USCA1 Opinion
November 29, 1993 [NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 93-1541
UNITED STATES OF AMERICA, for
u/b/o LUIS A. CABRERA, S.E.
A SPECIAL PARTNERSHIP,
Plaintiff, Appellee,
v.
SUN ENGINEERING ENTERPRISES, INC.,
AND CNA CASUALTY OF PUERTO RICO,
Defendants, Appellants.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jos Antonio Fust , U.S. District Judge]
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Before
Breyer, Chief Judge,
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Coffin, Senior Circuit Judge,
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and Torruella, Circuit Judge.
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Federico Lora-L pez for appellants.
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Thomas Doran-Gelabert, with whom Eduardo Castillo-Blanco was
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on brief for appellee.
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Per Curiam. This case concerns an action brought under
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the Miller Act, 40 U.S.C. 270a-f (1986), in the name of the
United States for the use and benefit of Luis A. Cabrera, S.E.
("Cabrera"), a subcontractor, against Sun Engineering
Enterprises, Inc. ("Sun Engineering"), a general contractor, and
its surety, CNA Casualty of Puerto Rico ("CNA"). In the
complaint, Cabrera claimed money it was due under a subcontract
with Sun Engineering. After a non-jury trial, the United States
District Court for the District of Puerto Rico awarded Cabrera
$44,769.25. Sun Engineering then filed this appeal claiming that
the district court improperly amended the pre-trial order at
trial, and that there was insufficient evidence to support the
court's findings of fact. For the reasons stated herein, we
affirm.
I. BACKGROUND
I. BACKGROUND
We review the facts in favor of the prevailing party at
trial, Cabrera. See American Title Ins. Co. v. East West
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Financial Corp., 959 F.2d 345, 346 (1st Cir. 1992). Sun
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Engineering is a construction company which was the prime
contractor for a federal project involving partially renovating
the United States General Post Offices in San Juan, Puerto Rico
("the Project"). Cabrera was a subcontractor on the Project. On
December 21, l989, Mr. Luis Cabrera submitted a price quotation
to Mr. Francisco Jim nez, the president of Sun Engineering, which
detailed, item by item, the work which the Project blueprints and
specifications required with respect to supplying and installing
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vinyl floors, dry wall partitions, and acoustical ceilings. The
quotation estimated the cost of the work to be $106,707.35.1
Mr. Cabrera and Mr. Jim nez then discussed the precise terms of
the quotation. On January 8, l990, Sun Engineering sent a letter
to Cabrera accepting Cabrera's December 21, l989 quotation.
Although the parties had negotiated some changes to the work
specified in the quotation, and a reduced "estimated" contract
price of $80,000, an absolute price for the contract was never
agreed upon. Rather, Cabrera and Sun Engineering informally
agreed that Sun Engineering would pay Cabrera based on the work
Cabrera actually performed.
After the contract was formed, Cabrera commenced work.
During the course of the Project, Mr. Jim nez verbally requested
that Cabrera perform additional work not encompassed by the
original contract. This work involved floor underlays. Mr.
Ismael El as, the designer of the Project who also served as the
Project inspector for the Post Office, also verbally requested
Cabrera to make changes with respect to some partitions it was
installing. Cabrera completed all work required on the Project
by June 5, l99l.
Cabrera billed Sun Engineering $105,495.39 for the work
it performed. Sun Engineering made progress payments to Cabrera
totalling $60,726.14. Sun Engineering refused to pay Cabrera the
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1 At trial, there was some dispute regarding the precise dollar
figure of this initial quotation. The present appeal does not in
any way turn upon the exact figure of this initial quotation, and
for the purposes of this opinion, we will assume that $l06,707.35
was the correct figure.
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balance of $44,769.25.
Cabrera then filed suit. As its defense, Sun
Engineering claimed that the contract was for a total price of
$80,000, and therefore, Sun Engineering only owed Cabrera
$l9,273.86. Sun Engineering also claimed that Cabrera
negligently performed its work, and delayed the completion of the
Project.
