Court Opinion

ID: 4267121
Source: CourtListenerOpinion
Date Created: 2018-04-24 00:01:04.425976+00
Date Added: 2024-06-11T14:31:06.669289
License: Public Domain

Long Trail House Condo. Ass’n v. Engelberth Constr., Inc., No. 581-11-08 Wmcv (Wesley, J., Sept. 1, 2011)

[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
Windham Unit                                                                               Docket No. 581-11-08 Wmcv

Long Trail House Condominium
Association

v.

Engelberth Construction, Inc.

v.

Morgan’s Roofing & Construction, et al.

     Order Granting Defendant Engelberth’s Motion for Summary Judgment and Order
              Denying Defendant Engelberth’s Motion for Sanctions as Moot

        Defendant/Third-Party Plaintiff Engelberth Construction Inc. has moved for summary
judgment on all claims asserted by Plaintiff Long Trail House Condominium Association,
asserting that the economic-loss rule and the absence of contractual privity with Engelberth
doom Plaintiff’s claims. Similar to past decisions rendered by this Court addressing almost
analogous facts and allegations, the Court concludes, as a matter of law, that the economic loss
rule prevents the Association’s tort claims against Engelberth, as the Association is alleging
economic losses, and no exception to the economic loss rule is available. Likewise, the
Association’s implied warranty claims fail as a matter of law since there is no contractual privity
between the parties, and because Engelberth validly disclaimed any implied warranties running
to successors in interest. Accordingly, the Court GRANTS Engelberth’s Motion for Summary
Judgment.

        Additionally, because the Court’s holding effectively dismisses Engelberth from this
action, the Court will deny Engelberth’s pending motion for sanctions against the Association as
moot.

Facts

        This suit arises from a construction project to erect a 143-unit condominium complex
known as the Long Trail House at Stratton Mountain, Vermont. In January, 1997, Stratton and
Engelberth entered into a Preconstruction Agreement (“the Preconstruction Agreement”), which
articulated preconstruction terms and services that Engelberth was to supply Stratton, which
included recommendations on construction feasibility, consultation as to the selection of
materials and equipment, assisting with zoning requirements and permits, and cooperation with
the “Design Team” to provide value engineering services. Further, under section 2 of the
Preconstruction Agreement which outlined Engelberth’s “extent of responsibility,” Engelberth
explicitly disclaimed “responsibility to ascertain that the Drawings and Specifications are in
accordance with applicable laws, statutes, ordinances, building codes, rules and regulations,” and
disclaimed responsibility for the Design Team’s designs, errors or omissions.

        Subsequently, on March 10, 1998, Engelberth and the Stratton Corporation and Intrawest
Corporation (collectively “Stratton”) the owners, entered into a Standard Owner and Contractor
Form Agreement, (the “Agreement”) with Modified General Conditions (appearing as “Exhibit
B” to the Agreement), outlining the scope and terms of the project. Article 1.1.2 of the Modified
General Conditions stated that:

       “The Contract represents the entire and integrated agreement between the parties hereto
       and supersedes prior negotiations, representations or agreements, either written or oral.
       The Contract documents shall not be construed to create a contractual relationship of any
       kind . . . (3) between any person or entities other than the Owner and Contractor.”

        After construction was complete, Plaintiff Long Trail House Condominium Association
(“Long Trail” or “the Association”) notified Stratton of alleged defects associated with the
construction of the Long Trail House, and of its position that Stratton was responsible for
repairing the damaged elements of the complex. At first, the condominium unit owners
experienced several minor problems with their units, most notably water leakage into the units,
which caused damage to interior walls. The owners also complained of other water related
issues, including peeling and chipping away of paint on the building, and rotting trim. In fact,
the Association was forced repaint the building much sooner than expected, and also observed
water damage around certain balconies which prompted the Association to undertake a
comprehensive investigation of the Project.

