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Hisert v. Blue Waters Dredging LLC

United States District Court, D. Massachusetts

June 20, 2017

RICHARD HISERT, Manager, on behalf of H2H ASSOCIATES, LLC, Plaintiff,
v.
BLUE WATERS DREDGING LLC, DAVID URBANI, HERBERT HASCHEN, and DOROTHY B. WILLIAMS, Defendants.

          MEMORANDUM AND ORDER ON DEFENDANTS URBANI'S AND HASCHEN'S MOTIONS TO DISMISS

          F. DENNIS SAYLOR IV UNITED STATES DISTRICT JUDGE.

         This is an action arising out of a contract dispute concerning a marine dredging project. In July 2015, the Army Corps of Engineers awarded plaintiff H2H Associates, LLC a contract for a dredging project in Cohasset Harbor in Massachusetts. H2H subcontracted with defendant Blue Waters Dredging LLC to perform work on that project (“BWD”). The verified amended complaint alleges that BWD failed to perform under the contract as promised and repeatedly made false statements and threats to induce H2H to make payments to BWD not due under the contract. The complaint alleges three counts under Massachusetts law for breach of contract, breach of the implied covenant of good faith and fair dealing, and fraud.

         Defendants Herbert Haschen and David Urbani have separately moved to dismiss the complaint. For the following reasons, Urbani's motion will be denied, and Haschen's motion will be granted in part and denied in part.

         I. Factual Background

         The following facts are set forth as alleged in the verified amended complaint.

         Plaintiff H2H Associates, LLC, is a New York limited liability company. (Hisert Aff.). Richard Hisert is the sole manager and member of H2H. (Am. Compl. ¶ 4).

         Defendant Blue Waters Dredging LLC is a Maryland limited liability company. (Id. ¶ 6). At all relevant times, defendants Herbert Haschen, David Urbani, and Dorothy B. Williams were members of BWD and residents of Maryland. (Id. ¶¶ 12-14). Urbani is also a principal member of Morris Street Financial LLC, a finance company funding BWD. (Id. ¶ 12; Id. Ex. A).

         A. Prime Contract with the ACOE

         On July 13, 2015, the Army Corps of Engineers (“ACOE”) awarded H2H the prime contract for a marine dredging project in Cohasset Harbor in Massachusetts. (Id. ¶ 5). H2H secured a 100% performance and payment bond with International Fidelity Insurance Company in the amount of $1, 703, 090, as required by the prime contract. (Id. ¶ 8). The prime contract required H2H to maintain sufficient capacity and equipment to complete the project by January 31, 2016. (Id. ¶¶ 21-22, 45). It further required H2H to propose a schedule of equipment needed to meet that deadline, subject to the ACOE's approval. (Id. ¶ 24).

         B. Subcontract with BWD

         On August 27, 2015, H2H subcontracted with BWD to perform work on the project for a price of $1, 194, 611. (Id. ¶¶ 7, 10). The subcontract required BWD to provide all “materials, labor, [and] equipment to dredge Cohasset Harbor.” (Id. ¶ 9). Also on August 27, Urbani, Haschen, and Williams submitted equipment specifications to H2H. (Id. ¶ 23). Thereafter, H2H sent an equipment list containing BWD's specifications to the ACOE and received approval. (Id. ¶¶ 24-25).

         C. Booster Pump

         The specifications submitted by BWD and approved by the ACOE included an Ellicott Series 670 Booster Pump that was necessary to perform the dredging work. (Id. ¶ 23). BWD arrived at the job site to commence work on October 3, 2015. However, it did not have the required booster pump and thus the dredging operations could not be performed. (Id. ¶¶ 28, 31).

         The amended complaint alleges that on October 21, 2015, nearly three weeks later, defendants represented to H2H that BWD's financial condition did not allow it to purchase or lease a booster pump, and requested financing to procure a pump. (Id. ¶¶ 33, 37). Despite that representation, on October 22, defendants admitted they had arranged to purchase a new booster pump the previous month in order to save $100, 000, but that the new pump had not been built in time for work to begin. (Id. ΒΆΒΆ 34-35). The next day-after BWD had already missed 18 good-weather days suitable for dredging in October-H2H loaned BWD ...


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