April 29, 1994 [NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 93-1685
NORTH ATTLEBORO ARMS REALTY TRUST,
Plaintiff, Appellant,
v.
HARTFORD FIRE INSURANCE COMPANY,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Joseph L. Tauro, U.S. District Judge]
Before
Breyer, Chief Judge,
Coffin, Senior Circuit Judge,
and Torruella, Circuit Judge.
Guy E. Guarino for appellant.
Raymond A. LaFazia with whom Gunning, LaFazia & Gnys, Inc. was on
brief for appellee.
BREYER, Chief Judge. The plaintiff in this case
(the "Developer") is a real estate trust that hired a
Contractor to build condominiums. The Developer says that a
Subcontractor -- a maker of exterior walling systems --
defaulted on its contract to supply the condominiums with
"curtain walls." And, it has sued that Subcontractor's
surety, The Hartford Fire Insurance Company, for damages.
The district court, trying both the facts and the
law, found that the Developer suffered no harm -- at least,
none that legally entitles it to an award of damages. The
Developer now appeals, basically asking us to find that the
court's factfinding was "clearly erroneous." Fed.R.Civ.P.
52(a). The district court's findings, however, have
adequate record support; and, we therefore affirm its
judgment.
We have read the record in a light appropriately
favorable to the winning party, defendant Surety. See
Capt'n Mark v. Sea Fever Corp., 692 F.2d 163, 166 (1st Cir.
1982). So read, the record reveals the following relevant
background facts:
1) In a contract dated December 2, 1987, the
Subcontractor promised the Contractor (which
in turn was controlled by the Developer) to
provide curtain walls for the condominium
building for a total price of $339,655.
2) As of June or July, 1988, the Subcontractor
had substantially completed the job. Several
months later, on November 4, 1988, the
Contractor's architect provided the
Subcontractor with a "punch list" of five
items to be corrected (such as "rust stains"
on certain walls, "misalignment" of certain
panels, "incomplete trim" around some sliding
doors, etc.) About ten days later, the
architect sent an expanded list of eight
items.
3) On November 18, 1988, the Subcontractor wrote
back that the work on the punch list "will
cost approximately $3,000 to $4,000 to
remedy." But, it would not perform that work
until the architect released its final
payment (which it estimated to be about
$31,000). It pointed out that the architect
retained an additional $34,000 (otherwise
belonging to the Subcontractor) as security
for performance; and, it agreed that the
architect need not release this money until
all the work was complete. In early
December, the Developer wrote to the
architect that the punch list work "ha[d] not
been started," that it would require 24 of
the units "to be plumbed out" (removing
existing dry wall), and that this would cost
$2,200 per condominium unit. A month later,
the Developer wrote to the Surety that the
Subcontractor was in "default."
4) Ten months later, in November 1989, the
Developer's counsel wrote to the Surety
stating that the Subcontractor's failure to
cure the punch list defects meant that the
Developer could not
conclude closings of
fifty-four (54)
units which were
under written
purchase and sale
agreements with
third parties.
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He added that these "damages are not
speculative," and that he would like to work
with the Surety "in acquiring a settlement."
Counsel wrote further letters, threatened
legal action, and then, in preparing for
litigation in September 1990, had the
architect draw up a final repair cost
estimate totalling roughly $345,000.
After the Surety refused to pay, the Developer brought this
diversity action, arguing, among other things, that the
Surety broke its surety contract requiring it "promptly" to
"remedy" any "default," and seeking damages in the amount of
the repair and completion costs ($345,000).
After a trial, the district court concluded that
the Developer had failed to prove its case. The court said
that although it accepted Developer's sole witness (the
architect) as competent to testify on the matter of damages,
it need not "credit" his opinion. Specifically, the court
rejected the architect's $345,000 correction-cost estimate,
which in the court's view was "an extraordinary amount," and
which (by what seemed to the court "an extraordinary
coincidence") amounted to the entire curtain wall contract
price. The court found "more immediate" problems for the
Developer in the fact that, even if one assumed that it
would cost $345,000 to dismantle portions of the building
and then make the punch list repairs, that cost would so
vastly exceed "any resulting benefit" that it would "involve
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unreasonable economic waste." (internal quotation marks
omitted). In such circumstances, the court concluded that
the proper measure of damages was (1) the Developer's
reasonably incurred actual costs, or (2) the loss of market
value (e.g., the difference between the market value of the
structure-as-promised and the market value of the structure-
as-constructed). See generally Concannon v. Galanti, 202
N.E.2d 236, 238 (Mass. 1964); Restatement (Second) of
Contracts 348(2) & cmt. c (1979); John D. Calamari &
Joseph M. Perillo, Contracts 14-29, at 633-36 (3d ed.
1987). Because the record lacked any concrete evidence as
to either, the plaintiff was not entitled to any recovery.
On appeal, the Developer argues at length that the
district court erred in its factfinding. But, on the all-
important issue of loss suffered as a result of the
Subcontractor's (alleged) default, the Developer's brief
contains virtually no citations to the record. We have
reviewed the record independently, but have found no
significant evidence tending to show "lost unit sales" or
sales "at reduced prices," or any other evidence of
diminished market value. Indeed, the one person who would
seem to have been qualified to testify about the market loss
caused by the alleged defects in the walling system -- the
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Developer's trustee, Alfred Pace, Sr. -- did not testify.
We, like the district court, can find no concrete evidence
of loss, other than the evidence about the $345,000 in
correction costs, which figure the district court found to
be both (1) unbelievable and (2) an improper basis for
recovery. We must respect the district court's decision to
reject the architect's opinion. See Dedham Water Co., Inc.
v. Cumberland Farms Dairy, Inc., 972 F.2d 453, 457 (1st Cir.
1992). We also agree with the district court, for the
reasons it stated, that the $345,000 is not a legally proper
measure of damages. See Restatement (Second) of Contracts
348(2) & cmt. c. Of course, we recognize that the
Subcontractor itself conceded that it would cost roughly
$3,000 to $4,000 as of November 1988 to complete the punch
list items, and that, with minor exceptions, they were never
completed. But, as far as we can tell, the Developer did
not seek recovery for those costs, and the Developer does
not argue for those specific costs on appeal. Thus, we
need not consider in this context whose fault it actually
was that the punch list corrections were never made.
The district court also held that the
Subcontractor's refusal to make the punch list repairs in
November 1988 did not amount to a "default," for that
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failure represented a reasonable refusal not to proceed in
the absence of a further payment, to which the Subcontractor
was entitled. The record more than adequately supports this
finding. And, in its light, we agree with the district
court that there was not sufficient evidence of "rascality"
by the Surety to support a chapter 93A claim. Levings v.
Forbes & Wallace, Inc., 396 N.E.2d 149, 153 (Mass. 1979).
The finding of no proven damages is also sufficient to
warrant judgment for the Surety on the Developer's remaining
claims.
The judgment of the district court is
Affirmed.
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