krisroywick holding v. north east response ( 2024 )

Vermont Superior Court
Filed
04/0
alde U/
oma nit
VERMONT SUPERIOR COURT 1
fl4 CIVIL DIVISION
Caledonia Unit Case N0. 21-CV-03550
1126 Main Street Suite 1
St. JohnsburyVT 05819
802-748-6600 fifi
wwwvermontjudiciaryorg
Krisroywick Holding Corp v. North East Response Svcs Llc
ENTRY REGARDING MOTION
Title: Motion to Dismiss Defendant's Counterclaims and Third Party Complaints (Motion:
8)
Filer: Daniel D. McCabe
Filed Date: February 21, 2024
The motion is GRANTED.
Plaintiff Krisroywick Holdings Corp. and Third-Party Defendants Chadwick Roy and
Kristina Roy seek to dismiss Defendant North East Response Services, LLC’s counterclaims and
third-party claims for failure to prosecute and to comply with discovery deadlines and the Court’s
prior motions to compel.
A brief history is warranted. Plaintiff filed the present action in November of 2021.
Defendant filed an answer and counterclaim in January 2022. At the time, both parties and Third—
Party Defendants were represented by counsel. In May 2022, Defendants served written discovery
on Plaintiff and Third—Party Defendants. The parties adopted a discovery schedule in July of 2022
that had a trial ready date of May 2023. In November 2022, Plaintiffs served written discovery on
Defendant. In April of 2023, Defendant moved to amend the discovery schedule and push several
deadlines back to September 2023. In August 2023, Defendant’s attorney sought to withdraw citing
a lack of communication with his client. The Court conducted a hearing on the motion to withdraw
in November 2023. At that hearing, counsel for Defendant stated that despite best efforts his client
had not responded to his communications or responded to his efforts to answer Plaintist discovery
requests. At the hearing, Plaintiff also reported that the November 2022 written discovery requests
had never been answered and that Plaintiff had been working with Defendant’s counsel and had
held off from filing a motion to compel. The Court granted the motion to withdraw and gave
Defendant 45 days to obtain new counsel or enter a notice of appearance. The Court also indicated
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21—CV—03550 Krisroywick Holding Corp v. North East Response Svcs Llc
that it would hold a status conference after this deadline to address all outstanding and remaining
discovery.
Defendant did not file a notice of appearance or any response to the Court’s order. On
January 5, 2024, Plaintiff filed a motion to compel responses to its outstanding discovery. The
Court held a status conference and motion hearing on January 17, 2024. As with the November
hearing, Defendant did not attend or send a representative. No motions or letters were filed to
explain Defendant’s absence. Plaintiffs represented that despite repeated efforts, they had received
no response from Defendant in any shape or form. Following this hearing, the Court granted the
motion to compel on January 17, 2024 and gave Defendant until February 20, 2024 to provide
responses to Plaintiff’s outstanding discovery requests and to enter a notice of appearance. The
Court also required Plaintiff to serve a copy of the Order directly on Defendant. Plaintiff complied
with this direction and had a copy of the Court’s January 17, 2024 Order served on Defendant.
On February 21, 2024, Plaintiff filed the present motion and a motion for default judgment.
On the same day, the Court also took up Plaintiff’s prior motion for sanctions based on its January
Motion to Compel. The Court awarded Plaintiff $862 in costs associated with the motion to
compel. At that time, the Court noted that Defendant had not provided any discovery answers,
entered a notice of appearance, sought any extension, or made any explanation to the Court in the
face of these repeated orders. On February 28, 2024, Defendant sent an email indicating that it had
secured new counsel who would be entering a notice of appearance shortly. Defendant requested an
extension of time. The Court granted this request and gave Defendant until March 31, 2024 to have
the new attorney file a notice of appearance and make contact with Plaintiffs. No such notice of
appearance was forthcoming from either Defendant or the reported new counsel. No further filings
have been made, and Plaintiff’s discovery remains 17 months delayed.
During this period, the only steps that Defendant has taken in furtherance of its claims is
one set of written discovery issued and answered nearly two years ago. Apart from this action, the
Court is not aware of any actions taken by Defendant to prosecute its counter and third-party
claims.
The Court finds that Defendant’s failure to prosecute its counter and third-party claims were
willful. Defendant has been given successive and repeated opportunities to act in this litigation.
