Mayancela et al v. Parker

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Luis Mayancela et al.
v. 	Case No. 20-cv-998-SM
Rob Parker d/b/a Rob Parker & Son
Roofing & Construction et al.
v.
GM Construction and Roofing, Inc.
REPORT AND RECOMMENDATION
Rob Parker d/b/a Rob Parker & Son Roofing & Construction
(“Parker”) filed a third-party complaint against GM Construction
and Roofing, Inc. (“GM Construction”) seeking indemnification
under the terms of the parties’ subcontractor agreement. 	On
January 7, 2022, the Clerk of Court entered default against GM
Construction, (Doc. No. 43), and on August 2, 2022, Parker moved
for default judgment (Doc. No. 46) pursuant to Federal Rule of
Civil Procedure 55(b)(2). 	The motion for default judgment is
before the court for a recommendation as to disposition. 	As
explained below, the court recommends that Parker’s motion be
granted in part and denied in part. The court also recommends
that damages be awarded in the amount of $325,000.00.
STANDARD OF REVIEW
When a party moves for a default judgment under Rule
55(b)(2), the court “may examine a plaintiff's complaint, taking
all well-pleaded factual allegations as true, to determine
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whether it alleges a cause of action.” 	Ramos-Falcon v.
Autoridad de Energia Electrica, 301 F.3d 1, 2 (1st Cir. 2002).
The defaulting party is “taken to have conceded the truth of the
factual allegations in the complaint.” 	Ortiz-Gonzalez v.
Fonovisa, 277 F.3d 59, 62 (1st Cir. 2002). 	Admitting the truth
of the factual allegations, however, “does not admit the legal
sufficiency of [the] claims.” 	10 James W. Moore, Moore's
Federal Practice § 55.32[1][b] (3d ed. 2013). 	For that reason,
the court reviews the admitted facts in light of the elements of
the claims pleaded before entering a default judgment. 	Sampson
v. Lambert, 903 F.3d 798, 805-06 (8th Cir. 2018); Neff v.
Mediation Processing Servs., LLC, No. 21-CV-310-JL, 2021 WL
7082838, at *1 (D.N.H. Sept. 27, 2021), report and
recommendation adopted, No. 21-CV-310-JL, 2021 WL 7082833
(D.N.H. Oct. 14, 2021).
BACKGROUND
By virtue of its default, GM Construction concedes the
following facts alleged in Parker’s third-party complaint.
Wesfield Construction Co. (“Wesfield”) served as the general
contractor on a construction project, which called for work to
be completed at a building owned by the City of Concord, New
Hampshire. 	On April 4, 2019, Wesfield entered into a
subcontractor agreement with Parker, in which Parker agreed to
complete the roofing work at the project. 	Parker then entered
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into a separate subcontractor agreement with GM Construction
(the “Agreement”), in which GM Construction agreed to provide
roofing labor for the project. 	Third-Party Compl. (Doc. No. 12,
¶ 11).
The terms of the Agreement also required GM Construction to
“indemnify and hold harmless [Parker] . . . from all claims,
losses, damages, expenses, fees including attorney fees, costs,
settlements and judgments arising out of the performance of [GM
Construction]. . . .” 	Id. ¶ 12; see also Subcontractor
Agreement, Ex. D to Supp. Brief (Doc. No. 47-4, § 5). 	Further,
GM Construction was “responsible for maintaining a safe work
environment for its employees and complying with all
Occupational Safety and Health Administration safety
requirements.” 	Third-Party Compl. (Doc. No. 12, ¶ 13).
