Court Opinion

ID: 2962842
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:02:41.25202+00
Date Added: 2024-06-11T15:01:34.104320
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                              _________________________          No. 94-1375                                    DIANE GIBSON,                                Plaintiff, Appellant,                                          v.                              CITY OF CRANSTON, ET AL.,                                Defendants, Appellees.                              _________________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF RHODE ISLAND                    [Hon. Ronald R. Lagueux, U.S. District Judge]                                             ___________________                              _________________________                                        Before                                Selya, Circuit Judge,                                       _____________                            Aldrich, Senior Circuit Judge,                                     ____________________                              and Boudin, Circuit Judge.                                          _____________                              _________________________               Lauren  E.  Jones, with  whom  Jones  Associates, Daniel  V.               _________________              _________________  __________          McKinnon, and McKinnon & Harwood were on brief, for appellant.          ________      __________________               William F. Holt, Assistant City Solicitor, for appellees.               _______________                              _________________________                                   October 3, 1994                              _________________________                    SELYA, Circuit Judge.   This appeal  arises out of  Dr.                    SELYA, Circuit Judge.                           _____________          Diane Gibson's short and stormy stay as superintendent of schools          in Cranston, Rhode  Island.   It stands as  a vivid  illustration          that some of life's  most instructive lessons are learned  in the          classroom  of adversity.    After educating  ourselves about  the          facts of the case, the applicable law, and the proceedings below,          we conclude that the district court correctly refused to give the          plaintiff's case a passing grade.          I.  BACKGROUND          I.  BACKGROUND                    Because the trial  court took this  case from the  jury          and terminated it by means of an instructed verdict, we summarize          the   facts  adduced  below  in  the   light  most  congenial  to          appellant's claims.                    In    early   1989,   while    serving   as   Assistant          Superintendent of Schools  in Waterloo, Iowa, plaintiff-appellant          Diane  Gibson  applied  for a  job  as  school superintendent  in          Cranston.   The school committee (the  Committee) interviewed her          twice (once  publicly and once privately)  and eventually offered          her the post.  On  August 21, 1989, she met in Rhode  Island with          members of the Committee  concerning her employment contract (the          Contract).  The parties signed it the next day.                    The   Contract  contained  11  sections,  counting  the          preamble, spread over eight pages.  It specified a term that  ran          from October 1, 1989  to June 30, 1992.   The Contract  contained          various  clauses  related to  professional  growth, compensation,          contract renewal, salary adjustments, termination for cause,  and                                          2          resignation.  It  also provided for  such miscellaneous items  as          certification,  annual  medical   examinations,  and   disability          protection.  Article  III described the superintendent's  duties,          stating that she                    shall be the chief administrator and agent of                    the Cranston  schools and have charge  of the                    administration  of  the  schools   under  the                    direction of the Committee.  In this capacity                    she  shall implement, among other things, all                    policies approved by  the Committee,  provide                    for  efficient  administration of  the system                    and provide for the performance evaluation of                    all administrators, teachers, and  quality of                    the education provided.          The same  article stated that the parties' "respective rights and          responsibilities .  . . shall  be as  specified in  Chapter 2  of          Title 16 of the [Rhode Island General Laws]."                    Article VI of the Contract has particular pertinence in          this  litigation.    By  its  terms,  the  article  obligated the          Committee  to  assess  in  writing  the  Superintendent's overall          performance  at least annually.  The format and procedure for the          evaluation were to  be decided upon by the  parties no later than          60  days after the Contract's effective date.  Once an evaluation          emerged, the  Committee and the  Superintendent were to  meet for          discussion  of it;  specifically, the  Contract indicated  that a          meeting  dedicated to this purpose would be held between February          15 and March 15 of each contract year.  The evaluation  was to be          used   in  determining  "if  the  Superintendents's  Contract  is          renewed/not renewed."  