Unity School District v. Vaughn Associates, Inc. et al
Filing
164
///ORDER granting 159 Amended Motion to Dismiss Third Party Complaint. For the reasons discussed, as well as those set forth in movants' legal memoranda (documents no. 160 and 162), the Amended Motion to Dismiss filed by Superior Walls of the Northeast, LLC and Superior Walls by Weaver Northeast (document no. 159) is granted and all claims advanced in Vaughn's third-party complaint against those entities are dismissed. Thus, the sole remaining claims in Vaughn's third-party complaint are those against Superior Walls of the Hudson Valley, Inc. So Ordered by Judge Steven J. McAuliffe.(lw)
Case 1:15-cv-00155-SM Document 164 Filed 04/20/20 Page 1 of 9
UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Unity School District,
Plaintiff
v.
Case No. 15-cv-155-SM
Opinion No. 2020 DNH 062
Vaughn Associates, Inc.,
and Scott Vaughn,
Defendants
v.
Superior Walls of Hudson Valley, Inc.,
a/k/a Superior Walls by Weaver Northeast,
a/k/a Superior Walls of the Northeast, LLC,
Third-Party Defendants
O R D E R
This multi-party construction litigation arises out of
failed contracts between the Unity School District and Scott
Vaughn and his company, Vaughn Associates (collectively,
“Vaughn”).
The background facts have been described in numerous
prior orders of the court and they need not be recounted here.
At this juncture, the court need only make two observations:
first, the sole remaining claims are those Vaughn asserts
against third-party defendant Superior Walls of the Hudson
Valley, Inc. (“Hudson”); and, second, in its third-party
complaint Vaughn asserts that Hudson is “also known as” Superior
Case 1:15-cv-00155-SM Document 164 Filed 04/20/20 Page 2 of 9
Walls by Weaver Northeast (“SW Weaver”) and Superior Walls of
the Northeast, LLC. (“SW Northeast”).
Pending before the court is a motion to dismiss, filed by
SW Weaver and SW Northeast.
In short, movants assert that
Vaughn has incorrectly grouped them together with Hudson as a
single entity that does business under different names.
incorrect.
That is
Instead, say movants, they are entirely distinct
entities (one is a New York limited liability company, and the
other is its “trade name” or “d/b/a”) that were entitled to, but
never received, proper service of process.
And, because movants
say they were never properly served with Vaughn’s third-party
complaint, they move the court to dismiss all claims against
them.
Vaughn objects.
Discussion
Federal Rule of Civil Procedure 12(b)(5) provides for
dismissal of a claim if service of process was not properly
made.
And, “once challenged, plaintiffs have the burden of
proving proper service.”
Rivera-Lopez v. Municipality of
Dorado, 979 F.2d 885, 887 (1st Cir. 1992).
When service of
process is properly challenged, “[a] return of service generally
serves as prima facie evidence that service was validly
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performed.”
Blair v. City of Worcester, 522 F.3d 105, 111 (1st
Cir. 2008).
Before turning to the merits of movants’ motion to dismiss,
the court notes that Superior Walls of America, Ltd. (not a
party) appears to license companies to operate local businesses
using the “Superior Walls” name (or some variation thereof).
See, e.g., Superior Walls License Agreement (document no. 160-1)
at 10-12.
That, it would seem, explains the variety of
confusing corporate names employing variations of the “Superior
Walls” element.
It may also explain Vaughn’s apparent confusion
over precisely which entities it has named as defendants, and
which entities it has actually served.
Additionally, it probably bears noting that movants do not
question (or even address) whether Vaughn properly served
Hudson.
As a distinct legal entity(s), movants have neither an
interest in, nor standing to raise, that issue.
Consequently,
it is not before the court and Vaughn has not been called upon
to demonstrate proper service upon that defendant.
But, as to
SW Northeast and SW Weaver, Vaughn does bear the burden of
demonstrating that it properly served those entities (or, at a
minimum, that it properly served SW Northeast, the actual
corporate entity).
Vaughn has failed to carry that burden.
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Because Vaughn’s arguments defy simple description, it is
probably best to quote them as they appear in Vaughn’s legal
memorandum.