        Structural engineers consulting with both Stratton and the Association found significant
further damage to the structure which would likely lead to personal property loss and personal
injury if they were not promptly remediated. The engineers found that: 1) water continued to
penetrate exterior walls; 2) trusses were improperly supported which could lead to roof collapse;
3) severe water damage to the balconies persisted which could result in their collapse within the
next year; 4) load-bearing walls were unsupported and could collapse; and 5) gable end walls in
the roof area of both the North and South building were not properly braced and could collapse
in a high wind event, causing personal injury or significant property damage.

         On or about May 2, 2007, Stratton, Intrawest, and the Association entered into a
“Settlement Agreement and Release of Claims” through which the parties settled the
Association’s design and construction defect claims for $7,025,000. Section 4(c) of the
Settlement specifically states that “Intrawest shall pursue a claim against Engelberth
Construction, Inc. (“ECI”) within two (2) years from the Date of this Agreement to recover part
or all of the payment paid to the Association under the Agreement.”

       About a month later, Stratton filed suit against Engelberth, alleging that Engelberth was
responsible for the construction defects observed in the buildings, the bulk of which was caused
by water damage stemming from leaks throughout the building as a result of alleged faulty
workmanship.

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        The Association thereafter retained contractors to conduct extensive remediation work,
which cost approximately $1,500,000 more than the settlement amount. A year later, the
Association filed the instant suit against Engelberth, charging Engelberth with negligence and
breach of express and implied warranties. The defects alleged by the Association mirrored those
in Stratton’s lawsuit, and included additional claims related to other alleged defects in the
buildings’ HVAC and electrical systems with regard to elevators.

Standard

        In order to prevail on a motion for summary judgment, the moving party must show that
there is no genuine issue as to any material fact, and that it is entitled to judgment as a matter of
law. V.R.C.P. 56(c)(3). The moving party has the burden of proof, and the opposing party must
be given the benefit of all reasonable doubts and inferences in determining whether a genuine
issue of material fact exists. Price v. Leland, 149 Vt. 518, 521 (1988). It is not the function of
the court to weigh the probative effect of conflicting testimony; summary judgment must be
denied if a genuine issue of material fact exists. Baldwin v. Upper Valley Services, Inc., 162 Vt.
51 (1994).

Analysis

       I.      The Economic Loss Rule Bars the Association’s Negligence Claims.

        As this Court has stated in a recent decision in another case with similar claims,
tort/negligence actions are usually better suited for resolving claims for unanticipated
physical/property injury, while the principles of contract law are generally better suited for
determining claims for consequential damages that parties have or could have addressed by
agreement. Treetop at Stratton Condominium Assoc. v. Treetop at Stratton Dev. Co., et al., 147-
3-09 Wmcv, at 3, (Vt. Super. Ct. Feb. 4, 2011) (Wesley, J.) (citing Spring Motors Distribs. v.
Ford Motor Co., 489 A.2d 660, 672 (N.J. 1985)).

        In keeping with these general policies for maintaining analytic clarity in the consideration
of appropriate remedies, the economic loss rule was developed through common law to prohibit
tort recovery for purely economic losses. See Springfield Hydroelectric Co. v. Copp, 172 Vt.
311, 314 (2001). The doctrine seeks to: (1) maintain the fundamental distinction between tort
law and contract law; (2) protect commercial parties' freedom to allocate economic risk by
contract; and (3) to encourage the party best situated to assess the risk of economic loss to
assume, allocate, or insure against that risk. 1325 North Van Buren, LLC v. T-3 Group, Ltd., 716
N.W.2d 822, 831 (Wis. 2006). The economic loss rule applies to commercial disputes outside
the confines of products liability, including the home construction defect context. See Heath v.
Wyatt, 2006 VT 125, 181 Vt. 545.

