NESC, Inc. v. Bacon Constr. Co.

224 A.3d 1135

NESC, INC. d/b/a New England Specialty Concrete

v.BACON CONSTRUCTION CO., INC., et al.

No. 2017-423-Appeal.

No. 2018-107-Appeal.

No. 2018-111-Appeal.

PC 08-4992

Supreme Court of Rhode Island.

February 17, 2020

Frederic A. Marzilli, Esq. Robert J. Roughsedge, Esq. J. Mark Dickison, Pro Hac Vice Michael Williams, Pro Hac Vice, for Plaintiff.

David M. Campbell, Esq. Christopher J. Fragomeni, Esq. Girard R. Visconti, Esq., for Defendant.

Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

Justice Robinson, for the Court.

These consolidated cases come before the Supreme Court pursuant to a judgment on a jury verdict entered on November 3, 2017 in favor of the plaintiff, NESC, Inc. (NESC). The defendant, Bacon Construction Co., Inc. (Bacon), appeals from a judgment entered pursuant to Rule 54(b) of the Superior Court Rules of Civil Procedure relating to a January 3, 2018 order denying its motion for a new trial or, in the alternative, a remittitur. NESC cross-appeals from a September 2, 2014 order denying its "Motion for Leave to File First Amended Complaint" (motion to amend) and a November 4, 2016 order denying its motion to reconsider the denial of its motion to amend.

For the reasons set forth in this opinion, we affirm the judgment and the orders of the Superior Court.

IFacts and Travel

This case arises from a dispute between a general contractor, Bacon, and a subcontractor, NESC, regarding an agreement to install flooring in a dormitory on the campus of Rhode Island College (RIC). On July 30, 2008, NESC filed a complaint in Superior Court against both Bacon and CNA Surety Corporation¹ alleging as to each defendant: (1) breach of contract; (2) unjust enrichment; (3) violation of the Rhode Island Prompt Payment Act; and (4) insurer bad faith. The factual allegations underlying all four claims were to the effect that NESC had not been fully compensated for the work which it had performed as a subcontractor on the RIC project. In response, Bacon filed a counterclaim against NESC, alleging breach of contract and negligence.

ANESC's Motion to Amend

On March 25, 2010, NESC filed, under seal, a proposed amended complaint seeking to add a claim against Bacon under the Rhode Island False Claims Act, G.L. 1956 § 9-1.1-3. NESC also provided a written copy of the amended complaint to the Rhode Island Department of the Attorney General in accordance with § 9-1.1-4(b)(2). On December 3, 2013, the Attorney General filed in the Superior Court a "Notice of Election to Decline Intervention." On August 4, 2014, NESC filed a motion to amend its complaint. On September 2, 2014, following a hearing on August 27 of that year, an order entered denying NESC's motion to amend. Some two years later, on September 9, 2016, NESC filed a motion to reconsider the previous denial of its motion to amend. On November 4, 2016, following a hearing on October 27 of that year, an order entered denying NESC's motion to reconsider.

BThe Trial

Prior to trial, the parties stipulated to a contract price of $10.69 per square foot for the complete flooring system.² The parties also stipulated as follows:

"that NESC's claimed contact [sic ] amount owed is $125,733.67 (which claim Bacon disputes). (The amount of NESC's claim is based on its claimed contract price of $949,272 (88,800 square foot. x $10.69 per square foot) minus payments previously made by Bacon of $784,538.33 minus the above-mentioned credit of $39,000)."³

The case opened to the jury on October 30, 2017 and was heard over four days. The jury heard testimony from six witnesses. We summarize below the relevant evidence presented at trial.

The Testimony of Anthony Petronio

NESC called Anthony Petronio as its first witness. He testified that he began working for NESC in 2002 and assumed the position of general manager in 2006. He stated that, as general manager, part of his job duties included finding work, obtaining drawings for presentation to estimators, and negotiating contracts. He also testified that he had authority to enter into contracts on behalf of his employer. He further testified that, in 2006, NESC distributed Maxxon products, which are gypsum-based flooring products.

Mr. Petronio also testified that Bacon asked NESC to submit a bid to install flooring at the RIC project and that it provided NESC with the contract drawings. He testified that Robinson Green Beretta, the architectural firm on the project, was seeking the installation of a specific type of acoustic Maxxon flooring composed of two products: (1) Dura-Cap, a type of base layer; and (2) WearTop, a type of finished flooring. Mr. Petronio also testified that, when Bacon first provided NESC with the bid documents, it was NESC's understanding that the project was to be completed by the Spring of 2007, in anticipation of the dormitory opening for students in the Fall semester. He stated that NESC submitted its first bid to Bacon in January of 2006 based on an estimate that 92,000 square feet of flooring would be needed; he added that Bacon did not accept that first bid. Mr. Petronio further testified that Bacon later asked NESC to submit a revised bid based on 91,430 square feet, and that NESC did so on July 26, 2006. He stated that Bacon did not accept the revised bid either.

