Roback v. Wash Cty Railroad

Vermont Superior Court
Filed 12/30/25
Windsor Unit

VERMONT SUPERIOR COURT CIVIL DIVISION
Windsor Unit Case No. 405-9-17 Wrev
12 The Green

Woodstock VT 05091
802-457-2121
www.vermontjudiciary.org

Roback et al vs. Washington County Railroad Co.

ENTRY REGARDING MOTION

Title: Motion for Summary Judgment; (Motion: 32)
Motion for Summary Judgment; (Motion #33)
Filer: Marie C. Horbar, Esq. for State of Vermont

Peter F. Young, Esq. for Washington County Railroad Company
Filed Date: June 20, 2025; June 21, 2025

DECISION AND ORDER ON
DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT

Plaintiffs John Roback and Gail Langeloh assert claims seeking damages from
Defendants Washington County Railroad Company (“Railroad”) and the State of Vermont
(“State”). The Defendants now move, separately, for a summary judgment as to each of the
claims pled against them.

Plaintiffs are represented by Claudine C. Safar, Esq. The Railroad is represented by Peter
F, Young, Esq., and the State is represented by Assistant Attorney General Marie Horbar, Esq.

For reasons that follow, Defendants’ motions are granted.

Procedural Background

This case is now more than eight years old and has an unusual procedural history. The
Court will presume familiarity with that history, as set forth in the Court’s decision filed on
March 25, 2025, and provides only additional relevant background here.

Through an Amended Complaint filed in April of 2018, Plaintiffs brought the following
claims against the State:

1. In Count II, Plaintiffs challenged an August 2017 decision of the State Board of
Transportation to close the railroad crossing at issue here, as lacking sufficient factual
findings.

2. In Count III, Plaintiffs asserted that the State breached a contractual obligation, set
forth in an easement by deed granted long ago by the State’s contractual predecessor
to Plaintiffs’ predecessors, which requires the State to maintain the easement or
crossing.
3. In Count IV, Plaintiffs asserted a claim entitled “bad faith,” alleging that the State
intentionally or recklessly breached a duty to owed to Plaintiffs, by not preventing the
Railroad, the State’s lessee, from taking steps to close the crossing.

4. In Count V, Plaintiffs asserted that the State violated the implied covenant of good
faith and fair dealing, by failing to maintain the easement, by allowing the Railroad to
close the easement, and by acquiescing to the Railroad’s actions.

The State now seeks summary judgment as to all four claims. However, Plaintiffs
conceded in their opposition brief that Count II of their Amended Complaint is now moot, and
they do not offer any opposition to the motion on that Count. The Court will therefore grant the
State’s motion on that claim, leaving only three claims against the State for analysis.

Count VI of Plaintiffs’ Amended Complaint asserts the lone claim in this case against the
Railroad: for tortious interference with contractual relations, by inducing or otherwise causing
the State to fail to perform contractual duties owed to Plaintiffs. The Railroad now seeks
summary judgment on that claim.

Standard of Review

“Summary judgment is appropriate when, construing the facts as alleged by the
nonmoving party and resolving reasonable doubts and inferences in favor of the nonmoving
party, there are no genuine issues of material fact and judgment is appropriate as a matter of
law.” Dewdney v. Duncan, 2025 VT 26, 4 8, 342 A.3d 818 (quotation marks omitted). “When
reviewing such a motion, [the Court] “regard[s] as true all allegations of the nonmoving party
supported by admissible evidence and give[s] the nonmoving party the benefit of all reasonable
doubts and inferences.” Jd. (quotation marks omitted).

Where, as here, parties are moving for summary judgment on claims on which the
movants would not bear the burden of persuasion at trial, the movants “may satisfy [their] burden
of production by showing the court that there is an absence of evidence in the record to support
the nonmoving party’s case.” Caldwell v. Champlain Coll. Inc., 2025 VT 17, 4 7, 336 A.3d 423.
If that initial burden is met by the movant, the nonmovant may not rest on mere allegations, but
instead must respond “with specific facts raising a triable issue.” Jd. (quotation marks omitted);
see Gross v. Turner, 2018 VT 80, { 8, 208 Vt. 112; Clayton v. Unsworth, 2010 VT 84, J 16, 188
Vt. 432. “‘Summary judgment is mandated where, after an adequate time for discovery, a party
fails to make a showing sufficient to establish the existence of an element essential to the party’s
case and on which the party has the burden of proof at trial.’” Jd. (quoting Burgess v. Lamoille
Hous. P’ship, 2016 VT 31, 4 17, 201 Vt. 450). “[W]here the jury could only find for the plaintiff
by relying on speculation, the defendant is entitled to [summary] judgment.” Boyd v. State, 2022
VT 12, | 19, 216 Vt. 272.