To  this end, Article VI also  contained a          non-exclusive list of factors to be considered in  the evaluation          process and required  that the end product describe in reasonable                                          3          detail "specific instances of strengths and commendations as well          as specific instances of any unsatisfactory performance."                    At the  end  of the  first 60  days of  her reign,  Dr.          Gibson had not  heard from the Committee regarding the evaluation          process.   She  brought the  matter to  the attention  of Stephen          Dambruch,  the  Committee's chairman.    Dambruch suggested  that          appellant develop and disseminate a proposed evaluation form.  On          December 4, 1989, appellant complied.  On March 1, 1990, Dambruch          notified  the  Committee  that  an  evaluation  was  due  between          February  15  and March  15  of  each year.    Five  of the  nine          Committee members  responded on the form  appellant had prepared.          Two  other  members  wrote  letters  commenting  upon appellant's          performance.  Two Committee  members kept their own counsel.   In          any  event, the  Committee never  composed a  unified performance          evaluation.                    This  lollygagging  took  place   during  a  period  of          considerable turmoil.   In  January 1990 the  Committee voted  to          restructure the public schools, only to reverse itself two months          later.1   Spurred in part by this  dramatic about-face, appellant          requested that the Committee provide her with a written statement          of  its goals.   Although  a  meeting was  held  to discuss  this          request, the Committee never complied with it.                    In March  1990 appellant  became aware that  the school                                        ____________________               1To  add to  the muddle, hard  on the  heels of  the vote to          restructure  the school  system a  Committee member  circulated a          poll  requesting   teachers'  input.     This  impulsive   action          ultimately led to the filing of an unfair labor practice charge.                                          4          system had improperly  paid health benefits  on behalf of  former          employees.  She brought this matter to the Committee's attention.          Dambruch and his colleagues commissioned an ad hoc committee (the          AHC)  to mull the problem.   The AHC  sought to exclude appellant          from  its  deliberations.    To  compound  this  contretemps,  an          assistant  city  solicitor  wrote to  Dambruch  on  June  8, 1990          suggesting  that  the AHC  might be  illegally infringing  on the          Superintendent's  administrative prerogatives and  might lack the          legal authority necessary to  arrange for an audit of  the school          system's records.  Eventually, the Committee retained a certified          public accountant.  Although the  accountant completed a study of          the situation, the Committee never provided appellant either with          the  accountant's  report  or  with any  feedback  regarding  the          accountant's recommendations.                    Cranston held a municipal election in November of 1990.          The  electoral results  significantly  affected  the  Committee's          composition.   A member suggested that  appellant's evaluation be          completed  before the  newly elected  members took  office.   The          Committee  scheduled  a special  meeting  for  this purpose,  but          appellant  resigned before  the meeting  could be  held.   In her          letter of resignation, dated December 28, 1990, appellant accused          the Committee of violating the Contract by not providing a proper          evaluation and statement of goals, and by infringing on the scope          of her autonomy as superintendent.                    All was serene for well over a year.  On June 10, 1992,          however,  appellant,  then  a   citizen  and  resident  of  North                                          5          Carolina, sued for  breach of  contract in a  Rhode Island  state          court.  She claimed that the City of Cranston, acting through the          Committee, disregarded  duties owed  under the contract,  and she          sought  damages including the balance  of her salary and benefits          for  the  period from  January 1,  1991  through June  30, 1992.2          Noting the  existence of diversity jurisdiction, 28 U.S.C.   1332          (1988), Cranston removed the case to  federal district court, see                                                                        ___          28 U.S.C.   1441 (1988).                    In due course, Chief Judge Lagueux empaneled a jury and          trial  commenced.  At the close of the appellant's case, Cranston          moved  for a judgment  as a matter  of law.3   The district judge          assumed arguendo that Cranston  had not fulfilled its contractual                  ________          commitments, but ruled that, even so, the evidence did not permit          a rational jury to find a breach of  sufficient materiality as to          allow appellant  to cease performance and recover damages for the          balance of the unexpired term.  This appeal followed.4                                        ____________________               2Although Dr.  Gibson originally sued a  bevy of defendants,          only  Cranston and  its treasurer  remain in  the case.   