Unity School District v. Vaughn Associates, Inc. et al

Filing 165

ORDER denying 149 Motion for Default Judgment as to Third Party Defendant Superior Wall of the Hudson Valley. For the foregoing reasons, Vaughn's renewed motion for default judgment against Superior Walls of the Hudson Valley (document no. 149) is denied. The Clerk of Court shall enter judgment in accordance with this order and close the case. So Ordered by Judge Steven J. McAuliffe.(lw)

Case 1:15-cv-00155-SM Document 165 Filed 07/20/20 Page 1 of 13

UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Unity School District,
Plaintiff
v.

Case No. 15-cv-155-SM
Opinion No. 2020 DNH 128

Vaughn Associates, Inc.,
and Scott Vaughn,
Defendants
v.
Superior Walls of Hudson Valley, Inc.,
Third-Party Defendant

O R D E R
After one of the third-party defendants, Superior Walls of
Hudson Valley, failed to appear or file a dispositive motion,
the court entered a default.
36).

See Entry of Default (document no.

Third-party plaintiffs (collectively, “Vaughn”) now move

the court to enter a default judgment in their favor and award
them the sum of $1,441,095.96.

That motion is denied.

As this court has previously noted, “After default is
entered and when the amount at issue is not a sum certain, the
party must apply to the court for a default judgment.

Although

a defaulting party admits the factual basis of the claims
asserted against it, the defaulting party does not admit the

Case 1:15-cv-00155-SM Document 165 Filed 07/20/20 Page 2 of 13

legal sufficiency of those claims.

To recover on a motion for

default judgment, the claimant must state a legally valid claim
for relief.

Therefore, before entering default judgment, the

court must determine whether the admitted facts state actionable
claims.”

Bradley v. Wells Fargo Bank, N.A., No. 12-CV-127-PB,

2015 WL 12851708, at *1 (D.N.H. Dec. 21, 2015), report and
recommendation approved, 2016 WL 7383772 (D.N.H. Jan. 13, 2016)
(emphasis supplied) (citations and internal punctuation
omitted).

The broader factual background to this case has been
discussed numerous times in prior orders of the court and need
not be recounted.

The specific factual claims Vaughn asserts

against Superior Walls are set forth in paragraphs 49 through 60
of Vaughn’s Third Party Complaint (document no. 8).

In short,

Vaughn did not have a contract with Superior Walls.
Nevertheless, says Vaughn, Superior Walls promised to
manufacture and deliver to the project a “precast foundation
wall and interior wall system” at some unspecified time.
According to Vaughn, “Superior made representations to [Vaughn]
that its prefabricated concrete components would be available to
be used in the construction of the new Unity Elementary School
in a timely manner.”

Id. at para. 146 (emphasis supplied).

But, says Vaughn, in April of 2012, when it attempted to order

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the precast walls from Superior, “Superior informed [Vaughn]
that it would not be able to deliver the anticipated wall panels
within the time necessary for the orderly progress of the work,
in fact the anticipated delay was 6-12 months.”
(emphasis supplied).

Id. at para. 52

See also Id. at paras 151-52 (“After the

design was complete, [Vaughn] attempted to order Superior’s
prefabricated concrete components for inclusion in the new Unity
Elementary School.

[Vaughn] was informed by Superior that its

prefabricated concrete products would not be available for up to
a year.”).

Those are the factual allegations against Superior: it
promised it could deliver a precast wall system in a “timely”
manner, but when Vaughn went to place an order for that wall
system, it learned that it would take 6-12 months to manufacture
– outside of the timeframe Vaughn needed it.

Based upon those

factual claims, Vaughn advanced four causes of action against
Superior Walls: intentional misrepresentation; negligent
misrepresentation, statutory contribution under N.H. Rev. Stat.
Ann. (“RSA”) 507:7-f, and implied common law indemnity.

The

court has discussed those causes of action and their essential
elements in detail in prior orders.

See, e.g., Order on Town of

Unity’s Motion to Dismiss (document no. 42); Order on Excel’s
Motion for Summary Judgment (document no.145).

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See generally

Case 1:15-cv-00155-SM Document 165 Filed 07/20/20 Page 4 of 13

Gray v. Leisure Life Indus., 165 N.H. 324 (2013); Johnson v.
Capital Offset Co., No. 11-CV-459-JD, 2013 WL 5406619, at *8,
2013 DNH 127 (D.N.H. Sept. 25, 2013); Dunn v. CLD Paving, Inc.,
140 N.H. 120 (1995).

Those discussions need not be repeated.

It is sufficient to note that Vaughn’s factual claims are
so vague that, had Superior Walls appeared and filed a motion to
dismiss for failure to state a claim, that motion almost
certainly would have been granted.

Nowhere does Vaughn allege

that Superior Walls promised, but failed to meet, a specific
lead time for production of the wall system.

