Guinn Bros., LLC v. Jones Brothers, Inc. of Tennessee , 287 F. App'x 298 ( 2008 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
July 10, 2008
No. 07-30931 Charles R. Fulbruge III
Summary Calendar Clerk
GUINN BROTHERS, LLC,
Plaintiff-Appellant,
v.
JONES BROTHERS, INC. OF TENNESSEE,
Defendant-Appellee,
Appeal from the United States District Court
for the Western District of Louisiana
USDC No. 05-CV-1616
Before STEWART, OWEN, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
Plaintiff-Appellant Guinn Brothers, LLC (“Guinn”) appeals the district
court’s grant of summary judgment to Defendant-Appellant Jones Brothers, Inc.
(“Jones”) on its claim for damages arising from Jones’s alleged breach of
contract. For the reasons discussed below, we affirm in part and reverse in part
the district court’s grant of summary judgment.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
No. 07-30931
I.
On March 23, 2000, Jones was awarded a contract with the Louisiana
Department of Transportation (“DOTD”) for road and bridge construction on
Louisiana Highway 171. Jones and Guinn entered a subcontract agreement
under which Guinn would remove and construct four bridges for a price of
$1,747,883.81. This subcontract incorporated by reference all of the terms and
conditions of the DOTD contract, as well as all of the plans, specifications, and
schedules between Jones and the DOTD. The subcontract also contained a
mandatory notice provision pertaining to claims for additional compensation:
[Guinn] agrees to give notice in writing and make all
claims for which [DOTD] is, or may be, liable in the
manner provided and in a time framework which is
consistent with the Principal Contract so that [Jones]
may timely give notice of such claim to [DOTD].
Provided that the preceding sentence does not require
earlier action, written notice of such claims shall be
given by [Guinn] to [Jones] within one (1) week prior to
the beginning of the Work or the event or condition for
which such claim is to be made, or immediately upon
[Guinn’s] first knowledge of the event or condition,
whichever shall first occur. Otherwise, such claims
shall be deemed waived. [Guinn] shall give written
notice of all claims for which [Jones] is, or may be
liable, within five (5) days of the beginning of the event
for which claim is made; otherwise, such claims shall be
deemed waived. This notice period takes precedence
over any other notice provisions provided by, or in, this
Subcontract.
The contract between Jones and DOTD contained a similar mandatory notice
provision. However, it also contained a requirement that notification of all
claims must conform to the requirements of EDSM III.1.1.28, which sets forth
specific information and documents which must be submitted in support of a
claim.
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No. 07-30931
From the project’s inception, there were significant delays and Guinn’s
work was stopped for a number of periods of time. It is these periods of delay,
discussed more fully below, which primarily form the basis of this lawsuit.
Eventually, in early 2004, a dispute arose between Jones and the DOTD
that caused Jones to demobilize its equipment and discontinue all work on the
project. On May 27, 2004, counsel for Jones sent correspondence to Guinn
advising Guinn to cease all work on the project and also informing Guinn of
settlement negotiations between Jones and DOTD. In response, Guinn indicated
that it had “incurred significant down time with this project” and would be
“examin[ing] their options closely as to how they should best address the down
time issue.” As part of the settlement negotiations, DOTD permitted Jones to
rebid the remaining portion, and Guinn submitted a revised bid to Jones on
October 11, 2004. Guinn indicated that this revised bid did not include the delay
and down time claim because Guinn did not yet have all the information and
would submit the claim when it was complete.
Ultimately, in February 2005, under a settlement agreement between
Jones and DOTD (Plan Change No. 50) Jones’s involvement in the project was
terminated. As part of the settlement agreement, Jones agreed to indemnify the
DOTD for all claims arising out of the bridge construction project.
Based on the delays and eventual termination of the contract, Guinn filed
suit against Jones in August 2005. Guinn’s complaint contains six numbered
causes of action, each describing a separate incident in which Jones allegedly
breached the subcontract, causing Guinn to suffer delay damages. In its sixth
cause of action, Guinn also sought lost profits and lost material resulting from
Jones’s failure to allow Guinn to complete the job. After extensive discovery,
Jones moved for summary judgment. On September 27, 2007, the district court
granted summary judgment to Jones on all of Guinn’s claims. Guinn timely
appealed.
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No. 07-30931
II.
