Court Opinion

ID: 9387614
Source: CourtListenerOpinion
Date Created: 2023-04-18 17:01:01.108064+00
Date Added: 2024-06-11T17:18:14.758005
License: Public Domain

NOT FOR PUBLICATION                          FILED
                    UNITED STATES COURT OF APPEALS                       APR 18 2023
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                            FOR THE NINTH CIRCUIT

ARCHITECTURAL DESIGN                            No.    21-56290
CONTRACTORS, INC., a California
corporation (substituted as Plaintiff per       D.C. No. 5:18-cv-02594-SB-SP
docket no. 49) Substituted for Temcula
M.O.B., LLC,

                Plaintiff-Appellee,

 v.

BUILDER SERVICES GROUP, INC., a
Florida corporation as the successor to
TRUTEAM OF CALIFORNIA, INC., a
California corporation,

                Defendant-Appellant.

ARCHITECTURAL DESIGN                            No.    21-56393
CONTRACTORS, INC., a California
corporation (substituted as Plaintiff per       D.C. No. 5:18-cv-02594-SB-SP
docket no. 49) Substituted for Temcula
M.O.B., LLC,
                                                MEMORANDUM*
                Plaintiff-Appellant,

 v.

BUILDER SERVICES GROUP, INC., a
Florida corporation as the successor to
TRUTEAM OF CALIFORNIA, INC., a

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
California corporation,

                Defendant-Appellee.

                   Appeal from the United States District Court
                       for the Central District of California
                 Stanley Blumenfeld, Jr., District Judge, Presiding

                             Submitted April 13, 2023**
                               Pasadena, California

Before: MILLER and MENDOZA, Circuit Judges, and MOSKOWITZ,*** District
Judge.

      This case is a tale of two waivers. At trial in this breach-of-contract action

between Plaintiff Architectural Design Contractors, Inc. (ADC) and Defendant

Builders Services Group, Inc. (BSG), BSG argued it was entitled to judgment as a

matter of law because ADC did not mediate before bringing suit when it was

contractually required to.    But BSG never raised or invoked the mediation

requirement before trial. BSG’s silence on the mediation requirement before trial

waived that requirement. Because the district court’s waiver decision was correct,

we affirm the denials of BSG’s motions for judgment as a matter of law.

      After prevailing at trial, ADC moved for attorney’s fees under the

      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      ***
            The Honorable Barry Ted Moskowitz, United States District Judge for
the Southern District of California, sitting by designation.

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subcontract.    ADC did not seek attorney’s fees under an addendum to the

subcontract.   The district court correctly ruled that ADC was not entitled to

attorney’s fees under the subcontract provisions it relied upon in its motion.

Moreover, the district court correctly ruled that ADC forfeited or waived the

argument that it was entitled to attorney’s fees under the addendum by not seeking

such fees under the addendum in its original motion. Because the district court

properly denied ADC’s motion for attorney’s fees, we affirm the denial of that

motion.

      We have jurisdiction over these appeals under 28 U.S.C. § 1291. Because

the parties are familiar with the factual and procedural history of the case, we need

not recount it here.

      We review the denials of BSG’s motions for judgment as a matter of law—

and the question whether BSG waived the mediation provision—de novo. Wadler

v. Bio-Rad Lab’ys., Inc., 916 F.3d 1176, 1185 (9th Cir. 2019) (explaining that

review of the denial of a motion for judgment as a matter of law is de novo).

Because, as detailed below, the Federal Rules of Civil Procedure are applicable to

the question of whether BSG waived the mediation provision, those Rules govern

the issue of waiver. See, e.g., Healy Tibbitts Constr. Co. v. Ins. Co. of N. Am., 679

F.2d 803, 804 (9th Cir. 1982) (per curiam) (“While state law defines the nature of

the defenses, the Federal Rules of Civil Procedure provide the manner and time in

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which defenses are raised and when waiver occurs.”).

      The subcontract provided that “mediation [wa]s a condition precedent to any

other form of binding dispute resolution.” However, BSG was silent about the

mediation provision before trial. It did not raise it in its answer, in its motion for

summary judgment, nor in any pretrial filings, including the proposed pretrial

order. Indeed, it did not raise the mediation provision until after the close of

ADC’s case. As the district judge correctly ruled, that silence waived the issue.

      The disagreement between the parties over whether the mediation

requirement was an affirmative defense or an element of ADC’s claim is

immaterial. If the requirement was an affirmative defense, then BSG waived it by

failing to comply with Federal Rule of Civil Procedure 8(c)(1). See Fed. R. Civ. P.

