Vermont Union School Dist. No. 21 v. H.P. Cummings Const. Co., No. 180-81

• Docket Nº: No. 180-81
• Citation: 469 A.2d 742, 143 Vt. 416
• Case Date: September 09, 1983
• Court: United States State Supreme Court of Vermont

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469 A.2d 742 143 Vt. 416 VERMONT UNION SCHOOL DISTRICT NO. 21
v.
H.P. CUMMINGS CONSTRUCTION CO.; Major L. Rodd, Inc.,
William G. Rodd, d/b/a Major L. Rodd, The Roofer;
and GAF Corporation. No. 180-81. Supreme Court of Vermont. Sept. 9, 1983.
Reargument Denied Oct. 19, 1983.

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[143 Vt. 417] Sten Lium, St. Johnsbury, for plaintiff-appellee.

John T. Sartore and S. Crocker Bennett, II, of Paul, Frank & Collins, Inc., Burlington, and Kolvoord, Overton & Wilson, Essex Junction, for defendants-appellees Rodd.

Plante, Richards, Terino & Hanley, White River Junction, and Harold Hestnes, Robert F. McLaughlin, John J. Regan, Nancy D. Israel and Christopher Weld, Jr., of Hale & Dorr, Boston, Mass., for defendant-appellant GAF Corp.

Before [143 Vt. 416] BILLINGS, C.J., HILL, PECK and GIBSON, JJ., and LARROW, J. (Ret.), Specially Assigned.

[143 Vt. 418] HILL, Justice.

The Vermont Union School District No. 21 (school district) instituted this action on July 26, 1976, against its general contractor, the H.P. Cummings Construction Company (Cummings), and Cummings' roofing subcontractor, Major L. Rodd, Inc. (Rodd), for alleged defects in the school district's Blue Mountain School roof. Its complaint alleged that the new roof had widespread leakage problems caused by the roof's blistering and bubbling surface. The complaint further alleged that both defendants had been negligent, had breached warranties, and had failed to construct the roof in a workmanlike manner. In response, Cummings and Rodd sought indemnity from the GAF Corporation (GAF), Rodd's supplier of roofing materials for the Blue Mountain School.

On October 1, 1976, GAF moved to dismiss the indemnity claims by asserting as affirmative defenses that it lacked contractual privity with Cummings, that Rodd's negligent installation barred indemnity, and that all applicable statutes of limitation had expired as to any claims against GAF. Its motion for summary judgment on the indemnity claims was denied on December 13, 1976, and its subsequent attempts to secure permission for an interlocutory appeal were denied by both the trial court and this Court. Thereafter, the parties engaged in a protracted period of negotiation and discovery.

After extensive review of the documents secured from GAF through discovery, the parties took several procedural steps which significantly altered the posture of this action. On March 3, 1980, and June 6, 1980, the trial court permitted Rodd and the school district to amend their pleadings to seek direct relief and punitive damages against GAF. The school district, Rodd and Cummings then negotiated an agreement detailing each party's liabilities and obligations.

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In the agreement, which was later memorialized and filed with the trial court on November 10, 1980, Rodd and Cummings waived all defenses to the school district's complaint and admitted all liability. The school district then agreed that the judgments stipulated to would be fully satisfied and discharged in return for the good faith prosecution by Cummings and Rodd of all claims pending against GAF. The agreement further outlined a distribution formula for all damages ultimately collected from GAF.

In response, GAF moved to have the agreement declared void, to have all claims against it dismissed as being extinguished[143 Vt. 419] by the agreement, and again to have the claims of Rodd and the school district dismissed on statute of limitation grounds. On January 7, 1981, GAF's motion was denied. GAF then cross-claimed against Rodd, seeking indemnity for improper application of the roof, alleging that Rodd breached warranties and negligently failed to follow GAF's specifications.

The trial commenced on February 3, 1981. On March 25, 1981, the jury, in answer to special interrogatories, returned an award of approximately $2,295,000 against GAF, of which $1,600,000 constituted punitive damages (to be split evenly, according to the agreement, between the school and Rodd). Of the remainder, $195,000 was awarded to the school for the cost of roof replacement, and approximately $500,000 was awarded to Rodd as compensatory and indemnity damages. GAF moved for remittitur of all punitive damages and all further damages awarded to Rodd, and additionally moved for a new trial. In a post trial order dated May 7, 1981, the trial court denied the motions, and GAF subsequently filed a timely notice of appeal. We reverse.

