Elhannon, LLC et al v. The F.A. Bartlett Tree Expert Company

Filing 138

OPINION AND ORDER denying 124 Motion to Dismiss; denying 124 Motion for Summary Judgment. Signed by Judge William K. Sessions III on 8/2/2017. (jam)

UNITED STATES DISTRICT COURT
FOR THE
DISTRICT OF VERMONT

ELHANNON LLC,et al
Plaintiffs,
v.
THE F.A. BARTLETT TREE EXPERT
COMPANY,
Defendant.

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Case No. 2:14-cv-262

OPINION AND ORDER
I. Introduction
This matter arises from a contract and consumer fraud
dispute between Plaintiffs Elhannon Wholesale Nurseries, LLC, a
New York corporation, and its predecessors (collectively
“Elhannon”), and Defendant F.A. Bartlett Tree Expert Company
(“Bartlett”), a Connecticut corporation. Elhannon alleges that
between 2007 and 2014, the parties entered into a series of
contracts calling for Bartlett to design and execute an
integrated pest management program for Elhannon’s entire tree
nursery, which it called the “MoniTor” program. Elhannon alleges
that, despite Bartlett’s representations and contractual
promises, Bartlett employees underserviced the nursery, leading
to a large scale outbreak of disease and insects on its trees.
In addition, Elhannon alleges that Bartlett applied chemicals
that were illegal under New York law to Elhannon’s nursery in
order to attempt to control an incipient outbreak. Finally, the

Amended Complaint states that Bartlett falsified its records to
give the impression that it was doing more work at Elhannon than
it actually performed, and that Bartlett improperly billed
Elhannon for work done for others. As a consequence of these
failures, Elhannon alleged that it had to destroy trees valued
at several million dollars and to implement its own pest
management program. Elhannon brings claims for breach of
contract, negligence, negligent misrepresentation, fraud and
intentional misrepresentation, fraud in the performance, and
violations of New York’s General Business Law.
Following a series of discovery disputes, the Court granted
the parties’ joint motion for a revised discovery schedule. ECF
128. Discovery is now set to be completed by November 30, 2017,
and summary judgment motions are due on December 31, 2017.
Nevertheless, on June 7, 2017, Bartlett filed a motion for
dismissal based on spoliation of the evidence and a motion for
summary judgment. ECF 124. In the first motion, Bartlett
contends that it was prejudiced by Plaintiff’s destruction of
“the very trees for which [Elhannon] seeks millions of dollars
in damages from Bartlett.” Id. at 5. As a result of this alleged
spoliation of the evidence, Bartlett contends that it will be
unable to challenge Plaintiff’s claims about the number of trees
that were allegedly damaged by its conduct, or to independently

2

determine the cause of the alleged damage. Rather, it may only
assess the cause and scope of the damages from the documentary
evidence that Elhannon gathered before destroying the trees, as
well as its inspection of the nursery after much of the tree
destruction took place. Consequently, Bartlett moves the Court
to (i) dismiss the Amended Complaint and award it attorneys’
fees; (ii) hold an evidentiary hearing on the spoliation issue
to allow it to present evidence that the harm it has suffered
from Elhannon’s destruction of evidence warrants dismissal; or
(iii) grant any other relief it finds just and proper.
Furthermore, Bartlett asserts that Plaintiffs do not own
the trees on the Nursey, or the Nursery itself. As a result,
Defendant argues that Plaintiffs have sustained no physical harm
and cannot recover for economic losses in tort. In addition,
Bartlett asserts that Plaintiffs have not suffered compensable
damages under any alternative theory, including harm caused by
illegal spraying, loss of business reputation, or Elhannon’s
alleged payment for work performed for other Bartlett customers.
Thus, Bartlett argues that no rational jury could find in
Elhannon’s favor, and moves for summary judgment on all counts
of Plaintiff’s amended complaint. Elhannon opposes both motions,
asserting that its removal of trees was necessary to mitigate
damages to the nursery, that it did, in fact, own the trees on

3

the nursery, and that it has sustained damages. For the reasons
discussed below, the Court denies Bartlett’s motions.
II.
a.

