United States Court of Appeals
For the First Circuit
No. 00-1684
NORTHEAST DRILLING, INC.,
Plaintiff, Appellee,
v.
INNER SPACE SERVICES, INC.;
NATIONAL GRANGE MUTUAL INSURANCE COMPANY,
Defendants, Appellants,
v.
RANGER INSURANCE COMPANY, INC.
Counterclaim Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. D. Brock Hornby, U.S. District Judge]
Before
Selya, Circuit Judge,
Stahl, Circuit Judge,
and Lisi,* District Judge.
Richard L. Neumeier, with whom Timothy J. van der Veen and
McDonough, Hacking & Neumeier, LLP, were on brief, for
appellants.
Deirdre M. Smith, with whom Jerrol A. Crouter and Drummond
Woodsum & MacMahon, were on brief, for appellees.
March 16, 2001
____________________
*Of the District of Rhode Island, sitting by designation
STAHL, Circuit Judge. During the construction of a
shipbuilding facility in Bath, Maine, a series of events,
primarily attributable to the caprices of nature, delayed the
schedule, forcing significant alterations to the work plan and
ultimately making the project more expensive than had been
anticipated. These events led to a dispute between the
project's dredging subcontractor, Inner Space Services, Inc.
("ISSI"), and the drilling and blasting subcontractor it had
hired, Northeast Drilling, Inc. ("NDI"), over who should bear
the additional costs arising from these various matters.
Following a six-day bench trial, the district court determined
that NDI should receive some of the payments it claimed were due
under its contract with ISSI, but that it was not entitled to
the full amount because it had failed to render complete
performance under its agreement with ISSI. The court also
awarded attorney's fees and interest to NDI.
On appeal, ISSI challenges a number of the district
court's factual findings, and argues that the court erred by
declining to make certain additional findings. ISSI also
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assigns error to several legal determinations made by the
district court, including the district court's failure to join
the general contractor as a party, its refusal to grant ISSI's
motion for judgment as a matter of law, and its approach to
calculating damages. We affirm in all respects.
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I. Background
The facts of this case are chronicled extensively in
the district court opinion, Northeast Drilling, Inc. v. Inner
Space Servs., Inc., No. 99-173-P-H, 2000 WL 761020 (D. Me. Mar.
31, 2000), and so we restrict our discussion to the facts
bearing on this appeal. On September 21, 1998, ISSI, a
Massachusetts-based firm, entered into an agreement with
Atkinson Construction ("Atkinson"), the general contractor on
the Bath Iron Works Land Level Facility Construction Project
("BIW Project" or "Project"). The BIW Project, which took place
along the banks of the Kennebec River in Bath, Maine, involved
the creation of a fifteen-acre facility enabling Bath Iron Works
to build simultaneously three Navy destroyer ships and to launch
those ships into a floating dry dock. To this end, ISSI was
hired by Atkinson to lower the underwater rock table to a
suitable elevation through drilling, blasting, and dredging.
Before submitting its bid to Atkinson, ISSI had
contacted NDI, a drilling and blasting specialist headquartered
in Maine, about NDI's availability to perform work on the BIW
Project. After securing the subcontract with Atkinson, ISSI
concluded an agreement with NDI on November 2, 1998. According
to the terms of the ISSI-NDI contract, NDI was to be paid
$1,140,000 for its drilling and blasting work on the area of
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submerged rock specified in the Atkinson-ISSI contract.1 For
this sum, NDI agreed to perform blasting on a "6 x 6 grid, with
the intent of supplying 'diggable' rock for dredging."2 Nowhere
in the contract was the term "diggable" defined. The agreement
further provided that if, at some point during the Project, ISSI
asked NDI to perform drilling and blasting work outside of the
designated area in order to achieve the desired elevation
therein, NDI would receive a "proportional amount of any claims
made to Atkinson by ISSI" for such additional work. Pursuant to
the parties' arrangement, NDI was to be paid "if and only if
ISSI receives compensation" from Atkinson for work in this
"expanded" area.3 Finally, the timeline for NDI's performance
under the contract was structured to account for the stringent
environmental regulations protecting the Kennebec River's
sturgeon population. NDI was to commence work on or about
1This amount later grew to $1,182,561.16 based on additional
work that NDI completed pursuant to approved "change orders"
submitted to ISSI during the course of the Project.
2According to the initial 6' x 6' grid scheme, NDI would
drill a row of holes six feet apart in the rock, then drill
another row six feet away from the first row. NDI would then
insert blast charges in the holes and then simultaneously
detonate several rows of charges.
3Under the Atkinson-ISSI contract, ISSI was to seek payment
for work in this "expanded" area by submitting change-order
requests to Atkinson before authorizing NDI to begin drilling
and blasting work.
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November 15, mid-November being the point at which the sturgeon
typically vacate the affected area, and was to finish its
operations by the end of March of the following year, when the
fish were expected to return.
Unfortunately for the parties, the Kennebec River
sturgeon were uncharacteristically slow to swim away from the
Project area that year and, as a result, NDI did not receive
authorization to begin blasting until January 7, 1999. By that
time, ice floes had emerged on the surface of the river. This
floating ice posed a significant challenge to NDI's operations
by threatening to detach the detonation cords that NDI planned
to stretch from the drilling barge to the holes in the submerged
rock that contained the blast charges. In response to this
problem, NDI abandoned its original blasting plan, which called
for detonating several rows of explosives simultaneously, and
decided to blast one row at a time. This attempt at problem-
solving only created a new set of difficulties, however, as the
blasting of the first row of charges broke up the rock in the
surrounding area, making it nearly impossible to fulfill the
contractual obligation to drill another row of holes six feet
from the previous row. Accordingly, NDI proposed an alternative
to ISSI: it would extend the size of the drilling and blasting
grids from 6' x 6' to 6' x 7' or 6' x 8' while continuing to
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blast one row at a time. ISSI was reluctant to endorse this
enlarged-pattern approach, as it knew that its likely byproduct
would be larger pieces of rock that would be more difficult to
dredge, and it expressed these concerns, in writing and in
person, to NDI's president, Forrest Bradbury. Nonetheless, NDI
went forward with the modified plan, believing that it had
secured ISSI's acquiescence.
