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Unity School District v. Vaughn Associates, Inc.

United States District Court, D. New Hampshire

March 23, 2016

Unity School District, Plaintiff.
Vaughn Associates, Inc., and Scott Vaughn, Defendants,
School Administrative Unit #6, Excel Mechanical, Inc., Superior Walls of Hudson Valley, Inc., and Town of Unity, Third-Party Defendants. Opinion No. 2016 DNH 062


          STEVEN J. McAULIFFE, District Judge.

         This case arises from two contracts between the Unity School District and Vaughn Associates, Inc., pursuant to which Vaughn Associates agreed to design and, subsequently, oversee construction of a new elementary school in Unity, New Hampshire. Those contracts were terminated in early 2014, and this litigation ensued. Initially, the Unity School District filed a four-count writ in state court against Vaughn Associates and its principal, Scott Vaughn (collectively, "Vaughn"). Vaughn then removed the action to this court, on grounds that the parties are diverse. Subsequently, it filed a ten-count third-party complaint against several entities, none of which was a party to its contracts with the Unity School District.

         Two of those third-party defendants - the Town of Unity and School Administrative Unit #6 - now move to dismiss all claims advanced against them, asserting that none states a viable cause of action. See generally Fed.R.Civ.P. 12(b)(6). Vaughn objects. For the reasons discussed, those motions are granted.

         Standard of Review

         When ruling on a motion to dismiss under Rule 12(b)(6), the court must "accept as true all well-pleaded facts set out in the complaint and indulge all reasonable inferences in favor of the pleader." SEC v. Tambone, 597 F.3d 436, 441 (1st Cir. 2010). Although the complaint need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief, " Fed.R.Civ.P. 8(a)(2), it must allege each of the essential elements of a viable cause of action and "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face, " Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation and internal punctuation omitted).

         In other words, "a plaintiff's obligation to provide the grounds' of his entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Instead, the facts alleged in the complaint must, if credited as true, be sufficient to "nudge" plaintiff's claims "across the line from conceivable to plausible." Id. at 570. If, however, the "factual allegations in the complaint are too meager, vague, or conclusory to remove the possibility of relief from the realm of mere conjecture, the complaint is open to dismissal." Tambone, 597 F.3d at 442.


         Accepting the allegations of the third-party complaint as true - as the court must at this juncture - the relevant facts are as follows. In 2009, the New Hampshire Department of Education voted to close the Town of Unity's elementary school because it failed to comply with state building, fire safety, and educational requirements. In 2010, Scott Vaughn volunteered to donate his design services to assist the Unity School District in preparing a proposal to construct a new elementary school and to secure voter approval of a bond to fund the project.

         In August of 2010, that bond was approved by the voters of the school district. Subsequently, the Unity School District entered into an Architectural Services Contract with Vaughn Associates, under which Vaughn Associates agreed to design the new elementary school. Shortly thereafter, the Unity School District entered into a second contract with Vaughn Associates, pursuant to which Vaughn Associates would act as the project's construction manager. Once the project got underway, however, it was plagued by difficulties and delays. Eventually, in January of 2014, Vaughn Associates resigned as construction manager and, approximately two months later, it sent notice to the Unity School District terminating the Architectural Services Agreement. In terminating that contract, Vaughn Associates cited "impracticability, frustration of purpose, lack of good faith and fair dealing, and non-payment." Third-Party Complaint (document no. 8) at para. 125.

         In March of 2015, the Unity School District filed suit in state court against Vaughn Associates, Inc. and Scott Vaughn, advancing claims of negligence, breach of contract, negligent misrepresentation, and violations of New Hampshire's Consumer Protection Act. Vaughn removed the action, invoking this court's diversity subject matter jurisdiction. See generally 28 U.S.C. § 1332. And, as noted above, Vaughn subsequently filed a tencount third-party complaint against School Administrative Unit #6 ("SAU #6"), Excel Mechanical, Inc., Superior Walls of the Hudson Valley, and the Town of Unity, New Hampshire.

         Pending before the court are motions filed by SAU #6 and the Town of Unity, seeking dismissal of all claims asserted against them. Counsel for the parties presented their arguments in legal memoranda, as well as at a hearing before the court on December 1, 2015.


         Before addressing the specifics of the pending motions to dismiss, it probably bears noting that, with the exception of its claim against the Town of Unity for intentional interference with contractual relations, Vaughn does not seek to recover damages for actual losses or injuries it sustained. Instead, Vaughn seeks contribution or, better still, complete indemnification from both the Town and SAU #6 for harms sustained by the Unity School District and any damages Vaughn may, in the future, owe to the Unity School District. See, e.g., Third-Party Complaint at paras. 138, 144, 205, and 212. Vaughn has clearly, repeatedly, and unambiguously proclaimed that it is (with the one exception noted above) pursuing claims for contribution and implied indemnification. Accordingly, its claims must be treated as such (despite allegations in the third-party complaint that might suggest Vaughn is pursuing the third-party defendants for harm it suffered as a consequence of their allegedly tortious conduct).

         I. Claims Against SAU #6.

         Vaughn advances two claims against SAU #6: one for statutory contribution, pursuant to N.H. Rev. Stat. Ann. ("RSA") 507:7-f (count one); and one for common law indemnity (count two). Third-Party Complaint at paras. 138 and 144. See also Vaughn's Memorandum in Opposition (document no. 30-1) at 2-3 ("[Vaughn's] Third-Party Complaint against SAU seeks contribution and/or indemnity for the actions of SAU which caused or contributed to the Project issues and delays."). The New Hampshire Supreme Court has explained the distinction between contribution and indemnification as follows:

[I]ndemnity is distinguished from contribution because whereas indemnity shifts the entire burden of loss from one tortfeasor who has been compelled to pay it, to another whose act of negligence is the primary cause of the injured party's harm, contribution is partial payment made by each or any of jointly or severally liable tortfeasors who share a common liability to an injured party.

         Gray v. Leisure Life Indus., 165 N.H. 324, 330 (2013) (citations and internal ...

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