Discussion

Motion to Dismiss Due to Spoliation of Evidence
A district court may impose sanctions for spoliation

pursuant to its inherent power to control litigation. See West
v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999).
Spoliation is defined as “the destruction or significant
alteration of evidence, or the failure to preserve property for
another's use as evidence in pending or reasonably foreseeable
litigation.” Id. Courts should craft sanctions in order to (1)
deter parties from engaging in spoliation; (2) place the risk of
an erroneous judgment on the party who wrongfully created the
risk; and (3) restore the prejudiced party to the same position
he would have been in absent the destruction of evidence by the
opposing party. Id. Although a court may choose to dismiss a
case as a sanction for spoliation, it should do so “only in
extreme circumstances, usually after consideration of
alternative, less drastic sanctions.” Id. (quoting John B. Hull,
Inc. v. Waterbury Petroleum Prods., Inc., 845 F.2d 1172, 1176
(2d Cir. 1988). Thus, before dismissing a party’s case, the
court should first consider whether dismissal is the only
adequate remedy to “vindicate the trifold aims” of the
4

spoliation sanctions doctrine. Id. at 780; see also Dahoda v.
John Deere Co., 216 F. App'x 124, 125–26 (2d Cir. 2007)
(considering whether “no lesser sanctions exist that would cure
the potential prejudice” before concluding that district court
abused its discretion in dismissing case for spoliation).
In order to obtain an adverse inference instruction based
on spoliation –a lesser sanction than dismissal –a party must
establish “(1) that the party having control over the evidence
had an obligation to preserve it at the time it was destroyed;
(2) that the records were destroyed with a culpable state of
mind; and (3) that the destroyed evidence was relevant to the
party's claim or defense such that a reasonable trier of fact
could find that it would support that claim or defense.” Chin v.
Port Auth. of N.Y. & New Jersey, 685 F.3d 135, 162 (2d Cir.
2012) (quoting Residential Funding Corp. v. DeGeorge Fin. Corp.,
306 F.3d 99, 107 (2d Cir.2002)). Dismissal, however, requires a
stronger showing of a “culpable state of mind” than a mere
instruction. See e.g., Great N. Ins. Co. v. Power Cooling, Inc.,
Case No. 06-CV-874, 2007 WL 2687666, at *10 (E.D.N.Y. Sept. 10,
2007) (holding that degree of fault did not warrant dismissal,
but did establish that Plaintiff acted with requisite
culpability to warrant a lesser sanction). The harshest sanction
“is appropriate if there is a showing of willfulness, bad faith,

5

or fault on the part of the sanctioned party.” West, 167 F.3d at
779. “Although dismissal can be entered even absent a finding of
bad faith or willfulness, see Reilly v. Natwest Mkts. Group,
Inc., 181 F.3d 253, 267 (2d Cir.1999) (noting that gross
negligence constitutes showing of “fault” that could warrant
sanction of dismissal), the degree of fault on the part of the
plaintiff is a relevant consideration in fashioning an
appropriate sanction.” Dahoda, 216 F. App'x at 125. In
considering the degree of fault, for example, the Second Circuit
has looked to whether the non-moving party exhibited dilatory
behavior or compliance with prior discovery orders. See Metro
Found. Contractors, Inc. v. Arch Ins. Co., 551 F. App'x 607, 610
(2d Cir. 2014). Ultimately, the Second Circuit has found that a
“case-by-case approach to the failure to produce evidence” is
appropriate because “such failures occur along a continuum of
fault –ranging from innocence through the degrees of negligence
to intentionality.” Residential Funding Corp. v. DeGeorge Fin.
Corp., 306 F.3d 99, 107–08 (2d Cir. 2002) (internal quotation
omitted).
Here, there is no question that Elhannon acted willfully in
destroying the allegedly infected trees. In fact, Elhannon
clearly acted with the prospect of litigation in mind in doing
so, since, according to Mr. Sutton’s testimony, it believed

