UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 93-1011
WESTCOTT CONSTRUCTION CORP.,
Plaintiff, Appellant,
v.
FIREMEN'S FUND OF NEW JERSEY,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Francis J. Boyle, U.S. District Judge]
Before
Torruella, Circuit Judge,
Oakes,*, Senior Circuit Judge,
and Cyr, Circuit Judge.
Peter Lawson Kennedy with whom Adler Pollock & Sheehan
Incorporated was on brief for appellant.
Shelia High King with whom Bert J. Capone, Michael P. Duffy and
Peabody & Arnold were on brief for appellee.
June 25, 1993
*Of the Second Circuit, sitting by designation.
OAKES, Senior Circuit Judge. Westcott
Construction Co. ("Westcott") appeals from an order of the
United States District Court for the District of Rhode
Island, Francis J. Boyle, Judge, denying Westcott's motion
for summary judgment and granting defendant Firemen's
Insurance ("Firemen's") cross-motion for summary judgment.
Westcott sought to enforce the terms of a performance bond
executed by Firemen's on behalf of Westcott's subcontractor,
Crouse Combustion Systems ("Crouse"), in which Westcott was
named as obligee. In particular, Westcott sought to be
indemnified for payments made to the City of Cranston, Rhode
Island ("Cranston"), for damages suffered by the town as a
result of Crouse's delays.
Westcott, Crouse and Cranston previously had
participated in lengthy arbitration proceedings in which the
arbitrators had established damages owed by Crouse to
Westcott and by Westcott to Cranston, as well as by Cranston
to Westcott. Westcott argues that the arbitrators were not
asked to consider Crouse's duty to indemnify and that,
therefore, this question is open to the courts to decide.
Westcott initially petitioned the arbitrators to reconsider
the award. After that request was denied, Westcott
unsucessfully sought to vacate or modify the award in the
Rhode Island state courts on the ground that the award
failed to consider Westcott's indemnification claim against
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Crouse. Westcott then sought relief against Firemen's,
Crouse's surety on the performance bond, in the United
States District Court for the District of Rhode Island, and
after losing there, now seeks redress in this court. We
find Westcott's appeal clearly foreclosed by res judicata,
in fact so clearly that we award double costs on behalf of
Firemen's.
BACKGROUND
In November, 1981, Firemen's issued a performance
bond to subcontractor Crouse, with Westcott, the general
contractor, as obligee, for a wastewater treatment plant
being built for the city of Cranston, Rhode Island. When a
dispute arose over the project, Westcott, Crouse and
Cranston submitted their damage claims to arbitration. On
April 25, 1989, the arbitrators issued their findings and
award. After finding Crouse responsible for much of the
delay damages, the arbitrators awarded Cranston $314,000
from Westcott and awarded Westcott $384,000 from Crouse and
$117,600 from Cranston (for delays caused by the city).
Westcott filed a motion on May 10, 1989, requesting the
arbitrators to reconsider the award as it allegedly failed
to require Crouse to make good on its performance bond and
thus to indemnify Westcott for the $314,000 paid to
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Cranston. The arbitrators denied Westcott's motion for
reconsideration and modification of their decision.
Westcott then sought to modify or vacate the award
in state court, arguing that the award had failed to pass
through the $314,000 in damages to Crouse. The Superior
Court's denial of Westcott's motion was affirmed by the
Rhode Island Supreme Court, Westcott Constr. Corp. v. City
of Cranston, 586 A.2d 542 (R.I. 1991) (per curiam), which
concluded that Westcott had submitted its claims for
additional damages to the arbitrators and therefore the
claim was not open to the court to decide.
Westcott then brought suit against Firemen's as
Crouse's surety in the District of Rhode Island. The claim
was dismissed. Westcott now appeals.
DISCUSSION
Westcott, on this appeal, requests us to award
indemnification damages against Firemen's, maintaining that
the question of indemnication was never considered by the
arbitrators or by the state courts. The district court
ruled against Westcott, finding this claim foreclosed by res
judicata. As the district court stated, "[i]t seems
abundantly clear to me that the Rhode Island Supreme Court
has already considered and decided the controversy." We
agree with the district court's assessment. That the Rhode
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Island Supreme Court considered this issue is clear from the
language of the opinion. As that court noted, "Westcott
argues that the $1,000-per-day award to the city should have
been 'passed through' to Crouse and that, therefore, the
arbitrators' award is imperfect." Westcott Construction
Corp., 586 A.2d at 543. We fail to see how Westcott's state
court claim differs from its federal one. Indeed, it seems
clear that this issue was submitted to the arbitrators as
well. Westcott itself, in its motion to the arbitrators for
reconsideration and modification of their decision, admitted
that "[t]he parties agreed at the initial hearing on
September 5, 1986 that all matters between Cranston,
Westcott, Crouse and the other subcontractors would be
decided." As Firemen's notes, this statement demonstrates
that the arbitrators were to consider Westcott's claim
against Crouse.
