Court Opinion

ID: 620022
Source: CourtListenerOpinion
Date Created: 2011-12-30 01:01:40+00
Date Added: 2024-06-11T09:14:30.670254
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                            FILED
                            FOR THE NINTH CIRCUIT                             DEC 29 2011

                                                                          MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

YACHT WEST, LTD., a Cayman Islands               No. 10-35382
company,
                                                 D.C. No. 3:07-cv-01547-KI
              Plaintiff - Appellee,

  v.                                             MEMORANDUM*

CHRISTENSEN SHIPYARDS, LTD., a
Washington corporation; DAVID H.
CHRISTENSEN,

              Defendants - Appellants.

YACHT WEST, LTD., a Cayman Islands               No. 10-35383
company,
                                                 D.C. No. 3:07-cv-01547-KI
              Plaintiff - Appellant,

  v.

CHRISTENSEN SHIPYARDS, LTD., a
Washington corporation; DAVID H.
CHRISTENSEN,

              Defendants - Appellees.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                    Appeal from the United States District Court
                             for the District of Oregon
                   Garr M. King, Senior District Judge, Presiding

                    Argued and Submitted November 14, 2011
                               Portland, Oregon

Before: FISHER, PAEZ, and CLIFTON, Circuit Judges.

      We consider here the cross-appeals by Christensen Shipyards, Ltd. and

Yacht West, Ltd. from the district court’s post-trial order granting in part and

denying in part the parties’ motions for judgment as a matter of law under Federal

Rule of Civil Procedure 50(b). We have jurisdiction under 28 U.S.C. § 1291, and

affirm.

                         I. Christensen’s Rule 50(b) Motion

      A jury’s verdict of compensatory damages is reviewed for substantial

evidence. In re Exxon Valdez, 270 F.3d 1215, 1247–48 (9th Cir. 2001). It must be

affirmed “unless the amount is grossly excessive or monstrous, clearly not

supported by the evidence, or based only on speculation or guesswork.” Del Monte

Dunes at Monterey, Ltd. v. City of Monterey, 95 F.3d 1422, 1435 (9th Cir. 1996).

In calculating damages, a factfinder is entitled to “make a reasonable

inference of damages from the facts adduced.” Holland Livestock Ranch v. United

States, 655 F.2d 1002, 1006 (9th Cir. 1981).

                                          2
1.     Substantial evidence supported the jury’s award of $2.6 million to Yacht

West for the nonconforming exhaust system. Yacht West’s expert testified that his

conceptual analysis showed that it was possible to reroute the exhaust system to

discharge at the rear of the boat for $2.6 million, and that a variety of specific

implementations of his general concept were feasible.

2.     Substantial evidence did not support the jury’s award of $2 million to Yacht

West for a structural defect in the form of either a vibration or weight in excess of

the contract requirements. A Yacht West expert opined that the vibration was

“hull-springing vibration” caused by a “lack of stiffness in the structure,” but

admitted that he could not tell the jury how the problem could be corrected because

“it requires further testing.” Another Yacht West expert testified that it would cost

$4 million “to repair the structural inadequacy of the vessel,” but that it would first

entail “a very substantial effort . . . to find out why the boat is vibrating the way

that it is.”

       Because neither Yacht West expert could identify the source of the vibration

or specify how to fix it, the jury was required to impermissibly speculate about the

provenance and redressability of the vibration. The district court therefore correctly

granted Christensen’s Rule 50(b) motion on this issue.

                                           3
                         II. Yacht West’s Rule 50(b)Motion

1.    Substantial evidence supported the jury’s award of $1,674,242 to

Christensen for delay damages not stemming from unabsorbed overhead.

Interpretation of an integrated agreement “is to be determined by the trier of fact if

it depends on . . . a choice among reasonable inferences to be drawn from extrinsic

evidence.” Berg v. Hudesman, 801 P.2d 222, 229 (Wash. 1990) (quoting

Restatement (Second) of Contracts § 212 (1981)) (internal quotation marks

omitted). The parties presented testimony to the jury about the meaning of the

contract. The jury received a general instruction and special verdict form, and

neither party objected that the jury instructions or special verdict were improper.

Further, Christensen’s expert testified that Yacht West and its contractors and

suppliers delayed construction by failing to provide necessary information and

materials, and that these delays subsumed any delays caused by Christensen.

Substantial evidence supported the jury’s finding that the contract permitted an

award for delay damages and the amount of delay damages it awarded.

2.    “The raison d’etre of Eichleay requires at least some element of uncertainty

arising from suspension, disruption or delay of contract performance. Such delays

are sudden, sporadic and of uncertain duration. As a result, it is impractical for the

contractor to take on other work during these delays.” C.B.C. Enters. v. United

                                           4
States, 978 F.2d 669, 675 (Fed. Cir. 1992). In Washington, unabsorbed overhead is

recoverable “if the delay prevented the contractor from obtaining contracts during

the delay period that would have ‘absorbed’ the ongoing overhead expense.” Golf

Landscaping, Inc. v. Century Constr. Co., 696 P.2d 590, 593 (Wash. Ct. App.

1984). Christensen’s workforce was never placed on standby during the

construction of the Party Girl, and there is no evidence that the delays prevented

Christensen from taking on new contracts. Christensen is therefore precluded from

obtaining damages for unabsorbed overhead.

      AFFIRMED.

                                         5
                                                                              FILED
                                                                              DEC 29 2011
Yacht West, Ltd. v. Christensen Shipyards, Ltd., No. 10-35382
                                                                          MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

RAYMOND C. FISHER, Circuit Judge, concurring in part and dissenting in part:

      I concur in all but part I.2 of the memorandum disposition, from which I

respectfully dissent. I would hold that substantial evidence supports the jury’s

award of $2 million to Yacht West for the structural defect. All parties agree that

the yacht is overweight, that it suffers from a vibration, that the vibration is

structural and hull-related and that further evaluating and remedying the defect will

be extremely costly. Yacht West’s expert testified that the defect would cost at

least $4 million to repair, and Christensen did not offer a repair estimate of its own

to refute that testimony. There was also testimony that the structural defect

affected the market value of the yacht, which in any event is self-evident, as well as

the uses to which the yacht could safely be put. That the jury awarded Yacht West

only half of what it requested further indicates that the jury exercised its discretion.

It is true that Yacht West’s experts could not isolate the precise source of the

problem or set out a specific plan for repair without further evaluation, but I do not

believe Yacht West was required to tear the vessel apart to establish an entitlement

to damages. See Holland Livestock Ranch v. United States, 655 F.2d 1002, 1006

(9th Cir. 1981) (“Once injury has been proven, the fact that damages are not

susceptible to precise measurement does not preclude recovery”). I accordingly

dissent from part I.2 of the disposition.