6

removal was necessary in order to mitigate damages. ECF 129-2;
129-7, p. 3-4. That concern was warranted: in certain
circumstances, New York law 1 imposes an obligation on a “party
subjected to injury from the breach of a contract ... to make
reasonable efforts to render the injury as light as possible.”
Losei Realty Corp. v. City of N.Y., 254 N.Y. 41, 47–48, 171 N.E.
899, 902 (1930); see also Cornell v. T. V. Dev. Corp., 17 N.Y.2d
69, 74, 215 N.E.2d 349, 352 (1966) (“While the plaintiff is
required to mitigate damages upon breach, the burden of proving
a lack of diligent effort to mitigate damages is upon the
defendant”); Donald Rubin, Inc. v. Schwartz, 191 A.D.2d 171,
171–72, 594 N.Y.S.2d 193, 194 (1993) (“The obligation to
mitigate damages [in a contract dispute] turns upon the
particular facts in the individual case.”). In the same vein, a
party who is injured in tort may have an obligation to employ
“reasonable and proper efforts to make the damage as small as
practicable.” N.Y. Tel. Co. v. Harrison & Burrowes Bridge
Contractors, Inc., 3 A.D.3d 606, 609–10, 771 N.Y.S.2d 187, 191
(2004) (internal quotation omitted).
However, parties to a dispute may also be subject to an
obligation to preserve evidence for purposes of litigation. “The
obligation to preserve evidence arises when the party has notice
1

For the reasons outlined in the Court’s last order on Defendant’s prior
motion to dismiss, ECF 25, New York law guides the substance of the contract
and torts disputes in this case.

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that the evidence is relevant to litigation or when a party
should have known that the evidence may be relevant to future
litigation.” Fujitsu Ltd. v. Fed. Exp. Corp., 247 F.3d 423, 436
(2d Cir. 2001). “Identifying the boundaries of the duty to
preserve involves two related inquiries: when does the duty to
preserve attach, and what evidence must be preserved?” Zubulake
v. UBS Warburg LLC, 220 F.R.D. 212, 216 (S.D.N.Y. 2003). In this
case, the damage to the trees is the primary subject-matter of
the litigation, and is therefore clearly relevant. Moreover, the
duty to preserve the physical evidence attached, at latest, on
December 10, 2014, when Elhannon filed its first complaint in
this case. ECF 1; see Id. (finding that duty to preserve
attached at latest when employee alleging discrimination filed
her complaint before the Equal Employment Opportunity
Commission). 2 In fact, Elhannon continued to destroy trees after
this point. See ECF 129-1, p. 5 (acknowledging that, according
to Elhannon’s payroll records, its tree destruction ended in the
week of September 11, 2016).
In this sense, Elhannon was arguably subjected to competing
obligations with respect to the tree destruction: on the one
hand, to destroy trees that could cause further damages, and on
2

It is arguable that the obligation attached sooner, such as at some point
after Elhannon received Bartlett’s response to its demand letter dated
September 8, 2014. Bartlett’s denial of liability at this point would have
put Elhannon on notice that future litigation was likely, and that the nature
of the tree damage would likely be the subject of that litigation.

8

the other hand to preserve trees that might serve as physical
evidence of the injury it suffered in this case. While not
binding on this Court, district courts’ decisions from other
circuits provide a persuasive framework for addressing
situations when a party’s obligations regarding the preservation
of physical evidence are in tension. First, courts have noted
that “evidence that a party destroyed evidence in the course of
mitigating damages is relevant to whether the destruction was
intentional and in bad faith.” Flint Hills Res. LP v. Lovegreen
Turbine Servs., Inc., Case No. 04-4699 JRT/FLN, 2006 WL 2472819,
at *5 (D. Minn. Aug. 25, 2006). In Flint, the district court
found that dismissal was not warranted even where the opposing
party was not provided with the opportunity to inspect the
physical evidence, where removal of that evidence was necessary
to avoid accruing damages of roughly a million dollars per day
and the non-moving party took “all reasonable steps to preserve
evidence” by documenting the physical evidence with photographs
and notes and saving fragments of the removed evidence. Id. In
contrast, other district courts have found that spoliation
sanctions may be required where the failure to preserve evidence
in its original state “was not urgently required” or necessary
for purposes of mitigation. See e.g., PacifiCorp v. Nw. Pipeline
GP, 879 F. Supp. 2d 1171, 1192–94 (D. Or. 2012).