   A. The economic loss rule is still in effect in Vermont

        The Plaintiff first argues that the economic loss rule has been abandoned in many
jurisdictions, and should likewise be abandoned by this Court. See Pl.’s Opp’n, p. 7 (citing cases

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from Maryland, California, Colorado, Kansas, New Jersey, North Carolina, South Carolina, and
Wisconsin). However, the Vermont Supreme Court has recently upheld the application of the
economic loss rule, and has directly cited to authority from many other states to support this
proposition. See Heath v. Palmer, 2006 VT 125, ¶15, 181 Vt. 545 (mem.) (“[the economic loss
rule] is the general rule in most other jurisdictions, as well,” citing to courts in Arizona, Idaho,
Illinois, Kansas, Nevada, and Utah).1 This Court concludes that the economic loss rule is still
vital in this state.

    B. The Association’s alleged damages are pure economic loss not recoverable in tort

        Economic loss has been defined broadly to include damages for inadequate value, costs
of repair and replacement of the defective product, or consequent loss of profits, as well as the
diminution in the value of the product because it is inferior in quality and does not work for the
general purposes for which it was sold or manufactured. Redarowicz v. Ohlendorf, 441 N.E.2d
324, 327 (Ill. 1982); Heath v. Palmer, 2006 VT 125, ¶ 15. Therefore, to recover in negligence,
there must be a showing of harm above and beyond disappointed expectations, since a buyer's
desire to enjoy the benefit of his bargain is not an interest that tort law traditionally protects.
Redarowicz, 441 N.E.2d at 327.

        In a recent case with similar litigants, facts, and causes of actions, this Court held that a
condominium association’s claimed damages stemming from latent construction defects were
economic in nature, and not recoverable in tort as precluded by the economic loss rule. Treetop,
No. 147-3-09 Wmcv, at 5. There, the damages consisted of costs for repair or replacement of
portions of the condominium project caused by various deficiencies in construction, including
roof leaks. Although the association in Treetop alleged that the deficiencies resulted in damage
to “other property,” and were therefore outside the grasp of the economic loss rule, this Court
found such injury to the product itself within the scope of the rule. Id.

        Similarly here, the damages alleged by Long Trail qualify as economic loss, precluding
tort recovery. The claims consist almost entirely of costs of repair that stemmed from the alleged
faulty construction, including: i) replacement of certain components of the complex that were
properly installed and undamaged but which needed to be removed and replaced as part of the
remediation, such as siding; and ii) costs incurred in relation to water damage to interior walls
and painted surfaces inside specific units. Indeed, the amount sought from Engelberth represents
the difference in market value between the units as built and as they should have been built.
Here, the cost of remedy, encompassing all consequential damages, is the only recovery sought;
that claimed recovery, however, represents pure economic loss.

       Nonetheless, Long Trail argues that the damages it has incurred are not purely economic.
The Association points to costs incurred due to damage to the interior of individual units such as
water damage to interior walls and painted surfaces, and the removal/replacement of materials
that were not defective in order to conduct repairs, such as the siding. As with Treetop, however,

1
  See also Def.’s Reply, n. 1, noting that the “majority of the cases [Plaintiff has cited] do not provide for support for
[the proposition that the trend is in favor of abandoning economic loss rule], having either been distinguished or
limited by more recent authority.”

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this effort is doomed when it attempts to classify as “other property” damage to any aspect of the
“product” of the condominium construction contract in order to avoid the economic loss rule.

   C. Engelberth did not share a special relationship with the Association for purposes of the
      professional services exception to the economic loss rule

