United States District Court, D. Hawaii
PACIFIC COMMERCIAL SERVICES, LLC, a Hawaii limited liability company, Plaintiff,
LVI ENVIRONMENTAL SERVICES, INC., nka NORTHSTAR CONTRACTING GROUP, INC., ET AL., Defendants.
ORDER DENYING DEFENDANTS' MOTION FOR
RECONSIDERATION, ECF NO. 172
MICHAEL SEABRIGHT CHIEF UNITED STATES DISTRICT JUDGE
August 27, 2018, Defendants LVI Environmental Services, Inc.,
nka Northstar Contracting Group, Inc., and Northstar Recovery
or “LVI”) filed a Motion for Reconsideration of
Findings of Fact and Conclusions of Law, ECF No. 172
(“Motion for Reconsideration”), seeking amendment
or modification of the court's August 10, 2018 Findings
of Fact and Conclusions of Law (“FOFCOL”), ECF
No. 170. The court construed the Motion for Reconsideration
as a timely-filed Motion under Federal Rules of Civil
Procedure 52(b) and/or 59(e) to amend the FOFCOL and modify
the Judgment. ECF No. 173. Plaintiff Pacific Commercial
Services, LLC (“Plaintiff” or “PCS”)
filed its Opposition on September 14, 2018, ECF No. 177, and
LVI filed a Reply on September 28, 2018, ECF No. 180. The
court decides the Motion under Local Rule 7.2(e) without an
oral hearing. The Motion is DENIED.
Motion raises two arguments for the court's
consideration.First, LVI contends that the court
manifestly erred in not addressing, and not accepting, its
argument that it partially cancelled the Subcontract between
it and PCS pursuant to Paragraph 1.59.A of the Prime Contract
between it and Hawaiian Electric
(“HECO”). (The FOFCOL addressed and rejected a
similar argument under Paragraphs 21(a) and 21(b) of the
Terms and Conditions of the Subcontract, but not under terms
of the Prime Contract.) Second, it contends that PCS is not
entitled to prejudgment interest because PCS was responsible
for an unreasonable delay of “approximately 39 months
or 3.25 years” in bringing this suit. ECF No. 172 at
17. The court addresses each argument in turn.
LVI's Argument Under Paragraph 1.59.A of the Prime
Contract is Barred, and Would Fail for Lack of Proof
court agrees with PCS that LVI's argument (that the
Subcontract was partially terminated under paragraph 1.59.A
of the Prime Contract, which was incorporated by reference
into the Subcontract) is barred - it was not argued in the
trial briefs, was not specifically mentioned at trial, and
was not discussed in any substantive pretrial motion.
See, e.g., Marlyn Nutraceuticals, Inc. v.
Mucos Pharma GmbH & Co., 571 F.3d 873, 880
(9th Cir. 2009) (“A motion for reconsideration
‘may not be used to raise arguments or present
evidence for the first time when they could reasonably have
been raised earlier in the litigation.'”) (quoting
Kona Enters., Inc. v. Estate of Bishop, 229 F.3d
877, 890 (9th Cir. 2000)); Wereb v. Maui Cty., 830
F.Supp.2d 1026, 1031 (9th Cir. 2011) (reiterating that
“reconsideration may not be based on evidence and legal
arguments that a movant could have presented at the time of
the challenged decision”) (citing Kona
Enters., 229 F.3d at 890).
the court were to consider it now, its resolution depends
upon facts that were not litigated and which were not
developed in the trial record. LVI argues that the Prime
Contract's terms were incorporated by reference into the
Subcontract, as it urged in its proposed Findings and
Conclusions. According to LVI, this
incorporation-by-reference argument is a purely legal issue
for which no evidence was necessary at trial. Defs.'
Reply at 3, ECF No. 180. This is decidedly not so.
sure, “whether material has been incorporated [by
reference] presents a question of law.” Safeway,
Inc. v. Nordic PCL Constr., Inc., 130 Haw. 517,
527, 312 P.3d 1224, 1234 (Haw. Ct. App. 2013) (quoting 11
Richard A. Lord, Williston on Contracts §
30:25, at 308 (4th ed. 2012) (other citations omitted)). But
“it is [also] clear that whether one agreement has
incorporated another has factual components[.]”