Because          Rhode  Island  law  treats a  suit  against  the  treasurer of  a          municipality,  in his or her official capacity, as a suit against          the  city, see  R.I.  Gen.  Laws     45-15-5  (1991),  these  two                     ___          defendants are  in effect  the  same entity.   We  refer to  them          collectively as "Cranston."               3In  1991, Fed.  R. Civ.  P. 50  was amended  to change  the          appellation "directed verdict"  to "judgment as a matter of law."          This  change in nomenclature does not affect the substance of the          applicable legal standard.               4Although we affirm  the grant  of judgment as  a matter  of          law, see  infra, we caution that in most cases a trial court will               ___  _____          be better advised to  reserve decision on such a  motion, passing          on the legal question only after submitting the case to the jury.          Mid-trial  directed verdicts  should  be the  exception, not  the          rule.   We  concluded long  ago that  refraining from  granting a                                          6          II.  STANDARD OF REVIEW          II.  STANDARD OF REVIEW                    When confronted with a motion  for judgment as a matter          of law, whether at the end of a plaintiff's case or  at the close          of  all the evidence, a trial court must scrutinize the proof and          the inferences reasonably to be drawn therefrom in the light most          amiable to  the nonmovant.  See Rolon-Alvarado v. Municipality of                                      ___ ______________    _______________          San Juan, 1 F.3d 74, 76 (1st Cir. 1993); Wagenmann  v. Adams, 829          ________                                 _________     _____          F.2d 196, 200 (1st Cir. 1987).  In the process, the court may not          consider  the  credibility  of witnesses,  resolve  conflicts  in          testimony, or evaluate  the weight of  evidence.  See  Wagenmann,                                                            ___  _________          829 F.2d at 200.   A judgment as a  matter of law may be  granted          only if the evidence, viewed from the perspective  most favorable          to  the nonmovant,  is so  one-sided that  the movant  is plainly          entitled to judgment, for reasonable minds could not differ as to          the outcome.  See Rolon-Alvarado, 1 F.3d at 77.                        ___ ______________                    Because granting a judgment as a  matter of law depends          upon the legal  sufficiency of the evidence, appellate  review is          plenary.   See Jordan-Milton Mach., Inc. v. F/V Teresa Marie, II,                     ___ _________________________    ____________________          978 F.2d  32, 34 (1st Cir. 1992).  It is incumbent upon the court          of appeals  to apply precisely  the same criteria  that constrain          the trial court.   See Rolon-Alvarado, 1  F.3d at 77.   Moreover,                             ___ ______________                                        ____________________          judgment as a  matter of law until  the jury has had a  chance to          deal  with the  merits  is  frequently  a "wise  and  time-saving          precaution."   Talbot-Windsor  Corp. v.  Miller, 309 F.2d  68, 69                         _____________________     ______          (1st Cir. 1962).   By following that course, the  judge minimizes          the risk that the trial will have to be replayed  yet retains the          power  to pass  on the sufficiency  of the  evidence in  a timely          manner.   Of course,  everything depends upon  the circumstances,          and in some cases granting the motion is both efficient and wise.                                          7          the standard of review affords no place for any deference to  the          district  court's  view anent  state-law  questions.   See  Salve                                                                 ___  _____          Regina Coll. v. Russell, 499 U.S. 225, 238 (1991).          ____________    _______          III.  ANALYSIS          III.  ANALYSIS                    The  substantive law  of Rhode  Island governs  in this          diversity  case.  Under Rhode Island law, a contracting party may          cease performance and seek damages if the other contracting party          commits  a breach that is "material," see, e.g.,Philip Carey Mfg.                                                ___  ____ _________________          Co. v. General Prods. Co., 151 A.2d 487, 493 (R.I. 1959), or that          ___    __________________          "goes  to the essence of  the contract," Aiello  Constr., Inc. v.                                                   _____________________          Nationwide Tractor  Trailer Training & Placement  Corp., 413 A.2d          _______________________________________________________          85, 87 (R.I.  1980).  Some courts and  commentators have cast the          standard  in terms of a "total" breach  as opposed to a "partial"          breach,  with  only  the   former  justifying  termination  of  a          contract.   See, e.g., Lovink  v. Guilford Mills,  Inc., 878 F.2d                      ___  ____  ______     _____________________          584, 586-87 (2d Cir. 1989); Arthur L. Corbin, Corbin on Contracts                                                        ___________________            946, at 809 (1951).  