This Court reviews a district court’s grant of summary judgment de novo,
applying the same standards as the district court. Strong v. Univ. Healthcare
Sys., L.L.C., 482 F.3d 802, 805 (5th Cir. 2007). “Summary judgment is proper
when there exists no genuine issue of material fact and the movant is entitled
to judgment as matter of law.” Id. (citing FED. R. CIV. P. 56(c)). “The evidence
and inferences from the summary judgment record are viewed in the light most
favorable to the nonmovant.” Minter v. Great Am. Ins. Co. of N.Y., 423 F.3d 460,
465 (5th Cir. 2005).
The moving party “bears the initial responsibility of informing the district
court of the basis for its motion, and identifying those portions of [the record] .
. . which it believes demonstrate the absence of a genuine issue of material fact.”
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the movant meets this
burden, the burden shifts to the nonmovant “to make a showing sufficient to
establish the existence of an element essential to that party’s case, and on which
that party will bear the burden of proof at trial.” Id. at 322. To survive a
summary judgment motion, the nonmovant “need only present evidence from
which a jury might return a verdict in his favor,” Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 257 (1986), but mere allegations or denials will not defeat a
well-supported motion for summary judgment. FED. R. CIV. P. 56(e)
III.
On appeal, Guinn first argues that the district court erred in granting
summary judgment on its claims for lost profits and lost materials because Jones
did not move for summary judgment on these claims. Generally, “a district court
may not grant summary judgment sua sponte on grounds not requested by the
moving party.” Baker v. Metro. Life Ins. Co., 364 F.3d 624, 632 (5th Cir. 2004)
(quoting John Deere Co., v. Am. Nat’l Bank, 809 F.2d 1190, 1192 (5th Cir. 1987)).
An exception exists when the district court gives a party ten days notice; in those
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No. 07-30931
situations a court may grant summary judgment sua sponte on grounds not
urged in a pending motion. See Judwin Properties, Inc. v. U.S. Fire Ins. Co., 973
F.2d 432, 436-37 (5th Cir. 1992).
We agree that Jones did not move for summary judgment on the lost
profits and materials claims. Examining the record, Jones’s summary judgment
motion does not ever reference or discuss Guinn’s claims for lost profits or lost
material. Rather, the motion focuses on the six specific instances of delay
alleged by Guinn. Further, Guinn’s opposition to the motion for summary
judgment fully evidenced its understanding that these claims were not part of
the motion for summary judgment.
In addition, the record does not indicate that the district court gave any
notice to Guinn before sua sponte dismissing its claims for lost profits and lost
materials. Consequently, Guinn was not on notice to present arguments on
these claims, and we reverse the district court’s grant of summary judgment
with regard to these two claims.
IV.
Guinn also argues that the district court erred in dismissing each of its six
delay claims because it provided proper written notification of its claims to Jones
as required by the subcontract.
In Louisiana, a contract is the law between the parties. Gen. Elec. Capital
Corp. v. S.E. Health Care, Inc., 950 F.2d 944, 951 (5th Cir. 1991). Under the
Civil Code, contract interpretation “is the determination of the common intent
of the parties.” LA. CIV. CODE ANN. art. 2045. “When the words of a contract are
clear and explicit and lead to no absurd consequences, no further interpretation
may be made in search of the parties’ intent.” LA. CIV. CODE ANN. art. 2046.
“The general rule in Louisiana is that a provision in a written construction
contract that no claims for extra work or materials shall be allowed unless made
in writing is valid and binding upon the parties, and that when the contract so
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No. 07-30931
provides, and there is no written order for such extras, no recovery can be had
for them.” Meaux v. S. Const. Corp.,159 So. 2d 156, 161 (La. Ct. App. 1964).
Here, under the plain language of the subcontract, Guinn was required to
give written notice and make all claims within one of two time periods: (1) for
claims for which DOTD is the responsible party, in the manner and timeframe
provided in the primary contract, but no later than one week prior to the event
for which such claim is to be made or immediately upon Guinn’s first knowledge
of the event or condition; or (2) for claims for which Jones is the responsible
party, within five days of the beginning of the event for which the claim is based.
The subcontract is unambiguous that if timely notice is not provided, the claim
is waived. Additionally, the subcontract incorporates the provisions of the
contract between the DOTD and Jones, and thus requires documentation of all
items and figures for claims against the DOTD that the subcontractor intends
to bring.
