United States Ex Rel. Wallace v. Flintco Inc.

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

_______________________

No. 96-11360
_______________________

THE UNITED STATES OF AMERICA For the
Use of MARSHALL E. WALLACE d/b/a
WALLACE CONSTRUCTION COMPANY, ET AL.,

Plaintiffs,

MARSHALL E. WALLACE, doing business as Wallace
Construction Company,

Plaintiff - Counter Defendant
Appellee-Cross-Appellant,

versus

FLINTCO INC.; AMERICAN HOME ASSURANCE CO.,

Defendants-Counter-Claimants Third Party Plaintiffs
Appellants-Cross-Appellees,

versus

VICTORE INSURANCE COMPANY,

Third-Party Defendant-Appellee-Cross-Appellant.
_________________________________________________________________

Appeals from the United States District Court
for the Northern District of Texas
________________________________________________________________
June 29, 1998

Before KING and JONES, Circuit Judges, and WERLEIN*, District
Judge.

By EWING WERLEIN, JR., District Judge:

*
District Judge of the Southern District of Texas, sitting by
designation.
 This case presents cross-appeals by a contractor and a

subcontractor, and their respective bond sureties, from an Amended

Judgment entered after a two-week jury trial. After a careful

review of the trial proceedings, we conclude that those portions of

the Amended Judgment of the district court that award costs to both

sides against their respective adversaries, should be VACATED and

REMANDED for further proceedings, and that the Amended Judgment, as

reformed herein for clarification, should otherwise be AFFIRMED.

Background

The United States Army Corps of Engineers ("Corps”) engaged

Flintco, Inc. ("Flintco"), a general contractor, to build an

enlisted dormitory at Sheppard Air Force Base, Texas, ("the

Project"). Flintco, in turn, subcontracted with Marshall E.

Wallace d/b/a Wallace Construction Company ("Wallace") for Wallace

to perform dirt and paving work on the Project. Flintco and

American Home Assurance Co. ("AHAC"), Flintco’s surety, furnished

a payment bond pursuant to the Miller Act, 40 U.S.C. § 270a;

Wallace and Victore Insurance Co. ("Victore"), Wallace's surety,

furnished private payment and performance bonds.

Wallace began work on the Project in March 1992. In July

1992, August 1992, and January 1993, Wallace submitted change

orders No. 1, No. 2, and No. 3, respectively, for additional

2
compensation. Each was approved, and pursuant to each, Wallace was

compensated.

In July 1993, the Corps issued a directive that the compaction

of the subgrade of the parking lots be increased from 90% to 95%

density. Wallace began this work before submitting a claim to the

Corps, through Flintco, for additional compensation. Wallace later

submitted the claim, but before the claim was fully processed,

Wallace ceased work on the Project and left the Project site on

December 23, 1993, leaving his own subcontractors unpaid to the

extent of approximately $101,000. Flintco contracted with another

dirt and paving subcontractor to complete the unfinished work.

In April 1994, Wallace submitted a "Request for Equitable

Adjustment" in which he sought $ 215,292.50 in compensation for the

increased compaction. The Corps responded with an award of only

$7,000.00. Wallace later submitted an amended claim which was

denied.

Wallace filed this suit against Flintco and AHAC for breach of

contract and for quantum meruit. Wallace alleged that Flintco, the

Corps, and other subcontractors interfered with his work on the

Project, and caused him "productivity impact" damages. Flintco and

AHAC counterclaimed against Wallace for breach of the subcontract,

and filed a third party action against Victore on the performance

and payment bonds.

A two-week jury trial resulted in a special verdict for

Wallace on all questions submitted. Among other things, the jury

3
found that Flintco breached its contract with Wallace; that Wallace

was entitled to a quantum meruit recovery; that Wallace had

fulfilled all contractual conditions precedent to filing suit

against Flintco and AHAC; and that Flintco and AHAC had breached

the Miller Act bond by failing to pay Wallace. Conversely, the

jury also found that Wallace had not breached his contract with

Flintco; that Wallace was not negligent in performing his work;

that Wallace had not waived his claims against Flintco; that

Flintco had not fulfilled all contractual conditions precedent to

filing suit against Wallace and Victore; that Flintco did not

acquire from Wallace’s subcontractor creditors their claims against

Victore; and that Wallace and Victore did not breach their

obligations to Flintco under the payment bond. The jury awarded

$197,777.00 to Wallace and awarded nothing to Flintco.

