Cal State Electric, Inc. (CSE) (plaintiff) was the prime contractor on a project with the U.S. Army Corps of Engineers. CSE hired Palmer Construction, Inc. (Palmer) (defendant) as a subcontractor. The price for Palmer’s work under the subcontract was to be $235,137. Palmer completed some work and then breached. CSA had already paid Palmer $114,758.98 and was required to pay another party $126,673.56 to complete the work that was supposed to be done by Palmer, for a total of $241,432.54. The district court found that CSE had suffered $6,295.54 in damages for the amount it was required to pay in addition to the contract price and was also entitled to prejudgment interest of $1,468.88. The district court also found that the value of work that Palmer had completed was $204,845.26 and awarded Palmer the value of its work, less the amount it had already been paid, less the amount of CSE’s damages and prejudgment interest, for a total of $82,321.86. CSE appealed.