The district court concluded that, with respect to Guinn’s six down time
claims, Guinn had failed to comply with the notice and documentation provisions
of the subcontract. Accordingly, the district court granted summary judgment
to Jones on these claim. We will examine each of Guinn’s claims in turn.
First, Guinn alleges that on May 29, 2000, it had completed its excavating
work and was prepared to proceed, but that it was unable to work from May 29,
2000 until October 2, 2000, because of Jones’ refusal to timely install the
surcharge1 material. On September 11, 2000, Guinn sent Jones notification of
1
Surcharge is excess material (usually dirt) placed on top of an embankment area to
accelerate the compaction process of the underlying embankment. After the desired
compaction level is reached, the surcharge material is removed. As originally bid, the project
did not include a surcharge requirement, but after some issues arose with the installation of
embankment material, the DOTD notified Jones in June 2000 that it was requiring the
installation of a surcharge. On September 1, 2000, the DOTD issued Plan Change No. 2,
“Surcharge Placement and Removal,” which modified the existing contract, the work schedule,
and the specifications associated with the embankment material and the surcharge.
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No. 07-30931
the delays and Guinn’s intent to seek reimbursement for its additional costs.
This letter was forwarded to the DOTD on September 13, 2000, and the DOTD
responded that the impact of delays and additional costs would be assessed at
a later date via the Critical Path Method (“CPM”) of construction scheduling.
The parties disagree over whether DOTD or Jones is responsible for this claim,
and thus, which notice period applies and whether Guinn was required to submit
documentation in compliance with EDSM III.1.1.28. We need not resolve this
dispute, because under either time period, Guinn’s notice was untimely. Guinn’s
own petition states that its claim for surcharge delay began on May 29, 2000.
However, Guinn did not submit notice of a possible claim for delay damages until
September 11, 2000, over three months after discovery of the problem.
Second, Guinn alleges that Jones negligently installed the control points2
for one of the bridges, preventing Guinn from working from November 13, 2000
through November 17, 2000. Guinn argues that it provided notice to Jones of
this claim in an October 27, 2000 letter. However, although this letter indicates
that there is a problem with the control points, and that Guinn will not be
responsible for any incorrect layout, this letter does not state that Guinn would
be asserting a claim based on any resulting delay. Accordingly, this letter
cannot be said to constitute notice to Jones for a down time claim stemming from
negligent installation of the control point.
Third, Guinn alleges that Jones impeded Guinn from completing its work
by failing to blade wet material off of the surcharge after a rainfall on four
separate occasions: November 27, 2000; January 2, 2001 to January 8, 2001;
January 10, 2001 to January 22, 2001; and March 8, 2001 to March 19, 2001.
Guinn first contends that the September 11, 2000 letter served as adequate
notice for each of these periods. This is untenable, given that the September 11,
2
Control points are the reference points set to determine where to place the pilings for
the bridge.
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No. 07-30931
2000 letter dealt only with the pile driving delays associated with the surcharge.
Jones’s alleged failure to blade wet material off of the surcharge is an entirely
separate claim. Guinn refers the court to five other letters sent to Jones
referencing surcharge removal and delays associated with the layout. None of
these letters discuss or even mention any problem with removal of wet material
off the surcharge after a rainfall. These letters cannot be deemed to have
provided the notice envisioned by the contract.
Fourth, Guinn alleges two additional periods of delay based on Jones’s
negligent fixing of the control points: February 2, 2001 to March 1, 2001; and
April 2, 2001 to April 26, 2001. As we noted above, the October 27, 2000 letter
was insufficient to provide notice to Jones because it did not indicate that Guinn
would be seeking delay damages stemming from this issue. Guinn also points
the Court to four other letters dated: February 22, 2001; April 18, 2001; April 26,
2001; February 1, 2002; and May 21, 2004. None of these letters could possibly
have provided timely notice with regard to the February 2001 claim, as they
were all submitted more than five days after the delay allegedly began.
However, the February 22, 2001, letter clearly indicates that problems
with the control points have continued to cause delays in the construction of
Bridge #2 and that Guinn would not be able to continue its work until the layout
problem was resolved. In this letter, Guinn also states that “it intends to submit
to [Jones] all costs related to the delays.” Guinn provided evidence to the district
court that the second delay period, April 2, 2001 to April 26, 2001, was also
caused by the failure of the control points for Bridge #2 to be placed in the proper
positions, the problem specifically discussed in the February 22, 2001, letter.
