Associates, v. Gammino, Inc. ( 1993 )

July 27, 1993
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 92-2281
COMMERCIAL ASSOCIATES, ET AL.,
Plaintiffs, Appellees,
v.
TILCON GAMMINO, INC.,
Defendant, Appellant.
ERRATA SHEET
The opinion of the Court issued on July 22, 1993, is corrected as
follows:
On page 16, paragraph 3, line 2: substitute "or" for "and."
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 92-2281
COMMERCIAL ASSOCIATES, ET AL.,
Plaintiffs, Appellees,
v.
TILCON GAMMINO, INC.,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Ernest C. Torres, U.S. District Judge]
Before
Boudin, Circuit Judge,
Campbell, Senior Circuit Judge,
and Stahl, Circuit Judge.
John R. Fornaciari with whom Louis V. Jackvony, Jr., Jackvony &
Jackvony, Robert M. Disch and Ross & Hardies were on brief for
appellant.
William R. Landry with whom Michael DiBiase, Karen A. Pelczarski
and Blish & Cavanagh were on brief for appellee, Lechmere, Inc.
July 22, 1993
BOUDIN, Circuit Judge. This action arises out of
efforts to develop a shopping complex known as Bald Hill
Plaza in Warwick, Rhode Island. The plan was the brainchild
of real estate developer Anthony DelVicario, who was a
general partner in a Massachusetts limited partnership called
Commercial Associates ("Commercial"). Tilcon Gammino, Inc.
("Tilcon"), a construction company, learned about the project
and expressed interest to DelVicario in obtaining a contract
to do certain construction work in connection with the
project, primarily site clearing and grading. DelVicario,
with Tilcon's assistance, approached Lechmere, Inc.
("Lechmere"), a Minnesota corporation that operates a chain
of retail stores, and persuaded Lechmere to join the project
as one of the shopping center's "anchor stores."
Lechmere purchased the real estate on which its store
was to be located, and Commercial acquired the remainder of
the property needed for the development. Lechmere and
Commercial entered into a written agreement--called the CORE
agreement-- which provided inter alia that Commercial would
be responsible for the site-clearing work and the
construction of the "footprint" underlying the entire
shopping complex, including the "pad" upon which Lechmere's
store would be built. In consideration, Lechmere agreed to
pay Commercial $1.3 million. Commercial then retained Tilcon
to serve as the general contractor for the site-clearing
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work. Commercial and Tilcon entered into a written contract
dated February 8, 1985, which generally described the scope
of the work to be performed by Tilcon and contained an
estimated total cost of "about $2,800,000." Tilcon started
the site-clearing work around that same time. DelVicario was
the supervisor of the project and directed Tilcon's
activities at the work site on a daily basis. Lechmere had
wanted the pad completed by March 15, 1985, so its store
could open that September in time for the holiday shopping
season. At least in part to meet that timetable, DelVicario
insisted that Tilcon accelerate its work schedule, requiring
Tilcon's staff to work overtime and necessitating extra
equipment and supplies. And, according to Tilcon, DelVicario
insisted that Tilcon perform substantial work at the shopping
center site that went beyond the description of the job
contained in the February 8 contract; Tilcon refers to these
additional tasks as "extras."
Work was completed on schedule, but a dispute soon arose
as to Tilcon's compensation. Tilcon claimed that it was
entitled to additional compensation for the "extras" it
performed at DelVicario's direction. Commercial disagreed--
it believed that Tilcon had agreed to a "guaranteed maximum
price" and had been paid in full--and refused to pay the
final three bills submitted by Tilcon. Tilcon filed a
mechanic's lien on the property under Rhode Island law, and
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on February 7, 1986, brought an action against Commercial and
Lechmere in Rhode Island Superior Court to enforce that lien.
Pursuant to the Rhode Island statute, Commercial posted a
$1.2 million bond to release the lien, and the action proceed
in rem against the bond.1
Following a seven-day bench trial the superior court
found in favor of Tilcon. In a 28-page opinion, the court
found that Tilcon was not bound by the estimated price
contained in the original February 8 contract. The court
found that Tilcon was bound by a maximum price of $3,095,000
contained in a May 8 letter to Commercial, but that a number
of tasks were excluded from this price. Finally, the court
found that Tilcon was entitled to compensation on a "cost-
plus" basis for numerous "extras" performed at the site,
pursuant to the oral assurances of DelVicario.