9

Here, Elhannon points to the affidavit of James Sutton,
Elhannon’s president, along with evidence from its tree experts,
to support its contention that the purpose of destroying the
nursery trees was to mitigate its damages arising from the harm
allegedly caused by Bartlett. ECF 130, p. 8. 3 Separately,
Elhannon argues that dismissal would not be warranted even if
the court were to find a culpable mental state because, “long
before filing this lawsuit [it] diligently documented the damage
to the trees, and also its destruction of the trees, in several
hundred photos (nearly 350) and videos (110), and also compiled
a detailed spreadsheet listing the destroyed trees,” which it
provided to Bartlett three months before filing suit. Id. at 12.
In contrast, Bartlett implies –although it does not
expressly argue so in its initial motion –that the destruction
of the physical evidence in this case was more widespread than
necessary to mitigate damages attributable to its own conduct.
Bartlett’s expert, Judd Scott, attended a site inspection at the
nursery in June 2016. He later reported that “there was no way
for Bartlett to confirm the alleged damages because the trees
had either been destroyed, or were not identified by Elhannon,

3

In particular, Elhannon contends that the destruction of trees was necessary
to limit the further spread of infestations to other trees at the nursery; to
avoid and/or limit Elhannon’s reputational damage in the wholesale tree
nursery industry; and to avoid violating New York law, which designates
diseased or infested trees at nurseries as public nuisances subject to
destruction by a state agency, eradication orders and quarantine orders. Id.
at 8-9.

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so that Bartlett could inspect them.” ECF 124-13, p. 3. Bartlett
points to some examples, however, of trees which Bartlett was
able to obtain for testing which were not in fact infested by
pests by the time that Bartlett had access to them. In addition,
it points to testimony by Elhannon’s expert, Jeffrey Ling, who
inspected the nursery in September 2014, stating that he could
not conclude that Bartlett was the cause of the damage to
certain, photographed trees.

This evidence suggests that

Elhannon may have destroyed trees that were either not infested
by pests or disease (and therefore potentially unnecessary to
remove for purposes of mitigating damages), or that were not
damaged as a consequence of Bartlett’s conduct.
In short, the evidence presented by the parties at this
stage –in the form of affidavits, experts’ reports and
deposition testimony –suggests that there is a dispute of fact
concerning whether all of the destruction of the trees was, in
fact, necessary in order to mitigate damages, or whether it
actually produced unnecessary losses that were unrelated to
Bartlett’s conduct. However, Plaintiffs have presented facts
suggesting that destruction was required for mitigation with
respect to at least some of the trees, and Defendants have not
made the case that none of the tree destruction was warranted.
For example, some of Mr. Ling’s testimony suggests that

11

causation can be determined from the photographic evidence
Elhannon collected, and Mr. Sutton’s testimony, if credited by a
factfinder, would suggest that he destroyed trees which he found
to be damaged by insects or disease. ECF 124-12. Under these
circumstances, the Court finds that at least some of Elhannon’s
tree destruction was necessary to mitigate damages, and that, in
the absence of a court order on this issue at the time,
Plaintiff’s efforts to preserve evidence through photographs and
videos were reasonable. 4 Accordingly, Defendants have not made a
sufficient showing of fault or bad faith in the destruction of
the physical evidence to warrant dismissal of Plaintiff’s case
in its entirety on this ground. See, e.g., PacifiCorp, 879 F.
Supp. 2d at 1192–94; Flint Hills Res. LP, 2006 WL 2472819 at *5.
Nevertheless, the Court will reserve judgment on whether
alternative sanctions might be necessary –including applying an
adverse inference instruction to the evaluation of evidence in
this case –if Plaintiffs are unable to show at a later stage
that all of their tree destruction was, in fact, necessary to
mitigate damages.
Finally, the Court is not persuaded that the prejudice
suffered by Defendants in this case is so extreme that dismissal
4

Elhannon also notified Bartlett that it had had to destroy trees “valued at
several million dollars” in September 2014, before it filed suit in this
case. ECF 124-8. Since Bartlett received notice only after a good number of
trees had already been destroyed, the Court will not fault Bartlett for
failing to solicit an inspection at that point in reaching its conclusion.