First-party plaintiff, Luis Mayancela, was employed by GM
Construction to perform roofing work at the project. 	While
performing the roofing work, Mr. Mayancela fell from a ladder
and suffered severe injuries. 	On the day of his accident, GM
Construction failed to provide Mr. Mayancela with necessary
protective equipment, such as a harness. 	To recover for his
injuries, Mr. Mayancela and his spouse, Maria Sanisaca, filed
suit on October 2, 2020. 	They did not name GM Construction as a
defendant in their lawsuit,1 and instead alleged claims against
1 Mr. Mayancela’s receipt of workers’ compensation benefits
under Massachusetts law, see Supp. Brief (Doc. No. 48, ¶ 12),
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Parker, and later Wesfield, for negligence and loss of
consortium. 	See Compl. (Doc. No. 1); Amd. Compl. (Doc. No. 16).
Parker, however, filed a third-party action against GM
Construction on January 14, 2021, asserting that GM Construction
was the party at fault and that Parker was entitled to
indemnification under the terms of their Agreement. 	Third-Party
Compl. (Doc. No. 12). 	GM Construction was served with the
complaint and summons on February 18, 2021. 	(Doc. No. 23).
When GM Construction did not file a response within the time
allowed, the Clerk of Court entered default against it. 	(Doc.
No. 43).
On April 11, 2022, Mr. Mayancela and Ms. Sanisaca entered
into a settlement agreement with Parker and Wesfield. 	(Doc. No.
46, ¶ 5). 	As part of the agreement, the plaintiffs released
their claims against Parker and its liability insurance carrier,
Ohio Mutual Insurance Group, in exchange for payment in the
amount of $325,000.00. 	Id. ¶ 6. 	The plaintiffs agreed the
total settlement payment was made in full and final satisfaction
of their claims. 	Id. ¶ 8. 	On August 2, 2022, Parker moved for
default judgment as to GM Construction. 	(Doc. No. 46).
Following the October 27, 2022 hearing on the motion for default
judgment, Parker submitted supplemental briefing (Doc. Nos. 47,
48), which included a copy of its Agreement with GM
released his direct claims against GM Construction. 	See M.G.L.
c. 152, § 23.
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Construction, as well as evidence supporting the reasonableness
of the settlement amount.2
DISCUSSION
Parker brings two claims3 against GM Construction. 	In Count
I, Parker seeks indemnification under the terms of the Agreement
for all damages owed to Mr. Mayancela and Ms. Sanisaca. 	Parker
also seeks to recover the same damages under a claim for breach
of contract (Count III). 	Based on counsel’s representations at
the October 27, 2022 hearing, Parker seeks only to recover
judgment in the amount it paid pursuant to the settlement
agreement, $325,000.00, and does not seek an award of attorneys’
fees or costs. 	The court first addresses the sufficiency of
Parker’s claims before turning to whether Parker has satisfied
its burden to be entitled to an award of damages.
2 “On a motion for default judgment, a court may . . .
consider any affidavits or evidence on the record.” Amguard Ins.
Co. v. Santos Remodeling, Inc., No. 14-14745-FDS, 2016 WL
424961, at *1 n.1 (D. Mass. Feb. 3, 2016) (citing KPS & Assocs.,
Inc. v. Designs by FMC, Inc., 318 F.3d 1, 17-20 (1st Cir.
2003)); see also Shannon F. v. Portsmouth School Dist. SAU 52,
No. 14-cv-368-JL, 2017 WL 1233815, at *6 (D.N.H. Jan. 27, 2017)
(quotation omitted) (recognizing that based on similarities in
the Rule 55 and Rule 12(b)(6) standards, the court can consider
“documents central to the plaintiff’s claims”), R&R adopted,
(D.N.H. Feb. 22, 2017).
3 At the October 27, 2022 hearing on the motion for default
judgment, counsel for Parker withdrew its claim for contribution
(Count II).
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I. 	Liability Under Indemnification (Count I)
Under New Hampshire law, a right to indemnity exists where
“there is an express duty to indemnify.” 	Gray v. Leisure Life
Industries, 165 N.H. 324, 327 (2013) (quotation omitted). 	When
a contract contains a provision for indemnity, the express duty
to indemnify arises, and the scope of the duty is determined by
the specific terms of the contract. 	Id. at 328. 	While an
express indemnity agreement is construed strictly and without
consideration of equitable principles, id., the court interprets
the agreement by looking “to the parties' intent at the time the
agreement was made,” and ascribing common meaning to the words
and phrases used by the parties. 	Kessler v. Gleich, 161 N.H.