Under Rhode Island law Tilcon could recover in the lien
enforcement proceeding only for work performed within the
120-day period prior to notice of the lien (the so-called
"lien period"). The court expressly found that Tilcon was
entitled to compensation for work performed prior to the lien
1The mechanic's lien statute provides that respondents
can secure the release of a lien by depositing with the
registry of the court "cash equal to the total amount of the
accounts and demands of all persons claiming liens" or a
surety bond in that amount in lieu of cash. R.I. Gen. Laws
34-28-17. In this case, Commercial deposited a $1.2 million
bond with the registry and, apparently without any objection
from Tilcon as to the amount, the lien was discharged.
-4-
period, but held that it had no power to include these
amounts in its judgment. The court left it to Tilcon to
"pursue this claim in another appropriate proceeding."
The Rhode Island court entered judgment against
Commercial and Lechmere for $1,329,207.03, which represented
the court's painstaking calculation of the compensation due
Tilcon for work at the Bald Hill site during the 120-day lien
period. Tilcon, however, was able to collect only $1.2
million, the amount of the bond that had been posted to
release the lien, leaving a $129,207 deficiency between the
judgment and Tilcon's recovery. The superior court's
decision was affirmed in all respects by the Rhode Island
Supreme Court. Tilcon Gammino, Inc. v. Commercial Assocs.,
570 A.2d 1102 (R.I. 1990).
During the pendency of the mechanic's lien proceeding,
Lechmere and Commercial filed this separate action against
Tilcon in Rhode Island Superior Court seeking damages of
their own arising out of the Bald Hill project. Tilcon
removed the action to federal district court based on
diversity of citizenship. It also filed a counterclaim
against Lechmere and Commercial seeking payment for work that
was not recoverable in the lien action--the deficiency
between the judgment and the bond, and compensation for work
done prior to the lien period--on various theories including
breach of contract, unjust enrichment and fraud.
-5-
After the final decision in the lien case, Tilcon moved
for summary judgment on its counterclaim in this action.
Tilcon argued that the Rhode Island Superior Court had found
as a matter of fact that DelVicario bound Lechmere and
Commercial to a series of oral contracts with Tilcon, and
that Tilcon was owed specific amounts for work performed
under those contracts. Tilcon claimed that Commercial and
Lechmere were collaterally estopped from relitigating these
issues, and that Tilcon was therefore entitled to judgment as
a matter of law for the $129,207 discrepancy between the
superior court's judgment and the $1.2 million bond,2 as
well as approximately $600,000 for work at the Bald Hill site
prior to the lien period.
The district court agreed that Commercial and Lechmere
are bound by the Rhode Island court's factual findings but
only those that were necessary to its judgment. Thus, the
court held that the Rhode Island decision conclusively
established that Tilcon was owed an additional $129,207 for
work performed during the lien period. But the district
court concluded that the Rhode Island decision did not
resolve the issue of who was liable for the deficiency, nor
2Tilcon claims that it is entitled to recover in this
case the entire $1,329,207 amount of the Rhode Island
judgment. But it is undisputed that Tilcon recovered $1.2
million by executing on the bond, and Tilcon does not explain
why it is entitled to more than the $129,207 discrepancy for
the lien period.
-6-
did it establish Tilcon's entitlement to compensation for
work prior to the lien period. The case proceeded to trial.
The original claims of Lechmere and Commercial having been
dismissed, the case was now limited to Commercial's and
Lechmere's liability, if any, for work done by Tilcon prior
to the lien period. The dispute was further narrowed by
stipulations. Pursuant to its prior ruling, the district
court instructed the jury that certain facts, primarily,
Tilcon's entitlement to $129,207 for work done during the
120-day period, had been established in prior litigation and
should not be reconsidered. The court therefore precluded
the parties from introducing any evidence regarding work done
during the lien period. It was determined that liability for
the $129,207 deficiency would be imposed upon whichever of
the defendants was held liable at trial for the pre-lien
work.