12

would be warranted even though Plaintiffs’ degree of fault in
destroying the evidence was limited. Elhannon notified
Defendants of its continuing destruction of trees prior to
filing this lawsuit, and allowed Defendants to inspect the
nursery after the lawsuit began. Its employees also documented
the trees with photographs and videos. Although Defendant has
pointed to errors in Elhannon’s own tally and record-keeping of
the scale of tree damage attributable to Bartlett, it has not
sufficiently demonstrated that it would be entirely unable to
challenge Elhannon’s calculation on the basis of the available
evidence. In fact, Mr. Ling has challenged whether the damage
was attributable to insects or disease, and thus whether
Bartlett was responsible for the injury, in just this manner.
Moreover, if the evidence collected by Elhannon about the
damaged trees is insufficient to demonstrate causation, Elhannon
will be prejudiced thereby, since it carries the burden of
proving this element of its claim by a preponderance of the
evidence. Finally, even if the limitations in the available
evidence were more prejudicial to Bartlett than to Elhannon, the
Court may be able to rectify that prejudice by providing an
adverse inference instruction with regard to a certain
subsection of the tree destruction. Thus, the Court finds that
complete dismissal of Plaintiff’s case is not warranted in light

13

of the particular circumstances surrounding the destruction of
evidence in this case. 5
b.

Motion for Summary Judgment for Failure to Prove

Damages
Next, Bartlett also moves for summary judgment on the
ground that there is no genuine dispute of fact concerning
whether Elhannon sustained damages, and therefore that no
rational juror could find in Elhannon’s favor.

In particular,

Defendant contends that Elhannon did not incur damages because
it does not own the damaged trees, and because Elhannon has
failed to provide evidence that it suffered any other form of
injury. In response, Elhannon challenges the factual basis for
Defendant’s motion.
i.

Standard of review
Summary judgment should be granted if the movant shows that

there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(a). “An issue of fact is genuine if the evidence is such
that a reasonable jury could return a verdict for the nonmoving
party. A fact is material if it might affect the outcome of the
suit under the governing law.” SCR Joint Venture L.P. v.
5

In light of the Court’s conclusion on the spoliation claim, the Court need
not address whether Defendant’s motion should be denied as untimely.

14

Warshawsky, 559 F.3d 133, 137 (2d Cir. 2009) (citing Roe v. City
of Waterbury, 542 F.3d 31, 35 (2d Cir.2008)). Thus, summary
judgment must be entered “against a party who fails to make a
showing sufficient to establish the existence of an element
essential to that party's case, and on which that party will
bear the burden of proof at trial.” Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986).
“[O]n summary judgment the inferences to be drawn from the
underlying facts ... must be viewed in the light most favorable
to the party opposing the motion.” Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 587–88 (1986) (citing
United States v. Diebold, Inc., 369 U.S. 654, 655 (1962))
(internal quotations omitted). However, “a court is obliged not
to consider inadmissible evidence at the summary judgment stage,
[and] it remains in that court's discretion whether to strike
the inadmissible portions or simply disregard them.” Pacenza v.
IBM Corp., 363 F. App'x 128, 130 (2d Cir. 2010).
Finally, “the nonmoving party must have had the opportunity
to discover information that is essential to his opposition to
the motion for summary judgment.” Hellstrom v. U.S. Dep't of
Veterans Affairs, 201 F.3d 94, 97 (2d Cir. 2000) (internal
quotation omitted). As such, “only in the rarest of cases may
summary judgment be granted against a plaintiff who has not been
15

afforded the opportunity to conduct discovery.” Id.; see also
Morales v. Pallito, Case No. 1:12-CV-247, 2012 WL 7748859, at *1
(D. Vt. Dec. 18, 2012), report and recommendation adopted, Case
No. 1:12-CV-247-JGM-JMC, 2013 WL 1089878 (D. Vt. Mar. 15, 2013)
(“Generally speaking, it is appropriate for a party to move for
summary judgment after both sides have had a meaningful
opportunity to conduct discovery.”); G-I Holdings, Inc. v. Baron
& Budd, 213 F.R.D. 146, 150 (S.D.N.Y. 2003) (“Because the
parties are now in the midst of continuing discovery, it would
be appropriate to deal with a consolidated summary judgment
motion from all the defendants on all potential issues
(including the one dealt with in the instant summary judgment
motion) at the close of discovery.”). Nevertheless, where the
record is well-developed or the non-moving party has failed to
identify the essential facts that he seeks to discover, the
Second Circuit has declined to reverse district courts’ grants
of summary judgment prior to the close of discovery. See Young
v. Benjamin Dev. Inc., 395 F. App'x 721, 722–23 (2d Cir. 2010);
Trammell v. Keane, 338 F.3d 155, 161 (2d Cir. 2003).
Although Bartlett has moved for summary judgment prior to
the close of discovery, Elhannon has not argued in response that
a summary judgment decision would be inappropriate at this
stage. However, the Court notes that even if Bartlett had set

16

forth more persuasive arguments for granting summary judgment on
the basis of the evidence discovered until this point,
adjudication would be more appropriate after the close of
discovery. Nevertheless, since the admissible evidence
discovered to date suggests that there are at least material
disputes of fact on the damages issues raised in Bartlett’s
motion, the Court will deny the motion at this stage.
ii.

