American Underground Engineering, Inc. v. City of Syracuse

11-4903-cv (L)
Am. Underground Engineering, Inc. v. City of Syracuse
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO
A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS
GOVERNED BY FEDERAL RULE OF APPELLAT E PROCEDURE 32.1 AND THIS COURT' S
LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED
WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPE NDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION "SUMMARY ORDER" ). A PARTY
CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT
REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Thurgood Marshall United
States Courthouse, 40 Foley Square, in the City of New York, on
the 4th day of June, two thousand thirteen.
PRESENT: DENNY CHIN,
RAYMOND J. LOHIER, JR.,
Circuit Judges,
LAURA TAYLOR SWAIN,
District Judge.*
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AMERICAN UNDERGROUND ENGINEERING, INC.,
Plaintiff-Appellee,
-v.- 11-4903-cv (L)
12-3297-cv (CON)
CITY OF SYRACUSE,
Defendant-Appellant.
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*
The Honorable Laura Taylor Swain, of the United States
District Court for the Southern District of New York, sitting by
designation.
FOR PLAINTIFF-APPELLEE: KEVIN M. COX (Joseph A. Camardo,
Jr., on the brief), Camardo Law
Firm, PC, Auburn, New York.
FOR DEFENDANT-APPELLANT: JOHN G. POWERS (James P. Youngs,
on the brief), Hancock Estabrook,
LLP, Syracuse, New York, for Mary
Anne Doherty, City of Syracuse
Corporation Counsel, Syracuse, New
York.
Appeal from the United States District Court for the
Northern District of New York (Scullin, J.).
UPON DUE CONSIDERATION, IT IS ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court is AFFIRMED.
On July 1, 2010, a jury found that defendant-appellant
City of Syracuse (the "City") had substantially breached a
construction contract entered into with plaintiff-appellee
American Underground Engineering, Inc. ("AUE") and awarded AUE
$7,306,021.64 in damages. Post-trial, the City requested that
the district court treat the jury's verdict as advisory,
challenging the damages awarded to AUE, and seeking judgment as
a matter of law. The City now appeals from the district court's
August 6, 2012 amended judgment correcting its October 13, 2011
judgment entered pursuant to its October 11, 2011 Memorandum-
Decision and Order, which granted remittitur to $5,312,678.00
but otherwise denied the City's motion. We assume the parties'
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familiarity with the underlying facts, the procedural history,
and the issues on appeal.
1. Election of Remedies
The City argues that the district court erred because
it permitted AUE to move forward under a rescission theory on
the second day of trial, after AUE had, the City contends,
elected its damages remedy by moving for summary judgment on
liability on a breach of contract theory. We review questions
of law de novo, see L-3 Commc'ns Corp. v. OSI Sys., Inc., 607
F.3d 24, 27-28 (2d Cir. 2010), and conclude that the City's
arguments lack merit.
First, although summary judgment is generally treated
as the procedural equivalent of a trial, see S.J. Capelin
Assocs., Inc. v. Globe Mfg. Corp., 34 N.Y.2d 338, 341 (1974),
AUE's motion for summary judgment addressed liability alone.
Hence, to the extent the motion was the equivalent of a trial
for these purposes, it did not address damages or rescission at
all. Cf. Reilly v. Natwest Markets Grp. Inc., 181 F.3d 253, 263
(2d Cir. 1999) (holding that, where plaintiff did not seek to
rescind a contract and only sought quantum meruit recovery after
a jury had determined an enforceable contract existed, plaintiff
was limited to recovery under the contract). AUE cannot be
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deemed to have elected its damages remedy when damages were not
at issue on the motion.
