Gulf 95, Inc. v. Lariviere ( 2005 )

Not for Publication in West's Federal Reporter
Citation Limited Pursuant to 1st Cir. Loc. R. 32.3
United States Court of Appeals
For the First Circuit
No. 03-2714
GULF 95, INC.,
Plaintiff, Appellee,
v.
ROGER LARIVIERE,
Defendant, Third-Party Plaintiff, Appellant,
v.
MANDI SARDI
Third-Party Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Ernest C. Torres, U.S. District Judge]
Before
Torruella, Lipez and Howard, Circuit Judges.
Christopher M. Mulhearn, with whom W. Mark Russo and Ferrucci
Russo P.C. were on brief, for appellant.
Joseph J. Brodigan, P.C., with whom Brodigan and Gardiner,
Louis V. Jackvony, Jr. and Jackvony & Jackvony were on brief, for
appellees.
February 3, 2005
Per Curiam. Gulf 95, Inc. sued Roger Lariviere in Rhode
Island superior court alleging that he had converted, for his own
use and benefit, certain valuable property. Following removal on
diversity grounds, Lariviere filed an answer and third-party
complaint against Nandy Sarda1, the sole owner of Gulf, alleging
breach of contract and seeking indemnification and contribution.
Following a bench trial, the district court found in favor of Gulf
on its conversion claim and rejected Lariviere's claims. The court
entered judgment against Lariviere in the amount of $164,133.33,
plus interest. Lariviere brings this appeal to challenge the
sufficiency of the evidence supporting the court's damages award.
In the mid-1980s, Gulf purchased a number of steel and
aluminum truss assembly systems for use in the construction of
concrete buildings in Florida. Each system is composed of either
steel or aluminum trusses and component parts that allow the
trusses to be assembled into forms. When assembled, these forms
permit a contractor to pour concrete decks on each level of a
building under construction. After completion of each floor, the
forms can be moved up to the next floor with a crane. These so-
called “flying forms” eliminate the need to construct concrete
forms at each level and thus increase the speed of construction
1
The third-party defendant, appellee, appears on the district
court docket, and on our own docket, as “Mandi Sardi.” For the
purposes of this opinion, however, we adopt the spelling of
appellee's name reflected in the trial transcript and in appellees'
brief, “Nandy Sarda.”
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while lessening the cost. As a result, truss assembly systems can
be quite valuable.
Gulf used its truss assembly systems to build
approximately 20 high-rise buildings during a five year period in
the late 1980s. After Gulf discontinued its Florida construction
operation, the systems were removed, first to a storage site in
Massachusetts, and subsequently to a site in Rhode Island owned by
the Flexicore Corporation, a manufacturer of precast concrete slabs
that, like Gulf, is wholly owned by Nandy Sarda. The systems were
stacked on pallets along the rear fence line of the Flexicore
property and were never again used by Gulf or Flexicore. Nandy
Sarda's nephew, Anthony Sarda, prepared a written inventory of the
truss systems when they arrived at the Flexicore plant in early
1991. Included on that inventory were 910 steel trusses, 244
aluminum trusses, and the necessary component parts (also referred
to as accessories). Nandy Sarda's secretary subsequently printed
an official version of the inventory for record-keeping purposes.
In 1996, Anthony Sarda hired Lariviere as an independent
contractor to perform maintenance on forklifts and other equipment
at the Flexicore plant. Before Anthony Sarda left Flexicore in
September 1998, he undertook a second inventory of the truss
assembly systems. This second count (which was not reduced to
writing) confirmed that the 1991 inventory was still accurate.
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As Flexicore's operations wound down in the late 1990s,
Lariviere's duties gradually transformed from that of repairman to
that of caretaker. By 1999, Lariviere assumed the role of the
primary caretaker of the plant and was given access to the entire
facility. That same year, Nandy Sarda put the plant up for sale.
Sarda's real estate agent suggested that, in order to facilitate a
sale, the large amount of debris and equipment scattered across the
property be cleared.
At this point the litigants' stories diverge. Lariviere
claims that Nandy Sarda instructed him to clear the property of all
debris, including the truss assembly systems, and that he and Sarda
agreed that he could retain the proceeds from the sale of any
material he could sell for scrap. Sarda admits that he did
endeavor to clear the site of debris, but denies having given
Lariviere authority to scrap or sell any of the systems. To the
contrary, Sarda contends that he told Lariviere on multiple
occasions that the systems were valuable and should not be sold or
scrapped.
Regardless, Lariviere made arrangements to begin removing
the truss assembly systems from the property in late spring of
2000. He sold the steel trusses to two scrap metal companies and
many of the aluminum trusses to independent scrap collectors.
Lariviere collected approximately $10,500 for his efforts. Sarda,
who was living in Nevada at the time, was unaware of these
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transactions. Lariviere completed the clean-up of the site in
December 2000. By this time, all that remained of the truss
assembly systems were 30 aluminum trusses.