The Court has mandated that Orders be served on Defendant to ensure notice and opportunity. In
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21-CV-03550 Krisroywick Holding Corp v. North East Response Svcs Llc
each case and despite the notice, knowledge, and warning of additional sanctions, Defendant has not
acted. Defendant is fully aware of the responsibilities of parties within litigation as Defendant was
recently a successful plaintiff in separate civil action involving other parties. See North East Response
Services, LLC v. St. Johnsbury Route 5 Associates Ltd Ptnr., Dckt. No. 21-CV-02587 (contract action to
recover fees associated with remediation work) (settlement and dismissal filed on Sept. 18, 2023).
Defendant’s failure to appear or to defend the present case cannot be attributed to lack of
knowledge or experience. It is a willful decision, and it shows signs of bad faith.
This decision has created prejudice and harm for Plaintiffs who have been unable to
progress on their claims in over a year and a half, have incurred attorney’s fees, and have not had
recourse to either a judgment and recovery or finality on their claims. Furthermore, given that
Plaintiff’s have not had responses to its initial written discovery, they have been unable to retain
experts or advance their defense. With the passage of time, these delays have grown more serious as
witnesses, records, and memories grow more difficult to find and retain.
Standard for Dismissal
The Court has given Defendant several months to comply with various Court Orders and
obligations under the Vermont Rules of Civil Procedure. Apart from one e-mail, the Court has not
received any response from Defendant. At each step, the Court has sought to impose limited,
coercive sanctions to obtain compliance without affecting Defendant’s right to carry forward with its
claims. To date, Defendant has not taken any action on either its outstanding discovery obligations,
or its obligation to prosecute its counterclaims. Under V.R.C.P. 37, Defendants’ failures warrant
dismissal of its counter and third-party claims. Goshy v. Morey, 149 Vt. 93, 96 (1987). While dismissal
is usually a sanction of last resort, the facts here support the imposition of this sanction. Rathe
Salvage, Inc. v. R. Brown & Sons, Inc., 2008 VT 99, ¶ 12.
The Court’s conclusions under Rathe are supported by three reasons. First, the Court has
exhausted lower and limited sanctions without success. Second, the record indicates that
Defendant’s failure to participate and prosecute its claims or reply to discovery has been willful
given its knowledge of the case, notice of Court Orders, and experience in prior litigation. Manosh v.
First Mountain Vermont, L.P., 2004 VT 122, ¶ 10. Third, there is evidence that Plaintiffs have been
prejudiced by these delays and failure to participate. Given the various opportunities Defendant has
had to reply, explain, and advance its claims, the Court finds that the weight of procedural history in
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this case warrants dismissal of Defendant’s counter and third-party claims for failure to participate in
discovery.
In addition to the Rules 37 basis, the Court also finds grounds under V.R.C.P. 41(b) to
dismiss Defendant’s counter and third-party claims. Under this rule, the Court may dismiss a claim
if the party with the burden of proving the claim fails to advance the litigation or comply with the
rules of civil procedure. V.R.C.P. 41(b). As the Vermont Supreme Court has noted, a party’s failure
to appear, respond, or comply with Court Orders compelling specific actions, are sufficient grounds
under V.R.C.P. 41(b) to justify the dismissal of a claim. Garbitelli v. Central Vermont Public Service, Inc.,
2009 WL 2427941, at *2 (Mar. 5, 2009) (unpub. mem.). In this case, Defendant has ignored and
failed to comply with multiple Court Orders and notices. The Court cannot devote on-going
resources to a claim or matter that the party itself is not working to advance or develop. As the
Court in Garbitelli states:
A trial judge acts well within his duties to assure that the most effective use be made
of the court's resources[,] to supervise and control the movement of all cases on its
docket from the time of filing through final disposition, and to apply sanctions when
reasonable efforts to manage the court's caseload have failed.
Id. (quoting State v. Jones, 157 Vt. 553, 558–59 (1991) (quotations and emphasis omitted)). For these
reasons, the Court grants the dismissal of Defendant’s counter and third-party claims under Rule
41(b) for failure to prosecute.
ORDER
Based on Defendant’s failure to prosecute and respond to discovery, its counter and third-
party claims are Dismissed as a matter of law, Plaintiff’s motion is Granted. Third-Party Defendant
Chadwick and Kristina Roy are dismissed as parties.
Electronically signed on 4/5/2024 5:32 PM pursuant to V.R.E.F. 9(d)
__________________________________
Daniel Richardson
Superior Court Judge
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21-CV-03550 Krisroywick Holding Corp v. North East Response Svcs Llc