124 A.3d 489
Vt.2015Background
- Stratton hired Engelberth as general contractor to build a condominium complex (construction 1998–2000); water intrusion problems appeared during construction and continued; a condominium association claim was settled in 2007.
- In June 2007 Stratton sued Engelberth for negligence, breach of contract, and breach of warranty for water-related construction defects; Engelberth asserted statute-of-limitations defense and filed third-party indemnity claims against subcontractors.
- Engelberth moved for summary judgment in December 2012 on statute-of-limitations grounds; the trial court granted summary judgment in May 2013, concluding Stratton was on inquiry notice more than six years before suit.
- The trial court then issued an entry stating it would dismiss Engelberth’s third-party claims as moot unless opposed; no timely opposition was filed and the third-party claims were dismissed in August 2013.
- Stratton appealed the summary judgment; Engelberth later moved to amend the third-party dismissal to be "without prejudice" (fearing refile if appeal succeeded). After settlement and dismissal of the appeal, the trial court denied Engelberth’s motion to amend, holding the prior dismissal was an adjudication on the merits and Engelberth had waived timely objection.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Stratton’s claims against Engelberth were time-barred | Stratton argued its claims were timely (appeal from summary judgment) | Engelberth argued Stratton had inquiry notice >6 years before suit, so claims barred | Court granted summary judgment for Engelberth — Stratton’s claims barred by statute of limitations |
| Whether third-party indemnity claims were moot and could be dismissed with prejudice | Engelberth argued third-party indemnity claims are independent and survive dismissal of principal claim | Third-party defendants contended indemnity claims were contingent and moot if Engelberth incurred no liability to Stratton | Court held Engelberth’s third-party claims were moot because Engelberth had no liability to Stratton; dismissal with prejudice was proper |
| Whether dismissal should have been without prejudice under Rule 14 or Rule 41 | Engelberth argued Rule 14 dismissal is presumptively without prejudice and Rule 41 did not apply | Third-party defendants and court treated dismissal as under Rule 41(b)(3), which, absent specification, operates as adjudication on the merits | Court held Rule 41(b)(3) applied; silence meant dismissal operated as an adjudication on the merits (with prejudice) |
| Whether Engelberth waived right to preserve third-party claims by failing to timely object and by settling appeal | Engelberth argued it reasonably relied on dismissal being without prejudice and later sought amendment when circumstances changed | Defendants argued Engelberth had notice, failed to object when invited, and settled without preserving the claims | Court held Engelberth waived timely objection; its post hoc motion to amend was untimely and denied; law-of-the-case prevented revival |
Key Cases Cited
- Investment Properties, Inc. v. Lyttle, 739 A.2d 1222 (Vt. 1999) (express indemnity may be independent claim)
- Riblet Tramway Co. v. Marathon Elecs.-Avtek Drive Div., 621 A.2d 1274 (Vt. 1993) (if third-party plaintiff incurs no liability to principal plaintiff, third-party defendant incurs no liability)
- Coty v. Ramsey Assoc., Inc., 573 A.2d 694 (Vt. 1990) (law-of-the-case doctrine binds subsequent proceedings in same case)
- Bull v. Pinkham Eng’g Assocs., 752 A.2d 26 (Vt. 2000) (issues not raised in trial court are not preserved for appeal)
- U.S. v. Munsingwear, Inc., 340 U.S. 36 (U.S. 1950) (principle discouraging reopening after parties settle or lose right to contest)