The ad hoc nature of this drilling and blasting
technique also forced the parties to incur unexpected costs
along the way. In order to account for the extra labor
necessitated by the single-row, enlarged-grid blasting
technique, Atkinson leased an additional drilling barge, known
to the parties as the "Hughes barge," and backcharged its cost
to ISSI. ISSI, in turn, deducted this cost from the amount to
be paid to NDI. Additionally, NDI was called upon by ISSI to do
drilling and blasting in the "expanded" area in an attempt to
improve the quality of the blasted rock inside the contract
area. ISSI, however, failed to submit a change-order request to
Atkinson, as required under its agreement with the general
contractor, until September 1999 -- nearly six months after NDI
had demobilized from the BIW Project site.
Although NDI ultimately did complete its drilling and
blasting work before the March 31 environmental window closed,
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the proportion of large rock it left behind made it impossible
for ISSI to do dredging work using the equipment already on
site.4 This forced ISSI to lease extra equipment and to spend
more time dredging the area, and as a result, it was required to
cancel a subsequent dredging contract in Boston, depriving it of
additional revenue. Furthermore, a survey of the site
commissioned by Atkinson after NDI's demobilization revealed
that some of the submerged land, particularly that located in
the "expanded" area, was not at the proper elevation.
Because of these problems, ISSI sent a default notice
to NDI in March 1999, asserting that NDI had failed to perform
its contractual obligations to provide "diggable" rock and to
lower the submerged rock to the proper elevation. Although it
made several payments after NDI's demobilization, ISSI refused
to pay the remaining $403,431 due NDI under the initial $1.14
million contract price. ISSI also refused to absorb any of the
cost of the "Hughes barge," electing to treat the full cost of
approximately $126,707 as a component of the drilling and
blasting operations for which NDI bore responsibility. Finally,
a dispute between Atkinson and ISSI over the cost of the
4
Before demobilizing, NDI used a jackhammer on the oversize
rocks in an attempt to reduce their size. However, NDI was not
able to remedy the problem to ISSI's satisfaction using this
approach.
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blasting and drilling performed by NDI in the "expanded" area
resulted in NDI not receiving any payments for that work, as the
contract provision dealing with work outside the target area
stated that NDI would only receive a proportional share of the
payments that ISSI obtained from Atkinson and ISSI did not
initially seek such sums.
On April 29, 1999, NDI sued ISSI in the Superior Court
of Sagadahoc County, Maine, claiming breach of contract, unjust
enrichment, quantum meruit, and equitable accounting, as well as
a cause of action under Maine law for delayed contractor
payments, 10 M.R.S.A. § 1114(4). ISSI removed the case to
federal district court based on the diversity of the parties and
the existence of a controversy in the requisite amount, and on
June 4, 1999, it filed an answer and counterclaim, asserting
that NDI's failure to produce adequately sized rock and to lower
the submerged rock to elevation amounted to negligence and a
breach of the parties' contract. Both NDI and ISSI subsequently
amended their complaints to add as defendants the parties'
respective insurance carriers in an attempt to collect on the
payment bonds that had been issued during the BIW Project.
Following a protracted discovery period, ISSI moved for
partial summary judgment on NDI's unjust enrichment and quantum
meruit claims. The district court denied this motion on January
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5, 2000. Six days later, ISSI moved to continue the trial
indefinitely pending resolution of its ongoing dispute with
Atkinson over the adequacy of ISSI's performance under the
Atkinson-ISSI agreement. The district court also denied this
motion. Finally, two weeks before the scheduled start of the
trial and weeks after the joinder deadline laid out in the
pretrial schedule had passed, ISSI moved under Fed. R. Civ. P.
19(a) to have Atkinson joined as a necessary party. The joinder
motion was considered, and denied, by Magistrate Judge Cohen.
At the start of the trial, ISSI filed a motion for
reconsideration of the magistrate judge's decision on the
joinder issue; the district court heard oral arguments and
denied the motion.5
The district court conducted a six-day bench trial,
primarily consisting of the testimony of officials of the two
firms and expert witnesses familiar with the industry practices
governing drilling, blasting, and dredging work. At the close
of all the evidence, ISSI moved for judgment as a matter of law,
asserting that NDI could not prevail on its claims because it
had breached its obligations under the agreement to blast
5
In its later written opinion, the district court reaffirmed
this finding, stating that "NDI's lawsuit is not to be dismissed
for insufficient joinder in failing to make Atkinson a party.
(ISSI was free to make Atkinson a party if it chose to do so.)".
Northeast Drilling, Inc., 2000 WL 761020, at *8.
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according to a 6' x 6' grid and to provide "diggable" rock. The
district court denied this motion.
On March 31, 2000, the court issued its written
findings of fact and conclusions of law. The court first found
that NDI's decision to deviate from the 6' x 6' blast grid did
not constitute a breach of contract because ISSI, despite its
expressions of concern, had acquiesced in the enlarged blast
pattern. Moreover, the court concluded that NDI had, in fact,
adequately blasted the rock down to the proper elevation; it
discounted as inconclusive the post-demobilization survey
indicating the insufficient elevation of some spots in the
target area, noting the possibility that a neighboring sand dump
in the Kennebec River may have caused the problem. With respect
to NDI's obligation to provide "diggable" rock, however, the
district court found that NDI had not fully performed. On this
point, the court, relying on expert testimony adduced at trial,
construed the term "diggable" rock as it appeared in the
contract to mean a quantity of rock in which no more than ten
percent of the sample exceeded one cubic yard in volume. In
this case, the court found that 30 percent of the rock that NDI
had left behind at the BIW Project site exceeded one cubic yard.
As to the "consequence" of NDI's incomplete performance, the
court determined that the failure to provide "diggable" rock
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lowered the value of NDI's services by $175,000. 6 The court
determined that this $175,000 figure for NDI's failure to fully
perform was precisely the same amount that ISSI could prove on
its counterclaims for negligence and breach of contract, and
that it therefore did not matter whether the $175,000 "credit"
to ISSI came in the form of a damage award on its counterclaims
or as a reduction in NDI's payment claim. Subtracting that
$175,000 figure from the remaining amount ($403,431) that ISSI
was withholding from NDI, the court determined that NDI was
entitled to receive an additional $228,431 from ISSI for the
work it had performed under the contract.
