Brunswick Topsham Water Dist. v. Layne Christensen Co.

• Court: Superior Court of Maine
• Decided: May 7, 2009
• Docket: CUMcv-07-333
• Status: Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT CUMBERLAND, ss. CIVIL ACTION - OJ". ',' '. :": , DOCKET NO. CV-07-333 ./ -----------------'.""".,-~:. __ . ,; '.

BRUNSWICK TOPSHAM WATER ZGOq j'\'{ - -1 P Lt: Ol DISTRICT,

Plaintiff, ORDER ENTERING JUDGMENT v. AGAINST PLAINTIFF BRUNSWICK TOPSHAM WATER LAYNE CHRISTENSEN COMPANY, DISTRICT and TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA,

Defendants.

Pursuant to a jury verdict dated February 6, 2009, it is hereby ORDERED that judgment

shall be entered in favor of Defendants Layne Christensen Company ("Layne") and Travelers

Casualty and Surety Company of America, and against Plaintiff Brunswick Topsham Water

District ("District") on the claims set forth in the Complaint. Judgment shall enter in favor of

Layne on Counts I, II, III and IV of the Counterclaim. Judgment shall therefore enter against the

District and in favor of Layne as follows:

Contract balance (Well Construction Contract): $11,132.75 Contractual interest @18% starting 7/9/05: 2,671.06 1% per m(lllth penalty starting 7/9/05: 4,599.45 Subtotal: $ 18,403.26

Contract balance (Redevelopment Contract): $13,370.00 Prejudgment interest @ 6.97% starting 3/14/06: 2,494.17 1% per month penalty starting 3/14/06: 4,412.77 Subtotal: $ 20,276.94

Dated: S\11 et1 STATE OF MAINE . • . ' '.. ' 1.. ',- SUPERIOR COURT I. '.: CUMBERLAND, ss. ' ... "-- r ;, CIVIL ACTION Docket No. CV-07-333 J r 4: 01 J

BRUNSWICK TOPSHAM WATER DISTRICT,

Plaintiff

v. POST-JUDGMENT ORDER

LAYNE CHRISTENSEN COMPANY and TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA,

Defendants

After trial, the jury returned a verdict on February 6, 2009, finding that Layne

Christensen Company (Layne) did not breach its contracts with Brunswick Topsham

Water District (the District) but that the District breached its agreements with Layne and

awarding damages in the amount of $11 ,132.75 for breach of the well construction

contract and $13 ,370 for breach of the redevelopment contract. The District has renewed

its motion for a judgment as a matter of law and Layne has filed a motion for fees and

expenses. Both motions are opposed.

Motion for Judgment as a Matter of Law

The District contends in its motion that (1) the contract permitted it to withhold

payment, (2) it withheld payment that was proportional and reasonable in light of the

amount in dispute consistent with the Prompt Payment Act and (3) there was no evidence

that the District acted in bad faith. Rule 50(a) provides that the court may grant judgment as a matter of law "if the

court determines that, viewing the evidence with all reasonable inferences therefrom most

favorably to the party opposing the motion, a jury could reasonably find for that party on

an issue that under substantive law is an essential element of the claim." M.R.Civ. P.

50(a). A party seeking a judgment as a matter of law after trial has the burden of

establishing that "the adverse jury verdict was' clearly and manifestly wrong.'" Maine

Energy Recovery Company v. United Steel Structures, Inc. 1999 ME 31, ~ 5, 724 A. 2d

1248, (quoting Townsendv. Chute Chem. Co., 1997 ME 46, ~ 8, 691 A.2d 199,202).

The court must deny the motion "if any reasonable view of the evidence and those

inferences that are justifiably drawn from that evidence supports the jury verdict".

Townsend, 1997 ME 46, ~ 8, 691 A. 2d at 202. The court reviews the evidence in the

light most favorable to the party opposing the motion and denies the motion if "any

reasonable view of the evidence could sustain a verdict for the opposing party." Maine

Energy Recovery, 1999 ME 31, ~ 6.

The Prompt Payment Act provides for the prompt payment of amounts invoiced

in construction matters and provides an incentive to an owner to make timely payments.

The Act provides for penalties against owners who do not make timely payments. See 10

M.R.S.A. §§ 1111-1120. The available remedies include prejudgment interest at an

enhanced rate, a 1% monthly penalty on amounts wrongfully withheld, and attorney fees.

10 M.R.S.A. §§ 1113(4), 1118(2), 1118(4). "Because the remedies provided by the

prompt payment provisions are intended to augment damages that are traditionally

available for contract or quantum meruit claims, it is not sufficient for the party seeking

penalties to prove that work was completed and that an outstanding balance exists."

2 Jenkins, Inc. v. Walsh Bros., 2001 ME 98, , 24. In seeking penalties, the contractor must

prove (1) the services were performed in accordance with the agreement or understanding

of the parties, (2) the contractor had invoiced the work, and (3) the owner failed to make

payment within twenty days after receipt of the invoice. 10 M.R.S.A. § 1113(3).

Penalties may not be imposed on any amount withheld that "bears a reasonable relation to

the value of any claim held in good faith." 10 M.R.S.A. § 1118(3).

Viewing the evidence and all justifiable inferences in the light most favorable to

Layne, the jury reasonably could have found that Layne performed the services called

for in the contract, Layne invoiced the work and the District never paid for the work.