Second, the motion for partial summary judgment on the
issue of liability for breach of contract was not inconsistent
with rescission and the remedy of quantum meruit. Whether the
City had breached the contract, and whether it did so in a
manner that "substantially defeat[ed the contract's] purpose,"
Callanan v. Keeseville, Ausable Chasm & Lake Champlain R.R. Co.,
199 N.Y. 268, 284 (1910), cited in R.R. Chester, LLC v.
Arlington Bldg. Corp., 803 N.Y.S.2d 100, 101 (2d Dep't 2005),
were at the heart of this dispute. Furthermore, if -- as the
jury found -- the City's breach defeated the purpose of the
contract, then AUE could "timely rescind and seek recovery on
the theory of quasi contract." Clark-Fitzpatrick, Inc. v. Long
Island R.R. Co., 70 N.Y.2d 382, 389 (1987). This would be the
case notwithstanding the general rule that the "existence of a
valid and enforceable written contract governing a particular
subject matter" precludes a quantum meruit recovery. Id. at
388. Hence, as the district court concluded, AUE made no
election as to its damages remedy by moving for summary judgment
as to liability alone.
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Third, we note that, during a colloquy with the
district court and AUE regarding the propriety of the rescission
argument, the City's attorney argued:
I guess the first thing [AUE] need[s] to do then is
put on the record that they're withdrawing their
breach of contract causes of action and claims and
they're simply asking for an action for recision [sic]
quantum meruit would be I guess would be [sic] the
first part, your Honor.
After the City prompted AUE to elect its remedy, AUE did so --
choosing to proceed solely on a theory of rescission. Thus, to
the extent the City now contends that the district court erred
by allowing AUE to elect its remedy during the second day of
trial, this argument has been waived. See, e.g., In re Nortel
Networks Corp. Sec. Litig., 539 F.3d 129, 132-33 (2d Cir. 2008)
(per curiam).
Finally, while a litigant must, of course, elect among
inconsistent remedies presented, under New York law, that
precise moment is left to the trial court's discretion "in the
light of the record as it develops." Lukaris v. Harrison
Vending Sys., Inc., 283 N.Y.S.2d 674, 676 (3d Dep't 1967); see
also, e.g., Wilmoth v. Sandor, 686 N.Y.S.2d 388, 390-91 (1st
Dep't 1999); Baratta v. Kozlowski, 464 N.Y.S.2d 803, 809-10 (2d
Dep't 1983); Patrick M. Connors, Practice Commentaries
§ C3002:14, in N.Y. C.P.L.R. § 3002 (McKinney's 2013). Hence,
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no legal error undermined the district court's exercise of its
discretion as to when AUE should elect its theory of damages.
2. Waiver of Advisory Jury
The City further claims that the district court erred
by allowing the jury to decide the rescission action, a purely
equitable claim. The district court "may, with the parties'
consent, try any issue by a jury whose verdict has the same
effect as if a jury trial had been a matter of right." Fed. R.
Civ. P. 39(c)(2). The record here indicates that the parties
proceeded under the assumption that the case would be tried
before a jury. Even after the only claim remaining was the
equitable rescission action, the parties never discussed whether
the jury should be dismissed or whether its findings should be
treated as advisory. In fact, the phrase "advisory jury" was
never uttered until the City filed its post-trial motion.
Because "silence may be deemed 'consent' under Rule 39(c),"
Broadnax v. City of New Haven, 415 F.3d 265, 272 (2d Cir. 2005),
we conclude that the district court's adherence to the jury's
verdict, as binding, was entirely proper.
3. Damages
Finally, the City also raises numerous arguments
challenging the damages awarded to AUE. We review a district
court's remittitur ruling for abuse of discretion, see, e.g.,
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Zeno v. Pine Plains Cent. Sch. Dist., 702 F.3d 655, 672 (2d Cir.
2012), and find these arguments to be without merit. The City
conceded during oral argument that it chose below to present its
damages theory solely by cross-examining AUE's witnesses. It
presented no witnesses, offered no evidence or alternative
damages calculations, and (except in its post-trial motion) made
none of the arguments advanced now on appeal. Hence, the
district court was well within its discretion to find that the
jury's award of damages -- with the exception of the portion it
reduced -- was supported by AUE's evidence as presented at
trial.
We have considered the City's remaining arguments and
conclude they are without merit. For the foregoing reasons, we
AFFIRM the judgment of the district court.
FOR THE COURT:
Catherine O'Hagan Wolfe, Clerk
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