The district court also addressed NDI's claim of right
to payment for its drilling and blasting in the "expanded" area,
for which NDI only was to receive "proportional" compensation
from the amount Atkinson paid to ISSI, as well as its claim for
a partial credit for the "Hughes barge," a cost that it had been
required to fully absorb. The court relied on trial testimony
establishing that Atkinson and ISSI were on the verge of
6As to how it arrived at the $175,000 figure, the court
stated that it represented neither a "precise number that can be
calculated arithmetically from specific exhibits" nor an
"average [or] attempt to 'split the difference,'" but rather a
"factfinder's conclusion of what the approximately correct
number is when the parties have presented damage numbers at the
polar extremes in a factual setting of great uncertainty and
difficulties of proof (i.e., what happened underwater and why)."
Northeast Drilling, Inc., 2000 WL 761020, at *7.
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concluding a settlement in which Atkinson would pay ISSI
$140,000 for drilling and blasting done outside the contract
area,7 and concluded that the $140,000 figure was an accurate
assessment of the amount that ISSI was entitled to receive from
Atkinson. Alternatively, the district court found that NDI was
deserving of payment for its work in the expanded area because
"ISSI had the obligation to make a reasonably timely request
upon Atkinson [for payment] and failed to do so." Northeast
Drilling, Inc., 2000 WL 761020, at *2. Going further, the court
determined that "[b]ecause ISSI is the only party that knows
what NDI's proportional share is and because ISSI has provided
no evidence on this topic, there is no basis on which to reduce
the $140,000, and I find that NDI is entitled to the full
$140,000." Id. As to the "Hughes barge," the court found that
under the anticipated Atkinson-ISSI settlement, Atkinson was to
reimburse ISSI $81,560 for the barge's cost. Since NDI had paid
the full cost of the barge through ISSI's backcharging, and had
never been reimbursed by either ISSI or Atkinson, the court
7Although the district court stated in its March 31, 2000
opinion that a settlement agreement between Atkinson and ISSI
was pending, that agreement apparently had been reached on
February 28, 2000, between the end of the trial in this case and
the issuance of the court's opinion. While the occurrence of
this agreement has been made part of the record in this case,
its terms have not.
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awarded NDI the full $81,560 that ISSI was to receive from
Atkinson for this expense.
Finally, the district court determined that NDI was
entitled to interest under Maine law, 10 M.R.S.A. § 1114(4), for
the delayed payments by ISSI. The court found that ISSI was
obliged to pay interest on $83,431 because, although $403,431
remained to be paid on the original contract price, $175,000 of
that sum was being deducted by the court for NDI's incomplete
performance and ISSI had yet to receive $145,000 from Atkinson.
The court further determined that NDI was entitled to recoup
reasonable attorney's fees under Maine law, see 10 M.R.S.A. §
1118(4), in an amount "to be apportioned according to the degree
of its success." ISSI seasonably filed its notice of appeal.
On appeal, ISSI challenges both the district court's
factual and legal determinations. On the facts, ISSI points to
three findings made by the district court, mainly involving the
parties' performance under the contract, that it alleges were
erroneous. It also claims that the district court should have
made findings on twelve additional points. On the law, ISSI
attacks the district court's refusal to grant its motions to
continue the trial and to join Atkinson as a party, its denial
of ISSI's motion for judgment as a matter of law, and the
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permissibility of the court's method of assessing ISSI's damages
for NDI's imperfect performance.
II. Factual Findings
ISSI claims that the district court made three
erroneous factual findings in its written opinion. Moreover, it
claims that the court erred by not making twelve additional
findings of fact that it claims the overwhelming weight of the
evidence at trial would compel. According to ISSI, these
alleged factual mistakes, which relate to the parties'
performance under the contract, demand correction because they
played a pivotal role in the district court's legal analysis and
award of damages.
Under Fed. R. Civ. P. 52(a), we will not disturb the
district court's factual determinations unless they are clearly
erroneous. See Vinick v. United States, 205 F.3d 1, 6 (1st Cir.
2000) ("Under [the clearly erroneous] standard, we accept the
district court's findings of fact unless we are left with the
definite and firm conviction that a mistake has been
committed.") (internal quotation marks omitted) (quoting
Anderson v. City of Bessemer City, 470 U.S. 564, 573 (1985)).
A.
ISSI points to three specific factual findings by the
district court that it claims were clearly erroneous.
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Specifically, ISSI challenges the findings of fact regarding its
acquiescence in the enlargement of the blasting-grid pattern,
its failure to exercise its right to demand a meeting with NDI
to discuss NDI's failure to drill and blast properly, and NDI's
success in blasting the target area down to the required
elevation. We address each alleged error in turn.
First, ISSI vehemently disputes the district court's
finding that it acquiesced in NDI's expansion of the 6' x 6'
blasting grid specified in the contract.8 It notes that Laurie
Mason, the president of ISSI, and Robert Mason, ISSI's manager
on the BIW Project, each testified at trial that they repeatedly
expressed, through letters and conversations, their
dissatisfaction with the grid change to NDI's president, Forrest
Bradbury. Both testified, moreover, that Bradbury told them not
to worry about the modified plan and assured them that
"everything will be okay." ISSI argues that this evidence
demonstrates that ISSI never gave the go-ahead to NDI to deviate
from the initial blast pattern, or, alternatively, that ISSI's
approval of the expanded blast grid was conditioned on NDI's
reaching a satisfactory result.
8
The Supreme Judicial Court of Maine has held that the issue
of whether a party has relinquished a contractual right is
typically a question of fact. Colbath v. H.B. Stebbins Lumber
Co., 144 A. 1, 4 (Me. 1929).
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Based on evidence in the record tending to cast doubt
on ISSI's version of the facts, we find that the district
court's determination on this point was not clearly erroneous.
For instance, ISSI's Laurie Mason sent a letter to NDI's
insurance carrier on January 22, 1999 -- after NDI had informed
ISSI of its plan to expand the blasting grid -- in which she
described NDI's blasting work to date as "satisfactory."