In light of our disposition of this case, a detailed version of the facts is unnecessary. The following facts, taken in the light most favorable to the prevailing parties, is sufficient. Quechee Lakes Corp. v. Terrosi, 141 Vt. 547, 552, 451 A.2d 1080, 1083 (1982). In August of 1970, plaintiff contracted with Cummings to build the Blue Mountain School. Cummings in turn contracted with Rodd to supply a "four ply" roof. Prior to the roof's construction, plaintiff, plaintiff's architect, and Cummings assented to Rodd's request to supply a "three ply" roof rather than the original four ply roof. The change was made on the understanding that the three ply roof, advertised as the most advanced technique in "built up" roofing, would best serve the school's purposes.

Both the four and three ply roofs involve a combination of asphalt-saturated "felts," which are applied over a roof deck in layers or plies, through the use of hot asphalt or other adhesive products. The felts consist of wood pulp or cellulose-like substances bound together and wound in long rolls approximately three feet in width, which are then inserted into asphalt. During the application process, they are rolled into the asphalt and then "broomed" into place to assure adhesion. The [143 Vt. 420] technique was developed in an attempt to create a heavier, more waterproof sheet. Throughout the 1960s the coated felts were promoted and marketed to roofers as being both more water resistant and more cost efficient, requiring fewer layers or plies than the prevailing standard roofs.

On September 21, 1970, construction of the Blue Mountain School's roof was completed. Within six months, however, a substantial blistering and bubbling problem appeared on the roof's surface which resulted in widespread water leaks to the school's interior. Throughout 1971 and 1972, the problem grew progressively worse despite Rodd's attempts to repair the roof. As a result of the leaking, the school incurred extensive damage to the interior ceiling tiles and library materials, and at one point there were leaks in almost every room in the school. In short, the faulty roofing adversely affected the overall functioning of the school's activities. At Rodd's request, GAF performed numerous tests on the roof's surface to determine the cause of the problem, but the results of the tests were allegedly suppressed by GAF. In

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1975, GAF further attempted to repair the blistering surface condition by use of "mastic injection" of the roof's blisters. This new and untried process proved unsuccessful.

At the trial's commencement, the school district, Rodd and Cummings, pursuant to their pretrial agreement, essentially sat collectively as plaintiffs proceeding against GAF. Their position was that GAF knew, prior to its marketing of the coated felt roof systems, that such systems were unproven and inadequately tested. They alleged actual knowledge on the part of GAF that unperforated coated felts, when used in multiple plies rather than as a base sheet, have a tendency to trap moisture, thus causing the coated felt roofs to blister and fail long before the industry standard roof life of twenty years. Moreover, they asserted that the decision to market the coated felt systems as "the most advanced technique in built up roofing" was made by GAF executives over the vocal opposition of GAF's research scientists who foresaw the potential difficulties. Based on information from GAF's internal business memoranda, plaintiffs further alleged that GAF knew of the blistering problems in the late 1960s, well before it sold the roof materials involved herein to Rodd. They accordingly proceeded[143 Vt. 421] against GAF on the theories of fraud, strict liability, breach of warranty and negligence.

I.

On appeal, the parties have comprehensively briefed many issues. Some of the issues raise questions about specific occurrences at trial, and some present issues of first impression for this Court. After prolonged study, however, this Court unanimously agrees that the trial court's verdict for plaintiffs must be reversed without discussion of many of these issues. Simply stated, this case was tried before an improperly constituted court. Just prior to trial, the court consisted of one presiding judge and two assistant judges as required by 4 V.S.A. § 111(a). See Suitor v. Suitor, 137 Vt. 110, 111, 400 A.2d 999, 1000 (1979). During the trial, however, one of the assistant judges suffered a stroke which rendered him incapable of continuing his duties. The court was thus reduced to one presiding judge and one assistant judge. Despite GAF's objection, the presiding judge, acting pursuant to an internal administrative directive that had no force of law, dismissed the remaining assistant judge and proceeded with the trial. ¹

When the trial commenced, 4 V.S.A. § 111(a), which sets forth the statutory prerequisite for a properly constituted court, stated that: "A superior court shall be held in each county at the times and places appointed by law, consisting of one presiding judge and the two assistant judges, if available." 4 V.S.A. § 111(a) (Amended 1979, No. 181 (Adj.Sess.), § 6, effective July 1, 1980). ² GAF contends that the presiding [143 Vt. 422] judge's dismissal of an available assistant judge was erroneous, since it rendered the court's composition improper. GAF notes that the language of § 111(a) provides no authority for the discharge of an available assistant judge when the other assistant

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judge becomes...