Because we believe  these terms constitute          various  ways  of  saying  the  same  thing,  we  will  use  them          interchangeably.5                                        ____________________               5The rigid material/non-material dichotomy  may oversimplify          the universe of  breaches.   Although this case,  in its  present          posture, does not require  us to make a finer distinction,  we do          not deprecate the  possibility that there may  be an intermediate          level of breach, i.e.,  breaches which are not serious  enough to                           ____          warrant repudiation of the contract and a suit for damages by the          injured party,  but which nonetheless might  constitute a defense          to  an action  for damages  brought by  the party  committing the          initial breach.  Thus,  our holding that the  Committee's alleged          breaches  were  not material,  see  infra,  does not  necessarily                                         ___  _____          betoken  that Dr. Gibson would have been liable had the Committee          sued her for breach.                                          8                    Appellant invites us to rule that materiality is always          a  question of  fact, thereby  eliminating the  possibility of  a          directed  verdict  where, as  here, the  issue  is disputed.   We          decline the  invitation.    While the  state  supreme  court  has          indicated that, in this context,  materiality  "is essentially  a          factual question," and  that its resolution  ordinarily "requires          consideration of all the  pertinent evidence and the  conduct and          relationship of the parties," Dunne Leases Cars & Trucks, Inc. v.                                        ________________________________          Kenworth  Truck Co., 466 A.2d  1153, 1160 (R.I.  1983), the first          ___________________          part  of this  statement  is  a  generalization, and,  like  most          generalizations, it  admits of  exceptions.  Though  questions of          materiality are usually to be determined by the trier of fact, in          this case  the jury, the  rule is not universal.   As is  true of          virtually any factual question, if the materiality  question in a          given case  admits of  only one  reasonable  answer (because  the          evidence  on  the  point  is either  undisputed  or  sufficiently          lopsided),  then the  court must  intervene  and address  what is          ordinarily a factual question as a question of law.                    The task  of delineating which  particular breaches may          justify  an injured  party  ceasing performance  and bringing  an          action  for damages is demanding,  but the case  law affords some          insights.   In Aiello, for  example, the plaintiff, a contractor,                         ______          sued  a property owner for nonpayment of installments due under a          construction contract.  The  Rhode Island Supreme Court upheld  a          finding that the defendant's failure to  pay installments as they          came  due went  to the  essence of  the contract  and, therefore,                                          9          excused further performance  by the plaintiff.   See Aiello,  413                                                           ___ ______          A.2d at 87.   In Dunne, the court upheld a finding  that a dealer                           _____          committed a  material breach of  its franchise  agreement with  a          truck manufacturer by  failing to honor  its promise to  separate          its leasing activities from its dealership operation.  See Dunne,                                                                 ___ _____          466  A.2d at  1159.   In  its opinion,  the court  emphasized the          presence  of  evidence  that  the  leasing  activities  adversely          impacted  the   truck  dealership   in  the  areas   of  parking,          cleanliness, parts sales, and service.  See id. at 1158.  On this                                                  ___ ___          basis, the  court concluded  that  the dealer's  breach might  be          deemed  material even  though the  dealer regularly  achieved its          sales quota under the franchise agreement.6  See id. at 1159.                                                       ___ ___                    Despite  the insights  that can  be gleaned  from these          cases,  the  Rhode  Island  courts thus  far  have  not precisely          defined  what constitutes  a  material breach.   Nonetheless,  we          believe  that   the  proper  analysis  is   informed  by  certain          commentaries  and  decisions  from  outside Rhode  Island.    See                                                                        ___          Michelin  Tires (Canada), Ltd. v. First Nat'l Bank, 666 F.2d 673,          ______________________________    ________________          682 (1st  Cir. 1981) ("In the  absence of a definitive  ruling by          the highest state  court, a federal court  may consider analogous          decisions,  considered dicta,  scholarly  works,  and  any  other                                        ____________________               6Although  Dunne involved  allegations that  the defendant's                          _____          decision to  terminate the  franchise agreement had  been reached          without "due cause" as  then required by R.I. Gen. Laws   31-5.1-          4(C)(3)  (1979  reenactment),  the  Rhode  Island  Supreme  Court          interpreted "due cause" as turning on  the materiality of certain          breaches committed by  the franchisee.   