        Notwithstanding the scope of the economic loss rule, and as an exception to its effect,
purely economic losses may be recoverable in professional negligence cases where the parties
have a special relationship which creates a duty of care independent of contract obligations.
EBWS, LLC v. Britly Corp., 2007 VT 37, ¶ 31, 181 Vt. 513. The Vermont Supreme Court has
not specified which services could fall into such an exception. Rather, the Court has held that
parties that “maintained complex and highly specialized responsibilities”, but nevertheless “did
not hold themselves out as providers of any licensed professional service,” were not deemed
“professionals” for purposes of the professional services/special relationship exception.
Springfield Hydroelectric Co. v. Copp, 172 Vt. 311, 316-17 (2001). Thus, the key is not whether
one is licensed in a particular field, but rather the type of relationship created between the parties.
EBWS LLC, 2007 VT 37, ¶ 31 (citing Business Men’s Assurance Co. v. Graham, 891 S.W.2d
438, 453 (Mo. Ct. App. 1994) (allowing party to sue for purely economic damages in tort “if the
party sues for breach of a duty recognized by the law as arising from the relationship or status the
parties have created by their agreement”)).

        In EBWS LLC, the Court found that defendant presented itself as a construction
contractor and not as a provider of a specialized professional service. Id. at ¶ 32. The Court
reasoned that plaintiff did not rely on defendant to provide it with a professional service, and
paid for the services of a contractor and not a professional architect. Id. (citations omitted).
Here, the Association claims that the services provided for by Engelberth under the Pre-
Construction Agreement - which included providing advice as to: 1) value engineering; 2) the
selection of materials, building systems, and equipment; 3) the “constructability” of the Project;
and 4) design alternatives - raised Engelberth’s status from a general contractor to a professional
providing professional services. Nevertheless, the Association has not persuaded the Court that
these “extra” services propelled Engelberth into a status beyond that of a mere general
contractor, or that the relationship between the parties can be distinguished from EBWS LLC.
Indeed, both the Preconstruction Agreement, and the later Agreement between Stratton and
Engelberth, reference third party architects/design teams expected to participate in the project.
See Page #1 of Agreement (specifying “Graham Gund Architects” as the architect for the Long
Trail project). This reinforces the conclusion that Engelberth, in fact and by contract, functioned
as a general contractor, and Plaintiff has established no sufficient facts to support its claim of
reliance on specialized professional services distinct from Engelberth’s general contractor role.

   D. Engelberth did not owe a duty to the Association in tort because the Association may
      have been a foreseeable owner of Long Trail House

        Plaintiff next asserts that Engelberth owed the Association a duty of care independent of
the contract. Plaintiff argues that as a company offering professional services in the design,
planning, coordination, and then actual construction of the Long Trail House, Engelberth was in
a position in which it owed an independent duty of care not just to Stratton, but also to Long

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Trail as a foreseeable end user. See Council of Co-Owners Atlantis Condo., Inc. v. Whiting-
Turner Contracting Co., 517 A.2d 335, 341 (Md. 1986). (“It is now a universal rule that the
contractor is liable to all those who may be foreseeably injured by the structure … when the
work is negligently done.”). In reliance on such foreign authority, the Association asserts that it
was reasonably foreseeable to Engelberth that Long Trail would take ownership of the very
building that it was constructing, generating a common-law duty of care to Long Trail and its
members to properly construct the building. Such duty, Long Trail maintains, did not arise from
the Contract, but under the common law to properly construct a building that was in compliance
with all relevant codes and not dangerous.

        The Court can perceive only the subtlest distinction between the tort liability Plaintiff
claims based on foreseeability, and the professional services exception to the economic loss rule
just discussed above and found unavailing. Indeed, this Court has already rejected a similar
“foreseeability” argument made against a general contractor and architect, and concludes that the
instant circumstances are indistinguishable from the previous holding. See Treetop, 147-3-09
Wmcv (Feb 11, 2011) (Wesley, J.); Mount Snow v. Grand Summit Resort Props., Inc., No. 564-
12-03 Wmcv, at 8 (Vt. Super. Ct. Oct. 24, 2007) (Howard, J.) (“[W]hether there is a cognizable
legal duty that supports a tort action depends on a variety of public policy considerations and
relevant factors, only one of which is foreseeability. Ultimately, whether a duty exists is a
question of fairness that depends on, among other factors, the relationship of the parties, the
nature of the risk, and the public interest at stake.”). Accordingly, the Court is not convinced
that any such special relationship was created merely because the Association’s eventual
ownership was foreseeable to Engelberth, nor would it be fair to impute such a duty to
Engelberth without clear evidence that such a duty was intended. The principles of contract law
and the policies of risk allocation underlying the economic loss rule would be compromised by
this gloss on the professional services exception, unless and until it is specifically acknowledged
by the Vermont Supreme Court.

