Sba Network Services, Inc v. Telecom Procurement Services, Inc.

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 06-4162
SBA NETWORK SERVICES, INC.
v.
TELECOM PROCUREMENT SERVICES, INC.;
TNT COMMUNICATIONS; GERALD KERSHNER;
RICK ROLLERT
Telecom Procurement Services, Inc.,
Appellant
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
(D.C. Civil No. 05-cv-01392)
District Judge: The Honorable Arthur J. Schwab
Submitted Under Third Circuit LAR 34.1(a)
September 25, 2007
Before: McKEE, BARRY, and FISHER, Circuit Judges
( Filed: October 9, 2007)
OPINION
BARRY, Circuit Judge
Appellant Telecom Procurement Services, Inc. (“TPS”) appeals from orders of the

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District Court granting summary judgment in favor of Appellee SBA Network Services,
Inc. (“SBA”) and awarding $355,334.71 in damages, interest, fees, and costs. TPS also
contends that the District Court erred in dismissing its crossclaims. For the reasons
discussed below, we will affirm in part, reverse in part, and remand for further
proceedings consistent with this opinion.
I.
This action arises out of a fire that occurred on October 9, 2003 in a wireless
telecommunications tower (the “Tower”) owned by Sprint Communications and located
in Catskill, New York. Cingular Wireless, seeking to add its phone service to the Tower,
contracted with Bechtel Corporation (“Bechtel”) for the installation of communications
equipment. Bechtel, in turn, subcontracted the work to SBA, a Florida corporation.
In need of a certified welder, SBA contacted TPS, a New York corporation that
was performing work on nearby telecommunications towers. Pursuant to this inquiry,
TPS, on September 29, 2003, submitted a “pricing proposal” to SBA for the installation
of three hand holes and an entry port on the Tower. SBA accepted the proposal on
October 1, 2003. The next day, SBA and TPS representatives executed a Purchase Order
Subcontract (the “Subcontract”) for TPS’s installation of the three hand holes and the
entry port. Just above the signature of TPS’s authorized representative, the Subcontract
expressly incorporated four exhibits, which included, among other things, the pricing
proposal and acceptance, as well as “General Conditions” and “Minimum Safety
Requirements.”

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On October 4, 2003, TPS issued a purchase order to Appellee TNT
Communications (“TNT”), an Iowa business entity, for the very work that TPS had
contracted with SBA to perform. Although the purchase order originated with TPS and
appeared under its letterhead, TPS contends that it provided no instruction or assistance to
TNT, and that SBA made all necessary arrangements. Nonetheless, TPS charged a 15
percent markup for its service.
On October 9, 2003, between 9 and 10:00 A.M., TPS foreman Terry Pennell
dispatched a TNT work crew, consisting of Gerald Kershner and Rick Rollert, to the
Tower. There, Kershner and Rollert met with Joseph Rains, the SBA site superintendent.
No TPS representative was present, although TPS’s president testified that Pennell held
ultimate responsibility for the job, including the responsibility to ensure that all work was
performed by qualified workers and in accordance with TPS and Bechtel standards.
Rains gave the TNT employees access to the Tower, provided the ports to be installed,
and remained onsite for several hours while Kershner and Rollert performed the work.
While Kershner and Rollert were welding, a fire started inside the Tower. Heat
from the fire caused the Tower to buckle, rendering it unusable. SBA subsequently had
the Tower disassembled and replaced with a new structure. The total cost to SBA for
replacing the Tower was $268,408.13.
On October 4, 2005, SBA filed a complaint in the U.S. District Court for the
Western District of Pennsylvania, naming as defendants TPS, TNT, Kershner, and
Rollert. Count 1 alleged that TPS had breached the Subcontract by, among other things,

