Architectural Design Contract v. Builder Services Group, Inc. ( 2023 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS APR 18 2023
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ARCHITECTURAL DESIGN No. 21-56290
CONTRACTORS, INC., a California
corporation (substituted as Plaintiff per D.C. No. 5:18-cv-02594-SB-SP
docket no. 49) Substituted for Temcula
M.O.B., LLC,
Plaintiff-Appellee,
v.
BUILDER SERVICES GROUP, INC., a
Florida corporation as the successor to
TRUTEAM OF CALIFORNIA, INC., a
California corporation,
Defendant-Appellant.
ARCHITECTURAL DESIGN No. 21-56393
CONTRACTORS, INC., a California
corporation (substituted as Plaintiff per D.C. No. 5:18-cv-02594-SB-SP
docket no. 49) Substituted for Temcula
M.O.B., LLC,
MEMORANDUM*
Plaintiff-Appellant,
v.
BUILDER SERVICES GROUP, INC., a
Florida corporation as the successor to
TRUTEAM OF CALIFORNIA, INC., a
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
California corporation,
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
Stanley Blumenfeld, Jr., District Judge, Presiding
Submitted April 13, 2023**
Pasadena, California
Before: MILLER and MENDOZA, Circuit Judges, and MOSKOWITZ,*** District
Judge.
This case is a tale of two waivers. At trial in this breach-of-contract action
between Plaintiff Architectural Design Contractors, Inc. (ADC) and Defendant
Builders Services Group, Inc. (BSG), BSG argued it was entitled to judgment as a
matter of law because ADC did not mediate before bringing suit when it was
contractually required to. But BSG never raised or invoked the mediation
requirement before trial. BSG’s silence on the mediation requirement before trial
waived that requirement. Because the district court’s waiver decision was correct,
we affirm the denials of BSG’s motions for judgment as a matter of law.
After prevailing at trial, ADC moved for attorney’s fees under the
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Barry Ted Moskowitz, United States District Judge for
the Southern District of California, sitting by designation.
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subcontract. ADC did not seek attorney’s fees under an addendum to the
subcontract. The district court correctly ruled that ADC was not entitled to
attorney’s fees under the subcontract provisions it relied upon in its motion.
Moreover, the district court correctly ruled that ADC forfeited or waived the
argument that it was entitled to attorney’s fees under the addendum by not seeking
such fees under the addendum in its original motion. Because the district court
properly denied ADC’s motion for attorney’s fees, we affirm the denial of that
motion.
We have jurisdiction over these appeals under 28 U.S.C. § 1291. Because
the parties are familiar with the factual and procedural history of the case, we need
not recount it here.
We review the denials of BSG’s motions for judgment as a matter of law—
and the question whether BSG waived the mediation provision—de novo. Wadler
v. Bio-Rad Lab’ys., Inc., 916 F.3d 1176, 1185 (9th Cir. 2019) (explaining that
review of the denial of a motion for judgment as a matter of law is de novo).
Because, as detailed below, the Federal Rules of Civil Procedure are applicable to
the question of whether BSG waived the mediation provision, those Rules govern
the issue of waiver. See, e.g., Healy Tibbitts Constr. Co. v. Ins. Co. of N. Am., 679
F.2d 803, 804 (9th Cir. 1982) (per curiam) (“While state law defines the nature of
the defenses, the Federal Rules of Civil Procedure provide the manner and time in
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which defenses are raised and when waiver occurs.”).
The subcontract provided that “mediation [wa]s a condition precedent to any
other form of binding dispute resolution.” However, BSG was silent about the
mediation provision before trial. It did not raise it in its answer, in its motion for
summary judgment, nor in any pretrial filings, including the proposed pretrial
order. Indeed, it did not raise the mediation provision until after the close of
ADC’s case. As the district judge correctly ruled, that silence waived the issue.
The disagreement between the parties over whether the mediation
requirement was an affirmative defense or an element of ADC’s claim is
immaterial. If the requirement was an affirmative defense, then BSG waived it by
failing to comply with Federal Rule of Civil Procedure 8(c)(1). See Fed. R. Civ. P.
8(c)(1) (“In responding to a pleading, a party must affirmatively state any
avoidance or affirmative defense.”); Nw. Acceptance Corp. v. Lynnwood Equip.,
Inc., 841 F.2d 918, 924 (9th Cir. 1988) (A defense “not raised in the pretrial order
or prior to trial” was waived); see also United States v. First Nat’l Bank of Circle,
652 F.2d 882, 886–87 (9th Cir. 1981) (explaining that issues “not at least implicitly
included in the [pretrial] order are [generally] barred”). If the mediation
requirement was an element of ADC’s claim, then Federal Rule of Civil Procedure
9(c) required BSG to invoke the requirement “with particularity.” See Fed. R. Civ.
