Concrete Systems Inc v. Pavestone Company

Not for Publication in West's Federal Reporter
Citation Limited Pursuant to 1st Cir. Loc. R. 32.3

United States Court of Appeals
For the First Circuit

Nos. 04-1010, 04-1011

CONCRETE SYSTEMS, INC.,

Plaintiff, Appellant/Cross-Appellee,

v.

PAVESTONE COMPANY, L.P., and
PAVESTONE GENERAL INC.,

Defendants, Appellees/Cross-Appellants.

APPEALS FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. George A. O'Toole, Jr., U.S. District Judge]

Before

Selya, Dyk,* and Howard, Circuit Judges.

Evan Slavitt with whom Richard P. O'Neil and Bodoff &
Slavitt LLP were on brief, for appellant.
Scott J. Tucker with whom Scott H. Kremer and Tucker,
Heifetz & Saltzman, LLP were on brief, for appellees.

September 29, 2004

*
Of the Federal Circuit, sitting by designation.
 Per Curiam. This diversity case stems from a failed real

estate transaction between Concrete Systems Inc. ("CSI") and

Pavestone Co. ("Pavestone"). CSI owned a parcel of land on Pierce

Avenue in Lakeville, Massachusetts ("the property"), that was

equipped to operate as a concrete plant. Pavestone, a Texas

company, wished to purchase the property so that it could increase

its concrete business in the region, but after placing a $50,000

deposit and signing a purchase and sale agreement, Pavestone

decided that it could not proceed with the closing.

After the sale fell through, CSI sued Pavestone on three

theories: (1) Pavestone breached its obligation to purchase the

property ("failure-to-close claims"); (2) Pavestone committed acts

on the property that resulted in Lakeville's rezoning the property

from industrial to residential, thereby reducing its value

("rezoning claims"); and (3) Pavestone failed to return the

property to its pre-existing condition and failed to return certain

equipment that it removed from the property after it decided not to

close ("condition-of-the-property claims"). The second and third

theories relate to Pavestone's work on the property during the pre-

closing period -- a period in which Pavestone was authorized under

the purchase and sale agreement to perform work on the property.

In a series of separate rulings, the district court

dismissed the failure-to-close claims, to the extent that they

sought damages in excess of Pavestone's $50,000 deposit, because

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the purchase and sale agreement contained a liquidated damages

clause limiting the damages for failing to close to the deposit

amount; granted summary judgment on the rezoning claims because CSI

could not establish that Pavestone's pre-closing work on the

property had caused Lakeville to rezone the property; and dismissed

the condition-of-the-property claims because of CSI's discovery

violations. As a result of these rulings, the case went to trial

only on the failure-to-close claims with a damage cap of $50,000.

After a short jury trial, CSI prevailed.

The district court subsequently entered judgment for CSI

in the amount of $50,000 plus 12 percent prejudgment interest

pursuant to Mass. Gen. L. ch. 231, § 6C. Pavestone then moved to

amend this judgment, arguing that it was excessive because CSI had

earned interest on the $50,000 deposit during the prejudgment

period. The court agreed and entered an amended judgment reducing

the award by the actual amount of interest earned by CSI. CSI

timely appealed and now challenges the district court's rulings

limiting the available damages on the failure-to-close claims,

granting summary judgment on the rezoning claims, and reducing the

amount of prejudgment interest. We consider these challenges in

turn.

CSI contends that the district court erred in granting

Pavestone's motion to dismiss the failure-to-close claims to the

extent that they sought damages in excess of $50,000. CSI asserts

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that this ruling was inappropriate because the liquidated damages

clause was an affirmative defense, and a court "may not delve into

the merits of possible defenses" at the motion to dismiss stage.

It further claims that, even if the court could grant such a

motion, it was wrong to do so in this case. Our review is de novo.

See Reppert v. Marvin Lumber & Cedar Co., 359 F.3d 53, 56 (1st

Cir. 2004).

"[A]n affirmative defense may be adjudicated on a motion

to dismiss for failure to state a claim." In re Colonial Mortgage

Bankers Corp., 324 F.3d 12, 16 (1st Cir. 2003); see also Blackstone

Realty LLC v. FDIC, 244 F.3d 193, 197 (1st Cir. 2001); Cavanagh v.