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failing to indemnify SBA for more than $237,000 in damages incurred as a result of the
fire. Counts 2 through 5 alleged negligence on the part of TPS, TNT, Kershner, and
Rollert, respectively. TPS answered and filed crossclaims against TNT, Kershner, and
Rollert for indemnification and contribution, although Rollert was never successfully
served. At no point did TNT, Kershner, or Rollert answer or otherwise defend SBA’s
claims or TPS’s crossclaims.
After the completion of discovery, SBA and TPS filed cross-motions for summary
judgment. On July 20, 2006, the District Court granted summary judgment for SBA as to
the breach of contract claim, granted summary judgment for defendants as to the
negligence claims, and reserved decision on the question of damages. TPS moved,
pursuant to Federal Rule of Civil Procedure 59(e), to alter or amend the judgment, and
SBA simultaneously filed a second motion for summary judgment on the question of
damages. On August 23, 2006, the Court denied TPS’s Rule 59(e) motion. After hearing
argument, the Court, on August 31, 2006, granted SBA’s second motion for summary
judgment and ordered the entry of judgment against all defendants in the amount of
$355,334.71, including damages of $268,408.13, prejudgment interest of $51,668.55, and
attorneys’ fees and costs in the amount of $35,258.03. TPS never raised its crossclaims at
any point during the summary judgment proceedings, and none of the Court’s memoranda
or orders specifically addressed them. This appeal followed.
II.
The District Court had diversity jurisdiction under 28 U.S.C. § 1332. We have

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1 The District Court determined that Florida law governed the interpretation of the
contract. Because TPS does not raise choice of law as an issue on appeal, we will assume
the application of Florida law.
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jurisdiction to review the final decision of the District Court under 28 U.S.C. § 1291. We
apply the same standard as the District Court. In conducting our plenary review of the
record, we view all evidence and draw all reasonable inferences in a light most favorable
to the nonmoving party. Matreale v. N.J. Dep’t of Military & Veterans Affairs, 487 F.3d
150, 152 (3d Cir. 2007). Summary judgment is appropriate only if “there is no genuine
issue as to any material fact and . . . the moving party is entitled to a judgment as a matter
of law.” Fed. R. Civ. P. 56(c).1
TPS contends that its contract with SBA consists of TPS’s September 29, 2003
price proposal, SBA’s October 1, 2003 acceptance, and an undated one-page exhibit on
TPS letterhead describing the general nature of the work to be performed. In support of
this position, TPS notes that when SBA returned the signed price proposal, its facsimile
cover sheet stated, “Here is the signed contract. Please accept [t]his as your notice to
proceed.” (App. at 197.) TPS would have us ignore, therefore, the Subcontract that the
parties executed on October 2, 2003.
We easily conclude, as did the District Court, that TPS is bound by the October 2,
2003 Subcontract and the exhibits expressly incorporated therein. On its face, TPS’s
September 29 proposal related only to “pricing,” and SBA’s October 1 acceptance served
only to fix the price term of the parties’ agreement. The next day, SBA proposed the

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remaining terms and conditions, which TPS promptly accepted. No additional
consideration was needed because the Subcontract merely complemented, and did not
modify, the parties’ earlier price agreement. (See App. at 62 (“The Contract Documents
are intended to be correlative and complementary . . . .”).) See Newkirk Constr. Corp. v.
Gulf County, 366 So. 2d 813, 815 (Fla. Dist. Ct. App. 1979) (“Modifications of contracts
must be supported by new consideration as well as the consent of both parties.” (emphasis
added)); see also Whitley v. Royal Trails Prop. Owners’ Ass’n, 910 So. 2d 381, 383 (Fla.
Dist. Ct. App. 2005) (“When two or more documents are executed by the same parties at
or near the same time, in the course of the same transaction, and concern the same subject
matter, they will be read and construed together.”).
We likewise reject TPS’s related argument that it should not be bound by the
General Conditions because it did not receive them until after the fire. The only evidence
on this point one way or the other was the testimony of Todd D’Angelo, SBA’s field
operations manager. D’Angelo testified that under SBA’s normal procedures, TPS would
have received the General Conditions when it first performed work for SBA in December
2002, and that those provisions would need to be on file at SBA’s home office before
subsequent purchase orders could be awarded to TPS. (See App. at 352-53; see also id. at
197 (issuing purchase orders to TPS on October 1, 2003); 243-44 (testifying that TPS first
worked for SBA in December 2002); 464-65 (attesting that SBA and TPS entered into a
Purchase Order Subcontract Agreement for a prior job in February 2003).) By
comparison, when TPS’s president was asked whether TPS had received a vendor’s