Wallace moved for entry of judgment; and Flintco and AHAC

filed a “Motion for Judgment Notwithstanding the Verdict” under

Fed. R. Civ. P. 50(b).1 The trial court granted in part Flintco’s

and AHAC’s Rule 50(b) motion, holding as a matter of law that they

were entitled to recover from Wallace and Victore approximately

$101,000 that they had paid to Wallace’s subcontractors whom

Wallace had not paid when he ceased work on the Project. The trial

1
The correct terminology under Rule 50(b) is now “renewed
motion for judgment as a matter of law,” although, as will be seen,
Flintco and AHAC did not initially file a Rule 50(a) motion for
judgment as a matter of law.

4
court ultimately signed an Amended Judgment, which is summarized as

follows:

! Judgment for Wallace against Flintco on Wallace's
state law quantum meruit claim for:

“1. Actual damages in the amount of $197,777.00;

“2. Pre-judgment interest thereon in the amount of
$62,681.85;

“3. Post-judgment interest on all amounts awarded
in item numbers one and two above at the
currently prevailing rate pursuant to 28
U.S.C. § 1961 of 5.90% per annum, compounded
daily, from the date of this judgment until
paid.”

R. Vol. 13 at 3776-77 (footnotes omitted).

! A take nothing Judgment on Wallace's claim for
breach of contract against Flintco;2

! Judgment for Wallace and against Flintco and AHAC,
jointly and severally, on Wallace's Miller Act payment
bond claim for:

“1. Actual damages in the amount of $197,777.00;

“2. Pre-judgment interest thereon in the amount of
$62,681.85;

“3. Post-judgment interest on all amounts awarded
in item numbers one and two above at the
currently prevailing rate pursuant to 28
U.S.C. § 1961 of 5.90% per annum, compounded
daily, from the date of this judgment until
paid.”

Id. at 3777.3

2
This aspect of the Amended Judgment was based on
Wallace's election to recover on his quantum meruit theory rather
than for breach of contract.
3
It appears that the trial court did not intend for this
three-numbered segment of the Amended Judgment and the first three-

5
 ! A take nothing judgment on Flintco and AHAC's breach
of contract claim against Wallace;

! Judgment for Flintco and AHAC and against Wallace
and Victore, jointly and severally, on their third-party
payment bond claim in the amount of $101,187.30, plus
pre-judgment interest in the amount of $30,834.13, and
post-judgment interest at a rate of 5.90%;

! A take nothing Judgment on Flintco and AHAC's third
party performance bond claim against Victore;

! $73,778.43 in costs recoverable by Flintco and AHAC
from Wallace and Victore, jointly and severally;

! $90,091.00 in costs recoverable by Wallace from
Flintco and AHAC, jointly and severally;

! $256,338.00 in attorneys’ fees recoverable by
Wallace from Flintco; and

! $183,425.78 in attorneys’ fees recoverable by
Flintco from Wallace.

It is this Amended Judgment that is the subject of the cross

appeals in almost every respect.

numbered segment of the Amended Judgment, first quoted above, to be
a double recovery for Wallace, and the parties have not argued a
contrary understanding. The Amended Judgment is intended to make
one award to Wallace in the amount of $197,777.00, plus prejudgment
interest of $62,681.85 and post-judgment interest, but adjudged
against Flintco on two grounds -- on quantum meruit, in the first
segment, and on the Miller Act payment bond, in the second segment.
The joint and several liability of Flintco’s surety, AHAC, for that
full sum arises only from its obligation on the Miller Act payment
bond, in the second segment. For clarification, and to avoid any
ambiguity about Wallace’s entitlement to recover only one sum of
$197,777.00, plus interest, the Amended Judgment will be reformed
to consolidate these two decretal segments.

The Amended Judgment also orders that post-judgment interest
be compounded daily. This is plain error; post-judgment interest
is “computed daily to the date of payment” but “compounded
annually.” 28 U.S.C. § 1961(b) (emphasis added).

