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Global One Engineering, LLC v. SiteMaster, Inc.

United States District Court, N.D. Oklahoma

July 27, 2017

GLOBAL ONE ENGINEERING, LLC, Plaintiff,
v.
SITEMASTER, INC., Defendant.

          OPINION AND ORDER

          CLAIRE V. BAGAN UNITED STATES DISTRICT JUDGE

         Now before the Court are the following motions: plaintiff's Motion for Attorneys' Fees and Combined Brief in Support (Dkt. # 87); Defendant/Counterclaimant SiteMaster, Inc.'s Motion for Set-Off and Incorporated Brief in Support (Dkt. # 88); Defendant/Counterclaimant SiteMaster, Inc.'s Motion for Attorneys' Fees and Non-Taxable Costs and Incorporated Brief in Support (Dkt. # 94); Defendant/Counterclaimant SiteMaster, Inc.'s Motion for New Trial on Damages, or in the Alternative Motion to Amend Judgment and Incorporated Brief in Support (Dkt. ## 97, 99); Defendant/Counterclaimant SiteMaster, Inc.'s Motion for New Trial on Fraud and Incorporated Brief in Support (Dkt. # 98); Defendant/Counterclaimant SiteMaster, Inc.'s Motion to Review Clerk's Order on Costs and Incorporated Brief in Support (Dkt. # 109).

         I.

         On October 14, 2015, Global One Engineering, LLC (Global One) filed this case alleging that it entered a contract with SiteMaster, Inc. (SiteMaster) concerning the painting of a United States Navy communications tower on the island of Sicily. Dkt. # 2, at 2. Under the contract, SiteMaster was the general contractor and Global One was a subcontractor, and Global One represented that it was “engaged in the business of maintenance, repair, and painting of telecommunication and radio towers, specializing in tall towers.” Id. Global One alleged that it was not provided enough time to complete the painting of the tower, and it claimed that SiteMaster refused to pay several invoices that had been submitted by Global One. Id. at 3. Global One alleged a claim of breach of contract seeking over $300, 000 in damages and attorney fees. SiteMaster asserted counterclaims for breach of contract and fraud, seeking more than $900, 000 in damages. Dkt. # 16.

         The case was tried before a jury and certain facts were not disputed. In particular, there was no dispute that Global One did not finish painting the tower and that SiteMaster brought in another subcontractor to complete the work. Dkt. # 55, at 1-2 (pretrial order). The parties disputed how much work Global One completed and the quality of that work, but the evidence was undisputed that SiteMaster paid a second subcontractor, Allstate Tower, Inc. (Allstate), approximately $653, 000 to finish painting the tower. Dkt. # 97-2, at 2. SiteMaster also presented testimony that it incurred an additional $305, 000 in expenses in relation to mobilizing a second subcontractor to go to Sicily. Dkt. # 97-1, at 2-13. Global One took the position that it had been denied access to the worksite for the full amount of time promised under the contract. See Dkt. # 97-3, at 4. According to Global One's expert witness, Michael Berryman, the contract guaranteed Global One 99 calendar days to work on the tower, and he believed that Global One could not be held responsible for failing to complete its work if SiteMaster failed to make the site available for the full amount of time. Id. Berryman opined that Global One had completed between 55 and 59 percent of the work that it agreed to perform under the parties' contract when it left Sicily, and he testified that Global One was owed $329, 511 for unpaid invoices submitted to SiteMaster. Dkt. # 110-3, at 2. The invoices submitted by Global One show that this amount is comprised of $129, 511 for work completed between August 15 and September 15, 2015, and $200, 000 for demobilization and completion. Dkt. # 110-3, at 15-19. The parties' written agreement consisted of a subcontract agreement, a purchase order, and an award letter. Dkt. # 88-3, at 5-11; Dkt. # 98-2; Dkt. # 98-3. The purchase order contains the following provision:

20. Seller's Default: Subject to Paragraph 21 above, whenever Seller (1) refuses or fails to deliver any Deliverables within the time specified in the Contract or in written instructions issued to Seller, or (2) otherwise defaults in the performance of the work, Company may terminate the Contract, in whole or in part, immediately upon mailing notice of default. Company and Seller may agree to grant to Seller an opportunity to cure any such default. In the event that Company must complete the Deliverables using its own crews or another subcontractor, the costs to complete the Deliverables will be deducted from any amounts due to Seller.

Dkt. # 88-3, at 10.