At trial, Tilcon introduced evidence seeking to show
that Commercial and Lechmere were liable for additional
payments for work done outside the lien period. At the close
of Tilcon's case the court granted judgment as a matter of
law for Lechmere with respect to all of Tilcon's claims,
leaving only the claims against Commercial; the reasons for
the court's ruling are more conveniently discussed later in
this opinion. The jury then returned a verdict in favor of
Tilcon against Commercial for $307,500. The district court
-7-
added to this amount the $129,207 deficiency between the
judgment in the mechanic's lien action and the bond, made a
number of other adjustments to reflect the stipulations among
the parties, and then entered judgment in favor of Tilcon
against Commercial for the resulting amount of $268,903, plus
prejudgment interest on a certain portion of the debt.
Tilcon now appeals. It argues that the Rhode Island
court's factual findings, if given proper preclusive effect,
required that judgment for the $129,207 deficiency be entered
against Lechmere as well as against Commercial. Commercial
has not made any appearance in this appeal; if the limited
partnership is a defunct or insolvent entity, that might
explain why it is important to Tilcon to obtain a judgment
against Lechmere. Tilcon also argues that collateral
estoppel made Lechmere and Commercial both liable for some
$600,000 in work done prior to the lien period and that it
was error to submit this issue to the jury, which found only
$307,500 due from Commercial. Finally, preclusion aside,
Tilcon argues that the court erred by granting judgment for
Lechmere as a matter of law on each of Tilcon's claims.
We start by considering the collateral estoppel issue
before turning to Tilcon's individual claims against Lechmere
and Commercial. "Federal courts are bound by state law on
the preclusive effect of state judgments." Carillo v. Brown,
807 F.2d 1094, 1101 (1st Cir. 1986); see also 28 U.S.C.
-8-
1738; Gonsalves v. Alpine Country Club, 727 F.2d 27, 29 (1st
Cir. 1984). Thus, the district court was obliged to give the
Rhode Island Superior Court's decision the same preclusive
effect that the Rhode Island courts themselves would give
that decision.
In order for the doctrine of collateral estoppel to
apply under Rhode Island law, "several requirements must be
satisfied: there must be an identity of issues; the prior
proceeding must have resulted in a final judgment on the
merits; and the party against whom collateral estoppel is
sought must be the same as or in privity with the party in
the prior proceeding." State v. Chase, 588 A.2d 120, 122
(R.I. 1991). Like a set of Chinese boxes, the identity-of-
issues element, which is the crucial one in this case, has
three components of its own: "[F]irst, the issue sought to
be precluded must be identical to the issue decided in the
prior proceeding; second, the issue must actually have been
litigated; and third, the issue must necessarily have been
decided." Id. at 123.
In addition, Rhode Island courts, consistent with the
prevailing approach, "allow themselves a good deal of
latitude in applying the rule [of collateral estoppel],
observing the spirit of it rather than the letter." Hill v.
Bain, 15 R.I. 75, 23 A. 44 (1885); see also Klein v.
Commissioner, 880 F.2d 260, 264 (10th Cir. 1989) ("Trial
-9-
courts are granted broad discretion in the application of
collateral estoppel."). We think this "latitude" was vested
in the district court below, as it was sitting in this
diversity case as a surrogate for a Rhode Island tribunal.
Tilcon's principal argument is that the district court
failed to give proper preclusive effect to the Rhode Island
Superior Court's finding that DelVicario was acting as an
agent of Lechmere and as such bound Lechmere to the oral
contracts with Tilcon. Tilcon's argument is based on a
single paragraph in the superior court's decision in which
the court stated that DelVicario, in making assurances of
payment to Tilcon, was "acting within the scope of [his]
authority for and on behalf of . . . Commercial and
Lechmere," and therefore bound his principals to the contract
modifications. We agree with the district court that the
issue of Lechmere's contractual relationship with Tilcon was
not one that "must necessarily have been decided" in the lien
proceeding, and therefore is not entitled to preclusive
effect under Rhode Island law. Chase, 588 A.2d at 123.