See Dunne,  466 A.2d  at                                                   ___ _____          1157.  Thus,  Dunne is  useful authority in  connection with  the                        _____          question sub judice.                   ___ ______                                          10          reliable data tending convincingly to show how the highest  court          in the state would  decide the issue at hand, taking into account          the  broad  policies  and  trends  so  evinced.")  (citation  and          internal  quotation  marks  omitted).    The  Restatement  is  an          especially helpful source of guidance because Rhode Island courts          frequently turn to  the Restatement  to fill gaps  in state  law.          See,  e.g.,  Bibby's  Refrig.,  Heating  &   Air  Cond.  Inc.  v.          ___   ____   ________________________________________________          Salisbury,  603 A.2d 726,  729 (1992); Durapin,  Inc. v. American          _________                              ______________    ________          Prods., Inc. , 559 A.2d 1051, 1059 (1989).  The Restatement lists          ____________          five factors  that may  be  considered in  determining whether  a          breach is  material.7  Other commentators  have espoused slightly                                        ____________________               7These factors are:                    (a)  the  extent to  which the  injured party                    will  be  deprived  of the  benefit  which he                    reasonably expected;                    (b) the extent to which the injured party can                    be adequately  compensated  for the  part  of                    that benefit of which he will be deprived;                    (c) the extent to  which the party failing to                    perform  or  offer  to  perform  will  suffer                    forfeiture;                     (d) the likelihood that the party failing to                    perform or to offer  to perform will cure his                    failure,   taking   account   of    all   the                    circumstances   including    any   reasonable                    assurances;                    (e) the  extent to which the  behavior of the                    party  failing to  perform  or  to  offer  to                    perform comports with standards of good faith                    and fair dealing.          Restatement (Second) of Contracts   241 (1979).                                          11          different  sets  of  relevant  factors  for  use  in  determining          materiality,  such as the extent  to which the  contract has been          performed at the time of  the breach, the willfulness vel non  of                                                                ___ ___          the breach,  and the  degree of  seriousness attributable to  the          breach,  expressed  in  quantitative  terms.    See  2  E.  Allan                                                          ___          Farnsworth,  Farnsworth On  Contracts    8.16, at 442  (1990); J.                       ________________________          Calamari  & J.  Perillo,  Contracts 408-09  (2d  ed. 1977).    We                                    _________          believe that when  the occasion arises, the Rhode  Island Supreme          Court will adopt  some variant  of these tests  to determine  the          materiality  of a  breach of  contract.8   In our view,  the test          will  concentrate  on  factors  such   as  those  listed  in  the          Restatement, with special emphasis, in the employment context, on          the extent to which the alleged breach interferes with the duties          and benefits flowing from the contract in its  entirety.  We need          not dice matters too  finely, however, for appellant's proof  can          meet neither the Restatement  standard nor any reasonable variant          of it.  We explain briefly.                    While a material breach  of an employment contract need          not completely  frustrate the entire purpose of  the contract, it          must be so important  that it makes continued performance  by the          plaintiff  virtually  pointless, see  Lovink,  878  F.2d at  587.                                           ___  ______          Thus, if Cranston  refused to pay  appellant, or, conversely,  if                                        ____________________               8Appellant suggests that "a breach is  material if it denies          a  party a  bargained-for  exchange."   We find  this formulation          unacceptable,  for it does not reflect how significant a contract          provision must be before its breach will be deemed material.                                          12          appellant completely  withheld her services for  no valid reason,          the ensuing breach would reach the essence of the Contract.                    But that is not what  transpired here.  We think it  is          readily apparent that, under the stringent standard that obtains,          the Committee's alleged breaches of the Contract are, as a matter          of  law, not  material.   The superintendent's job  encompasses a          complex and varied set of responsibilities.  Under a provision of          the Rhode  Island General  Laws, which is  incorporated into  the          Contract by explicit reference, the post includes a vast array of          administrative,   supervisory,   managerial,   and   policymaking          functions.  