Semco, LLC v. Grand Ltd.

221 So. 3d 1004, 2017 WL 2350946
CourtLouisiana Court of Appeal
DecidedMay 31, 2017
DocketNO. 16-CA-342
StatusPublished
Cited by27 cases

This text of 221 So. 3d 1004 (Semco, LLC v. Grand Ltd.) 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
Semco, LLC v. Grand Ltd., 221 So. 3d 1004, 2017 WL 2350946 (La. Ct. App. 2017).

Opinion

WICKER, J.

Lin this appeal, Semco, L.L.C. and The Grand Ltd. seek review of the trial judgment, rendered following a nearly three-week jury trial, awarding $4,831,144.00 in favor of Semco and $680,845.00 in favor of The Grand for damages arising out of the construction of a multi-million dollar lift-boat. For the following reasons, we affirm the trial court judgment but amend the judgment to award judicial interest from the date of demand.

PROCEDURAL HISTORY

On October 28, 2013, Semco filed suit against The Grand for claims arising out of the parties’ January 30, 2012 contract to construct a liftboat. In its petition, Semco, the builder, alleged that, in light of various changes requested by the owner, The Grand, in addition to design difficulties in reaching the desired tonnage for the vessel, the construction cost far exceeded the $15,934,000.00 contract price. Semco asserted claims for reformation or rescission of the contract and sought first the total construction cost, minus the amounts already paid by The Grand, or, alternatively, the cost of the specific changes that increased the contract price. Semco filed an amended petition, additionally asserting claims for detrimental reliance and unjust enrichment.1

The Grand filed an answer to Semco’s petition, asserting that the contract at issue is a fixed-price contract and, thus, with the exception of the approved change orders executed, Semco assumed the risk of any additional construction costs incurred. [1009]*1009The Grand additionally filed a reconven-tional demand against Semco, alleging that the vessel was defective in several respects upon delivery and, further, that The Grand sustained monetary damages related to the delay of the completion and delivery of the vessel.2

l2On July 31, 2015, the Grand filed a motion for partial summary judgment as to several of Semco’s claims, including its causes of action alleged for total cost damages and for reformation and/or rescission of the contract.3 After taking the matter under advisement, the trial judge denied The Grand’s motion.

The matter proceeded to trial by jury on September 8, 2015. During a jury charge conference, The Grand objected to the trial court’s denial of its proposed jury charge concerning the law pertinent to lump-sum or fixed-price contracts. At the conclusion of Semco’s case-in-chief, The Grand moved for a directed verdict on Semco’s contract rescission and reformation claims as well as its claims for unjust enrichment and detrimental reliance. The trial judge denied the motion for directed verdict without reasons. Following a nearly three-week trial, the jury returned a verdict in favor of Semco in the amount of $4,831,144.00, with legal interest from the date of judgment, and in favor of The Grand as to its recon-ventional demand in the amount of $680,845.00. Both parties have appealed, challenging the amounts awarded by the jury and raising other specific assignments of error addressed below.

FACTUAL BACKGROUND

This litigation arises out of the construction of a liftboat. A liftboat is a large vessel with retractable legs that imbed into the sea bottom and allow the vessel to be elevated—providing offshore working and living spaces for the onboard workers. Semco, formed by John Powers, is a marine engineering and construction company that developed a unique patented crane design, which allows the liftboat’s crane to be placed on a leg of the vessel, rather than on the deck, thereby providing more valuable open deck or work space on the vessel. The Grand is a ^holding company formed by Bob Springob for vessels and equipment operated by a group of other companies started by Springob, namely Laredo Construction, Laredo Offshore, and Springob Enterprises.

On January 30, 2012, Semco and The Grand entered into a contract for the construction of a liftboat, the Brazos.

The Contract

The January 30, 2012 written contract at issue between Semco and The Grand provides that Semco would construct a vessel for The Grand in accordance with the at--tached Contract Specifications and Drawings, for the , contract price of $15,934,000.00. Attached to the contract are extensive specifications which provided for the construction - of a 230-foot leg length jack-up barge with a 200-ton leg crane capacity and a 120-foot boom length. The parties revised the Contract Specifica[1010]*1010tions in May 2012. and June 2012. The written amendments to the contract relevant to this appeal are (1) the original Contract Specifications provided that the vessel, including the hull and structural bulkheads, would be of steel construction; the June 2012 revised Contract Specifications provided that the structural bulkheads in the interior spaces would be of aluminum construction; and (2) the original Contract Specifications provided that Semco would obtain ABS/ANSI certification and the June 2012 amendment reflects that the “API 2C, 7th Edition only” is required.

The Contract Specifications further provided that the vessel would be under 200 US regulatory gross tons. However, the contract contained a provision which stated that if Semco could not achieve a tonnage under 200 gross tons through normal methods, the parties would negotiate a solution, which may result in increased construction costs.4 The language in the' contract provided;

• I ¿Builder shall make all practical efforts to obtain US regulatory tonnage of less than 200 gross tons. If not practical or possible by normal methods, a satisfactory solution shall be negotiated between the builder and the owner which may include additional cost.

The contract further contained a warranty 'clause, indicating that the vessel would be delivered in accordance with the contract specifications and drawings and free from defects. The contract required The Grand to give prompt notice to Semco of any alleged defects upon discovery but in no event would Semco be responsible for any alleged defect not reported within 180 days from delivery of the vessel. In the event Semco was timely’notified of any defect, the contract instructs that Semco would be responsible to correct the defect or to allow The Grand to correct the defect, subject to a specified reimbursement claim. The contract contained a “Waiver of Consequential Damages” provision, stating that both parties waived any indirect, incidental, , or consequential damages arising out of the contract, .,

Concerning the paint application for the vessel, the contract provided that Semco would use Carboline paint and apply the same in accordance with- the manufacturer’s 'Specifications and instructions. The warranty provision, howéver, specifically excluded any warranty for defects related to the manufacture of the paint itself or the manufacturer’s recommendations for application.

The contract provided that, only Sprin-gob and Powers, as the designated representatives for The Grand and Semco respectively, could modify or change the contract terms.5 The contract provided that the written contract superseded any prior oral agreements or understandings and that, any , changes to the Contract Specifications must be requested in the form of a change order and approved in writing. The contract provibed that, if The Grand failed to respond to- a requested I ^change order, the change order would be deemed rejected and the changed work would not be performed.

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Cite This Page — Counsel Stack

Bluebook (online)
221 So. 3d 1004, 2017 WL 2350946, Counsel Stack Legal Research, https://law.counselstack.com/opinion/semco-llc-v-grand-ltd-lactapp-2017.