Commercial Associates v. Tilcon Gammino, Inc.

• Decision Date: 21 September 1992
• Docket Number: Civ. A. No. 86-0748-T.
• Citation: 801 F. Supp. 939
• Parties: COMMERCIAL ASSOCIATES and Lechmere, Inc. v. TILCON GAMMINO, INC.
• Court: U.S. District Court — District of Rhode Island

801 F. Supp. 939

COMMERCIAL ASSOCIATES and Lechmere, Inc. v. TILCON GAMMINO, INC.

Civ. A. No. 86-0748-T.

United States District Court, D. Rhode Island.

September 21, 1992.

Richard W. Petrocelli, Girard R. Visconti, David M. Campbell, Visconti & Petrocelli, Ltd., Providence, R.I., Marie C. Vaccarelli, Robert D. Kozol, Friedman & Atherton, Boston, Mass., for Commercial Associates.

Michael DiBiase, William R. Landry, Blish & Cavanagh, Richard W. Petrocelli, Girard R. Visconti, David M. Campbell, Visconti & Petrocelli, Ltd., Providence, R.I., for Lechmere, Inc.

Louis V. Jackvony, Jackvony & Jackvony, Lincoln, R.I., John R. Fornaciari, Robert M. Disch, Ross & Hardies, Washington, D.C., for Tilcon Gammino, Inc.

Vincent A. Indeglia, Providence, R.I., for Thomas Prendergast.

Guido R. Salvadore, Higgins, Cavanagh & Cooney, Providence, R.I., for Stephen J. Watchmaker, Neil Zais.

Salvatore M. Giorlandino, Bernkopf, Goodman & Baseman, Boston, Mass., for Gerald Fineberg, Gerald Felman.

MEMORANDUM AND ORDER

TORRES, District Judge.

Tilcon Gammino Inc. has moved, pursuant to Federal Rule of Civil Procedure 59(e), to amend a judgment awarding it damages on its counterclaim. Specifically, it asks the Court to add prejudgment interest referable to amounts it previously recovered pursuant to a partial settlement and through a proceeding under the Rhode Island Mechanics' Lien statute, R.I.Gen. Laws §§ 34-28-1 to 34-28-36 (1984 Reenactment), between the time its right to those amounts accrued and the date on which payment was actually received. For reasons hereinafter stated, the Court grants the motion with respect to the mechanics' lien amount but denies it with respect to the partial settlement amount.

FACTS

Commercial Associates ("Commercial") is a general partnership that developed a shopping center known as the "Bald Hill Plaza" on property it owned in Warwick, Rhode Island. In February, 1985, Commercial hired Tilcon Gammino, Inc. ("Tilcon") to do the site work required for construction of the retail stores that were to occupy the shopping center.

The contract between Tilcon and Commercial described certain work (the "contract work") for which Tilcon was to be paid a maximum of $3,095,000.00. In addition, the parties agreed that Tilcon was to be compensated on a "cost plus" basis (i.e., the cost of labor and materials plus a reasonable profit) for "extra" work not specified in the contract.

As the project progressed, Tilcon submitted periodic bills for the contract work. Those bills were in the form of "Pay Estimates" itemizing the work done and the amounts due. The first six Pay Estimates, referable to contract work performed between February, 1985, and August 4, 1985, were paid in full; but Commercial refused to pay for the balance of the contract work reflected in Pay Estimate Nos. 7-9 covering the period from August 5, 1985, through October, 1985. Commercial also refused to pay for any of the "extras" claimed by Tilcon. Tilcon responded by asserting a lien against the shopping center property pursuant to the Rhode Island Mechanics' Lien Statute, R.I.Gen.Laws §§ 34-28-1 to 34-28-37 (1984 Reenactment). On February 7, 1986, Tilcon filed a petition in the Rhode Island Superior Court to enforce its mechanics' lien.

Under Rhode Island law, such a petition contemplates notice to the property owner and other lienholders; a hearing to determine the validity, amount and priority of the claim; and, if necessary, a judicially ordered sale of the property to satisfy the claim. R.I.Gen.Laws §§ 34-28-10 to 34-28-21. However, the statute limits the amount of the lien to the value of the work performed during the 120 day period immediately preceding the date on which notice of intent to claim it is first given (the "lien period"). Thus, in Tilcon's case, the lien was enforceable only with respect to work done after August 18, 1985, and did not apply to contract work performed during the first portion of the period covered by Pay Estimate No. 7 (i.e., between August 5 and August 18, 1985) or to "extra" work performed prior to August 18, 1985.

Commercial participated in the Superior Court action and vigorously contested Tilcon's effort to enforce a mechanics' lien. While that action was pending, Commercial obtained an order releasing the property from Tilcon's claimed lien by providing substitute security in the form of a $1,200,000.00 surety bond that was deposited in the registry of the court.

