Court Opinion

ID: 194803
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:25:27+00
Date Added: 2024-06-11T11:52:48.420906
License: Public Domain

UNITED STATES COURT OF APPEALS
                   FOR THE FIRST CIRCUIT

                                        

No. 93-1011

                WESTCOTT CONSTRUCTION CORP.,

                   Plaintiff, Appellant,

                             v.

               FIREMEN'S FUND OF NEW JERSEY,

                    Defendant, Appellee.

                                        

        APPEAL FROM THE UNITED STATES DISTRICT COURT

              FOR THE DISTRICT OF RHODE ISLAND

        [Hon. Francis J. Boyle, U.S. District Judge]
                                                   

                                        

                           Before

                  Torruella, Circuit Judge,
                                          
               Oakes,*, Senior Circuit Judge,
                                            
                  and Cyr, Circuit Judge.
                                        

                                        

Peter  Lawson   Kennedy  with   whom  Adler   Pollock  &   Sheehan
                                                                 
Incorporated was on brief for appellant.
       
Shelia High King  with whom Bert J.  Capone, Michael P. Duffy  and
                                                            
Peabody & Arnold were on brief for appellee.
           

                                        

                       June 25, 1993
                                        
                

*Of the Second Circuit, sitting by designation.

          OAKES,   Senior   Circuit    Judge.       Westcott
                                            

Construction Co.  ("Westcott") appeals from an  order of the

United  States  District Court  for  the  District of  Rhode

Island, Francis  J. Boyle, Judge, denying  Westcott's motion
                                

for  summary  judgment  and  granting   defendant  Firemen's

Insurance ("Firemen's") cross-motion  for summary  judgment.

Westcott  sought to enforce the  terms of a performance bond

executed by Firemen's on behalf of Westcott's subcontractor,

Crouse Combustion  Systems ("Crouse"), in which Westcott was

named  as  obligee.   In particular,  Westcott sought  to be

indemnified for payments made to the City of Cranston, Rhode

Island ("Cranston"), for  damages suffered by the  town as a

result of Crouse's delays. 

          Westcott,  Crouse  and  Cranston   previously  had

participated in lengthy arbitration proceedings in which the

arbitrators  had  established  damages  owed  by  Crouse  to

Westcott and by Westcott to Cranston, as well as by Cranston

to Westcott.   Westcott argues that the arbitrators were not

asked  to  consider Crouse's  duty  to  indemnify and  that,

therefore,  this question is  open to the  courts to decide.

Westcott initially petitioned  the arbitrators to reconsider

the  award.    After   that  request  was  denied,  Westcott

unsucessfully sought  to vacate or  modify the award  in the

Rhode  Island state  courts  on the  ground  that the  award

failed  to consider Westcott's indemnification claim against

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Crouse.    Westcott then  sought  relief against  Firemen's,

Crouse's  surety  on the  performance  bond,  in the  United

States District Court for the  District of Rhode Island, and

after losing there,  now seeks  redress in this  court.   We

find Westcott's appeal  clearly foreclosed by res  judicata,

in  fact so clearly that we award  double costs on behalf of

Firemen's.

                         BACKGROUND
                                   

          In  November, 1981, Firemen's issued a performance

bond  to subcontractor  Crouse, with  Westcott, the  general

contractor,  as  obligee, for  a wastewater  treatment plant

being built for the city of Cranston, Rhode Island.   When a

dispute  arose  over  the  project,  Westcott,  Crouse   and

Cranston submitted  their damage claims to  arbitration.  On

April 25,  1989, the  arbitrators issued their  findings and

award.   After finding  Crouse responsible  for much  of the

delay  damages, the  arbitrators  awarded Cranston  $314,000

from Westcott and awarded  Westcott $384,000 from Crouse and

$117,600  from Cranston  (for  delays caused  by the  city).

Westcott  filed a  motion on  May 10,  1989, requesting  the

arbitrators to  reconsider the award as  it allegedly failed

to require Crouse to  make good on its performance  bond and

thus  to  indemnify  Westcott   for  the  $314,000  paid  to

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Cranston.    The arbitrators  denied  Westcott's motion  for

reconsideration and modification of their decision.   

          Westcott then sought to modify or vacate the award

in  state court, arguing that  the award had  failed to pass

through the  $314,000 in  damages to  Crouse.   The Superior

Court's  denial of  Westcott's  motion was  affirmed by  the

Rhode Island Supreme  Court,  Westcott Constr. Corp. v. City
                                                            

of  Cranston, 586 A.2d  542 (R.I. 1991)  (per curiam), which
            

concluded  that   Westcott  had  submitted  its  claims  for

additional  damages to  the  arbitrators  and therefore  the

claim was not open to the court to decide.

          Westcott  then brought  suit against  Firemen's as

Crouse's  surety in the District of Rhode Island.  The claim

was dismissed.  Westcott now appeals.

