Summary
The First Circuit reviewed a bench-trial judgment awarding Reliance Steel Products Company damages against a surety for unpaid construction materials supplied for the Mt. Hope Bridge project. The court upheld the district court’s factual findings regarding project delays and defective materials under the clearly erroneous standard, but held that the calculation of the setoff improperly omitted overhead and profit on riser bar repairs. The court directed entry of a modified judgment for $447,081.54, plus interest and costs.
Topics
Practice areas
Questions Presented
- Whether the district court clearly erred in finding that Reliance did not cause or materially contribute to delays in the bridge project.
- Whether the district court clearly erred in limiting National Fire's setoffs for losses allegedly caused by defective or misfabricated goods.
- Whether the riser-bar repair setoff was incorrectly calculated by omitting applicable overhead and profit.
Holdings
- The district court's finding that Reliance did not cause delays warranting an offset was supported by the evidence and was not clearly erroneous.
- The appellate court would not disturb the district court's factual findings or limited setoffs where the evidence supported them and the appellant merely reargued the weight and significance of the evidence.
- A claimed element of loss must be computed in a rational manner upon a firm factual basis; generalized evidence of labor, equipment, or expense is insufficient without a concrete showing of actual additional loss or diversion.
- The district court clearly erred by omitting overhead and profit from the riser-bar repair credit; the credit had to be increased to $41,016.46, producing a total setoff of $60,923.20 and a judgment of $447,081.54 plus interest and costs.
Key quotations
“Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous.”
“a claimed element of loss must be computed in some rational way upon a firm factual base.”
Factual background
The Rhode Island Turnpike and Bridge Authority undertook renovation of the Mt. Hope Bridge and awarded the general contract to Dick Corporation, whose payment bond was issued by National Fire. Reliance supplied specialty steel items, but project delays occurred and Reliance was not fully paid. The district court found that Reliance did not cause the delays, while some riser bars and grid panels supplied by Reliance were defective and warranted repair-related setoffs.
Procedural history
The Rhode Island Turnpike and Bridge Authority awarded Dick Corporation a bridge-renovation contract, and National Fire provided a payment bond. Reliance, a material supplier, sued the surety after remaining unpaid. The district court found that Reliance did not cause or materially contribute to project delays, found limited defects in certain riser bars and grid panels, awarded Reliance $508,000.74 less $53,804.64 in setoffs, and entered judgment for $454,196.10. The First Circuit affirmed the factual findings and most of the judgment but held that the riser-bar repair offset had to include applicable overhead and profit, directing entry of judgment for $447,081.54 plus interest and costs.
Remand instructions
Vacate and reenter the judgment to reflect a balance owed by National Fire to Reliance of $447,081.54, plus interest and costs, incorporating a total setoff of $60,923.20. The district court may make any other adjustments necessary in light of the opinion.