In support of its argument that it properly served
entities known as “Superior Walls by Weaver Northeast” (SW
Weaver) and/or “Superior Walls of the Northeast, LLC” (SW
Northeast), Vaughn says:
In opposition to [SW] Northeast’s prior Motion to
Dismiss, VAI [i.e., Vaughn] argued that it had
properly served the third party complaint on [SW]
Northeast. VAI cited to the Affidavit of Michael E.
Coghlan, former counsel for VAI, Docket Document No.
31, in which Attorney Coghlan recounts his efforts, in
the summer of 2015, to serve the third party complaint
as requested by this Honorable Court. In his
affidavit, Attorney Coghlan stated that he originally
had the third party complaint served on Hudson Valley
at its address in Poughkeepsie, NY. However, the
local sheriff’s department informed him that a person
at Hudson Valley’s address stated that Hudson Valley
had been sold and was now located in Pennsylvania.
Attorney Coghlan then attempted to serve Hudson Valley
in Pennsylvania. Exhibit 2 to Attorney Coghlan’s
Affidavit (Docket Document No. 31-2) indicates that
sheriff’s department in Lancaster County, PA, served
the third party complaint on “DOTTIE WEAVER (OWNER),
WHO ACCEPTED AS ‘ADULT PERSON IN CHARGE’ FOR SUPERIOR
WALLS BY WEAVER PRECAST, INC AT 824 EAST MAIN STREET,
EPHRATA, PA 17522.” Attorney Coghlan states that
subsequently an attorney for Superior Walls by Weaver
Precast, Inc. (“Weaver Precast”) contacted him and
stated that Weaver Precast had purchased the business
assets of Hudson Valley but not the business itself
and provided Attorney Coghlan with an address for
Hudson Valley at 111 Balsam Square, Poughkeepsie, New
York. Another filing in this lawsuit, Docket Document
No. 33, is a Proof of Service indicating that the
third party complaint was served on “Arthur Ackard
[sic] at 111 Balsam Square, Poughkeepsie, New York.”
When compared to the averments made in the Affidavit
of Gary Weaver attached to Weaver Northeast’s Amended
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Motion, the Affidavit of Michael Coghlan confirms that
VAI properly served the third party complaint on [SW]
Northeast.
Vaughn’s Opposition Memorandum (document no. 161) at 3-4
(emphasis supplied).
A more condensed version might be this: Vaughn claims to
have served its third-party complaint on Hudson (twice) and a
company known as “Superior Walls by Weaver Precast, Inc.” (not a
named defendant).
But, even looking beyond the factual error
contained in that paragraph quoted above (Weaver Precast did not
purchase the assets of Hudson), it is entirely unclear how or
why Vaughn believes that service upon Hudson and/or service upon
a company called Weaver Precast “confirms that [it] properly
served the third party complaint on [SW] Northeast.”
Vaughn’s arguments in opposition to dismissal are confusing
and rest upon assertions of its having served (or having
attempted to serve) completely unrelated third parties – parties
that, despite similar sounding corporate names, are not named
defendants in this action (e.g., “Superior Walls by Weaver
Precast, Inc.” and “Weaver Precast, Inc.”).
Moreover, Vaughn
has not demonstrated that whatever entities it did serve are
successors to, or otherwise related to, the entities named in
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the complaint.
Finally, Vaughn’s claims of having made service
upon individuals who were not authorized by law (or by SW
Northeast or SW Weaver) to accept service of process on their
behalf are simply off the mark (e.g., Dottie Weaver of Superior
Walls by Weaver Precast, Inc. and Arthur Ackert, Sr., of
Hudson).
Movants, on the other hand, have introduced undisputed
evidence that:
1.
SW Northeast in a limited liability company
organized under the laws of New York. Affidavit
of Gary L. Weaver (document no. 160-1) at para.
1. See also Certificate of Publication (document
no. 160-1) at 8.
2.
SW Weaver (that is, “Superior Walls by Weaver
Northeast”) is a trade name or “d/b/a” under
which SW Northeast does business. It is not a
distinct incorporated entity. Weaver Affidavit,
at para. 2-3. See also License Agreement
(document 160-1) at 10.
3.
