Alltel Information Services, Inc. v. Federal Deposit Insurance Corp.

BOOCHEVER, Circuit Judge, dissenting:

This case involved cross-motions for summary judgment. I agree that ALLTEL may not recover its expectation under the contract as compensation for the substantial costs that it claims to have incurred in preparation for performance, and would affirm the denial of its motion for summary judgment.

I do not believe, however, that the FDIC is entitled to summary judgment as there is a triable issue of fact concerning the damages to which ALLTEL is entitled for reimbursement of its costs in preparation for performance of the contract.

I realize that ALLTEL limited its argument to the contention that it was entitled to the full amount it expected to receive for performance of the five-year contract, but that argument necessarily subsumed that it was entitled to the lesser amount of its actual expenditures in preparation for performance.

I disagree with the majority’s apparent conclusion that the waiver rule bars consideration of whether these preparation expenses are compensable under another theory of damages. See Maj. Op. at 1043 n. 9. This court has considered issues raised for the first time on appeal in “those cases in which the courts below were not presented with and did not consider the governing theory of law.” Aguon v. Calvo, 829 F.2d 845, 848 (1987). It is basic contract law that “the injured party has a right to damages based on his reliance interest, including expenditures made in preparation for performance or in performance,” when expectation damages are, for whatever reason, unavailable. Restatement (Second) Contracts § 349. Cases cited in the majority opinion uphold the right to such damages under FIRREA. See Nashville Lodging Co. v. RTC, 59 F.3d 236, 245-46 (D.C.Cir.1995) (holding reliance damages recoverable under FIR-REA); cf. Monrad v. FDIC, 62 F.3d 1169, 1173-74 (9th Cir.1995); McMillian v. FDIC, 81 F.3d 1041, 1053-56 (11th Cir.1996) (both finding severance pay to be earned compensation and therefore recoverable as “actual direct compensatory damages”).

*1045The record in this case, adverts to facts that, if proven, would clearly entitle ALLTEL to recover its preparation costs as direct compensatory damages under a reliance theory. I would remand this case to allow the district court to resolve this triable issue of fact.