Deborah George Development, LLC v. Southern Vermont Sprinkler Services, Inc. et al

Filing 63

OPINION AND ORDER denying without prejudice 27 Motion for Summary Judgment; denying without prejudice 30 Motion for Summary Judgment; denying 51 Motion to Strike Plaintiffs Statement of Disputed Facts; denying 54 Motion to Strike Plainti ff's Statement of Disputed Facts; granting 29 Motion to Amend the Discovery Schedule; the ptys shall submit a stipulated discovery schedule allowing an additional 90 days for discovery within 14 days of thisOpinion and Order. Signed by Judge William K. Sessions III on 9/20/2019. (jam)

UNITED STATES DISTRICT COURT
FOR THE
DISTRICT OF VERMONT
DEBORAH GEORGE DEVELOPMENT,
LLC,

)
)
)
)
)
)
)
)
)
)
)
)

Plaintiff,
v.
SOUTHERN VERMONT SPRINKLER
SERVICES, INC. and R.T.
STEARNS, INC.,
Defendants.

Case No. 2:18-cv-45

OPINION AND ORDER
Plaintiff Deborah George Development, LLC brings this
diversity action claiming Defendants are liable for improper
installation and implementation of a commercial fire protection
pump.

Now pending before the Court are Defendants’ motions for

summary judgment and motions to strike Plaintiff’s Statement of
Disputed Facts.

Plaintiff has filed a motion to amend the

discovery schedule.
Plaintiff opposes summary judgment, arguing that the case
requires additional discovery.

The Court agrees that summary

judgment at this juncture would be premature.

Accordingly, as

set forth more fully below, the motions for summary judgment are
denied without prejudice, the motions to strike are denied, and
the motion to amend the discovery schedule is granted.
Factual Background
Plaintiff is a limited liability company of which Deborah
George is the sole member.

Ms. George lives in California, and

her company’s principal office is located in Pacific Palisades,
California.

Defendant Southern Vermont Sprinkler Services, Inc.

(“SVSS”) is a Vermont corporation with a principal place of
business in Brattleboro, Vermont.

Defendant R.T. Stearns

(“Stearns”) is a New Hampshire corporation with a principal place
of business in Portsmouth, New Hampshire.
Plaintiff owns a shopping center complex in Hinsdale, New
Hampshire, known as the Shoppes at George’s Field.

The shopping

center is protected by a central fire protection system.

Water

for the system is stored in an approximately 100,000 gallon tank
underneath a below-grade fire pump house.

Inside the pump house

is a pump with a vertical turbine that extends down into the
tank.

The fire pump is powered by a motor that is bolted to the

pump house’s concrete floor.
In early 2015, Plaintiff determined that the fire pump
needed to be replaced, and in June 2015 contracted with SVSS to
install a replacement pump.

SVSS in turn contracted with

Defendant Stearns to purchase a pump from a manufacturer.
Stearns subsequently procured a pump and sold it to SVSS, which
then installed the replacement pump in Plaintiff’s pump house.
Installation of the replacement pump was completed on December
29, 2015.
During the installation process, SVSS needed to enlarge the
opening in the floor to accommodate the replacement pump.

2

Plaintiff claims that both Stearns and SVSS were aware the hole
would need to be enlarged.
the concrete floor.

SVSS enlarged the hole by chiseling

In an effort to catch falling debris, SVSS

created a seal by opening an umbrella under the hole, pulling it
tight to the opening, and tying it off.

SVSS also reportedly

used a vacuum cleaner to suck out the debris.
On June 28, 2016, Stearns’ technicians visited the pump
house to perform a field acceptance test of the replacement pump.
As part of this test, the technicians connected the new pump to a
hose to test water flow.
up.

During the flow test, the pump seized

The pump was then removed and returned to the manufacturer

for analysis.

Following that analysis, Stearns reported to SVSS

that grit and contaminants had degraded the pump, and that the
water quality issue needed to be fixed before the pump could be
re-installed.

The pump was repaired and delivered to SVSS.

There is a dispute of fact about responsibility for the grit
in the water.

SVSS claims that Plaintiff was required to have

the tank and sump area inspected every five years, and failed to
properly maintain the water.