Analysis

I. The State’s Motion for Summary Judgment

A. Claim for Breach of Contract

The contract at issue in this case is an easement by deed, formed in 1911 by and between
the State’s predecessor in interest, Boston & Maine Railroad, to Plaintiffs’ predecessors, private
landowners known as the Eastmans. The State presently owns the rail line and lands running
beneath it, which had been owned by Boston & Maine in 1911.! Plaintiffs presently own and
reside on lands in the Town of Norwich, formerly owned by the Eastmans, which is located
easterly and immediately adjacent and to the rail line, which runs approximately north-south.
The 1911 deed was created in response to an order of the State Public Service Commission,
which had “ordered the abolishment” of two railroad crossings, and a portion of a public
highway to the east of the rail line, each of which had served and benefitted the Eastmans.
State’s Ex. 1, at 1 (recital clause of 1911 deed, explaining Commission’s order). In return for the
Eastmans’ loss of rights, Boston & Maine agreed under the new deed to “construct and maintain
a farm crossing,” traveling over the railroad line, near the Eastmans’ residence. /d. at 2. Further,
Boston & Maine agreed to construct a short road, one rod wide, connecting the new crossing
with a proposed public highway to be located to the west of the rail line.2, Boston & Maine also
agreed to construct a short continuation of this road, running from the new crossing towards the
east, to its connection with the existing highway that ran by the Eastmans’ property. The deed
further indicated that the new road and crossing were to be located as shown on a blueprint filed
with the Public Service Commission. See id. Notably, the deed further stated, about the new
crossing and the new road giving access to the crossing:

said road and crossing to be for the use of said Eastmans, their heirs and assigns
and for the use of other persons now and hereafter owning or occupying the
residences and lands on the easterly side of said Railroad.

Id. (emphasis added).

In the instant case, Plaintiffs claim that for more than 100 years, the State and its
predecessor failed to perform any maintenance of the crossing, thus constituting breach of
contract. Plaintiffs also claim that, because of this breach, the crossing became unsafe for use by
motorists, a condition that prompted the State’s transportation safety regulator, the State Board
of Transportation, to order permanent closure of the crossing in 2017.

The essential elements of a claim for breach of contract are: (1) existence of a valid
contract, see Sutton v. Vt. Reg’ Ctr., 2019 VT 71A, Jf 59-60, 212 Vt. 612; (2) plaintiff's
performance or a showing of a willingness and ability to perform the plaintiff's contractual
obligations, see Margolis v. Daily Direct, LLC, 2023 VT 20, 7 8, 218 Vt. 31; (3) breach by the
defendant, see Beldock v. VWSD, LLC, 2023 VT 35, {| 23-27, 218 Vt. 144; and (4) damages as a
result of defendant’s breach, see Smith v. Country Vill. Int’l, Inc., 2007 VT 123, 4 9, 183 Vt. 535
(mem.). Here, the State moves for summary judgment under first, third, and fourth elements. Its
primary argument is that the easement by deed is illegal and void, as against the transportation

! The State leases this property to the Railroad, which actively operates a railroad on the

property.
2 This proposed highway is known today as Vermont Route 5.
safety policies of the State, as reflected in the Board’s order to permanently close the crossing.
The Court does not agree with this particular argument, and grants the State’s motion on other
grounds, as explained later in this decision. The Court begins with an analysis of the State’s
primary argument, however, even though it is not the basis for which the Court grants the State’s
motion on the breach of contract claim, as the Court believes its discussion sheds helpful light on
how the Court interprets the obligations created by the easement by deed.

Where an express easement by deed, as here, “unambiguously limits and defines a right-
of-way,” the court interpreting the deed must “enforce the deed as written,” in accordance with
its “‘plain meaning.’” Gladchun v. Eramo, 2023 VT 5, 4 17, 217 Vt. 481 (quoting Beldock v.
Town of Charlotte, 2010 VT 74, | 11, 188 Vt. 345); see Restatement (Third) of Property:
Servitudes § 4.1(1) (2000) (servitudes, including easements running with the land, “should be
interpreted to give effect to the intention of the parties ascertained from the language used in the
instrument . . . and to carry out the purpose for which it was created”); 3 Tiffany Real Property
§ 802 (3d ed.) (“In the case of easement by express grant, . . . the rights and liabilities of parties
are determined by the terms of agreement.”). Here, the plain terms of the easement by deed
impose a duty on the servient estate (now owed by the State) to maintain the crossing, which
duty is met so long as such maintenance is adequate to allow “use” of the crossing or easement
by the dominant estate (now held by Plaintiffs). The duty is not an absolute, or strict liability
duty—i.e., not a duty of “maintenance for maintenance’s sake.” Thus, if the manner or extent of
maintenance, for example, deprives or interferes with Plaintiffs’ use of the easement, such as by
causing or allowing conditions at the rail crossing to deteriorate to warrant its permanent closure
by transportation safety regulators, the duty of maintenance will not have been met.