After trial, the district court found that the parties
entered into an informal contract. In accordance with the
contract, Cabrera was entitled to be paid $105,495.39 for the
work it had performed on the Project. The court found that
Cabrera was not responsible for any Project delays. Because Sun
Engineering had only paid Cabrera $60,726.14, the court entered
judgment in Cabrera's favor in the amount of $44,769.25.
Sun Engineering then filed this appeal. Sun
Engineering makes three arguments on appeal. Sun Engineering
contends that 1) by allowing a modification of the pre-trial
order at trial, the district court permitted Cabrera to introduce
evidence with respect to the cost of the contract that
contradicted a stipulated fact, and changed Cabrera's theory of
its case, in violation of Fed. R. Civ. P. 16(e); 2) the evidence
presented at trial did not support the district court's
conclusion that valid change orders were issued to Cabrera; and
3) the record does not support the district court's finding that
Cabrera was not responsible for Project delays. Sun
Engineering's arguments are meritless.
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II. THE RULE 16 CHALLENGE
II. THE RULE 16 CHALLENGE
In the final pre-trial order, the parties stipulated
that "the agreed price on said subcontract was $80,000." At
trial, Cabrera introduced its December 21, l989 quotation for
$106,707.35 as an exhibit. Sun Engineering objected to the
introduction of this exhibit on the ground that the parties had
stipulated that there was a contract for $80,000, and that this
evidence, which suggested a different price for the contract,
contradicted that stipulation. The court overruled Sun
Engineering's objection and permitted Cabrera to introduce the
exhibit because the court believed that the quotation was
relevant to the negotiations between the parties, and what the
parties intended to be the terms of the contract. On appeal,
Sun Engineering argues that the court violated Fed. R. Civ. P.
16(e)2 by effectively amending the pre-trial order at trial and
permitting Cabrera to introduce evidence which contradicted a
stipulated fact, and which changed Cabrera's theory of its case.
A trial court has broad discretion to preserve the
integrity and purpose of the pre-trial order. Roland M. v.
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Concord School Comm., 910 F.2d 983, 999 (lst Cir. l990), cert.
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denied, 499 U.S. 912 (1991). An appellate court should exercise
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2 Federal Rule of Civil Procedure l6(e) provides in pertinent
part:
[A pre-trial order] shall control the
subsequent course of the action unless
modified by a subsequent order. The
order following a final pretrial
conference shall be modified only to
prevent manifest injustice.
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minimal interference with a trial court's interpretation of a
pre-trial order and a court's decision to permit the introduction
of evidence, or exclude evidence, based on that interpretation.
See Ram rez Pomales v. Becton Dickinson & Co., S.A., 839 F.2d 1,
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3 (1st Cir. l988); Geremia v. First Nat'l Bank of Boston, 653
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F.2d 1, 5 (lst Cir. l981); 6 Charles A. Wright, Arthur R. Miller
& Mary K. Kane, Federal Practice & Procedure 1527, at 279-286
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(1990). "Unless there is manifest injustice or the district
court has abused its discretion to the point of being arbitrary,"
the court's ruling will not be disturbed. Nickerson v. G.D.
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Searle & Co., 900 F.2d 412, 422 (lst Cir. l990); Ram rez Pomales,
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839 F.2d at 3.
Federal Rule of Civil Procedure l6 provides that at the
final pre-trial conference the participants shall formulate a
plan for trial. Ram rez Pomales, 839 F.2d at 3. After the pre-
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trial conference, an order shall be entered reciting the action
taken, and this order then controls the subsequent course of the
action, unless modified by a subsequent order. Fed. R. Civ. P.
l6(d),(e); Ram rez Pomales, 839 F.2d at 3. The interpretation of
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a pre-trial order is the responsibility of the trial court. A
trial court should construe the pre-trial order liberally so that
it covers any of the possible legal or factual theories that
might be embraced by its language. Geremia, 653 F.2d at 5
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(quoting Rodr gues v. Ripley Indus., Inc., 507 F.2d 782, 787 (lst
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Cir. l974) (citing 6 C. Wright & A. Miller, Federal Practice &
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Procedure l527, at 609 & n.47 (l971))).
