Westcott v. Firemen's

• Court: Court of Appeals for the First Circuit
• Decided: June 25, 1993
• Docket: 93-1011
• Status: Published

Opinion

USCA1 Opinion

UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

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No. 93-1011

                             WESTCOTT CONSTRUCTION CORP.,

                                Plaintiff, Appellant,

                                          v.

                            FIREMEN'S FUND OF NEW JERSEY,

                                 Defendant, Appellee.

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                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF RHODE ISLAND

[Hon. Francis J. Boyle, U.S. District Judge]
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                                 ____________________

                                        Before

                               Torruella, Circuit Judge,
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                            Oakes,*, Senior Circuit Judge,
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                               and Cyr, Circuit Judge.
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                                 ____________________

            Peter  Lawson   Kennedy  with   whom  Adler   Pollock  &   Sheehan
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        Incorporated was on brief for appellant.
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            Shelia High King  with whom Bert J.  Capone, Michael P. Duffy  and
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        Peabody & Arnold were on brief for appellee.
        ________________

____________________

                                    June 25, 1993
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        _____________________

        *Of the Second Circuit, sitting by designation.

OAKES,   Senior   Circuit    Judge.       Westcott
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             Construction Co.  ("Westcott") appeals from an  order of the

             United  States  District Court  for  the  District of  Rhode

             Island, Francis  J. Boyle, Judge, denying  Westcott's motion
                                        _____

             for  summary  judgment  and  granting   defendant  Firemen's

             Insurance ("Firemen's") cross-motion  for summary  judgment.

             Westcott  sought to enforce the  terms of a performance bond

             executed by Firemen's on behalf of Westcott's subcontractor,

             Crouse Combustion  Systems ("Crouse"), in which Westcott was

             named  as  obligee.   In particular,  Westcott sought  to be

             indemnified for payments made to the City of Cranston, Rhode

             Island ("Cranston"), for  damages suffered by the  town as a

             result of Crouse's delays. 

                       Westcott,  Crouse  and  Cranston   previously  had

             participated in lengthy arbitration proceedings in which the

             arbitrators  had  established  damages  owed  by  Crouse  to

             Westcott and by Westcott to Cranston, as well as by Cranston

             to Westcott.   Westcott argues that the arbitrators were not

             asked  to  consider Crouse's  duty  to  indemnify and  that,

             therefore,  this question is  open to the  courts to decide.

             Westcott initially petitioned  the arbitrators to reconsider

             the  award.    After   that  request  was  denied,  Westcott

             unsucessfully sought  to vacate or  modify the award  in the

             Rhode  Island state  courts  on the  ground  that the  award

             failed  to consider Westcott's indemnification claim against

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Crouse.    Westcott then  sought  relief against  Firemen's,

             Crouse's  surety  on the  performance  bond,  in the  United

             States District Court for the  District of Rhode Island, and

             after losing there,  now seeks  redress in this  court.   We

             find Westcott's appeal  clearly foreclosed by res  judicata,

             in  fact so clearly that we award  double costs on behalf of

             Firemen's.

BACKGROUND
                                      __________

                       In  November, 1981, Firemen's issued a performance

             bond  to subcontractor  Crouse, with  Westcott, the  general

             contractor,  as  obligee, for  a wastewater  treatment plant

             being built for the city of Cranston, Rhode Island.   When a

             dispute  arose  over  the  project,  Westcott,  Crouse   and

             Cranston submitted  their damage claims to  arbitration.  On

             April 25,  1989, the  arbitrators issued their  findings and

             award.   After finding  Crouse responsible  for much  of the

             delay  damages, the  arbitrators  awarded Cranston  $314,000

             from Westcott and awarded  Westcott $384,000 from Crouse and

             $117,600  from Cranston  (for  delays caused  by the  city).

             Westcott  filed a  motion on  May 10,  1989, requesting  the

             arbitrators to  reconsider the award as  it allegedly failed

             to require Crouse to  make good on its performance  bond and

             thus  to  indemnify  Westcott   for  the  $314,000  paid  to

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Cranston.    The arbitrators  denied  Westcott's motion  for

             reconsideration and modification of their decision.   

                       Westcott then sought to modify or vacate the award

             in  state court, arguing that  the award had  failed to pass

             through the  $314,000 in  damages to  Crouse.   The Superior

             Court's  denial of  Westcott's  motion was  affirmed by  the

             Rhode Island Supreme  Court,  Westcott Constr. Corp. v. City
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             of  Cranston, 586 A.2d  542 (R.I. 1991)  (per curiam), which
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             concluded  that   Westcott  had  submitted  its  claims  for

             additional  damages to  the  arbitrators  and therefore  the

             claim was not open to the court to decide.

                       Westcott  then brought  suit against  Firemen's as

             Crouse's  surety in the District of Rhode Island.  The claim

             was dismissed.  Westcott now appeals.