This construction of the State’s duty of performance aligns with the law of the case. As
the Court held earlier in this case, the State is obligated “to perform such maintenance and
related work at the crossing as is necessary to maintain compliance with safety standards.”
Decision & Orders on Cross Motions for Summ. J. — Stay of Proceedings — Order to Mediate
(filed Feb. 22, 2022), at 7; see also id. (State has prospective obligation to perform maintenance
and repairs if such “will operate to bring the crossing into compliance with safety standards”).

The State now contends that the easement by deed is illegal and unenforceable, because it
violates the transportation safety policies of the State. The State sees a conflict between the
easement, which plainly allows use of the crossing, and the Board’s order, which prohibits such
use. The State argues that this conflict renders the easement by deed void, as against the public
policies of the State (as reflected the Board’s order). Notably, the State’s position, while taken in
litigation, is also reflected in the administrative record created by the Board. See Decision on
Appeal (Mar. 25, 2025) at 5 (“the record establishes that the board considered plaintiffs’ deeded
rights but found plaintiffs’ private interests to be outweighed by the safety concerns presented”).

3 To this statement of the law the Court could have added, “or perform such maintenance as is
necessary to otherwise allow use of the crossing by Plaintiffs and their neighbors,” but since the
Plaintiffs’ inability to use the crossing was due for safety-related reasons, the Court’s earlier
declaration of the law was properly specific to the circumstances.
The Court does not agree with the State’s interpretation of the easement by deed.
“Unless the purpose for which the [easement] is created violates public policy, and unless
contrary to the intent of the parties, a[n easement] should be interpreted to avoid violating public
policy.” Restatement (Third) of Property: Servitudes § 4.1(2) (emphasis added). Further,
“Ta]mong reasonable interpretations, that which is more consonant with public policy should be
preferred.” Jd. Here, there is clearly no indication from the easement’s terms or otherwise that it
was created with the intent or for the purpose of allowing any use of the crossing that would
violate or contravene public policy, including transportation safety policies. Indeed, the 1911
easement itself indicates that it was created in response to an order of the State’s Public Service
Commission, and not with the intent or purpose of violating any state law or policy.

Moreover, even assuming it is reasonable to conclude that the contracting parties
intended for the easement to grant or allow violations of public policy by Plaintiffs or others,
another reasonable interpretation, one that finds no such unlawful intent or purpose, is also
reasonable and is favored, as the Restatement indicates. The Board, and now the State in its
motion, have taken the view that Plaintiffs’ private easement rights are “outweighed” or
superseded in favor of conflicting public policies regarding transportation safety, but that
interpretation mistakenly supposes that the easement by deed sought to grant the dominant estate
a right of use notwithstanding applicable public policies to the contrary. In short, the easement
by deed has never been void as against public policy because, properly interpreted, it is
consonant with that policy.

Further, the Court does not find illegal the promise by the State’s contractual predecessor
to maintain the railroad crossing, even though the performance of that promise at this point (post-
closure) may be impossible in fact, if not without purpose. Indeed, a contractual defense arising
from the Board’s closure order might have been asserted under the doctrine of impracticability or
frustration of purpose. See, e.g., Burt v. Bd. of Trustees of Univ. of R.I., 84 F.4th 42, 53-54, 57-
58 (1st Cir. 2023) (Covid-19 closure order by public health authorities was an event, the non-
occurrence of which was a basic assumption on which public university’s contract to provide on-
campus, in-person instruction was made, which discharged as impracticable the university’s
obligation) (citing Restatement (Second) of Contracts § 264). However, that defense is generally
considered an affirmative defense, see 30 Willison on Contracts § 77:7 (4th ed.), and it was not
pled by the State or even argued in its motion.

As noted above, in addition to moving for judgment for lack of a valid, enforceable
contract, the State moves for summary judgment by arguing, inter alia, that there is insufficient
evidence to satisfy Plaintiffs’ burden on the essential elements of contractual breach and
damages. Starting with breach, the Court agrees that Plaintiffs have failed to meet their burden
because they have failed to come forward with evidence that would be sufficient for a reasonable
fact-finder, even granting Plaintiffs all favorable inferences, to conclude that the State failed to
perform maintenance so as to cause or allow conditions at the crossing to become so unsafe as to
warrant its closure by regulators.

