Franchi Construction Co., Inc. v. Combined Insurance Company of America

580 F.2d 1
CourtCourt of Appeals for the First Circuit
DecidedNovember 11, 1978
Docket77-1242
StatusPublished
Cited by27 cases

This text of 580 F.2d 1 (Franchi Construction Co., Inc. v. Combined Insurance Company of America) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Franchi Construction Co., Inc. v. Combined Insurance Company of America, 580 F.2d 1 (1st Cir. 1978).

Opinions

MYRON L. GORDON, District Judge.

This action was commenced in superior court, Middlesex County, Massachusetts, by the plaintiff-appellee Franchi Construction Company, Inc. (Franchi). The defendant-appellant Combined Insurance Company of America (Combined) removed the action to the United States district court for the district of Massachusetts, pursuant to 28 U.S.C. § 1441, claiming diversity of citizenship as the jurisdictional basis. 28 U.S.C. § 1332. The action arose out of a contract entered into on June 3,1969, between Fran-chi, the general contractor, and Combined, the owner, for the construction of an office and commercial building known as Hearthstone Plaza in Brookline, Massachusetts. Construction of the building continued from 1969 until this action was commenced in February, 1972. Of a total adjusted contract price in excess of $5,000,000, Combined withheld from Franchi the sum of $277,973.87 as retainage for assertedly incomplete or defective work.

Count I of Franchi’s declaration sought damages on a contract theory in connection with the construction of the building; count II sought damages on a theory of quantum meruit; and count III claimed damages for construction delays allegedly caused by Combined. Combined filed an answer and a counterclaim, the latter claiming, inter alia, damages for construction delays allegedly caused by Franchi. In a supplemental pretrial order filed October 21,1975, both parties waived their claims for damages purportedly occasioned by construction [3]*3delays. This removed count III of Fran-chi’s declaration and count I of Combined’s counterclaim from contention in the lawsuit.

A 13-day trial commenced on June 4, 1976. At the close of the evidence, the trial court ordered the plaintiff to make an election between counts I and II of the declaration. Franchi elected to proceed on count II, in quantum meruit. The case was submitted to the jury in the form of 31 special interrogatories, 14 of which had already been answered by the trial judge. After responding to the interrogatories, the jury was discharged. Thereafter, in a memorandum dated August 23, 1976, the district judge determined that he had ruled erroneously at trial on the measure of the plaintiff’s damages, and in order to rectify this error he directed that the trial “resume” for the purpose of taking additional testimony.

The “resumed” trial was held before a different jury on January 18, 1977. This second jury answered a set of three special interrogatories. Thereafter the trial judge issued a “memorandum on the calculation of damages and order for judgment” dated March 29, 1977, in which he utilized the findings of both the first and second juries as well as certain stipulations of the parties in arriving at the plaintiff’s damages. Judgment was entered for Franchi, in accordance with the March 29, 1977, memorandum, in the amount of $248,972.36, plus interest and costs. Combined has appealed.

Combined urges on this appeal that the trial court erred (1) in denying its motion for the entry of judgment in the amount awarded to Franchi by the first jury; (2) in ordering a resumed trial before the second jury; (3) in denying its motion for a new trial; and (4) in “performing a recalculation of damages . . . purportedly based on the findings of the first and second juries.” These four contentions present common questions about Massachusetts law on the measure of damages in quantum meruit and about the separation of issues for trial before different juries. Additionally, Combined asserts error in the trial court’s determinations (5) refusing to grant its motion for a directed verdict at the close of Fran-chi’s opening statement; (6) ruling that Franchi had no obligation to paint the garage ceilings in the Hearthstone Plaza; (7) permitting the jury to determine the amount by which the punch-list items were overvalued; (8) excluding Combined’s exhibit 2A for identification; and (9) precluding Combined from presenting evidence on spalling concrete at the resumed trial.

For the reasons appearing below, we conclude that the judgment of the district court should be reversed, and the case should be remanded for a new trial. In view of this determination, we do not reach issues (6) through (9), relating to alleged errors in the course of the first and second trials.

I. BACKGROUND

The case was submitted to the first jury on a series of special interrogatories, certain of which had previously been answered by the trial judge. The first interrogatory asked the jury to determine whether Fran-chi “substantially perform[ed] the contract with the intention in good faith to do all that it agreed to do.” Having responded “Yes” to that question, the jury proceeded to answer those of the remaining 30 questions to which answers had not been supplied by the district judge. Each of these questions required a determination of the amount owing to Franchi for a particular item of work. Based on all of the answers, the total sum found due to Franchi was $149,309.50.

However, judgment was not entered in that amount. Instead, in the August 23, 1976, memorandum, the trial judge indicated that he had ruled incorrectly on the measure of Franchi’s damages on a quantum meruit theory of recovery and had failed “to put the evidence of the thirty disputed items in the proper context.” Discarding an earlier ruling made by him at trial that “the plaintiff could only recover the amount which the jury awarded since there was no other evidence of fair value of the work,” the trial judge held the correct measure of damages in quantum meruit under Massachusetts law to be as follows:

[4]*4“The plaintiff is to recover the value of the work to the defendant, but the mode of arriving at that value is to start with the contract price, and deduct from it the cost of completing the work according to specifications, and where that can not be done, by deducting ‘so much from the contract price as the work was worth less to the owner.’ ” (emphasis in original)

The trial judge found that awarding Franchi the sum of the answers to the special interrogatories “may result in a possible windfall to the defendant.” Conversely, awarding Franchi the amount it claimed “would leave the defendant to bear alone the burden of the Court’s error” since, in the trial court’s view, the defendant relied on the original ruling and failed to present certain evidence at trial. Inasmuch as the jury had returned answers to special interrogatories instead of to a general verdict, the court determined that the trial should be “resumed” for receipt of evidence on “ . . . the defendant’s allegations of

other defective and deficient work, defendant’s allegations of defective and deficient work that can not be corrected, and the allegations of both parties as to the diminution in fair value to the defendant of the work as a result of defective or deficient work which can not be corrected.”

The resumed trial was conducted before a new jury on January 18,1977. That second jury heard testimony on three additional items of work and returned answers to additional special interrogatories totaling $2,588.01.

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Bluebook (online)
580 F.2d 1, Counsel Stack Legal Research, https://law.counselstack.com/opinion/franchi-construction-co-inc-v-combined-insurance-company-of-america-ca1-1978.