
USCA1 Opinion

	




                                [NOT FOR PUBLICATION]                                ____________________       No. 96-1465                                  TABER PARTNERS I,                           A NEW YORK GENERAL PARTNERSHIP,                                Plaintiff, Appellant,                                         v.              MERIT BUILDERS, INC., A PUERTO RICO CORPORATION, ET AL.,                               Defendants, Appellees.                                ____________________       No. 96-1466                                  TABER PARTNERS I,                           A NEW YORK GENERAL PARTNERSHIP,                                Plaintiff, Appellant,                                         v.              MERIT BUILDERS, INC., A PUERTO RICO CORPORATION, ET AL.,                               Defendants, Appellees.                                ____________________       No. 96-1467                                  TABER PARTNERS I,                           A NEW YORK GENERAL PARTNERSHIP,                                Plaintiff, Appellee,                                         v.              MERIT BUILDERS, INC., A PUERTO RICO CORPORATION, ET AL.,                               Defendants, Appellees,                                ____________________                          DESARROLLOS METROPOLITANOS, S.E.,                          Third Party Defendant, Appellant.                               _______________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF PUERTO RICO                    [Hon. Jaime Pieras, Jr., U.S. District Judge]                                ____________________                                       Before                                Selya, Circuit Judge,                      Coffin and Bownes, Senior Circuit Judges.                                ____________________            Arch Y.                     Stokes with whom Stokes                                             & Murphy, Ruben                                                             T. Nigaglioni and       McConnell & Valdes                          were on brief for plaintiff, appellant Taber Partners       I.             Eric                   A.                      Tulla with whom  Rivera,                                               Tulla                                                     &                                                       Ferrer,  Woods                                                                      &                                                                        Woods,       Raffle F. Ojeda-Colon                             were on brief for defendants, appellees and cross-       appellants, Merit Builders, Inc., and Merit Builders, S.E.,  Harold                                                                            D.       Vincente, with whom   Vincente                                        &                                           Cuebas, was on brief for appellee       Insurance Company of North America.            Humberto                      Guzman-Rodriguez with whom Fiddler,                                                          Gonzalez                                                                   &                                                                     Rodriguez       were on brief for third-party defendant, appellant Desarrollos       Metropolitanos, S.E.                                ____________________                                    JULY 31, 1997                                ____________________                      BOWNES, Senior                                        Circuit                                                 Judge. This breach of            contract case is a product of the renovation and expansion of            the Ambassador Plaza Hotel and Casino (formerly a Howard            Johnson Hotel) in San Juan, Puerto Rico. Plaintiff-appellant            Taber Partners I is the owner of the hotel. Its two partners            are A. Eugene Romano and his daughter, Linda Romano.            Defendant-appellee and cross-appellant Merit Builders, Inc. was            the general contractor. John Schlump, one of the two owners of            Merit, directed the construction and reconstruction work on the            hotel.                      On January 18, 1989, Taber entered into a "cost-plus"            construction contract with Merit whereby Merit became the            general contractor for the renovation and expansion of the            hotel. Prior to this, Schlump had been retained as a            consultant by Eugene Romano to advise him how to proceed with            the proposed reconstruction and expansion. The "cost-plus"            contract was followed by a fixed price contract; both contracts            were collectively called the Tower contract. A third contract            was entered into by the parties for finish work on the casino,            two restaurants, and the hotel lobby.                      On February 20, 1991, Taber filed a complaint in the            federal district court of Puerto Rico alleging breach of            contract by reason of delay, defective performance, and            negligent workmanship. There was also a claim for fraud and            deceit. The complaint was amended twice; the causes of action                                         -3-                                          3            remained essentially the same. At some point, it is not clear            from the record just when, Taber sued the Insurance Company of            North America under the performance bond INA issued for the            Tower contract.                      Merit brought a counterclaim against Taber alleging            multiple breaches of contract, a claim based on Taber's alleged            delays and changes in the scope and nature of the work            contracted for, and fraud. Merit also brought a third-party            action against Desarrollos Metropolitanos, S.E., the concrete            subcontractor. It brought another third-party complaint            against Victor Torres and Associates, the inspectors of the            work, alleging breach of duty and tortious interference with            the performance of the contracts between Taber and Merit.                      After a fourteen-week trial, the jury returned a            verdict finding that Merit was not liable to Taber. It further            found that Taber owed Merit $1,597,414.00 for breach of            contract. We consider Taber's appeal first.                      At the close of the evidence, the district court            dismissed Merit's claim against Victor Torres and Associates.                                   TABER'S APPEAL                      Taber forwards two issues on appeal: The ruling of            the district court excluding evidence of the loss of value of            the hotel due to defective construction work; and improper jury            instructions.                                         -4-                                          4            The Exclusionary Ruling                      We start with the exclusionary ruling. In a pre-            trial order the court ruled that it would not allow evidence as            to the loss of value of the hotel. Taber had two expert            witnesses who would have testified that the reconstruction and            renovation work by Merit was done so incompetently and            defectively that the hotel's value was considerably less than            what it would have been had it been done properly.                      At the start of its specific instructions the court            told the jury:                           Taber Partners I claims that Merit                      Builders, Inc. breached all contracts                      entered into for the renovation and                      expansion of the Ambassador Plaza Hotel                      and Casino by failing to properly                      construct the building and by failing to                      complete the project in time. As a                      result, plaintiff claims that it suffered                      damages suffered [sic] due to alleged                      construction defects and time delays for                      which it seeks to recover the total sum of                      $3,730,995 from Merit.            