To begin, Plaintiffs’ opposition indicates that they “will present evidence at trial that the
State failed to maintain the crossing for over 100 years and that [Plaintiffs] suffered damages as a
result.” Pls.” Opp’n to State & Railroad’s Mots. for Summ. J. (filed July 28, 2025), at 10. That
does nothing to meet Plaintiffs’ burden on the issue of breach. See Caldwell, 2025 VT 17,4 7.

Alternatively, Plaintiffs seek to prove a lack of maintenance by relying on factual
findings made by the Transportation Board in its 2017 Order. See Pls.” Opp’n at 9 (“[T]he
Transportation Board has already found that ‘the railroad neglected this crossing and allowed the
above-described unsafe situation to persist.’” (quoting 2017 Board Order, at 10)). However,
such reliance is misplaced.* The Board’s 2017 Order was reversed and remanded by this Court
in 2022. On remand, the Board issued a second order, in December of 2023, that clearly and
decisively concluded that no amount of maintenance, repairs, or similar work would make the
railroad crossing safe for use by motorists. The Board also held that a duty of maintenance, with
respect to the crossing, is not a duty to redesign, reconstruct, or materially upgrade the crossing.
The Board’s 2023 Order was affirmed in all respects by this Court, in March of 2025. No
reasonable factfinder, relying on the findings in the Board’s 2023 Order, and construing all
reasonable doubts and inferences in Plaintiffs’ favor, could conclude that the State’s acts or
omissions with regard to maintenance of the crossing caused or contributed to the conditions at
the crossing that made it unsafe and warranted its closure.

Since, as noted above, the State’s contractual obligation was to maintain the crossing
sufficient to permit its use, and because the crossing was closed for reasons other than
inadequate maintenance, the State breached no duty of performance under the easement by deed.
Accordingly, the State is due summary judgment on the breach of contract claim.

Turning to the issue of damages, the Court reaches the same conclusion, in that Plaintiffs
have failed to meet their evidentiary burden for purposes of Rule 56. On a claim for breach of
contract, “[t]wo types of damages are recoverable: ‘direct damages that naturally and usually
flow from the breach itself, and special or consequential damages, which must pass the tests of
causation, certainty, and foreseeability.’” Smith, 2007 VT 132, 9 (quoting Waterbury Feed
Co., LLC vy. O’Neil, 2006 VT 126, 4 25, 181 Vt. 535 (mem.)). Where actual monetary damages
are sought, there must be evidence of their existence and extent, and sufficient data or
information from which the amount of damages can be computed or reasonably ascertained. See
24 Williston on Contracts § 64:12 (4th ed.). “The amount of damages must be proven with
reasonable, not absolute, certainty,” and generally speaking, “the exact amount need not be
shown, since mathematical precision is not required.” Id.; see Waterbury Feed, 2006 VT 126,

{| 27 (“damages may be given in approximate amounts” (citing A. Brown, Inc. v. Vt. Justin Corp.,
148 Vt. 192, 196 (1987)); Tour Costa Rica v. Country Walkers, 171 Vt. 116, 127 (2000) (only
where “the character of the damages is such as to be capable of being estimated by a strict money
standard” must the plaintiff “give evidence thereof in dollars and cents”).

Here, if the State breached the easement by deed, Plaintiffs have failed to show any
resulting economic injuries or losses, whether direct or consequential. For example, it appears
that Plaintiffs might have suffered a direct economic injury, such as the diminution of fair market

4 The parties do not question the admissibility of the Board’s findings in a de novo trial in this
Court on a claim for breach of contract. The Court will thus treat those findings as admissible, at
least for purposes of the pending Rule 56 motions.
value of their real property. They point out that because of the closure of the crossing, they
“have had to drive a longer distance several times per day for years,” and “they are now subject
to being trapped by flood waters as a result of losing a way out of their home.” Pls.’ Opp’n at
16. It is not unreasonable to think that those changes or new circumstances, resulting from the
closure of the crossing, might decrease the fair market value of residential real estate owned by
Plaintiffs.

Yet, Plaintiffs’ Rule 56(c)(2) statements cite to no evidence, whether an appraisal or
other form of estimate, showing the loss in value of their respective real properties, resulting
from the State’s supposed breach. Plaintiffs merely state in their brief that they “will present
evidence at trial in support of damages.” Jd. That is plainly insufficient for purposes of Rule 56.
See Caldwell, 2025 VT 17, § 7.

Plaintiffs also claim consequential damages arising from the State’s supposed breach,
such as attorney’s fees that Plaintiffs have incurred in petitioning the Board for relief and in
litigating the instant case. See Pls.’ Opp’n at 16. Again, however, Plaintiffs have presented no
evidence—e.g., no invoices, billing records, receipts, transaction histories, or other records—
showing in dollars and cents the amount of attorney’s fees and related costs that they have
incurred. Nor have they even presented an affidavit, from Plaintiffs themselves or their
attorneys, setting forth upon personal knowledge an estimate or approximation of the dollar
amount incurred. As for other consequential damages, perhaps the actual costs of increased
driving would count as such, but again, there is no proof offered as to such costs.

