Aniero Concrete Co. v. New York City Construction Authority (308 F. Supp. 2d 164, 2003)

MEMORANDUM OPINION AND ORDER

HAIGHT, Senior District Judge.

At a bench trial in this diversity action, a construction company asserted a claim against a surety company to recover in quantum meruit for work performed during the renovation of a high school in the Bronx. The parties exchanged post-trial main and reply briefs. Counsel presented oral summations. This Memorandum Opinion and Order constitutes the Court’s findings of fact and conclusions of law pursuant to Rule 52(a). Fed.R.Civ.P.

I.FINDINGS OF FACT

1. Plaintiff Aniero Concrete Company, Inc. (“Aniero”) is a New Jersey corporation maintaining its principal place of business in that state.

2. Defendant Aetna, Casualty and Surety Company (“Aetna”) is a Connecticut corporation maintaining its principal place of business in that state.

3. . In July 1992 the New York City School Construction; Authority (“SCA”) contracted with the P.J. Carlin. Construction Company (“Carlin”) for a large-scale modernization and renovation of the Morris High School in the Bronx (“the Project”). Carlin was the general contractor for the Project, and retained the services of a number of subcontractors. Aetna had issued a performance bond obligating Aet-na to complete the Project at its expense if Carlin failed to do so. That eventuality came to pass. Carlin was terminated from the Project, nowhere near completion, after little more than a year.

4. Aetna retained Aniero to act as replacement general contractor. At that time, Aetna and Aniero purported to enter into a written contract referred to as the “Completion Agreement.” However, the Court held in an earlier opinion that the Completion Agreement was invalid because Aetna failed to obtain the SCA’s written consent of Aetna’s assignment of the Carlin contract to Aniero. See Aniero Concrete Company, Inc. v. New York City Construction Authority, 1998 WL 148324 (S.D.N.Y. March 30, 1998). Accordingly Aniero’s claim against Aetna sounds in quantum meruit.

5. Aniero mobilized on the job site in March, 1994. It kept on some of Carlin’s subcontractors and retained others of its choosing. Aniero ceased working on the uncompleted Project on December 22, 1994, and, complaining of Aetna’s delays in making payments under the purported contract, commenced this action against Aetna on that day.

6. Aniero claims that Aetna owes Anie-ro a total amount of $4,007,620.75 in addition to the amounts Aetna previously paid to Aniero. Aetna clams that it overpaid Aniero in the amount of $2,548,174.41, and in consequence owes Aniero nothing in quantum meruit. 'Aetna did not press a claim for overpayment at the trial, although it has not abandoned that claim. The procedural posture of the case was such that at the trial Aetna confined its efforts to denying Aniero any recovery in quantum meruit.

7. The president and principal owner of Aniero is Stephen Crevani, Sr. (hereinafter “Crevani”). His son, Stephen. Crevani, Jr. (hereinafter “Crevani Jr.”) was also active in Aniero during the pertinent times.

8. Aniero was an active company from 1970 until 1995, when it withdrew from the Project. It was a general contractor, developer, and reinforced concrete contractor. During Aniero’s years of operation, Crevani at one time or another performed all functions at this small company: estimating costs for bids, working and supervising at the job sites, working in the office, and overseeing all aspects of the business.

9. Having been retained by Aetna as the general contractor replacing Carlin, Aniero began work at the site of the Project during, the week ending on March 25, 1994. Aniero’s last day on the job was December 22,1994.

10. Aniero established several trailers at the job site. The main trailer was used as a field office, containing computers, copy machines, fax machines, calculators, filing cabinets, and other office equipment. Aniero’s permanent office was located in Hackensack, New Jersey. Other trailers at the job site were used for storage purposes and to accommodate some of Anie-ro’s subcontractors.

11. Given the near total renovation of a large multi-story school building, it is not surprising that Aniero used the services of many subcontractors specializing in the full gamut of the building trades. The names of those subcontractors, some 95 in number, are listed in Appendix A to Anie-ro’s Main Post-Trial -Trial Brief at 5. Based upon that cost total, Aniero claims an additional 15%, or $1,193,638.49, for “overhead and profit.” Aniero’s proof in support of that percentage consists principally of Crevani’s personal expectation. He testified on direct examination:

Q. Mr. Crevani, is it customary for Aniero in a project where the work was being performed on a cost-plus basis to assess or include an amount for overhead and profit?