P. 9(c) (providing that satisfaction of conditions precedent can be alleged generally
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but that parties must deny their performance “with particularity”). BSG did not
specifically invoke or mention the mediation requirement in response to ADC’s
general pleading regarding conditions precedent. Thus, BSG failed to comply with
Federal Rule of Civil Procedure 9(c) and waived the mediation requirement. See,
e.g., De Saracho v. Custom Food Mach., Inc., 206 F.3d 874, 878–79 (9th Cir.
2000) (concluding defendants waived authority-to-sue argument by failing to plead
it under Rule 9(a) and not raising it “until one week before the trial was scheduled
to begin”).
What is most troubling about BSG’s invocation of the mediation
requirement after the close of ADC’s case at trial is that TruTeam of California,
Inc. (a company that later merged into BSG) explicitly waived the requirement
before this litigation started. In response to a “demand for mediation” by ADC,
TruTeam’s counsel explained in an email that because “mediation would [not] be
productive,” TruTeam was “willing to waive the mediation requirement.”
The district judge relied on that email, and BSG has not shown that the judge
erred in doing so. The explicit waiver of the mediation requirement forecloses
BSG’s challenge to the district judge’s waiver ruling. Indeed, allowing BSG to
invoke the mediation requirement at trial would have circumvented a main purpose
of pretrial filings: “to eliminate surprise.” See generally Walker v. W. Coast Fast
Freight, Inc., 233 F.2d 939, 941 (9th Cir. 1956) (explaining that a primary purpose
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of pretrial orders “is to eliminate surprise by sharpening and simplifying the issues
which must be tried”). We hold that the district judge correctly ruled that BSG
waived the mediation provision and properly denied BSG’s motions for judgment
as a matter of law.
We review the district court’s interpretation of contractual provisions for
attorney’s fees de novo. Milenbach v. Comm’r, 318 F.3d 924, 930 (9th Cir. 2003)
(“The interpretation and meaning of contract provisions are questions of law
reviewed de novo.”). The district court properly denied ADC’s motion for
attorney’s fees, for two main reasons. First, ADC was not entitled to attorney’s
fees under the original subcontract. The subcontract provided that the prevailing
party in any “dispute resolution procedure designated in the Subcontract
Documents shall be entitled to recover from the other party reasonable attorney’s
fees” (emphasis added). ADC argued that the mediation provision—which
provided that “mediation is a condition precedent to any other form of binding
dispute resolution”—designated litigation as a dispute resolution procedure.
The subcontract provisions relied upon by ADC in its motion for attorney’s
fees did not expressly designate litigation as a dispute resolution procedure by
providing that mediation was a condition precedent to any other form of binding
dispute resolution. The district judge correctly rejected the sole argument in
ADC’s motion for attorney’s fees.
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Second, ADC waived any reliance on the addendum, which expressly
provided for attorney’s fees in litigation. ADC did not rely on the addendum in its
motion. The district judge filed a tentative ruling and gave ADC the opportunity at
oral argument to raise a different contractual provision, but ADC did not invoke
the addendum and instead submitted on the tentative ruling. The district judge was
not required to search for additional contractual provisions on ADC’s behalf. See
generally Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir. 1994) (declining to
“manufacture arguments for an appellant” because “[j]udges are not like pigs,
hunting for truffles buried in briefs” (quoting United States v. Dunkel, 927 F.2d
955, 956 (7th Cir. 1991) (per curiam))); In re E.R. Fegert, Inc., 887 F.2d 955, 957
(9th Cir. 1989) (“The rule in this circuit is that appellate courts will not consider
arguments that are not . . . raised sufficiently for the trial court to rule on [them].”).
ADC’s reliance on the addendum in its Rule 59(e) motion was simply “too
late.” See 389 Orange St. Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999)
(stating that argument raised for first time in reconsideration motion was “too little,
too late”). ADC waived any reliance on the addendum. Because the district judge
properly rejected ADC’s argument for attorney’s fees, and because ADC did not
rely on the addendum in its motion for such fees, the district judge’s denial of that
motion is also affirmed. The parties shall bear their own costs and fees on appeal.
AFFIRMED.
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