Orleans Parish School Bd. v. Gegg

708 So. 2d 425, 1998 WL 12404
CourtLouisiana Court of Appeal
DecidedJanuary 14, 1998
Docket97-CA-0947, 97-CA-0948
StatusPublished
Cited by3 cases

This text of 708 So. 2d 425 (Orleans Parish School Bd. v. Gegg) 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
Orleans Parish School Bd. v. Gegg, 708 So. 2d 425, 1998 WL 12404 (La. Ct. App. 1998).

Opinion

708 So.2d 425 (1998)

ORLEANS PARISH SCHOOL BOARD
v.
Michael J. GEGG, et al.
JCM CONSTRUCTION COMPANY, INC.
v.
ORLEANS PARISH SCHOOL BOARD.

Nos. 97-CA-0947, 97-CA-0948.

Court of Appeal of Louisiana, Fourth Circuit.

January 14, 1998.
Rehearing Denied February 17, 1998.

*426 J. Warren Gardner, Jr., Scott P. Yount, Christovich & Kearney, New Orleans, for Appellant.

John W. Hite, III, Sessions & Fishman, L.L.P., New Orleans, for Appellee.

Before PLOTKIN, JONES and CIACCIO, JJ.

JONES, Judge.

Appellant Michael J. Gegg d/b/a JCM Construction Company (Gegg), appeals the district court's decision granting summary judgment in favor of the Defendants: Orleans Parish School Board, Laurance Eustis Insurance Agency, Inc., Employers Reinsurance Corporation, and Joseph A. O'Connor, Vice President of Laurence Eustis Insurance, Inc. (collectively "Eustis").

FACTS

In 1989, the Orleans Parish School Board advertised for bid proposals, pursuant to the Louisiana Public Contracts Law, LSA-R.S. 38:2181 et seq., for the relocation of two portable classroom buildings from Karr Junior High School to Harte Elementary School. Gegg was the successful bidder on the project. Gegg was advised by letter dated November 3, 1989, that he was to contact the School Board's attorney, Mr. Rosenberg, to execute the contract documents.

Article 20 of the "General Conditions" attached to the contract sets forth the contractor's obligation to provide insurance coverage. It states that the contractor "shall effect and maintain, until the date of filing of the Owner's acceptance of the work" six different types of insurance, including "Builders' Risk Insurance for Fire, Extended Coverage, Vandalism, and Malicious Mischief." Article 21, entitled "Submission of Insurance Policies," states that the contractor must furnish to the School Board's notary and the School Board's insurance consultant, at least five days prior to the signing of the contract, the required certificates of insurance. The article further provides:

The Contractor will not be permitted to sign the contract before the School Board Notary until the Certificates of Insurance or insurance policies have been approved by the School Board insurance consultant. In the event the successful contractor fails to provide the Certificates of Insurance or insurance policy for review, the amount of guaranty deposited by him will be forfeited to the Orleans Parish School Board, not as a penalty but as acknowledged liquidated damage.

On November 3, 1989, Gegg submitted to the Laurance Eustis Insurance Agency, Inc., the School Board's insurance consultant, a certificate of insurance showing various types of coverage (general liability, automobile liability, etc.) but not including builder's risk coverage. The certificate of insurance was initially returned by Joseph A. O'Connor, Jr., Vice-President of Laurance Eustis, with a written notation that the School Board should be listed as the certificate holder rather than Laurance Eustis. Gegg submitted a new certificate of insurance correcting this error, and on November 16, 1989, Mr. O'Connor sent Gegg a letter stating: "We have reviewed the Certificate of Insurance for the above captioned [Karr relocation project] and find it meets the necessary requirements for School Board purposes." The contract was executed on November 17, 1989, and recorded on December 1, 1989.

Gegg began work on the project in February of 1990. On August 9, 1990, after the project was substantially complete, but before the School Board had filed its formal acceptance of the work, three juveniles broke into the classrooms and started a fire, which completely destroyed the two portable buildings.

The School Board refused to pay Gegg the remainder of the money due under the contract. On June 4, 1991, Gegg filed suit against the School Board seeking the balance due him as well as damages for the Board's alleged breach of contract. On July 14, 1991, the School Board filed suit against Gegg, the three arsonists, Gegg's insurer, and Gegg's surety, Integon Indemnity Corporation (Integon), seeking the value of the portable classrooms. The two suits were consolidated.

*427 On June 14, 1994, the School Board moved for partial summary judgment against Gegg and Integon, alleging that they were solidarily liable for all damages sustained by the Board as a result of Gegg's failure to procure builder's risk insurance as required by the contract. Integon also filed a motion for summary judgment. The motions were heard on September 30, 1994.

On October 5, 1994, the district court granted the School Boards's motion for partial summary judgment against Gegg and Integon. In written reasons for judgment, the court stated that Gegg was obligated to provide the insurance under the terms of the contract and "was not in any way relieved of this obligation." The court apparently relied upon the fact that the contract required any modification of its terms to be in writing, signed by both parties. The court further stated that Integon was solidarily liable, up to the amount of its performance of all obligations assumed by Gegg under the contract.

Following the judgment, Gegg moved for a new trial based upon alleged "newly discovered evidence." This evidence was a statement by Gegg's insurance agent that a standard builder's risk insurance policy would not have covered the fire in question. The trial court denied Gegg's motion.

Gegg and Integon appealed the district court's granting of summary judgment in favor of the School Board. Additionally, Integon had applied for writs from this court (94-C-2376) from the trial court's denial of its motion for summary judgment. A panel of this Court converted the writ application and consolidated it with Gegg and Integon's appeal.

On appeal, Gegg argued that the trial court erred in granting summary judgment because: (1) the correspondence exchanged between the parties prior to the execution of the contract effectively modified the contract as to the requirement concerning builder's risk insurance; and (2) the School Board waived its right to claim breach of contract by approving the certificate of insurance submitted by Gegg. Gegg also argued that the trial court should have granted the motion for new trial on the grounds that the impossibility of obtaining builder's risk coverage on the project renders the contractual provision void. Additionally, Integon argued that the trial court erred in holding it liable for Gegg's failure to obtain insurance because the obligation to procure insurance was to be completed prior to the execution of the contract and was not related to the performance of the work.

On appeal the summary judgment granted in favor of the School Board against Integon was reversed and summary judgment was rendered dismissing Integon from the lawsuit. Accordingly, the issue concerning Gegg and Integon's motion for a new trial on the basis of newly discovered evidence was found to be moot. The matter was remanded to the trial court for further proceedings.

On remand Gegg submitted a Second Supplemental and Amending Petition adding: Laurance Eustis Insurance Agency, Inc., Employers Reinsurance Corporation, and Joseph A. O'Connor, Vice President of Laurance Eustis Insurance Agency, Inc., as Defendants. Gegg alleged that Eustis is liable for negligent misrepresentation and detrimental reliance. On October 3, 1996, Eustis filed a Motion for Summary Judgment arguing that as a disclosed agent for the School Board they cannot be held liable. The district court granted summary judgment in favor of Eustis.

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Related

JCM Construction Co. v. Orleans Parish School Board
871 So. 2d 1122 (Supreme Court of Louisiana, 2004)
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860 So. 2d 610 (Louisiana Court of Appeal, 2003)
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719 So. 2d 597 (Louisiana Court of Appeal, 1998)

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Bluebook (online)
708 So. 2d 425, 1998 WL 12404, Counsel Stack Legal Research, https://law.counselstack.com/opinion/orleans-parish-school-bd-v-gegg-lactapp-1998.