Jacoby Donner v. Aristone Realty

VERMONT SUPERIOR COURT CIVIL DIVISION
Lamoille Unit Case No. 24-CV-02463
154 Main Street
Hyde Park VT 05655
802-888-3887
www.vermontjudiciary.org

Jacoby Donner, P.C. v. Aristone Realty Capital, LLC et al

ENTRY REGARDING MOTION
Title: Motion for Summary Judgment (Motion: 2)
Filer: William F Grigas
Filed Date: November 27, 2024

In this case, plaintiff Jacoby Donner, P.C., seeks to foreclose a judgment lien on
property in Stowe in which the related group of defendants have an interest. Plaintiff has
moved for summary judgment. Defendants oppose the motion. For the reasons set forth
below, the motion is denied.
Background
The relevant facts of this dispute are largely undisputed. See Pl.’s Statement of
Undisputed Material Facts (SUMF); Defs.’ Response ¶¶ 2-34, 37-43.
Defendant Patrick McGrath is the principal manager of the three corporate
defendants: Aristone Realty Capital, LLC (Aristone); Castlestone Mansfield Inn, LLC
(Castlestone); and Mansfield Loan Acquisition, LLC (Mansfield). Castlestone is the record
owner of a property located 1007 Mountain Road in Stowe (the Mountain Road property).
Mansfield holds the mortgages on the Mountain Road property and was created solely for
the purpose of acquiring those mortgages. Aristone is the majority owner of both
Castlestone and Mansfield. Aristone’s only current asset is its interest in Castlestone.
Castlestone’s current business status is “terminated” according the Vermont Secretary of
State’s website.
Plaintiff is, or was, a law firm in Philadelphia that did legal work for Aristone.
Following a fee dispute, plaintiff and Aristone stipulated to a consent judgment in the U.S.
District Court for the Eastern District of Pennsylvania on June 22, 2021. The consent
judgment was for $750,000 in plaintiff’s favor, with 6% per annum interest running from
Mach 23, 2021. Mr. McGrath signed the judgment on Aristone’s behalf. See SUMF, Exh. 3.
Plaintiff thereafter sued Aristone to enforce the judgment in the U.S. District Court
for the Southern District of New York. In a May 9, 2022 order, the district court granted

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24-CV-02463 Jacoby Donner, P.C. v. Aristone Realty Capital, LLC et al
plaintiff’s motion to charge Aristone’s interest in both Castlestone and Mansfield with
payment of the unsatisfied amount of the consent judgment along with post-judgment
interest. The order provided that “[a]ny distributions, return of contributions, or
outstanding obligations to which [Aristone] is entitled via its membership interest in”
either Castlestone or Mansfield “including but not limited to proceeds from the repayment
of any loan relating to [the Mountain Road property] shall be paid directly to” plaintiff.
SUMF, Exh. 2, ¶¶ 4-5 (the charging order).
In a prior action, this court issued an order on August 31, 2023 domesticating the
consent judgment and domestication order pursuant to the Full Faith and Credit Clause of
the U.S. Constitution. See SUMF, Exh. 6 (the domestication order). Plaintiff thereafter
recorded the consent judgment, charging order, and domestication order in the Town of
Stowe land records as a judgment lien against the Mountain Road property. Aristone has
not satisfied the judgment lien within 30 days of its recording (nor has any other
defendant).
There were originally two mortgages taken out by Castlestone on the Mountain
Road property for a total of approximately $2.8 million. Both mortgages were thereafter
assigned to Grey Birch Associates, LP (Grey Birch), which thereafter assigned the
mortgages to Mansfield in 2011. Before the latter assignment, Grey Birch had filed an
action against Castlestone to foreclose on its mortgages. After the assignment, Mansfield
was substituted as the foreclosure plaintiff and stipulated to dismissal of the action.
Analysis
“Summary judgment is appropriate ‘if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.’”
Hier v. Slate Valley Unified Sch. Dist., 2025 VT 2, ¶ 8 (quoting V.R.C.P. 56(a)).
Here, plaintiff seeks summary judgment and requests a foreclosure decree that
orders judicial sale of the Mountain Road property, shortens the redemption period from six
months to thirty days, and directs that plaintiff’s judgment lien have priority over
Mansfield’s unsatisfied mortgage.
There is no dispute that Aristone is indebted to plaintiff in accordance with the
consent judgment, and that Aristone has not made any payments toward that debt—either
before or since the judgment lien was recorded against the Mountain Road property.
Accordingly, if Aristone—the judgment debtor—was the owner of the Mountain Road
property, plaintiff would be entitled to foreclose on its judgment lien and seek judicial sale
the property. See 12 V.S.A. § 2903(d); V.R.C.P. 80.1(l).
Moreover, under the charging order, plaintiff has the right to receive any payments
or distributions made to Aristone on account of its interest in Castlestone and Mansfield
until the consent judgment is satisfied. Because no distributions or payments have been

