CONST. INTERIOR SYSTEMS v. DONOHOE COMPANIES, Civ. A. No. 90-2551 (HHG).

• Decision Date: 23 December 1992
• Docket Number: Civ. A. No. 90-2551 (HHG).
• Citation: 813 F. Supp. 29
• Parties: CONSTRUCTION INTERIOR SYSTEMS, INC., Plaintiff, v. The DONOHOE COMPANIES, INC., and Federal Center Plaza Corporation, Defendants.
• Court: U.S. District Court — District of Columbia

813 F. Supp. 29

CONSTRUCTION INTERIOR SYSTEMS, INC., Plaintiff, v. The DONOHOE COMPANIES, INC., and Federal Center Plaza Corporation, Defendants.

Civ. A. No. 90-2551 (HHG).

United States District Court, District of Columbia.

December 23, 1992.

Charles G. Atkins, Strauss & Troy, Cincinnati, OH, A. Thomas Carroccio, Santarelli, Smith & Carroccio, Washington, DC, for plaintiff.

Richard F. Smith, Jonathan D. Shaffer, Smith, Pachter, McWhorter & D'Ambrosio, Vienna, VA, for defendants.

MEMORANDUM

HAROLD H. GREENE, District Judge.

I Introduction

This case involves breach of contract and unjust enrichment claims brought by the plaintiff Construction Interior Systems, Inc. (CIS), against the defendants Donohoe Companies, Inc. (Donohoe) and Federal Center Plaza Corporation (Federal Center).

Before the Court are a number of outstanding motions which must be resolved before trial. Oral argument was heard on several of these motions on October 15, 1992.

This Memorandum and attached Order address the plaintiff's motion for reconsideration of the Court's April 9, 1992 Order granting of partial summary judgment and the defendants' separate motion for partial summary judgment on Counts I-III of the first amended complaint. This Memorandum and attached Order also resolve the plaintiff's motion for leave to file a second amended complaint and all subsequent motions filed by the defendants regarding Count IV of the this new complaint.

II Background

Donohoe Construction Company, a general contractor, awarded Construction Interior Systems (CIS) a subcontract in June 1987 to refurbish 262 guest rooms and baths as well as seven corridors at the Georgetown Holiday Inn. The total contract was valued at $237,323.

The Donohoe Construction Company, a division of the Donohoe Companies, Inc., performed renovation and refurbishment work on this Hotel. The defendant Federal Center Plaza is the general partner of 2101 Wisconsin Associates, a partnership which owns the Georgetown Holiday Inn.

The plaintiff, through the first two complaints, alleges breach of contract and unjust enrichment against both defendants. The plaintiff contends that the defendants failed to supply CIS with adequate rooms for renovation and comply with other conditions of the contract. In Count I, CIS seeks over $80,000 for work completed and billed, and approximately $200,000 for unresolved change orders, construction delays and subcontractor expenses. Counts II and III allege unjust enrichment for the work allegedly completed, but not paid for by the defendants. The original complaint was filed on September 12, 1990 and the first amended version was submitted to the Court on November 5, 1990.

The defendants have filed a counterclaim for over $300,000 alleging that CIS failed to deliver renovated rooms in a timely fashion and failed to complete work in accordance with the terms of the contract. They allege that CIS lost or destroyed furniture, failed to pay room charges incurred by CIS workers and caused a substantial loss of revenue.

On May 13, 1992, the plaintiff filed a motion for leave to file a second amended complaint. This new complaint contains a fourth count, charging that Donohoe tortiously interfered with CIS's business relations with other hotel operators.

For the reasons stated below, the Court denies the plaintiff's motion for reconsideration of the partial summary judgment order entered on April 9, 1992, and also denies the defendants' separate motion for partial summary judgment on Counts I-III. Furthermore, the Court grants the plaintiff's motion for leave to file a second amended complaint. However, the new count in this complaint, alleging tortious interference with contract, is barred by the statute of limitations and is consequently dismissed. All of the defendants' other motions pertaining to the tortious interference claim are dismissed as moot.

III Motion to Reconsider

On March 14, 1992 the defendants moved for partial summary judgment on all of the plaintiff's claims which arose prior to August 25, 1987. The defendants based this motion on releases CIS signed upon receipt of partial contract payments by Donohoe. These releases explicitly waived "any and all" rights and claims of CIS for work done up to August 25, 1987. The terms of the releases specifically encompass any claims related to "extra work or change orders."

Under Local Rule 108(b) and Rule 6(e) of the Federal Rules of Civil Procedure, CIS's opposition to this summary judgment motion was due on March 30, 1992. CIS failed either to respond by that date or to move for an enlargement of time within which to file an opposition. Consequently, on April 9, 1992, this Court granted the defendants' partial summary judgment motion.