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Contrary to Sun Engineering's contention, the district
court did not amend the pre-trial order. Rather, the court
reviewed the pre-trial order, and based on its interpretation of
that order, found that the exhibit Cabrera proposed to introduce
was admissible. The district court's actions were not an abuse
of discretion. After Sun Engineering objected to the
introduction of the exhibit, the court reviewed the factual
stipulation in the context of Cabrera's legal theory, which was
also set out in the pre-trial order. The court found that the
introduction of the exhibit by Cabrera was consistent with its
theory of the case. Pursuant to the contract, Cabrera was
entitled to be paid on the basis of the work it actually
performed. The December 21, l989 quotation and the subsequent
change orders established the work that Cabrera was to perform.
While the factual stipulation did provide that the agreed cost of
the contract was $80,000, the court stated that it would simply
defy logic to find that Cabrera stipulated that the absolute
price of the contract was $80,000, in light of its theory of the
case. Rather, the court found that the only reasonable
interpretation of the stipulation was that it referred to an
agreed "estimated" contract cost of $80,000. The court acted
within its discretion in interpreting the stipulation and pre-
trial order in this manner, and we will not disturb its ruling.
III. THE CHANGE ORDERS
III. THE CHANGE ORDERS
Sun Engineering argues that in light of federal
regulations which purportedly require all change orders on
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government projects to be in writing, the evidence was
insufficient to support a finding that valid change orders were
issued to Cabrera.
An appellate court will review a district court's
findings of fact in a bench trial for clear error. Dedham Water
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Co. v. Cumberland Farms Dairy, Inc., 972 F.2d 453, 457 (lst Cir.
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l992); Fed. R. Civ. P. 52(a).3 A finding is clearly erroneous
when the reviewing court is left with the definite and firm
conviction that a mistake has been committed. See Dedham Water,
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972 F.2d at 457. Mixed questions of fact and law, which require
a court to determine if certain facts possess, or lack, legal
significance in a given case, are also reviewed for clear error.
Roland M., 910 F.2d at 990. Absent a showing that the court made
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a mistake of law, we will give effect to the trial's courts
findings. Id. at 990-91.
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The record supports the district court's factual
findings that change orders were issued to Cabrera. Mr. Cabrera
and Mr. Jim nez testified that after Cabrera submitted the
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3 Federal Rule of Civil Procedure 52(a) provides in pertinent
part:
In all actions tried upon the facts
without a jury . . . the court shall find
the facts specially and state separately
its conclusions of law thereon, and
judgment shall be entered pursuant to
Rule 58 . . . . Findings of fact,
whether based on oral or documentary
evidence, shall not be set aside unless
clearly erroneous, and due regard shall
be given to the opportunity of the trial
court to judge of the credibility of
witnesses.
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original quotation to Mr. Jim nez detailing the work Cabrera
proposed to do, Mr. Jim nez requested that Cabrera make certain
changes to the quotation. Mr. Cabrera also offered undisputed
testimony that after the parties entered into the original
contract, Mr. Jim nez orally requested that Cabrera perform work
beyond that encompassed in the contract with respect to floor
underlays. Mr. Jim nez and Mr. El as both testified that Mr.
El as also orally requested Cabrera to do additional work with
respect to partitions, that Mr. Jim nez was aware of this
request, and that Cabrera made those requested changes.
Cabrera claims that even if oral changes were issued to
Cabrera, they were of no legal consequence. There is no
requirement, however, that change orders to subcontractors on
government projects be in writing and approved by the government
to be legally binding. Despite Sun Engineering's contention to
the contrary, 48 C.F.R. 43.201 (1992) does not impose such a
requirement.4 Part 43 of the Code of Federal Regulations
generally addresses government policies and procedures for
preparing and processing contract modifications. 48 C.F.R.
43.000 et seq. (1992). The regulations are directed to
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4 48 C.F.R. 43.201(a) (1992) provides in pertinent part:
Generally, Government contracts contain a
changes clause that permits the
contracting officer to make unilateral
changes, in designated areas, within the
general scope of the contract. These are
accomplished by issuing written change
orders on Standard Form 30, Amendment of
Solicitation/Modification of Contract
(SF 30), unless otherwise provided.
