United States District Court, D. New Hampshire
Fraser Engineering Company, Inc.
IPS-Integrated Project Services, LLC and Lonza Biologics, Inc.
D. Ciotti. Esq.
Michael Pasakarnis, Esq.
David Quinlan, Esq.
R. Farrell, Esq.
G. Callaghan, Esq.
Christopher T. Hilson, Esq.
K. Johnstone, United States Magistrate Judge.
Engineering Company, Inc., alleges that IPS-Integrated
Project Services, LLC, and Lonza Biologics, Inc., wrongfully
withheld payments for subcontract work Fraser performed on a
construction project. IPS served as general contractor on the
project, which involved the design and construction of a
building in Portsmouth, New Hampshire. Lonza owned the
building. Fraser entered into a subcontract with IPS to
provide mechanical and plumbing services as part of the
sole issue before the court is whether Fraser may perfect a
mechanics lien on the property. Fraser moved for, and was
granted, an ex parte attachment in state court. The
defendants objected to that attachment before removing the
case to this court. They then filed an assented-to motion for
a hearing on their objections pursuant to N.H. Rev. Stat.
Ann. (RSA) § 511-A:3. The district judge granted that
motion and directed Fraser to refile its complaint and its
motion for ex parte attachment and the defendants to refile
their objections to that motion. Mar. 22, 2017 Order (doc.
no. 8) at 2-3 (DiClerico, J.). The district judge designated
the undersigned magistrate judge, pursuant to 28 U.S.C.
§ 636(b)(1)(A), to consider and resolve the
court held a hearing on the objections in May 2017. At that
time, the court granted the parties leave to file
post-hearing memoranda and statements of fact. Following the
hearing, Fraser moved to compel the defendants to produce the
prime contract governing the project. The defendants
objected, and the district judge referred the motion to the
court initially deferred ruling on the motion to compel based
on the parties' representation that they would mediate
this matter in November 2017. When that mediation did not
occur, however, the court conducted an in camera review of
the prime contract and granted the motion to compel in part.
Following that ruling, the parties submitted a statement of
undisputed facts, statements of disputed facts, post-hearing
memoranda, and replies. The mechanics lien issue is therefore
ripe for resolution.
reviewed the parties' pre- and post-hearing filings and
their arguments at the hearing, the court overrules the
defendants' objections to Fraser's attachment. As
discussed below, the defendants have not demonstrated that
Fraser failed to timely perfect the lien, that Fraser waived
the lien, or that the lien amount should be reduced. Fraser
is accordingly entitled to a mechanics lien on the property
in the amount of $4, 917, 122.02.
Standard of Review
an applicable federal statute, “the law of the state
where the [district] court is located” governs
attachment proceedings. Fed.R.Civ.P. 64(a), (b). Under New
Hampshire law, any person who performs labor or furnishes
materials in the amount of $15 or more when erecting or
repairing a building pursuant to a contract with the owner of
that building has a lien on the materials furnished and on
the building. See RSA 447:2, I. RSA 447:5 extends that right
to subcontractors performing work or furnishing materials
pursuant to a subcontract, so long as certain notice
requirements are met. The lien continues for 120 days after
the work is performed or the materials are furnished, unless
payment is made. See RSA 447:9. The lien may be secured
beyond the 120-day period by attaching the subject property
during the lien period. RSA 447:10.
511-A, which governs pre-judgment attachment procedures,
applies to proceedings to secure mechanics liens under RSA
447. See Chagnon Lumber Co. v. Stone Mill Const.
Corp., 124 N.H. 820, 823 (1984). Under RSA 511-A:8, a
court may attach property ex parte if a plaintiff establishes
probable cause of its basic right to recovery and the amount
of the lien. RSA 511-A:8, III; Chagnon, 124 N.H. at 823. When
a court grants an ex parte attachment, the party against
which the attachment is made may object and is entitled to a
prompt hearing. RSA 511-A:8.
a burden-shifting framework typically applies during
attachment hearings, see RSA 511-A:3, several courts,
including at least two in this district, have declined to
follow this framework when analyzing mechanics liens, see
Osgood v. Kent, No. 11-cv-477-SM, 2011 WL 6740411, at *3
(D.N.H. Dec. 21, 2011); H.E. Contracting v. Franklin Pierce
Coll., 360 F.Supp.2d 289, 291 (D.N.H. 2005); W. Side Dev.
Grp. v. D'Amour, No. 04-C-018 (N.H. Super. Mar. 24,
2004); Consolidated Elec. Distrib., Inc. v. SES Concord, Co.,
No. 89-C-571/579 (N.H. Super. Nov. 21, 1989). Those courts
instead analyze whether a plaintiff has met its burden under
RSA 511-A:8, which a defendant may rebut by challenging the
plaintiff's basic right to recovery, the lien amount, or
the notice provisions. See Osgood, 2011 WL 6740411,
at *3; H.E. Contracting, 360 F.Supp.2d at 291. Both parties
agreed at the hearing that the RSA 511-A:3 framework does not
apply in the present context. See Hearing Trans. (doc. no.
29) at 71-74. Accordingly, the court will analyze this matter
under the standard articulated by those courts that have
found RSA 511-A:3 inapplicable.
leases a building on property in Portsmouth, New Hampshire.