104, 112 (2010). 	In the absence of ambiguous terms, the court
limits its review “to the four corners of the document itself.”
Id.
If the indemnity agreement is enforceable and applicable,
the indemnitee must also show that it is either potentially
liable or actually liable to the original plaintiffs. 	See 	One
Beacon Ins., LLC v. M&M Pizza, Inc., 160 N.H. 638, 643-44 (2010)
(recognizing that if the indemnitor is afforded an opportunity
to participate in settlement or in conducting the defense, then
the indemnitee need only show “potential liability” rather than
the greater burden of “actual liability”).
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A. The Parties’ Indemnification Provision
The parties’ indemnification provision set forth in the
Agreement, requires GM Construction to:
[I]ndemnify and hold harmless [Parker], Owner, Design
Professionals, and their respective agents and
assigns from all claims, losses, damages, expenses,
fees including attorney fees, costs, settlements and
judgments arising out of the performance of [GM
Construction] or resulting in whole or in part from
the actual or alleged acts, omissions, or breaches of
this Subcontract . . . .
Subcontractor Agreement, Ex. D to Supp. Brief (Doc. No. 47-4, §
5). 	GM Construction’s performance under the Agreement included
providing “all labor to remove and replace existing roofing
material . . .” and complying with all applicable building codes
and regulations. 	Id. § 1.
Parker asserts that the indemnity provision is enforceable
and applicable to its settlement payment to Mr. Mayancela and
Ms. Sanisaca because their injures arose from GM Construction’s
performance under the Agreement. 	The court agrees. 	The
specific terms of the Agreement and indemnity provision impose a
duty on GM Construction to indemnify Parker for settlements that
arise out of4 GM Construction’s performance under the Agreement.
GM Construction’s performance included its provision of labor to
4 Under New Hampshire law, the phrase “arising out of” has
been interpreted as “a very broad, general and comprehensive
term . . .” and as meaning “originating from or growing out of
or flowing from.” 	Merrimack Sch. Dist. v. Nat’l School Bus
Serv., Inc., 140 N.H. 9, 13 (1995) (quotation omitted).
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remove and replace the roof, as well as its compliance with
applicable building codes and regulations. 	Parker’s settlement
payment to Mr. Mayancela and Ms. Sanisaca compensated the
parties for injuries sustained by Mr. Mayancela after he fell
from a ladder while performing roofing work for GM Construction.
These undisputed facts demonstrate that the settlement payment
arises out of GM Construction’s performance under the Agreement.
Thus, the indemnity provision is enforceable and applicable to
Parker’s settlement payment, so long as Parker satisfies its
burden regarding its liability.
B. Parker’s Liability to Original Plaintiffs
Consistent with Parker’s position, the potential liability
standard applies because GM Construction had notice and
opportunity to assume Parker’s defense as early as February 18,
2021, the date when GM Construction was served with Parker’s
Third-Party Complaint. 	See One Beacon Ins., LLC, 160 N.H. at
643-44; see also (Doc. No. 23). 	To satisfy its burden of
showing potential liability to Mr. Mayancela under a claim of
negligence, Parker must demonstrate that it owed Mr. Mayancela a
duty, that it breached that duty, and that the breach
proximately caused Mr. Mayancela’s injuries. 	See Macie v.
Helms, 156 N.H. 222, 224 (2007). 	In establishing that a breach
of a duty proximately caused the plaintiff’s injuries, there
must be a showing that “the injury would not have occurred
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without the negligent conduct”, and that the negligent conduct
was a “substantial factor” in bringing about the injury. 	Estate
of Joshua T. v. State, 150 N.H. 405, 407-08 (2003) (quotation
omitted).
