Trevor v. Icon Legacy Custom Modular Homes, LLC

• Decision Date: 15 August 2019
• Docket Number: Nos. 18-162 & 18-257,s. 18-162 & 18-257
• Citation: 217 A.3d 496
• Parties: Dagney TREVOR v. ICON LEGACY CUSTOM MODULAR HOMES, LLC, et al.
• Court: Vermont Supreme Court

217 A.3d 496

Dagney TREVOR

v.ICON LEGACY CUSTOM MODULAR HOMES, LLC, et al.

Nos. 18-162 & 18-257

Supreme Court of Vermont.

January Term, 2019

August 15, 2019

Reargument Denied September 4, 2019.

Stephen D. Ellis of Paul Frank + Collins PC, Burlington, for Plaintiff-Appellee/ Cross-Appellant.

Allan R. Keyes of Ryan Smith & Carbine, LTD, Rutland, for Defendants-Appellants Icon Legacy Custom Modular Homes, LLC and Icon Legacy Transport, LLC.

Gregory A. Weimer and Adrienne Shea of Lynn, Lynn, Blackman & Manitsky, P.C., Burlington, for Defendants-Appellees Osborne Construction, LLC, Paul Osborne.

Richard H. Wadhams, Jr. of Pierson Wadhams Quinn Yates & Coffrin, LLP, and Maxwell Krieger, Burlington, for Defendant-Appellee Merusi Builders, Inc.

PRESENT: Reiber, C.J., Skoglund, Robinson, Eaton and Carroll, JJ.

SKOGLUND, J.

¶ 1. This appeal arises from the sale and construction of a new modular home that suffered from significant deficiencies. Appellants—Icon Legacy Custom Modular Homes, LLC and Icon Legacy Transport, LLC—challenge a series of trial court orders in favor of appellees—Dagney Trevor, Merusi Builders, Inc., Osborne Construction, LLC, and Paul Osborne. For the reasons stated below, we affirm in part and reverse in part.

I. Facts and Procedural History

¶ 2. Because there are many parties involved in this appeal, we identify them, their role in the case below, and their role in the current appeal. Dagney Trevor (Trevor) is the purchaser of the defective modular home, the plaintiff in the suit below, and appellee and cross-appellant in the current appeal. Icon Legacy Custom Modular Homes, LLC (Icon Legacy) and Icon Legacy Transport, LLC (Icon Transport) are the manufacturer and transporter of the defective modular home purchased by Trevor, defendants in the suit below, and appellants in the current appeal.¹ Osborne Construction, LLC (Osborne Construction) and Paul Osborne (Osborne) are collectively the contractor involved in the assembly of the defective modular home, two of the defendants in the suit below, and appellee in the current appeal. Merusi Builders, Inc. (Merusi) is a subcontractor involved in the assembly of the defective modular home, one of the defendants in the suit below, and appellee in the current appeal. And, even though they are not parties in the current appeal,² we identify, for clarity's sake, Vermont Modular Homes, Inc., David Curtis, and Blane Bovier as Icon's Vermont-based "approved builders" and as three of the defendants in the suit below.

¶ 3. The facts of this case are relatively simple. In 2015, Trevor purchased an Icon Legacy Custom Modular Home to replace her home, which she had lost in a fire the previous year. Icon's communications with Trevor relating to the design, specifications, sale, delivery, and installation of the home were primarily through Icon's "approved builders," Curtis and his company, Vermont Modular Homes. During the sale of the home, Curtis communicated with Icon's employees, who in turn prepared drawings, price lists, and other marketing material for Curtis to provide to Trevor. Once Trevor bought the home, it was assembled by Osborne Construction and Merusi in their capacities as contractor and subcontractor. The home sustained significant water damage during a rainstorm when water entered the home before the roof installation was complete. Other structural defects emerged after Trevor moved into the home. Although Icon and Vermont Modular Homes repaired some of the damage, major defects relating to both the water damage and alleged improper construction remained in the home.

¶ 4. The procedural history, on the other hand, is relatively complex. Trevor filed suit against Icon Legacy, Icon Transport, Vermont Modular Homes, Curtis, Bouvier, Osborne Construction, Osborne, and Merusi. Icon and Vermont Modular Homes filed suit as cross-claimants, seeking indemnification, among other things, against Osborne Construction, Osborne, and Merusi. And Curtis and Bouvier filed suit as cross-claimants against Osborne Construction, Osborne, and Merusi.

¶ 5. The parties created, and the court approved, the first discovery-schedule order in early 2016, and then the amended discovery-schedule order in December 2016. The second order set a deadline of April 1, 2017, for discovery to be completed, the case to be ready for trial, and all pretrial motions to be filed, except those based on circumstances that arose after the cut-off date or a motion to dismiss for lack of subject matter jurisdiction.

