Norwich creamery owners sue Vermont Tech over farm sale

For the Valley News
Published: 5/25/2021 8:42:27 AM
Modified: 5/25/2021 8:42:26 AM

NORWICH — The owners of Norwich Farm Creamery are suing the Vermont State Colleges System for $500,000 as it tries to sell a farm they currently occupy.

Chris Gray and Laura Brown allege that state college leaders lied about their intentions for the property when forming a business partnership with the couple, undermined the venture and didn’t give their cheesemaking operation the time it needed to get off the ground.

Gray and Brown filed the lawsuit in Vermont Superior Court in Washington County on May 14 just after Vermont Technical College — a subsidiary of the state college system — rejected the Norwich Farm Foundation’s fourth attempt to buy the property. The foundation was formed by community members to support the couple’s attempt to stay put and to ensure the land is not further developed. 

The suit comes after a long back-and-forth between the creamery operators and the state college system. The two parties had entered into a partnership to form an educational dairy program on the site in 2015, but it unraveled the next year.

Gray and Brown have about a month remaining before their five-year lease agreement with the college expires on June 30, at which point they expect to be kicked off the property. “We are on the verge of eviction and have no choice but to protect our family’s investment and the future of this farm,” Gray and Brown said in a written statement. 

They say the $500,000 they’re seeking represents the investment they made in the business venture and improvements to the property. They’re suing on one count each of fraud, negligence, unjust enrichment and breach of fiduciary duty. 

The 5.2-acre Turnpike Road property they call home includes a cow barn and farmhouse. It has been listed for sale for $1.25 million with Lang McLaughry Commercial Real Estate since February. Vermont Technical College has rejected four purchase offers from the nonprofit foundation, most recently for $750,000, according to college president Pat Moulton and members of the foundation. 

A.J. LaRosa, an attorney representing Gray and Brown, said the lawsuit is a final attempt to redeem some of the creamery owners’ investment as their hopes of obtaining the property dwindle.

“If they had been successful in buying the property, I’m not sure they would have told me to file the suit,” LaRosa said.

Moulton and Sophie Zdatny, the chancellor of the state colleges system, said in a statement that Vermont Technical College had fulfilled its legal obligation to Norwich Farm Creamery and is selling the properties “to enable VSCS to strategically reinvest in core educational mission initiatives.” 

They said the lawsuit would be “vigorously defended and (the Vermont State Colleges System) expects to prevail.” They declined further comment.

VTC has 60 days to formally respond to the complaint. 

The property in question was a gift from Norwich resident Andrew Sigler to the college in 2015. At the time, it included the 5.2-acre parcel on which Gray and Brown live; a 2.2-acre parcel with a house and mobile trailer; and an adjoining 353 acres of open land. The college later sold the land to the Upper Valley Land Trust. 

Shortly after Sigler made the gift, Gray and Brown sold their home in West Pawlet, Vt., and moved to the farm to start the joint venture with the college, according to the lawsuit. The college hired Gray as a contractor to lead and teach an experimental, hands-on, value-added dairy program. 

The plan was to bring students, a dairy farmer with a herd of cattle and a cheesemaker to live at the property. Students would learn the art of making dairy products and contribute labor while Gray would launch a private start-up business making dairy products from milk he purchased from the farmer.

Gray and the college planned to sell and co-brand certain cheeses, according to the lawsuit. Both were to contribute equally to the farm.

The college bought $125,000 worth of micro-creamery equipment with a federal grant and spent another $75,000 on infrastructure at the farm to make it suitable for students, while Gray and Brown paid $150,000 to install the creamery equipment, according to the lawsuit. The program ended shortly after it began.

Part of the problem, according to the lawsuit, is that former Vermont Technical College president Dan Smith signed conflicting agreements with two parties over the farm.

According to documents included in the lawsuit, Smith signed a memorandum of understanding in June 2015 in which the college agreed to negotiate a long-term lease with Gray. A month later, Smith signed an option agreement with the Upper Valley Land Trust, which allowed the trust to acquire the farm property for just $50,000 — free and clear of encumbrances — if the educational program failed.