A. Yes. it is.

Q. Would you tell the court on a job of this nature, extent and magnitude of the Morris High School project what Aniero would expect to receive for overhead and profit and why?

A. Yes. Aniero would expect to receive 15 percent overhead and profit in a job of that magnitude.

Tr. 573. Responding to a question by the Court, “15 percent of what?”, Crevani said: “15 percent of your actual costs.” Id. Cre-vani then expanded somewhat on this concept:

THE COURT: Let me withdraw my question and ask it a different way. Of the 15 percent, Mr. Crevani, what portion is overhead and what portion is profit?

A. When we calculate overhead and profit, it’s not an exact percentage for each item. It could vary based on the percentage of work or the quantity of work that you have at the time. Because basically you have like a fixed overhead with our yard and our office, and if you have a tremendous amount of work going, then you would allocate your overhead and it would be a less percentage. If you don’t have that much work going on, then of course the percentage of the overhead is going to be a little bit more, and so that would reduce the profit.

So based on that, of course the more — it’s still 15 percent total in its entirety, but it will fluctuate. Sometimes it will be 10 percent for profit, 5 percent for overhead. Sometimes it may be 9 percent and 6 percent. It will fluctuate. But the total aggregate of both would be 15 percent.

Tr. 574., Aetna’s principal contention on this aspect of the case is that this proof is insufficient in law to sustain any allowance for overhead and profit.

42. Appendix A to Aniero’s Main Post-Trial Brief sets forth the calculations of its quantum meruit claim against Aetna. Adding the overhead and profit claim of $1,193,638.49 to the total' job costs of $7,957,589.95 gives a total gross claim of $9,151,228.44, against which Aniero credited the $6,781,069.00 received from Aetna and the stipulated $25,000 reduction, giving a sub-total of $2,345,159.44. To this amount Aniero added $1,195,566.97 for 9% prejudgment interest from December 22, 1994 to August 12, 2000 (the date of the judgment in Aniero’s favor against Lazer), which gives a further sub-total of $3,540,726.41. Aniero then credited Aetna with $106,681.74, representing Aniero’s net recovery from Lazer, which gives yet another sub-total of $3,434,044.67, to which Aniero added $473,575.58 for 9% pre-judgment interest from August 13, 2000 to December 18, 2002, giving yet another sub-total of $3,907,620.25, to which Aniero added $100,000 to reflect Crevani’s evaluation of the Degmor subcontractor claim, at that time still pending in the state court. Thus Aniero’s total claim against Aetna, as set forth its brief, is $4,007,620.25, an amount which, Aniero calculates, would yield $551.95 per diem interest until the entry of judgment. Those figures are subject to adjustment if Aniero is entitled, as it contends, to increase the cost of Deg-mor’s services from the $100,000 Crevani estimated at trial as the value of Degmor’s uncompensated work to the $150,000 Anie-ro paid to settle Degmor’s claim.

Aetna’s position is that it overpaid Anie-ro, and in consequence owes Aniero nothing in quantum meruit.

II. DISCUSSION

A. The Nature of a Quantum Meruit Claim

As I have held in prior opinions in this case, Aniero did not have an enforceable contract with the SCA or Aetna covering the construction work Aniero performed on the Morris High" School Project. Accordingly Aniero’s claim against Aetna sounds in quantum meruit.

Claims for unjust enrichment or quantum meruit “are non-contractual, equitable remedies that are inapplicable if there is an enforceable contract governing the subject matter.” R.B. Ventures, Ltd. v. Shane, 112 F.3d 54, 60 (2d Cir.1997) (citation omitted). “Quantum meruit is an equitable remedy.” McNamee, Lochner, Titus & Williams, P.C. v. Higher Education Assistance Foundation, 50 F.3d 120, 125 n. 1 (2d Cir.1995) (citing New York cases). “Quantum meruit is an equitable remedy that is awarded when the circumstances are such that equity and good conscience require the defendant to make restitution.” Tappe v. Alliance Capital Management L.P., 177 F.Supp 2d 176, 186 n. 10 (S.D.N.Y.2001) (internal quotation marks and citations omitted). “Recovery under the quantum meruit theory is derived from principles of equity and fairness and is allowed where there is substantial performance but not full completion of the contract.” 66 Am.Jur. Restitution and Implied Contracts, § 93.

