E. Cornell Malone Corp. v. Sisters of the Holy Family

922 F. Supp. 2d 550, 2013 WL 486689, 2013 U.S. Dist. LEXIS 16067
CourtDistrict Court, E.D. Louisiana
DecidedFebruary 6, 2013
DocketCivil Action Nos. 12-0361, 12-0823
StatusPublished
Cited by11 cases

This text of 922 F. Supp. 2d 550 (E. Cornell Malone Corp. v. Sisters of the Holy Family) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
E. Cornell Malone Corp. v. Sisters of the Holy Family, 922 F. Supp. 2d 550, 2013 WL 486689, 2013 U.S. Dist. LEXIS 16067 (E.D. La. 2013).

Opinion

ORDER AND REASONS

NANNETTE JOLIVETTE BROWN, District Judge.

Before the Court is the Motion to Sever and Stay1 filed by defendant and third-party plaintiff, St. Mary’s Academy of the Holy Family (“St. Mary’s”),2 wherein St. Mary’s requests that third party defendant Satterfield & Pontikes Construction Group, L.L.C.’s (“S & P”) claims be severed and stayed pending resolution of claims asserted in the matter pending in the Civil District Court for the Parish of Orleans (hereinafter, the “CDC”). Having considered the motion, the memorandum in support, the response, the reply, the record, and the applicable law, the Court will sever and stay S & P’s claims.3

J. Background

A. Factual Background

This case arises from a dispute regarding a construction project for a new St. Mary’s Academy Permanent High School Campus, located in New Orleans, Louisiana.4 St. Mary’s entered into a construction contract for the construction of the campus with a general contractor, S & P,5 who in turn entered into a subcontract with the plaintiff, E. Cornell Malone, Corp. (“Malone”), for the performance of a portion of the work on the construction project. Funding for the project was provided by the Federal Emergency Management Agency (“FEMA”), with funds paid to the State of Louisiana through the Governor’s Office of Homeland Security and Emergency Preparedness (“GOHSEP”).6 GOHSEP administers the funds and pays the applicant, here St. Mary’s.7

For the construction project, Western Surety Company (“Western”) and Safeco Insurance Company of America (“Safeco”), as sureties to S & P, issued a $31,800,000.00 payment bond (hereinafter, the “payment bond”), obligating themselves to pay S & P’s debts with respect to work on the project.8 During the course of the construction, Malone entered into a $1,280,000.00 subcontract with S & P to perform roofing for the construction project.9 Malone alleges that it “fully and satisfactorily performed its scope of work under the terms of the Subcontract and in compliance with the Project’s plans and specifications applicable to Malone’s scope of work.” 10 Malone also alleges that it timely submitted invoices to S & P throughout the course of the construction [553]*553project but that $134,236.73 remains due to Malone for work performed.11

B. Procedural Background

1. Procedural Background in State Court

On June 22, 2011, Gootee Construction, Inc. filed suit against St. Mary’s in the CDC in a matter entitled Gootee Construction, Inc. v. St. Mary’s Academy of the Holy Family (hereinafter, the “Gootee Suit”). The Gootee Suit arises out of the same construction project that is the subject of this litigation, generally involving claims against St. Mary’s for job cost overruns and other non-payment issues. St. Mary’s filed a Third Party Demand in the Gootee Suit against S & P for breach of contract and other causes of action. Thereafter, in September of 2011, S & P filed suit against GOHSEP, St. Mary’s, Three Fold Consultants, LLC (“Three Fold”), and Rozas-Ward/A.I.A Architects, Inc. (“Rozas-Ward”) in the 19th Judicial District Court, East Baton Rouge Parish, for work done on the construction project (hereinafter, the “S & P suit”).12 On April 9, 2012, the S & P suit was transferred to the CDC and consolidated with the Gootee suit.

2. Procedural Background in Federal Court

On February 25, 2011, Malone “filed and recorded with the Clerk of Court and Recorder of Mortgages for the Parish of Orleans, an Affidavit and Sworn Statement of Amount Due and Statement of Claim or Privilege,” thereby creating a lien and privilege on the property where Malone performed the roofing work on the construction project.13 Malone filed an amendment to the affidavit on March 16, 2011, in which it added an additional claim supplementing the first privilege.14

On February 6, 2012, Malone filed suit against defendants St. Mary’s, Western, and Safeco in the Eastern District of Louisiana.15 Malone alleges a claim against St. Mary’s, secured by the privileges entered on the immovable property, under the provisions of La.Rev.Stat. § 9:4801, et seq.16 Moreover, Malone alleges that St. Mary’s remains liable, even though Western and Safeco issued payment bonds for the construction project, because the notice and bond were not properly and timely filed in accordance with La.Rev.Stat. § 9:4811.17 Additionally, Malone alleges claims against Western and Safeco on the payment bond under the terms of the payment bond itself, the Louisiana Private Works Act,18 and Louisiana law regarding sureties.19 Malone has specifically stated that it “did not and has not sued S & P on or under the Malone Subcontract.”20 Having inadvertently omitted the exhibits referenced in Malone’s complaint, on April 25, 2012, Malone filed an unopposed motion for [554]*554leave to file the exhibits,21 which this Court granted.22

Western and Safeco filed a Motion to Dismiss, Alternatively to Stay Proceedings23 on March 22, 2012, wherein they asserted that the action should be stayed or dismissed due to improper venue, a pending state court action, or the prematurity of the suit based on specific provisions in the subcontract entered into between Malone and S & P. This Court denied the motion to dismiss on May 23, 2012, 2012 WL 1886055.24

On March 30, 2012, St. Mary’s filed its answer, asserting a third party demand against S & P and cross claims against Western and Safeco.25 Therein, St. Mary’s asserted that S & P failed to perform its work in a good and workmanlike manner, that S & P failed to complete the construction within the time specified in the contract, and that St. Mary’s made all payments that were due and owing under the contract for work performed by S & P and Malone.26 Against Western and Safeco, St. Mary’s asserted that Western and Safeco, as sureties, must indemnify St. Mary’s to the extent that St. Mary’s is liable to Malone for amounts not paid for Malone’s work on the construction project.27 Western and Safeco filed a second motion to dismiss or stay the cross claims asserted by St. Mary’s,28 and S & P filed a motion to dismiss or stay the third party demand or for a more definite statement, in which S & P also asserts a counterclaim against St. Mary’s.29 The Court denied Western, Safeco and S & P’s motions on June 7, 2012,30

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922 F. Supp. 2d 550, 2013 WL 486689, 2013 U.S. Dist. LEXIS 16067, Counsel Stack Legal Research, https://law.counselstack.com/opinion/e-cornell-malone-corp-v-sisters-of-the-holy-family-laed-2013.