Doc. no. 43 ¶ 1. On September 8, 2014, Lonza and IPS
entered into an agreement for the design, procurement, and
construction of a manufacturing facility on that property.
Id. ¶ 2. That agreement was subsequently
amended on July 19, 2016. Id. Pursuant to these
documents, Lonza was required to pay IPS for “the cost
of trade labor including the indirect costs, overhead and
profit for all [s]ubcontractors and equipment necessary for
construction.” See Prime Contract § 17.16
October 9, 2015, IPS notified Fraser that it intended to
award Fraser a subcontract to perform mechanical piping and
plumbing work on the project. Doc. no. 43 ¶ 5. Fraser
and IPS executed a formal subcontract on February 11, 2016,
whereby Fraser agreed to furnish all labor, services,
materials, tools, equipment, supplies, and any other items
necessary or incidental to perform the plumbing and
mechanical scope of work on the project. Id.
¶¶ 3, 6. The original subcontract sum was $5, 312,
100. Id. ¶ 7.
subcontract contained specific procedures for performing
extra work. See, e.g., doc. no. 12-1 at 5, 71. Though Fraser
did not always follow those procedures, IPS approved change
orders totaling $1, 535, 350.87. See doc. nos. 12-2, 12-3.
IPS rejected four change orders totaling $317, 461.17. See
doc. no. 12 ¶ 12; doc. no. 12-5.
December 2015, Fraser and IPS began having discussions about
Fraser potentially accelerating its work on the project. Doc.
no. 20-4. On December 11, 2015, Fraser indicated to IPS and
Lonza that doing so would result in labor inefficiencies.
Doc. no. 20-5. On December 21, 2015, IPS directed Fraser to
accelerate its work by using extra overtime under the
subcontract. Doc. no. 20-7. The accelerated work continued
for months, during which time the parties communicated on
numerous occasions about purported labor inefficiencies
resulting from the acceleration. See doc. nos. 20-8 through
20-14. The inefficiencies directly resulted in Fraser's
employees working 59, 845 additional man-hours on the
project. Doc. no. 12-6 at 7, 29.
subcontract required Fraser to tag valves and mark pipes.
Doc. no. 43 ¶ 12; doc. no. 12-1 at 32. Fraser started
this work on August 9, 2016. Doc. no. 20-16 at 11. The work
continued through at least October 3, 2016. See Id.
at 11-13; doc. no. 20-17 at 4-7; doc. no. 20-18 at 1. All
told, Fraser employees spent 1, 199 hours tagging valves and
marking pipes in August, September, and October 2016. See
doc. no. 20-16 at 11-13; doc. no. 20-17 at 4-7; doc. no.
20-18 at 1.
subcontract contained several additional clauses relevant to
the present dispute. Under section 10.6, IPS has the sole and
exclusive option to arbitrate any disputes arising under the
subcontract, which it has invoked in this case. Doc. no. 12-1
at 13. Section 4.18 contains what the defendants characterize
as a waiver of indirect damages. Doc. no. 12-1 at 8. Section
2.17 required Fraser to notify IPS of any unforeseen
conditions resulting in changes to the work, and indicated
that failure to do so would result in Fraser waiving any
claim for an adjustment of time of completion, milestone
dates, or agreement value. Id. at 4-6. Section 2.6
required IPS to submit conditional lien waivers with each
request or invoice for a progress payment. Id. at 3,
79. During the course of its time on the project, Fraser
submitted eight individual lien waivers pursuant to section
2.6. Fraser did not exclude any claims from the first seven
of these waivers, the last of which was executed on May 31,
2016. See doc. no. 14-5. The eighth waiver, executed October
26, 2016, included exclusions. See doc. no. 45 ¶ 29.
August 31, 2016, Fraser submitted a closeout claim to IPS in
the amount of $4, 006, 505.72. Doc. no. 43 ¶ 10; doc.
no. 12-6. Fraser specifically sought $3, 324, 083.30 for
unpaid man-hours caused by the labor inefficiency (doc. no.
12-6 at 7, 29) and $682, 422.42 resulting from changes in the
scope of Fraser's work during the course of the project
(doc. no. 12-6 at 2, 4, 7). See also doc. no. 43 ¶ 10.
Fraser further indicated in its closeout claim that it was
entitled to $1, 554, 867.29 in retainage and unpaid contract
balance amounts. Doc. no. 12-6 at 2. On September 16, 2016,
IPS rejected the closeout claim. Doc. no. 43 ¶ 11.
January 24, 2017, Fraser provided IPS and Lonza with a notice
of intent to lien. See doc. no. 12-7. Two days later, Fraser
filed a verified motion for ex parte attachment to perfect a
mechanics lien in Rockingham County Superior Court. See doc.
no. 1-1 at 12-18. Fraser specifically sought a lien totaling
$4, 917, 122.02, including $3, 324, 083.30 in unpaid
man-hours resulting from the labor inefficiency, $682, 422.42
caused changes to the scope of Fraser's work, $593,
155.13 in outstanding subcontract balance, and $317, 461.17
in outstanding change order requests. Id. at 12. The
state court granted Fraser's motion on an ex parte basis
to the extent it sought to attach ...