Indefinite terms

and phrases like “timely” and “within the time necessary” are
insufficient to state a viable claim that Superior Walls
promised to deliver its product by a date certain (or within so
many weeks after an actual order had been placed) and then
failed to honor that commitment.

If, as alleged, Vaughn

communicated with Superior Walls about using its product, Vaughn
subsequently incorporated that product into its design plans,
and Vaughn then called to place an order for that product, it is
not surprising that it might take Superior Walls six months (or
more) to fulfill that order.

Any actual “wrongdoing” on the

part of Superior Walls is entirely absent from Vaughn’s
narrative.

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I.

Failure to State a Viable Claim
Vaughn has broken down its claimed damages (and

corresponding theories of recovery) into three broad categories:
1.

$425,000.00, representing “the amount [Vaughn’s]
insurance company was required to pay to resolve
this lawsuit with the USD;” and

2.

$908,095.96, representing “fees [Vaughn] was not
paid by the Unity School District” under the
contract between Vaughn and the School District;
and

3.

$108,000.00, representing the “6 months in which
[Scott Vaughn] worked 50 hours per week to
redesign the Project.”

Affidavit of Scott Vaughn (document no. 149-1) at para. 3.

A.

Contribution and Indemnity.

With respect to the first category of damages – the amount
paid to settle the claims advanced by the Unity School District
(“USD”) against Vaughn – Vaughn asserts that it is entitled to
recover from Superior Walls on theories of implied common law
indemnity and statutory contribution under RSA 507:7-f.

Those

two theories of recovery can be quickly dispatched.

Vaughn’s insurance company may have a claim for
reimbursement of those sums.

But, there is no indication that

Vaughn is acting on behalf of the insurance company.

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Moreover,

Case 1:15-cv-00155-SM Document 165 Filed 07/20/20 Page 6 of 13

and largely for the reasons set forth in the court’s order
discussing Vaughn’s claims against Excel Mechanical (document
no. 142), Vaughn’s claims against Superior Walls for common law
indemnity and statutory contribution fail to state the essential
elements of viable claims.

According to Vaughn, it and Superior Walls are joint
tortfeasors with joint and several liability.

Plaintiff’s

memorandum (document no. 149) at 3 (“Accordingly, [Vaughn] is
entitled to recover from Superior Walls as a joint tortfeasor
with join and several liability the $425,000 it [actually, its
insurer] paid to USD to extinguish USD’s claims against Superior
Walls . . ..”) (emphasis supplied).

Two facts bear noting.

First, in its complaint, Unity School District did not advance
any claims against Superior Walls.

Second, there are no

allegations in the Vaughn’s Third Party Complaint that would
support the notion that Superior Walls is a tortfeasor with
respect to the School District.

Indeed, the Third Party

Complaint suggests that the School District did not believe it
had been harmed by Superior Walls’ conduct.

See Third Party

Complaint at para. 56-60 (alleging that Vaughn notified two
different attorneys for the School District of Superior Walls’
alleged conduct, yet they did nothing to “preserve the School
District’s rights” against Superior Walls).

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So, even if Vaughn were permitted to recover the settlement
amount on behalf of its insurer, it has failed to demonstrate
(or even allege) that Superior Walls owed and breached any
cognizable common law duties to the School District that
proximately caused the injuries for which the School District
sought (and obtained) compensation from Vaughn.

See generally

Leisure Life Indus., 165 N.H. at 330 (“contribution is partial
payment made by each or any of jointly or severally liable
tortfeasors who share a common liability to an injured party.”)
(emphasis supplied).

See also Restatement (Third) Torts:

Apportionment Liab. § 23 (Am. Law. Inst. 2000) (noting that the
party seeking contribution (Vaughn) must demonstrate that the
party from whom it seeks contribution (Superior Walls)
proximately caused the plaintiff’s (USD’s) injuries).

This issue requires (and warrants) no further discussion.
Vaughn’s asserted entitlement to monies paid by its insurance
company to settle claims asserted against Vaughn, under theories
of either implied common law indemnity or statutory
contribution, is entirely unsupported and, on this record,
without merit.

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B.

Negligent and Intentional Misrepresentation.

Vaughn seeks to recover the remainder of its claimed
damages under theories of negligent and/or intentional
misrepresentation.

While couched in nefarious terms, the

allegations in the Third Party Complaint fail to adequately and
plausibly allege the essential elements of claims for either
negligent or intentional misrepresentation.

Even if Superior

Walls did promise that it could provide its product in a
“timely” manner and “within the time necessary,” Vaughn’s
factual allegations fail to suggest that Superior Walls
neglected to honor that promise, or that it negligently (or
intentionally) misled Vaughn in that regard.

In the world of

engineered, precast wall systems, it is entirely possible that
manufacturing such a product for a project this size in 6-12
months is “timely.”

Notably absent from the Third Party

Complaint are allegations that Superior Walls represented to
Vaughn that it could deliver its product to the worksite on or
before a date certain, Vaughn reasonably relied to its detriment
on those representations, and Superior Walls then failed to
fulfill its promises to Vaughn.