Accordingly, Plaintiffs have failed to meet their burden on damages, and summary
judgment is therefore warranted in the State’s favor on the claim for breach of contract.

B. Claim for Breach of the Implied Covenant of Good Faith and Fair Dealing

As a matter of public policy there is implied in every contract in Vermont a covenant of
good faith and fair dealing. See Carmichael v. Adirondack Bottled Gas Corp. of Vt., 161 Vt.
200, 208 (1993). An action for a breach of this covenant sounds in tort, not contract. Id. The
covenant rests on the principle “that each party promises not to do anything to undermine or
destroy the other’s rights to receive the benefits of the agreement.” Jd. “The implied promise by

> In their briefs, the parties dispute whether Plaintiffs ever petitioned or supplied evidence to the
Board, sufficient to justify the Board’s determination and award of statutory damages. The
Board indicated in its 1997 order that, pursuant to 5 V.S.A. §§ 3639-40, it may award
compensatory damages to a party whose property rights are adversely affected by a permanent
closure of a railroad crossing. But statutory damages are distinct from contract damages. The
former is compensation for the public use (or condemnation) of private property, and the latter is
compensation for all direct and consequential injuries or losses proximately caused by another’s
breach of contract. And the issue before the Court presently is whether Plaintiffs, as nonmovants
with the burden of proof at trial on the issue of contract damages, have presented sufficient
evidence on that issue to warrant a trial. Therefore, the parties’ simmering dispute as to whether
Plaintiffs took proper steps to warrant a statutory damages award from the Board is not before
the Court at this time.
its nature protects against ‘a variety of types of conduct characterized as involving ‘bad faith’
because they violate community standards of decency, fairness or reasonableness.’” Jd. at 208-
09 (quoting Restatement (Second) of Contracts § 205 cmt. a). The question whether the implied
covenant has been breached is “usually a question of fact for a jury.” Boulton v. CLD Consulting
Eng’rs, Inc., 2003 VT 72, 4 12, 175 Vt. 413. Notably, there is no “separate cause of action for
breach of the implied covenant of good faith and fair dealing when the plaintiff pleads breach of
contract based upon the same conduct.” Tanzer v. MyWebGrocer, Inc., 2018 VT 124, § 33, 209
Vt. 244 (quotation marks omitted). The Court concludes that Plaintiffs have not come close to
meeting their evidentiary burden on this claim.

First, to the extent the claim is premised on the State’s supposed failure to maintain the
crossing, see Pls.” Opp’n at 12, it is based on the same conduct for which Plaintiffs assert a
separate claim for breach of contract, and is barred for that reason. See Tanzer, supra.

Second, Plaintiffs’ claim is otherwise largely premised on the State’s inaction with regard
to unilateral conduct of its lessee, the Railroad.® In early February of 2017, the Railroad closed
the rail crossing without first seeking an agreement for closure from Plaintiffs or others, and
without petitioning the State Transportation Board for a closure order. The Railroad performed
this initial closure by giving Plaintiffs and other affected residents a written notice explaining the
Railroad’s safety-related concerns, and then almost immediately thereafter installing a physical
blockade of the crossing. By not seeking an agreement from affected landowners or petitioning
the Board, the Railroad’s actions violated 5 V.S.A. § 3639(a), which requires such procedural
steps to be taken by a party seeking to close a railroad crossing. Indeed, the Board found the
Railroad liable for those two violations and for each violation ordered the Railroad to pay the
maximum civil fine permitted by statute, 5 V.S.A. § 3639(b). Notably, in addition to authorizing
civil fines, the statute also affords “any person aggrieved by such” procedural violations a right
to bring a private action to “recover the person’s damages.” Jd. Plaintiffs failed to bring such an
action in this Court, however. Instead, Plaintiffs now cite the Railroad’s statutory violations as
evidence that the Railroad (and by extension, the State) violated the implied covenant of good
faith and fair dealing.