Material disputes of fact require denial of summary

judgment
Defendant contends that “there is no genuine issue of
material fact that the Plaintiffs have not been damaged by any
of the alleged wrongful conduct of Bartlett.” ECF 124, p. 23. As
a preliminary matter, Bartlett argues that that Plaintiff must
sustain physical harm to recover in tort. Id. As a result,
Defendant seeks dismissal of counts III, IV, V and VI, but does
not address the breach of contract or New York statutory claims. 6
In response, Elhannon does not challenge the need to show
physical harm, or address the applicability of Defendant’s
arguments to the non-tort claims. Rather, it asserts that
Defendants overlook key facts contradicting the evidence
Bartlett has set forth.
6

Nevertheless, at the end of its motion, Defendant seeks dismissal of “all
counts of Plaintiffs’ Amended Complaint.” Id. at 29. In the absence of any
argument pertaining to counts I and VII, however, the Court sees no need to
address potential problems with these claims.

17

The Court agrees that, at a minimum, material disputes of
fact preclude summary judgment on Elhannon’s tort claims. New
York law generally requires a showing of physical injury or
damage to property to recover in tort. See Caronia v. Philip
Morris USA, Inc., 22 N.Y.3d 439, 452, 5 N.E.3d 11 (2013)
(“Allowance of such a [tort] claim, absent any evidence of
present physical injury or damage to property, would constitute
a significant deviation from our tort jurisprudence.”); but see
Johnson v. N.Y. City Bd. of Educ., 270 A.D.2d 310, 312, 704
N.Y.S.2d 281, 283 (2000) (“physical injury is no longer a
necessary element of a cause of action for negligent infliction
of emotional distress”). In particular, “plaintiffs must plead
actual injuries or damages, resulting from defendants’ conduct,
as an essential element of” negligence, negligent
misrepresentation, and fraud. See Frank v. DaimlerChrysler
Corp., 292 A.D.2d 118, 121–22, 741 N.Y.S.2d 9, 12–13 (2002)
(collecting cases).
Bartlett does not provide support for its assertion that
only a tort plaintiff who has an ownership interest over
property that he or she claims as the subject of injury is
entitled to damages. Rather, Defendant assumes that no other
type of proprietary interest is relevant to determining whether
a plaintiff has shown injury. In fact, this Court’s review of

18

New York’s jurisprudence reveals a somewhat more complex set of
norms, with some courts contemplating potential damages arising
from torts claims for individuals who do not own the property at
issue in their suit. See, e.g., Julia Properties, LLC v. Levy,
137 A.D.3d 1224, 1226 (N.Y. App. Div. 2016) (concluding that
“the mere fact that the plaintiff [lessee] expended no money to
repair any damage to the property does not warrant dismissal of
the cause of action alleging trespass.”); Abbo-Bradley v. City
of Niagara Falls, 132 A.D.3d 1318, 1320 (N.Y. App. Div.) (the
court erred in denying those parts of their respective motions
seeking to dismiss the third and fourth causes of action,
asserting private nuisance and trespass, as alleged by
plaintiffs as parents and natural guardians of their infant
children, inasmuch as plaintiffs' children lack an ownership or
possessory interest in the respective properties (emphasis
added)).
Nevertheless, even if the law requires nothing less than
Elhannon’s full ownership of the trees in order for the nursery
to recover for damages to them, there is at least a material
dispute of fact concerning the ownership question. First,
Bartlett contends that Elhannon’s president, Mr. Sutton,
testified in unrelated cases that he (rather than Elhannon) was
the owner of the trees on the nursery. However, the parties