Plaintiff alleges that the grit was

generated by the chiseling performed by SVSS around the pump
access hole.

Plaintiff further claims that the grit accumulated

near the pump intake line and was ingested into the pump.
Plaintiff denies that the accumulation of grit was caused by any
lack of either maintenance or inspection of the water tank.

3

The Complaint brings four causes of action.

Count I,

brought against both Defendants, alleges violation of the Vermont
Consumer Protection Act.

The primary factual allegation in Count

I is that Defendants misled Plaintiff by representing that the
pump was damaged as a result of Plaintiff’s failure to clean the
tank.

Count II, also brought against both Defendants, alleges

negligence with respect to the testing, servicing, and/or
installation of the replacement pump.

Count II also alleges

breach of a duty to advise Plaintiff that the tank needed to be
inspected and cleaned prior to testing.

Count III claims that

SVSS breached its contract by failing to properly install the new
pump.

Count IV alleges that SVSS breached the covenant of good

faith and fair dealing by concealing the cause of the
contaminants in the tank and instead blaming Plaintiff.
With respect to damages, the Complaint states that Plaintiff
has since hired a new contractor to install another fire pump at
a cost of approximately $65,000.

Plaintiff has also allegedly

expended time and resources to hire engineers to remove the
debris and investigate the source of water contamination in the
tank.

During the time period when there was no pump in place,

Plaintiff was reportedly compelled to hire a “fire watch” to
supervise and monitor the shopping center property.
Procedural Background
Plaintiff filed its Complaint on March 12, 2018.

4

A

Stipulated Discovery Order provided that expert witness reports
were to be submitted by October 1, 2018, and discovery closed by
January 30, 2019.
Plaintiff submits that it served discovery requests in
August 2018, but did not receive Defendants’ responses to those
requests until, at the earliest, January 8, 2019.

Plaintiff

further contends that it could not have been reasonably expected
to depose defendants’ witnesses prior to receiving and reviewing
those responses.
On February 1, 2019, within approximately three weeks of
sending its discovery responses, Stearns moved for summary
judgment.

On February 4, 2019, Plaintiff moved to amend the

discovery schedule to extend the deadlines for all depositions
and the Early Neutral Evaluation session.
judgment on February 8, 2019.

SVSS moved for summary

Both Defendants have opposed

amendment to the discovery schedule.
Plaintiff argues that given the lack of meaningful
discovery, the summary judgment motions should be denied as
premature.

Plaintiff has also submitted a statement of disputed

facts supported by a declaration from its expert, Dr. Timothy
Morse, who contends that fault for the pump failure lies with the
Defendants.

Defendants object to the Morse report as unsworn,

inadmissible and untimely, and have correspondingly moved to
strike Plaintiff’s Statement of Disputed Facts.

5

Discussion
I.

Summary Judgment Standard
Summary judgment is appropriate when “the movant shows that

there is no genuine dispute as to any material fact and the
movant is entitled to summary judgment as a matter of law.”
R. Civ. P. 56(a).

Fed.

“An issue of fact is ‘genuine’ if the evidence

is such that a reasonable jury could return a verdict for the
non-moving party.”

Senno v. Elmsford Union Free Sch. Dist., 812

F. Supp. 2d 454, 467 (S.D.N.Y. 2011) (quoting SCR Joint Venture
L.P. v. Warshawsky, 559 F.3d 133, 137 (2d Cir. 2009)).

A fact is

“material” if it might affect the outcome of the litigation under
the governing law.

Id.

In deciding a motion for summary

judgment, the Court construes the facts in the light most
favorable to the nonmovant and resolves all ambiguities and draws
all reasonable inferences against the movant.

Brod v. Omya,

Inc., 653 F.3d 156, 164 (2d Cir. 2011).
II.

SVSS’s Summary Judgment Motion
SVSS first argues that Plaintiff cannot prove its negligence

allegations without an expert.

Specifically, SVSS argues that

the standard of care required of a pump installer is beyond the
knowledge of a lay juror, and that expert opinion is required.
Because the original expert designation deadline has passed, SVSS
contends that Plaintiff’s expert submission is untimely and that
summary judgment should be granted.
6

Assuming for the sake of argument that expert testimony is
required to establish a negligence claim against SVSS, Plaintiff
has disclosed an expert.