The "necessarily decided" element of collateral estoppel
means in this context that an issue was not only actually
decided but also necessary to the judgment. See Restatement
(Second) of Judgments 27 (determination must be "essential
to the judgment"). The reasons for this condition are that a
collateral issue, although it may be the subject of a
-10-
finding, is less likely to receive close judicial attention
and the parties may well have only limited incentive to
litigate the issue fully since it is not determinative. See
Wright, Miller & Cooper, Federal Practice and Procedure
4421 at 193 (1981 ed.). Under these circumstances, extending
the force of the unnecessary finding into a different case is
deemed too risky and possibly unfair.
Liability under the Rhode Island mechanic's lien statute
is not dependent on contract. The statute creates a right of
action against a parcel of property whenever improvements are
made "by oral or written contract with or at the oral or
written request of" the landowner. R.I. Gen. Laws 34-28-
1(a) (emphasis added).3 Thus, Lechmere's liability in the
superior court suit (or more technically, the liability of
Lechmere's property) flowed from its status as owner and the
fact that Tilcon's work on the property was done at
Lechmere's request. A "request," of course, is a far cry
3Deleting irrelevant language, the Rhode Island
mechanic's lien statute provides as follows:
Whenever any building . . . or other improvement
shall be constructed . . . by oral or written
contract with or at the oral or written request of
the owner thereof, . . . such building . . . or
other improvement, together with the land, is
hereby made liable and shall stand subject to liens
for all the work done by any person in the
construction . . . of such building . . . or other
improvement, and for the material used in the
construction . . . thereof, which have been
furnished by any person.
-11-
from a contract. To be sure, findings regarding the
existence and terms of the contract governing Tilcon's
assignment at the work site were necessary to a determination
of the amount of Tilcon's lien, since under Rhode Island law
the amount of the lien is dependent upon the underlying
contract. See Art Metal Constr. Co. v. Knight, 56 R.I. 228,
185 A. 136 (1936). But whether that contract was with
Commercial alone, or Commercial and Lechmere jointly, was
irrelevant. All that mattered was that Tilcon was acting "at
[Lechmere's] request," a fact that was undisputed.4
But we do not rest entirely upon this parsing of the
lien statute. If a factual issue were vigorously litigated
in a prior proceeding and were the focus of the court's
decision, preclusion might well be appropriate even if in
hindsight it could be shown that the issue was, in some
sense, not strictly essential to the outcome. After all, a
factual determination is not inherently untrustworthy just
because the result could have been achieved by a different,
shorter and more efficient route. In this case, however, the
single sentence in question seems to us to fall within the
principle that "if an inquiry reveals that the matters had
``come under consideration only collaterally or incidentally,'
4The Rhode Island Supreme Court's opinion refers to
Lechmere only twice. It does not say that DelVicario was
Lechmere's agent, nor does it suggest that privity of
contract between Lechmere and Tilcon is relevant to the
outcome.
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preclusion is denied." Federal Practice and Procedure,
supra, 4421 at 194 (quoting Norton v. Larney, 266 U.S. 511,
517 (1925)).
The Rhode Island Superior Court states that DelVicario
was an agent of Lechmere only at one point in its 28-page
decision, and there only in passing, somewhat cryptically and
without any explanation or analysis. A few pages earlier in
the decision, the court states that DelVicario was "acting as
Commercial's agent and representative at the job site," with
no mention of Lechmere. We do not think it is at all clear
that, in the later, single sentence relied on by Tilcon, the
superior court meant to determine that DelVicario was
Lechmere's agent for purposes of creating a contract between
Lechmere and Tilcon.5 We conclude that this "finding" was
collateral and not preclusive; and we rest this conclusion on
the joint force of three considerations: the lack of any
legal need for a finding of such an agency, the lack of
clarity in the supposed finding, and the earlier, explicit
statement that DelVicario was Commercial's agent.
5The later sentence relied upon by Tilcon occurs in the
context of a discussion rejecting Commercial's claim that
"extras" authorized by DelVicario did not enlarge the
liability of Commercial under the written contract; and it is
at least possible that the court meant no more than that
DelVicario spoke for Commercial and that Lechmere, having
contracted with Commercial, was stuck with limited
responsibility for DelVicario's extras that flows from the
mechanic's lien statute.
