Opinion ID: 199314
Heading Depth: 1
Heading Rank: 5

Heading: NDI's Work in the Expanded Area

Text: 43 ISSI next challenges the district court's findings regarding NDI's work in the expanded area. The court found that, pursuant to an anticipated agreement between ISSI and Atkinson, ISSI was about to receive $140,000 for the drilling and blasting work done by NDI outside of the contract area -- a sum that, according to the district court, reasonably represented the value of the work performed by NDI in the expanded area. Alternatively, the court found that ISSI could not complain about the fact that it would have to compensate NDI before receiving payment from Atkinson because ISSI had been six months late in requesting such payments from Atkinson. The court also determined that ISSI had failed to meet its burden to establish the proportional share of the Atkinson payments that NDI was entitled to receive under the parties' agreement, and accordingly awarded the entire $140,000 sum to NDI. On appeal, ISSI argues that the district court should not have based its award on the uncertain occurrence of the ISSI-Atkinson settlement agreement, nor should it have found that the entire amount of the Atkinson payments belonged to NDI. In the same vein, it contends that the district court should not have credited NDI $81,560 for the Hughes barge, another expense for which ISSI was expected to receive compensation from Atkinson in the same settlement agreement. 44 At the heart of the first component of ISSI's argument - that the district court erred by finding that Atkinson was about to pay ISSI $140,000 for work in the expanded area -- is the contractual provision stating that NDI would be paid for such work if and only if ISSI receives compensation. ISSI asserts that under this clause in the contract, Atkinson's remission of fees was a condition precedent to it making any flow-through payments to NDI, and that it was therefore improper for the district court to award anything for work in the expanded area given the absence of a finding that the condition had been met. Although Atkinson and ISSI did reach a settlement covering work in the expanded area on or about February 28, 2000, the terms of that settlement have not been divulged. Under these circumstances, it would be improper for us to assume that the expected amount of the settlement agreement was the amount that ISSI actually received. Cf. Mulero-Rodriguez v. Ponte, Inc., 98 F.3d 670, 672 (1st Cir. 1996) (noting that appellate court may only make inferences that can be drawn from the evidence without resort to speculation) (citing Frieze v. Boatmen's Bank of Belton, 950 F.2d 538, 541 (8th Cir. 1991)). 45 The district court's $140,000 award rested, however, on an alternate ground: that ISSI effectively surrendered its authority to enforce the condition precedent (Atkinson's payment) by waiting six months after NDI's demobilization to submit the change-order requests to Atkinson for NDI's work in the expanded area. Under the so-called prevention doctrine, a contractual condition precedent is deemed excused when a promisor hinders or precludes fulfillment of a condition and that hindrance or preclusion contributes materially to the nonoccurrence of the condition. Restatement (Second) of Contracts § 245 (1981). In this case, the court found that in spite of having the information needed to submit change-order requests to Atkinson, ISSI failed to submit such requests until September 1999, or nearly six months after the completion of NDI's work. 17 Because this delay materially contributed to Atkinson's failure to pay ISSI before the NDI-ISSI trial, ISSI is estopped from arguing that it was entitled to be paid by Atkinson before it reimbursed NDI for drilling and blasting in the expanded area. 13 Richard A. Lord, Williston on Contracts § 39:4 (4th ed. 2000) ([W]here one improperly prevents the performance or the happening of a condition of his or her own promissory duty, the offending party thereby eliminates it as a condition . . . .); cf. Moore Bros. Co. v. Brown & Root, Inc., 207 F.3d 717, 724-26 (4th Cir. 2000) (applying prevention doctrine to render inoperative pay when paid condition precedent in construction subcontract). Based on this principle, the district court reasonably concluded that the value of the work performed in the expanded area was $140,000. 46 Apart from the issue of whether NDI deserves any payments given the uncertainty surrounding the payments by Atkinson, ISSI further contends that the district court committed error by awarding all of the $140,000 sum to NDI. Under the contract, NDI was to receive a proportional share of the amount ISSI received from Atkinson; this critical term in the contract, however, was unaccompanied by further elaboration. ISSI claims that the court erred by determining that [b]ecause ISSI is the only party that knows what NDI's proportional share is and because ISSI has provided no evidence on this topic, there is no basis upon which to reduce the $140,000 . . . . Northeast Drilling, Inc., 2000 WL 761020, at . ISSI points to the trial testimony of Laurie Mason, who was asked to discuss the manner in which ISSI would tally NDI's proportional share. In that testimony, Laurie Mason noted that ISSI would make those payments to NDI according to the same ratio by which it had paid NDI for NDI's drilling and blasting work in the contract area. She neglected, however, to disclose what that ratio was. On appeal, ISSI attempts to make up for this omission by proposing a formula by which this court could ascertain the proper amount. That suggested formula, however, was not presented to the district court; and absent extraordinary circumstances not present in this case, we may not entertain newly proffered evidence for the first time on appeal. In re Colonial Mortgage Bankers Corp., 186 F.3d 46, 50 (1st Cir. 1999), cert. denied, 528 U.S. 1139 (2000). As the district court noted, because the proportion of the Atkinson payments that would pass to NDI was a fact about which ISSI had exclusive knowledge (as NDI apparently had no control over the size of its proportional share for work in the expanded area), ISSI's failure to divulge that fact meant that NDI was entitled to all of the payments. Cf. United States v. N.Y., New Haven & Hartford R.R. Co., 355 U.S. 253, 256 n.5 (1957) (The ordinary rule, based on considerations of fairness, does not place the burden upon a litigant of establishing facts peculiarly within the knowledge of his adversary.); Selma, Rome & Dalton R.R. v. United States, 139 U.S. 560, 567-68 (1891) (holding that burden of proof regarding right to payment rests with party possessing relevant account books). 47 ISSI also attacks the district court's award of $81,560 to NDI for the cost of the Hughes barge. The court's award was based on ISSI's backcharging of NDI for the cost of this additional equipment, which NDI needed to procure to make up for the time it had lost in its drilling and blasting operations. The district court found that as part of the pending settlement agreement in which Atkinson would agree to pay ISSI for the work in the expanded area, Atkinson also would pay ISSI $81,650 to partially defray the cost of the Hughes barge. Since ISSI never absorbed any expense for this barge, the court found, that payment should completely pass through to NDI. In light of our finding that ISSI is estopped from asserting the condition precedent of Atkinson's payment for extras, we find no reason to set aside the reasonable determination by the district court that NDI is entitled to partial reimbursement for the cost of this additional expense. 18 48 Finally, ISSI attempts to impugn the district court's award of interest under the prompt-payment statute, 10 M.R.S.A. § 1114(4). Its argument on this point, however, is neither well developed nor supported by case law, and consequently has been waived. United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990).