Smit Land & Marine, Inc. v. WHC, INC.

930 So. 2d 215, 2006 La. App. LEXIS 1041, 2006 WL 1154837
Louisiana Court of Appeal·Decided May 3, 2006·No. 05-1254, 05-1255·Published·Cited by 1 cases

Opinion

930 So.2d 215 (2006)

SMIT LAND & MARINE, INC.
v.
WHC, INC.

Nos. 05-1254, 05-1255.

Court of Appeal of Louisiana, Third Circuit.

May 3, 2006.

*216 Bernard E. Boudreaux, Jr., Murphy J. Foster, III, Breazeale, Sachse & Wilson, L.L.P., Baton Rouge, LA, Lloyd Noble Shields, New Orleans, LA, for Defendant/Appellant, WHC, Inc.

David Arthur Hurlburt, Hurlburt, Privat & Monrose, Lafayette, LA, for Plaintiff/Appellee, Smith Land & Marine, Inc.

Robert Beattie McNeal, Patricia Elise Weeks, Weeks & Gonzalez, New Orleans, LA, for Defendant/Appellee, Exxon Mobile Pipeline Company.

L. Katherine A. Theunissen, Mahtook & Lafleur, Lafayette, LA, for Defendant/Appellee, National Union Fire Insurance Co.

Court composed of ULYSSES GENE THIBODEAUX, Chief Judge, JIMMIE C. PETERS, and J. DAVID PAINTER, Judges.

THIBODEAUX, Chief Judge.

Plaintiff-appellee, Smit Land & Marine, Inc. ("Smit"), filed a motion for partial summary judgment regarding its claim for nonpayment of fees allegedly owed to it under its contract with defendant-appellant, WHC, Inc. ("WHC"). The trial court granted the motion and certified the judgment as final pursuant to La.Code Civ.P. art. 1915(B). WHC has appealed the judgment as well as the trial court's certification of the judgment as final. For the following reasons, the appeal is dismissed, the order certifying the partial summary judgment as final is vacated, and the case is remanded for trial.

I.

ISSUES

1. Did the trial court err in certifying its judgment as final and appealable pursuant to La.Code Civ.P. art. 1915(B)?
2. Did the trial court erroneously find that there is no genuine issue of material fact as to Smit's entitlement to the unpaid fees?

II.

FACTUAL BACKGROUND

In this ongoing litigation, multiple parties are suing and/or being sued for damages resulting from alleged acts of negligence, breach of contract, and intentional tort, arising out of a pipeline construction job. This saga began on August 28, 1998, *217 when Exxon Pipeline Company, now known as ExxonMobil Pipeline Company ("Exxon"), hired general contractor, WHC, to construct approximately forty-six miles of pipeline in an area extending from the vicinity of Anchorage, Louisiana to the vicinity of St. James, Louisiana. This project was referred to as the South Louisiana Pipeline Project ("the project"). On October 15, 1998, WHC hired a subcontractor, Smit, to perform directional drilling work for four pipeline crossings for the project. One of those crossings, known as the North Mississippi River Crossing, is the subject of this dispute.

The North Mississippi River Crossing was to be placed under the Mississippi River near Baton Rouge, Louisiana. The subcontract required Smit to bore one hole of a sufficient capacity to house a single bundle of pipelines, consisting of one twenty-four-inch pipeline and two twelve-inch pipelines. The work was to be completed within twenty-five days. The final agreed upon price for the work to be performed by Smit on the North Mississippi River Crossing was $898,388.15.

It is undisputed that this work was not completed in the manner described by the subcontract. Rather, Smit completed the North Mississippi River Crossing by drilling two holes instead of one—one hole was used for the placement of the two twelve-inch pipelines and the other was used for the placement of the one twenty-four-inch pipeline. In addition, this crossing was completed thirty to forty days beyond the original twenty-five-day deadline. Smit explained that these contract variations resulted because it was unprepared for soil conditions it encountered. Smit claimed that this was a result of its reliance on erroneous soil condition information set forth in the geotechnical report provided by Exxon.

The contractor, WHC, also had work obligations under the subcontract. WHC was to provide Smit with equipment and personnel during its "pullback" and "preream" operations of the drilling. According to WHC, these operations required more work than originally expected because of the problems encountered by Smit on the job. Therefore, WHC was necessarily required to provide additional supporting work to Smit beyond what was originally set forth in the subcontract. WHC submitted a claim to Smit in the amount of $621,410.77 for these additional support services and withheld this amount from final payment to Smit.

Smit, in turn, sued WHC. It also filed a separate action in the same district court[1] against Exxon and Eustis Engineering Co., Inc. ("Eustis Engineering"), the engineering firm that prepared the allegedly faulty geotechnical report for Exxon.[2] In both suits, Smit sought payment of the unpaid subcontract fee of $621,410.77, as well as $2,013,063.24 in additional costs it claims to have incurred during completion of the North Mississippi River Crossing. Smit sought additional damages for wrongful conversion of funds, unjust enrichment, breach of contract, and unfair trade practices under the Louisiana Unfair Trade Practices Act.

Smit also sought, from WHC only, penalties for its nonpayment of funds pursuant to La.R.S. 9:2784. Smit claimed that months had passed since WHC had received its final payment from Exxon for all *218 work under their principal contract; however, it asserted that WHC had failed to pay it within fourteen days of receiving those funds, in violation of La.R.S. 9:2784. Therefore, Smit asked the court to impose the statute's maximum penalty of fifteen percent ($93,211.61) of the $621,410.77 being withheld, along with attorney fees.

WHC answered the petition and filed a reconventional demand, naming as defendants, Smit; Exxon; Eustis Engineering; and Smit's bonding company, National Union Fire Insurance Co. ("National Union").[3] In its answer, WHC alleged that Smit materially breached the contract, was negligent, and had been paid all sums that it was due. Alternatively, WHC asserted the defenses of "set-off, reduction, abatement or apportionment" in regard to any damages that it might be ordered to pay as a result of Smit's claims. WHC also asserted its claim for payment of the $621,410.77 in costs and expenses it claimed to have incurred as a result of the additional work it was required to perform.

Regarding both Exxon and Eustis Engineering, WHC claimed that they were both negligent and liable to it for damages because they provided information that did not accurately portray the soil conditions that would be encountered while drilling for the pipeline crossings. WHC's claims against Exxon also included breach of contract claims for its failure to provide a defense to, or to indemnify it for, the claims brought by Smit. WHC also asserted its contractual entitlement of a twenty percent markup for all costs for which it may be ordered to pay Smit as a result of the differing site conditions encountered by Smit on the job.

Smit filed a motion for partial summary judgment on February 4, 2004, seeking a judgment on the issue of whether it was owed the subcontract balance of $621,410.77 that was being withheld by WHC. In addition, it asked for summary judgment on the issue of its entitlement to penalties and attorney fees from WHC for late payment, pursuant to La.R.S. 9:2784.

The trial court granted Smit's motion on the issue of its entitlement to the unpaid balance of its subcontract in the amount of $621,410.77. The trial court stated that no genuine issues of material fact existed th

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Smit Land & Marine, Inc. v. WHC, INC., 930 So. 2d 215, 2006 La. App. LEXIS 1041, 2006 WL 1154837 (La. Ct. App. 2006).

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