Not for Publication in West's Federal Reporter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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