Hermitage Inn Real Estate Holding Co., LLC v. Extreme Contracting, LLCAnnotate this Case
Defendant Extreme Contracting, LLC appealed a trial court’s order granting a default judgment to plaintiff Hermitage Inn Real Estate Holding Co., LLC in a contract dispute. The court held defendant responsible for enforcing a mandatory arbitration clause in the parties’ contract and ordered defendant to “initiate” arbitration by a certain date. When defendant failed to do so, the court considered this a failure to obey a “scheduling order” under Vermont Rule of Civil Procedure 16.2, and as a sanction, it granted a default judgment to plaintiff under Rule 37(b)(2)(C). Defendant argued, among other things, that a default judgment was inappropriate here. It contended that the court should have granted its motion to dismiss plaintiff’s suit given the mandatory arbitration provision, and that as the defendant, it should not have been required to “initiate” arbitration. It also argued that the court erred in denying its motion to vacate the default judgment. After review, the Vermont Supreme Court agreed the court erred, and based on that order ultimately granted a sanction unsupported by the facts and the law. The Court reversed the trial court’s decision and remanded for entry of an order requiring plaintiff to initiate arbitration or face dismissal of its suit.