Moreover, in a letter to Atkinson dated February 8, 1999, Laurie
Mason spoke approvingly of the expanded blasting pattern that
had already been used in drilling and blasting operations by
NDI. Perhaps most importantly, the Masons' testimony was
contradicted by Bradbury, who stated that Robert Mason, who was
present at the BIW Project site virtually every day, had agreed,
in spite of his trepidation, to go forward with the enlarged
grid "if that's what we had to do." Given the conflicting
evidence adduced at trial on this point, we cannot say that the
district court committed clear error by finding that ISSI
acquiesced in NDI's expansion of the 6' x 6' blasting grid.
Second, and closely related to the first issue, ISSI
claims that the district court was mistaken when it asserted
that there had been no NDI-ISSI meeting to discuss NDI's
drilling and blasting performance, even though ISSI had the
contractual right to summon NDI to such a meeting if NDI was not
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fulfilling its obligations. Such a finding, according to ISSI,
is "clearly erroneous and misleading to the extent it suggests
that ISSI did not promptly exercise its right to request such a
meeting."
Based on our earlier finding that ISSI acquiesced in
NDI's expanded-grid blasting plan, the issue of whether ISSI
called a formal meeting to object to NDI's performance loses
much of its relevance, at least in the context of this appeal.9
Nonetheless, we find that the district court did not clearly err
in finding that there was no meeting between NDI and ISSI that
had been requested by ISSI. During the period of the BIW
Project, at least one meeting, involving Atkinson, ISSI, and
NDI, did occur, but the evidence shows that that meeting was
convened by Atkinson. Furthermore, ISSI introduced evidence
showing that, on March 7 and 10, 1999, it sent letters to NDI
demanding a meeting to discuss the ways in which NDI's drilling
9 At oral argument, counsel for ISSI noted that ISSI is
currently in litigation with Atkinson over the issue of whether
ISSI upheld its obligations under the terms of the February 2000
settlement agreement. In this context ISSI, in characterizing
its response to NDI's drilling and blasting operations,
understandably seeks to avoid putting itself, metaphorically
speaking, between a rock and a hard place: if it fails to argue
in the present case that it did everything it could to ensure
NDI's adequate drilling and blasting, it risks undermining its
argument in the Atkinson litigation that it properly supervised
the drilling and blasting work by NDI for which it shouldered
ultimate responsibility under the Atkinson-ISSI contract.
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and blasting were not conforming to the requirements of the
contract (including the enlargement of the blasting grid).
These letters were sent, however, more than two months after the
drilling and blasting began, and well after NDI had completed
the lion's share of its work. Moreover, and more to the point,
the fact that ISSI requested such a meeting does not negate the
challenged finding that there was no such meeting held pursuant
to ISSI's contractual right to request one. There was, in sum,
no clear error by the district court on this point.
Finally, ISSI takes issue with the district court's
finding that NDI's drilling and blasting were generally
successful in satisfying the contract's elevation requirements.
It alleges weaknesses in the testimony by Atkinson's project
engineer, Timothy Daniels, that NDI had sufficiently drilled and
blasted, noting that Daniels had written a letter to his
supervisor on the eve of NDI's demobilization questioning the
adequacy of the drilling and blasting work. Moreover, ISSI
notes the December 1999 hydrographic survey which found that
certain portions of the area that NDI drilled and blasted were
at a higher elevation than that called for in the NDI-ISSI
agreement. In this regard, it argues that the district court's
statement that "[i]t is impossible . . . to tell whether [the
elevation was inadequate at the time of the survey] because of
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unblasted rock or whether it is a result of sand filling in the
area that has migrated from a sand dump in the river," Northeast
Drilling, Inc., 2000 WL 761020, at *4 n.5, represents an
improper shifting of the burden to ISSI to prove NDI's
nonperformance.
We do not agree with ISSI's argument that the district
court clearly erred by relying on Daniels's testimony in
concluding that NDI met its obligation to lower the target area
to the required elevation. The fact that Daniels may have
expressed uncertainty to his superiors as to the sufficiency of
NDI's drilling and blasting does not necessarily negate his
testimony at trial that, in the final analysis, NDI's
performance in lowering the elevation was adequate. Moreover,
the hydrographic survey cited by ISSI, which notes the
heightened elevation of some spots in the target area, was
conducted nine months after NDI demobilized. Given this time
lapse, it was not clearly erroneous for the district court to
discount this survey, and to find that NDI had met its burden of
proving, primarily through Daniels's testimony, its fulfillment
of the contractual obligation to drill and blast down to the
proper elevations.
In sum, on these three factual issues raised by ISSI,
the district court, acting as fact-finder, made its
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determinations based on its reasonable assessment of the
conflicting evidence before it. Thus its findings of fact
cannot be deemed clearly erroneous, Anderson, 470 U.S. at 574,
and must be affirmed.
B.
ISSI further claims that, beyond the three allegedly
erroneous findings of fact that the district court did make, the
court also erred in declining to make findings of fact on twelve
additional matters relating to the parties' performance under
the contract. 10 In the absence of specific findings by the
10
Specifically, ISSI claims the district court should have
made findings as to the following points: (1) the original blast
schedule that ISSI provided to Atkinson regarding cells 8, 9,
and 10 of the blasting map provided for a test blast on November
24, 1998, and additional blasting and shooting from November 26,
1998, to January 15, 1999; (2) the parties were on standby on
November 24, 1998, because of the sturgeon's failure to vacate
the blasting area; (3) Bradbury did no drilling and blasting
during the period of delay; (4) Bradbury got the go-ahead to
begin blasting on January 7, 1999; (5) NDI and ISSI amended
their contract to delete cells 8, 9, and 10 on December 30,
1998; (6) NDI was ultimately paid by ISSI for some "extras"; (7)
when NDI was paid for these "extras," it occurred after ISSI
submitted payment for such extras to Atkinson; (8) when ISSI was
paid by Atkinson, it paid NDI its "proportionate" share of the
extras; (9) Bradbury initially began blasting according to the
6' x 6' grid; (10) according to Mason's testimony, when the 6'
x 6' grid was used, there was no problem with producing
"diggable" rock; (11) according to testimony of both sides'
expert witnesses, blasting pursuant to a 6' x 6' grid using
3.5" holes would produce football-sized rock; and (12) ISSI's
expert testified that, based on past work on similar jobs, it
should have been possible to produce rock that was one foot in
size with very little oversize on the BIW Project.
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district court on these matters, ISSI asks us to remand the case
for additional factfinding, or to fill the gaps ourselves by
making those additional determinations that it claims the great
weight of evidence adduced at trial would compel.
