausteiner has
tried to suggest that the contract “failed” because he wired the money two days late, but there is
no evidence that CIT Group refused the payment on grounds of timeliness. No other evidence of
a breach exists either.

        1
          The same reasoning applies to the attempts to introduce the UCC financing statement. It is being used as
evidence of an oral agreement that would vary (indeed, nullify) the terms of the written contract.

                                                        8
        Snowdance Realty Company has also suggested that Mr. Plausteiner was acting as an
agent for Snowdance Realty Company at the time he sent the wire rather than as an agent for
Snowdance LLC. As noted above, the argument is contrary to the terms of payment specified in
the written agreement. In addition, even if the suggestion were true as a matter of fact, it would
represent a fairly clear breach of the agent’s duty of loyalty on the part of Mr. Plausteiner. See
Restatement (Third) of Agency §§ 8.01–8.04 (explaining an agent’s basic duties of loyalty,
including the “duty to refrain from competing with the principal and from taking action on behalf
of or otherwise assisting the principal’s competitors”). One of the possible remedies in such a
situation would be to void the alleged contract made between the breaching agent and the third
party. See Restatement (Third) of Agency § 8.01 cmt. d(1) (explaining possible monetary and
non-monetary remedies for breach). As such, the written contract would eventually prevail
under this theory as well.

        The final problem is that there is no documentary evidence to show that Snowdance
Realty Company ever became a holder of the underlying debt. Snowdance Realty Company has
said that it purchased the loan, but has not attempted to prove that the note was transferred in any
of the ways that would make it a holder under the Uniform Commercial Code. In the absence of
an underlying debt, any security interest is ineffective.

       For these reasons, the court concludes that the integrated written agreement provided the
terms of the transaction, and there is no ambiguity in the meaning of the written agreement: in
exchange for the payment of $250,000, the note and the security interest were discharged and
released.

                                                 II
         The next question is whether the description of the collateral in the PRIF Ascutney
security agreement is sufficient to establish that MFW Associates now has a valid security
interest in the high-speed quad chairlift. The applicable test is whether the description
“reasonably identifies the collateral so that disputed as to the coverage of the security interest
may be ironed out between the secured party and the debtor, and so that third parties, upon
inquiry, can determine what collateral is claimed by the secured party.” 9A Hawkland UCC
Series § 9-203:6 [Rev] (June 2012). Here, the security agreement plainly covers “ski tows and
ski lifts.”

        It is true that other provisions of the security agreement create a possibility that PRIF
Ascutney did not intend to take a security interest in this particular ski lift right away—at least
not so long as the CIT Group lien was in place and the chairlift was property that was leased by
Snowdance LLC rather than owned. But even if those conditions mean what Snowdance Realty
Company says they mean, the conditions expired by 2010, at the latest. After that point, the
description of collateral in the security agreement was sufficient to cover the high-speed quad
chairlift either as a “ski lift” or as after-acquired property. In re Southern Vermont Supply, Inc.,
58 B.R. 887, 891 (Bankr. D. Vt. 1986); 9A Hawkland UCC Series 9:204-1 [Rev] (June 2012).
MFW Associates holds a valid security interest in the chairlift.

                                                III

                                                 9
       MFW Associates has also argued that Snowdance Realty Company lost its priority status
as to any security interest it did have when it allowed its UCC financing statement to lapse in
2010 for failure to file a continuation statement. The foregoing rulings make it unnecessary to
address the argument, but, for the record, the court will note that a lapsed financing statement
destroys the perfected status of a security interest even as between parties to the same litigation.
See Thermal Supply, Inc. v. Big Sky Beef, 2008 MT 355, ¶¶ 15–17, 197 P.3d 1227 (explaining
that Revised UCC § 9–515(c) “simply delete[d] the tolling rule” that had been created by Avant
Petroleum, Inc. v. Banque Paribas, 853 F.2d 140, 144 (2d Cir. 1988)).

                                               IV
       The court will also take the opportunity to address all of the other motions that are either
pending or shown as pending on the court’s internal docket.