Accordingly, in evaluating the rights and obligations of Aniero and Aetna, I must apply those principles of fairness that traditionally inform the decisions of a Chancellor in Equity.

B. Quantum Meruit Claims in the Construction Industry

Numerous cases decided. by courts in this Circuit or by New York state courts consider claims in quantum meruit asserted in the context of building construction projects. Certain guiding principles may be derived from that body of case law.

Under a quantum meruit claim, a building contractor may recover its actual job costs for work, labor and services performed and material furnished, plus an allowance for overhead and profit. The claimant bears the burden of proving its actual job costs. To sustain a judgment there must be a definite and logical connection between what is proven and the damages sought to be recovered, which cannot be speculative or conjectural. Although overhead and profit may sometimes be established as a percentage above direct costs, courts may require specific evidence of overhead and profit. In the present case, Aniero must show that the reasonable value of its work (including any allowance for. overhead and profit justified by the evidence) exceeds by a sufficiently quantifiable amount'the payments it has received from Aetna.

C. Summary of the Parties’ Contentions

Aniero claims “actual job costs” of $7,957,589.95, and 15% of that figure, or $1,193,638.49, for overhead and profit. From the resulting total of $9,151,228.44, Aniero deducts payments received from Aetna in the stipulated amounts of $6,781,069 and $25,000, resulting in a net claim of $2,345,159.44. Aniero also claims prejudgment interest at 9% on that amount, credits Aetna with $ 106,681.74 representing Aniero’s net recovery on its claim against a subcontractor for overpayment, and adds a claim of $100,000' arising out of then-pending litigation with another subcontractor (now increased to $150,000, the amount Aniero paid to settle the case).

Aetna contends that Aniero is entitled to no recovery. It argues principally that Aniero has failed to prove the value of the subcontractors’ work for which Aniero paid; that Aetna is entitled to various credits (or reductions) against Aniero’s quantum meruit claim; that Aniero has not proved an entitlement to allowances for overhead and profit; and that Aniero should not be awarded prejudgment interest.

For the most part, this Opinion discusses those contentions in that order.

D. Aniero’s Claimed Actual Job Costs

1. The Nature and Quality of Aniero’s Proof with Respect to Payments to Subcontractors

As noted, a major component of Aniero’s quantum meruit claim against Aetna is a total for “job costs” of $7,957,589.95. Most of that amount represents payments Anie-ro made to subcontractors who performed work at or furnished materials to the Project. Aniero’s proof on this aspect of the case is derived almost entirely from the testimony of Stephen Crevani, Sr. and the exhibits received in evidence during that testimony.

After the trial was concluded and post-trial briefs and reply briefs exchanged, the Court scheduled closing arguments (or summations) by counsel. In advance of those arguments, and in preparation for them, I entered and sent to counsel a Memorandum, reported at Aniero Concrete Company, Inc. v. New York City Construction Authority, 2003 WL 21018842 (S.D.N.Y. May 5, 2003) (the “May 5 Memorandum”). In that Memorandum I observed:

During its performance as the general contractor at the Morris High School project during the period March-December 22, 1994, Aniero did relatively little work itself. Most of the work was performed by subcontractors retained by Aniero. For the most part, plaintiffs proof of the “actual job costs” underlying its claim consists of checks it drew to the order of the sub-contractors, denominated “payments on account.”.... But there is an almost complete absence of contemporaneous explaining, detailing, itemizing, or otherwise supporting the work, labor and services performed or material furnished by the sub-contractors to whom plaintiff made these payments “on account.”

2003 WL 21018842, at *1. Having read Aetna’s post-trial briefs, I then said this:

Defendant contends that this paucity of documentation constitutes a lack of proof which defeats plaintiffs quantum meruit claim for any amount greater than what it has been previously paid. Defendant’s briefs appear to argue in the alternative: first, contending that this lack of documentation combined with Crevani’s lack of personal knowledge necessarily bars plaintiffs claim; and alternatively, that the same shortcomings render his testimony unworthy of belief and devoid of probative weight. The first contention I am asked to accept as a matter of law; the alternative contention, attacking Crevani’s credibility and the value' of his testimony, is. addressed to me as the finder of the facts.