Standing in the way of this request, however, is ISSI's
own failure to file a postjudgment motion, under Fed. R. Civ. P.
52(b), asking the district court to amend its findings of fact
to include these twelve points. Rule 52(b), in pertinent part,
provides that "[o]n a party's motion filed no later than 10 days
after entry of judgment [in a case tried without a jury], the
court may amend its findings -- or make additional findings --
and may amend the judgment accordingly." Rule 52(b) represents
the principal, and preferred, mechanism for challenging the
district court's failure to find facts, as it allows a court
that has recently tried the case, rather than an appellate
tribunal perusing a cold record, to determine the propriety of
considering those additional facts. See Consol. Aluminum Corp.
v. Foseco Int'l Ltd., 910 F.2d 804, 814 n.9 (Fed. Cir. 1990)
("Rule 52(b), Fed. R. Civ. P., provides for post-judgment
motions for findings not made. Counsel should not simply ignore
that rule and head off to the appellate court to seek a remand
for the making of those same findings."); cf. United States v.
Falu-Gonzalez, 205 F.3d 436, 440 (1st Cir.) ("It is a general
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principle of appellate jurisprudence that a party desiring more
particularized findings at the trial court level must request
them from the trial court.") (quoting United States v. Tosca, 18
F.3d 1352, 1355 (6th Cir. 1994)), cert. denied, 120 S. Ct. 2731
(2000). When a party complains of incomplete findings of fact
after neglecting to file a Rule 52(b) motion, remand is
appropriate only in cases where (1) the district court failed to
make findings as to a certain fact and (2) that fact is
essential to the resolution of a material issue. Glaverbel
Societe Anonyme v. Northlake Mktg. & Supply, Inc., 45 F.3d 1550,
1555 (Fed. Cir. 1995).
After reviewing the record, we conclude that, even if
true, the twelve facts that ISSI seeks to have included as
formal findings would be largely redundant or irrelevant, and
that appellate factfinding or a remand for additional
factfinding by the district court therefore would be
inappropriate. We find the proposed findings concerning the
timing of NDI's performance to be immaterial because the
district court did not determine that the delay created by the
sturgeon excused the imperfections in NDI's performance, as ISSI
contends in its reply brief. On the contrary, the court's
reduction of NDI's damages by $175,000 reflected its view that
NDI had rendered deficient performance under the contract. As
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to those suggested findings that ISSI had paid only a
"proportionate share" of the money it received from Atkinson for
"extras," we find that they would not negate the court's
determination that NDI was entitled to all of the $140,000 for
work completed in the "expanded" area. The fact that ISSI had
paid a "proportionate share" on other occasions did not
eliminate its obligation to prove to the district court what
that term meant. Finally, we find that as to the facts relating
to the consequences of the deviation from the 6' x 6' blasting
pattern, the additional findings proposed by ISSI are irrelevant
because the district court found, in a manner that was not
clearly erroneous, see Part II.A, supra, that ISSI acquiesced in
this modification of the blasting pattern.
Accordingly, we decline ISSI's invitation to make
findings of fact on the twelve points or to remand the case to
the district court for the purpose of requiring it to make such
findings.
III. Continuance and Joinder
ISSI contends that the district court committed legal
error by denying its pretrial motions to continue the trial and
to join Atkinson as a necessary party. Both motions
constituted an attempt by ISSI to prevent the present case from
being decided without reference to ISSI's separate dispute with
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Atkinson arising out of the BIW Project. We consider each issue
separately.
A district court's decision to grant or deny a
continuance is analyzed under the abuse-of-discretion standard.
Amarin Plastics, Inc. v. Md. Cup Corp., 946 F.2d 147, 151 (1st
Cir. 1991). Only an "unreasoning and arbitrary insistence upon
expeditiousness in the face of a justifiable request for delay
will abuse [that discretion]." Id. (quoting United States v.
Torres, 793 F.2d 436, 440 (1st Cir. 1986)). Our review of the
record convinces us that the district court did not abuse its
discretion by declining to grant the continuance. While it
might have been helpful to ISSI to have its disagreement with
Atkinson resolved before going to trial with NDI, in that it
would have fixed the amount it was to receive from Atkinson,
virtually all of the issues posed by the present litigation
could be determined wholly without implicating the ISSI-Atkinson
dispute. We further note that even though ISSI's dispute with
Atkinson had not yet crystallized into formal legal proceedings
at the time of the continuance request, ISSI nonetheless
requested that the trial date in this case be postponed
indefinitely. Cf. United States v. Gantt, 140 F.3d 249, 256
(D.C. Cir. 1998) (noting that district court may consider length
of delay in deciding whether to grant or deny continuance
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motion). Given the potentially lengthy delay that this
continuance could have caused, and the rather marginal benefit
that would have redounded in return, we believe that the
district court was well within its discretion in denying the
motion.
ISSI also attacks the district court's denial of its
motion to join Atkinson as a necessary party under Fed. R. Civ.
P. 19(a). Consistent with its arguments regarding the
continuance motion, ISSI asserts that the commonality of facts
between the NDI-ISSI litigation and the ISSI-Atkinson dispute
counseled in favor of joining Atkinson as a party in the
present lawsuit. ISSI further argues that the district court
applied the wrong legal standard in assessing its Rule 19(a)
motion.
We have recently declined on two separate occasions to
decide whether a Rule 19(a) denial should be reviewed de novo or
for abuse of discretion because we found in both cases that the
distinction would not be outcome-determinative. United States
v. San Juan Bay Marina, 239 F.3d 400, 403 (1st Cir. 2001); Tell
v. Trustees of Dartmouth Coll., 145 F.3d 417, 418-19 (1st Cir.
1998) (noting in dicta that the panel would be "inclined" to
apply abuse-of-discretion standard if it mattered to the
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outcome). As in those cases, we need not resolve the issue here
because doing so would not affect the result.
In this case, ISSI moved to join Atkinson as a
necessary party well after the passage of the deadline to join
additional parties specified in the pretrial scheduling order.
It did not ask the court for leave to modify the scheduling
order in its Rule 19(a) motion, nor did it articulate
subsequently any "good cause" to excuse the belated filing,
although it was required to do both in order to move to join a
necessary party beyond the specified deadline. 11 See Fed. R.
