Town of Urania v. M.P. Dumesnil Construction Co.

492 So. 2d 888, 1986 La. App. LEXIS 7463
CourtLouisiana Court of Appeal
DecidedJuly 23, 1986
DocketNo. 85-985
StatusPublished

This text of 492 So. 2d 888 (Town of Urania v. M.P. Dumesnil Construction Co.) 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
Town of Urania v. M.P. Dumesnil Construction Co., 492 So. 2d 888, 1986 La. App. LEXIS 7463 (La. Ct. App. 1986).

Opinion

YELVERTON, Judge.

Plaintiffs, the Town of Urania and Sewerage District No. 1 of the Town of Urania, brought this action against the defendant, M.P. Dumesnil Construction Company, Inc., seeking damages, or alternatively reduction in the purchase price, for defects resulting from alleged improper workmanship in the construction of a sewage treatment plant. Dumesnil reconvened for payment of the unpaid balance of the contract price, and also filed a third party demand against Pollution Control, Inc., the manufacturer of the component parts of the treatment plant, and Southern Consultants, the engineers for the project. Pollution Control filed a third party demand against Dumesnil seeking payment of the unpaid balance of the purchase price of the machinery, and interest. The Town of Urania had withheld $26,978.37 of the contract amount, and the trial court found that the town was entitled to a reduction in the cost of only $11,315. Accordingly, the trial court awarded judgment for the difference in favor of Dumesnil against the town and the sewerage district for $15,663.37, plus legal interest. The trial court also awarded judgment in favor of Pollution Control, Inc. against Dumesnil for $5,241, together with interest as provided by the contract. All other claims were denied. No judgment was rendered affecting Continental Casualty Company, Dumesnil’s insurer. From these judgments, the town, the sewerage district, and Dumesnil have appealed.

The issues raised by the town and the sewerage district are 1) whether the trial court erred in not sustaining their exception of no right and/or no cause of action (to Dumesnil’s reconventional demand); and 2) whether the trial court erred in finding Dumesnil was entitled to any money under the terms of the contract.

The issues raised by Dumesnil’s appeal are 1) whether the trial court erred in concluding that the plaintiffs were entitled to a reduction in the contract price, 2) whether the trial court erred in denying the third party demands of Dumesnil against Pollution Control, Inc., and Southern Consultants, and 3) whether the trial court erred in awarding interest other than the legal rate on the judgment in favor of Pollution Control.

Plaintiffs’ No Right and/or No Cause of Action

Plaintiffs’ .exception of no right or no cause of action rested on the argument that under the terms of their contract, Du-mesnil had no right to seek the balance of the contract price until it paid Pollution Control the remainder of the purchase price for the machinery. We disagree.

Under Item G, Section 19 of the contract, the entire balance due to the contractor was to be paid within 30 days of completion and acceptance of the work, except for sums which were lawfully retained by the owner. Under Section 19.5 the owner [891]*891could request the contractor to furnish satisfactory evidence that all sums owed suppliers of equipment had been paid, discharged, or waived. If the contractor failed to provide such evidence the owner might, “after having notified the CONTRACTOR, either pay the unpaid bills or withhold from the CONTRACTOR’S unpaid compensation a sum of money deemed reasonably sufficient to pay any and all such lawful claims ...”

On March 6, 1978, the Town of Urania executed a Certificate of Substantial Completion accepting the project as completed in accordance with the terms of the contract. Therefore, under the provisions of the contract the unpaid balance owed the contractor was due 30 days after that date. The only request made by the Town of Urania to the contractor was that the contractor provide the town with a lien free certificate. The contractor provided the certificate. The record does not indicate that the town asked the contractor to give it evidence that Pollution Control had been paid. It is thus apparent that the town was not relying on Section 19.5 of the contract in withholding the balance and that section is therefore not applicable here. Even if Section 19.5 were applicable in the present case, the town could have withheld only the balance owed to Pollution Control by Dumesnil ($5,241). It is clear, however, that the town withheld payment of the balance of the contract because of alleged improper workmanship and not because the contractor failed to pay the supplier.

For these reasons we find that the unpaid balance under the contract was due 30 days after the date of acceptance of the project. Therefore, Dumesnil’s reconven-tional demand stated a cause of action and Dumesnil had the right to seek payment of the unpaid balance. The exceptions were properly overruled.

The Contract Dispute

The plaintiffs also argue that the trial court erred in finding Dumesnil was entitled to any more money under the terms of the contract. Although the evidence is clear that the Town owed a balance of $26,978.37, the plaintiffs argue that the trial court erred in not concluding that the additional amount of $38,000 which the town spent renovating and repairing the plant was the result of Dumesnil’s improper construction of the plant.

Dumesnil, on the other hand, argues that the trial court erred in concluding that the plaintiffs were entitled to any reduction in price due to improper workmanship.

The trial judge who decided this case wrote excellent reasons for judgment regarding the contract dispute. After a careful study of the record, the exhibits, and particularly the lengthy contract, we find the trial court’s findings are correct and his resolution of the case is proper. We adopt the trial court’s reasons for judgment as part of our opinion in this case. We set forth those reasons as follows:

“This is a contract dispute principally between the Town of Urania, Louisiana and Sewerage District Number One of the Town of Urania, plaintiffs, and the M.P. Dumesnil Construction Company, Inc., defendant. Also parties are Southern Consulting, Inc., and Pollution Control, Inc. The parties were all involved in the construction of a sewer system and sewerage treatment plant for the plaintiffs, hereinafter referred to as Urania. Southern Consulting, Inc., (SCI) is an engineering firm and designed the system. Pollution Control, Inc., (PCI) manufactured some component equipment for the project and the M.P. Du-mesnil Company, Inc., (Dumesnil) built the treatment plant. The overall project cost approximately $348,000.00, most of which has been paid. Urania held back $26,978.37 and contended that it was entitled to a $100,000.00 reduction in price because of deficiencies in the work done by Dumesnil and in the PCI equipment. PCI contends that Dumesnil owes it a $5,241.00 balance for the equipment it furnished which had an overall cost of $96,025.36. A variety of issues were litigated at the trial of this case.
[892]*892“Inherent in the overall dispute is whether the subject plant was so deficient that its inadequacies caused a need to reconstruct the whole treatment plant. Urania did reconstruct much of the plant so the costs involved in the revised plant have been discussed at length in the testimony. The revisions cost about $38,-000.00. Urania’s engineers from SCI explained that they and Urania were close to seeking bids on a lagoon type treatment system when Federal Environmental Protection Agency representatives changed their position and indicated a lagoon system could not be approved. Without such approval, financing could not be obtained. Therefore, SCI proposed a mechanical system that the EPA would approve.

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Bluebook (online)
492 So. 2d 888, 1986 La. App. LEXIS 7463, Counsel Stack Legal Research, https://law.counselstack.com/opinion/town-of-urania-v-mp-dumesnil-construction-co-lactapp-1986.