Id. (footnote omitted). The May 5 Memorandum cited and analyzed a number of New York cases, cited by the parties or unearthed by the Court’s research, and stated these preliminary views;

As for the first of defendant’s seeming contentions, the governing New York law does not appear to include a per se rule that the absence of supporting documentation is fatal to a quantum meruit claim.... Given this line of New York cases, I am presently inclined to the view that such deficiencies or gaps as appear in plaintiffs documentary evidence do not preclude its quantum me-ruit claim as a matter of law. Rather, they form a legitimate basis for defendant’s challenge to the credibility of Cre-vani as a witness and the weight of his testimony.

Id. at *2, *4. The May 5 Memorandum “invite[d] further argument from counsel on the point,” id.-at %

During the closing argument of Aetna’s able chief counsel, Mr. Lepelstat, I think it is fair to say that (while not formally abandoning the point) he no longer pressed the contention that a lack of supporting documentation precluded Aniero’s quantum mendt claim as a matter of law. Counsel focused instead upon Crevani’s credibility as a witness, beginning his argument by quoting from Justice Field’s opinion in Quock Ting v. United States, 140 U.S. 417, 420-21, 11 S.Ct. 851, 35 L.Ed. 501 (1891):

Undoubtedly, as a general rule, positive testimony as to a particular fact, uncon-tradicted by anyone, should control the decision of the court; but that rule admits of many exceptions. There may be such an inherent improbability in the statements of a witness as to induce the court or jury to disregard his evidence, even in the absence of any direct conflicting testimony. He may be contradicted by the facts he states as completely as by direct adverse testimony; and there may be so many omissions in his account of particular transactions, or of his own conduct, as to discredit his whole story. His manner, too, of testifying may give rise to doubts of his sincerity, and create the impression that he is giving a wrong coloring to material facts. All these things may properly be considered in determining the weight which should be given to his statements, although there was no adverse verbal testimony adduced.

In the May 5 Memorandum I described comparable considerations, although in language which does not approach the elegance of Justice Field’s:

Assuming without presently deciding that inadequate documentation does not preclude plaintiffs quantum mendt claim as .a matter of law, a core question for,the factfinder is whether this sort of testimony, given by this witness [Crevani], is (a) credible and (b) if credible, of sufficient probative weight to sustain plaintiffs burden of proof with respect to the actual' job costs for which it seeks to hold defendant responsible. In making those evaluations, I will presumably apply familiar criteria: the witness’s interest in the outcome; whether the witness’s stated powers of recollection appear to be candid or suspiciously selective; whether his testimony is corroborated or contradicted by independent evidence in the record, testimonial or documentary; whether what the witness says is inherently plausible or implausible.

2003 WL 21018842, at *5.

Before considering the credibility of Crevani’s testimony, I will now transform the inclination expressed in the May 5 Memorandum into a holding. I hold that under New York law, gaps in or even a total absence of supporting documentation do not preclude a quantum meruit construction claim as a matter of law. To the extent that Aetna still argues to the contrary, its argument is rejected. The cases supporting the Court’s holding are reviewed in detail in the May 5 Memorandum, which I adopt herein by reference and need not reiterate. It is sufficient for present purposes to quote again the words of the New York Court of Appeals in D’Angelo v. State, 39 N.Y.2d 781, 782-83, 385 N.Y.S.2d 284, 350 N.E.2d 615 (1976):

We reject the State’s contention that claims under public construction contracts must be proved by written business records which would be subject to audit by the State. We know of no statute, rule or decisional law which requires proof in such form.... [T]o the extent that oral testimony is credited by the trier of the facts in the absence of business records, and the claim is thus allowed, we know of no predicate on which the State can base a claim of insufficiency as a matter of law.

In this regard there is no principled distinction between a construction claim against a public body, as in D’Angelo, and a claim against a private entity such as Aetna, as in the case at bar. A number of New York cases cited and discussed in the May 5 Memorandum involve quantum me-ruit construction claims against private interests; they all support the holding which I now announce.