         The jury instruction conference was held on December 9 and 12, 2016.[1] SiteMaster had submitted a proposed jury instruction as to its damages, which instructed the jury to calculate the full amount of damages owed to SiteMaster and then subtract any amount owed to Global One for invoices that had not been paid by SiteMaster. Dkt. # 62, at 34. The Court raised this issue at the jury instruction conference and advised SiteMaster that the Court would not be asking the jury to perform a set-off as part of its damages calculation. Dkt. # 84, at 7. The Court stated that it would consider the issue of a set-off after the jury returned its verdicts, and neither party objected to the Court's proposal. Id. The jury was instructed as to Global One's breach of contract claim and SiteMaster's breach of contract counterclaim to put each party “in as good a position as it would have been if the contract had not been breached, ” and the jury was not instructed to determine whether any amount paid by SiteMaster to finish painting the tower should be set-off or deducted from any amounts owed to Global One. Dkt. # 76, at 46. However, paragraph 20 of the purchase order dealing with default was identified as a contractual term that was to be interpreted by the jury based on the intent of the parties. Dkt. # 76, at 30-31.

         Global One asked the Court to enter judgment as a matter of law in favor of Global One on SiteMaster's fraud counterclaim. Dkt. # 85, at 2. In ruling, the Court referenced the Oklahoma Supreme Court's decision in Harkrider v. Posey, 24 P.3d 821 (Okla. 2000), and distinguished between fraudulent inducement claims that render a contract void or merely voidable. Dkt. # 85, at 4. Counsel for SiteMaster, Heidi Shadid, agreed that the contract at issue was voidable and that SiteMaster was not seeking rescission as a remedy. Id. at 5. The Court also discussed the merger doctrine under which any representations, promises, or inducements made during contractual negotiations are merged into the contract and any agreements or representations not contained in the contract are not valid and binding agreements. Id. Shadid responded that the subcontract contains a customer list provided by Global One that was intended to induce SiteMaster to enter the contract, and the customer list contained numerous misrepresentations that falsely suggested that Global One was an experienced tower painting company. Id. at 6. However, Shadid agreed that the remedy under Oklahoma law for a contract that is voidable due to fraudulent inducement is rescission, and all of the damages that SiteMaster was seeking for fraud were recoverable as part of its breach of contract counterclaim. Id. at 7. The Court granted Global One's motion for judgment as a matter of law on SiteMaster's fraud counterclaim.

         On December 12, 2016, the Court instructed the jury, the parties made their closing arguments, and the jury returned its verdicts. The jury found for Global One on its breach of contract claim and for SiteMaster on its breach of contract counterclaim. Dkt. ## 77, 78. The jury awarded Global One $129, 511, but did not award any damages to SiteMaster. Before the jury returned to the courtroom with the verdicts, the jury had submitted a note asking if it was “allowed to find both parties in breach and only allow a monetary award to one party.” Dkt. # 80, at 2. The Court consulted with counsel for both parties before responding, and counsel agreed with the Court the appropriate response was simply “yes.” Id.

         SiteMaster has filed several motions challenging the outcome of the trial. SiteMaster argues that the Court should have allowed the jury to consider its fraud counterclaim and it requests a new trial on its fraud counterclaim. Dkt. # 98. SiteMaster requests a new trial on its breach of contract counterclaim as to damages only or, in the alternative, it asks the Court to amend the judgment to award SiteMaster $958, 000. Dkt. ## 97, 99. Finally, SiteMaster asks the Court to reduce the award of damages to Global One to $0 by means of an equitable set-off or recoupment, because the parties' contract requires that any amounts paid by SiteMaster to complete the work that was to be performed by Global One be deducted from any unpaid invoices due to Global One. Dkt. # 88.

         II.

         Under Fed.R.Civ.P. 59(a), a party may file a motion seeking a new trial on some or all issues “for any reason for which a new trial has heretofore been granted in an action at law in federal court . . . .” The motion for new trial must be filed within 28 days of the verdict, and there is no dispute in this case that SiteMaster has timely filed its motions seeking a new trial. In reviewing a Rule 59(a) motion, the district court must review the facts presented at trial and consider those facts in a light most favorable to the prevailing party. Snyder v. City of Moab, 354 F.3d 1179, 1188 (10th Cir. 2003). “Where a new trial motion asserts that the jury verdict is not supported by the evidence, ‘the verdict must stand unless it is clearly, decidedly, or overwhelmingly against the weight of the evidence.'” Anaeme v. Diagnostek, Inc., 164 F.3d 1275, 1284 (10th Cir. 1999). In reviewing a motion for new trial challenging the amount of damages, the award of damages should be sustained if there is any competent evidence tending to support the verdict. Black v. Hieb's Enterprises, Inc., 805 F.2d 360, 363 (10th Cir. 1986).

         In addition to a motion for a new trial, a party may also ask the court to alter or amend the judgment under Fed.R.Civ.P. 59(e). A motion under Rule 59(e) should be granted “only to correct manifest errors of law or to present newly discovered evidence, ” but such motions are not permitted “to reevaluate the weight of the evidence after a jury's verdict.” Elm Ridge Exploration Co., LLC v. Engle, 721 F.3d 1199, 1216 (10th Cir. 2013). The Tenth Circuit allows a party to challenge inconsistent verdicts under Rule 59(e), but a reviewing court must “accept any ...


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