6
7
 Analysis

I. Quantum Meruit and Miller Act Claims

Flintco and AHAC first challenge the sufficiency of the

evidence to support a judgment for Wallace on his quantum meruit

and Miller Act claims because the Flintco-Wallace subcontract

contained a "no damages for delay" clause. In response, Wallace

contends that Flintco failed to move for a “directed verdict”4 at

the close of the evidence and thereby waived its right to appellate

review of the sufficiency of the evidence. Wallace therefore

contends that this Court must review Flintco’s and AHAC’s arguments

as if they are presented for the first time on appeal, under the

plain error standard.

A. Standard of Review

Challenges to the sufficiency of the evidence must be raised

in a Fed. R. Civ. P. 50(a) motion for judgment as a matter of law

before submission of the case to the jury. If the trial court does

not grant a motion for judgment as a matter of law made after the

close of all the evidence, then the movant may renew its request

for judgment as a matter of law after the entry of judgment. Fed.

4
The correct terminology under Rule 50(a) is now “motion
for judgment as a matter of law." See McCann v. Texas City Ref.,
Inc., 984 F.2d 667, 670 n.3 (5th Cir. 1993).

8
R. Civ. P. 50(b). A party that fails to move for judgment as a

matter of law under Rule 50(a) on the basis of insufficient

evidence at the conclusion of all of the evidence waives its right

to file a renewed post-verdict Rule 50(b) motion, and also waives

its right to challenge the sufficiency of the evidence on appeal.

Bay Colony, Ltd. v. Trendmaker, Inc., 121 F.3d 998, 1003 (5th Cir.

1997) ("Generally, a party who fails to renew his motion for

directed verdict at the close of all the evidence waives his right

to challenge the sufficiency of the evidence."); Polanco v. City of

Austin, Tex., 78 F.3d 968, 974 (5th Cir. 1996) ("Where the

defendant failed to timely move for judgment as a matter of law, we

will consider the issue as waived by the defendant and will treat

the issue as being raised for the first time on appeal."); Allied

Bank-West, N.A. v. Stein, 996 F.2d 111, 114-115 (5th Cir. 1993) (a

district court cannot consider a Rule 50(b) motion for judgment as

a matter of law unless the movant has first sought a directed

verdict).

The Rule serves two purposes:

to enable the trial court to re-examine the sufficiency
of the evidence as a matter of law if, after verdict, the
court must address a motion for judgment as a matter of
law, and to alert the opposing party to the insufficiency
of his case before being submitted to the jury.

MacArthur v. University of Tex. Health Ctr. at Tyler, 45 F.3d 890,

897 (5th Cir. 1995). Rule 50(b) is to be examined and applied "`in

the light of the accomplishment of [its] particular purpose[s] as

well as in the general context of securing a fair trial for all

9
concerned in the quest for truth.’" Bay Colony, 121 F.3d at 1003

(quoting McCann, 984 F.2d at 671 (alterations in original)).

In certain cases in which a party has failed to meet the

technical requirements of Rule 50(a) but has still satisfied the

Rule's purposes, non-compliance has been excused. See, e.g., id.

at 1003-04 (defendant's motion for directed verdict at the close of

plaintiff's case-in-chief, which asserted that there was no

evidence or insufficient evidence for the issue to go to the jury,

and defendant's subsequent objections, on the same grounds, to the

proposed jury charge, satisfied the purposes of Rule 50(b));

Polanco, 78 F.3d at 974-75 (defendant's motion for judgment as a

matter of law at the close of plaintiff's case, which was taken

under advisement by the court and followed by the presentation of

thirteen defense witnesses and no rebuttal witnesses, alerted

plaintiff and the court to defendant's challenge to the sufficiency

of plaintiff's proof). Although Rule 50's requirements have been

liberally construed in this circuit, Hinojosa v. City of Terrell,

Tex., 834 F.2d 1223, 1228 (5th Cir. 1988), cert. denied, 493 U.S.

822, 110 S. Ct. 80 (1989), "[e]ven with a liberal interpretation

[of Rule 50(b)], . . . this circuit has never completely

disregarded the requirement that the defendant must move for

judgment as a matter of law at the close of all the evidence."

Polanco, 78 F.3d at 974.