Civ. P. 16(b); cf. Hernandez-Loring v. Universidad
Metropolitana, 233 F.3d 49, 51 (1st Cir. 2000). ISSI's
appellate briefs also fail to explicate its failure to properly
raise the issue. In denying ISSI's motion for reconsideration
of its decision not to join Atkinson, the district court noted
that the failure to meet this deadline constituted an
independent ground for denying the motion. We certainly believe
11
Counsel for ISSI did argue in its motion for
reconsideration that the dispute between Atkinson and ISSI
essentially did not materialize until after the joinder deadline
had passed in the present suit. This observation, however,
overlooks the fact that even if NDI's drilling and blasting were
inadequate, a fact that ISSI could have ascertained at the time
of NDI's demobilization, it did not relieve ISSI's obligation to
Atkinson to dredge to the proper elevation. In other words,
while the sufficiency vel non of ISSI's dredging was at the core
of the Atkinson-ISSI dispute, the adequacy vel non of NDI's
drilling and blasting under the NDI-ISSI agreement was not.
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that the district court had the discretion to remain faithful to
the pretrial scheduling order that it had previously entered.
Nickerson v. G.D. Searle & Co., 900 F.2d 412, 422 (1st Cir.
1990) (holding that district court decision not to deviate from
final pretrial order constituted neither manifest injustice nor
abuse of discretion requiring court of appeals to intervene).
Accordingly, we affirm its denial of ISSI's motion to join
Atkinson as a party.12
IV. "Judgment as a Matter of Law"
ISSI's next contention is that the district court
committed legal error by denying both its motion for judgment as
a matter of law at the close of NDI's evidence and its renewed
motion at the close of all the evidence. It claims that NDI
breached the parties' contract by deviating from the 6' x 6'
blasting pattern and by failing to produce "diggable" rock.
Given these breaches, ISSI insists, NDI was precluded from
prevailing on its contract claims as a matter of law.
In their briefs, both parties have erroneously
characterized ISSI's motions for judgment as a matter of law as
arising under Fed. R. Civ. P. 50. Because the trial was heard
12In so ruling, we expressly decline to consider the
district court's alternate ground for denying ISSI's joinder
motion, namely, that Atkinson was not a "necessary" party within
the meaning of Rule 19(a).
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without a jury, ISSI's motion at the close of NDI's case should
have been characterized as a motion for judgment on partial
findings under Fed. R. Civ. P 52(c). Rego v. ARC Water
Treatment Co.., 181 F.3d 396, 401 (3d Cir. 1999) ("Rule 50(a)
applies in jury trials and Rule 52(c) applies in non-jury
trials."). Moreover, because ISSI put on evidence following the
district court's denial of the motion for judgment on partial
findings, it waived its right to appeal from the denial of that
motion. N.Y. State Elec. & Gas Corp. v. Sec'y of Labor, 88 F.3d
98, 108 (2d Cir. 1996) (citing Bituminous Constr., Inc. v.
Rucker Enters., Inc., 816 F.2d 965, 967 (4th Cir. 1987)).
Consequently, we treat the arguments ISSI makes on appeal under
the heading of "motion for judgment as a matter of law" simply
as challenges to the factual and legal sufficiency of the
district court's determinations based on all the evidence. See
id. (noting that following denial of Rule 52(c) motion the
sufficiency of the evidence is analyzed on appeal by viewing the
entire record). Following a completed bench trial, of course,
we review the court's factual determinations for clear error and
its legal conclusions de novo. Commercial Union Ins. Co. v.
Seven Provinces Ins. Co., 217 F.3d 33, 40 (1st Cir. 2000), cert.
denied, 121 S. Ct. 1084 (2001).
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On the portion of ISSI's argument that relates to NDI's
deviation from the initial blasting scheme, we have little
trouble affirming the district court's conclusion. Given the
district court's factual finding that ISSI acquiesced in the
enlargement of the 6' x 6' grid (and our determination that that
finding was not clearly erroneous), it cannot be said that the
deviation prevented NDI from prevailing, as a matter of law, on
its contract claims.13 By acquiescing in the modified blasting
pattern, ISSI effectively relinquished its right under the
contract to have blasting performed according to the 6' x 6'
grid.
The second part of the argument concerns the district
court's allegedly erroneous interpretation of the term
"diggable" in the contract. The district court, relying on
trial testimony as to the meaning of "diggable" in the absence
of an explicit contractual definition, construed the term to
mean a quantity of rock in which no more than ten percent may
13In its argument on this point, ISSI attacks a remark by
the district court that "NDI did breach the contract [by] . . .
fail[ing] to amend the blast plan or [to] follow it precisely --
but none of these breaches was material or caused ISSI any
quantifiable damage." Northeast Drilling, Inc., 2000 WL 761020,
at *4. The nonmaterial "breach[es]" to which the district court
refers in this statement appear to be the failure to adjust the
blast plan document and the failure to conform precisely to the
modified understanding between the parties -- not the earlier
decision to abandon the original 6' x 6' blasting plan.
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exceed one cubic yard. The court further found that 30 percent
of the rock at the BIW Project site had a volume of more than
one cubic yard, and that the value of NDI's performance to ISSI
had been diminished by $175,000 due to this failure to perform
fully. ISSI argues that the contract did not provide for this
ten percent "error rate," and that the district court committed
"clear error of law [in] rewrit[ing] the contract" to allow for
the ten percent deviation. It further argues in its opening
brief (although it does not make the point with great clarity)
that NDI's production of a quantity of rock with an oversize
rate of either twenty or thirty percent (depending on whose
interpretation of the contract is accepted) amounted to a breach
of the contract as a matter of law.
We first find that the district court did not err in
finding that the term "diggable" in the contract allowed for a
ten percent oversize rate. Relying on extrinsic evidence in the
form of expert testimony, the court determined that this ten
percent tolerance threshold represented the industry standard
for such drilling and blasting operations, and that the NDI-ISSI
contract had incorporated this standard. This was an
appropriate method of construing the contract given the
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ambiguity of the term "diggable."14 Hilltop Cmty. Sports Ctr. v.
Hoffman, 755 A.2d 1058, 1063 (Me. 2000); cf. Commercial Union
Ins. Co., 217 F.3d at 38-39 (finding that district court
properly considered expert testimony on trade usage and industry
practice in order to ascertain meaning of ambiguous contract
term).