                                                  A
        As a matter of housekeeping, the court first addresses the motions that are shown as being
under advisement on the court’s docket but for which, for all practical purposes, decisions have
already been made. In entering these dispositions of the motions, the court does not mean to
upset any settled expectations of the parties, so if the parties think that the court has made an
error here they may bring it to the court’s attention by way of a motion to reconsider the specific
ruling at issue. By “error,” the court means that the ruling stated herein is contrary to what the
parties had understood the court’s ruling to be, not that the court made the wrong decision on the
merits of the motion.

        SRC’S Motion to File Amended Answer to the Supplemental Complaint (MPR #12),
filed June 18, 2010, is granted. Snowdance Ski Company, Snowdance Hotel Company, and the
Plausteiners’ Motion to File Amended Answer to the Supplemental Complaint (MPR #13), filed
June 18, 2010, is granted. Plaintiff’s Motion for Service by Mail on Defendant Mael (MPR
#15), filed June 30, 2010, is granted. Plaintiff’s Motion to Amend Complaint of Foreclosure
(MPR #16), filed July 1, 2010, is granted. Defendant Snowdance LLC’s Motion for Relief From
Judgment (MPR #21), filed January 18, 2011, is moot. Defendant Snowdance LLC’s Motion to
Consolidate Disqualification and Injunction Motions (MPR #26), filed May 9, 2011, is moot.
Defendant Snowdance LLC’s Motion for Injunctive Relief (MPR #28), filed May 9, 2011, is
moot. Defendant Snowdance LLC’s Motion for Extension of Time (MPR #29), filed May 26,
2011, is moot. Plaintiff’s Motion to Amend Complaint of Foreclosure (MPR #32), filed June 8,
2011, is granted. Defendant Snowdance Realty Company’s Supplemental Motion (MPR #44),
filed March 2, 2012, is treated as a motion to file a surreply and is granted.

                                                 B
        Snowdance Realty Company has moved for partial summary judgment on the question of
whether Snowdance LLC defaulted on its obligations under the former Textron note. See
V.R.C.P. 56(g) (2012) (summary judgment may be entered on issue of liability while leaving
damages undetermined). Snowdance Realty Company failed, however, to support its original
motion with evidence showing that there were no disputed material facts for trial and that it was
entitled to judgment as a matter of law. Price v. Leland, 149 Vt. 518, 521 (1988).

                                                10
         Snowdance Realty Company attached supporting documentation to its reply brief that
appears to be sufficient to show that there are no disputed material facts and that it is entitled to
judgment as a matter of law on the issue of liability. In the interest of avoiding unnecessary
effort, the parties are hereby ordered to treat the reply brief as if it were the original summary-
judgment motion. Any party opposed to the granting of the motion must file an opposition
stating a substantive reason therefor within 30 days of this order. See V.R.C.P. 56(e) (2012)
(court may make any appropriate order towards equitable determination of summary-judgment
motion).

                                                  C
       Snowdance Realty Company has also moved for a partial distribution of the escrowed
funds. It argues that it is entitled to at least the first $292,738 (plus per-diem interest) of the
escrowed funds, and thus should be able to withdraw at least that amount, because the parties
entered into a stipulation regarding the sale of the chairlift in which they agreed that the first
funds from the escrow account would be paid to Snowdance Realty Company in satisfaction of
the former Textron note.

        As a procedural matter, the parties can expect that any request for partial distribution of
the escrowed funds will be denied. Vermont Civil Procedure Rule 54(b) provides three
prerequisites for the entry of a partial final judgment: (1) there must be multiple parties or
multiple claims for relief, (2) at least one claim or the rights and liabilities of at least one party
must be finally decided, and (3) the court must find that there is no just cause for delay. Kelly v.
Lord, 173 Vt. 21, 31 (2001). In this case, even aside from the fact that Snowdance Realty
Company has not yet obtained a final judgment on its cross-claim, the court does not believe that
“earlier access to disputed funds from an escrow account” is a persuasive reason in favor of the
entry of a partial final judgment under Rule 54(b). See 10 Wright, Miller, Kane & Marcus,
Federal Practice and Procedure: Civil 3d § 2656 (“Rule 54(b) may be invoked only in a relatively
select group of cases and applied to an even more limited category of decisions.”). For this
reason alone, the motion for partial distribution is denied.