19

disagree about whether that testimony would apply to the
relevant time period in this suit: Elhannon contends that
ownership of the trees transferred to Elhannon on August 1,
2011, when the Suttons executed leases in favor of Elhannon, and
that the ownership-related statements made in suits arising
before that time are no longer applicable. 7 Bartlett argues that
Mr. Sutton made two statements after the leases were executed,
however, indicating that ownership of the trees remained with
the Suttons. In fact, however, even in the excerpts identified
in Bartlett’s brief, Mr. Sutton only represented that he owned
the property or land at a given address at a particular time. He
also stated that “per IRS rules the trees are grown under a
personal name” when asked how “the growing of the trees
operated.” ECF 124-21, p. 3. However, he made no statements

7

First, Elhannon argues in its response that Mr. Sutton’s statement that he
and his wife “were the only owners of the trees and plants involved in the
transactions at issue in this cause of action,” ECF 124-19, p. 1, is not
problematic, because the cause of action at issue (Harrington, Apex Nursery,
Inc., and Elhannon Wholesale Nurseries LLC v. Sutton) pertained to events
which took place before June 9, 2011, the date the suit was filed. See ECF
129, p. 4. Bartlett does not dispute this assertion in its reply. Second,
Elhannon contends that Mr. Sutton’s statements in Galusha Transport LLC v.
Elhannon are not in conflict with his statements in this case because the
events at issue in that lawsuit occurred in May and June, 2011. In reply,
Bartlett asserts that Mr. Sutton represented that he owned the trees at the
time of his deposition, which took place in 2012, after the leases were
executed. See ECF 131, p. 5-6 (citing ECF 124-21). As noted above, Mr. Sutton
did not actually make such a representation about the trees, but rather about
the property at issue. Finally, Elhannon argues that Mr. Sutton’s statements
about the ownership of the trees in a third lawsuit, D. James Sutton and Ruth
Sutton v. Jerome Construction, Inc., and Felicity Harrington Purzycki, also
pertain to events which occurred in 2010 and 2011. Elhannon does not refute
this assertion in its reply, but rather sets forth deposition testimony –
which does not directly address the issue of tree ownership –in yet another
case.