                         DISCUSSION
                                   

          Westcott,  on this  appeal, requests  us to  award

indemnification damages against Firemen's,  maintaining that

the question  of indemnication  was never considered  by the

arbitrators  or by  the state  courts.   The  district court

ruled against Westcott, finding this claim foreclosed by res

judicata.    As  the  district  court  stated,  "[i]t  seems

abundantly clear to  me that the Rhode  Island Supreme Court

has  already considered  and decided  the controversy."   We

agree with the  district court's assessment.  That the Rhode

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Island Supreme Court considered this issue is clear from the

language of  the opinion.   As that  court noted,  "Westcott

argues that the $1,000-per-day award to the city should have

been  'passed through'  to Crouse  and that,  therefore, the

arbitrators' award  is  imperfect."   Westcott  Construction
                                                            

Corp., 586 A.2d at 543.  We fail to see how Westcott's state
     

court  claim differs from its federal one.  Indeed, it seems

clear  that this issue  was submitted to  the arbitrators as

well.  Westcott itself, in its motion to the arbitrators for

reconsideration and modification of their decision, admitted

that  "[t]he  parties  agreed  at  the  initial  hearing  on

September  5,  1986  that  all   matters  between  Cranston,

Westcott,  Crouse  and  the  other  subcontractors would  be

decided."   As Firemen's notes,  this statement demonstrates

that the  arbitrators  were  to  consider  Westcott's  claim

against Crouse.   

          Res Judicata bars Westcott's claim.  See Coates v.
                                                            

Coleman, 51 A.2d 81,  85 (1947).  "[A] state  court judgment
       

commands the same res judicata effects in federal court that

it would  have in the court that entered it."  18 Charles A.

Wright,  Arthur  R.  Miller  &  Edward  H.  Cooper,  Federal
                                                            

Practice and Procedure   4469, at 659-60 (1981).  In Griffin
                                                            

v.  State of R.I., 760  F.2d 359 (1st  Cir.) (applying Rhode
                 

Island law),  cert. denied, 474  U.S. 845 (1985),  the First
                          

Circuit explained that res  judicata operates as an absolute

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bar  to the relitigation of the same cause of action between

parties  (or  their  privies)  and  that  a  prior  judgment

rendered  on the merits is conclusive not only to the issues

which were determined but as to all matters which might have

been determined as well.   Id. at  360; see also Corrado  v.
                                                            

Providence Redevelopment Agency, 320 A.2d 331, 332 (1973).  
                               

          All the requirements for applying res judicata are

met  in this case.   As in Griffin,  the appellant "contends
                                  

that the  'causes of  action' in  Rhode  Island and  federal

courts differed, and thus argues that  res judicata does not

bar her federal court action."  760 F.2d at 360.  And, as in

Griffin, "[a]n analysis of  the cause of action here  and in
       

the  prior state proceedings  clearly establishes  that both

are essentially the  same."  Id. at  361.  The  federal case
                                

involves the same subject matter and the same parties as did

the state  case,  and  contests the  same  point:  that  the

arbitrators  did  not  consider  Westcott's  indemnity claim

against Crouse. 

          Firemen's, as surety, is only liable to the extent

its  principal, Crouse, is  liable.  See  Rhode Island Hosp.
                                                            

Trust  Nat'l Bank v. Ohio Cas.  Ins. Co., 789 F.2d 74, 77-79
                                        

(1st  Cir. 1986).   Firemen's benefits  just as  Crouse does

from the  application of res  judicata.   Id. at 77.   Thus,
                                             

Firemen's, as surety for Crouse, is not legally bound to pay

the $314,000 Westcott seeks. 

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          This   application  of  res  judicata  effects  no

injustice.   None of  the grounds justifying  departure from

the doctrine of  res judicata are present in this case.  See
                                                            

Restatement (Second) of Judgments   20 (1982); 18 Charles A.

Wright,  Arthur  R.  Miller  &  Edward  H.  Cooper,  Federal
                                                            

Practice and Procedure    4435-4447 (1981) (earlier judgment
                      

entered without jurisdiction; improper venue; non-joinder or

misjoinder  of  parties;  prematurity;  failure  to  satisfy

condition precedent; and dismissal without prejudice).

          After examining the history of this litigation and

Westcott's repeated presentation of  the same issue, we find

it appropriate to assess a  monetary penalty of double costs

against  Westcott for a frivolous  appeal.  Fed.  R. App. P.

38.  Rule  38 provides that "[i]f  a court of  appeals shall

determine that  an appeal is  frivolous, it  may award  just

damages and single  or double  costs to the  appellee."   As

this  Circuit  stated  in  Natasha,  Inc.  v.  Evita  Marine
                                                            

Charters,  Inc., 763  F.2d 468,  471 (1st Cir.  1985), "[a]n
               

appeal  is  frivolous when  the  result is  obvious,  or the

arguments  are 'wholly without merit.'"  Id. at 472 (quoting
                                            

NLRB v. Catalina Yachts,  679 F.2d 180, 182 (9th  Cir. 1982)
                       

(citations  omitted)).   There are two  reasons to  assess a

penalty for  frivolous appeals.   First, such suits  must be

deterred  in order  to  ease the  burden  on the  courts  of

appeals  and, second,  in order  to protect  against "strike

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suits"  or  appeals brought  to delay  paying damages.   See
                                                            

Natasha Inc., 763 F.2d  at 471-72 (discussing policy reasons
            

for imposition of penalties by the court); cf. Bankers Trust
                                                            

Co.  v. Publicker Indus., Inc., 641 F.2d 1361 (2d Cir. 1981)
                              

(awarding  double costs  and up  to $10,000  damages against

client and counsel for frivolous appeal).

          Westcott   has   engaged  in   repeated  frivolous

appeals, requiring  Firemen's to litigate the  same claim in

different fora.  Westcott's attempt to distinguish its state

court claims from those brought in the federal courts has no

merit  as res  judicata clearly  foreclosed  its claim.   In

light  of  this  determination,  we award  double  costs  to

Firemen's.

                         CONCLUSION
                                   

          We affirm  the district  court's grant of  summary

judgment  to Firemen's on  the grounds  of res  judicata and

award double costs.

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