The court finds that Parker has met its burden to show that
it is at least potentially liable for Mr. Mayancela’s injuries
based on negligence. 	As the subcontractor responsible for
supervising the roofing work at the project, Parker had a duty
to ensure the work was being performed in a manner that was safe
and that complied with applicable law. 	See Wesfield and Parker
Subcontractor Agreement (Doc. No. 47-3, §§ 1, 8, 9.3) (outlining
Parker’s obligations to supervise the roofing work and ensure
compliance with contract documents and applicable law). 	New
Hampshire law required GM Construction to provide its employees
with protective equipment,5 yet the record establishes that Mr.
Mayancela did not have necessary safety equipment, including a
harness, on the day he was injured. 	See Dep. Tr. of Luis
Mayancela, Ex. E to Supp. Brief (Doc. No. 47-5, at 2-8); see
also Third-Party Compl. (Doc. No. 12, ¶ 22). 	Parker’s failure
to ensure that GM Construction provided protective equipment to
its employees likely constituted a breach of its duty. 	Where
Mr. Mayancela sustained injuries when he fell from a ladder
5 See N.H. Rev. Stat. Ann. § 281-A:64, I (requiring
employers to provide their employees with personal protective
equipment and to ensure that employees use such equipment
regularly).
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while performing roofing work at the project without protective
equipment, Third-Party Compl. (Doc. No. 12, ¶ 7), Parker’s
breach was likely a substantial factor in causing Mr.
Mayancela’s injuries, and the injuries likely would not have
occurred but for this breach.
The court similarly finds that Parker is also potentially
liable to Ms. Sanisaca for her loss of consortium claim. 	See
Brann v. Exeter Clinic, Inc., 127 N.H. 155, 161 (1985) (noting
that loss of consortium elements include loss of service and
society and that a relevant consideration is the extent of
injuries to the person whose service or society is claimed as a
loss). 	Parker submitted evidence of Mr. Mayancela’s permanent
injuries, including his inability to lift or carry over 15
pounds and his inability to walk or stand for a prolonged
period. 	See Supp. Brief (Doc. No. 48, ¶¶ 6-9). 	Where Parker’s
breach of its duty to Mr. Mayancela contributed to his permanent
injuries, the court finds that Parker is potentially liable for
Ms. Sanisaca’s loss of Mr. Mayancela’s service and society.
Accordingly, where Parker has established its potential
liability to the plaintiffs, and therefore, the sufficiency of
its claim for indemnification against GM Construction,6 the
district judge should enter default judgment as to this claim.
6 While Mr. Mayancela’s receipt of workers’ compensation
benefits under Massachusetts law released his claims against GM
Construction, see M.G.L. c. 152, § 23, the court is satisfied
that under both Massachusetts and New Hampshire law, the
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II. 	Liability Under Breach of Contract (Count III)
Parker’s breach of contract claim parrots its claim for
indemnification and is governed by the same analysis set forth
in Section I. 	Assuming that judgment will enter in favor of
Parker on Count I, the court declines to address the breach of
contract claim and recommends it be dismissed as moot.
III. 	Damages7
“In the case of defaulting defendants, allegations of
damages are not deemed admitted in the context of a default
allocation of risk through contractual indemnity agreements (as
opposed to a common law right of indemnity), is permissible and
enforceable because such allocation neither conflicts with
public policy nor workers’ compensation statutes prohibiting
direct recovery from the employer. 	MacGlashing v. Dunlop
Equipment Co., Inc., 89 F.3d 932, 939 (1st Cir. 1996) (applying
Massachusetts law and holding that contractual indemnification
provisions do not conflict with M.G.L. c. 152, § 23,
particularly where risk allocation is common in the construction
industry and the contracting parties were sophisticated business
entities); Spellman v. Shawmut Woodworking & Supply, Inc., 445
Mass. 675, 679-80 (2006) (reaching the same conclusion); see
also Wentworth Hotel, Inc. v. F.A. Gray, Inc., 110 N.H. 458,
460-61 (holding that New Hampshire’s workers’ compensation
statute did not preclude a party from enforcing a claim for
indemnification, implied in a service agreement, against an
employer because the employer had an independent duty to
indemnify and purportedly breached its obligation to perform
work in a workmanlike manner).