On February 1, 2019, Plaintiff

disclosed Dr. Morse and served his opinions on the parties.

That

disclosure occurred within a few weeks of receiving SVSS’s
discovery responses, and prior to the filing of SVSS’s summary
judgment motion.

Dr. Morse assigns blame for the pump failure on

the ingestion of grit generated by expanding the hole in the
floor, and opines that such ingestion could have been avoided by
either preventing the accumulation of grit or positioning the
pump intake line such that it was sufficiently far away from the
grit.
Because Dr. Morse is arguably qualified to speak to SVSS’s
alleged negligence, the essential question is whether his
opinions should be disregarded due to the timing of their
disclosure.

As the procedural history suggests, discovery in

this case is in the early stages in part because of a significant
delay by Defendants in responding to Plaintiff’s discovery
requests.

And as set forth below, Plaintiff has established

sufficient grounds for amending the discovery schedule.

Under a

new discovery schedule, the disclosure of Dr. Morse will no
longer be untimely.

Accordingly, the Court will not grant

summary judgment to SVSS on the ground that a timely expert
opinion is lacking.

7

SVSS next contends that Plaintiff’s negligence claim is
barred by the economic loss doctrine.

The economic loss doctrine

generally “prohibits recovery in tort for purely economic
losses.”

EBWS, LLC v. Britly Corp., 2007 VT 37, ¶ 30, 181 Vt.

513, 928 A.2d 497.

The Vermont Supreme Court has explained:

In tort law, duties are imposed by law to protect the
public from harm, whereas in contract the parties
self-impose duties and protect themselves through
bargaining. Thus, negligence actions are limited to
those involving unanticipated physical injury, and
claimants cannot seek, through tort law, to alleviate
losses incurred pursuant to a contract.
Id. (citations and quotations omitted).

In Springfield

Hydroelectric Co. v. Copp, 172 Vt. 311, 316, 779 A.2d 67, 71–72
(2001), the Vermont Supreme Court noted that despite the general
rule, tort recovery for economic loss resulting from professional
negligence may be available depending “on whether there is a duty
of care independent of any contractual obligations.”

The court

further noted that “[n]egligence law does not generally recognize
a duty to exercise reasonable care to avoid intangible economic
loss to another unless one’s conduct has inflicted some
accompanying physical harm.”

Springfield Hydroelectric Co., 172

Vt. at 314, 779 A.2d at 70.
Here, the extent and type of damages suffered by Plaintiff
have not been fully established in discovery.

Nor has the

precise nature of SVSS’s legal relationship with Plaintiff and
any associated legal duties.

Because there are factual, and

8

perhaps also legal, issues to be developed, the Court declines to
grant summary judgment to SVSS on Plaintiff’s negligence claim at
this time.
The Court likewise finds that summary judgment would be
premature on Plaintiff’s breach of contract and breach of
covenant claims.

SVSS contends that the breach of contract claim

requires evidence of duty of care (the customs and practices of
pump installation) and causation.

SVSS again claims that such

evidence must include expert testimony.

SVSS similarly argues

that Plaintiff’s claim of breach of implied covenant of good
faith and fair dealing requires an expert to establish that it
caused the replacement pump to fail.

As explained above, the

Court will allow an extension of the expert designation deadline
and therefore declines to grant summary judgment on the ground
that expert opinion is lacking.
SVSS also contends that the breach of implied covenant of
good faith and fair dealing must be more than a mere recharacterization of the breach of contract claim, and that the
claims in this case fail that test.

Under Vermont law, “[a]

breach for violation of the implied covenant may form a separate
cause of action than for breach of contract, as long as the
counts are based on different conduct.”

Harsch Properties, inc.

v. Nicholas, 2007 VT 70, ¶ 14, 182 Vt. 196, 202, 932 A.2d 1045,
1050).

Plaintiff submits that its breach of implied covenant

9

claim is based not upon the contractual act of installing the
replacement pump, but instead upon SVSS’s conduct after
installation, and in particular SVSS’s contention that Plaintiff
was responsible for the tank’s contamination.