10
 Flintco did not do so. It neither moved for judgment as a

matter of law under Rule 50(a) at the close of Wallace's case or at

the close of all the evidence. Moreover, Flintco did not

challenge the sufficiency of the evidence in connection with or as

a basis for making objections to the court’s jury charge.

Nonetheless, Flintco contends that the purposes of the Rule were

satisfied by its attempt to comply with the Rule's requirements, by

the trial court’s perceived understanding of Flintco’s unstated

insufficiency points and disinclination to hear the motions until

after a verdict was received, and by Flintco’s general objections

to certain issues being submitted to the jury. The Court

disagrees, although the argument requires a careful review of the

record.

At the close of Wallace's evidence, Mr. Sessions, Flintco's

counsel, stated his desire to present "certain motions," to which

the trial court replied that motions could be presented at the

lunch recess. R. Vol. 21 at 706, lines 5-11.5 During a recess

later that morning, but before the lunch recess, the trial court

5
The exchange occurred as follows:

Mr. Sessions stated, "Your Honor, I believe it's at this time
traditionally when we present certain motions to the Court.
I believe the Court has already indicated -- "

The trial court interjected, "We can do that at lunch time."

Mr. Sessions responded, "That'll be fine. We'll go forward
with it," and proceeded to call Flintco's first witness. R.
Vol. 21 at 706, lines 5-11.

11
informed counsel that such matters would be considered instead

during a recess "a little after" lunch. Id. at 783, lines 1-4.6

During the same exchange, the trial court commented, "I suspect I'm

going to have a motion here that I told Mr. Sessions would be

deferred so I have some legal decisions to make here on the current

state of this record . . . ." Id. at 787, lines 10-13. During the

recesses and the hearings outside the presence of the jury that

followed, Flintco addressed a number of matters with the court but

never reminded the court of Flintco’s previously-indicated desire

to present “certain motions,” and never moved for judgment as a

matter of law based on the evidence at the close of Plaintiff’s

case-in-chief.

At the close of Defendants’ evidence7 and before submission of

the case to the jury, the Court observed that motions had not been

"formally made" because the Court had "cut [] off" Mr. Sessions.

R. Vol. 22 at 947, lines 15-17. The Court then stated that motions

could be made post-verdict.8 R. Vol. 22 at 947, lines 17-22; R.

6
Specifically, the trial court stated, "There's been a
change in plans. What I told you we were going to do at lunch
time, we'll do a little after and take a break about then. I'll
just let you know as we go." R. Vol. 21 at 783, lines 1-4.
7
Wallace presented no witnesses in rebuttal.
8
Specifically, the trial court stated, "I know that although
it was not formally made because I cut everyone off or cut you off,
Mr. Sessions, any type of motion practice anyone may have with
regard to claims by the opponents can all be taken up post verdict.
There's no point in me deciding something if I don't have to decide
it. The Jury decides it for me. But -- well, that speaks for
itself." R. Vol. 22 at 947, lines 15-22.

12
Vol. 23 at 996, lines 2-4, 14-23. Flintco did not object to the

trial court’s deferral of the parties’ “motion practice,” and again

did not orally attempt to present a motion for judgment as a matter

of law. Moreover, Flintco did not file a written motion for

judgment as a matter of law.

The next morning during a lengthy jury charge hearing held

outside of the presence of the jury, Flintco objected to certain

instructions and portions of the proposed charge, including

portions addressing its liability under quantum meruit and the

Miller Act. The court sustained some of the objections and

modified the instructions. Flintco made no objection to the

proposed charge, however, on grounds pertaining to the sufficiency

of the evidence. R. Vol. 23 at 973-983, 985-987. In particular,

Flintco made no objection that there was insufficient evidence to

warrant submission of liability issues on Wallace’s breach of

contract, quantum meruit, and Miller Act claims or submission of

damages questions related to those claims.

After hearing the parties' objections to the proposed jury

charge and making certain changes in the charge, the trial court

commented,

One other thing so that -- so that you aren't blind sided
or no one is blind sided, and I'm saying this to let you
know so that it's on the record, and I have not
formulated any final opinions one way or another, but
after sitting here for two weeks and listening to this
case and looking at everything again, I want to let you
know that there was no motion -- you can make all this
post-verdict, but I, as a matter of law, am concerned

13
 about two things. And one is that -- is the partial
summary judgment Mr. Sessions filed against Victore about
conditions precedent about the materials and whether that
was triggered or not. And we can talk about that later
and revisit that issue, but I'm even more concerned about
the damage -- the aspect of damages that the Plaintiff
proved and whether or not as a matter of law that a
reasonable fact finder could could [sic] find -- find
that.