II.

No Entitlement to Damages.
None of the four counts against Superior Walls in the Third

Party Complaint actually states a viable cause of action.

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Nevertheless, even if it were possible to find that Superior
Walls is somehow liable to Vaughn, Vaughn has not adequately
explained the basis for its claimed entitlement to nearly $1.5
million from Superior Walls.

A non-exhaustive list of examples

may illustrate the point.

Beginning with the $425,000 paid by Vaughn’s insurance
company in settlement of Unity’s claims, it is entirely unclear
why Vaughn believes it is entitled to that money.

As noted

above, there is no indication that Vaughn is acting on behalf of
the insurance company.

On this record, Vaughn has failed to

show that it can lawfully recover that sum from Superior Walls.

Next, Vaughn claims entitlement to nearly $1 million in
unpaid fees and expenses under its contract with the School
District.

Those claims are equally unsupported.

Recall that

Scott Vaughn promised the School District that he could design
and oversee construction of a new elementary school that would
cost taxpayers no more than $4.7 million.
was unable to honor that commitment.

Ultimately, Vaughn

The project was beset by

numerous delays and mistakes (resulting in, for example,
construction halts issued by the State Fire Marshal and
water/snow damage when the project was not adequately closed-in
before winter).

Vaughn was fired and the school was eventually

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completed at a total cost of approximately $9.1 million.

Vaughn

now seeks – from Superior Walls – sums it claims it was entitled
to receive under Vaughn’s (terminated) contract with the School
District.

So, for example, Vaughn says that under its contract

with the USD, it was entitled to 10% of the total cost of the
project (up to a cap of $450,000).

Of that $450,000, Vaughn

says $66,800 remains unpaid and now Superior Walls is liable for
that amount.

Additionally, Vaughn says his contract with the

School District provided him with a further 10% of the
difference between $4.7 million and the actual total cost of the
completed project.

Because the total cost of completion

ballooned to $9.1 million (as a result of Vaughn’s errors and
mismanagement, according to the School District), Vaughn claims
entitlement to an additional percentage of that total.

After

various “deductions,” Vaughn says that amounts to roughly
$340,000.
4.

See Affidavit of Scott Vaughn (document no. 149-1) at

In other words, even though the School District accused
Vaughn of malpractice and breach of contract (among other
things) that caused the cost of the elementary school to nearly
double to $9.1 million, Vaughn claims it is entitled to receive
roughly 10% percent of that total cost.

And, because the School

District understandably declined to make such a payment (the

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contracts with Vaughn were terminated well before the project
was completed), Vaughn says Superior Walls is liable to it for
that sum based on theories of negligent and intentional
misrepresentation.

Other sums Vaughn seeks to recover from Superior Walls
include, for example, $15,000 for the “cost of used lockers from
Stevens High School” (no explanation for that is given);
$114,234.85 for “donated services and equipment” (apparently
Vaughn wants compensation from Superior Walls for Vaughn’s
“donations” to the School District – again, without explanation
for the basis of Superior Walls’ liability); and $81,261.11 in
“licensing fees” for the School District’s alleged use of Vaughn
construction designs.

See Exhibit A to Affidavit of Scott

Vaughn at 1-2.

Vaughn’s claimed entitlement to those sums from Superior
Walls is inexplicable.

It is not supported either legally or

factually on this record.

This project was beset by numerous

delays, errors, and miscalculations – many of which Vaughn
blamed on entities other than Superior Walls (i.e., the Town of
Unity, the School Administrative Unit, the State Fire Marshal,
Excel Mechanical, and others).
Complaint.

See generally Third Party

Notably, however, the Third Party Complaint fails to

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link Superior Walls’ alleged “misstatements” to the various
contract damages Vaughn claims to have sustained.

Perhaps most

importantly, it does not connect Superior Walls’ conduct to the
School District’s decision to terminate its contracts with
Vaughn.

Absent some link between Superior Walls’ allegedly

wrongful conduct and the School District’s decision to terminate
Vaughn’s contracts, it is unclear how Vaughn can recover from
Superior Walls revenue it anticipated, but was denied, under
those contracts.

Conclusion
Vaughn’s claimed entitlement to more than $1.4 million from
Superior Walls of the Hudson Valley is insufficiently developed,
explained, or documented – from both a legal and a factual
standpoint.

In short, Vaughn has not carried its burden of

demonstrating the viability of its legal claims against Superior
Walls, nor has it pointed to factual support for the damages
sought.

For the foregoing reasons, Vaughn’s renewed motion for
default judgment against Superior Walls of the Hudson Valley
(document no. 149) is denied.

The Clerk of Court shall enter

judgment in accordance with this order and close the case.

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SO ORDERED.
____________________________
Steven J. McAuliffe
United States District Judge
July 20, 2020
cc:

Counsel of Record

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