Beyond the issue of interpreting the term "diggable,"
ISSI makes the argument that NDI's failure to produce a quantity
of rock meeting that definition amounted to a breach of the
contract as a matter of law. The district court, finding the
amount by which NDI's defective production of "diggable" rock
lowered its performance value to be identical to the amount that
ISSI could prove on its breach-of-contract counterclaims (i.e.,
$175,000), deemed the distinction between substantial
performance and partial performance academic in this case.
Accordingly, it declined to characterize NDI's performance as
either substantial or partial. Northeast Drilling, Inc., 2000
WL 761020, at *7. ISSI insists, however, that under Maine law
14
Under Maine law a contract term is deemed ambiguous when
it is "reasonably susceptible of different interpretations."
Guilford Transp. Indus. v. Pub. Utils. Comm'n, 746 A.2d 910, 914
(Me. 2000) (quoting Portland Valve, Inc. v. Rockwood Sys. Corp.,
460 A.2d 1383, 1387 (Me. 1983)). Under this standard we agree
with the district court's conclusion that the term "diggable" is
an ambiguous one, given that there is neither a generally
prevailing definition for the term nor clarification as to its
meaning elsewhere in the contract. Id. at 914-15.
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ISSI was entitled to an explicit determination that NDI had
breached the parties' contract, thereby shifting the burden to
NDI to establish the value of its deficient performance under
the theory of quantum meruit. See Loyal Erectors, Inc. v.
Hamilton & Son, Inc., 312 A.2d 748, 756 (Me. 1973) (explicating
the elements of quantum meruit under Maine law).
We find ISSI's argument on this point to be unavailing.
The district court expressly found that no matter who bore the
burden of proving the "cost" of NDI's less-than-flawless
performance, the result would have been the same: a $175,000
reduction in the amount that NDI would have otherwise received.
Regardless of how useful a finding that NDI had breached its
contractual duties would have been to ISSI in its dispute with
Atkinson (and we doubt it would have been exceedingly so, given
the fact that ISSI at all times bore ultimate responsibility to
Atkinson for the quality of the end product), we do not agree
that ISSI was entitled to have the district court expressly
characterize its damages determination as being based on
substantial or partial performance.15 Given that the criteria
15ISSI relies heavily on our decision in Combustion
Engineering, Inc. v. Miller Hydro Group, 13 F.3d 437 (1st Cir.
1993), as support for its argument that NDI breached the
contract as a matter of law by producing oversize rock at a 20
percent higher rate than that allowed under the definition of
"diggable" rock. Applying Maine law in Combustion Engineering,
we found that the district court did not err in finding that the
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for both theories of damages were found to be fulfilled,16 and
given the district court's finding that application of either of
the two theories would have produced an identical measure of
damages for NDI, we think that the district court could fairly
characterize the quantum of damages as being derived alternately
from either one. Cf. Northern Heel Corp. v. Compo Indus., Inc.,
851 F.2d 456, 473 (1st Cir. 1988) (noting that there is often
more than one sufficient method of measuring damages in any
given case). We therefore uphold its damages methodology.
V. NDI's Work in the "Expanded" Area
ISSI next challenges the district court's findings
regarding NDI's work in the "expanded" area. The court found
that, pursuant to an anticipated agreement between ISSI and
builder of a hydroelectric facility breached the construction
contract with its client by erecting a dam that produced a water
flow exceeding the contract specifications by 15.38 percent.
Id. at 442-43. ISSI points to that finding and asserts that, a
fortiori, NDI's 20 percent deviation in this case must represent
a breach. Nowhere in Combustion Engineering, however, did we
hold that there is a certain performance threshold below which
a court must find breach of contract as a matter of law.
16Specifically, the district court found that NDI had acted
in good faith in its work under the contract, had significantly
performed to that end, and had conferred a material benefit upon
ISSI. By establishing these elements, NDI validly asserted a
claim of quantum meruit under Maine law, thereby entitling it to
the value of the work it did perform. Loyal Erectors, Inc., 312
A.2d at 756. Alternatively, if NDI substantially performed
under the contract, it was entitled to receive the contract
price less damages on account of the omissions. F.A. Gray, Inc.
v. Weiss, 519 A.2d 716, 717 (Me. 1986).
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Atkinson, ISSI was about to receive $140,000 for the drilling
and blasting work done by NDI outside of the contract area -- a
sum that, according to the district court, reasonably
represented the value of the work performed by NDI in the
"expanded" area. Alternatively, the court found that ISSI could
not complain about the fact that it would have to compensate NDI
before receiving payment from Atkinson because ISSI had been six
months late in requesting such payments from Atkinson. The
court also determined that ISSI had failed to meet its burden to
establish the "proportional" share of the Atkinson payments that
NDI was entitled to receive under the parties' agreement, and
accordingly awarded the entire $140,000 sum to NDI. On appeal,
ISSI argues that the district court should not have based its
award on the uncertain occurrence of the ISSI-Atkinson
settlement agreement, nor should it have found that the entire
amount of the Atkinson payments belonged to NDI. In the same
vein, it contends that the district court should not have
credited NDI $81,560 for the "Hughes barge," another expense for
which ISSI was expected to receive compensation from Atkinson in
the same settlement agreement.
At the heart of the first component of ISSI's argument
– that the district court erred by finding that Atkinson was
about to pay ISSI $140,000 for work in the expanded area -- is
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the contractual provision stating that NDI would be paid for
such work "if and only if ISSI receives compensation." ISSI
asserts that under this clause in the contract, Atkinson's
remission of fees was a condition precedent to it making any
flow-through payments to NDI, and that it was therefore improper
for the district court to award anything for work in the
expanded area given the absence of a finding that the condition
had been met. Although Atkinson and ISSI did reach a settlement
covering work in the "expanded" area on or about February 28,
2000, the terms of that settlement have not been divulged.
Under these circumstances, it would be improper for us to assume
that the expected amount of the settlement agreement was the
amount that ISSI actually received. Cf. Mulero-Rodriguez v.
Ponte, Inc., 98 F.3d 670, 672 (1st Cir. 1996) (noting that
appellate court may only make inferences that can be "drawn from
the evidence without resort to speculation") (citing Frieze v.