8(c)(1) (“In responding to a pleading, a party must affirmatively state any

avoidance or affirmative defense.”); Nw. Acceptance Corp. v. Lynnwood Equip.,

Inc., 841 F.2d 918, 924 (9th Cir. 1988) (A defense “not raised in the pretrial order

or prior to trial” was waived); see also United States v. First Nat’l Bank of Circle,

652 F.2d 882, 886–87 (9th Cir. 1981) (explaining that issues “not at least implicitly

included in the [pretrial] order are [generally] barred”).         If the mediation

requirement was an element of ADC’s claim, then Federal Rule of Civil Procedure

9(c) required BSG to invoke the requirement “with particularity.” See Fed. R. Civ.

P. 9(c) (providing that satisfaction of conditions precedent can be alleged generally

                                          4
but that parties must deny their performance “with particularity”). BSG did not

specifically invoke or mention the mediation requirement in response to ADC’s

general pleading regarding conditions precedent. Thus, BSG failed to comply with

Federal Rule of Civil Procedure 9(c) and waived the mediation requirement. See,

e.g., De Saracho v. Custom Food Mach., Inc., 206 F.3d 874, 878–79 (9th Cir.

2000) (concluding defendants waived authority-to-sue argument by failing to plead

it under Rule 9(a) and not raising it “until one week before the trial was scheduled

to begin”).

      What is most troubling about BSG’s invocation of the mediation

requirement after the close of ADC’s case at trial is that TruTeam of California,

Inc. (a company that later merged into BSG) explicitly waived the requirement

before this litigation started. In response to a “demand for mediation” by ADC,

TruTeam’s counsel explained in an email that because “mediation would [not] be

productive,” TruTeam was “willing to waive the mediation requirement.”

      The district judge relied on that email, and BSG has not shown that the judge

erred in doing so. The explicit waiver of the mediation requirement forecloses

BSG’s challenge to the district judge’s waiver ruling. Indeed, allowing BSG to

invoke the mediation requirement at trial would have circumvented a main purpose

of pretrial filings: “to eliminate surprise.” See generally Walker v. W. Coast Fast

Freight, Inc., 233 F.2d 939, 941 (9th Cir. 1956) (explaining that a primary purpose

                                         5
of pretrial orders “is to eliminate surprise by sharpening and simplifying the issues

which must be tried”). We hold that the district judge correctly ruled that BSG

waived the mediation provision and properly denied BSG’s motions for judgment

as a matter of law.

      We review the district court’s interpretation of contractual provisions for

attorney’s fees de novo. Milenbach v. Comm’r, 318 F.3d 924, 930 (9th Cir. 2003)

(“The interpretation and meaning of contract provisions are questions of law

reviewed de novo.”).     The district court properly denied ADC’s motion for

attorney’s fees, for two main reasons. First, ADC was not entitled to attorney’s

fees under the original subcontract. The subcontract provided that the prevailing

party in any “dispute resolution procedure designated in the Subcontract

Documents shall be entitled to recover from the other party reasonable attorney’s

fees” (emphasis added).      ADC argued that the mediation provision—which

provided that “mediation is a condition precedent to any other form of binding

dispute resolution”—designated litigation as a dispute resolution procedure.

      The subcontract provisions relied upon by ADC in its motion for attorney’s

fees did not expressly designate litigation as a dispute resolution procedure by

providing that mediation was a condition precedent to any other form of binding

dispute resolution.   The district judge correctly rejected the sole argument in

ADC’s motion for attorney’s fees.

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      Second, ADC waived any reliance on the addendum, which expressly

provided for attorney’s fees in litigation. ADC did not rely on the addendum in its

motion. The district judge filed a tentative ruling and gave ADC the opportunity at

oral argument to raise a different contractual provision, but ADC did not invoke

the addendum and instead submitted on the tentative ruling. The district judge was

not required to search for additional contractual provisions on ADC’s behalf. See

generally Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir. 1994) (declining to

“manufacture arguments for an appellant” because “[j]udges are not like pigs,

hunting for truffles buried in briefs” (quoting United States v. Dunkel, 927 F.2d

955, 956 (7th Cir. 1991) (per curiam))); In re E.R. Fegert, Inc., 887 F.2d 955, 957

(9th Cir. 1989) (“The rule in this circuit is that appellate courts will not consider

arguments that are not . . . raised sufficiently for the trial court to rule on [them].”).

      ADC’s reliance on the addendum in its Rule 59(e) motion was simply “too

late.” See 389 Orange St. Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999)

(stating that argument raised for first time in reconsideration motion was “too little,

too late”). ADC waived any reliance on the addendum. Because the district judge

properly rejected ADC’s argument for attorney’s fees, and because ADC did not

rely on the addendum in its motion for such fees, the district judge’s denial of that

motion is also affirmed. The parties shall bear their own costs and fees on appeal.

      AFFIRMED.

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