At this early

stage in the case, and without any directly-responsive legal
argument from SVSS, the Court will allow Plaintiff’s separate
claim for post-installation conduct to proceed.
SVSS’s final argument for summary judgment is that Plaintiff
cannot establish its claim under the VCPA.

Plaintiff alleges

that SVSS violated the VCPA when it blamed Plaintiff for the tank
contamination.

SVSS submits that the VCPA requires reliance on

an allegedly-deceptive statement, and that Plaintiff can not
establish such reliance.

Plaintiff counters that SVSS is reading

the VCPA too narrowly.
The VCPA prohibits “unfair methods of competition in
commerce” and “unfair or deceptive acts or practices in
commerce.”

9 V.S.A. § 2453.

It has been held that a consumer

bringing a claim under the VCPA must show three elements: “(1)
there must be a representation, practice, or omission likely to
mislead the consumer; (2) the consumer must be interpreting the
message reasonably under the circumstances; and (3) the
misleading effects must be ‘material,’ that is, likely to affect
the consumer’s conduct or decision with regard to a product.”
Greene v. Stevens Gas Serv., 2004 VT 67, ¶ 15, 177 Vt. 90, 97,

10

858 A.2d 238, 244 (2004) (quoting Peabody v. P.J.’s Auto Vill.,
153 Vt. 55 57, 569 A.2d 460, 462 (1989)).
Here, Plaintiff alleges that SVSS made deceptive statements
after the failure of the replacement pump.

Plaintiff then relied

on those statements, and was left without a functioning fire
prevention system.

Plaintiff claims that if SVSS had taken

responsibility for the broken pump from the outset, it would not
have expended time and money trying to diagnose and rectify the
problem.
SVSS argues there is no evidence that Plaintiff contracted
for goods or services after relying on allegedly misleading
statements.

SVSS also reiterates its assertion that expert

testimony is required.

As evidentiary issues may be fleshed out

through additional discovery, and expert testimony has been
secured, the Court finds that summary judgment on the VCPA claim
would again be premature.
III. R.T. Stearns’ Motion for Summary Judgment
Stearns’ motion for summary judgment mirrors that of SVSS in
several respects.

One distinguishing feature is its focus on the

lack of a direct contract between Stearns and Plaintiff.

To wit,

Stearns first argues that Plaintiff cannot bring a claim under
the VCPA because there was no contract between the parties, no
privity between the parties, and no communications with Plaintiff
prior to the failure of the pump.

11

With regard to contractual

privity, however, the Vermont Supreme Court has rejected a
privity requirement under the VCPA, noting that the statute
allows any consumer damaged by a false or fraudulent
misrepresentation or practice to sue “‘the seller, solicitor or
other violator.’”

Elkins v. Microsoft Corp., 174 Vt. 328, 331,

817 A.2d 9, 13 (2002).

“The statutory language contains no

privity requirement, that is, no provision that the consumer can
sue only the retailer and no one further up the supply chain.

In

general, we will not read provisions into the statute that are
not present unless it is necessary in order to make the statute
effective.”

Id.

Accordingly, Stearns may be sued under the VCPA

without a showing of either a direct contract or privity.
Stearns also argues that it cannot have made a
misrepresentation under the VCPA since it had no direct
communications with Plaintiff.

Plaintiff responds that although

it had no direct communications with Stearns, Stearns made
misrepresentations to SVSS which were then relayed to Plaintiff,
and upon which Plaintiff relied.

Plaintiff also submits that, at

the very least, it should be allowed the opportunity to depose
Stearns’ employees to determine the sufficiency of its VCPA
claim.

While the record is currently unclear as to any alleged

misrepresentations, as well as the extent of any damages suffered
as a result of those alleged misrepresentations, the Court agrees
that Plaintiff is entitled to additional discovery.

12

Stearns further argues that summary judgment should be
granted on Plaintiff’s negligence claim because, as the seller of
the pump to SVSS, it owed no duty to Plaintiff.

