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Hisert v. Blue Waters Dredging LLC

United States District Court, D. Massachusetts

September 13, 2019

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 MOTION FOR JUDGMENT OF DEFAULT AGAINST DOROTHY WILLIAMS

          F. Dennis Saylor IV United States District Judge

         This action arises out of a contract dispute concerning a marine dredging project. In July 2015, the Army Corps of Engineers awarded H2H Associates, LLC a contract for a dredging project in Cohasset, Massachusetts. H2H subcontracted with Blue Waters Dredging LLC (“BWD”) to perform work on that project. According to H2H, BWD fraudulently induced H2H to make payments to it by submitting false lien waivers and then abandoned the job.

         H2H brought suit against BWD and its members, including Herbert Haschen and Dorothy Williams. A default was entered against defendant Dorothy Williams on July 31, 2019. The case against defendant Herbert Haschen went to trial, and on August 8, 2019, the jury found him liable for $148, 626. H2H now seeks a default judgment against Williams pursuant to Fed.R.Civ.P. 55(b)(1). For the following reasons, the motion will be denied without prejudice.

         I. Background

         A. Factual Background

         The evidence and testimony presented at trial established the following facts.

         1. The Dredging Job

         On July 13, 2015, the Army Corps of Engineers awarded H2H a contract to dredge Cohasset Harbor in Massachusetts. On August 27, 2015, H2H subcontracted with BWD to provide all “labors, materials, equipment and services” necessary to dredge the harbor for a price of $1, 194, 611.

         BWD was a limited liability company organized under Maryland law. During the relevant period, BWD had three members: Herbert Haschen and Dorothy Williams, who each owned a 40% share of the company, and David Urbani, who owned the remaining 20%.

         In early October 2015, after the job was scheduled to be started, BWD had not yet obtained a necessary dredging booster pump. To begin the project, Haschen told H2H that BWD needed to lease a pump from another company in Long Island, but that BWD would need advance funding from H2H to be able to do so. In response, H2H transferred BWD $70, 000.

         From November 2015 through February 2016, BWD continued to insist that it needed funds to operate prior to the completion of significant work on the dredging job. H2H made numerous transfers to BWD over this time period, believing that it was doing so to help BWD cover expenses and continue to operate. In total, H2H transferred to BWD a total of $947, 774.07. BWD did not complete the project, causing significant losses to H2H.

         2. The Lien Waivers

         On seven occasions during the course of the project, BWD completed and submitted “Partial Lien Waiver[s]” that certified that BWD had paid all subcontractors and vendors in connection with the dredging job. H2H made payments to BWD in reliance on the submission of the lien waivers. Six of the seven partial lien waivers were signed by Williams; the other was signed by Haschen. The sum of the transfers made by H2H in response to the six lien waivers signed by Williams was $706, 866.42. According to BWD, all were fraudulent, because vendors and subcontractors had not in fact been paid.

         B. Procedu ...


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