Id. That is, “[r]emaining to be resolved . . .
is whether the parties assented to incorporation of those
conditions, and it is here that the inquiry shifts from a
matter of law to a matter of fact.” Id. at
529, 312 P.3d at 1236 (citations omitted). In
“look[ing] to the surrounding circumstances of the case
. . . assent is a factual inquiry.” Id.
LVI's memorandum acknowledges, “in order to uphold
the validity of terms incorporated by reference it must be
clear that the parties to the agreement had knowledge of and
assented to the incorporated terms.” Servco Pac.,
Inc. v. SkyBridge Glob., Inc., 2016 WL 6996987, at *5
(D. Haw. Nov. 29, 2016) (quoting Safeway, 130 Haw.
at 527, 312 P.3d at 1234). “Determining whether there
is mutual assent is not confined solely to the contractual
terms, but ‘in combination with the surrounding
circumstances presented in the case.'” Id.
(quoting Douglass v. Pflueger Haw., Inc., 110 Haw.
520, 532, 135 P.3d 129, 141 (2006)). It is an “exacting
whether the parties “had knowledge of and assented to
the incorporated terms, ” Safeway, 130 Haw. at
527, 312 P.3d at 1234, raises entirely new factual questions
in this case regarding § 1.59A of the Prime Contract -
questions that were not litigated or briefed, and for which
there is no evidence. The record contains no evidence of
intent, one way or the other - thus, even if the court
considered the question, LVI's argument would fail for
lack of proof. Without such evidence, the court could not
make findings regarding PCS's or LVI's
“knowledge of and assent” to the terms of the
Prime Contract between HECO and LVI, even if LVI had raised
the point earlier or even if it would have done so orally at
a post-trial hearing (as it claims it was planning to do).
PCS Did Not Unreasonably Delay Bringing Suit
argues that, because PCS waited “3.25 years” to
bring suit, the court abused its discretion in awarding
prejudgment interest. In response, PCS has established that
it did not unreasonably delay filing suit - thus, an award of
prejudgment interest is appropriate. See, e.g.,
Roxas v. Marcos, 89 Haw. 91, 153, 969 P.2d 1209,
1271 (1998) (explaining factors courts consider in making the
discretionary decision to award or deny prejudgment
interest). In particular, PCS has established that it
attempted at length to obtain a non-judicial resolution of
the dispute before filing this action, and when those
attempts failed, made a timely claim with LVI's bonding
company in July 2015. See Chang Decl. (Sept. 14,
2018) ¶¶ 3, 4, ECF No. 177-1; Lam Decl. (Sept. 14,
2018) ¶¶ 4 to 13, ECF No. 177-2. This suit was
first brought in state court on April 19, 2016 - well within
the six-year statute of limitations for contract claims, and
less than a month after LVI's bonding company denied
PCS's claim on March 21, 2016. See Pl.'s Ex.
11, ECF No. 177-13.
court also agrees with PCS that it is misleading for LVI to
suggest a 3.25 year “across the board” delay in
bringing suit - that time period is measured from February 5,
2013, which is when LVI first confirmed to PCS its decision
to use another contractor for asbestos containing material.
See Ex. P-24, ECF No. 141-27. But LVI continued to
breach the Subcontract through March 5, 2015. See
Ex. P-65A at 6; ECF No. 146-7. And the related dispute
between the parties regarding the per-drum or per-ton charge
for disposal of hazardous solid waste (involving the
“small font” provision of line item 4 of the HECO
Subcontract) was continuing throughout (when the parties
still had an ongoing relationship working on aspects of the
HECO and Kahuku Projects). At that point, refraining from
litigation was not unreasonable or dilatory.
§ 636-16 “vests the trial judge with broad
discretion to award interest in conformity ‘with the
circumstances of each case.'” In re Asbestos
Cases, 847 F.2d 523, 527 (9th Cir. 1988) (quoting the
statute). “[T]he clear weight of authority establishes
that an award of interest is compensatory in nature and
therefore appropriate, where as here, the plaintiff must wait
a substantial period between the time of injury and
compensation.” Id. (citations omitted).
“Under Hawaii law, ‘[p]rejudgment interest is an
element of complete compensation. Prejudgment interest serves
to compensate for the loss of use of money due as damages
from the time the claim accrues until judgment is entered,
thereby achieving full compensation for the injury those
damages are intended to redress.'” In re Maui
Indus. Loan & Fin. Co., 2013 WL 2897792, at *10 (D.
Haw. June 13, 2013) (quoting Kalawaia v. AIG Haw. Ins.
Co.,90 Haw. ...