Harry E. Wood & Associates v. Charity Hospital of Louisiana

451 So. 2d 1120, 1984 La. App. LEXIS 8351
CourtLouisiana Court of Appeal
DecidedMarch 14, 1984
DocketNo. CA-1268
StatusPublished
Cited by2 cases

This text of 451 So. 2d 1120 (Harry E. Wood & Associates v. Charity Hospital of Louisiana) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harry E. Wood & Associates v. Charity Hospital of Louisiana, 451 So. 2d 1120, 1984 La. App. LEXIS 8351 (La. Ct. App. 1984).

Opinions

LOBRANO, Judge.

On August 31, 1979 Harry E. Wood and Associates (hereinafter referred to as “Wood”) and Charity Hospital of New Orleans (hereinafter referred to as Charity) entered into a contract of lease whereby Wood was to install at Charity a device known as an “Eldon Heater”. The purpose of said device was to heat the water at a considerable cost savings over the conventional hot water system. In return, Wood was to receive a percentage of the monthly cost savings realized by Charity. Attached to the contract is an exhibit which sets out the necessary formulas to determine this cost savings.

The heater began operation on January 7, 1980 and shortly thereafter, on January 14, 1980 Charity ordered it shut down because of alleged water quality problems discovered on that date. The Eldon Heater was never again placed in operation at Charity Hospital. As a result, Wood filed the instant suit to recover those profits he would have realized from the costs savings during the contractual life of this lease (two years). Additionally attorney’s fees, expert fees and costs were sought.

Following a trial on the merits before Commissioner Anthony J. Vesieh, Jr., all counsel stipulated that the matter be submitted on transcript for decision before the Honorable Judge Robert Katz.

The trial judge found that Charity breached the contract of lease and awarded Wood $75,000.00 in damages plus $2,800.00 for modifications made to the Eldon Heater at Charity’s request. Additionally expert fees and attorney’s fees were awarded. From this judgment Charity appeals. Wood answered the appeal seeking an increase in damages, expert fees and attorney’s fees.

Charity argues that the lower court committed error in two areas. They contend first, that the “contract of lease” was not perfected in accordance with the requirements of State law for public bidding and was therefore null and void. Secondly they argue that they were excused from performance of this contract under the affirmative defenses of breach of contract by the lessor due to error, mistake and impossibility of performance.

VALIDITY OF THE LEASE

Although Charity concedes that the public official who signed the contract lease had the authority and capacity to do so, they contend that it was not perfected in accordance with the provisions of La. R.S. 39:171 et seq. (prior to their repeal by Act 715 of 1979 effective July 1, 1980) and executive order No. 28 in that the contract represents an unauthorized purchase within the intent of La.R.S. 39:191 and is therefore null, void and of no effect. We find, however, that the provisions of La.R.S. 39:185 are controlling in this situation. The pertinent portions of said statute provide:

[1122]*1122“Every effort shall be made to obtain quotations from three or more vendors when commodities are to be purchased out of schedule, except when standard equipment parts for which prices are established or when the article needed is a patented or proprietary one and therefore obtainable from only one source of supply...”

The evidence clearly reflects that the Eldon Heater was of such a nature as to come under the “proprietary exception” of the above statute. Charity’s own witness, Kenneth C. DeJean, who was employed by the Louisiana Attorney General’s Office, stated that the contract of lease was submitted to him for review and it was determined after investigation, that the contract of lease was exempt from the public bid law. His testimony is best reflected in the following answer to Charity’s inquiry:

“Q. Would you be able to tell us now what your opinion was with regard to whether or not this item was required to go out on public bid?
A. We responded in the negative in that, because of the important proprietary nature, and the fact that the Eldon Heater was patented, it could only be acquired from a single source, that it would be futile to engage in any public bidding, and, therefore, the item could be acquired without necessity for going down on advertisements and receipt of sale bids.”

Mr. DeJean further explained that this characteristic, i.e. single source, in and of itself was sufficient to exempt the contract of lease from the state bid laws.

Charity further argues that the patent for this particular unit had not been obtained at the time the lease was executed, but was obtained sometime later. Since we find that the “proprietary interest” exception is sufficient to exclude this lease from the public bid laws in effect in August, 1979, it is not necessary to decide the “patent pending” issue.

SUITABILITY OP THE ELDON HEATER

Breach of contract, error and mistake, and impossibility of performance are affirmative defenses. As such, the burden of proof is upon the party who asserts them, which burden must be maintained by a preponderance of the evidence. La.C. C.P. Art. 1005; Prestenbach v. Sentry Ins. Co., 340 So.2d 1331 (La.1976). Charity contends that the Eldon Heater was not fit for its intended purpose. More specifically they argue that the water heated by the unit is not compatible with the needs of Charity Hospital, and that it is detrimental to both human life and equipment.

It is not disputed by any of the parties that on January 14, 1980, approximately one week after the unit was put on line that the water quality at Charity Hospital deteriorated. The record reveals that on that date Wood agreed to shut down his heater because of the presence of an oily discolored appearance, objectionable taste and smell and the presence of gritty, sooty particles in the hot water. Wood contends, however, that Charity failed to prove by a preponderance of the evidence that this condition was caused by the Eldon Heater. In fact he alleges that problems other than his heater were the actual cause.

The majority of the evidence submitted by Charity consisted of expert testimony, in one form or another, as to the effect the poor water condition would have on the hospital patients and equipment, particularly the plumbing. A review of that testimony fails to substantiate the allegation that the poor water quality experienced on the 14th of January, 1980 was caused by the Eldon Heater.

Mr. Michael Epton, a graduate chemist, employed as laboratory supervisor of the New Orleans Sewerage and Water Board obtained water samples from Charity after receiving complaints. He ran tests on those samples the result of which show that the water from the cold water tap had no unusual peculiarities, whereas the hot water showed significant changes in turbidity, pH, CaCo3 and a Langler Index of negative 1.68. Without going into great [1123]*1123detail about the various effects this quality of water might have at Charity, suffice it to say all parties agree that it would not be compatible with Charity’s needs. The issue, however, is whether Mr. Epton’s testimony supports Charity’s allegation that the Eldon Heater caused the deteriorated conditions. In this regard Mr. Epton responded that he never examined the heater, and that “I speculated that the Eldon Heater was causing the pH to decrease.” Mere speculation is not enough. Charity also presented the testimony of various other witnesses, none of whom did a detailed examination of the heater, or who could opine that it was the cause of the problems.

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Related

Wood v. Charity Hospital of Louisiana at New Orleans
457 So. 2d 1185 (Supreme Court of Louisiana, 1984)

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Bluebook (online)
451 So. 2d 1120, 1984 La. App. LEXIS 8351, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harry-e-wood-associates-v-charity-hospital-of-louisiana-lactapp-1984.