Modern Electric, Inc. v. Ideal Electronic Security Co.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 2, 1998 Decided June 26, 1998

No. 97-7099

Modern Electric, Inc.,

In Its Own Right and

United States of America, ex rel. Modern Electric, Inc.,

Appellees

v.

Ideal Electronic Security Co., Inc., A D.C. Corporation,

Appellant

Appeal from the United States District Court

for the District of Columbia

(No. 94cv00385)

Curtis R. Smothers argued the cause for appellant. With
him on the briefs was John W. Karr.

Michael P. Darrow argued the cause and filed the brief for
appellee Modern Electronic, Inc.

Before: Edwards, Chief Judge, Ginsburg and Tatel,
Circuit Judges.

Opinion for the Court filed Per Curiam.

Per Curiam: Bringing this contract action to us for a
second time, appellant challenges district court rulings refus-
ing to reopen the record on remand, admitting a new exhibit
offered by appellee, denying a new trial, rejecting a claimed
offset, and awarding prejudgment interest. Because all of
appellant's arguments lack merit, we affirm.

I

We described this dispute in detail in United States ex rel.
Modern Electric, Inc. v. Ideal Electronic Security Co., Inc.,
81 F.3d 240, 242-44 (D.C. Cir. 1996). In brief, the facts are
as follows: In July 1991, through a Small Business Adminis-
tration program promoting disadvantaged businesses, appel-
lant Ideal Electronic Security Co., Inc. was selected to re-
place PCB-laced electrical transformers at the Walter Reed
Medical Centers. Ideal subcontracted with appellee Modern
Electric, Inc. to perform the bulk of the work under a written
contract that expired April 2, 1992. After the contract's
expiration, Modern continued to work for Ideal in response to
purchase orders and oral requests to complete specific tasks.
Although the parties entered into a new agreement in Janu-
ary 1993, disagreements soon mounted, and nine months
later, Modern stopped working for Ideal.

Modern sued, arguing that Ideal's purchase orders and oral
requests formed contracts that Ideal breached. The district
court found no contractual liability, but granted Modern some
recovery on an unjust enrichment theory for certain discounts
Ideal took from Modern's invoices.

Ideal and Modern both appealed, and this court reversed.
Id. at 244-45. Finding that under District of Columbia law,
purchase orders and oral agreements could form contracts,
id. at 244, we remanded to the district court "to make specific
findings regarding each ... alleged agreement[ ]," id. at 245.

On remand, and making each of the findings required by
our earlier decision, the district court found Ideal liable for
breach of contract arising out of three oral requests for work
and twenty-nine of fifty-five disputed purchase orders, U.S.
ex rel. Modern Elec., Inc. v. Ideal Elec. Sec., Inc., No.
94-0385, at 5-27 (D.D.C. May 1, 1997), and awarded Modern
$158,000 in damages, id. at 30, plus prejudgment interest of
almost $44,000. The district court also rejected two offsets
Ideal claimed: $74,000 based on the contention that a Federal
Acquisition Regulation required Modern to provide Ideal with
certain labor credits; and $88,000 for duct work done by
Modern that the government had allegedly rejected on the
theory that Ideal's contracts only required payment to Mod-
ern when Ideal received payment from the government. Id.
at 29-30. Ideal moved for a new trial, challenging the district
court's decision not to reopen the record and the sufficiency
of the evidence. The district court denied the motion. Ideal
again appeals.

II

We begin with Ideal's challenges that we review for abuse
of discretion: the denial of Ideal's request to reopen the
record; the acceptance of Modern's new evidence; the denial
of Ideal's motion for a new trial; and the award to Modern of
prejudgment interest during the period of the previous ap-
peal. See, e.g., Taylor v. FDIC, 132 F.3d 753, 766 n.7 (D.C.
Cir. 1997) (new evidence); Langevine v. District of Columbia,
106 F.3d 1018, 1023 (D.C. Cir. 1997) (denial of motion for new
trial); District of Columbia v. Pierce Assocs., Inc., 527 A.2d
306, 310 (D.C. 1987) (prejudgment interest in contract cases).

Ideal complains first about the district court's refusal to
reopen the record. Following our remand, the district court
ordered each party to submit proposed findings of fact based
on the original trial transcript and exhibits. Pointing to a
ruling at the original trial cutting short one witness's testimo-
ny, Ideal asked to reopen the record to take additional
testimony on each purchase order. The district court reject-

ed the request, noting that Ideal "was not foreclosed by that
ruling from adducing evidence with respect to each or any of
the purchase orders." We disagree with Ideal's contention
that this ruling amounted to an abuse of discretion. Not only
did Ideal fail to object to the district court's ruling about
Ideal's testimony, but read in context, the ruling only preclud-
ed the witness from elaborating on the background of an
exhaustive list of Ideal's individual defenses. As the district
court noted, Ideal remained free to offer any other testimony
or documentary evidence it deemed appropriate.

Ideal next asserts that the district court abused its discre-
tion in accepting and then relying on an exhibit offered by
Modern to rebut an offset Ideal claimed for duct work Ideal
asserted the government never paid for. But Ideal never
established that under the contracts formed by the invoices
and oral requests, it was entitled to pay Modern only when
paid by the government. Any error regarding Modern's
exhibit would therefore have been harmless.

Ideal's appeal of the district court's denial of its new trial
motion fares no better. Other than a challenge to the
sufficiency of the evidence, an issue not raised on appeal, the
new trial motion essentially relied on the two arguments we
have already rejected.

Ideal asserts that the district court abused its discretion by
failing to explain why it granted Modern prejudgment inter-
est for the period between the original judgment, vacated on
appeal, and the final judgment on remand, arguing that such
interest penalizes parties appealing a judgment and subverts
the federal post-judgment interest statute, 28 U.S.C. s 1961
(1994). Because extending the grant of prejudgment interest
(which Ideal has not challenged) to the period of appeal
merely compensated Modern for the continuing time-value of
its money, and in no way implicated the post-judgment inter-
est statute (it was entirely proper pre-judgment interest), we
cannot fault the district court's decision to award such inter-
est.

III

Ideal finally claims that the district court erred in denying
it a twenty-percent offset for "labor credits," arguing such
offset was required by a Federal Acquisition Regulation, 48
C.F.R. s 52.219-14(b)(4) (1997). Because this argument
presents a question of law, our review is de novo, see Moldea
v. New York Times Co., 22 F.3d 310, 316 (D.C. Cir. 1994).

Entitled "Limitations on Subcontracting," section 52.219-
14(b)(4) provides that in certain government construction
contracts under a Small Business Administration program
promoting disadvantaged contractors, prime contractors "will
perform at least 25 percent of the cost of the contract, not
including the cost of materials, with its own employees." 48
C.F.R. s 52.219-14(b)(4). We need not decide whether or to
what extent this regulation affected Ideal's contracts with
Modern. Even if the regulation had somehow been incorpo-
rated as a matter of law into those contracts, the regulation in
no way requires labor credits, let alone the very specific
twenty-percent credit Ideal sought.

We affirm the decision of the district court.

So ordered.