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made, plaintiff presumably could seek to foreclose on Aristone’s distributional interests in
the other two entities and force the sale of those interests to satisfy the consent judgment.
See 11 V.S.A. § 4074(c)(1).
But that is not the relief that plaintiff seeks. Plaintiff seeks to satisfy its judgment
lien through sale of the Mountain Road property, which is owned not by Aristone but by
Castlestone. Plaintiff has presented no relevant legal authority to support the position that
a judgment creditor can force the sale of a third party’s property so that the judgment
debtor will receive a distribution, which then must be paid to the judgment creditor
pursuant to a charging order.
Instead, plaintiff argues that the court should pierce the corporate veil between
Aristone, Castlestone, and Mansfield, and effectively consider them all to be alter-egos of
each other and of Mr. McGrath. If the corporate veil is pierced, then the Mountain Road
property could be considered owned by the debtor on the judgment lien and a judicial sale
would be an appropriate remedy to foreclose on that lien.
The court may “pierce the corporate veil, where the corporate form has been used to
perpetrate a fraud, and also where the needs of justice dictate.” Doherty v. Town of
Woodstock, 2023 VT 56, ¶ 9 (quotation omitted). “In cases not involving fraudulent activity,
the court will look to the facts and circumstances of each case to determine whether the
corporate veil should be pierced in the interests of fairness, equity, and the public need.” Id.
Relevant considerations include:
(1) disregard of corporate formalities; (2) inadequate capitalization; (3)
intermingling of funds; (4) overlap in ownership, officers, directors, and
personnel; (5) common office space, address and telephone numbers of
corporate entities; (6) the degree of business discretion shown by the
allegedly dominated corporation; (7) whether the dealings between the
entities are at arm[’]s length; (8) whether the corporations are treated as
independent profit centers; (9) payment or guarantee of the corporation's
debts by the dominating entity, and (10) intermingling of property between
the entities.
Concepts NREC, LLC v. Qiu, 662 F. Supp. 3d 496, 511 (D. Vt.) (quotation omitted),
objections overruled, 698 F. Supp. 3d 698 (D. Vt. 2023).
Plaintiff argues that the corporate veil should be pierced in the interests of justice.
The undisputed facts show overlapping control of the various entities by Mr. McGrath and
some common addresses—Mr. McGrath’s personal address and the Mountain Road
address—being used. Aristone is the majority owner of both Castlestone, the owner and
mortgagor of the Mountain Road property, and Mansfield, the mortgagee of the property.
Aristone’s only asset is Castlestone and Mansfield’s only corporate purpose is to hold the

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mortgages for the Mountain Road property. 1 These are relevant facts that could support
piercing the corporate veil. Nonetheless, the summary judgment record is largely bereft of
any evidence about how the various entities are operated, whether corporate formalities
have been observed, and whether funds or other property have been intermingled. And
although plaintiff claims that “Mansfield’s purported mortgage claim is an artificially
created encumbrance designed to evade the judgment,” Pl.’s Reply Mem. 3, the summary
judgment record shows that Mansfield was assigned the Mountain Road mortgages in
2011—a decade before the consent judgment was issued.
On this record, the court cannot conclude that plaintiff has established all the
material facts that would entitle it pierce the corporate veil between the defendants.
Accordingly, plaintiff is not entitled to summary judgment.
Order
The motion for summary judgment is DENIED.

Electronically signed on: 2/13/2025 pursuant to V.R.E.F. 9(d)

_______________________________________
Benjamin D. Battles
Superior Court Judge

1
It also appears that Castlestone’s registration as a Vermont LLC has been terminated, but the
court is unable to place much weight on that fact given the ease with which an administrative
termination can both occur and be undone under Vermont law. See generally 11 V.S.A. § 4034.

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