It was further Mr. Petronio's testimony that, on April 10, 2007, NESC sent a fax to Bacon addressed to Rick Reuter, an employee of Bacon,⁴ which fax consisted of yet another bid and a fax cover sheet stating that "it looks like the only variable at this point is an agreed to square footage." The fax containing the new bid and the cover sheet was admitted as an exhibit at trial. The just-referenced bid included a range of square footage for both Dura-Cap and WearTop. According to Mr. Petronio, the high and low points of the range of square footage were derived from Bacon's estimate of 88,800 square feet and NESC's estimate of 96,329 square feet. Mr. Petronio also testified that, on the same date, he had a discussion with Mr. Reuter, in the course of which discussion they agreed that, in order to resolve the difference in the square footage estimates, "[they] could get a third party to digitize the plans" and that "Mr. Reuter agree[d] to submit the plans to Civil Takeoffs^{[5 ]} * * *."

Mr. Petronio next testified that, after making an adjustment at Bacon's request concerning an item that is not material to the instant dispute, he faxed NESC's final bid to Bacon on April 11, 2007 and included therein the same range of square footage as he had included in the previous bid. He testified that Bacon accepted this bid and proceeded to generate a contract. Mr. Petronio testified that he received the proposed contract from Bacon on April 16, 2007. He further testified that the proposed contract included the same range of square footage as was set forth in NESC's final bid. Mr. Petronio stated that, after Wayne Capolupo (the owner of NESC) signed the contract without making any alterations to the range of square footage, the contract was faxed back to Bacon on April 18, 2007. According to Mr. Petronio's testimony, when NESC signed the contract, it was not "prepared to do the job and perform the work on the contract on a square footage less than 88,800 square feet[.]" He testified that, one day after returning the signed contract to Bacon, employees of NESC arrived on the job site and started working.

Mr. Petronio then testified that, on May 3, 2007, he received a fax from Mr. Reuter with a cover sheet that stated: "Here is a copy of your signed subcontract agreement. Please note the few markups made. Call with any questions." He went on to describe a note which appeared to him to have been written by Michael Bahry, the vice president of operations for Bacon, and which stated: "Actual price will be determined by actual quantity supplied by Civil Takeoffs, LLC, attached." Mr. Petronio testified that this note was added by Bacon. He further testified that the figure of 88,800 square feet used in the contract was crossed out and replaced with the number 83,318. Mr. Petronio acknowledged that 83,318 was the amount of square footage determined by Civil Takeoffs.

It was Mr. Petronio's testimony that, after receiving the May 3, 2007 fax, he immediately called Mr. Reuter and "told him [he] didn't think the number was correct." He added that he had told Mr. Reuter that he "couldn't do it for the eighty-[three⁶ ] three" because he "would end up losing money doing it." He then testified that Mr. Reuter said "what if we do an as-built[?] At the end of the job, we will measure up the rooms." Mr. Petronio stated that he rejected Mr. Reuter's suggestion, but said "what I will agree to is your original number of 88,800 square feet." He then testified that Mr. Reuter agreed to use the 88,800 square feet number. According to Mr. Petronio's testimony, Mr. Reuter did not qualify his agreement to using that number by saying that he needed to obtain permission from either George Agostini, the owner of Bacon, or Michael Bahry, the purchasing agent for Bacon. Mr. Petronio further testified that, immediately after his phone conversation with Mr. Reuter, he wrote on the fax cover sheet "Called Rick. Agreed to use Bacon number 88,800 square feet." He also testified that he had believed that Mr. Reuter had authority as executive manager of Bacon to make that agreement.

Mr. Petronio testified that, following this agreement, there were no further written agreements exchanged between the parties. He stated that NESC continued working on the project after the May 3, 2007 conversation and that NESC completed the project by the end of July 2007. Mr. Petronio further testified that NESC made three payment applications to Bacon, each application being based on the 88,800 square footage figure. He stated that Bacon paid the first two payment applications in full, but that the final payment application was not paid.

The Testimony of Richard Reuter

Next, NESC called Richard Reuter as an...