Vaughn’s discussion of its efforts to serve
entities known as “Superior Walls by Weaver
Precast, Inc.” and “Weaver Precast, Inc.” appear
to be irrelevant. First, those entities are not
named defendants. And, despite the similarity in
names, Vaughn has shown no relationship between
those entities and the movants: SW Northeast and
SW Weaver. See Weaver Affidavit, at paras. 2127.
4.
On December 9, 2011, SW Northeast (not Weaver
Precast) purchased a number of assets from the
defendant, Hudson. Id. at paras. 6, 24. See
also Asset Purchase Agreement (document no. 1601) at 14-43.
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5.
That asset purchase was negotiated at armslength, for fair market value, and included,
among other things, a covenant not to compete
executed by Hudson. Weaver Affidavit, at paras.
6-7. See Agreement not to Compete (document no.
160-1) at 54-59.
6.
Prior to closing that asset purchase, no employee
or representative of SW Northeast (or its “d/b/a”
SW Weaver) communicated with, or engaged in
activities with, Vaughn or the Unity School
District (and thus could have no pre-closing
liability to Vaughn). Weaver Affidavit, at para.
14.
7.
As part of the asset purchase agreement, SW
Northeast did not acquire any contracts between
Hudson and Vaughn (there apparently were none).
Nor did it acquire any of the contracts or
customer orders between Hudson and the Unity
School District (i.e., those related to this
litigation and arising out of the Unity School
District construction project). Id. at paras. 913.
8.
As part of the asset purchase agreement, Hudson
agreed to retain, and SW Northeast disclaimed,
any liabilities of Hudson (other than those
specifically disclosed, which do not relate to
this case), whether incurred prior to or after
the closing. SW Northeast did not assume any
liabilities or obligations of Hudson related to
the Unity School District project. See Section
3, Asset Purchase Agreement (document no. 160-1)
at 16-17.
9.
So, as part of that agreement, SW Northeast did
not acquire any of Hudson’s assets related to the
Unity School District project, nor did it assume
any of Hudson’s liabilities associated with that
project.
10.
Vaughn’s arguments that it completed service upon
SW Northeast in September of 2015 (years after
the closing) by serving Arthur “Ackard,” [sic]
Sr., at an address in Poughkeepsie, New York, are
without basis. See Proof of Service (document
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no. 33). Arthur Ackert, Sr. was never employed
by SW Northeast, and SW Northeast never occupied
that address in Poughkeepsie. Weaver Affidavit,
at paras. 19-20. Rather, Arthur Ackert, Sr., was
president of the defendant Hudson. See, e.g.,
Id. at 14-29 (executed by Arthur Ackert, Sr. as
President of Hudson).
Vaughn’s confusion on that latter point may stem from the fact
that, following the closing on the asset purchase agreement
between Hudson and SW Northeast, SW Northeast hired Arthur
Ackert, Jr., as one of its salaried employees.
However, Arthur
Ackert, Sr., - the man Vaughn purported to serve - was never
employed by SW Northeast (again, he was the president of the
named defendant, Hudson).
Thus, it is plain (as reflected in
the return of service) that Arthur Ackert, Sr., accepted service
of process on behalf of the company of which he was the head:
Hudson, and not SW Northeast.
See Proof of Service (document
no. 33).
Conclusion
The facts underlying the pending motion to dismiss are
somewhat complicated, particularly given the similarity of so
many corporate names and in light of Vaughn’s apparent
confusion.
But, the concept of service of process (particularly
on a domestic entity) is not a complex one.
Proving that
service was properly made on a named defendant should be
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correspondingly straightforward.
On the record presented, the
bottom line is clear: Vaughn has failed to sustain its burden of
demonstrating that it properly served SW Northeast (or its
“d/b/a” SW Weaver).
For the reasons discussed, as well as those set forth in
movants’ legal memoranda (documents no. 160 and 162), the
Amended Motion to Dismiss filed by Superior Walls of the
Northeast, LLC and Superior Walls by Weaver Northeast (document
no. 159) is granted and all claims advanced in Vaughn’s thirdparty complaint against those entities are dismissed.
Thus, the
sole remaining claims in Vaughn’s third-party complaint are
those against Superior Walls of the Hudson Valley, Inc.
SO ORDERED.
____________________________
Steven J. McAuliffe
United States District Judge
April 20, 2020
cc:
All Counsel of Record
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