Granting Plaintiffs the benefit of all reasonable doubts and favorable inferences, the
Court does not find that the Railroad’s conduct is sufficient to support a claim for breach of the
implied covenant. For example, Plaintiffs fail to present evidence that the Railroad (or the State,
as “mere bystander”) acted with an improper or unreasonable purpose or motive. Plaintiffs
“believe that the State has proffered reasons [for the closure] that are pretext and that the State
seeks to close the crossing to limit expenditure of funds to update the crossing.” Pls.’ Rule
56(c)(2) Statement In Response to State, { 14. Plaintiffs similarly suggest that “[i]f the Railroad
was concerned about some imminent risk, [it] likely would have taken some advanced steps to
make the crossing safer prior to closing the crossing,” and that “[t]he lack of any [advanced]

6 Plaintiffs seek to make the State liable for such conduct on the theory that the State was a
“mere bystander,” Pls.’ Opp’n at 12, or “acquiesce[ed] to the Railroad’s actions.” Am. Compl.
4,29. Notably, the State does not argue that it cannot bear direct or vicarious liability, in an
action sounding in tort, for what appears to be the Railroad’s own, independent conduct.
effort whatsoever demonstrates pretext.” Pls.’ Rule 56(c)(2) Statement In Response to Railroad,
23. While the Court is obligated under Rule 56 to grant Plaintiffs all reasonable doubts and
inferences, Plaintiffs here are offering only speculation to fill an evidentiary gap, which is an
insufficient basis on which to avoid summary judgment. See Boyd, 2022 VT 12, J 19; Palmer v.
Furlan, 2019 VT 42, 4 10, 210 Vt. 375.

The record simply does not support a claim of pretext, or other improper motive or
purpose. The Railroad’s reason for physically closing the crossing, and the reason it advanced
when later petitioning the Board for permanent closure, was that it was a public safety risk for
reasons that could not be adequately addressed or ameliorated by maintenance work. (The
Agency of Transportation, as intervenor in the administrative proceedings, took that same
position, though it relied on its own “Highway Crossing Sufficiency Analysis” that the Agency
performed in April of 2017.) Soon after the Railroad filed its petition, the State Transportation
Board—which generally functions as the “regulatory and quasi-judicial” arm of the Agency of
Transportation, 19 V.S.A. § 5(a), and whose members are presumptively knowledgeable about
issues “in various areas of the transportation field,” 19 V.S.A. § 3—conducted a full-blown
evidentiary hearing on the question whether the crossing should be permanently closed, see id.

§ 5(c) (Board adjudications governed by 3 V.S.A. chapter 25). The Board thus took evidence
from Plaintiffs (who had separately petitioned for re-opening), the Agency, and the Railroad. In
August of 2017, the Board issued an order closing the crossing, in which the Board agreed with
the Railroad’s reasoning and its view of the facts on the ground regarding safety risks.
Significantly, the Board, which “presumably possesses expertise” in the “specialized field of
transportation” and “in assessing standards for . . . performance” in contracts regarding
transportation infrastructure, Earth Constr., Inc. v. State Agency of Transp., 2005 VT 82, 4 9,
178 Vt. 620 (mem.), did not find or even suggest that the Railroad’s position was pretextual,
dishonest, or otherwise in bad faith. This Court eventually affirmed and upheld the Board’s
reasoning and determination in that regard, as well. As such, the Railroad’s actions were
certainly not lacking a reasonable basis in fact or regarding transportation safety policy, and they
were not shown to be pretextual or otherwise in bad faith.? And by extension, even assuming the
State may be liable for “acquiescing” to the Railroad’s conduct, Plaintiffs’ lack sufficient
evidence that the State breached the implied covenant of good faith and fair dealing.

7 The Court is aware that Plaintiffs continue to disagree with the findings and the merits of the
Board’s closure decision, and Plaintiffs still have a right to appeal this Court’s order affirming
the Board’s 2023 closure order. The more relevant point, however, for purposes of a claim
alleging “bad faith,” is not simply that the Railroad’s position was found supported by public
policy after a full evidentiary hearing before an administrative body with expertise in
transportation safety issues, but that the position was not simply rejected or dismissed as
arbitrary, unreasonable, improper, pretextual, or wholly without basis. In short, the Railroad’s
decision to close the crossing, even if found mistaken as a matter of policy following an appeal
and another Board decision on remand, has not been shown in the slightest to have been
undertaken in bad faith.
Further, Plaintiffs have not shown how their rights or interests were actually and
particularly harmed or undermined because of the Railroad’s actions to physically close the
crossing without first making efforts to negotiate a closing or petitioning the Board for an order
of permanent closure. Parties suing for breach of the implied covenant, like any tort plaintiff
seeking compensatory damages, must show actual injuries proximately caused by the tortious
conduct of the defendant. There is no evidence in the record indicating how or to what extent
Plaintiffs’ interests were injured or impaired by the Railroad’s violations of the procedural
mandates set forth in 5 V.S.A. § 3639(a). Plaintiffs’ Rule 56(c)(2) statements point to no
evidence that speaks to any injuries particularly arising from the Railroad’s (or the State’s)
supposed bad faith conduct.