Accordingly the case turns principally upon the credibility of Crevani’s testimony. Counsel for Aetna argued that Crevani’s testimony failed to meet any of the criteria of credibility articulated in Quock Ting. In counsel’s submission, Cre-vani’s testimony was inherently improbable; contradicted by facts in evidence; undermined by Crevani’s lack of personal knowledge of the value of subcontractors’ work, particularly with respect to the value of the work performed by Promo Pro, the largest subcontractor on the Project, a deficiency complicated by Aniero’s failure to call any witnesses from Promo Pro; and tainted by Crevani’s suspiciously selective preservation and loss of pertinent documents. These themes were stated at the outset of counsel for Aetna’s closing argument, see Tr.A. 38-42, further developed during the argument, and are of course set forth at length in Aetna’s post-trial briefs.

Contrary to these assertions, I found Crevani to be a credible and persuasive witness. Crevani as a witness is, of course, financially interested in the outcome of the trial: none more so. But parties to commercial cases invariably stand to gain or lose financially, depending on the outcome, and so that factor can never be sufficient, standing alone, to determine credibility. The plausibility or implausibility of the witness’s testimony is a more reliable touchstone. Aetna contends that Crevani’s testimony is inherently improbable. In fact, the opposite is true, at least with regard to the amounts of the job costs Aniero includes in its quantum me-ruit claim against Aetna.

The core of Crevani’s testimony on this aspect of the case is that each time Aniero made a payment “on account” to a subcontractor, the monetary value of that subcontractor’s work performed on or materials supplied to the Project as of the date of payment was equal to or greater than the amount of the payment. That value, Cre-vani also testified, was not fixed arbitrarily by him within the sheltered confines of his Hackensack office; the determination to make a particular payment on account to a particular subcontractor was preceded by inspections and evaluations of the work or materials at the job site by Crevani, Ber-del, and Jennings, who were there every day, and discussed among themselves (sometimes with participation of Crevani Jr.) the amount that should at that time be paid on account to that subcontractor

This is an inherently plausible narrative of events. Its plausibility lies principally in the likelihood that Amero, a small company of limited resources that had to borrow from its bonding company to fund settlements of claims by sub-contractors for additional amounts, would make sure that its on account payments to sub-contractors did not exceed the value of the work the subcontractors had actually performed or the materials they had actually provided to the Project.

The core contention for Aetna must be that Amero consistently, repeatedly, profligately and foolishly overpaid its subcontractors: showering the subcontractors with payments “on account” that vastly exceeded the value of the work performed or materials supplied by the subcontractors at. the times Amero made the payments. It is this view of evénts that is inherently implausible. It cannot be squared with the economic realities and practices of the heavy construction business, as revealed by this trial record; nor does Aetna’s view comport with common sense. Crevani impresses one as hardheaded, not softhearted. I say this neither in praise or in condemnation; it is simply a reflection of the industry in which he labors.

On a related point, I cannot accept Aetna’s contention that Crevani lacks personal knowledge of the value of the subcontractors’ performances. In his closing argument, in attempted support of that contention, counsel for Aetna focused upon Aniero’s payments to Promo Pro. Counsel stated: “First, I would like to note that Mr. Crevani has admitted that he does not have knowledge of the value of the work performed by Promo Pro, Aniero’s largest subcontractor on the Project.” Tr. A. 39. Endeavoring to demonstrate that admission, counsel read from Crevani’s cross-examination, Tr. 645:

Q. By the way, you wouldn’t know the value of the work performed by Promo Pro as of 4/22/94, would you?

A. Without looking at all kinds of documentation, no.

Q. You have no personal knowledge of that, do you?

A. Do I have personal knowledge right now?

Q. Yes.

A. Without looking at stuff, I don’t remember eight years ago, no.”

TR. A. 39-40. But Crevani did not admit to the lack of knowledge that Aetna’s argument implies. Even in the testimony just quoted, Crevani limited his admission by asking: “Do I have personal knowledge right now?” (emphasis added). Thus he draws a sensible distinction between the knowledge he had at the time of trial, eight years after the events, and the knowledge he had at the time Amero made payments on account to Promo Pro (and other subcontractors). That distinction was explicitly stated elsewhere in Creva-ni’s cross-examination; see, e.g., his testimony quoted in Findings of Fact ¶ 28, supra, and quoted again in part for the sake of this Discussion:

Q. As you sit here today, do you know the total amount of carpentry work which Promo Pro performed on the project as [of] the date of this check which is dated September 22,1994?

A. As I stated before, I don’t know today, but when I wrote this check I knew definitely that this payment was less than the'value of the work that he had already performed.