In the spring of 2001, Brooks Miner, a broker of concrete
forms and related construction equipment, contacted Sarda about
purchasing Sarda's truss assembly systems. Although Sarda
previously had rebuffed similar overtures from Miner, he agreed
this time to negotiate a sale and forwarded to Miner the 1991
inventory. Based on the inventory, Miner gave Sarda an estimated
quote, see infra note 3, and then traveled to the Flexicore plant
to inspect the systems himself. When he arrived, he found that
only 30 aluminum trusses remained. Miner reported to Sarda his
disappointment that most of the systems on the inventory were
missing. He did, however, agree to purchase the 30 aluminum
trusses for $9,200.2
Sarda was surprised to learn that the truss assembly
systems were missing and immediately traveled to Rhode Island to
inspect the site himself. When Sarda confronted Lariviere in
person, Lariviere acknowledged that he had sold many of the
systems' components to various third parties. Sarda and Lariviere
attempted to retrieve the systems from those third parties but were
2
There was conflicting testimony as to whether Miner paid
$9,200 or $9,270 for the 30 aluminum trusses. But because
Lariviere does not contest the issue, we adopt the $9,200 figure
found by the district court.
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unsuccessful. This lawsuit ensued and was tried to the district
court, which concluded that Sarda did not authorize Lariviere to
scrap the systems; that the trusses were in complete and marketable
condition at the time that they were scrapped; and that the fair
market value of the systems at the time they were converted was
$173,333.33.3 The court subtracted from that sum the $9,200 that
Gulf had received from Miner for the 30 aluminum trusses and
entered judgment for Gulf in the amount of $164,133.33, plus
interest.
3
The district court's market value calculation was based upon
the testimony of Miner. Having been in the business of buying and
selling similar systems for 43 years Miner was competent to testify
as to market value. He testified that it is customary to pay a
percentage of the original purchase price, or list price, when
buying a used truss assembly system, the discount depending on the
condition of the equipment and the completeness of the set (i.e.,
whether the system has all of its component parts). Before he
traveled to Rhode Island to inspect Gulf's equipment personally,
Miner quoted Sarda an estimate of 30 percent of the list price for
the systems reflected on the 1991 inventory. Miner testified that
this 30 percent estimate represented the median of the standard
value range (20 to 40 percent) for truss assembly systems of that
age. His 30 percent estimate was based on dual assumptions that
Gulf's systems included a complete set of accessories, and that
they were in average condition for systems of their age. According
to Miner, 30 percent of the list price yielded a range of between
$260,000 and $300,000 for the entire set of Gulf's systems.
Finding that the trusses had some surface rust, and that the
accessories were not in good condition, the district court declined
to use Miner's median estimate of 30 percent of the list price for
its fair market value calculation. Rather, the court based its
calculation on the low end of the standard range Miner had
mentioned in his testimony: 20 percent of the list price. Twenty
percent of the list price yielded a range of $173,333 to $200,000.
Again, acknowledging the poor condition of the accessories, the
court selected the low end of that range, $173,333, as representing
Gulf's damages.
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Lariviere's only developed argument on appeal is that the
evidence did not support the district court's conclusion as to the
fair market value of the truss assembly systems at the time they
were converted in 2000. In pressing this argument, Lariviere makes
two subsidiary assertions about the state of the evidence before
the court: first, that the 1991 inventory provides the only
credible evidence concerning the number of components in the
systems, but that the 1991 inventory is too far removed to
constitute probative evidence of the completeness of the systems at
the time of conversion (in 2000); and second, that there was no
evidence concerning the quality and/or condition of the systems at
the time of conversion. Because of these evidentiary gaps,
Lariviere contends, the court had no basis for concluding that the
systems had any value beyond their scrap value (established to be
approximately $10,500) at the time they were converted.
Lariviere's appeal is built on too stingy a reading of
the record. While it is true that the 1991 inventory provides the
only documentary evidence in the record concerning the number of
components in Gulf's truss assembly systems, there was no shortage
of testimonial evidence on this issue. This testimonial evidence,
found credible by the court, was sufficient to ground the judgment
entered. See Fed. R. Civ. P. 52(a) (factual determinations made at
a bench trial “shall not be set aside unless clearly erroneous”);
United States v. 15 Bosworth St., 236 F.3d 50, 53 (1st Cir. 2001).
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It was not clearly erroneous for the court to credit Anthony
Sarda's testimony that his 1998 recount confirmed that all of
Gulf's systems were still present on the property at that time.
Nor did the court clearly err in choosing to credit Nandy Sarda's
testimony that he did not observe any changes to the stacks of
equipment during any of his visits to the plant throughout the
1990s. In sum, although Gulf did not provide the court with a
written year 2000 inventory, there is no reason for us to question
the court's determination that the systems remained complete up
until the time they were converted.
So too with the court's determination that the systems
were of marketable quality. On this point, the court reasonably
credited testimony that Gulf stored the trusses in the customary
manner: the steel trusses were treated with baked-on paint to
avoid rusting (the aluminum trusses were not painted because
aluminum does not rust) and were stacked on pallets to elevate them
from the ground. There was credible testimony that trusses are
customarily stored outside because of their size and because the
weather does not ordinarily affect their condition when they are
painted and stacked properly. The court also reasonably credited
the testimony of several witnesses, including the caretaker of the
premises before Lariviere assumed the job in 1999, who testified
that the trusses (though not the accessories) appeared to be in
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good condition at various times as late as 1999.4 Although the
court did conclude that the accessories had acquired significant
rust due to improper storage, the court did not find that the
accessories were non-functional. Nor did the evidence compel such
a finding. Thus, we see no clear error in the line that the court
chose to draw: that the systems were in marketable condition, but
because the accessories (an important component of the systems)
were significantly rusted, only at a price at the lowest end of the
range in which systems of that age ordinarily sell. See supra note
3.
Affirmed.
4
These witnesses testified that, to the extent that rust was
observed on the trusses, it was only surface rust, which the court
reasonably accepted as being insignificant to the trusses' value.
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