Cavanagh, 489 N.E.2d 671, 673 (Mass. 1986). So long as the facts

establishing the defense appear on the face of the complaint and

the court's review leaves "no doubt" that the plaintiff's claim is

barred by the asserted defense, granting a motion to dismiss is

appropriate. Blackstone Realty, 244 F.3d at 197.

The operative complaint included the text of the

liquidated damages clause and had attached to it a copy of the

purchase and sale agreement containing the clause. See Stein v.

Royal Bank of Canada, 239 F.3d 389, 392 (1st Cir. 2001) (stating

that documents attached to the complaint may be considered on a

motion to dismiss). The facts establishing the existence and scope

of the liquidated damages clause were thus apparent from the face

of the complaint. CSI contends, however, that the second

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Blackstone Realty precondition -- certitude that the defense bars

the plaintiff's claim -- was not satisfied. See Blackstone Realty,

244 F.3d at 197. According to CSI, the facts in the complaint were

sufficient to support an argument that Pavestone had waived or was

estopped from asserting the liquidated damages clause as a defense.

CSI argues that the pre-closing work that Pavestone performed on

the property was so extensive that it represented a decision by

Pavestone "to close by . . . conduct." Thus, the argument

continues, Pavestone's conduct stripped it of "the right to walk

away for $50,000."

The purchase and sale agreement specifically provided

Pavestone with pre-closing access to the property to make

improvements. While the agreement listed certain contemplated

improvements, it provided that Pavestone could perform pre-closing

work "without limitation." The pre-closing work performed by

Pavestone was thus expressly contemplated by the parties'

agreement. Pavestone's exercise of its contractual right to work

on the property, a right expressly granted by the purchase and sale

agreement, cannot constitute a waiver or estop it from asserting

its right under the liquidated damages clause of the same

agreement. Thus, the merit of Pavestone's affirmative defense was

obvious at the motion to dismiss stage.1

1
CSI also claims that the district court mistakenly relied on
the liquidated damages clause to dismiss the condition-of-the-
property claims. As we understand the record, only the failure-to-
close claims in excess of $50,000 were dismissed because of the

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 We turn next to the grant of summary judgment on the

rezoning claims. We examine the summary judgment record in the

light most favorable to the non-moving party and review the

district court's ruling de novo. See Alberty-Velez v. Corporacion

De P.R. Para La Difusion Publica, 361 F.3d 1, 5-6 (1st Cir. 2004).

CSI argues that the district court erroneously granted

summary judgment on the rezoning claims by ruling that

Massachusetts law precludes causes of action requiring proof of the

legislative motive for the enactment of a municipal ordinance. We

are not so sure that this was the district court's rationale. The

court had before it Pavestone's motion for summary judgment, which

challenged CSI's rezoning claim as both legally and factually

insufficient. The basis for the district court's ruling is not

obvious. We may affirm, however, for any reason apparent from the

record. See id. at 6.

CSI focuses on the legal issue presented by Pavestone's

motion: whether a claim which requires proof of the legislative

motivation for an enactment may ever be viable under Massachusetts

law. We will assume arguendo that such a claim is theoretically

viable. Nevertheless, we affirm because CSI failed to present

sufficient evidence from which a trier of fact could conclude that

liquidated damages clause. The remaining claims were disposed of
on other grounds. See supra at 2-3.

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Pavestone's conduct was the proximate cause of the town's rezoning

decision.

CSI presented the following evidence in opposition to

Pavestone's motion: that Pavestone performed heavy work at the

property without warning abutting landowners; that Pavestone

received complaints from neighbors about work being performed at

night and on Sundays, and about heavy truck traffic on residential

streets; that some Lakeville residents led a campaign opposing

Pavestone's presence in the community; that some Lakeville

residents filed a petition with the Board of Selectmen seeking to

rezone the property; that the Planning Board subsequently held a

meeting to address the possibility of rezoning the property, and

that some local residents spoke negatively about Pavestone at that

meeting; and that nine days later, at the town meeting, the

residents of Lakeville voted 88 to 40 to rezone the property.

There was no evidence, however, as to who actually voted at the

town meeting or what motivated voters to approve the zoning change.

We do not know, for instance, whether any of the attendees of the

Planning Board meeting actually participated in the vote. Nor do

we know whether any of the residents who complained about

Pavestone's activities actually voted.