Boatmen's Bank of Belton, 950 F.2d 538, 541 (8th Cir. 1991)).
The district court's $140,000 award rested, however,
on an alternate ground: that ISSI effectively surrendered its
authority to enforce the condition precedent (Atkinson's
payment) by waiting six months after NDI's demobilization to
submit the change-order requests to Atkinson for NDI's work in
the "expanded" area. Under the so-called prevention doctrine,
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a contractual condition precedent is deemed excused when a
promisor hinders or precludes fulfillment of a condition and
that hindrance or preclusion contributes materially to the
nonoccurrence of the condition. Restatement (Second) of
Contracts § 245 (1981). In this case, the court found that in
spite of having the information needed to submit change-order
requests to Atkinson, ISSI failed to submit such requests until
September 1999, or nearly six months after the completion of
NDI's work.17 Because this delay materially contributed to
Atkinson's failure to pay ISSI before the NDI-ISSI trial, ISSI
is estopped from arguing that it was entitled to be paid by
Atkinson before it reimbursed NDI for drilling and blasting in
the "expanded" area. 13 Richard A. Lord, Williston on Contracts
§ 39:4 (4th ed. 2000) ("[W]here one improperly prevents the
performance or the happening of a condition of his or her own
promissory duty, the offending party thereby eliminates it as a
condition . . . ."); cf. Moore Bros. Co. v. Brown & Root, Inc.,
207 F.3d 717, 724-26 (4th Cir. 2000) (applying prevention
17
ISSI disputes the district court's factual finding that
ISSI was responsible for the delayed change-order request. It
claims that NDI, by refusing to respond to ISSI's requests for
backup information, prevented ISSI from completing the necessary
paperwork. Even if NDI did fail to respond to ISSI's requests
for supplemental information, however, that fact does not
contradict the district court's finding that at the time of
NDI's demobilization, ISSI had all the information it needed to
submit an adequate change-order request.
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doctrine to render inoperative "pay when paid" condition
precedent in construction subcontract). Based on this
principle, the district court reasonably concluded that the
value of the work performed in the "expanded" area was $140,000.
Apart from the issue of whether NDI deserves any
payments given the uncertainty surrounding the payments by
Atkinson, ISSI further contends that the district court
committed error by awarding all of the $140,000 sum to NDI.
Under the contract, NDI was to receive a "proportional" share of
the amount ISSI received from Atkinson; this critical term in
the contract, however, was unaccompanied by further elaboration.
ISSI claims that the court erred by determining that "[b]ecause
ISSI is the only party that knows what NDI's proportional share
is and because ISSI has provided no evidence on this topic,
there is no basis upon which to reduce the $140,000 . . . ."
Northeast Drilling, Inc., 2000 WL 761020, at *2. ISSI points to
the trial testimony of Laurie Mason, who was asked to discuss
the manner in which ISSI would tally NDI's "proportional" share.
In that testimony, Laurie Mason noted that ISSI would make those
payments to NDI according to the same ratio by which it had paid
NDI for NDI's drilling and blasting work in the contract area.
She neglected, however, to disclose what that ratio was. On
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appeal, ISSI attempts to make up for this omission by proposing
a formula by which this court could ascertain the proper amount.
That suggested formula, however, was not presented to the
district court; and absent extraordinary circumstances not
present in this case, we may not entertain newly proffered
evidence for the first time on appeal. In re Colonial Mortgage
Bankers Corp., 186 F.3d 46, 50 (1st Cir. 1999), cert. denied,
528 U.S. 1139 (2000). As the district court noted, because the
proportion of the Atkinson payments that would pass to NDI was
a fact about which ISSI had exclusive knowledge (as NDI
apparently had no control over the size of its "proportional"
share for work in the expanded area), ISSI's failure to divulge
that fact meant that NDI was entitled to all of the payments.
Cf. United States v. N.Y., New Haven & Hartford R.R. Co., 355
U.S. 253, 256 n.5 (1957) ("The ordinary rule, based on
considerations of fairness, does not place the burden upon a
litigant of establishing facts peculiarly within the knowledge
of his adversary."); Selma, Rome & Dalton R.R. v. United States,
139 U.S. 560, 567-68 (1891) (holding that burden of proof
regarding right to payment rests with party possessing relevant
account books).
ISSI also attacks the district court's award of $81,560
to NDI for the cost of the "Hughes barge." The court's award
-39-
was based on ISSI's backcharging of NDI for the cost of this
additional equipment, which NDI needed to procure to make up for
the time it had lost in its drilling and blasting operations.
The district court found that as part of the pending settlement
agreement in which Atkinson would agree to pay ISSI for the work
in the "expanded" area, Atkinson also would pay ISSI $81,650 to
partially defray the cost of the "Hughes barge." Since ISSI
never absorbed any expense for this barge, the court found, that
payment should completely pass through to NDI. In light of our
finding that ISSI is estopped from asserting the condition
precedent of Atkinson's payment for extras, we find no reason to
set aside the reasonable determination by the district court
that NDI is entitled to partial reimbursement for the cost of
this additional expense.18
Finally, ISSI attempts to impugn the district court's
award of interest under the prompt-payment statute, 10 M.R.S.A.
§ 1114(4). Its argument on this point, however, is neither well
developed nor supported by case law, and consequently has been
waived. United States v. Zannino, 895 F.2d 1, 17 (1st Cir.
1990).
18ISSI also challenges the district court's finding that NDI
had not agreed to absorb the full cost of the barge under the
extant circumstances. After reviewing the conflicting evidence
in the record on this point, we conclude that the court's
determination was not clearly erroneous.
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Conclusion
This is a classic construction case, with both parties
attempting to advance their respective versions of the facts by
adverting to the plethora of letters that they prepared over the
course of the BIW Project with an eye toward litigation. As is
often the case with disputes of this ilk, the district court
found that the substance of those letters generally did not mesh
with the reality of the interactions between NDI and ISSI, and
that the true nature of the parties' relationship could most
accurately be divined by weighing the credibility of those
testifying at trial. Our careful review of the record reveals
no basis for disturbing those findings of fact reached by the
district court in this fashion. Nor do we find any reversible
error in the court's legal conclusions. The judgment of the
district court is therefore
Affirmed. Costs to appellees.
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