Lastly, to the extent Plaintiffs’ claim rests on actions or omissions taken solely and
directly by the Agency of Transportation or the Transportation Board, the claim also lacks
sufficient support. For example, Plaintiffs allege a deprivation of their property without due
process and assert that such is proof that the State acted in bad faith. To the contrary, the State
afforded Plaintiffs an administrative adjudication in accordance with the Vermont Administrative
Procedures Act, 3 V.S.A. chapter 25, and those procedures embody and afford “minimum
standards of due process necessary for a fair proceeding.” Jn re Vt. Health Serv. Corp., 155 Vt.
457, 460 (1990); see also Earth Constr., 2005 VT 82, § 7 (listing powers delegated to Board by
statute that enable it to “function like a court when dealing with a variety of... complicated
matters” within its jurisdiction). Further, Plaintiffs were afforded and utilized a right to judicial
review of the Board’s adjudicatory actions, through which they could have alleged inadequate
procedural protections.

Relatedly, if Plaintiffs’ theory is that the State has violated due process by engaging in
biased or prejudiced decision-making—perhaps in an effort to avoid or nullify the State’s own
contractual obligations regarding the crossing—Plaintiffs have a steep evidentiary hill to climb.
As explained in a leading treatise on administrative law:

In order to prevail in a claim of bias violating due process, one must show an
unacceptable probability of actual bias on the part of those who have actual
decision-making power. The general rule requires a presumption of integrity and
honesty. Absolute impartiality is not required. An interpretation of events that
suggests bias or a hypothetical scenario that conjures up potential bias will not be
enough.

2 Charles H. Koch, Jr. & Richard Murphy, Administrative Law & Practice § 6:10 (3d ed.)
(quotation marks and citations omitted). More generally, “[a]dministrative officials are
presumed to be objective and capable of judging particular controversies fairly and on the basis
of their own circumstances.” Jd. “Evidence of bias must overcome a presumption of honesty
and objectivity.” Plaintiffs have made no such showings here, sufficient to prove that the State’s
decisionmakers (the Board or the Agency of Transportation) were biased or partial. Further, if
Plaintiffs are secking compensatory damages from the State, based on the Board’s closure
decision—as arbitrary, capricious, biased, or otherwise unlawful—tt is doubtful that the State has
waived its sovereign immunity from damages claims based on such regulatory actions or
decisions.
In conclusion, therefore, while breach of the implied covenant is usually a question of
fact, there is an insufficient evidentiary basis on which a jury, resolving all reasonable doubts
and drawing all reasonable inferences of fact in Plaintiffs’ favor, could determine that the
covenant had been breached by the acts and/or omissions of the State. Therefore, the Court will
grant the State’s motion on Count V of the Amended Complaint.

C. Additional Claim for “Bad Faith”

Plaintiffs separately assert, as Count IV, a claim against the State entitled “bad faith.”
Yet, Plaintiffs fail to articulate a basis for such a freestanding claim that arises outside or apart
from any contractual relationship. The nature and scope of the claim appears entirely duplicative
of the claim for breach of the implied covenant of good faith and fair dealing. Tellingly, upon
review of the section of Plaintiffs’ opposition brief addressing “bad faith,” the Court finds no
authorities discussing, much less supporting, an extra-contractual claim for “bad faith.” See Pls.’
Opp’n at 10-13. The only case cited there is Tanzer v. MyWebGrocer, Inc., supra, a case
addressing the implied covenant of good faith and fair dealing. Our Supreme Court has observed
that the term, “bad faith,” is often employed as “the general shorthand for breach of the implied
covenant of good faith and fair dealing.” Murphy v. Patriot Ins. Co.,2014 VT 96, § 17, 197 Vt.
438. That appears to be the case here. Accordingly, for the reasons stated above as to the claim
for breach of the implied covenant, and because the Court does not find that there is an
independent claim for “bad faith,” the Court will grant summary judgment to the State on Count
IV.

Il. The Railroad’s Motion On the Claim for Tortious Interference With Contract

In Count VI, Plaintiffs allege that the Railroad is liable for tortious interference with
contract, by inducing or otherwise causing the State to fail to perform contractual duties owed to
Plaintiffs. Our Supreme Court adheres to the Restatement standard for such a claim, which is as
follows:

One who intentionally and improperly interferes with the performance of a
contract (except a contract to marry) between another and a third person by
inducing or otherwise causing the third person not to perform the contract, is
subject to liability to the other from the failure of the third person to perform the
contract.

Restatement (Second) of Torts § 766; see also Kneebinding, Inc. v. Howell, 2018 VT 101, 93,
208 Vt. 578 (explaining that under this Restatement section, the plaintiff must prove actual harm
as a result of defendant’s interference).