DISCUSSION
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                       Westcott,  on this  appeal, requests  us to  award

             indemnification damages against Firemen's,  maintaining that

             the question  of indemnication  was never considered  by the

             arbitrators  or by  the state  courts.   The  district court

             ruled against Westcott, finding this claim foreclosed by res

             judicata.    As  the  district  court  stated,  "[i]t  seems

             abundantly clear to  me that the Rhode  Island Supreme Court

             has  already considered  and decided  the controversy."   We

             agree with the  district court's assessment.  That the Rhode

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Island Supreme Court considered this issue is clear from the

             language of  the opinion.   As that  court noted,  "Westcott

             argues that the $1,000-per-day award to the city should have

             been  'passed through'  to Crouse  and that,  therefore, the

             arbitrators' award  is  imperfect."   Westcott  Construction
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             Corp., 586 A.2d at 543.  We fail to see how Westcott's state
             _____

             court  claim differs from its federal one.  Indeed, it seems

             clear  that this issue  was submitted to  the arbitrators as

             well.  Westcott itself, in its motion to the arbitrators for

             reconsideration and modification of their decision, admitted

             that  "[t]he  parties  agreed  at  the  initial  hearing  on

             September  5,  1986  that  all   matters  between  Cranston,

             Westcott,  Crouse  and  the  other  subcontractors would  be

             decided."   As Firemen's notes,  this statement demonstrates

             that the  arbitrators  were  to  consider  Westcott's  claim

             against Crouse.   

                       Res Judicata bars Westcott's claim.  See Coates v.
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             Coleman, 51 A.2d 81,  85 (1947).  "[A] state  court judgment
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             commands the same res judicata effects in federal court that

             it would  have in the court that entered it."  18 Charles A.

             Wright,  Arthur  R.  Miller  &  Edward  H.  Cooper,  Federal
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             Practice and Procedure   4469, at 659-60 (1981).  In Griffin
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             v.  State of R.I., 760  F.2d 359 (1st  Cir.) (applying Rhode
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             Island law),  cert. denied, 474  U.S. 845 (1985),  the First
                           _____ ______

             Circuit explained that res  judicata operates as an absolute

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bar  to the relitigation of the same cause of action between

             parties  (or  their  privies)  and  that  a  prior  judgment

             rendered  on the merits is conclusive not only to the issues

             which were determined but as to all matters which might have

             been determined as well.   Id. at  360; see also Corrado  v.
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             Providence Redevelopment Agency, 320 A.2d 331, 332 (1973).  
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                       All the requirements for applying res judicata are

             met  in this case.   As in Griffin,  the appellant "contends
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             that the  'causes of  action' in  Rhode  Island and  federal

             courts differed, and thus argues that  res judicata does not

             bar her federal court action."  760 F.2d at 360.  And, as in

             Griffin, "[a]n analysis of  the cause of action here  and in
             _______

             the  prior state proceedings  clearly establishes  that both

             are essentially the  same."  Id. at  361.  The  federal case
                                          ___

             involves the same subject matter and the same parties as did

             the state  case,  and  contests the  same  point:  that  the

             arbitrators  did  not  consider  Westcott's  indemnity claim

             against Crouse. 

                       Firemen's, as surety, is only liable to the extent

             its  principal, Crouse, is  liable.  See  Rhode Island Hosp.
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             Trust  Nat'l Bank v. Ohio Cas.  Ins. Co., 789 F.2d 74, 77-79
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             (1st  Cir. 1986).   Firemen's benefits  just as  Crouse does

             from the  application of res  judicata.   Id. at 77.   Thus,
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             Firemen's, as surety for Crouse, is not legally bound to pay

             the $314,000 Westcott seeks. 

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This   application  of  res  judicata  effects  no

             injustice.   None of  the grounds justifying  departure from

             the doctrine of  res judicata are present in this case.  See
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             Restatement (Second) of Judgments   20 (1982); 18 Charles A.

             Wright,  Arthur  R.  Miller  &  Edward  H.  Cooper,  Federal
                                                                  _______

             Practice and Procedure    4435-4447 (1981) (earlier judgment
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             entered without jurisdiction; improper venue; non-joinder or

             misjoinder  of  parties;  prematurity;  failure  to  satisfy

             condition precedent; and dismissal without prejudice).

                       After examining the history of this litigation and

             Westcott's repeated presentation of  the same issue, we find

             it appropriate to assess a  monetary penalty of double costs

             against  Westcott for a frivolous  appeal.  Fed.  R. App. P.

             38.  Rule  38 provides that "[i]f  a court of  appeals shall

             determine that  an appeal is  frivolous, it  may award  just

             damages and single  or double  costs to the  appellee."   As

             this  Circuit  stated  in  Natasha,  Inc.  v.  Evita  Marine
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             Charters,  Inc., 763  F.2d 468,  471 (1st Cir.  1985), "[a]n
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             appeal  is  frivolous when  the  result is  obvious,  or the

             arguments  are 'wholly without merit.'"  Id. at 472 (quoting
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             NLRB v. Catalina Yachts,  679 F.2d 180, 182 (9th  Cir. 1982)
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             (citations  omitted)).   There are two  reasons to  assess a

             penalty for  frivolous appeals.   First, such suits  must be

             deterred  in order  to  ease the  burden  on the  courts  of

             appeals  and, second,  in order  to protect  against "strike

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suits"  or  appeals brought  to delay  paying damages.   See
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             Natasha Inc., 763 F.2d  at 471-72 (discussing policy reasons
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             for imposition of penalties by the court); cf. Bankers Trust
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             Co.  v. Publicker Indus., Inc., 641 F.2d 1361 (2d Cir. 1981)
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             (awarding  double costs  and up  to $10,000  damages against

             client and counsel for frivolous appeal).

                       Westcott   has   engaged  in   repeated  frivolous

             appeals, requiring  Firemen's to litigate the  same claim in

             different fora.  Westcott's attempt to distinguish its state

             court claims from those brought in the federal courts has no

             merit  as res  judicata clearly  foreclosed  its claim.   In

             light  of  this  determination,  we award  double  costs  to

             Firemen's.

CONCLUSION
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                       We affirm  the district  court's grant of  summary

             judgment  to Firemen's on  the grounds  of res  judicata and

             award double costs.

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