I'm just putting you on notice now so you won't think
it's something I haven't been thinking about all along,
but there are motions, but I am going to go ahead and get
the jury verdict.

Id. at 995-996.

In sum, when Plaintiff rested his case-in-chief, Flintco’s

counsel observed that “it’s at this time traditionally when we

present certain motions to the court.” R. Vol. 21 at 706, lines 5-

7. That was the one and only allusion ever made by defense counsel

of a desire to make a motion for judgment as a matter of law under

Rule 50(a). At the close of all of the evidence and before

submission of the case to the jury, Flintco never filed a written

Rule 50(a) motion; never asked to make an oral Rule 50(a) motion;

never objected to the trial court’s statement that “any type of

motion practice . . . can all be taken up post-verdict”; never

stated the grounds that would form the basis of a motion for

judgment as a matter of law if one were to be made, either in

writing or orally; never insisted upon its right either to file or

orally to make a Rule 50(a) motion even though the court chose not

to rule upon it until after a verdict; and never voiced objections

14
to the submission of liability and damage questions on grounds of

insufficiency of evidence.

Flintco argues that the purposes of Rules 50(a) and (b) were

served by the trial court’s above-quoted comment that he was

“concerned” about “the aspect of damages that the Plaintiff proved

and whether or not as a matter of law that a reasonable factfinder

could find -- find that.” R. Vol. 23 at 996, lines 9-13. Flintco

argues that the judge’s comment relates solely to the insufficiency

of Plaintiff’s evidence as a matter of law and that the purposes of

Rule 50 were thereby served. Flintco, however, did not follow up

the trial court’s comment with a Rule 50(a) motion. Nor did

Flintco state on the record what would be the basis of such a

motion had one been made. Under Rule 50(a), a movant is required

to “specify the judgment sought and the law and the facts on which

the moving party is entitled to the judgment.” Fed. R. Civ. P.

50(a)(2). Flintco never did this.

It is not enough for a party to rely upon “concerns”

volunteered by a trial judge as a substitute for making a Rule

50(a) motion. Not even a court of appeals, in holding that there

was sufficient evidence to send to the jury a question on gross

negligence and reversing the case for retrial on that issue, can

excuse the defendant from making a Rule 50(a) motion before the

case is submitted to the jury in the new trial. This is what

happened in Sims’ Crane Serv., Inc. v. Ideal Steel Prods., Inc.,

800 F.2d 1553 (11th Cir. 1986). On retrial, the defendant did not

15
make a motion for directed verdict on the gross negligence issue

because the court of appeals had previously ruled that the evidence

was sufficient to require its submission and because defendant

viewed the court of appeals’ decision as having declared the law of

the case. Id. at 1557. After the new verdict was returned for

plaintiff, the trial court granted a judgment notwithstanding the

verdict. On appeal from this judgment, the Eleventh Circuit Court

of Appeals held that the failure of defendant to have made a Rule

50(a) motion limited the court’s review to a determination of plain

error. Id. The appellate court wrote that although defendant’s

reasons for having not made a Rule 50(a) motion were

persuasive to some extent, we note that counsel sometimes
must take certain required, albeit formalistic, steps to
preserve the rights of their client and to perfect the
record for post-verdict proceedings.

Objections, proffers, and motions are frequently
required in trials even when it may seem certain to the
pertinent lawyer that the trial judge’s view is that such
efforts ought not to prevail. Of course, almost nothing
is really certain in litigation; `[i]ndeed, it is always
probable that something improbable will happen.’ Warren
v. Purtell, 63 Ga. 428, 430 (1879) (Bleckley, J.). Thus,
it is hard to know when some act would have been truly
useless. In any event, orderly and definite procedural
steps are necessary to sharpen the issues before the
court and to avoid misunderstanding. While it is true
that this Circuit has not been strict about motions for
directed verdicts, we cannot depart completely from Rule
50(b).