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government contracting officers and those parties who contract
directly with them. Section 43.20l is specifically directed at
the procedures which the government's contracting officer should
follow when issuing a change order to its contracting partner.
Generally, the relationship covered by the regulation is that
between the officer and the prime contractor on a government
project. The regulation does not apply to more remote parties,
such as subcontractors, who contract solely with the prime
contractor. We have been unable to find any other statutory or
regulatory requirement which purports to control the prime
contractor's relationship with its subcontractors with respect to
the logistics of contract modifications, such as change orders.5
The prime contractor/subcontractor relationship is
governed by the terms of the contract between the parties. See,
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e.g., United States for Control Systems, Inc. v. Arundel Corp.,
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814 F.2d 193, 196-97 (5th Cir.), modified on other grounds, 826
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F.2d 298 (5th Cir. 1987). In the present case, the court found
that the contractual dealings between Cabrera and Sun Engineering
were informal at best. The parties never signed a final written
contract. Moreover, there was no oral or written contractual
provision which required that any change orders issued to Cabrera
had to be in writing, or approved by the contracting officer, in
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5 In its brief, Sun Engineering points to the testimony of
Mr. El as and Mr. Delgado, an architect who worked for the Post
Office, who both stated that change orders were generally
accomplished through written directives. Their testimony,
however, also referred to the relationship between the government
and the prime contractor.
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order to be valid. Therefore, the oral change orders at issue
were legally binding, and the district court properly found that
Cabrera was entitled to be paid for the work performed pursuant
to those orders. This finding is in accord with the general
purpose of the Miller Act, 40 U.S.C. 270a-f (1986), a remedial
statute, enacted to assure that all workers and subcontractors on
government projects received compensation for their efforts. See
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F.D. Rich Co. v. United States for Use of Indus. Lumber Co., 417
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U.S. 116, 124 (l974).
IV. DELAY CLAIM
IV. DELAY CLAIM
Sun Engineering contends that the district court's
finding that Cabrera was not responsible for Project delays is
unsupported by the record. We disagree and find that the
evidence amply supports the court's findings. Mr. Cabrera, Mr.
Delgado and Mr. El as all offered uncontradicted testimony that
Cabrera completed all required work on the Project. There was
evidence that Cabrera did correct some deficiencies in its work
after the scheduled completion date of the Project. With the
exception of the testimony of Mr. Jim nez, however, the record is
void of any evidence that this "delay" translated into any
financial penalty to Sun Engineering. While Mr. Jim nez
testified that Sun Engineering was financially penalized for
delays which were in fact caused by Cabrera, Mr. El as offered
conflicting testimony to the effect that Sun Engineering was
solely responsible for the delays. The trial court refused to
credit Mr. Jim nez' testimony. It was well within the court's
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discretion to determine whether or not it found Mr. Jim nez to be
a credible witness. See Dedham Water Co., Inc., 972 F.2d at 461.
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There was no error in the court's findings.
V. DOUBLE COSTS
V. DOUBLE COSTS
Because Sun Engineering filed a frivolous appeal, we
find it appropriate to assess a monetary penalty of double costs
against it. Federal Rule of Appellate Procedure 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." Westcott Constr. Corp. v. Firemen's Fund of
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New Jersey, 996 F.2d 14, 17 (lst Cir. l993). An appeal is
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frivolous if the "result was obvious" or the arguments are
"wholly without merit." Id. "[I]t is enough that the appellants
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and their attorney should have been aware that the appeal had no
chance of success." E.H. Ashley & Co. v. Wells Fargo Alarm
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Servs., 907 F.2d 1274, 1280 (lst Cir. l990). Sun Engineering's
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arguments on appeal are wholly without merit. There is no legal
support for Sun Engineering's Fed. R. Civ. P. 16(e) challenge, or
its contention that change orders issued to Cabrera had to be in
writing to be legally binding. The record also amply supports
the trial judge's factual findings, and there are simply no
reasonable grounds to challenge the sufficiency of the evidence.
We therefore award Cabrera double costs.
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