Layne completed the work due under the construction contract and the District believed

that Layne had achieved final completion. The District received Layne's final invoice,

dated March 31, 2005, in April 2005. Layne submitted a revised final invoice on June 8,

2005 and all of Layne's work was completed by the time that the District received the

revised final bill. Wright-Pierce, the District's engineer, had responsibility for reviewing

Layne's invoices and making recommendations to the District for payment of Layne's

invoices. Wright-Pierce e-mailed Layne that its invoice would be processed; yet, Wright­

Pierce did not process the invoice. Wright-Pierce did not communicate to Layne that its

invoice would not be paid or why it was not being paid. The contract for the well

construction work required the engineer (Wright-Pierce) to return unacceptable invoices

to the contractor (Layne), stating in writing the reasons for refusing to recommend final

payment. Wright-Pierce did not send to Layne such a notice with regard to either its

March 31, 2005 invoice or its June 8, 2005 invoice. The District held the invoice for

nearly a year before it developed the belief that Layne did not perform the work properly.

3 In short, the jury reasonably could have found that the District did not timely pay the

invoice due under the well construction contract.

With regard to the Redevelopment Contract, the jury also reasonably could have

found that Layne entered into a contract for redevelopment work, Layne performed the

work required under the redevelopment contract and the District received Layne's

February 2006 invoice for the redevelopment work. The District withheld payment on

the redevelopment contract only because of concerns about Layne's work on the separate

well construction contract. The court instructed the jury, without objection from the

District, that the District was not permitted to deduct funds due on one contract to offset

any obligation under a separate contract. No other reason was offered for withholding

funds on the redevelopment contract. Thus, the jury reasonably could have found that the

District did not pay the development contract in violation of the Prompt Payment Act.

Viewing the evidence and all justifiable inferences in the light most favorable to

Layne, the jury reasonably could have found that Layne completed its work under the

well construction contract and the redevelopment contract, Layne submitted final

invoices to the District and the District did not pay the invoices within 20 days of receipt

of the final invoices. Further, the jury reasonably could have concluded that the District

did not have a good faith claim when it did not pay Layne's invoices within 20 days of

receipt of the final invoices. The District has failed to establish that the adverse jury

verdict was clearly and manifestly wrong.

Motion for Fees and Expenses

Layne seeks its attorney's fees and expenses in defending this action and in

pursuing its counterclaims. The District argues against a full award of attorney's fees

4 because Layne's claims under the Prompt Payment Act were a small part of this case.

Although this multi-day trial focused on whether Layne was responsible for the sand in

the well water, the only way Layne could have established that the contract balances were

due was to prove that Layne was not responsible for the appearance of sand in the well

water. Thus the claims and counterclaims in this case were inextricably entwined.

The Prompt Pay Act provides that the "substantially prevailing party in any

proceeding to recover any payment within the scope of this chapter must be awarded

reasonable attorney's fees in an amount to be determined by the court ... together with

expenses." 10 M.R.S.A. § 1118(4). Layne is the prevailing party on all claims in this

action, and as such is entitled to its attorney's fees and expenses. In order to prevail on

Layne's claim for payment, Layne had to defend against and defeat the District's claim

that Layne's work was defective. Because of the complexity of this case, the significant

effort required and the interrelationship of the District's claim that Layne performed

defectively under the construction contract and Layne's claims that the District failed to

pay the invoices due under both contracts, Layne is awarded its attorney's fees in the

amount of $99,831.72.

The parties' disagree whether "expenses" include Layne's expenses for its expert

witnesses. The court rejects Layne's argument that the Prompt Pay Act's use of the term

expenses rather than costs means it is entitled to all of the expenses related to the experts.

The court concludes that the narrow and explicit language relating to "reasonable expert

fees and expenses" in 14 M.R.S.A. § 1502-C and 16 M.R.S.A. § 251 controls the

question of what expert expenses are covered. Those statutory "provisions authorize only

fees that are directly related to attendance at trial." Poland v. Webb, 711 A. 2d 1278,

5 1281 (Me. 1998). Records review, travel time and expenses are not permitted costs under

16 M.R.S.A. § 251. Trial preparation time is also not allowed. See Poland v. Webb, 711

A. 2d at 1281. Thus, Layne is awarded $3,900 for the fee charged by Frank Getchell for

trial attendance and $620 for David Mostoller for trial attendance. Layne is denied costs

for items such as research, preparation of reports, deposition and trial preparation and

attendance at depositions because these costs and expenses are not authorized by 14

M.R.S.A. § 1502-C, 16 M.R.S.A. § 251 or M.R.Civ.P. 54(f). The balance of Mr. Getchell

and Mr. Mostoller's fees are not allowed.

Finally, Layne is allowed $5,127 of expenses related to trial exhibits, transcripts

and service of process.

The entry is:

Plaintiff's motion for judgment as a matter of law is denied.

Defendant's request for attorney's fees and expenses is allowed as follows:

Defendant is awarded attorney's fees in the amount of $ 99,831. 72. Defendant is awarded expert fees for trial attendance in the amount of $ 4,520. Defendant is awarded additional costs and expenses in the amount of $5, 127.

Date: May 7, 2009 A. Wheeler, Justice ine Superior Court

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