C. H. Leavell & Co. v. Board of Commissioners

309 F. Supp. 626, 1970 U.S. Dist. LEXIS 12872
District Court, E.D. Louisiana·Decided February 11, 1970·No. Civ. A. No. 69-725·Published·Cited by 1 cases

Opinion

OPINION ON MOTION TO DISMISS ACTION AS PREMATURE

RUBIN, District Judge:

C. H. Leavell’s contract with the Board of Commissioners (Dock Board) and the Louisiana Highway Department was to construct an exposition building (“The Rivergate”) for $12,705,807. Leavell has sued for the amounts allegedly due it in excess of the original contract price, totalling $5,100,000, plus interest, attorneys’ fees, and court costs. The Board contends the suit should be dismissed because Leavell has not finished this job, and no suit will lie until the entire contract is completed and accepted. The court has received memoranda and affidavits and has made an inspection of the building accompanied by representatives of both parties.

The Rivergate contains over 145,000 square feet of floor space on its first floor. It occupies a site on Canal Street in downtown New Orleans embracing over 600,000 square feet of ground: an area equal to six city squares. It was occupied by the Dock Board on December 18, 1968. Between September, 1968 and July, 1969 over 80 expositions, shows, and meetings were held in the building. The Board has already scheduled over 160 engagements, some of which are tentative, for the five year period from December, 1969 to December, 1974 and it is expected that over three million people will visit the building during that period in connection with these engagements. The owner is occupying the entire building including the exhibition area, the office spaces, the cafeteria, the cocktail lounge, and the underground garage (which accommodates v. to 800 automobiles). More than 600,000 persons visited The River-gate during its first year of operation, and it received over $250,000 in revenue.

The only alleged defects that remained uncorrected when the court visited the building were:

1. Surface of the loading dock. (The top surface was cracked and parts of it had broken off. This defect involved only the material applied to form the surface of the dock.)
2. The F-l lighting in the main exhibition area. (The lamps being used were not of the intensity contemplated by the plans and specifications.)
3. The floor of the main exhibition area. (This was cracked in a number of places.)
4. Air conditioning ducts and plenums. (The air conditioning was in use but the insulation was being repaired or completed.)

All of the building was then in use notwithstanding these problems. There is a serious dispute about where the responsibility rests for each of them: the Board contends that each defect is a result of Leavell’s improper performance of its contract while Leavell contends it [628] has done what the contract requires and that each problem complained of is a result of some fault attributable to the owner or its architects.

It is apparent from these factual conclusions that the building is substantially complete. To require the contractor to do more, as a condition precedent to filing suit, would make the owner the final arbiter of completion, for if its view is correct, no contractor could sue on any building contract until all of the alleged defects and incomplete work complained of by the owner had been remedied. Judicial resolution of the dispute concerning responsibility would be premature until after the owner’s complaints, however unjustified, had been satisfied. The words of the Louisiana Court of Appeals in Schroeter v. Newson, 2 Cir.1949, La.App., 41 So.2d 697, 698, dispose fully of this argument:

“To sustain this defense would be in effect to pronounce the amazing doctrine that a suit is premature so long as a defendant denies the correctness of a plaintiff’s claim. Though, perhaps, this would have what might be regarded as some salutary effect by way of terminating all litigation, it would, indeed, be such a severe and final blow to our legal system and the orderly processes of law heretofore recognized that we cannot assume the responsibility for such a pronouncement.”

In this diversity suit, the Louisiana rule that must be applied has been stated as follows:

“The principal question presented * * * is whether or not there has been substantial performance so as to permit recovery on the contract. This is a question of fact. Among the factors to be considered are the extent of the defect or non-performance, the degree to which the purpose of the contract is defeated, the ease of correction, and the use or benefit to the defendant of the work performed.” Airco Refrigeration Service, Inc. v. Fink, 1961, 242 La. 73, 134 So.2d 880, 882.

The Board has submitted lengthy memoranda contending that Leavell has not “substantially completed” the work called for by the contract, and that, in any event, the substantial completion rule is not applicable because the contractor is “not suing for the contract price or other agreed upon amount,” but is suing for a sum in excess of the original contract price.

Free access — add to your briefcase to read the full text and ask questions with AI

C. H. Leavell & Co. v. Board of Commissioners, 309 F. Supp. 626, 1970 U.S. Dist. LEXIS 12872 (E.D. La. 1970).

309 F. Supp. 626 (C. H. Leavell & Co. v. Board of Commissioners) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related