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package from SBA in the months prior to the fire, he responded only that he “d[id] not
know” and “would have to check.” (Id. at 248.)
Section 29.0 of the General Conditions provides that a subcontractor—in this case,
TPS—shall be responsible for property damage arising out of its performance of the
contracted-for work:
Subcontractor shall protect, hold free and harmless, defend and indemnify
Contractor and Owner (including its agents and employees) for all liability,
penalties, costs, losses, damages, expenses, causes of action, claims or
judgments (including attorneys’ fees) resulting from . . . damage to property
of any kind, which . . . damage arises out of or is in any way connected with
the performance of work under this Contract.
(App. at 66.) That same section provides an exception where the damage arises from the
sole negligence or willful misconduct of a non-party independent contractor who is
“directly responsible to Contractor or Owner.” (Id.) TPS argues that this exception
applies because TNT was “directly responsible” to SBA, not TPS. This argument is
without merit. The purchase order for TNT’s services originated with TPS, not SBA, and
TNT was paid by TPS. It was also a TPS foreman who dispatched the TNT crew to the
Tower and “communicated to start . . . cutting entry ports into [the Tower].” (App. at
234.) That an SBA representative provided access to the site and was “sitting in [his]
truck” nearby while the TNT crew worked on the Tower certainly did not strip TPS of its
“ultimate[] responsibility for the job.” (App. at 253-54, 300; see also id. at 252
(admitting that TPS employees were responsible for implementing the TNT purchase
order).)

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TPS argues, next, that the indemnity clause at Section 29.0 did not permit SBA to
recover attorneys’ fees and costs as a result of prosecuting this action. We disagree.
Nothing in the provision limits SBA’s recovery of attorneys’ fees to defending—as
opposed to prosecuting—legal claims. Rather, section 29.0 unambiguously provides that
TPS shall indemnify SBA for “costs, losses, damages, expenses, causes of action, claims
or judgments (including attorneys fees).” (App. at 66.) Even construing the indemnity
provision strictly in favor of TPS, see U.S.B. Acquisition Co. v. Stamm, 660 So. 2d 1075,
1079 (Fla. Dist. Ct. App. 1995), we find no support whatsoever for TPS’s reading of
“attorneys’ fees” as applying only to judgments obtained against SBA by third parties.
Nor do we find any basis under Florida law for setting aside an express attorneys’ fee
provision in a duly executed, arms-length commercial contract. The cases on which TPS
relies are inapposite, as they address only attorneys’ fees incurred in establishing the right
to common-law indemnity, not contractual indemnity. See, e.g., Bravo Elec. Co., Inc. v.
Carter Elec. Co., 532 So. 2d 698, 701 n.3 (Fla. Dist. Ct. App. 1988) (Cowat, J.,
dissenting); cf. Kuhns v. Koob, 408 So. 2d 796, 797 (Fla. Dist. Ct. App. 1982) (holding
that indemnitee may recover attorneys’ fees incurred in defending indemnity agreement);
Am. & Foreign Ins. Co. v. Avis Rent-A-Car Sys., Inc., 401 So. 2d 855, 858 (Fla. Dist. Ct.
App. 1981) (“[A]ttorney’s fees incurred by a party may be awarded against the opposing
party only when authorized by statute or by contract.”).
TPS also contends that the District Court’s calculation of prejudgment interest was