Under Massachusetts law, courts must be circumspect in

attempting to ascertain the legislators' rationale for enacting a

particular piece of legislation. As the Supreme Judicial Court

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recently explained, such an inquiry is complicated by "[t]he

diverse character of [the legislators'] motives, and the

impossibility of penetrating into the hearts of men and

ascertaining the truth." Durand v. IDC Bellingham, LLC, 793 N.E.

2d 359, 365 (Mass. 2003) (quoting Boston v. Talbot, 91 N.E. 1014,

1016-17 (Mass. 1910)); see also United States v. O'Brien, 391 U.S.

367, 383-84 (1968) ("Inquiries into [legislative] motives . . . are

a hazardous matter. . . . What motivates one legislator to make a

speech about a statute is not necessarily what motivates scores of

others to enact it."). The Massachusetts Appeals Court also has

cautioned that the pre-enactment history of a town ordinance that

does not clearly indicate the motives of the voters is insufficient

to establish the town's rationale for enacting the ordinance.

Southern New England Conference Ass'n of Seventh-Day Adventists v.

Burlington, 490 N.E. 2d 451, 456 (Mass. App. Ct. 1986).

As stated above, CSI's evidence could permit a trier of

fact to conclude that the rezoning change was made after Pavestone

worked on the property and some members of the community complained

about Pavestone's conduct. CSI presented no evidence, however,

connecting Pavestone's conduct or the citizen complaints to the

actual motivations of the voters who voted to rezone the property.

Massachusetts courts recognize that voters often cast their ballots

based on "irrelevant considerations," or at least for reasons other

than those at the forefront of pre-balloting discussions. Id.

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Given the Massachusetts courts' reluctance to engage in surmise

over legislative motivation, CSI's anecdotal evidence identifying

the concerns of some community members (who may not have even voted

at the town meeting) is insufficient proof from which a trier of

fact could conclude that the proximate cause of the voters'

decision to rezone the property was Pavestone's allegedly wrongful

conduct. Cf. Pheasant Ridge Assocs. Ltd. v. Burlington, 506 N.E.

2d 1152, 1156 (Mass. 1987) (affirming judicial determination that

town's exercise of its eminent domain power was in bad faith

because the evidence of bad faith was essentially undisputed, but

noting that courts "should not easily attribute . . . motives to a

town, and to its citizens voting at town meeting").

Finally, we consider CSI's challenge to the district

court's decision reducing the prejudgment interest award to exclude

the interest that CSI actually earned on the $50,000 deposit during

the prejudgment period. CSI argues that the district court erred

by reducing the prejudgment interest award because "Massachusetts

courts have almost no discretion" to make such reductions.2

2
Before discussing the merits of this argument, we dispose of
CSI's assertion that the district court lacked jurisdiction to
consider this issue because Pavestone's motion to alter or amend
the judgment was untimely. A party has ten days to file a motion
to alter or amend judgment under Fed. R. Civ. P. 59(e), and this
period may not be extended. See generally García-Velazquez v.
Frito Lay Snacks Caribbean, 358 F.3d 6, 8-9 (1st Cir. 2004). The
ten-day period does not include weekends and holidays. See Fed. R.
Civ. P. 6(a). Judgment entered on November 14, 2003, and Pavestone
filed its motion on November 25, 2003. Not including weekends,
Pavestone's motion was filed within ten days after judgment entered

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 Under the Massachusetts interest statute, prejudgment

interest in a contract action is usually computed at the contract

rate, if established, or otherwise at 12 percent. See Mass. Gen.

L. ch. 231, § 6C. The Supreme Judicial Court has interpreted the

statute to grant courts discretion to assure that interest awards

do not result in "windfall[s] for plaintiffs." Sterilite Corp. v.

Continental Cas. Co., 494 N.E. 2d 1008, 1011 (Mass. 1986). The

purpose of prejudgment interest is to compensate a wronged party

for the loss of the use of money, and the award should reflect this

purpose. Id.

Here, CSI earned interest on the $50,000 award during the

prejudgment period because it held the deposit in an interest-

bearing account. If CSI were able to retain this interest and

receive the entire 12 percent interest award available under the

statute, it would receive a windfall because it was able to benefit

from the $50,000 deposit during the prejudgment period. The

district court acted within the wide ambit of its discretion in

tailoring the interest award so as to avoid bestowing a windfall

upon CSI.

Affirmed.

and was therefore timely.

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