¶ 6. In February 2016, Icon sent Trevor a letter with a flash drive enclosed "with the project files maintained by Icon" and noted that it would email any additional documents it located. The following day, Icon responded to Trevor's interrogatories and requests for production, and indicated that all relevant and discoverable documents would be produced for inspection and copying at Icon's office. These responses were signed by Icon's sales manager, not by an attorney of record as required by Vermont Rule of Civil Procedure 26(g).

¶ 7. On December 9, 2016, Trevor served Icon with a notice of deposition pursuant to Vermont Rule of Civil Procedure 30(b)(6), specifying Burlington, Vermont, where all attorneys of record had their offices, as the location for the deposition. Icon moved for a protective order to permit its designees to appear remotely from Icon's headquarters in Pennsylvania. In support of its motion, Icon submitted affidavits from Icon's Pennsylvania-based general counsel and Icon's Rule 30(b)(6) authorized agent. The authorized agent stated that he "was involved in assembling the documents to be produced by Icon in this case" and that "[t]here [were] very few documents in this case involving Icon." General counsel stated that it was "aware that the documents produced in discovery [had] been exchanged electronically" and that "it [would] be an easy matter for ... Icon's corporate designees to follow along with any questioning as to documents." The court granted Icon's motion for a protective order and the depositions were conducted remotely.

¶ 8. On April 21, 2017, after Icon's 30(b)(6) depositions were complete and the deadline set by the discovery order had passed, Icon's local Vermont counsel sent a letter purporting to be a belated Rule 26(g) certification for Icon's 2016 responses to Trevor's discovery requests. In response, Trevor asked Icon to supplement its prior document production with all Icon emails having any bearing on the matter as well as any other responsive documents. Icon never responded. Instead, on July 14, 2017, Icon filed a motion for summary judgment, and on August 3, 2017, Icon's local counsel wrote a letter stating, "I hereby certify pursuant to V.R.C.P. 26(g) that Icon has provided all documents responsive to [Trevor]'s Request for Production to the best of my knowledge." The trial court struck Icon's motion for summary judgment on the ground that it was filed in violation of the discovery order and Vermont Rule of Civil Procedure 56(b).

¶ 9. The trial court scheduled the jury draw and set the case for trial in March 2018, with a final pretrial conference on November 1, 2017. After the pretrial conference, Icon moved for reconsideration of the court's order striking its motion for summary judgment, which the trial court denied on December 8, 2017.

¶ 10. On December 12, 2017, Icon produced 111 pages of additional documents, which it represented had been "recently uncovered," though some of the documents, on their face, appeared to contradict that statement. After this production, Trevor moved for spoliation sanctions. On January 11 and 18, 2018, before the court ruled on Trevor's first motion for sanctions, Icon produced over 3300 pages of additional documents in conjunction with its opposition to Trevor's motion for spoliation sanctions. Trevor then filed a second motion for sanctions on January 25, 2018.

¶ 11. Icon's responses to Trevor's sanction motions admitted that there was "no excuse" for Icon's failure to produce all requested documents in discovery and represented that Icon's local counsel had been "communicating with Icon's management team and IT personnel and urging Icon to conduct further investigation into whether it had produced all that [Trevor] had requested long before" the court struck Icon's summary judgment motion. Later in the proceedings, Icon's local counsel explained that Icon knew about the documents, stating that initially "they chose not to turn those over," but eventually "did so after they were implored to turn over everything that they had."

¶ 12. The trial court issued two written orders regarding Trevor's motions for sanctions. In its order on the first motion, the trial court sanctioned Icon by excluding the 111 documents disclosed on December 12 and noted that it found Icon's characterization of its conduct as mere oversight unpersuasive.

¶ 13. In its order on the second motion, the trial court accepted that the failure to disclose did "not appear to be with Icon's local counsel," but found that "Icon [did] not come forward with an explanation for how it could have allowed its attorneys to certify pursuant to V.R.C.P. 26(g) that Icon had produced all documents responsive to [Trevor]'s discovery requests, when it very obviously had not." The court further explained that "Icon [had] provided no information to the court as to what, if any, efforts its officers and employees [had] made over the past two years to locate, identify and produce documents requested in the course of discovery" and made no effort "to refute the inference ... that Icon's failure to produce these documents until two months before trial was intentional, rather than merely negligent." The trial court was "convinced that Icon blatantly disregarded its discovery obligations, and deliberately withheld responsive discovery until almost two years after it was due, in the hope that it would win its summary judgment motion and never have to produce them at all." It...