See  R. I. Gen. Laws    16-2-11 (1988), reprinted  in                      ___          the  appendix.   This  elaborate compendium  of responsibilities,          complemented by  the  multifarious  provisions  of  the  Contract          itself, put appellant's grievances  into proper perspective.  And          so viewed, we are unable to  see how a reasonable jury could find          that  the  Committee's  conduct involved  matters  of  sufficient          significance to constitute a material breach.                    Appellant's  flagship  claim   pirouettes  around   the          Committee's  failure to  provide her  with a  unified evaluation.          Given  the  admitted  feedback  that appellant  received  from  a          majority of  the individual Committee members,  we cannot discern          how the failure to reduce the feedback to a unified evaluation or          the other shortcomings in the evaluation process  could be deemed          a material breach.   Without the evaluation, appellant was  still          able to carry  out virtually  all of her  responsibilities.   She          still received the overwhelming majority of the benefits to which                                          13          the Contract entitled her.   Her mere testimony that  without the          evaluation  provision she  would not  have signed  the employment          agreement cannot make this otherwise  unremarkable provision into          one that "goes to the essence of the contract."  Salo Landscape &                                                           ________________          Constr. Co. v. Liberty Elec. Co., 376 A.2d 1379, 1382(R.I. 1977).          ___________    _________________          The determination of materiality,  like other aspects of contract          interpretation, must be based largely on  a standard of objective          reasonableness rather than purely subjective belief.  Cf. John F.                                                                ___ _______          Davis Co. v.  Shepard Co., 47  A.2d 635, 637 (R.I.  1946) (noting          _________     ___________          that the  "true question"  in  determining the  intention of  the          parties  is "not  what  intention existed  in  the minds  of  the          parties,  but what intention is expressed  by the language used")          (internal  quotation marks  omitted); Pahlavi v.  Palandjian, 809                                                _______     __________          F.2d  938,  945 (1st  Cir.  1987)  (commenting that  "contracting          parties are  bound by  objective manifestations  and expressions,          not subjective expectations").   In other  words, a party  cannot          transmogrify a provision that,  from an objective standpoint, has          only marginal  significance into one  of central salience  by the          simple  expedient of saying in retrospect that she believed it to          be very important.                    Here,    notwithstanding     plaintiff's    post    hoc                                                                ____    ___          rationalization,  the Committee's  failure to  provide a  unified          evaluation  seems much more a  matter of form  than of substance.          It did not in  any way shrink plaintiff's major duties or deprive          her  of  the  principal  benefits  of  her  contractual  bargain.          Nothing  about the failure betokens bad faith or an unfair course                                          14          of conduct.  And the sockdolager is that, at the  time Dr. Gibson          resigned, there  was a high  likelihood that the  Committee would          soon cure  its  breach  by  providing an  evaluation;  a  special          meeting for this  purpose was  scheduled to occur  less than  one          week after she precipitously resigned.                    Appellant's  fallback position  is  that the  Committee          never  furnished  her with  a written  statement  of goals.   But          appellant had ample contact with the Committee and its members to          get a sense of the school system's objectives.  Thus, as with the          first   alleged   breach,   this   failure  did   not   interfere          significantly with  either her duties  or her benefits  under the          Contract.   Consequently,  it  could  not be  deemed  a  material          breach.                    Finally, appellant alleges that the Committee infringed          upon  her  administrative  responsibilities.     She  offers  two          incidents  to illustrate  her contention:   a  Committee member's          action  in sending a  questionnaire directly to  the faculty, see                                                                        ___          supra  note 1,  and the  AHC's attempt  to  exclude her  from its          _____          deliberations.    Given  the   minor  nature  of  these  supposed          infractions and their  subsequent resolution, no  reasonable jury          could find that they constitute a material breach.          IV.  CONCLUSION          IV.  CONCLUSION                    We need go no further.  Considering all the evidence in          the light  most hospitable to plaintiff, no reasonable jury could          find that the Committee's alleged breaches of the Contract gutted          it.   Consequently,  the  court below  did  not err  in  granting                                          15          judgment as a matter of law.          Affirmed.          Affirmed.          ________                                          16