-13-
Tilcon also argues that the district court should have
given preclusive effect to the Rhode Island superior court's
findings as to the amount owed Tilcon for its work at the
Bald Hill site prior to the start of the lien period.
Although the Rhode Island court did make some findings as to
amounts owed for certain items of pre-lien work, it declined
to do so for other items, stating that it had no power under
the mechanics lien statute to award compensation for the pre-
lien work. Accordingly, the pre-lien findings are on their
face matters that it was not necessary to decide.
Tilcon seeks to rescue these findings by arguing that
they were necessary in order to determine the validity of the
"guaranteed maximum price" defense put forward by Commercial
and Lechmere. Under Rhode Island law, to the extent that a
contractor has promised to do a job for a fixed sum, the
amount that can be collected for that job under the
mechanic's lien statute is limited to the contract maximum
less whatever payments have already been made. See Art Metal
Constr. Co., 185 A. at 146-47. Therefore, Commercial and
Lechmere argued in the lien case that the guaranteed maximum
price agreed to by Tilcon represents an outer limit of
recovery. To reject the defense, says Tilcon, the extras
done prior to the lien period had to be individually
analyzed.
-14-
This argument is imaginative but not persuasive. The
Rhode Island trial judge ultimately rejected the guaranteed
maximum price defense on multiple grounds: he found that the
original contract price relied upon was a preliminary
estimate and that the later binding price was higher, covered
only work done after May 8, and covered only work specified
in the contract and not numerous extras. The guaranteed
maximum price defense then faded from view in his decision,
and there was no careful summing up of the pre-lien extras in
order to reject the defense. Indeed, as already noted, the
judge declined to quantify a number of pre-lien items on the
ground that they were not compensable.
In the end, it is not clear why the Rhode Island
Superior Court made specific findings as to some of the pre-
lien items. He did not explain why he did so and the issue
was not discussed on appeal. But there is no indication that
the trial judge in the lien case followed the line of
reasoning urged by Tilcon. It is up to Tilcon to establish
the requisites for collateral estoppel, see Federal Practice
and Procedure, supra, 4420 at 185, and in our view this
effort fails as to the pre-lien period findings. This is
enough for our purposes although we note that Lechmere's
liability would not be affected since--as we shall see--
Lechmere is not liable in any event.
-15-
The district court's ruling on the collateral estoppel
issues did not prevent Tilcon from attempting to prove at
trial in this case that Lechmere in fact entered into a
contract with Tilcon, or that Lechmere is liable to Tilcon on
one of the other theories set forth in Tilcon's counterclaim.
Tilcon did attempt to prove such liability, but at the close
of Tilcon's case the district court entered judgment as a
matter of law in favor of Lechmere on each of Tilcon's
claims. Tilcon says this was error as to three claims--
breach of contract, quantum meruit, and unjust enrichment6--
but we agree with the district court's entry of judgment.
At trial, Tilcon attempted to prove that DelVicario was
acting as an agent of Lechmere when he made oral assurances
to Tilcon that it would be paid for the "extra" work
performed at the site, and therefore bound Lechmere to a
series of oral agreements. The question posed, on review of
a directed verdict, is whether a reasonable jury could only
have reached the same conclusion as the trial court, and our
review is plenary. See NewHarbor Partners, Inc. v. F.D.
Rich. Co., 961 F.2d 294, 298 (1st Cir. 1992). We are
convinced that there was insufficient evidence to permit a
6Tilcon's remaining claims were fraud, constructive
trust, and violation of the Racketeer Influenced and Corrupt
Organizations Act ("RICO"), 18 U.S.C. 1961 et seq. The
RICO count was dismissed prior to trial, and judgment as a
matter of law was entered on the fraud and constructive trust
counts. Tilcon does not pursue these claims on appeal.
-16-
reasonable jury to find that DelVicario was an agent of
Lechmere capable of binding Lechmere to a contract.
Under Rhode Island law, agency may be based upon either
actual authority and apparent authority. See Menard & Co.
