Ramada Development Company v. Rauch

644 F.2d 1097 (5th Cir. 1981)

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Nature of the Case

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Facts

D signed a contract with P to design, furnish, and construct a 160-unit Ramada Inn Motor Hotel and Restaurant in Venice, Florida. By January 25, 1974, the construction was, according to one witness, 'substantially complete' in accordance with the construction contract. All that remained for completion were the 'punch list' items, a list of defects, compiled by D and given to P. D occupied most of the motel using the restaurant and renting rooms. At some time, D became dissatisfied with the motel or the furnishings and supplies. The contract demanded that the final payment was due upon 'substantial completion.' D refused to make the final payment. D claims he was not yet satisfied with the work while P claims that by that time D had not made any complaints beyond the usual 'punch list' items. To determine the validity of the claims, P investigated the defects that D had alleged. P commissioned the Goldsmith Report so that P could have informed settlement discussions with D. P sued D for the balance due under the contract for the construction, furnishing and supplying of the motel. D denied that P had satisfied the statutory prerequisites for the establishment of its lien claim. At trial, D sought to admit the Goldsmith Report because it confirmed the majority of the alleged defects. The district court concluded that it was inadmissible under Rule 408 because the report was a tool used in an unsuccessful settlement attempt. P got the verdict and D appealed.