Q. And do you know the total; quantity of demolition work which Promo Pro had performed on the project as of the date of this check?

A.. Same answer.

Q. You don’t know.

A. As I sit here today. But at the time of the check I did.

(emphasis added). Crevani never departed or retreated from this basic assertion, which I find to be entirely credible.

As noted, this testimony is inherently plausible. Moreover, Crevani’s demeanor during a number of days’ testimony impressed me favorably. Accordingly I find that the amount of each payment on'account Aniero made to a subcontractor reflected the collective contemporaneous judgment of persons with the requisite knowledge that the amount was equal to or less than the value of the subcontractor’s work or materials as of the date of the payment. I further find that the nature and quality of Aniero’s proof at trial are sufficient to show that the values of the work and materials furnished by the subcontractors listed on pages 1-5 of Appendix A to Aniero’s Main Posh-Trial Brief were, at the least, equal to the amounts paid to those subcontractors, as listed in the Appendix. It follows that Aniero may recover those amounts from Aetna as parts of its quantum meruit claim, unless other evidence in the record bars or reduces recovery. Aetna contends that such evidence exists, and advances a number of arguments in support of that proposition. I consider those arguments in turn.

2. Spoliation of Evidence and Failure to Call Witnesses

Aetna argues that Aniero “failed to preserve critical documentation” related to its claims, and “failed to proffer witnesses with knowledge of the actual value of the alleged work supplied to the Project.” Aetna’s Main Posh-Trial Brief at 59. I am urged to draw “an adverse inference against plaintiff Aniero to the extent it shall be presumed that such missing- documents and witnesses would have been unfavorable to Aniero’s claim herein.” Id. In the alternative (and in escalation of the suggested sanction), Aetna asks- the Court to “enter judgmént as a matter’ of law in favor of Aetna and against Aniero with respect to the issues for which such documents pertain” [sic]. Id. Thé asserted failure to preserve documents focuses upon “supporting documentation with respect to [Aniero’s] claim in connection with the purported work, labor, services or materials supplied by” the leading subcontractors, including Promo Pro. Id. at 62.

There is no substance to Aetna’s argument insofar as it is based on Aniero’s failure to call witnesses other than Creva-ni. As the discussion in Part II.D.l., supra, demonstrates, Crevani’s testimony, if believed (and I do believe it) is sufficient in law to sustain Aniero’s quantum meruit claim against Aetna to recover amounts Aniero paid to subcontractors.

Aetna’s criticism of Aniero for failing to offer more supporting documents as trial exhibits constitutes, as the briefs for Aetna make explicit, a charge that Aniero wrongfully committed spoliation of evidence. Spoliation is “the destruction or significant alteration of evidence or the failure to preserve the property for another’s use as evidence in pending or reasonably foreseeable litigation.” West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir.1999) (emphasis added). Spoliation is sanctionable conduct; and “[t]he sanction should be designed to: (1) deter parties from engaging in spoliation; (2) place the risk of an erroneous judgment on the party who wrongfully created the risk; and (3) restore the prejudiced party to the same position he would have been in absent the wrongful destruction of evidence by the opposing party. ” Id. (internal quotation marks and citations omitted) (emphasis added).

The gravamen of Aetna’s spoliation charge is that Aniero failed to preserve relevant documentary evidence. Since a principal purpose of the spoliation doctrine is to punish a party in litigation for prejudicing the opposing party by destroying or failing to preserve evidence useful to that other party, it is not surprising that most spoliation cases arise out of failures to comply with legitimate pre-trial discovery demands. Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99 (2d Cir.2002), upon which Aetna primarily relies, is typical. It was a breach of contract case where the defendant sought an adverse-inference jury instruction because of plaintiffs “failure to produce certain emails in time for trial.” Id. at 101. The district court refused to give the adverse inference instruction. The Second Circuit, on an appeal by defendant from a judgment in plaintiffs favor, remanded the case for further consideration by the district court on the question of sanctions. The court of appeals said at the outset that “where, as here, the nature of the alleged breach of a discovery obligation is the non-production of evidence, the District Court has broad discretion in fashioning an appropriate sanction,” id., and went on to hold that when

an adverse inference instruction is sought on the basis that the evidence was not produced in time for trial, the party seeking the instruction