Res Judicata bars Westcott's claim. See Coates v.
Coleman, 51 A.2d 81, 85 (1947). "[A] state court judgment
commands the same res judicata effects in federal court that
it would have in the court that entered it." 18 Charles A.
Wright, Arthur R. Miller & Edward H. Cooper, Federal
Practice and Procedure 4469, at 659-60 (1981). In Griffin
v. State of R.I., 760 F.2d 359 (1st Cir.) (applying Rhode
Island law), cert. denied, 474 U.S. 845 (1985), the First
Circuit explained that res judicata operates as an absolute
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bar to the relitigation of the same cause of action between
parties (or their privies) and that a prior judgment
rendered on the merits is conclusive not only to the issues
which were determined but as to all matters which might have
been determined as well. Id. at 360; see also Corrado v.
Providence Redevelopment Agency, 320 A.2d 331, 332 (1973).
All the requirements for applying res judicata are
met in this case. As in Griffin, the appellant "contends
that the 'causes of action' in Rhode Island and federal
courts differed, and thus argues that res judicata does not
bar her federal court action." 760 F.2d at 360. And, as in
Griffin, "[a]n analysis of the cause of action here and in
the prior state proceedings clearly establishes that both
are essentially the same." Id. at 361. The federal case
involves the same subject matter and the same parties as did
the state case, and contests the same point: that the
arbitrators did not consider Westcott's indemnity claim
against Crouse.
Firemen's, as surety, is only liable to the extent
its principal, Crouse, is liable. See Rhode Island Hosp.
Trust Nat'l Bank v. Ohio Cas. Ins. Co., 789 F.2d 74, 77-79
(1st Cir. 1986). Firemen's benefits just as Crouse does
from the application of res judicata. Id. at 77. Thus,
Firemen's, as surety for Crouse, is not legally bound to pay
the $314,000 Westcott seeks.
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This application of res judicata effects no
injustice. None of the grounds justifying departure from
the doctrine of res judicata are present in this case. See
Restatement (Second) of Judgments 20 (1982); 18 Charles A.
Wright, Arthur R. Miller & Edward H. Cooper, Federal
Practice and Procedure 4435-4447 (1981) (earlier judgment
entered without jurisdiction; improper venue; non-joinder or
misjoinder of parties; prematurity; failure to satisfy
condition precedent; and dismissal without prejudice).
After examining the history of this litigation and
Westcott's repeated presentation of the same issue, we find
it appropriate to assess a monetary penalty of double costs
against Westcott for a frivolous appeal. Fed. R. App. P.
38. Rule 38 provides that "[i]f a court of appeals shall
determine that an appeal is frivolous, it may award just
damages and single or double costs to the appellee." As
this Circuit stated in Natasha, Inc. v. Evita Marine
Charters, Inc., 763 F.2d 468, 471 (1st Cir. 1985), "[a]n
appeal is frivolous when the result is obvious, or the
arguments are 'wholly without merit.'" Id. at 472 (quoting
NLRB v. Catalina Yachts, 679 F.2d 180, 182 (9th Cir. 1982)
(citations omitted)). There are two reasons to assess a
penalty for frivolous appeals. First, such suits must be
deterred in order to ease the burden on the courts of
appeals and, second, in order to protect against "strike
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suits" or appeals brought to delay paying damages. See
Natasha Inc., 763 F.2d at 471-72 (discussing policy reasons
for imposition of penalties by the court); cf. Bankers Trust
Co. v. Publicker Indus., Inc., 641 F.2d 1361 (2d Cir. 1981)
(awarding double costs and up to $10,000 damages against
client and counsel for frivolous appeal).
Westcott has engaged in repeated frivolous
appeals, requiring Firemen's to litigate the same claim in
different fora. Westcott's attempt to distinguish its state
court claims from those brought in the federal courts has no
merit as res judicata clearly foreclosed its claim. In
light of this determination, we award double costs to
Firemen's.
CONCLUSION
We affirm the district court's grant of summary
judgment to Firemen's on the grounds of res judicata and
award double costs.
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