Nohcra Communications, Inc. v. Am Communications, Inc.

909 F.2d 1007, 1990 U.S. App. LEXIS 19426, 1990 WL 110263
CourtCourt of Appeals for the Seventh Circuit
DecidedOctober 25, 1990
Docket89-2543
StatusPublished
Cited by3 cases

This text of 909 F.2d 1007 (Nohcra Communications, Inc. v. Am Communications, 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
Nohcra Communications, Inc. v. Am Communications, Inc., 909 F.2d 1007, 1990 U.S. App. LEXIS 19426, 1990 WL 110263 (7th Cir. 1990).

Opinions

ALLEN SHARP, Chief District Judge.

This action involves the breach of a contract to dig ditches, rather sophisticated ditches that constitute an underground cable television system. The plaintiff in this action, Nohcra Communications, Inc. (Noh-cra) entered into a subcontract agreement with defendant, AM Communications, Inc. (AM) to install cable television equipment. Several Chicago suburbs had franchised with Warner Amex Cable Communications, Inc. (Warner Amex) to bring cable television to the residents of Buffalo Grove, Elk Grove Village, Hoffman Estates, Palatine and Rolling Meadows. Warner Amex sought bids from various contractors to serve as general contractor for the entire [1009]*1009project. AM was the successful bidder. As general contractor, AM hired Nohcra (along with other subcontractors) to perform the cable installation. Nohcra was assigned underground (as opposed to aerial) cable work.

Nohcra’s subcontract is an elaborate agreement containing several schedules that specify what (and when) work is to be completed, to what specifications, and for what price. The agreement is dated March 26, 1982, and provides that its provisions are to be performed and construed according to the laws of the Commonwealth of Pennsylvania.2 Nohcra commenced its work in mid-April. On July 9, 1982, AM orally notified Nohcra it was terminating their agreement. Three days later AM indicated in writing four reasons for the termination: (1) Nohcra failed to construct the required ten thousand feet per day; (2) Nohcra failed to install cable in continuity; (3) Nohcra generated excessive homeowner complaints; and (4) Nohcra lacked experienced personnel.

On August 25, 1982, after AM had failed to pay the vast majority of Nohcra’s invoices, Nohcra filed a five-count complaint against AM alleging breach of contract. Counts I, II and III seek compensation for work performed prior to the termination. Counts IV and V request lost profits resulting from the termination. In January 1983 AM filed a counterclaim against Nohcra and its president for breach of contract. AM asks for recovery of moneys spent by AM to repair Nohcra’s faulty work and for damages due to Nohcra’s fraudulent misrepresentations in negotiating the subcontract.

Following a bifurcated bench trial on the issues of liability and damages, the district court found for Nohcra and awarded compensatory damages (for work performed and lost profits) and prejudgment interest. The court dismissed AM’s counterclaim, holding that AM had failed to prove any material misrepresentation. The district court’s jurisdiction was based on diversity of citizenship under 28 U.S.C. § 1332.

AM appeals, presenting five issues for our review: two relate to liability; two to damages; and one to the dismissal of the counterclaim.

I. LIABILITY PHASE

A.

The district court heard testimony in the liability phase of the trial that spanned six days. After reviewing the evidence, the district court held that AM’s failure to pay Nohcra’s invoices constituted a material breach of the subcontract agreement. Findings- of Fact and Conclusions of Law (Findings) at 6. On appeal, AM argues that, in an action for breach of contract (as opposed to quantum meruit), the plaintiff is required to prove more than the mere performance of some work without being paid. Rather, Nohcra must prove it performed all of its contractual obligations. Girard Bank v. John Hancock Mutual Life Ins. Co., 524 F.Supp. 884, 891 (E.D.Pa. 1981), aff'd, 688 F.2d 820 (3d Cir.1982), citing Mellon Bank, N.A. v. Aetna Business Credit, 619 F.2d 1001, 1007-08 (3d Cir.1980); 5A Corbin on Contracts § 1228, at 507-08 (1964).

AM characterizes Nohcra’s duties under the contract as furnishing all labor, tools, equipment, and necessary experience and personnel to produce a continuous and usable portion of the Warner Amex system to the satisfaction of AM, in a timely manner, and in accordance with the contract’s specifications. AM insists Nohcra did not perform any of these obligations. Appellant’s Brief at 14.

The district court found that Nohcra had performed its obligations in a commercially reasonable and acceptable manner. Findings at 6. Addressing AM’s reasons for termination, the court held that (1) Nohcra did not construct ten thousand feet per day because it was not assigned enough work to sustain that rate of production; also, [1010]*1010Nohcra encountered delays in obtaining utility locates and design maps that were entirely beyond its control; (2) Nohcra was not responsible for lack of continuity because it performed its work in accordance with assignments from Warner Amex and AM; also, delays in obtaining design prints and utility locates precluded Nohcra’s installation of cable in continuous runs; (3) although Nohcra generated some homeowner complaints, which is to be expected when installing underground cable systems, there was not an excessive number of complaints; and (4) AM failed to prove that Nohcra misrepresented its experience. AM challenges these findings and asks us to reverse the district court’s judgment.

Rule 52(a) of the Federal Rules of Civil Procedure provides the pertinent standard of review: “Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.” A finding is clearly erroneous when, “although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985) (citations omitted). Speaking for the Court in Anderson, Justice White continued:

This standard plainly does not entitle a reviewing court to reverse the finding of the trier of fact simply because it is convinced that it would have decided the case differently. The reviewing court oversteps the bounds of its duty under Rule 52(a) if it undertakes to duplicate the role of the lower court.... If the district court’s account of the evidence is plausible in light of the record reviewed in its entirety, the court of appeals may not reverse it even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Where there are two permissible views of the evidence, the factfinder’s choice between them cannot be clearly erroneous (citations omitted).

Id. at 573-74, 105 S.Ct. at 1511-12; see also Graphic Sales, Inc. v. Sperry Univac Div., 824 F.2d 576, 580 (7th Cir.1987). We note that in no way does the majority opinion in Anderson, or the concurring opinions of Justices Powell and Blackmun, diminish the important obligation of federal appellate courts to engage in a comprehensive review of the entire record.

The district court heard testimony from Nohcra’s president and project supervisor.

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909 F.2d 1007, 1990 U.S. App. LEXIS 19426, 1990 WL 110263, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nohcra-communications-inc-v-am-communications-inc-ca7-1990.