   E. The lack of privity between Engelberth and the Association does not render the economic
      loss rule inapplicable

       The Association also argues that the economic loss rule is inapplicable here because there
was no contractual privity between the Association and Engelberth, and thus, the Association
could not negotiate the allocation of risks with Engelberth. The Association asserts that
application of the rule would run contrary to and be inconsistent with the policy underlying the
economic loss rule and tort law. The Association maintains that the economic loss rule is not
meant to apply where it strips a plaintiff of tort remedies when it has no other recourse for
addressing a breach of duty. Pl.’s Opp’n p. 8 (citing Vincent R. Johnson, The Boundary-Line
Function of the Economic Loss Rule, 66 Wash. & Lee. L. Rev. 523, 584 (2009)).

       Yet, as this Court has previously observed, Vermont courts have consistently applied the
economic loss rule to disallow claims of economic loss to third parties absent privity of contract.
See Hamill v. Pawtucket Mut. Ins. Co., 179 Vt. 250, 253 (2005) (plaintiff insured’s negligence
claim against insurance adjuster for physical damage to property deemed purely economic losses
recoverable under contract law and not tort); Mount Snow v. Grand Summit Resort Props., Inc.,
No.564-12-03 Wmcv (Vt. Super. Ct. Mar.1, 2007) (Wesley, J.) (economic loss rule applied to

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bar tort claims by a condominium owner’s association against design professional despite lack of
a contractual relationship). See also Davencourt at Pilgrim’s Landing Homeowners Ass’n. v.
Davencourt , 221 P.3d 234, 243 (Utah 2009) (economic loss rule applied despite lack of
opportunity to negotiate/allocate risks between association and developer and builder).

         Moreover, this case provides a particular apt illustration to counter the claim that the
economic loss rule operates unfairly to deprive injured claimants of any effective remedy. As
recounted above, it is undisputed that the Association sought recourse directly against Stratton,
the developer and seller, and realized a substantial settlement for the very matrix of construction
defects it complains of in this case. That Plaintiff’s current claim is based on a shortfall between
the negotiated amount paid by Stratton, and the actual cost of remedial work, and does not
establish any inadequacy in its choice of remedies that impugns the integrity of the economic
loss doctrine. There were doubtless many variables accounting for the amount negotiated
between the Association and Stratton, including the need to estimate future costs in order to
avoid litigation, but these are the very matters which the doctrine contemplates are best allocated
in precisely this fashion: through the mechanisms of the original contracts and the subsequent
negotiations appropriate to claims for contractual remedies. That a party is left unhappy by the
eventual result of such negotiations is not a sound basis for concluding that resort to additional
tort claims against other parties more remote to the initial contract must be implied. This is the
repeated teaching of economic loss jurisprudence, and this case affords, in this Court’s view, a
textbook example for the wisdom of its strictures.