7 The court did not hold a hearing on damages. Rule
55(b)(2) “makes an evidentiary hearing an available tool, not a
prerequisite, to the determination of a damage award.”
AngioDynamics, Inc. v. Biolitec AG, 780 F.3d 429, 436 (1st Cir.
2015).
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judgment, and it is the plaintiff's burden to establish any
entitlement to recovery.” Joe Hand Promotions, Inc. v. Rajan,
No. 10-40029-TSH, 2011 WL 3295424, at *3 n.2 (D. Mass. July 28,
2011) (internal quotation marks and citation omitted).
Parker seeks $325,000.00 in damages, reflecting the
settlement amount paid by Parker to Mr. Mayancela and Ms.
Sanisaca under the settlement agreement. 	Where an indemnitee
seeks indemnification of a settlement payment made voluntarily,
the indemnitee must establish the “reasonableness of the amount
of the settlement . . . .” 	Morrissette, 114 N.H. at 390. 	The
indemnitee must also show that the settlement was “entered into
in good faith.” 	Coco v. Jaskunas, 159 N.H. 515, 520 (2009). 	In
evaluating the reasonableness of settlement and whether it was
entered into in good faith, courts consider the viability of the
parties’ claims and defenses, costs incurred, and risks
associated with trial. 	See id. at 520-21. 	For example, in
Coco, the court held that the indemnitee’s decision to mitigate
damages was reasonable and did not preclude the indemnitee from
pursuing indemnification because while the indemnitee’s claim
had a potential likelihood of success, the indemnitee had
incurred significant attorneys’ fees and expenses and risked a
greater loss at trial. 	Id.
As explained above, Mr. Mayancela and Ms. Sanisaca had
colorable negligence and loss of consortium clams against
Parker. 	In addition, the expert reports submitted by Parker
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opine that Mr. Mayancela’s injuries have resulted in his
permanent disability, as well as a 36% whole person impairment
under the AMA Guides to the Evaluation of Permanent Impairment.
See e.g. Medical Report of George P. Whitelaw, MD, Dec. 30,
2021, Ex. C to Supp. Brief (Doc. No. 48-3, at 5). 	Given the
extensive injuries suffered by Mr. Mayancela at the age of 24,
the court finds that Parker risked an award of damages greater
than $325,000.00 at trial. 	Parker would have also incurred
additional attorneys’ fees and costs if it proceeded to trial.
Thus, based on the undisputed evidence before it, the court
finds that Parker entered into the settlement agreement in good
faith, and that the settlement amount of $325,000.00 was fair
and reasonable. 	Accordingly, the district judge should award
Parker damages in the amount of $325,000.00.
CONCLUSION
For the foregoing reasons, the court recommends that the
district judge: (1) grant Parker’s motion for default judgment
(Doc. No. 46) as to its claim for indemnification (Count I); (2)
award Parker damages in the amount of $325,000.00; and (3)
dismiss the remaining claim (Count III) as moot.
Any objections to this Report and Recommendation must be
filed within fourteen days of receipt of this notice. 	See Fed.
R. Civ. P. 72(b)(2). 	The fourteen-day period may be extended
upon motion. 	Only those issues raised in the objection to this
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Report and Recommendation are subject to review in the district
court. 	See Sch. Union No. 37 v. United Natl Ins. Co., 617 F.3d
554, 564 (1st Cir. 2010). 	Any issues not preserved by such
objection(s) are precluded on appeal. 	See id. 	Failure to file
any objections within the specified time waives the right to
appeal the district court's order. 	See Santos-Santos v. Torres-
Centeno, 842 F.3d 163, 168 (1st Cir. 2016).
__________________________
Andrea K. Johnstone
United States Magistrate Judge
February 23, 2023
cc: 	Counsel of Record
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