On April 28, 1992, CIS filed a motion seeking reconsideration of the April 9, 1992 order pursuant to Rule 60 of the Federal Rules of Civil Procedure. The applicable provisions of Rule 60 authorize a court to relieve a party from an order for "(1) mistake, inadvertence, surprise, or excusable neglect ... or (6) for any other reason justifying relief." Fed.R.Civ.P. 60.

The plaintiff contends that the illness of CIS President John Penker prevented them from properly responding in time. Counsel confesses that he was unaware of Local Rule 108(b) and now moves the Court to excuse his failure to respond.

The Court of Appeals has cited three factors to be considered when a Rule 60 motion for reconsideration is before a court. See Jackson v. Beech, 636 F.2d 831, 836 (D.C.Cir.1980). Specifically, the trial court is to examine (1) whether the default was willful, (2) the degree of prejudice to the opposing party, and (3) whether the alleged pleading was meritorious. Id.

The fact specific nature of this analysis has resulted in precedents both denying and granting reconsideration of a court order entered because of one party's failure to respond. Compare Betters v. Stickney, No. 91-1405, 1991 WL 241895, 1991 U.S. Dist.Lexis 14984 (D.D.C. October 22, 1991) ("slovenly practices" of counsel should not deprive party's right to hearing on the merits) with Lepkowski v. United States Dep't of Treasury, 804 F.2d 1310 (D.C.Cir.1986) (denial of reconsideration affirmed where trial court made several unsuccessful attempts to obtain an opposition memorandum); Davidson v. Columbia Hosp. For Women Medical Ctr., Inc., 1991 WL 277434, (D.D.C. December 11, 1991) (reconsideration denied where attorney failed to comply with Local Rule 108(b)); Byrd v. City of Fayetteville, 110 F.R.D. 71 (E.D.N.C.1986), aff'd, 819 F.2d 1137 (4th Cir.1987) (failure to comply with local rules in responding to summary judgment does not constitute excusable neglect).

In this case, the movant has failed to demonstrate that it is entitled to relief based on the criteria set forth in Beech. With respect to the first factor, counsel for CIS strenuously asserts that his disregard of Local Rule 108(b) was not willful. Without making a specific finding on this issue, the Court notes that during the period when CIS's response to the summary judgment was already past due, CIS twice filed discovery related pleadings with the Court. In one of these pleadings CIS acknowledged its failure to respond and promised to file an opposition in the near future. See April 21, 1992 "Reply to Defendants' Opposition to CIS's Motion to Enlarge Time for Discovery" at 7. If nothing else, CIS was aware that the Court might be curious as to why it had failed to respond to a pending motion. Other conduct by CIS during the course of this litigation has evidenced disregard for Court rules and procedures.¹

Turning to the second prong, it is clear that the defendants will be prejudiced if this Court grants the motion to reconsider. The defendants have prepared their trial strategy based on the assumption that they would not be litigating claims arising prior to August 25, 1987.

The plaintiff's failure properly to oppose motions submitted to the Court have placed the defendants in the unenviable position of having the scope of this case dramatically expanded shortly before trial. According to defense counsel, litigation of these new claims would double both the time needed to prepare for trial and the number of documents to be introduced. Granting the motion to reconsider would also require a reopening of discovery and inevitable discovery disputes if the track record of this litigation is any indication. The time, expense, and inconvenience to the defendants and the Court constitutes prejudice.

The plaintiff's conduct also compromises the judicial system as a whole and is unfair to other litigants appearing Court. See Lepkowski, supra, 804 F.2d at 1313 (violation of rule requiring response to motion in ten days by itself "indicates prejudice to an already overburdened system of litigation"; Ohliger v. United States, 308 F.2d 667, 667-68 (2d Cir.1962) (court has an "obligation to other litigants whose cases are necessarily delayed" by disregard for court rules).

On the third, and perhaps most important criterion, CIS has failed to demonstrate that the purported opposition to the defendants' summary judgment motion is meritorious. CIS does not deny the authenticity of the release forms at issue. These forms clearly and unambiguously state that CIS waives "any and all claims" for work done prior to the date contained in the release form. CIS conceded at oral argument that the release forms are not ambiguous on their face.

Instead, CIS urges the Court to look beyond the actual language of the release forms to find the ambiguity CIS asserts. CIS claims that the parties signed these forms with the implicit understanding that they did not actually waive CIS's right to payments for change orders and delay claims. In essence, CIS contends that the release forms apply only to work performed under the original terms of the contract and that the broad language of the release forms is meaningless.

In support of their...