Court Opinion

ID: 1086629
Source: CourtListenerOpinion
Date Created: 2013-10-23 18:00:46.24236+00
Date Added: 2024-06-11T09:15:23.289254
License: Public Domain

FILED
                           NOT FOR PUBLICATION                             OCT 22 2013

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

                            FOR THE NINTH CIRCUIT

MARTIN CONSTRUCTION, INC.,                       No. 12-35177

              Plaintiff - Appellant,             D.C. No. 1:10-cv-00072-RFC

  v.
                                                 MEMORANDUM*
ROSCOE STEEL & CULVERT CO.,

              Defendant-third-party-
plaintiff - Appellee,

  v.

LANE ENTERPRISES, INC.,

              Third-party-defendant -
Appellee.

                    Appeal from the United States District Court
                            for the District of Montana
                 Richard F. Cebull, Senior District Judge, Presiding

                      Argued and Submitted October 8, 2013
                               Portland, Oregon

Before: SILVERMAN, W. FLETCHER, and CALLAHAN, Circuit Judges.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
      Martin Construction, Inc. (“Martin”) appeals the district court’s grant of

summary judgment in favor of defendant Roscoe Steel and Culvert Company

(“Roscoe”). We review de novo the district court’s decision on the interpretation

of the contract. Miller v. Safeco Title Ins. Co., 758 F.2d 364, 367 (9th Cir. 1985).

We may affirm on any basis supported by the record. Gordon v. Virtumundo, Inc.,

575 F.3d 1040, 1047 (9th Cir. 2009). We affirm.

      This dispute arises out of Roscoe’s delayed performance of a contract to

deliver steel pipe. The contract obligated Roscoe to supply steel pipe to Martin, a

state government contractor building culverts for a Montana highway. Martin

claims that Roscoe did not initially ship enough nuts and bolts to assemble the

pipe, delaying Martin’s completion of the culvert. Martin alleges that the delay

caused monetary damages for which Roscoe should be held liable.

      Paragraph Four of the parties’ contract precludes Martin from recovering

consequential damages for delayed delivery. Martin seeks to recover (1) liquidated

damages assessed against Martin by the Montana Department of Transportation

(“MDOT”), (2) time and expenses incurred negotiating with MDOT, (3) payments

to compensate Martin’s subcontractors for the delay, and (4) “productivity costs”

from continuing to dedicate personnel and equipment during the delay. Contrary

to Martin’s arguments, all of these claimed damages are consequential damages

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under Montana law. See Mont. Code Ann. § 30-2-715(2) (following the Uniform

Commercial Code). Therefore, they are barred by Paragraph Four of the contract.

      The liquidated damages and negotiation expenses are consequential damages

because they were “incurred by the nonbreaching party in its dealings . . . with

third parties.” 67A Am. Jur. 2d Sales § 1153; see Cannon Builders, Inc. v. Rice,

888 P.2d 790, 793–94 (Idaho Ct. App. 1995); State ex rel. Concrete Sales & Equip.

Rental Co. v. Kent Nowlin Constr., Inc., 746 P.2d 645, 649–50 (N.M. 1987).

Martin’s payments to its subcontractors also arose out of its dealings with third

parties and so are traditional consequential damages. See 67A Am. Jur. 2d Sales

§ 1176; see also Wright Schuchart, Inc. v. Cooper Indus., Inc., 40 F.3d 1247, 1994

WL 621889, at *2 (9th Cir. Nov. 8, 1994) (stating that “additional subcontractor

costs” are consequential damages); Frontline Processing Corp. v. Am. Econ. Ins.

Co., 149 P.3d 906, 911 (Mont. 2006) (describing fees paid to third parties to

investigate employee fraud as consequential damages).

      Martin’s “productivity costs” were caused by its out-of-sequence work,

extended overhead, and additional equipment costs. These, too, are classic

consequential damages. See Wright Schuchart, 1994 WL 621889, at *2; 67A Am.

Jur. 2d Sales §§ 1177, 1190; accord United States ex rel. Fed. Corp. v.

Commercial Mech. Contractors, 707 F.2d 1124, 1125–26, 1129 (10th Cir. 1982).

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       Because we affirm on this ground, we do not reach the grounds relied on by

the district court.

       AFFIRMED.

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