Masonry Building Contractors v. Marshall Bldg. Sys., Inc.,
539 A.2d 523, 527 (R.I. 1988) (adopting formulation of
Restatement (Second) of Agency). The first theory requires
evidence of an actual understanding between the principal and
agent that the latter is to act on behalf of the former.
There was no suggestion at trial of any actual agreement
between Lechmere and DelVicario under which the latter would
act as Lechmere's agent with respect to the Bald Hill
project. Accordingly, Tilcon presses only a theory of
apparent authority.
Apparent authority "arises from the principal's
manifestation of such authority to the party with whom the
agent contracts." Menard & Co. Masonry Building Contractors,
539 A.2d at 526. In other words, the focus is on the conduct
of the principal, not the putative agent. The principal must
act in a way that leads a third party to believe that the
agent is authorized to act on the principal's behalf, here,
authorized to enter into contractual arrangements for
Lechmere with Tilcon. And, finally, the third party's belief
in the agent's authority to act on behalf of the principal
-17-
must be a reasonable one. See Rodrigues v. Miriam Hosp., 623
A.2d 456 (R.I. 1993); Restatement (Second) of Agency 267.
Here, the only evidence of any representations and other
conduct by Lechmere regarding DelVicario's authority was the
testimony of Thomas Gammino, Tilcon's chief engineer and vice
president, that Lechmere's people instructed Tilcon to follow
DelVicario's instructions on the job site. But that
statement would not permit a reasonable person to conclude
that DelVicario's promises regarding payment for work were
the promises of Lechmere. Indeed, the statement is perfectly
consistent with the opposite interpretation: that Lechmere
was leaving the site-clearing work to Commercial and
Commercial's man DelVicario, and was keeping its own hands
out of it. This is also true of the fact that DelVicario may
have been motivated in directing Tilcon's actions by a
timetable and other requirements imposed by Lechmere on
Commercial. Tilcon points to no other evidence of any
actions by Lechmere affirming DelVicario's authority, and
this gap in proof is fatal to Tilcon's contract claim against
Lechmere.
In addition, even if Tilcon in fact believed that
DelVicario represented Lechmere,7 no reasonable jury could
7In fact, the trial testimony was quite equivocal as to
whether Tilcon actually believed that DelVicario represented
Lechmere. Only two witnesses testified for Tilcon: its vice
president, Thomas Gammino; and its foreman at the Bald Hill
site, Robert Pion. Both witnesses described DelVicario as a
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have found that belief justifiable. At the outset of the
project Tilcon joined forces with DelVicario to make a sales
pitch to Lechmere; there is no suggestion that DelVicario had
any prior affiliation with Lechmere. Gammino testified that
it was Tilcon's practice to enter into written contracts with
all parties with whom Tilcon dealt, yet Tilcon never entered
into or sought to enter into a written contract with
Lechmere. Before beginning work Tilcon performed a credit
check on Commercial, but made no such inquiries regarding
Lechmere.
Nor did Lechmere take a more prominent role once work
began. The May 8 letter containing a binding maximum price
was submitted by Tilcon to Commercial, not to Lechmere.
Tilcon submitted all its bills to Commercial for payment.
Lechmere was never involved in the billing process, never
asked to examine any of Tilcon's invoices, and never made any
direct payments to Tilcon. Even when the final three bills
went unpaid, Tilcon did not look to Lechmere for
compensation. Lechmere was simply one of the anchor stores
in a larger project developed by Commercial. It was not
until litigation, and the need for a deeper pocket, that
Lechmere was brought into the fray.
representative of Commercial. But Gammino did testify at one
point (after considerable hedging) that he "believed . . .
that Tony Delvicario was in charge for both people," i.e.
Commercial and Lechmere, and so we will assume that Tilcon
introduced enough evidence, if barely, to show actual belief.
