Allen & O'Hara, Inc. v. Barrett Wrecking, Inc.

898 F.2d 512
CourtCourt of Appeals for the Seventh Circuit
DecidedFebruary 13, 1990
DocketNos. 88-2509, 88-2558 and 88-2559
StatusPublished
Cited by18 cases

This text of 898 F.2d 512 (Allen & O'Hara, Inc. v. Barrett Wrecking, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allen & O'Hara, Inc. v. Barrett Wrecking, Inc., 898 F.2d 512 (7th Cir. 1990).

Opinion

FLAUM, Circuit Judge.

This diversity case concerns a contract between Allen & O’Hara (A & 0) and Barrett Wrecking (Barrett) for the demolition of a building owned by Northwestern Mutual Life Insurance (NML). After a six week trial, the jury issued a special verdict finding that A & 0 had wrongfully terminated the contract and that NML had tor-tiously interfered with the contract. The district court granted NML judgment n.o.v. on the tort claim. The principal issue in this case involves the proper measure for contract damages under Wisconsin law. In addition, the parties appeal the district court decisions regarding tortious interference with contract, statutory conspiracy, punitive damages, payment of costs, attorney’s fees, and prejudgment interest for both contract damages and conversion damages. For the reasons stated below, we affirm except with respect to the prejudgment interest on the contract damages.

Facts and Proceedings Below

NML hired A & 0, a wholly owned subsidiary of NML, to act as its general contractor for the renovation of NML’s downtown Milwaukee office. As part of the renovation, A & 0 solicited bids for the demolition of part of the office, giving tours of the building and allowing potential bidders to examine the building’s blueprints. Barrett submitted a bid of $595,-000, slightly below its anticipated cost of demolition on the basis that it could cover its costs through sale of the salvage. Barrett’s bid was significantly below other bids, so A & O and Barrett entered into a demolition contract.1

The contract called for demolition work to begin in May of 1979 and to finish in September 1979. NML did not, however, vacate the building until mid-to-late August and full scale demolition did not begin until August 27, 1979, at which time Barrett submitted a four month completion schedule.

[515]*515Almost immediately upon commencement of the demolition, Barrett began to encounter unanticipated conditions which caused delays. These conditions included a vault that was constructed of steel, concrete and copper, and heavy structural beams designed to support eight additional stories. Complaints regarding excessive dust, noise, and vibrations caused A & 0 to instruct Barrett to employ procedures to reduce these conditions which slowed the demolition process further.

The delays pushed the completion date further and further back, until Barrett finally submitted a schedule that called for completion in July 1980. Eventually, Francis Ferguson, President of NML, expressed his concern over the delays to A & 0, and on May 9, 1980, A & 0 terminated the contract.

A & 0 promptly sued Barrett and State Surety (Barrett’s bonding company) for breach of contract. It also named, in his individual capacity, Thomas Barrett, president of Barrett Wrecking, as a defendant. Barrett counterclaimed for breach of contract. Their dispute centers around which party was responsible for the delays and who should bear the additional costs of demolition caused by the delays and the subsequent changes in procedure. The contract was a fixed-price contract and called for formal written change orders for any change in price. Even so, Barrett claims that it is entitled to payment for extra costs because the parties waived the contract provisions calling for written change orders.

NML intervened as of right in the action because it was potentially liable as an in-demnitor of A & 0. Barrett counterclaimed against NML for tortious interference with business contract relationships, and (along with Thomas Barrett) common law and statutory conspiracy to damage reputation, trade and business.

The district judge dismissed the common law conspiracy claims on a motion for partial summary judgment. Following a six week trial, the jury returned a special verdict finding that A & 0 had breached the contract by terminating it without justification. They awarded compensatory damages of $852,000. They further found that A & O had wrongfully retained salvage belonging to Barrett in the amount of $62,-798. In addition, the jury found that NML had wrongfully interfered with the contractual relationship between Barrett and A & O, with damages of $1,400,000.

The district judge granted judgment n.o.v. on the tortious interference claim, finding that NML was privileged to interfere with the contract and therefore the claim failed as a matter of law. He also denied motions by Barrett for prejudgment interest and for State Surety’s attorney’s fees.

Analysis

1. Preliminary Matters

Before considering the proper measure of damages, we dispose of Barrett’s counterclaims. Except for the claim for prejudgment interest on the contract damages, none of these claims has merit and we affirm the district court.

Barrett’s first claim is that the judge should not have granted a directed verdict to the plaintiffs but should have submitted its conspiracy claim to the jury. We review this decision de novo. Selle v. Gibb, 741 F.2d 896 (7th Cir.1984).

Initially, we note that district courts, in general, should be reluctant to remove an issue from the jury. Nevertheless, where there is not substantial evidence to support the verdict, a directed verdict or, alternatively, a judgment n.o.v. is appropriate. See id. at 900; Erwin v. County of Manitowoc, 872 F.2d 1292, 1295 (7th Cir.1989); Brady v. Southern Railway, 320 U.S. 476, 64 S.Ct. 232, 88 L.Ed. 239 (1943). “All the evidence, taken as a whole, must be viewed in the light most favorable to the non-moving party. This evidence must provide a sufficient basis from which the jury could have reasonably reached a verdict without speculation or drawing unreasonable inferences which conflict with the undisputed facts.” Selle, 741 F.2d at 900. A judgment n.o.v. is appropriate only if this is not the case.

[516]*516Barrett’s conspiracy claim is based on a civil cause of action deriving from a criminal conspiracy statute. Wis.Stat. § 134.01; Radue v. Dill, 74 Wis.2d 239, 246 N.W.2d 507, 511 (1976). To establish this claim, Barrett needed to prove that NML conspired or acted in concert with at least one other individual or entity to willfully injure Barrett (or Thomas Barrett) in their reputations or businesses and that injury resulted. Id.

Barrett’s proof relies entirely on circumstantial evidence which is sufficient to prove a claim of conspiracy, Lange v. Heckel, 171 Wis. 59, 175 N.W. 788, 789-90 (1920), but it is necessarily weaker than direct evidence. In Wisconsin, if circumstantial evidence supports equal inferences of lawful action and unlawful action, then the claim of conspiracy is not proven. See Scheit v. Duffy, 248 Wis. 174, 176, 21 N.W.2d 257 (1946). We believe that at best this is the case here.

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Bluebook (online)
898 F.2d 512, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allen-ohara-inc-v-barrett-wrecking-inc-ca7-1990.