        MFW Associates has also opposed the motion on substantive grounds. MFW Associates
argues that the stipulation was prepared as consideration for Snowdance Realty Company’s
agreement to withdraw its objections to the proposed sale of the lift to Burke Mountain for $1.5
million dollars. Obviously, the proposed Burke Mountain sale fell through, and the lift was
eventually sold to Peak Resorts for $1.35 million dollars. MFW Associates now argues that (1)
the stipulation applied only to the proposed Burke Mountain sale, (2) Snowdance Realty
Company breached the stipulation by opposing the Peak Resorts sale and thus cannot now seek
to enforce the terms of the original stipulation, and (3) the stipulation became ineffective when
the court imposed its own terms on the escrow requirements for the sale of the chairlift to Peak
Resorts. After reviewing the stipulation, the court has concluded that interpretation of the
agreement is best undertaken as a factual matter at a merits hearing. Hall v. State, 2012 VT 43,
¶ 21.

                                            D
      By the court’s count, there are three remaining substantive issues to be decided: (1)
whether Snowdance Realty Company is entitled to a foreclosure judgment on the former Textron

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note; (2) whether the pledge agreements given by the three Snowdance companies are recourse
or non-recourse (the issue identified by the first summary-judgment decision); and (3) whether
Snowdance Realty Company is entitled under the February 2011 stipulation to be paid first from
the sale proceeds in satisfaction of the amounts due under the former Textron note. Beyond that,
the only remaining issues in the case are the accounting of the amounts due and attorney fees.
Unless the parties disagree, the court is prepared to address all remaining issues at an omnibus
merits and accounting hearing.

                                          * * * *

        For the foregoing reasons, the court concludes that MFW Associates has a secured
interest in the proceeds from the sale of the high-speed quad chairlift, and that the former CIT
Group note and security interest were discharged and released by virtue of the 2008 transaction.
Snowdance Realty Company may, however, subject to further rulings of the court, have a claim
on at least some of the sale proceeds by virtue of its possession of the Textron note.

                                           ORDER

        (1) SRC’S Motion to File Amended Answer to the Supplemental Complaint (MPR #12),
filed June 18, 2010, is granted.

        (2) Snowdance Ski Company, Snowdance Hotel Company, and the Plausteiners’ Motion
to File Amended Answer to the Supplemental Complaint (MPR #13), filed June 18, 2010, is
granted.

        (3) Plaintiff’s Motion for Service by Mail on Defendant Mael (MPR #15), filed June 30,
2010, is granted.

       (4) Plaintiff’s Motion to Amend Complaint of Foreclosure (MPR #16), filed July 1, 2010,
is granted.

       (5) Defendant Snowdance LLC’s Motion for Relief From Judgment (MPR #21), filed
January 18, 2011, is moot.

        (6) Defendant Snowdance Realty Company’s Motion to Determine Priority Status (MPR
#25), filed May 2, 2011, is denied.

      (7) Defendant Snowdance LLC’s Motion to Consolidate Disqualification and Injunction
Motions (MPR #26), filed May 9, 2011, is moot.

        (8) Defendant Snowdance LLC’s Motion for Injunctive Relief (MPR #28), filed May 9,
2011, is moot.

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       (9) Defendant Snowdance LLC’s Motion for Extension of Time (MPR #29), filed May
26, 2011, is moot.

       (10) Plaintiff’s Motion for Partial Summary Judgment as to Priority Status of Chairlift
Lien (MPR #31), filed June 6, 2011, is granted

        (11) Plaintiff’s Motion to Amend Complaint of Foreclosure (MPR #32), filed June 8,
2011, is granted.

      (12) Defendant Snowdance Realty Company’s Supplemental Motion (MPR #44), filed
March 2, 2012, is treated as a motion to file a surreply and is granted.

       (13) Any party opposed to the granting of Snowdance Realty Company’s Motion for
Summary Judgment (MPR #45), filed March 22, 2012 and as supplemented through May 11,
2012, shall file an opposition within 30 days of this order

        (14) Defendant Snowdance Realty Company’s Motion for Partial Distribution (MPR
#49), filed May 21, 2012 (MPR #49), is denied.

       (15) The clerk shall schedule an omnibus merits and accounting hearing for the
remaining issues in the case.

       Dated at Hartford, Vermont this ____ day of __________, 2012.

                                                  ________________________________
                                                  William D. Cohen
                                                  Superior Court Judge

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