Nebo Construction Co. v. Southeastern Electric Construction Co.

200 F. Supp. 582, 1961 U.S. Dist. LEXIS 5959
CourtDistrict Court, W.D. Louisiana
DecidedDecember 21, 1961
DocketCiv. A. No. 7238
StatusPublished

This text of 200 F. Supp. 582 (Nebo Construction Co. v. Southeastern Electric Construction Co.) is published on Counsel Stack Legal Research, covering District Court, W.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nebo Construction Co. v. Southeastern Electric Construction Co., 200 F. Supp. 582, 1961 U.S. Dist. LEXIS 5959 (W.D. La. 1961).

Opinion

BEN C. DAWKINS, Jr., Chief Judge.

Grasping hopefully at shadows, for want of any real substance, plaintiff here seeks to create a binding contract out of a mere hope that such might have been consummated.

Nebo Construction Company, Inc., a Louisiana corporation with its principal office in Shreveport, Louisiana, originally brought this action against (1) Southeastern Electric Construction Company, Inc., an Alabama corporation qualified to do business in Louisiana, (2) Southeastern Constructors, Inc., a Florida corporation qualified to do business in Louisiana, (3) Houston Gas and Oil Corporation, a Florida corporation qualified to do business in Louisiana (4) Roy Richards, a citizen of Georgia who does not have an agent for service of process in Louisiana, and (5) Richards & Associates, Inc., a Kentucky corporation, not qualified to do business in Louisiana, with its principal office in Carrollton, Georgia. Service of process was made on the Secretary of State as agent for Richards & Associates, Inc., pursuant to LSA-R.S. 13:3471(5) (d). Roy Richards, individually, appeared through counsel and was served pursuant to LSA-R.S. 13:3471. The action has been dismissed voluntarily as against Houston Oil and Gas Corporation.

Generally, plaintiff’s theory of attempted recovery is this: Nebo Construction Co., Inc., was incorporated in January of 1958, with H. B. McCullough as president and J. B. McCullough as vice president. Prior to incorporation, the McCulloughs had operated under the trade name of “H. B. McCullough & Sons,” and were [583]*583engaged in the business of clearing rights-of-way for pipelines and similar projects. Since 1950, the McCulloughs have participated in various jobs with companies either owned or controlled by Roy Richards, president of Richards & Associates, Inc. In 1955, the Southeast Alabama Gas District Company let a contract to Richards and Southeastern Construction Co. and the McCulloughs subcontracted with Richards for the project. Richards did not require a performance bond from the McCulloughs on this project and Richards has waived bond on other jobs subsequent to 1955.

In early 1958, a firm known as Mid-western-Walco opened negotiations for the clearing of right-of-way for a pipeline project running from Louisiana to Florida. Plaintiff contends that Richards, through Frank Rose, his agent, entered into an agreement with the McCulloughs to the effect that, if the contract for the right-of-way work was secured by Richards, the latter would jointly venture with or subcontract the work to the McCul-loughs’ company and would post the required performance bond in favor of Midwestern-Walco. Plaintiff further contends that Richards promised to give plaintiff any financial help that might be required for completion of the job. According to plaintiff, Richards, however, brought Southeastern Construction Co. and Southeastern Constructors, Inc., into the negotiations with the understanding that Stewart Culpepper, an officer in the Southeastern companies, was to act as Richards’ agent in securing the contract from. Midwestern-Walco. Richards controlled both Southeastern companies. It was understood, so plaintiff argues, that any participation by either one or both of the Southeastern companies would be in the interest of Richards and that such participation would not affect the one-half share of the profits going to the McCulloughs.

The contract finally was let to the two Southeastern companies and the McCul-loughs allegedly were advised that this was merely a formality necessitated by “union problems.” Plaintiff contends that Culpepper^ the officer of the Southeastern companies, was heavily indebted to Richards as a result of failures on earlier projects and that Richards posted the performance bond for the Southeastern companies on the Midwestern-Walco job.

Richards later wrote a letter to plaintiff repudiating the McCulloughs’ understanding and denying that he had ever agreed to let them participate in the project or post the required performance bond. Plaintiff alleges that the reason the contract was let in the name of the Southeastern companies was for the purpose of circumventing the purported arrangements with Nebo. It is argued that the Southeastern companies are merely acting as “dummies” or “alter egos” for Richards, that Richards is the actual beneficiary of the contract, and that this arrangement will allow Culpepper, an officer of the Southeastern companies, to pay off his indebtedness to Richards.

Plaintiff alleges that Richards has been put in default and should be held liable to Nebo for one half of the profits for the breach of their “joint venture” agreement. It prays for judgment against all other defendants in solido for one half of the profits derived from the project.

The record in this case is replete with vagueness, indefiniteness and lack of certainty as to the terms, details, and provisions of the so-called “agreement” or “contract” between Richards & Associates and Nebo. The following findings of fact are but a few reasons why plaintiff’s case must fall of its own weight, or rather, lack of weight.

According to the testimony of J. B. McCullough, Frank Rose, Roy Richards’ agent, made two telephone calls to Shreveport prior to a meeting held on March 18th, 1958, in Baton Rouge. It is alleged that in both of those calls Rose asked for bids from Nebo on the pipeline project and that J. B. McCullough was led to believe that Nebo “would be taken care of” by Richards & Associates. It is undisputed that many essential details were not agreed upon and it is clear that all that happened was that both parties con[584]*584templated future negotiations leading up to a possible contract.

In response to questions relative to the two calls made by Rose to him, J. B. McCullough testified as follows:

“The Court: Up until the time you went to Baton Rouge, as I understood your testimony a moment ago, there was no definite contract between you and Richards & Associates and Mr. Rose ? It was simply an understanding you would work out something?
“The Witness: That is correct. The final details would have to be worked out on our first trip.”

Rose testified that he failed to remember the details of either telephone conversation with McCullough; that he may have talked with either J. B. or H. B. McCullough; and that the purpose of the calls was simply to ask that representatives of Nebo meet with Stewart Culpep-per and other possible sub-contractors in Baton Rouge for the purpose of inspecting the right-of-way. Rose denied that he assured J. B. McCullough that Nebo “would be taken care of” after submission of bids on the project; to the contrary, he testified that he conformed to the practice of treating all prospective subcontractors as possible future parties to an agreement and that no conditional agreements were entered into at that stage of negotiations.

Clearly, from the depositions and testimony of the parties to this alleged contract, neither party considered itself bound contractually prior to the March 18th meeting in Baton Rouge. In fact, none of the prospective sub-contractors had sufficient information to form the basis for calculating the bids or cost estimates. The agreement, if any, was simply that Nebo would be included in the project negotiations scheduled at Baton Rouge and that the McCulloughs would be given an opportunity to inspect the location of the right-of-way.

J. B. and H. B.

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Cite This Page — Counsel Stack

Bluebook (online)
200 F. Supp. 582, 1961 U.S. Dist. LEXIS 5959, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nebo-construction-co-v-southeastern-electric-construction-co-lawd-1961.