This was an accurate statement of Taber's claims.                      The jury answered the following questions on Merit's            liability:                      PART A: Taber's claim against Merit for                      breach of contract                      Question 1A.                           Do you find that under the Lump Sum                      Tower Contract Merit failed to perform its                      duties and obligations or in any other way                      breached its contract with Taber by                      failing to comply with the plans and                      specifications?                                         -5-                                          5                      . . .                       Question 3A.                           Do you find that under the Specialty                      Contract Merit failed to perform its                      duties or in any other way breached its                      contract with Taber by failing to comply                      with the plans and specifications?                      . . .                      Question 5A.                           Do you find that under the Cost Plus                      Contract Merit failed to perform its                      duties or in any other way breached its                      contract with Taber by failing to follow                      the plans and specifications?                      These jury findings establish beyond peradventure            that Merit was not liable to Taber for breach of contract,            which was the basis of Taber's claims against Merit.                       We have read the transcript testimony of all            witnesses who testified on behalf of Taber. The record shows            that there was a plethora of evidence from which the jury could            have found liability, if it believed any of the witnesses. But            it chose not to do so. If any principle is embedded firmly in            our law it is that the jury is the final arbiter of the facts            and credibility decisions are exclusively within its domain.                      Another firmly established legal rule is that a            finding of liability must precede any finding of damages.                                         -6-                                          6            Taber seeks to avoid this rule by arguing that "the Judge            erroneously forced Taber to argue liability without being            permitted to prove damages; it is the rare jury that will find            liability when it cannot appreciate that the plaintiff has            suffered damage." Taber's Brief at 20. This argument is            belied by the record. The court allowed in evidence all            damages claimed by Taber except that of the value of the hotel            and those that were duplicative.                      Randall Redman, an expert witness called by Taber,            testified that, after inspecting the project, he told Eugene            Romano that the only way to achieve a quality building that            would last would be to tear the building down and start all            over.                      During the testimony of Eugene Romano it was            stipulated as follows:                           If the jury finds that there was a                      delay by Merit in the performance of any                      of the contracts, the parties agree that                      there is a $2,000 liquidated damages                      provision per day, per contract, which                      includes the specialty contract. That is                      to say, the work for the casino,                      restaurant and lobby, plus and also the                      tower contract.                           The cost-plus contract is                      specifically not made a part of this                      stipulation as it had no time limit in                      which it was supposed to be complete.                      Eldon Gayle Tipping, another of Taber's experts,            testified that the cost to repair this project would be in            excess of the original contract price. He testified                                         -7-                                          7            specifically that the damages due to defective concrete work            were $1,353,703.00.                      Victor Torres, a civil engineer, was retained to            settle disputes between the parties and issue certificates of            payment. He testified extensively about change orders and            "deductive" change orders. A "deductive" change order results            in a decrease of the amount due for a specific contract change.            Torres testified that he allowed $856,944.90 in deductive            change orders out of $3,938,228.64 claimed by Taber.                      The most extensive testimony on damages came from            Linda Romano, a partner, with her father, in Taber. She            started her testimony by stating:                           The Witness: We sued Merit Builders                      because we paid Merit in excess of $12                      million to build us a quality hotel within                      a specified time and they didn't do it.                      And we sued the Insurance Company of North                      America because they promised the                      performance, they secured the performance                      of Merit under the performance bond.                      By Mr. Stokes:                      Q    Ms. Romano, what are you seeking by                      this lawsuit?                      A    I am asking the jury to find that the                      Insurance Company of North America and                      Merit Builders should pay us in excess of                      three and a half million dollars.                           In addition to that, I am asking the                      jury to find that we have paid Merit in                      full. I am seeking to be made whole,                      although I don't believe I can be.                                         -8-                                          8                      Linda Romano testified for four days on direct            examination. She explained the defects in construction. This            part of her testimony was amplified by numerous photographs,            which were admitted in evidence. Ms. Romano took over 2,000            photos of the work in progress. Romano gave specific costs of            change orders and deductive change orders. She concluded her            testimony by summarizing the amount due Taber for defective            work and time delays -- $3,730,995.00. This was the figure            given by the court in its instructions to the jury as to the            amount Taber claimed in damages.                      Despite the argumentative rhetoric in Taber's brief,            the record makes it abundantly clear that the jury was fully            informed as to the construction defects alleged by Taber and            its claim for the costs of correcting them. The district court            allowed 98% of the evidence offered by Taber to be presented to            the jury. This is not a case of a trial judge being technical            and limiting in his evidentiary rulings. Taber received an            eminently fair trial. It cannot now seize upon one adverse            ruling on the preclusion of certain evidence on damages to            overturn the jury's findings that Merit was not liable to Taber            for breach of contract. Such findings preclude, as a matter of            law, any contention on damages.            