On May 6, 1988, a Superior Court judge entered judgment for Tilcon in "the sum of $1,329,207.03, with interest thereon at the rate of 12% as provided by law." Tilcon Gammino, Inc. v. Commercial Assocs., No. KM 86-121 (Sup.Ct. May 6, 1988) (amended judgment). That judgment represented the amount that the Court determined was owed for all work done during the lien period including that portion of the work shown on Pay Estimate No. 7 that was performed after August 18. The Superior Court did not adjudicate Tilcon's claim for contract work shown in Pay Estimate No. 7 that was performed before August 18 or for "extra" work performed before that date because such work was outside that lien period.

Commercial appealed the judgment, but its appeal was rejected by the Rhode Island Supreme Court. Tilcon Gammino, Inc. v. Commercial Assocs., 570 A.2d 1102 (R.I. 1990). Consequently, on April 16, 1990, the Superior Court clerk issued an execution in the amount of $1,991,135.24 (the principal amount of the judgment plus 12% annual interest from October, 1985) and the Court ordered that the $1,200,000.00 bond be applied "in part satisfaction of the execution." Tilcon Gammino, Inc., No. KM 86-121 (Sup.Ct. April 19, 1990) (order releasing and assigning surety bond to Tilcon).

Approximately one month later, the original execution was recalled and a new execution was issued in the amount of $1,200,000.00 to be satisfied solely from the bond. The explanation given was that "this is an In Rem action. Therefore, the Execution cannot be used against the land or the respondent, individually." Tilcon Gammino, Inc., No. KM 86-121 (Sup.Ct. May 23, 1990) (order amending order of April 19, 1990). However, the underlying judgment was not amended.

Tilcon was unable to collect the $1,200,000.00 from the surety bond until January 24, 1991. On April 8, 1991, it also received $300,000.00 pursuant to a settlement agreement with Gerald Fineberg, one of Commercial Associates' partners, which counsel agreed should be applied to reduce any judgment in favor of Tilcon. (Tr. 2/3/92 at 6.)

In the meantime, Commercial brought this suit seeking money damages for what it alleged was Tilcon's breach of contract and fraud, and Tilcon responded with a counterclaim for the balance it asserted was due for the work it had performed. This Court narrowed the issues to be resolved at trial by determining that the parties were bound by and collaterally estopped from relitigating the factual findings made in the mechanics' lien action (i.e., that Tilcon was entitled to $1,329,207.03 for both contract work and extra work performed during the lien period). Commercial Assocs. v. Tilcon Gammino, Inc., No. 86-0748 (D.R.I. Dec. 19, 1991) (order partially granting Tilcon's motion for summary judgment). During the trial, the issues were further narrowed when the parties stipulated that Tilcon was entitled to an additional $132,196.20 for contract work shown on Pay Estimate No. 7 that was performed before the lien period. The jury resolved the only remaining issue by returning a verdict for Tilcon and fixing the amount it was owed for "extra" work done before the lien period at $307,500.00.

Based on the foregoing, this Court directed the clerk to enter judgment in favor of Tilcon in the amount of $268,903.23 plus interest and costs. The amount of the judgment was calculated by, first, totalling the amount owed for extra work performed before the lien period (i.e., $307,500.00); the balance owed for contract work performed before the lien period (i.e., $132,196.20) and the balance owed for all work performed during the lien period (i.e., $1,329,207.03 minus the $1,200,000.00 collected under the bond); and, then subtracting the Fineberg settlement payment (i.e., $300,000.00).

Tilcon now moves, pursuant to Federal Rule of Civil Procedure 59(e), to amend the judgment "to include prejudgment interest on all monies owed to Tilcon as required by R.I.G.L. § 9-21-10." In essence, it asks the Court to add interest for the period between October, 1985, (i.e., the date work was completed) and January 24, 1991, (i.e., the date on which the $1,200,000.00 bond payment was received) based on the entire balance outstanding during that period (i.e., $1,768,903.23) rather than the net amount owed after deduction of the bond payment and the Fineberg settlement payment (i.e., $268,903.23).

DISCUSSION

I. The Rule 59(e) Standard

Federal Rule of Civil Procedure 59(e) expressly recognizes a court's authority to alter or amend its judgments. In exercising that authority, courts have broad discretion to correct errors and see that justice is done. White v. New Hampshire Dept. of Empl. Sec., 455 U.S. 445, 102 S.Ct. 1162, 71 L.Ed.2d 325 (1982) (quoting Notes of Advisory Committee on 1946 Amendment to Rules, 5 F.R.D. 433, 476 (1946)); Earnhardt v. Commonwealth of Puerto Rico, 744 F.2d 1 (1st Cir.1984). The principal limitation on that discretion is that a motion to amend "may not be granted where to do so would undermine the jury's fact-finding role and trample on the defendant's Seventh Amendment right to a jury trial." Robinson v. Watts Detective Agency, Inc., 685 F.2d 729, 742 (1st Cir. 1982), cert. denied, Consolidated Service Corp. v. Robinson, 459 U.S. 1105, 103 S.Ct. 728, 74 L.Ed.2d 953 (1983).

Specifically, Rule 59(e) has been invoked to correct damage awards that were improperly calculated, Lubecki v. Omega Logging, Inc., 674 F.Supp. 501 (W.D.Pa. 1987), aff'd, 865 F.2d 251 (3d Cir.1988), and to include...