Cianbro Corp. v. Curran-Lavoie, Inc.

• Decision Date: 18 March 1987
• Docket Number: CURRAN-LAVOI,No. 86-1680,INC,86-1680
• Citation: 814 F.2d 7
• Parties: 3 UCC Rep.Serv.2d 469 CIANBRO CORPORATION, Plaintiff, Appellee, v., d/b/a Kenneth E. Curran, Inc., Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 7

814 F.2d 7

3 UCC Rep.Serv.2d 469

CIANBRO CORPORATION, Plaintiff, Appellee, v. CURRAN-LAVOIE, INC., d/b/a Kenneth E. Curran, Inc.,

Defendant, Appellant.

No. 86-1680.

United States Court of Appeals, First Circuit.

Argued Jan. 6, 1987.

Decided March 18, 1987.

Alexander J. Kalinski, Manchester, N.H., with whom Richard S. Emerson, Jr., Portland, Me., was on brief, for defendant, appellant.

George F. Burns, with whom W. John Amerling, John David Kennedy and Amerling & Burns, P.A., Portland, Me., were on brief, for plaintiff, appellee.

Before COFFIN, Circuit Judge, ALDRICH and ROSENN, ^* Senior Circuit Judges.

ROSENN, Senior Circuit Judge.

This highly fact intensive case arises out of a dispute over the sale of certain assets and road construction contracts by Curran-Lavoie, Inc. (Curran), a construction company, to Cianbro Corp. (Cianbro), in exchange for a $600,000 promissory note. The district court found that a settlement agreement between the parties resolved all prior disputes, so that Curran could no longer recover a sum of $18,855 it claimed Cianbro owed to it. The district court also found that Cianbro was entitled to "set-off" the disputed amount by withholding two payments due under the note now held by Kenneth E. Curran, Inc. ¹ and that accordingly Cianbro was not in default on the note. We affirm. ²

I.

In 1978 Curran was actively engaged as a road construction contractor. It was experiencing certain difficulties, however, due primarily to its president's illness and the State of New Hampshire's decision to suspend contracted-for work on two major bridge projects in Keene, New Hampshire. As a result, representatives of Curran communicated with Cianbro for the purpose of selling inventory and equipment, and also for the purpose of inducing Cianbro to complete several uncompleted contracts.

After a period of negotiation, the parties entered into a handwritten "Agreement for Sale" (the sales agreement) to take effect on September 1, 1978. The agreement provided, inter alia, that Curran would sell equipment and inventory, and assign four of its construction contracts, including the two Keene, New Hampshire projects, to Cianbro. In return, Cianbro agreed to pay Curran $600,000, to be evidenced by a promissory note. The note provided that Cianbro would pay Curran $600,000 plus 10% interest, payable monthly at a rate of $10,000 per month.

Because part of the sales agreement called for the assignment of the uncompleted construction contracts with the State of New Hampshire, State approval was required to substitute Cianbro as the contractor. New Hampshire refused to consent to the substitution of Cianbro for Curran on the contracts, however, and Cianbro therefore arranged to become a subcontractor. Accordingly, Curran remained as an intermediary to whom the State payments were made and Curran in turn transmitted the payments to Cianbro.

As a further complication, the State owed money to Curran for work Curran had performed prior to September 1, 1978 (the date the sales agreement became effective). At the August 1978 meeting at which the agreement of sale was prepared and signed, Curran and Cianbro were unable to determine the exact amount still owed to Curran by the State, and so they agreed to figure it out at a later meeting between their representatives. This meeting never took place. Further, Cianbro also recognized that Curran was entitled to damages from the State for extra work caused by the unwarranted shut-down of the Keene projects. ³ Cianbro agreed to compensate Curran for sums awarded by the State for these claims out of the checks forwarded by the State to Curran and transmitted by Curran to Cianbro.

In a letter dated November 8, 1978, Curran informed Cianbro that Cianbro owed it a total of $137,441.03, subject to later correction, both for work in progress on September 1 and for extra costs. Cianbro disagreed with the amount and in an effort to resolve the dispute the parties exchanged letters for eight months.

In April 1979, Curran received and endorsed over to Cianbro a check for $174,729.57 from the State for extra costs, including those incurred by Curran. On April 19, 1979, Cianbro's engineer wrote to Curran indicating that Curran was entitled to $9,300 for the rental of steel sheet piling and $1,555 for overhead during the shut-down. On June 7, 1979, Cianbro's chairman wrote Curran a letter agreeing that Curran was entitled to $8,000 for "Mobilization" on the Keene projects. The total of the three sums is $18,855, the amount at issue in Cianbro's action against Curran.

