Direct Tech Drilling, LLC v. Danrik Construction, Inc.

235 So. 3d 1173
Louisiana Court of Appeal·Decided November 22, 2017·No. 17-324·Published

Opinion

COOKS, Judge.

12Panrik Construction, Inc. entered into an agreement with BellSouth in December of 2012 to install approximately 27,000 feet of cable. This endeavor involved laying cable and innerduct underneath the Calca-sieu River, which necessitated boring under the river to lay a polyvinyl pipé through which the cable and innerduct would be fitted.

After one unsuccessful attempt with a different subcontractor, Danrik subcón-tracted with- Direct Tech Drilling, LLC, to install pipe for the purpose of running communications cable across the Calcasieu River. The original quote for the job was $23,000.00. However, after beginning the project, .Direct Tech determined it would have to use a more expensive process to complete the job. Thus, the parties agreed that Direct Tech was to receive $46,000.00 as the contract price. These facts were undisputed.

.Direct Tech eventually bored and placed a pipe under the Calcasieu River. This process occurred on August 22 and 23, 2014. The pipe installed was not purchased by Direct Tech, but was provided to them by Danrik. Direct Tech did not “proof’ the pipe to determine if the pipe was open and could be used’ to run cable under the river.1 Dahrik eventually determined that cable could not be pulled through the pipe; thus, the pipe, after installation, was unusable for its intended purpose.

Danrik attempted to resolve the matter themselves, trying to blow air-and water through the pipe to clear any possible obstruction. These attempts were unsuccessful. They also attempted to drill another bore on two occasions. During these attempts, Danrik also contacted K-Jon Sewer and Septic to clear the pipe. Using a waterjet and ordering hose to insert, into the pipe, K-Jon was partially able to clear the pipe. However, testimony established the diameter within the cleared ^portion of the pipe was only sufficient to get the cable through, but would not fit the inner-duct.

Danrik acknowledged despite the fact the pipe would only be able to accommodate the cable and not the innerduct, it was paid in full by BellSouth. Rick Judice, one of the owners of Danrik, testified they likely “were going to get caught with that one day.” Because of the fact the pipe was not usable after Direct Tech finished laying it, Danrik refused to pay the invoice it received from Direct Tech. In response, Direct Tech proceeded to file a Material-man’s Lien against Danrik and notice letters were sent to all parties, putting them on notice of Direct Tech’s claim.

After suit was filed by Direct Tech, Dan-rik filed a reconventional demand claiming it had incurred expenses in order to make the pipe usable. Direct Tech claimed this was the first time it was given notice or had knowledge of such a claim by Danrik.

The matter came to trial on June 27, 2016. After trial, judgment was rendered in favor of Direct Tech and against Danrik in the amount of $46,000.00, the: full amount of the contract. In its oral reasons for judgment, the trial court focused on the fact that the pipe eventually was able to be used by Danrik and that Danrik was paid in full by BellSouth. The trial court stated, because there was no specific provision in the contract requiring Direct Tech to proof the pipe, Danrik “can’t hold them responsible for something the parties never agreed to, that there never was a meeting of the minds.” Attorney fees weré also awarded to Direct Tech in the amount of $6,500.00 and $350.00 was awarded for the cost of filing suit and recording the lien. The trial court denied Direct Tech’s request' for penalties, finding Danrik had “genuine concerns, and they thought that was a valid defense to paying,” thus their actions were not malicious. The trial court denied UDanrik’s reconventional demand against Direct Tech. A motion for new trial was filed by Danrik and denied.

This appeal followed, wherein Danrik asserts the following issues with the trial courts judgment:

1.Was Direct Tech’s lien timely filed?

2. Did the trial court err when it determined that Direct Tech had fulfilled its contract?

3. Assuming that Direct Tech substantially performed its obligations under the contract, which is denied, did the trial court err when it failed to allow Danrik credit for the cost of completing the contract?

Direct Tech answered the appeal and requested this court raise the amount of attorney fees awarded by the trial court.

ANALYSIS

The facts are undisputed that Danrik entered into a contract with BellSouth to install fiber optic cable and innerduct under the Calcasieu River. Danrik then subcontracted a portion of the work to Direct Tech, whose job it was to bore a polyvinyl pipe underneath the river to house the cable and innerduct. Testimony established Direct Tech was aware of the intended use of the polyvinyl pipe.

Direct Tech completed its boring of the pipe. Several days after completion of its work, Danrik determined the pipe was not usable as it was blocked for some undetermined reason. Therefore, Danrik could not place the fiber optic cable through the pipe as required by the contract with BellSouth. Danrik was then forced, at its expense, to bring in another subcontractor to open the pipe enough to run the fiber optic cable through. All testimony established the pipe would not have sufficient diameter to later install the innerduct. Danrik was paid in full by BellSouth as set forth in the contract between those two parties.

■ Much ado was made about the issue of “proofing” the pipe and whether it was provided for in the contract. We find this issue irrelevant in resolving the | .^ultimate issue presented in this case. A construction contract at the very least contains an implied understanding between the parties that the thing so constructed can be used for its intended purpose unless expressly stated otherwise. As an example, Danrik notes if a party were to contract for the installation of a water line, it would be implicit in any such installation that the line be capable of carrying water, and there would be no compliance with the contract if the line was not capable of carrying water. The same situation, Danrik insists, applies here. Fitness for the purpose intended requires that the pipe installed by Direct Tech must be capable of housing cable. While the contract may well have been silent as to the necessity or any obligation to “proof’ the pipe, there still remained the implicit obligation on Direct Tech’s part to provide a pipe fit for its intended use. The testimony established Direct Tech was aware that the intended purpose of the pipe, which- it had been contracted to bore under the river, was the housing of fiber optic cable and innerduct. Direct Tech acknowledged in its brief that “Austin Gautreaux was informed Danrik would be installing fiber and innerduct.” When the pipe was found to be incapable of accommodating the fiber optic cable and innerduct, it was not fit for its intended purpose. The pipe did not become partially fit for its intended purpose until Danrik brought in K-Jon to blow open the pipe sufficiently to accommodate the cable.

Under Louisiana law, a contractor is entitled to recover the contract price even though defects and omissions are present when he has substantially performed the duties set forth under the contract. Rice v. Mesa Gen.

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Direct Tech Drilling, LLC v. Danrik Construction, Inc., 235 So. 3d 1173 (La. Ct. App. 2017).

235 So. 3d 1173 (Direct Tech Drilling, LLC v. Danrik Construction, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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