Menzie Tile Co., Inc. v. Professional Centre

594 So. 2d 410, 1991 WL 310837
CourtLouisiana Court of Appeal
DecidedDecember 27, 1991
Docket90 CA 1931-90 CA 1940
StatusPublished
Cited by17 cases

This text of 594 So. 2d 410 (Menzie Tile Co., Inc. v. Professional Centre) 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
Menzie Tile Co., Inc. v. Professional Centre, 594 So. 2d 410, 1991 WL 310837 (La. Ct. App. 1991).

Opinion

594 So.2d 410 (1991)

MENZIE TILE COMPANY, INC.
v.
PROFESSIONAL CENTRE, a Louisiana General Partnership, et al.
BERNHARD MECHANICAL CONTRACTORS
v.
PROFESSIONAL CENTRE, a Louisiana General Partnership, et al.
MONTGOMERY ELEVATOR COMPANY
v.
PROFESSIONAL CENTRE, a Louisiana General Partnership, et al.
CRASTO ARCHITECTURAL PRODUCTS, INC., and/or Southern Architectural Products, Inc.
v.
PROFESSIONAL CENTRE, a Louisiana General Partnership, et al.
DOYLE ELECTRIC, INC.
v.
PROFESSIONAL CENTRE, a Louisiana General Partnership, et al.
NORTH AMERICAN CONTRACTORS
v.
PROFESSIONAL CENTRE, a Louisiana General Partnership, et al.
MID SOUTH FIRE PROTECTION, INC.
v.
PROFESSIONAL CENTRE, a Louisiana General Partnership, et al.
HARRY S. PETERSON COMPANY, INC.
v.
PROFESSIONAL CENTRE, a Louisiana General Partnership, et al.
ALL AMERICAN DECORATING SERVICE, INC.
v.
PROFESSIONAL CENTRE, a Louisiana General Partnership, et al.
HECK INDUSTRIES, INC.
v.
PROFESSIONAL CENTRE, a Louisiana General Partnership, et al.

Nos. 90 CA 1931-90 CA 1940.

Court of Appeal of Louisiana, First Circuit.

December 27, 1991.
Rehearing Denied March 13, 1992.

*412 Craig L. Kaster, Murphy Foster, III, Baton Rouge, and Jeff Snodfrass, New Orleans, for plaintiffs-appellees.

Jeff Whittenbrink, Kathryn Wyble, and James Holliday, Jr., Baton Rouge, for defendants-appellants.

Before SHORTESS, LANIER and CRAIN, JJ.

SHORTESS, Judge.

This litigation involves ten consolidated suits brought by contractors, subcontractors, and suppliers (plaintiffs)[1] against Centerbank (formerly Bank Center) (defendant), who was one of the lenders for the Professional Centre office building project on Essen Lane, in Baton Rouge, Louisiana. The suits were based primarily on detrimental reliance.[2] After a trial on the merits, a unanimous jury reached a verdict in favor of plaintiffs. From a separate judgment which totals $975,584.44, plus legal interest, defendant appeals.[3]

FACTS

A number of entities are involved in this suit, and they need some form of introduction. The Professional Centre Partnership (the partnership), composed of John Clements and Dr. Henry Olinde, undertook in 1984 to construct the Professional Centre office building. Savings Investments Service Corporation (SIScorp) supplied the partnership construction financing in the amount of 17 million dollars. SIScorp sold participation in the construction loan to various lenders, including defendant. The partnership hired Hambrick-Craig as the general contractor. Hambrick-Craig in turn subcontracted with the majority of the plaintiffs.

*413 SIScorp defaulted on its loan obligation in late 1985, and defendant assumed the position of lead lender. Defendant hired Strategic Services, an accounting firm based in Utah, to keep the books on the project. Defendant also hired Ch2M Hill, an architect/engineering firm based in Mississippi, to assist Strategic Services in handling the submitted draws for work completed. Specifically, Ch2m Hill was to provide on-site inspections and report to Strategic Services whether the amount of funds requested corresponded to the amount of work performed, and to estimate the cost of completion.

In February 1986 Hambrick-Craig left the job without paying the subcontractors any of the $350,000.00 monthly draw it had just received.[4] The partnership eventually hired North American Constructors to replace Hambrick-Craig as the general contractor.

Before defaulting on its loan obligation, SIScorp had fallen behind on funding the draws for work completed on the project. This created apprehension in the minds of the subcontractors. Their apprehension significantly increased when Hambrick-Craig left the job with a significant amount of money that belonged to the subcontractors. In an effort to assuage the subcontractors' concerns and convince them to stay and complete the project, Charles Dennison, the partnership's project supervisor, met with the subcontractors on February 27, 1986. The subcontractors expressed concern over receiving payment for labor and materials already in the project, as well as whether sufficient funds existed to complete the project. They demanded that the lender or its representative provide written assurances and meet with them to provide some form of verbal assurances. If they did not receive the assurances, they threatened to walk off the job, which at that time was approximately 90% complete.

Dennison testified[5] that after the February 27 meeting, he had Bill Gaines, the certified public accountant for the partnership, contact David Rogers of Strategic Services and request something in writing which stated that enough money was left in the loan to complete the project.

Clements testified that, meanwhile, he traveled to Connecticut in early March and met with Dave Watson, defendant's loan officer in charge of the project. Clements also testified he informed Watson verbally (and in writing) that assurances were needed to keep the subcontractors on the job, and that Watson agreed to provide said assurances. On the other hand, Watson testified he did not recall the conversation with Clements or receiving Clements' letter.

Rogers testified Gaines did not inform him the subcontractors wanted the letter. He admitted however that Gaines informed him the subcontractors wanted a representative of the lender at a meeting scheduled for March 7, 1986. Rogers contacted Watson and received approval to write a letter to Gaines that contained the requested information. On March 6, 1986, Rogers sent the following letter, apparently by overnight mail, which was addressed to Gaines:

Dear Mr. Gaines:

I have examined the construction budget for the Professional Centre office along with related loan documents. As of this date, there is sufficient money left in the loan to complete the basic structure based upon the current estimated costs.

This letter was given to the subcontractors at a meeting held the following day, March 7, 1986.

Watson testified he did not recall authorizing Rogers to send the letter. However, Watson admitted receiving a copy of Rogers' letter "within a few days afterward."

Dennison testified he contacted Rob Wamstad, of Ch2M Hill, who agreed to attend the March 7 meeting with the subcontractors. Dennison also testified he and Wamstad agreed that Wamstad would come to Baton Rouge, review the draw schedule, examine the physical structure, and then meet with the subcontractors and give a report as to his findings.

*414 Wamstad attended the meeting with the contractors on March 7, 1986. Wamstad testified he received approval to come to Baton Rouge. He stated "the Bank ... felt that it was of value to see what discussions were going on at the site." Wamstad did not remember much of what was said or done at the meeting. However, he did remember the letter being passed out and Dennison stating there was enough money in the loan to finish the project. He also admitted not refuting what was contained in the letter. Moreover, he denied being asked about the sufficiency of the funds to complete the project.

Several of the people who attended the March 7 meeting testified at trial. Gaines, Dennison, Eugene Dunavant, of Mid South Fire Protection Inc., Robert A. Schenk, president of All American Decorating Inc., and Edward M.

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Cite This Page — Counsel Stack

Bluebook (online)
594 So. 2d 410, 1991 WL 310837, Counsel Stack Legal Research, https://law.counselstack.com/opinion/menzie-tile-co-inc-v-professional-centre-lactapp-1991.