Phoenix Engineering and Supply Inc. v. Universal Elec. Co., Inc.
| Decision Date | 09 January 1997 |
| Docket Number | No. 95-15518,95-15518 |
| Citation | 104 F.3d 1137 |
| Parties | 31 UCC Rep.Serv.2d 406, 97 Cal. Daily Op. Serv. 235, 97 Daily Journal D.A.R. 383, 97 Daily Journal D.A.R. 455 PHOENIX ENGINEERING AND SUPPLY INC., Plaintiff-Appellee, v. UNIVERSAL ELECTRIC COMPANY, INC., Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Jerry E. Hogan and Jacques-Alain G. Bronze, Hogan & Link, Agana, Guam, for defendant-appellant.
John C. Dierking, Agana, Guam, for plaintiff-appellee.
Appeal from the United States District Court for the Territory of Guam, Appellate Division, Unpingco, Goodwin, and Munson, Judges, Presiding. D.C. No. CV-94-00059A.
Before: WALLACE, SCHROEDER, and ALARCON, Circuit Judges.
Universal Electric Company, Inc. ("Universal") appeals from the judgment of the District Court of Guam, Appellate Division ("Appellate Division"). The Appellate Division affirmed the Superior Court of Guam's ("Superior Court") award of the unpaid amount due on account and prejudgment interest to Phoenix Engineering and Supply Inc. ("Phoenix"). The Appellate Division also affirmed the Superior Court's dismissal of Universal's counterclaim for damages due to breach of contract. Universal seeks reversal of the award of prejudgment interest because it was awarded improperly on an "open account" and there was no agreement between the parties to pay interest. Universal argues that the dismissal of its counterclaim should be reversed because the Superior Court's finding that Phoenix did not breach its contract with Universal was clearly erroneous and because the Superior Court erred by invoking the statute of frauds. We affirm the decision of the Appellate Division upholding the award by the Superior Court of prejudgment interest because we conclude that Guam law provides for prejudgment interest on amounts due under a contract. We also affirm the Appellate Division's judgment affirming the dismissal by the Superior Court of Universal's counterclaim because we conclude that it did not clearly err in finding that Phoenix did not breach its contract with Universal. Accordingly, we do not reach the question of the timeliness of the notice of breach, or whether the Appellate Division erred in affirming the Superior Court's ruling that Universal's counterclaim was barred by the statute of frauds.
We summarize the facts in the light most favorable to Phoenix as the prevailing party at trial. See United States v. Oba, 978 F.2d 1123, 1129 (9th Cir.1992) (). Universal is an electrical contractor with offices in the Territory of Guam. Phoenix is a vendor of commercial electrical fixtures and materials with offices in New Jersey. From 1986 to 1992, Universal contracted with Phoenix to supply materials and custom-made fixtures on various projects. When Universal bid on a contract, it provided Phoenix's agent in Guam with a bill of materials. 1 Phoenix's agent would then transmit the bill of materials to Phoenix. Upon receipt of the bill of materials, Phoenix would prepare a price quotation for Universal for its use in support of its bid. If Universal was awarded the contract, it would transmit a purchase order to Phoenix. In response, Phoenix would prepare a submittal of materials and manufacturers for presentation by Universal to the contracting party. Upon receipt of the approved submittals from Universal, Phoenix would order the listed materials.
In June 1988, the United States Navy awarded a contract to build six potable water wells ("the Navy project") to Marianas Drilling, Inc. ("MDI") as prime contractor. MDI selected Universal to act as the subcontractor to provide labor, materials, and equipment for the electrical work on the Navy project.
Universal entered into an agreement with Phoenix that it would supply the materials needed on the Navy project. After Universal was awarded the contract, but before receiving a purchase order, Phoenix accommodated Universal's request for submittals for two of the well sites. The Navy approved the submittals. Universal gave the submittals to Phoenix's agent on September 19, 1988. The agent then forwarded the submittals to Phoenix on September 22, 1988. Universal told Phoenix to proceed with ordering the materials for the two sites. The president of Phoenix told Phoenix's agent in Guam that it would not proceed without a purchase order. Phoenix did not receive a purchase order and a complete bill of materials for the Navy project until December 1, 1988. The purchase order was backdated to July 5, 1988. Universal informed the Navy that the purchase order was submitted to Phoenix on July 5, 1988.