Id. In the instant case, Flintco, in arguing now that it should be

excused for not having made the motion because of the trial court’s

volunteered declaration of its “concerns” about the evidence, has

16
a far less cogent excuse than that given by the defendant in Sims’

Crane. The Eleventh Circuit summarized the law as follows:

A lawyer who never moves for directed verdict, given the
wording of Rule 50(b) and the clear case law regarding
the effect of such a decision -- regardless of the
reasons for such a decision, must realize that a
subsequent motion for jnov can be granted only if plain
error can be proven.

Id.; see also McCann, 984 F.2d at 672 (“While it is true that this

Circuit approaches such questions [about compliance with Rule

50(b)] with a `liberal spirit,’ we are not willing to rewrite the

Federal Rules of Civil Procedure.”) (internal citation omitted).

Because Flintco made no Rule 50(a) motion and did not specify

what judgment was sought and the law and the facts that would

entitle Flintco to such a judgment, we conclude that the second

purpose of Rule 50 -- to alert Wallace to the specific grounds for

an anticipated challenge to the sufficiency of its proof and to

allow Wallace the opportunity to move to cure any such deficiency

-- was not served. In that the purposes of Rule 50 were not met,

non-compliance with the Rule cannot be excused. McCann, 984 F.2d

at 671 ("In each case where we have excused noncompliance with Rule

50(b), this Court has concluded that the purposes of the rule had

been satisfied.") (emphasis in original); see, e.g., Guilbeau v.

W.W. Henry Co., 85 F.3d 1149, 1160 (5th Cir. 1996) (the purpose of

Rule 50(a)'s requirement that a motion for judgment as a matter of

law specify the law and the facts upon which the moving party

17
relies “is to assure the responding party an opportunity to cure

any deficiency in that party's proof that may have been overlooked

until called to the party's attention by a late motion for

judgment") (citing Fed. R. Civ. P. 50 advisory committee's note

(1991 amendment)), cert. denied, ___ U.S. ___, 117 S. Ct. 766

(1997); Hinojosa, 834 F.2d at 1228 (“In this case [defendant] did

not at any time move for a directed verdict in his favor . . . ,

nor did he object to the submission of any of the interrogatories

pertaining to these claims on the ground that the claims were

unsupported by the evidence. . . . [Defendant thus] failed to

alert [plaintiff], prior to submission of the case to the jury, to

the possibility that insufficient evidence was presented . . . .").

Because of Flintco’s non-compliance with Rule 50(a), we must

consider Flintco's objections to the sufficiency of Wallace's

evidence on its quantum meruit and Miller Act claims as though they

were raised for the first time on appeal. Polanco, 78 F.3d at 974.

"It is the unwavering rule in this Circuit that issues raised for

the first time on appeal are reviewed only for plain error. In

other words, this Court will reverse only if the judgment

complained of results in a `manifest miscarriage of justice.'"

McCann, 984 F.2d at 673 (internal citation omitted). On plain

error review "the question before this Court is not whether there

was substantial evidence to support the jury verdict, but whether

there was any evidence to support the jury verdict." Id.

18
(emphasis in original). If any evidence supports the jury verdict,

the verdict will be upheld. Polanco, 78 F.3d at 974.

B. Discussion

Flintco challenges the sufficiency of the evidence to support

the jury verdict on Wallace's quantum meruit and Miller Act claims.

Flintco specifically argues that Wallace's damages are precluded by

the "no damages for delay" clause in the parties' subcontract, that

there is insufficient evidence to support the amount of damages

awarded by the jury, and insufficient evidence of the actual "out

of pocket expenses" Wallace incurred in support of a verdict on the

Miller Act claim. Because our review is under the plain error

standard, the jury verdict in Wallace's favor on its quantum meruit

and Miller Act claims will be upheld unless there is no evidence to

support the jury's verdict on those claims.

19
 1. There is some evidence that Wallace's damages fall
outside of the "no damages for delay" clause in the
parties' subcontract.

The "no damages for delay" clause at issue provided:

In the event delays in the performance of this
Subcontract are occasioned by FLINTCO, Owner, Architect
or some other subcontractor, an extension of time for the
completion of this Subcontract shall be granted for a
period of time equal to the delay caused to
Subcontractor. Such extension of time shall be in lieu
and in full satisfaction of any and all claims whatsoever
of Subcontractor against Owner, Architect, FLINTCO or
other subcontractor causing such delay.