Plaintiff

alleges that, in addition to procuring a pump and delivering it
to SVSS, Stearns knew that the hole in the pump house floor would
need to be enlarged.

Stearns also allegedly sent technicians to

the pump house to perform a flow test, failed to check for grit,
and continued to run the pump even after discolored water began
to discharge.

Because these factual allegations suggest that

Plaintiff may be able to establish negligence by Stearns’
employees, summary judgment will not be granted on the negligence
claim at this time.
IV.

Motions to Strike Plaintiff’s Statement of Facts
Defendants have each moved to strike Plaintiff’s Statement

of Disputed Facts.

In large part, the motions take issue with

the letter submitted by Dr. Morse, arguing that the letter is
unsworn, untimely, inadmissible, and does not effectively dispute
Defendants’ facts.
As explained previously, Dr. Morse opines that the pump
failure could have been avoided if Defendants had taken certain
preventive steps.

Those opinions are clearly contrary to

Defendants’ causation theories.

While his initial letter was

unsworn, Plaintiff has submitted a replacement Declaration that
is verified under 28 U.S.C. § 1746.

13

Because the contents of the

Declaration are the same as the document it replaces, Defendants
cannot claim prejudice.
For reasons discussed below, the Court will grant
Plaintiff’s motion to amend the discovery schedule.

Accordingly,

any question about the timeliness of Dr. Morse’s designation as
an expert is currently moot.

Furthermore, because the motions

for summary judgment are being denied as premature, the propriety
of Plaintiff’s Statement of Disputed Facts is not directly at
issue.
V.

The motions to strike are therefore denied.

Motion to Amend the Discovery Schedule
Shortly after Stearns filed its summary judgment motion, and

before SVSS moved for summary judgment, Plaintiff moved to amend
the discovery schedule.

In its motion, Plaintiff explained that

Stearns had produced discovery responses on January 8, 2019, SVSS
on January 18, 2019, and that additional time was needed to take
depositions and engage in Early Neutral Evaluation (“ENE”).
Stearns and SVSS have both vigorously opposed the motion, arguing
that Plaintiff failed to properly prosecute its case.
This Court’s Local Rules require a party to show
“exceptional circumstances” when a motion to extend discovery is
filed after the expiration of the discovery deadline.
26(a)(7).
cause.”

L.R.

The Local Rules also require a showing of “good
Id.

Similarly, the Federal Rules of Civil Procedure

require “good cause” for modification of a discovery schedule,

14

Fed. R. Civ. P. 16(b)(4), while in general a party must show
“excusable neglect” when a motion is filed after the applicable
deadline has expired, Fed. R. Civ. P. 6(b).

The advisory

committee notes to the Federal Rules of Civil Procedure state
that because scheduling orders are set early in the case, a “good
cause” standard is appropriate and the movant need not show
either “manifest injustice” or “substantial hardship.”

Fed. R.

Civ. P. 16, advisory committee notes to 1983 amendments.
Here, Plaintiff filed its motion for amendment of the
discovery schedule four days after the January 30, 2019
expiration of the deadline for completion of discovery.
Plaintiff contends that its counsel contacted Defendants’
attorneys in mid-January 2019 with a request to revise the
existing discovery schedule.

Defendants’ counsel allegedly

failed to respond until after the deadline had expired and
summary judgment motions were filed.
Defendants argue, and Plaintiff concedes, that all three
parties failed to respond to discovery in a timely manner.
Indeed, Stearns served requests to produce on Plaintiff on July
31, 2018, and Plaintiff did not respond until February 1, 2019.
Nonetheless, as the summary judgment motions highlight, there are
issues of both fact and law in this case that require further
development, and the Second Circuit has repeatedly voiced its
preference for resolving cases on the merits rather than on the

15

basis of procedural shortcomings.

See Pecarsky v.

Galaxiworld.com Ltd., 249 F.3d 167, 174 (2d Cir. 2001) (“A clear
preference exists for cases to be adjudicated on the merits.”);
Salahuddin v. Cuomo, 861 F.2d 40, 42 (2d Cir. 1998) (citing the
“jurisprudential preference for adjudication of cases on their
merits rather than on the basis of formalities”).