20

concerning the ownership of the trees. As such, the Court finds
that this evidence does not squarely resolve the issue that
Bartlett purports it to: namely, whether the Plaintiffs can show
that they suffered damages as a result of the torts they allege.
Even assuming, for the sake of argument, that evidence from
the other lawsuits is admissible and relevant to the time period
at issue here, a material dispute of fact arises from the
evidence at issue in this case. In particular, Mr. Sutton made
contrary statements about tree ownership in his deposition in
this case — namely, by testifying in September 2016 that
Elhannon, rather than the Suttons, now owned the trees. At a
minimum, this statement creates a material dispute of fact
concerning Elhannon’s relevant property interest in the trees,
and therefore at least a dispute about the validity of
Elhannon’s claim of physical property damages. Accordingly, this
inconsistency alone provides reason to deny Bartlett’s motion
for summary judgment.
Defendant contends that Supreme Court dicta should dissuade
this Court from finding a material dispute of fact based on Mr.
Sutton’s testimony in this suit. See ECF 131, p. 8 (citing
Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795, 806-07
(1999)). However, the Second Circuit authority Bartlett sets
forth for this assertion creates a more limited rule: that a
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party cannot create a dispute of fact by making a statement in
deposition testimony in a particular case which he or she later
contradicts through affidavits provided to avoid summary
judgment in the same case. See Perma Research & Dev. Co. v.
Singer Co., 410 F.2d 572, 578 (2d Cir. 1969) (“If a party who
has been examined at length on deposition could raise an issue
of fact simply by submitting an affidavit contradicting his own
prior testimony, this would greatly diminish the utility of
summary judgment as a procedure for screening out sham issues of
fact.”). More recently, the Second Circuit reversed a district
court’s decision to disregard conflicting deposition testimony
taken in a single matter at the summary judgment stage. Hayes v.
N.Y. City Dep't of Corr., 84 F.3d 614, 620 (2d Cir. 1996). In
Hayes, the Court noted that the second deposition was not taken
to avoid summary judgment; that the first deposition was less
reliable because it was taken without the presence of
Plaintiff’s counsel; and that the two deposition statements were
only “arguably contradictory.” Id. Similar circumstances arise
in this case, where the parties debate whether all or some of
the statements necessarily go to the same time period, the
deposition in this case was not undertaken solely for the
purpose of avoiding summary judgment, and the earlier statements
were made in other matters, such that Plaintiff’s counsel could
not have been attentive to the factual issues at play in the
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present case. Accordingly, in this context, no per-se rule
requires the Court to ignore Mr. Sutton’s conflicting statement
about Elhannon’s ownership of the trees in this case.
In addition, Elhannon points to ground leases dated August
1, 2011, whereby the Suttons lease property to Elhannon to use
the premises as a wholesale and retail nursery and landscaping
business. ECF 129-12. Plaintiffs argue that this lease itself is
evidence that Elhannon owns the trees, because New York courts
have held that nursery property tenants are the owners of the
nursery stock on leased property. See ECF 129, p. 8 (citing
Kelder v. State, 22 A.D.2d 999, 1000, 254 N.Y.S.2d 895, 898
(App. Div., 3d Dept. 1964)). In fact, the case cited by Elhannon
stands for the principle that where a fixture is sufficiently
annexed to the freehold so that it would pass between vendor and
purchaser, but is removable by a tenant if the right to remove
it is expressly reserved in the lease or implied from the
circumstances, the fixture is the property of the tenant who has
retained the right to remove it. Kelder, 22 A.D.2d at 999.
In this case, the leases at issue are somewhat unclear
about Elhannon’s right to remove trees from the property. In
fact, as Bartlett points out in its reply, the leases provide
that “all erections, alterations, additions and improvements,
whether temporary or permanent in character, which may be made
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upon the premises either by the Landlord or the Tenant, except
furniture or movable trade fixtures installed at the expense of
the Tenant, shall be the property of the Landlord and shall
remain upon and be surrendered with the premises as a part
thereof at the termination of this Lease, without compensation
to the tenant.” ECF 12-12, p.3. The leases do not specifically
mention the trees, or explain whether the trees would constitute
“movable trade fixtures” or “erections, alterations, additions
and improvements” to the property within the meaning of the
lease terms. However, it is relevant that the trees were clearly
intended to be used for Elhannon’s business and trade. See
Orange Cty.-Poughkeepsie M.S.A. Ltd. P'ship v. Bonte, , 754
N.Y.S.2d 312, 312 (2003) (“communications tower erected by the
plaintiff on the leased premises was a trade fixture, as it was
annexed to the leased premises by the plaintiff, and intended to
be used solely for the plaintiff's business and trade ... As
such, the tower remained the plaintiff's personal property.”
(internal quotation omitted)). Moreover, Mr. Sutton stated in
his affidavit that Elhannon retained the right to remove and
sell the trees on the leased properties. See ECF 129-2, p. 3.
Accordingly, although the Court has not been presented with a
full record on the circumstances relevant to Elhannon’s rights
over the trees as a tenant, the facts presented so far create at
least a dispute of fact concerning the Plaintiffs’ ownership
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rights over the trees. As such, Bartlett is not entitled to
summary judgment on this ground.
Finally, Bartlett further argues that Elhannon has not
suffered any other type of compensable injury caused by its
conduct. Since there is at least a dispute of fact concerning
whether Elhannon has suffered the primary damages it alleges
here – damage and disease to the trees it purports to have owned
– the Court need not resolve whether Elhannon has suffered
other, additional forms of damages. In any event, beyond those
forms of harm that Elhannon has conceded it will not seek,
Bartlett has merely alleged that Elhannon has not yet proven
additional forms of harm. Since discovery is ongoing, and
Elhannon may present additional evidence on the remaining
issues, 8 the Court finds it both premature and unnecessary to
determine whether there is sufficient evidentiary support for
the other forms of damages that Elhannon has alleged.
III. Conclusion
For the foregoing reasons, Defendant’s motion to dismiss
due to spoliation of the evidence and its motion for summary
judgment are denied.

8

Elhannon argues, for example, that some of the statements made by Felicity
Harrington that Bartlett relies upon in this regard are hearsay, and that Ms.
Harrington’s deposition has yet to be taken in this matter.

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Dated at Burlington, in the District of Vermont, this 2nd
day of August, 2017.
/s/ William K. Sessions III
William K. Sessions III
District Court Judge

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