-19-
We also agree with the district court's entry of
judgment for Lechmere on the unjust enrichment claim. To
recover on a theory of unjust enrichment under Rhode Island
law, the plaintiff must show that it conferred a benefit on
the defendant "in such circumstances that it would be
inequitable for the defendant to retain the benefit without
payment to the plaintiff for the value thereof." Anthony
Corrado, Inc. v. Menard & Co. Bldg. Contractors, 589 A.2d
1201, 1202 (R.I. 1991). This claim under state law was
equitable and was tried to the district judge. We share the
district court's view that Tilcon offered "no evidence that
would suggest that the enrichment [to Lechmere] if there was
any was unjust," and therefore need not concern ourselves
with the standard of appellate review on this issue.8
As the district court noted, virtually all of the work
done by Tilcon at the Bald Hill site benefitted all of the
participants in the project--including Commercial and the
other stores in the shopping complex--and Tilcon offered no
principled way of isolating the economic benefit to Lechmere
alone. The district court also found that Lechmere's CORE
8Courts have disagreed whether unjust enrichment
presents a question of fact that is reviewed under a clearly
erroneous standard, or a question of law reviewed de novo.
Compare Commodity Futures Trading Comm'n v. Heritage Capital
Advisory Servs., Ltd., 823 F.2d 171, 172 (7th Cir. 1987),
with In re Estate of Zent, 459 N.W.2d 795, 798 (N.D. 1990).
Needless to say, such an all-or-nothing choice is not
compelled.
-20-
agreement with Commercial included a payment to Commercial to
arrange for the site-clearing work. Tilcon offered no
evidence that the benefit to Lechmere resulting from Tilcon's
work at the site exceeded that payment. Finally, the court
traced the relationship between Tilcon and Lechmere
throughout the project and concluded, based on the many of
the same factors recited above, that Tilcon had no reasonable
expectation of compensation from Lechmere for work done at
the site.
Tilcon suggests that the court's collateral estoppel
ruling precluded the introduction of any evidence of work
done during the lien period and deprived Tilcon of the
opportunity to show that work done during that period
specifically benefitted Lechmere. But there is no indication
that the work done during the lien period was uniquely
beneficial to Lechmere. We also do not agree with Tilcon
that the district court erroneously believed that proof of
fraud was necessary in order to recover on an unjust
enrichment theory. Rather, the court merely observed,
consistent with Rhode Island case law, that the existence of
fraud or other wrongdoing is a factor in determining whether
the retention of a benefit would be inequitable. See R&B
Elec. Co., 471 A.2d at 1354.
Turning finally to the quantum meruit claim, this is a
quasi-contract claim which, as the district court noted, is a
-21-
close cousin to the equitable remedy of unjust enrichment.
Historically, the claim allowed a party to collect for the
value of services or supplies furnished to another, based on
an implied (at law) promise to pay, even though all of the
requisites of a formal contract might not be present. See
Farnsworth, Contracts, 2.20 at 103 (2d ed. 1990). The
district court made clear that, even if this claim were
directed against Lechmere, the court would direct a verdict
on it for essentially the same reasons given by the court in
ruling on the unjust enrichment claim.9
In its brief in this court, Tilcon chooses instead to
assimilate its quantum meruit claim to its contract claim,
stressing as to both claims the same facts concerning
DelVicario's actions in directing the work to meet Lechmere's
deadlines. The chameleon character of quasi-contract claims
is such that Tilcon can fairly stress this affinity with
contract. But this in turn means that Tilcon must have had a
reasonable basis for looking to Lechmere for payment, and for
reasons already given we do not think that there was any such
relationship between Lechmere and Tilcon, either real or
reasonably imagined by Tilcon. See generally Farnsworth,
9The district court believed with considerable basis
that in Tilcon's complaint the quantum meruit claim, as well
as the contract claim, had been directed solely against
Commercial; but in each case the district court ruled in the
alternative that the claim lacked merit so we do not discuss
the pleading issue further.
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supra, at 107 ("Nor can a party that has made a contract with
another generally disregard the contract and claim
restitution from a third person for performance rendered
under the contract, even if the third person has benefitted
from that performance.").
In sum, we think that the district court ably sorted its
way through a complex commercial dispute, further complicated
by the prior determinations in the mechanic's lien case. It
may well be that Tilcon has not recovered all that it is due,
possibly because of default by the partnership with which it
contracted and partly because of its failure to insist on an
adequate bond in the lien proceeding. But the decision to do
the work without a contract with or guarantee from Lechmere
was Tilcon's own decision. There was no error in the
district court's rulings.
Affirmed.
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