       The absence of direct contractual privity between the parties does not negate the
economic loss rule, and the Court cannot ignore the contract expectations that existed among the
condominium owners, the developer Stratton, and general contractor Engelberth. To conclude
otherwise would essentially impose the Plaintiff’s economic expectations upon parties with
whom Plaintiff did not deal, and alter the economic expectations created by contracts to which it
was not a party. See Treetop, 147-3-09, at 7; Davencourt, 221 P.3d at 243 (citations omitted).
       F. An Unreasonably Dangerous Condition Exception Cannot Be Established
        The Association further alleges that Engelberth’s negligence created unreasonably
dangerous conditions that prevent application of the economic loss rule. The Association alleges
that construction defects in the Long Trail House created the potential for substantial and
imminent danger and damage to persons and property, although it is undisputed that no personal
injury actually occurred. The Association argues that the consequence of not responding to the
structural defects found in the property would have created massive property damage and/or
personal injury, and that it would not have been acting in the best interest or safety of its
members, guests, or the general public if it had waited until a personal injury occurred before
suing Engelberth for negligent construction.
         Plaintiff’s argument is misguided in several particulars, especially the failure to account
for established precedent to the contrary. As already noted, the resort to hyberbole is exposed by
the inconvenient fact that the Association was able to obtain remediation costs from the party
that it had contracted with, Stratton, which owed it a contractual duty to provide a product that
complied with the express and implied warranties given at the time of purchase. Indeed, the
Vermont Supreme Court, has held that “warranty law would, in effect, be subsumed into tort
law” if the court were to allow recovery for purely economic losses absent any physical harm

                                                 7
based solely on claims that an alleged defect could have endangered persons or their property.
Paquette v. Deere & Co., 168 Vt. 258, 264 (1998) (denying the availability of purely economic
damages under theories of strict liability in the defective motor home context) (emphasis added).

   II. The Association’s Contractual Claims Fail Due to it’s Lack of Privity with
   Engelberth

         Engelberth also moves for summary judgment on the Association’s contract claims,
arguing that because there is no contractual privity between Engelberth and the Association,
there can be no sustained cause of action for breach of warranty. The Association responds that
it is suing Engelberth for breach of implied warranties that run to a subsequent purchaser of
improved real property, specifically the implied warranty against latent defects under the implied
warranties of habitability and good workmanship. See Beachwalk Villas Condo. Ass’n., Inc. v.
Martin, 406 S.E.2d 372, 374 (S.C.1991) (“we hold that architects may be held liable to
homebuyers for negligence in connection with home construction projects and breach of implied
warranty where no contractual privity exists between the architect and the homebuyer.”).

         The Association further argues that because there were no express disclaimers of any
implied warranties that ran to subsequent purchasers of the units by Engelberth in the
Preconstruction Agreement - unlike the express disclaimer of any contractual relationship
between Engelberth and any third party in the General Conditions attached to the subsequent
agreement between Engelberth and Stratton - there remains a question of fact as to whether any
implied warranties that may run to the Association were in fact validly disclaimed. See Pl.’s
Opp’n, p. 18 (citing 14 R. Powell et al., Powell on Real Property § 84A.06 [8], at 84A-62 (1994),
(noting general rule that disclaimer of implied warranty for builder of home may be upheld if it
is specific, conspicuous, and mutually agreed upon by all parties.)). However, this argument
fails to account for the fact that the express terms of Article 1.1.2 of the Agreement state that the
Agreement was the “entire and integrated agreement between the parties.” Accordingly, the
Court finds that this provision clearly and unambiguously provided that the Agreement
superseded any prior agreement which may or may not have preserved an implied warranty to
subsequent purchasers. Vermont’s courts give effect to the intent of the parties as that intent is
expressed in their writing. Hamelin v. Simpson Paper (Vermont) Co., 167 Vt. 17, 19 (1997)
(citation omitted). Moreover, when the contract language is clear, the intent of the parties is
taken to be what the agreement declares. Karlen Communications, Inc. v. Mt. Mansfield
Television, Inc., 139 Vt. 615, 617 (1981).