The Jury Instructions                      We state this issue as it is worded in Taber's brief                                          -9-                                          9            at page 3:                           The District Court, in this case                      arising from faulty hotel construction,                      reversibly erred by improperly instructing                      the jury to presume as factually                      legitimate the certificates for payment                      issued by the inspecting engineer/                      architect, Victor Torres, in direct                      contravention of the contract language,                      yet failing to instruct the jury to assume                      as similarly legitimate the deductive                      change orders and substantial completion                      decisions certified by the same                      individual.                      This plaint founders on the same barrier reef as did            Taber's argument excluding one of its claims for damages -- the            jury findings of no liability.                      We also point out that in this circuit objections to            jury instructions cannot be properly preserved unless a party            objects after the charge and before the jury has retired to            consider the case. The mandate of Fed. R. Civ. P. 51 is stated            as follows:                      No party may assign as error the giving or                      the failure to give an instruction unless                      that party objects thereto before the jury                      retires to consider its verdict,  stating                      distinctly the matter objected to and the                      grounds                                of                                    the                                        objection. Opportunity                      shall be given to make the objection out                      of the hearing of the jury. (Emphasis                      added).            We have construed this to mean what it says. Objections to            jury instructions must be stated fully after the charge and            before the jury retires regardless of any pre-charge            objections. See                             Senra v. Cunningham                                               , 9 F.3d 168, 171 (1st Cir.                                        -10-                                         10            1993); Elgabri v. Lekas, 964 F.2d 1255, 1259 (1st Cir. 1992);            Transnational                           Corp.                                 v.                                    Rodio                                          &                                            Ursillo,                                                     Ltd., 920 F.2d 1066,            1069 (1st Cir. 1990). Failure to follow our regime results in            a plain error analysis.                      After the charge the court invited counsel to the            bench. All counsel except Taber's made detailed objections on            the record. The only thing counsel for Taber said was: "Same            comments as yesterday, Your Honor." This was not sufficient            under Fed. R. Civ. P. 51 and our case law.                      We have read the jury instructions carefully and find            no plain error. In fact, we think the jury instructions            explained this difficult, complex, and lengthy case clearly and            fairly to the jury.                                MERIT'S COUNTERCLAIM            Fraud                      Merit objects to the pre-trial dismissal of its fraud            claim against Taber. The record discloses the following pre-            trial order:                           Finally, during the Pretrial                      Conference, the parties discussed with the                      Court the fraud claims presented by Taber                      and Merit in the Second Amended Complaint                      and the Counterclaim. Both parties agreed                      that                             these                                    fraud                                           allegations                                                        lack                                                              the                      requisite                                    specificity                                                  detailed                                                             under                      Rule 9(b)                                 of                                    the                                         Federal                                                 Rules                                                       of                                                           Civil                      Procedure. However, neither party brought                      this issue to the Court's attention before                      the Pretrial Conference. In light of the                      parties' admissions during the Conference,                      and after close examination of the                      complaint and the counterclaim, the Court                                        -11-                                         11                      will not allow evidence or allegations of                      fraud to be made during Trial by either                      party. (Emphasis added).            In light of Merit's agreement that its fraud allegations lacked            the specificity required under Fed. R. Civ. P. 9(b), Merit is            foreclosed from objecting to the exclusion of its fraud claim.            Moreover, we have read the entire counterclaim carefully and it            is obvious that Merit did not rely on any of the fraudulent            acts alleged. Reliance was not alleged in the fraud claim.            This was a breach of contract case. Merit's answer and            counterclaim make it evident that its defense to the breach of            contract claim was that it met its contract obligations and was            owed money by Taber (which the jury found to be true).            Dismissal of Merit's Contract Claims                      Merit objects to two other pre-trial rulings:            (1) the preclusion of damages compensable in the "construction            context" of this case; (2) the preclusion of damages from            Taber's delays and changes in the nature and scope of the work            contracted.                      As we understand it from Merit's brief at page 48,            Merit claims that in addition to the amount awarded it by the            jury for unpaid change orders and other specified claims, it            has a claim for "disruptions and resulting damages" in the            amount of two million dollars.  Id.                      The answer to this claim comes from the record.            During the trial, Merit attempted through a blow-up to                                        -12-                                         12            introduce evidence of damages for general overhead, general            field conditions, acceleration costs, and delay damages. The            court excluded the claim for three reasons. We need go no            further than the first:                           First, for the pretrial conference on                      February 28, 1995, the Court ordered the                      parties to submit an itemization of all                      damages to be claimed at trial. Merit                      submitted its itemized list of damages by                      motion dated February 28, 1995. During                      said conference Merit discussed with the                      Court all of the claims it wanted to                      present at trial and never mentioned the                      claims brought to the Court's attention                      yesterday.                      Merit waived its claim to the additional damages            sought by its failure to submit them in accord with the pre-            trial order of the court.                      The jury's findings that Merit was not liable to            Taber nullified the two third-party claims brought by Merit.                      The judgment of the district court is     Affirmed.            Costs on appeal are against Taber.                                        -13-                                         13