The college’s lease with Gray started in August 2016 and allowed Gray to live at the property for at least five years with a possibility to renew the lease for another 20 years.

The lawsuit claims the college failed to uphold its end of the joint venture and ended the educational program before it had a chance to succeed. During negotiations, the creamery operators “routinely expressed (to the college) that development of a high-end, cave-aged cheese business, would take 10-20 years,” and both sides agreed that the proposal would need “15 years to develop,” according to the suit. 

“The core problem is the leadership didn’t seem to care about the commitments previously made,” LaRosa said.

But in an interview, Chris Dutton, the former head of the Vermont Tech’s agricultural department, said he had opposed leasing the property to Gray for longer than a year, in case the concept didn’t work. “We were committed to working with each other, but I tried to be extremely clear that the most important thing was to get income enough to support the cows,” Dutton said.

Dutton’s plan was for Gray to “make high-end European style raw-milk cheeses that would be sold for a profit,” according to the lawsuit, but Dutton said he later learned Gray couldn’t produce cheese.

Gray currently hauls milk from Billings Farm in Woodstock and processes it at the facility in Norwich, from which he sells yogurt, milk, ricotta and ice cream. He does not, however, make aged cheese at Norwich Farm Creamery and never has, according to Gray and Dutton. Gray said he doesn’t make cheese in Norwich because the facility is not equipped to do so, while Dutton said Gray doesn’t have experience making cheese himself. 

Gray was formerly the creamery director and director of sales and marketing at Consider Bardwell Farm in West Pawlet before he came to Norwich. Gray said he has completed extensive coursework in dairy production and made cheese at Consider Bardwell, though he wasn’t the lead cheesemaker. 

“When you are a partner in a startup farm business, you do every part of the work,” Gray said.  

Smith, who left the college just after the agreement with Gray was reached, is now the director of the Vermont Community Foundation. He declined to comment on the lawsuit.

Moulton, Smith’s successor, allegedly made “no efforts to market the program” or attempt to manage the students, according to the lawsuit. In 2017, the college terminated the program under Moulton’s leadership after just one semester “without warning or notice” to Gray and then tried to sell the farm to the Upper Valley Land Trust under the option agreement, according to the lawsuit.

Gray and Brown said they signed the lease without knowing about the land trust’s option. They said the omission was “intentional” and the college “lied” when it affirmed its long-term commitment to the educational program.

“Had Plaintiffs been informed of the option they would not have entered into any further agreement or relationship with Defendants,” according to the lawsuit.

The college pays about $70,000 a year to maintain the property, while Gray and Brown pay $500 a month in rent.

Moulton has previously said the college ended the program largely due to a lack of student interest, but Gray and Brown said in the lawsuit that officials never indicated the venture was contingent on student enrollment.

“It was understood that enrollment would be slow at first and build over time as the venture developed,” according to the suit. 

When the program ended, the land trust threatened Gray and Brown with “aggressive legal action” in March 2018 so that the trust could purchase the land unencumbered no later than May 2018, according to the lawsuit. Upper Valley Land Trust sued the college under the option. The two institutions ultimately reached a confidential settlement. 

In an interview last week, Upper Valley Land Trust president Jeanie McIntyre said she was unaware of Gray’s and Brown’s new lawsuit. 

She said she also did not know at the time the option agreement was signed that the college had a long-term lease commitment with Gray and Brown.

McIntyre said the land trust sought to buy the property only after hearing from Moulton that the college was ending the educational program and said she wanted to give Gray and Brown a chance to make other arrangements. 

“I wanted them to be able to plan far enough ahead so if they had to relocate their business they could find a spot for it,” McIntyre said. 

Valley News

24 Interchange Drive
West Lebanon, NH 03784


© 2021 Valley News
Terms & Conditions - Privacy Policy