        Again relying on an analysis here replicated from previous rulings, the Court concludes
that Vermont law requires privity in order to sustain a cause of action for breach of an implied
warranty. Implied warranties arise from the business of selling rather than the business of
manufacturing. Bolkum v. Staab, 133 Vt. 467, 470 (1975). Indeed, in the limited number of
cases addressing this issue, Vermont courts have generally rejected the contention that warranties
can be implied in the absence of a contract between the parties. See Mainline Tractor & Equip.
Co., Inc., v. Nutrite Corp., 937 F. Supp. 1096 (D. Vt. 1996) (lack of privity barred recovery in
products liability case under implied warranty theories); Kinney v. Goodyear Tire & Rubber Co.,
134 Vt. 571 (1976) (express warranty claim not controlling on statute of limitations issue in
products liability case because lack of privity barred warranty claim); Mount Snow, No. 564-12-

                                                 8
03 Wmcv (Vt. Super. Ct. Oct. 24, 2007) (Howard, J.) at 10 (underlying policies of the limitation
on duty reflected in the economic loss rule would be undermined and effectively nullified if
Court were to allow an action based on implied warranties despite the lack of a contractual right
or duty); Treetop, No. 147-3-09 Wmcv, at 10 (Vt. Super. Ct. Feb. 4, 2011) (Wesley, J.)
(“recognition of implied warranties [absent privity or any party guarantees] would have a
corrosive effect on the policies furthered by the economic loss doctrine”). See also Davencourt,
221 P.3d.at 252 (Utah joining the “overwhelming majority of states” in requiring there be privity
of contract in order to bring a claim for breach of implied warranty).

        Further, whether or not a party is a third-party beneficiary is a matter of law and is based
on the intention of the original contracting parties. Morrisville Lumber Co., Inc. v. Okcuoglu,
148 Vt. 180, 184-85 (1987). A party alleging third-party beneficiary status must present
evidence indicating that the parties in privity entered into their agreement in contemplation of
conferring a benefit on the third party. Id.; Hedges v. Durrance, 175 Vt. 588, 590 (2003)
(“plaintiff must prove that the primary purpose and intent of the [contractual] relationship was to
benefit or influence the third party” in order to establish third-party beneficiary status).

        In Mount Snow, this Court dismissed the association’s claims against the architect,
recognizing specifically that there was no privity of contract with the Association. No. 564-12-
03 Wmcv, at 4-5 (Orders of Mar. 7, 2007 and Oct. 24, 2007). More recently in Treetop, this
Court rejected the association’s attempt to assert third-party beneficiary status, since Vermont
law requires evidence that the contracting parties contemplated conferring a benefit on the third
party. Since there is no evidence in this case that the conferral of such a benefit on Long Trail
was ever contemplated by the contracting parties, and in consideration of the clear and
unambiguous language in the Agreement between Stratton and Engelberth that their contract
created no contractual relationship of any kind between any persons or entities other than
Stratton and Engelberth (Article 1.1.2), resolution of this issue is guided by this Court’s holdings
in Mount Snow and Treetop, and accordingly, Engelberth’s Motion for Summary Judgment as to
the Association’s contract claims is granted.

       III.    Defendant Engelberth’s Motion for Sanctions is moot as a result of this
               decision.

         Defendant Engelberth has also filed a Motion for Sanctions against the Association
stemming from a deposition of Association President Sidney Stein, a 30(b)(6) witness produced
by the Association. Engelberth charges that Mr. Stein was inadequately prepared for this
deposition, despite Engelberth’s requests that the Association’s 30(b)(6) witness be able to
testify as to certain pre-specified matters. The Association responds by alleging that
Engelberth’s requests were unreasonable, and that Engelberth has failed to engage in good-faith
negotiations with the Association to settle this discovery dispute prior to seeking the Court’s
intervention. Without inquiring further into the merits of the parties’ contentions, the Court
concludes that its decision granting Defendant summary judgment effectively moots the request
for sanctions.

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                                  ORDER
WHEREFORE it is hereby ORDERED:

  Defendant Engelberth’s Motion for Summary Judgment is GRANTED.
  Defendant Engelberth’s Motion for Sanction is DENIED as moot.

  Dated at Newfane, Vermont this 1st    day of September, 2011.

                                        _____________________________
                                        John P. Wesley
                                        Presiding Judge

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