In February 1989, MDI asked Phoenix to rush the order because of the approaching completion deadlines for the Navy project. In order to accomplish this request, Phoenix had to substitute materials. Phoenix prepared new submittals for Navy approval. The Navy approved all of the substituted materials and either used them in the Navy project or kept them for future use. Universal did not meet the Navy project completion deadlines. Most of the materials arrived in Guam between February 1989 and August 1989. One shipment of minor special-order items arrived in October 1989.
Universal failed to pay Phoenix for the materials supplied for the Navy project and others between 1989 and 1992, despite numerous demands from Phoenix. In 1993, Phoenix filed a complaint in the Superior Court for the unpaid amount plus prejudgment interest. Universal filed a counterclaim for damages resulting from the late delivery of materials for the Navy project. Universal used the $76,650 in liquidated damages assessed against it by MDI for the failure to meet the Navy's deadlines as the measure of the damages caused by Phoenix's alleged breach.
After a bench trial, the Superior Court adopted Phoenix's proposed findings of fact and conclusions of law. The court awarded Phoenix $203,901.97, as the amount due on its contracts with Universal, and $66,202.41 in prejudgment interest. The court also dismissed Universal's counterclaim.
In its appeal to the Appellate Division, Universal contended that the Superior Court erroneously awarded prejudgment interest because the parties did not agree that Universal was obligated to pay interest on late payments and because Guam law does not provide for prejudgment interest on an "open account." Universal contended that the Superior Court clearly erred in finding that Phoenix timely delivered the Navy project materials and that Universal accepted the goods without giving notice of breach. Universal also contended that the Superior Court erred by invoking the statute of frauds to dismiss its counterclaim. The Appellate Division held that the Superior Court's findings were not clearly erroneous and that it did not err by awarding prejudgment interest and dismissing the counterclaim.
Appeals from the Superior Court of Guam are determined by the Appellate Division of the District Court of Guam. 48 U.S.C. § 1424-3(b). Final decisions of the Appellate Division are reviewed by the United States Court of Appeals for the Ninth Circuit. 48 U.S.C. § 1424-3(c). We have previously concluded that we must apply the de novo standard of review to the Appellate Division's interpretation of Guam law. People of Territory of Guam v. Yang, 850 F.2d 507, 509-11 (9th Cir.1988) (en banc).
We have not yet been called upon to determine our standard of review regarding the Superior Court's findings of fact. The Appellate Division concluded that the Superior Court's factual findings were not clearly erroneous. In Yang, we noted that adoption of the de novo standard of review for questions of local law "prevents our applying a standard of review in conflict with that applied by the Third Circuit in its review of Appellate Division decisions of the District Court of the Virgin Islands." 850 F.2d at 510.
In Bennerson v. Small, 842 F.2d 710 (3d Cir.), cert. denied, 488 U.S. 845, 109 S.Ct. 121, 102 L.Ed.2d 94 (1988), the Third Circuit held that it was required to use the clearly erroneous standard in reviewing the determinations of the Appellate Division regarding the territorial court of the Virgin Island's findings of fact. Id. at 713. We agree with the Third Circuit. As an appellate court, the Appellate Division cannot make findings of fact. Thus, the only manner in which we can determine whether the Superior Court erred in its findings of fact is to review them for clear error. If the Superior Court did not clearly err in its findings of fact, then we must affirm the judgment of the Appellate Division.
During oral argument, counsel for Universal contended that the Superior Court's findings of fact were unclear and ambiguous. Under Guam law, a party may file a motion to amend or clarify a trial court's findings of fact. Guam R.Civ.P. 52(b). Universal failed to move for amendment or clarification of the findings adopted by the Superior Court. An appellant may not challenge the specificity of the court's findings if he or she failed to make a motion for more specific or additional findings. Reliance Fin. Corp. v. Miller, 557 F.2d 674, 681-82 (9th Cir.1977). Accordingly, we do not review Universal's challenge as to the clarity or accuracy of the findings.
Universal contends that "close scrutiny" of the record is required because the Superior Court adopted Phoenix's proposed finding of facts. We agree. When a trial court adopts a party's proposed findings, "the clearly erroneous standard applies, although 'close scrutiny' of the record is appropriate." Kern Oil and Refining Co. v. Tenneco Oil Co., 792 F.2d 1380, 1386 (9th Cir.1986), cert. denied, 480 U.S. 906, 107 S.Ct. 1349, 94 L.Ed.2d 520 (1987). Consistent with this principle, we have closely scrutinized the record.
Universal contends that the Appellate Division erred in affirming the...
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