980 F.3d 6
1st Cir.2020Background
- H2H Associates, LLC (H2H) won a 2015 Army Corps dredging contract for Cohasset Harbor and subcontracted the work to Blue Waters Dredging LLC (BWD), of which Herbert Haschen was a member.
- In December 2015 Haschen signed a partial lien waiver on behalf of BWD stating BWD had been paid in full, despite knowing about unpaid vendors and open accounts.
- H2H relied on the waiver and continued payments; later H2H sued for fraud. A jury found Haschen liable under Massachusetts law and awarded $148,626 (plus a default judgment against another defendant).
- The district court applied Massachusetts choice-of-law principles (the functional approach) over Maryland law, noting differences in intent and burden of proof between the two states.
- On appeal Haschen challenged dismissal/summary-judgment rulings, the choice of law, the fraud verdict, and whether the arbitration clause barred the suit; the First Circuit found many challenges unpreserved and affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of law: whether Massachusetts or Maryland law governs the fraud claim | Hisert: Massachusetts law applies (transaction and harm centered in MA) | Haschen: Maryland law should apply | Massachusetts law governs under the functional approach (MA had the most significant relationship) |
| Sufficiency/standards for fraud (intent and burden) | Hisert: evidence supports fraud under MA law (preponderance; no deliberate-intent requirement) | Haschen: Maryland requires deliberate intent and clear-and-convincing proof | Jury verdict upheld; MA standards apply and evidence was sufficient |
| Effect of arbitration clause in H2H–BWD contract | Hisert: arbitration right was waived because Haschen never moved to compel | Haschen: arbitration clause bars the claim against him | Arbitration right waived—Haschen never sought to compel or stay under the FAA; claim proceeds in court |
| Preservation and appealability of pretrial rulings (12(b)(6), summary judgment, Rule 50) | Hisert: many pretrial denials are not reviewable after trial | Haschen: challenges earlier denials and jury instruction on choice of law | Several issues were unpreserved or not appealable; appellant’s arguments lacking preservation and merit; affirmed |
Key Cases Cited
- Ortiz v. Jordan, 562 U.S. 180 (2011) (orders denying summary judgment are generally not reviewable after a full trial)
- Levin v. Dalva Bros., Inc., 459 F.3d 68 (1st Cir. 2006) (First Circuit explains functional choice-of-law approach guided by Restatement)
- UBS Fin. Servs., Inc. v. Aliberti, 133 N.E.3d 277 (Mass. 2019) (Massachusetts recognizes functional/interest analysis in choice-of-law)
- Cosme v. Whitin Mach. Works, Inc., 632 N.E.2d 832 (Mass. 1994) (Mass. application of choice-of-law factors)
- Bushkin Assocs., Inc. v. Raytheon Co., 473 N.E.2d 662 (Mass. 1985) (Mass. courts assess comparative state interests and significant relationship)
- Ji v. Bose Corp., 626 F.3d 116 (1st Cir. 2010) (preservation rules for appellate review)
- In re Citigroup, Inc., 376 F.3d 23 (1st Cir. 2004) (arbitration rights may be waived expressly or implicitly)
- Udemba v. Nicoli, 237 F.3d 8 (1st Cir. 2001) (Rule 50 renewal required to preserve JMOL challenge for appeal)