Accordingly,

if Plaintiff can meet the applicable standards for amendment of
the discovery schedule, appropriate relief will be granted.
As Defendants note, there is little case law on what
constitutes an “exceptional circumstance” in discovery.
“Excusable neglect” under Rule 6(b) “is a somewhat elastic
concept and is not limited strictly to omissions caused by
circumstances beyond the control of the movant.”

Pioneer Inv.

Servs. Co. v. Brunswick Assocs. Ltd. Partnership, 507 U.S. 380,
391-92 (1993).

When considering whether conduct is excusable, a

district court should consider “all relevant circumstances
surrounding the party’s omission,” including “the danger of
prejudice . . . , the length of the delay and its potential
impact on judicial proceedings, the reason for the delay,
including whether it was within the reasonable control of the
movant, and whether the movant acted in good faith.”

Id. at 395.

“Good cause” depends on the diligence of the moving party,
“meaning that the moving party must show that the schedule cannot
have reasonably been met despite that party’s diligence.”

16

Grochowski v. Phoenix Constr., 318 F.3d 80, 86 (2d Cir. 2003).
While diligence is the “primary consideration,” the Court may
also consider “other relevant factors including, in particular,
whether allowing the amendment of the pleading at this stage of
the litigation will prejudice the defendants.”

Kassner v. 2nd

Ave. Delicatessen Inc., 496 F.3d 229, 244 (2d Cir. 2007).
In this case, Plaintiff’s diligence may be viewed in the
context of Defendants’ delayed responses to discovery.

When it

became clear that the delays would require an extension of the
discovery deadlines, Plaintiff’s counsel reached out to opposing
counsel but reportedly received no reply prior to the January 30,
2019 deadline.

When that deadline arrived and Plaintiff received

Stearns’ motion for summary judgment, Plaintiff filed its motion
to amend within days of the deadline’s expiration.
Despite Defendants’ protests to the contrary, any prejudice
resulting from a discovery extension will be minimal.

The

parties have engaged in paper discovery, and there have been no
depositions.

Expert designations and full expert reports need to

be exchanged and reviewed.

In other words, much significant

discovery remains to be performed.

Defendants have moved for

summary judgment, but their motions rely on an extremely limited
record, and their legal arguments will no doubt be revisited in
the course of the case.
Pursuant to the legal standards set forth above, the Court

17

finds that counsel acted with proper diligence when it first
contacted opposing counsel to seek consent to an amendment, then
filed its motion to amend within a few days of the discovery
deadline.

Compare Rent–A–Ctr., Inc. v. 47 Mamaroneck Ave. Corp.,

215 F.R.D. 100, 104 (S.D.N.Y. 2003) (denying motion to amend
where the motion was filed “four months, a substantial amount of
time, after the deadline in the Scheduling Order [had] passed”
and it was “time for [the] case to move forward”); NAS Elecs.,
Inc. v. Transtech Elecs. PTE Ltd., 262 F. Supp. 2d 134, 150–51
(S.D.N.Y. 2003) (denying motion to amend discovery schedule as
untimely where moving party “had knowledge of the facts and
circumstances in the case for a period of several years and could
have made their motion within the specified time period”).

The

Court also finds that Plaintiff has shown good cause for
amendment, and that any neglect in failing to file the motion to
amend before the discovery deadline was excusable.

The motion to

amend the discovery schedule is granted, and the parties shall
submit a stipulated discovery schedule to the Court within 14
days of this Opinion and Order.
Conclusion
For the reasons set forth above, Defendants’ motions for
summary judgment (ECF Nos. 27, 30) are denied without prejudice
to re-filing, Defendants’ motions to strike Plaintiff’s statement
of disputed facts (ECF Nos. 51, 54) are denied, and Plaintiff’s
18

motion to amend the discovery schedule (ECF No. 29) is granted.
The parties shall submit a stipulated discovery schedule allowing
an additional 90 days for discovery.

The stipulated discovery

schedule shall be submitted to the Court within 14 days of this
Opinion and Order.
DATED at Burlington, in the District of Vermont, this 20th
day of September, 2019.
/s/ William K. Sessions III
William K. Sessions III
District Court Judge

19