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2 We have held that a court sitting in diversity awards prejudgment interest pursuant
to the law of the forum. Zippertubing Co. v. Teleflex Inc., 757 F.2d 1401, 1414 (3d Cir.
1985). As neither party has urged the application of Pennsylvania’s law to the award of
prejudgment interest, however, we deem the parties to have consented to the application
of Florida’s law on this issue. See Schwan’s Sales Enters., Inc. v. SIG Pack, Inc., 476
F.3d 594, 596 (8th Cir. 2007) (stating that a substantive matter of state law under the Erie
Doctrine requires only that some state’s law be applied to the issue).
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contrary to Florida law.2 Under Florida law, two prerequisites must be satisfied for a trial
court to award prejudgment interest: “(1) out-of-pocket pecuniary loss; and (2) a fixed
date of that loss.” Glover Distrib. Co. v. F.T.D.K., Inc., 816 So. 2d 1207, 1213 (Fla. Dist.
Ct. App. 2002). When both prerequisites are satisfied, the award of prejudgment interest
is mandatory. Argonaut Ins. Co. v. May Plumbing Co., 474 So. 2d 212, 215 (Fla. 1985).
Although SBA’s out-of-pocket loss is unquestioned, TPS disputes the date that the
District Court determined for that loss.
The District Court found that SBA incurred full damages as of January 1, 2004, a
date by which, according to SBA, the replacement tower was in place and operating. As
TPS correctly notes, however, the record shows that as of that date, SBA had incurred an
out-of-pocket loss of less than $1000. Although SBA is correct that under Florida law,
damages for breach of contract generally are measured as of the date of the breach,
Grossman Holdings Ltd. v. Hourihan, 414 So. 2d 1037, 1040 (Fla. 1982), the District
Court determined that TPS’s breach was not its negligence on October 9, 2003, but its
subsequent failure to indemnify SBA for losses actually incurred. Thus, to order TPS to

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3 We note, in particular, that SBA’s records do not reflect any fixed date for its out-of-
pocket loss corresponding to the more than $61,000 in additional damages that it
appended to its second motion for summary judgment.
4 We reject, however, TPS’s argument that prejudgment interest may not be awarded
from a date earlier than SBA’s formal demand for payment. Although there is some
authority for this proposition, we note that the overriding purpose of prejudgment interest
is to compensate the prevailing party fully for its loss. Argonaut Ins. Co., 474 So. 2d at
215. Where there is no dispute that TPS had contemporaneous notice of the fire, and
where TPS has been adjudged to have breached its contractual obligation to indemnify
SBA for losses incurred in dismantling and replacing the Tower, we think that interest
should accrue from the date or dates of those losses. See id. (“[W]hen a verdict liquidates
damages on a plaintiff’s out-of-pocket, pecuniary losses, plaintiff is entitled, as a matter
of law, to prejudgment interest at the statutory rate from the date of that loss.”). That
calculation will be for the District Court on remand.
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pay interest on monies that SBA had not yet expended is to award SBA a windfall.3
Metro. Dade County v. Bouterse, Perez & Fabregas Architects Planners, Inc., 463 So. 2d
526, 527 (Fla. Dist. Ct. App. 1985) (“Awarding prejudgment interest from a time prior to
the date any payment became due provides [the nonbreaching party] with a windfall and
unjustly penalizes the [breaching party].”); see also Nat’l Educ. Ctrs., Inc. v. Kirkland,
678 So. 2d 1304, 1306 (Fla. Dist. Ct. App. 1996) (quoting same); Koplowitz v. Girard,
658 So. 2d 1183, 1184 (Fla. Dist. Ct. App. 1995) (stating that a party in a breach of
contract action “can neither receive more than it bargained for nor should it be put in a
better position than it would have been in had the contract been properly performed”).
Because SBA has not demonstrated that it sustained an out-of-pocket loss of $268,408.13
as of January 1, 2004, we conclude that the District Court’s award of prejudgment interest
was erroneous. 4

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We have carefully reviewed SBA’s evidence of damages and find it sufficient to
support the District Court’s judgment. We conclude, however, that the Court erred in
ordering the docket closed without addressing TPS’s crossclaims. Although, as SBA
notes, TPS did not raise its crossclaims for indemnification and contribution at summary
judgment, we see no need for it to have done so before it was adjudged liable to SBA.
Because it is by no means clear that TPS cannot possibly prevail on its crossclaims
(although we have little confidence that it will attempt to do so now), their dismissal
without notice was inappropriate. See PNH Corp. v. Hullquist Corp., 843 F.2d 586, 594-
95 (1st Cir. 1988) (vacating District Court’s sua sponte dismissal of crossclaim for
indemnification).
III.
For the foregoing reasons, we will affirm the District Court’s grant of summary
judgment in favor of SBA on its breach of contract claim, and will affirm its award of
damages, attorneys’ fees, and costs. We will reverse, however, the Court’s award of
prejudgment interest, and will remand with instructions to award prejudgment interest
only from the dates of SBA’s out-of-pocket losses. We will also order the reinstatement
of TPS’s crossclaims for indemnification and contribution.

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