Representatives of Curran and Cianbro ultimately met on August 29, 1979. Curran claims that the meeting was conducted for the sole purpose of determining how much Cianbro owed to it for work in progress as of September 1, 1978, and that extra costs incurred by Curran prior to that time were neither discussed nor a part of their settlement agreement. ⁴ Cianbro, on the other hand, contends that the meeting was intended to resolve all disputed claims, and points to a letter sent by Curran the day before the meeting, which noted that the parties were "to meet tomorrow at Littleton to resolve all claims relative to the Sale of Curran-Lavoie, Inc. equipment and inventory, September 1, 1978." The settlement agreement reached on August 29 was drawn up by Curran, labeled "Final Estimate," and read:

by State of New Hampshire for extra expenses incurred because of temporary work suspension at Keene May 22, 1978, adjusted to correct for costs in excess of estimates as at November 8, 1978 are $66,684.99 plus $1,684.66, or $68,369.65.

Note: The above invoice is complete and final, per agreement reached this date, subject to a final adjustment relative to the performance and payment bond premiums upon receipt of audited invoices from The Rowley Agency, Inc. It is anticipated that a substantial additional bond premium must be paid for Keene P-2962-F because of extra work items approved by the Department. Also, it is understood that a credit will be generated by audit of Wentworth-Rumney project because of direct payment of all structural steel by NCS. This subject will be reviewed and reported to Cianbro as soon as available after acceptance and approval by the State of New Hampshire.

(Emphasis added).

Curran states that the starting figure of $137,441.03 represents what Curran claimed was owed to it for both the work in progress and the extra costs, including the $18,855 Cianbro had acknowledged was due Curran and which Cianbro had received. Subtracted from that was $66,684.99, which Curran states is the amount it had previously claimed represented the extra costs, including the $18,855. Finally, Curran states that the balance was adjusted by agreement, part of which represented the amount owed to it for construction work in progress on September 1, 1978. The agreement stated that Curran would seek compensation from the State for the extra costs, and Curran did so as part of an action filed December 12, 1980. In the meantime, Cianbro paid the $45,569.48 balance representing the "Net Amount Due Curran-Lavoie, Inc." in the settlement agreement. Curran contends that this $45,569.48 figure did not include the $18,855 owed to it for extra costs, as that amount was included in the $66,684.99 deduction.

In November 1980, Curran received a check from the State in the amount of $23,617.19, which represented the State's final payment on the Keene projects. Curran's president then reviewed Curran's financial records, and determined that Cianbro had already been paid $18,855 in extra costs due and owing to Curran. Accordingly, Curran deposited the check, deducted $18,855 plus two other items and interest, and forwarded the $868 balance to Cianbro. Cianbro did not cash Curran's $868 check.

After many months of dispute, Cianbro withheld its July and August 1983 payments of $10,000 each, due Curran on Cianbro's original note. Cianbro did make its payment for that September, but failed to do so in October, November, or December of 1983. On September 23, 1983, Curran sent Cianbro a notice of default for the July and August payments. On November 4, 1983, Curran sent a letter of acceleration and demand for all payments due under the terms of the original promissory note. Finally, in January of 1984 Cianbro resumed making its monthly payments to Curran, and at some point paid the amounts due for October, November, and December of 1983. However, Cianbro never paid Curran the amounts due under the note for July and August of 1983.

II.

A threshold issue raised in Curran's appeal is whether the District Court of New Hampshire erred in transferring Curran's New Hampshire lawsuit to Maine, and whether the district court in Maine erred in denying Curran's motion for a change of venue, ⁵ because of the asserted great expense and inconvenience of litigating in Maine a settlement agreement negotiated and entered into in New Hampshire, which involves New Hampshire contracts, inventory, and witnesses.

A decision of the district regarding a transfer of venue in a civil action may only be overturned for an abuse of discretion. Eagle-Picher Indus. v. Liberty Mut. Ins. Co., 682 F.2d 12, 16 n. 1 (1st Cir.1982), cert. denied sub nom. Froude v. Eagle-Picher Indus., 460 U.S. 1028, 103 S.Ct. 1279, 75 L.Ed.2d 500 (1983). Factors to be considered by the district court in making its determination include the convenience of the parties and witnesses, the order in which jurisdiction was obtained by the district court, the availability of documents, and the possibilities of consolidation. Codex v. Milgo Elec. Corp., 553 F.2d 735, 737 (1st Cir.), cert. denied, 434 U.S. 860, 98 S.Ct. 185, 54 L.Ed.2d 133 (1977); 28 U.S.C. Sec. 1404(a). Where identical actions are proceeding concurrently in two federal courts, entailing duplicative litigation and a waste of judicial resources, the first filed action is generally preferred in a choice-of-venue decision. Codex, ...