R. Excerpt 5D to Appellant’s Brief at ¶ 11. Clauses such as this

have been upheld under Texas law, and have been found to bar damage

claims that are based on delay. United States ex rel. Straus Sys.,

Inc. v. Associated Indem. Co., 969 F.2d 83, 85 (5th Cir. 1992)

(applying Texas law to "no damages for delay" clause); City of

Houston v. R.F. Ball Constr. Co., 570 S.W.2d 75, 77 (Tex. Civ.

App.--Houston [14th Dist.] 1978, writ ref'd n.r.e.). "No damages

for delay" clauses will be strictly construed and enforced unless

the delay at issue (1) was not contemplated by the parties; (2) was

so long as to justify abandonment of the contract; (3) was caused

by fraud, misrepresentation, or bad faith; or (4) was caused by

actual interference with the performance required under the

contract. R.F. Ball, 570 S.W.2d at 77 & n.1.

Wallace argues that his complaint is not one of delay within

the meaning of the “no damages for delay” clause, but is for

20
Flintco’s active interference and hindrance of Wallace’s

performance. Indeed, a leading Texas decision on this subject

upheld damages, notwithstanding a “no damages for delay” clause,

where the defendant was found to have committed the following acts

and omissions:

(1) Failure to plan development and construction of whole
project; (2) Failure to furnish master progress schedule;
(3) Failure to coordinate work of various prime
contractors; (4) Failure to proceed with underground
utilities contract until August 1, 1952; (5) Failure to
proceed with the sidewalks contract until July 1, 1953;
(6) Failure to expedite flow of information; (7) Failure
to decide on type of water heaters; (8) Failure to
deliver water heaters; (9) Arbitrary and capricious
requirements of Architects; (10) Instructions to asphalt
tile sub-contracts; (11) Refusal to accept the buildings
within reasonable time after August 25, 1953.

Housing Auth. of Dallas v. Hubbell, 325 S.W.2d 880, 890 (Tex. Civ.

App.--Dallas 1959, writ ref’d n.r.e.). The Court explained:

[T]he `no-damage-for-delay’ provision did not give Owner
a license to cause delays `willfully’ by `unreasoning
action’, `without due consideration’ and in `disregard of
the rights of other parties’, nor did the provision grant
Owner immunity from damages if delays were caused by
Owner under such circumstances.

Id. at 891.

In the instant case, there is evidence from Rodney Wallace, Ed

Wallace, and Donald McDonald that Flintco, and the other

subcontractors on the site over which Flintco had control,

disrupted and actively interfered with Wallace's performance under

the subcontract. That disruption and active interference consisted

of (1) Flintco's failure properly to coordinate and sequence the

21
work done by all the subcontractors on the job; (2) Flintco's

direction of Wallace to small, piecemeal jobs on the site; (3)

Flintco's failure to ensure that its other subcontractors removed

their materials and debris from the areas in which Wallace had to

work; (4) Flintco's improper surveying and staking of an area

around two of the buildings on the project that required Wallace to

regrade areas it believed had been completed to specifications; (5)

Flintco's failure to locate timely and remove physical obstacles

(power poles and a gas line) from the areas in which Wallace had to

work; and (6) Flintco's failure to ensure that the work Wallace had

completed was not adversely affected by the other subcontractors on

the site. This disruption and interference, according to the

testimony of Rodney Wallace, Ed Wallace, and Donald McDonald,

caused Wallace to suffer productivity impacts, resulting in

increased labor costs, increased equipment costs, and increased

overhead expenses. Because the record contains some evidence that

the actions of Flintco constituted active interference with

Wallace's performance and that Flintco breached the contract, and

because Texas law recognizes that a “no damages for delay” clause

does not preclude a contractor from recovering damages when the

delay is caused by active interference with the contractor’s

performance,9 there is no plain error in the Court’s submission of

9
Flintco relies on Black Lake Pipe Co. v. Union Constr. Co.,
Inc., 538 S.W.2d 80, 86 (Tex. 1976) to argue that Wallace cannot
recover in quantum meruit because the damages it claims are covered
by the parties’ contract. Black Lake Pipe, however, does not

22
questions and the jury’s findings on Flintco’s liability and

Wallace's damages.

