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Nature of Suit Code: 130
Nature of Suit: Miller Act
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 2, 1998 Decided June 26, 1998

No. 97-7099

Modern Electric, Inc.,

In Its Own Right and

United States of America, ex rel. Modern Electric, Inc.,

Appellees

v.

Ideal Electronic Security Co., Inc., A D.C. Corporation,

Appellant

Appeal from the United States District Court

for the District of Columbia

(No. 94cv00385)

Curtis R. Smothers argued the cause for appellant. With

him on the briefs was John W. Karr.

Michael P. Darrow argued the cause and filed the brief for

appellee Modern Electronic, Inc.

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Before: Edwards, Chief Judge, Ginsburg and Tatel,

Circuit Judges.

Opinion for the Court filed Per Curiam.

Per Curiam: Bringing this contract action to us for a

second time, appellant challenges district court rulings refusing to reopen the record on remand, admitting a new exhibit

offered by appellee, denying a new trial, rejecting a claimed

offset, and awarding prejudgment interest. Because all of

appellant's arguments lack merit, we affirm.

I

We described this dispute in detail in United States ex rel.

Modern Electric, Inc. v. Ideal Electronic Security Co., Inc.,

81 F.3d 240, 242-44 (D.C. Cir. 1996). In brief, the facts are

as follows: In July 1991, through a Small Business Administration program promoting disadvantaged businesses, appellant Ideal Electronic Security Co., Inc. was selected to replace PCB-laced electrical transformers at the Walter Reed

Medical Centers. Ideal subcontracted with appellee Modern

Electric, Inc. to perform the bulk of the work under a written

contract that expired April 2, 1992. After the contract's

expiration, Modern continued to work for Ideal in response to

purchase orders and oral requests to complete specific tasks.

Although the parties entered into a new agreement in January 1993, disagreements soon mounted, and nine months

later, Modern stopped working for Ideal.

Modern sued, arguing that Ideal's purchase orders and oral

requests formed contracts that Ideal breached. The district

court found no contractual liability, but granted Modern some

recovery on an unjust enrichment theory for certain discounts

Ideal took from Modern's invoices.

Ideal and Modern both appealed, and this court reversed.

Id. at 244-45. Finding that under District of Columbia law,

purchase orders and oral agreements could form contracts,

id. at 244, we remanded to the district court "to make specific

findings regarding each ... alleged agreement[ ]," id. at 245.

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On remand, and making each of the findings required by

our earlier decision, the district court found Ideal liable for

breach of contract arising out of three oral requests for work

and twenty-nine of fifty-five disputed purchase orders, U.S.

ex rel. Modern Elec., Inc. v. Ideal Elec. Sec., Inc., No.

94-0385, at 5-27 (D.D.C. May 1, 1997), and awarded Modern

$158,000 in damages, id. at 30, plus prejudgment interest of

almost $44,000. The district court also rejected two offsets

Ideal claimed: $74,000 based on the contention that a Federal

Acquisition Regulation required Modern to provide Ideal with

certain labor credits; and $88,000 for duct work done by

Modern that the government had allegedly rejected on the

theory that Ideal's contracts only required payment to Modern when Ideal received payment from the government. Id.

at 29-30. Ideal moved for a new trial, challenging the district

court's decision not to reopen the record and the sufficiency

of the evidence. The district court denied the motion. Ideal

again appeals.

II

We begin with Ideal's challenges that we review for abuse

of discretion: the denial of Ideal's request to reopen the

record; the acceptance of Modern's new evidence; the denial

of Ideal's motion for a new trial; and the award to Modern of

prejudgment interest during the period of the previous appeal. See, e.g., Taylor v. FDIC, 132 F.3d 753, 766 n.7 (D.C.

Cir. 1997) (new evidence); Langevine v. District of Columbia,

106 F.3d 1018, 1023 (D.C. Cir. 1997) (denial of motion for new

trial); District of Columbia v. Pierce Assocs., Inc., 527 A.2d

306, 310 (D.C. 1987) (prejudgment interest in contract cases).

Ideal complains first about the district court's refusal to

reopen the record. Following our remand, the district court

ordered each party to submit proposed findings of fact based

on the original trial transcript and exhibits. Pointing to a

ruling at the original trial cutting short one witness's testimony, Ideal asked to reopen the record to take additional

testimony on each purchase order. The district court rejectUSCA Case #97-7099 Document #362547 Filed: 06/26/1998 Page 3 of 5
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ed the request, noting that Ideal "was not foreclosed by that

ruling from adducing evidence with respect to each or any of

the purchase orders." We disagree with Ideal's contention

that this ruling amounted to an abuse of discretion. Not only

did Ideal fail to object to the district court's ruling about

Ideal's testimony, but read in context, the ruling only precluded the witness from elaborating on the background of an

exhaustive list of Ideal's individual defenses. As the district

court noted, Ideal remained free to offer any other testimony

or documentary evidence it deemed appropriate.

Ideal next asserts that the district court abused its discretion in accepting and then relying on an exhibit offered by

Modern to rebut an offset Ideal claimed for duct work Ideal

asserted the government never paid for. But Ideal never

established that under the contracts formed by the invoices

and oral requests, it was entitled to pay Modern only when

paid by the government. Any error regarding Modern's

exhibit would therefore have been harmless.

Ideal's appeal of the district court's denial of its new trial

motion fares no better. Other than a challenge to the

sufficiency of the evidence, an issue not raised on appeal, the

new trial motion essentially relied on the two arguments we

have already rejected.

Ideal asserts that the district court abused its discretion by

failing to explain why it granted Modern prejudgment interest for the period between the original judgment, vacated on

appeal, and the final judgment on remand, arguing that such

interest penalizes parties appealing a judgment and subverts

the federal post-judgment interest statute, 28 U.S.C. s 1961

(1994). Because extending the grant of prejudgment interest

(which Ideal has not challenged) to the period of appeal

merely compensated Modern for the continuing time-value of

its money, and in no way implicated the post-judgment interest statute (it was entirely proper pre-judgment interest), we

cannot fault the district court's decision to award such interest.

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III

Ideal finally claims that the district court erred in denying

it a twenty-percent offset for "labor credits," arguing such

offset was required by a Federal Acquisition Regulation, 48

C.F.R. s 52.219-14(b)(4) (1997). Because this argument

presents a question of law, our review is de novo, see Moldea

v. New York Times Co., 22 F.3d 310, 316 (D.C. Cir. 1994).

Entitled "Limitations on Subcontracting," section 52.219-

14(b)(4) provides that in certain government construction

contracts under a Small Business Administration program

promoting disadvantaged contractors, prime contractors "will

perform at least 25 percent of the cost of the contract, not

including the cost of materials, with its own employees." 48

C.F.R. s 52.219-14(b)(4). We need not decide whether or to

what extent this regulation affected Ideal's contracts with

Modern. Even if the regulation had somehow been incorporated as a matter of law into those contracts, the regulation in

no way requires labor credits, let alone the very specific

twenty-percent credit Ideal sought.

We affirm the decision of the district court.

So ordered.

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