Plaintiffs’ theory is that the Railroad, by initially closing the crossing unilaterally, and
then successfully petitioning the Board for a permanent order of closure, prevented the State
from performing its executory obligations under the contract (i.e., continued maintenance at the
crossing). However, assuming arguendo that this theory is viable and supported by sufficient
evidence, Plaintiffs have not shown harm or injury to their interests from the State’s failure to
perform its maintenance obligations after the crossing was closed. Additional maintenance work
at the crossing, after its closure, would not have benefitted Plaintiffs in any respect.’ Indeed,
Plaintiffs identify no pecuniary loss, stemming from any post-closure failure to maintain the
crossing. They also fail to point to evidence demonstrating that they have suffered other,
consequential harms, injuries, or losses, proximately resulting from the State’s failure to perform
(or the impossibility of performing) maintenance at the crossing after its closure.

Furthermore, there is insufficient evidence from which a jury could find that the
Railroad’s actions were “improper,” within the meaning of the Restatement. See Restatement
(Second) of Torts § 767 (listing factors relevant to the “improper interference” element, including
the nature of the actor’s conduct, the actor’s motive, interests with which the actor’s conduct
interferes, and interests sought to be advanced by the actor); Gifford v. Sun Data, Inc., 165 Vt.
611, 612 (1996) (mem.) (citing § 767). Most significantly, as discussed above, there is no
evidence demonstrating that the Railroad acted for any reason or motive other than to advance a
significant public safety interest—preventing a collision at the crossing. Relatedly, to the extent
the Railroad’s actions are understood to have caused the temporary and permanent closure of the
crossing, then the Railroad is thereby responsible for securing that significant public safety
interest. Far from “improper,” the Railroad’s actions thus furthered the public welfare.

Section 767(e) of the Restatement lists, as relevant to the issue of improper interference,
“the social interests in protecting the freedom of action of the actor and the contractual interests
of the other.” There is certainly a strong interest in the enforcement and enjoyment of valid
private contracts, such as easements by deed that run with the land, and related contractual duties
to maintain such easements. However, Plaintiffs’ claim also clearly and adversely impacts
society’s interest in protecting the Railroad’s freedoms, in particular, its speech and petition
rights under the First Amendment and the Vermont Constitution. After all, the Railroad’s
actions here included petitioning the State government (the Board) for relief—the order of
permanent closure. Thus, to find the Railroad’s actions “improper” here, and thereby force it to
pay compensatory damages on a claim for tortious interference, would significantly impair and
chill the Railroad’s First Amendment rights and those afforded under the Vermont Constitution.
See Jacobsen v. Garzo, 149 Vt. 205, 208 (1988) (“Free and uninhibited access to the courts is an
important right of all citizens. Indeed, in Vermont this right is recognized by our fundamental
law.” (citing Vt. Const. ch. I, art. 4)); Kollar v. Martin, 167 Vt. 592, 593-94 (1997) (“‘as a matter
of law, the filing of a lawsuit alone cannot constitute tortious interference with contractual
relations’” (quoting Jacobsen, 149 Vt. at 209)); Regel v. Campbell Soup Co., No. 24-CV-6541
(KMK), 2025 WL 2733840, at *6 n.3 (S.D.N.Y. Sept. 25, 2025) (claims for tortious interference
predicated on litigation brought by defendant are “routinely” barred by courts under the First
Amendment doctrine known as Noerr- Pennington). This is another factor that weighs against
the Railroad’s liability for tortious interference.

8 The Board also found that no amount of maintenance work by the State would be adequate to
warrant the opening of the crossing. Thus, assuming the Railroad’s actions interfered with the
State’s ability to perform maintenance work, that interference resulted in an inconsequential loss
to Plaintiffs, since the lack of maintenance was not the actual cause of the closure of the
crossing, or the resulting deprivation of Plaintiffs’ right to use of the crossing.
In conclusion, Plaintiffs’ claim fails for lack of evidence of damages and on the element
that the Railroad’s actions were “improper.”

ORDER

Wherefore, the Court GRANTS the motion for summary judgment by Defendant State of
Vermont as to all remaining claims pled against the State (Counts II-V of Plaintiffs’ Amended
Complaint). The Court GRANTS the motion for summary judgment by Defendant Washington
County Railroad Company on Count VI of Plaintiffs’ Amended Complaint, the lone claim
remaining against the Railroad.

Motion #32 is GRANTED in favor of Defendant the State of Vermont to all counts (II,
Ill, IV, V).

Motion #33 is GRANTED in favor of the Defendant Washington County Railroad
Company to the remaining count VI.

The Court will separately enter a final judgment in favor of Defendants.

Dated December 29, 2025.

Electronically signed pursuant to V.R-E-F. 9/d).

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Kerry 4. McDonald-Cady, Superior Court Judge