2. There is some evidence to support the amount of damages
awarded to Wallace by the jury on the quantum meruit
claim.

Damages must be proven to a reasonable certainty, but

mathematical precision is not required.

All that the law requires is that the best evidence of
which a case is susceptible be produced, and if from such
evidence the amount of damages caused by the defendant
can be inferred or estimated by the jury with reasonable
certainty, then the amount of such damages is for the
jury.

Bildon Farms, Inc. v. Ward County Water Improvement Dist. No. 2,

415 S.W.2d 890, 897 (Tex. 1967); see also South Builders, Inc. v.

preclude Wallace from obtaining a quantum meruit recovery. When a
general contractor actively interferes with its subcontractor’s
performance, the subcontractor may “treat the contract as rescinded
and recover under quantum meruit the full value of the work done.”
McCracken Constr. Co. v. Urrutia, 518 S.W.2d 618, 621-22 (Tex. Civ.
App.--El Paso 1974, no writ); see also United States ex rel. Aucoin
Elec. Supply Co. v. Safeco Ins. Co. of Am., 555 F.2d 535, 542 (5th
Cir. 1977) (when general contractor prevents performance,
subcontractor may recover in quantum meruit); Citizens Nat’l Bank
v. Vitt, 367 F.2d 541, 546 (5th Cir. 1966) (“`Once a subcontractor
has established a breach of contract by the prime, he can recover
the value of the work he has done or the service he has rendered.
In other words, he is entitled to a quantum meruit.’”) (quoting
McBride and Wachtel, Government Contracts 49-185, § 49.150(4));
Kleiner v. Eubank, 358 S.W.2d 902, 905 (Tex. Civ. App.--Austin
1962, writ ref’d n.r.e.). In this case, the jury found in response
to Jury Question No. 1 that Flintco had breached the parties’
contract. Given that finding of a breach by Flintco, Wallace was
entitled to “treat the contract as rescinded and recover under
quantum meruit the full value of the work done.” Kleiner, 358
S.W.2d at 905.

23
Brown, 449 S.W.2d 542, 548 (Tex. Civ. App--Eastland 1969, writ

ref'd n.r.e.) (a subcontractor suing a general contractor for

breach of the subcontract is required to prove his damages in such

detail that the jury can make an estimate of the damages with

reasonable certainty). In reviewing whether damages have been

proven to a reasonable certainty, all evidence is to be considered

in the light most favorable to the party that was awarded damages.

Thompson and Wallace of Memphis, Inc. v. Falconwood Corp., 100 F.3d

429, 435 (5th Cir. 1996).

Donald McDonald, Wallace's damages expert, testified without

objection to his estimate of quantum meruit damages in the amount

of $297,643.88. R. Vol. 17 at 149-151, 156. The estimate appears

not to have been based on the reasonable value of the work

performed but instead, like his estimate of contract damages, on

man and machine hour averages. This methodology has been accepted

in calculating damages in construction cases. See U.S. Indus.,

Inc. v. Blake Constr. Co., Inc., 671 F.2d 539, 547 (D.C. Cir.

1982); see also Servidone Constr. Corp. v. United States, 931 F.2d

860, 861-62 (Fed. Cir. 1991) (modifying the total cost method to

account for bid inaccuracies was a proper method of calculating

damages); Neal & Co., Inc. v. United States, 36 Fed. Cl. 600, 638

(Fed. Cl. 1996), aff’d, 121 F.3d 683 (Fed. Cir. 1997) (allowing

modified total cost method of calculating damages). We have found

no precedent, however, specifically approving the use of this

24
methodology to prove quantum meruit damages. Nonetheless, given

our inability to review the sufficiency of the evidence and the

fact that there is some evidence of quantum meruit damages in the

approximate amount of $297,000, the jury's award of $197,777.00 to

Wallace on its quantum meruit claim does not constitute plain

error.

25
 3. There is some evidence to support the judgment awarding
damages to Wallace on the Miller Act claim.

Under the Miller Act, 40 U.S.C. § 270b, only out-of-pocket

costs of delay are recoverable. In awarding Miller Act damages,

the district court must be assured that the subcontractor did not

cause the delay and then "carefully limit the recovery to