Jones was therefore adequately notified of the potential for a down time claim
resulting from the problems with the Bridge #2 control points prior to the April
2001 delay period. Therefore, we find that Guinn provided sufficient notice with
respect to its delay claim for the period April 2, 2001 to April 26, 2001.
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No. 07-30931
Next, Guinn alleges three periods of delay arising from Jones’s failure to
properly install embankment material.3 From May 24, 2001, through July 20,
2001, Guinn contends that it was unable to work because it was waiting for
Jones to remove and re-install embankment material. Guinn alleges that it
completed the embankment work itself, with the approval of Jones and the
DOTD, but has not been reimbursed for the use of its equipment or labor. From
July 30, 2001 to October 1, 2001, Guinn asserts that it was unable to work
because of Jones’s failure to correctly install embankment material for the
approach slab on the south side of Bridge #1 northbound. Finally, from October
9, 2001 to October 23, 2001, Guinn was unable to work because it was waiting
for Jones to install embankment material for both approach slabs at Bridge #1
northbound. Guinn ultimately installed the material itself, but alleges it was
not compensated by Jones. Guinn argues that it provided timely notice of all
three claims in its April 18, 2001 letter to Jones. An examination of the record
reveals that this letter focuses primarily on the control point problem, and only
cursorily mentions that Guinn has asked Jones to have the approach slab
graded. This letter does not discuss the three specific problems alleged by Guinn
in its petition, nor does it discuss the removal and reinstallation of embankment
material. The mere mention of a general problem with the “approach slabs” was
not sufficient, under the subcontract, to serve as notice of any one of Guinn’s
three distinct embankment related claims.
Finally, Guinn alleges that from October 23, 2001 until May 27, 2004,
Jones refused to allow Guinn to perform any work on the jobsite for no reason.
The record contains two letters referencing the shut-down, one dated February
1, 2002, and another on March 25, 2004. Neither of these could possibly provide
timely notice for a claim allegedly commencing on October 23, 2001.
3
Embankment material is the road base leading up to bridges and between bridges.
Embankment material must be in place before bridge construction can begin.
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No. 07-30931
In sum, with the exception of Guinn’s April 2, 2001 to April 26, 2001
control point delay claim, we agree with the district court that Guinn failed to
provide Jones with timely notice of these claims under the terms the
subcontract.
V.
Perhaps recognizing the lack of timely notice, Guinn also argues that the
notice and documentation provisions of the subcontract were modified by the
written plan changes, letter modifications, actions of the parties, and oral
modifications. Guinn argues that with respect to the surcharge installation,
DOTD Plan Change No. 2 evidences a clear, written modification to the notice
and documentation provisions of the original contract. Similarly, Guinn argues
that the “problems and delays” with the control points and approach slabs
evidence a modification of the notice provisions. The district court found that
Guinn failed to present competent summary judgment evidence demonstrating
that the parties modified the contractual language regarding the claim
notification requirements.
Under Louisiana law, written contracts for construction, including notice
provisions, may be modified orally and by the conduct of the parties. Pelican
Electrical Contractors v. Neumeyer, 419 So. 2d 1, 5 (La. App. 1982). Guinn, as
the party asserting modification, must prove by a preponderance of the evidence
facts or acts giving rise to the modification. LA. CIV. CODE ANN. art. 1831;
Wisinger v. Casten, 550 So. 2d 685 (La. App. 1989). Further, the party urging
modification must establish that parties mutually consented to the agreement
as modified. Taita Chem. Co. v. Westlake Styrene Corp., 246 F.3d 377, 386 (5th
Cir. 2001) (citing LA. CIV. CODE ANN. art 1927).
Guinn relies primarily on Big “D” Dirt Services, Inc. v. Westwood, Inc., 653
So. 2d 604 (La. App. 1995), to support its argument that the conduct and letters
of the parties orally modified the notice provision of the subcontract. In that
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No. 07-30931
case, Big “D,” a subcontractor, had completed its work under the subcontract,
but the DOTD rejected the work and Westwood, the general contractor, hired a
third party to correct the defects in Big “D”’s work. Id. at 1-2. Westwood then
refused to pay Big “D” for its work on the project and Big “D” filed suit. Id.
Among other things, Big “D” alleged that Westwood’s failure to comply with a
seven-day written notice provision amounted to a breach of contract for which
Westwood was liable. Id. at 9. In response, Westwood argued that the strict
notice requirement was modified by a subsequent oral agreement between the
parties. Id. The court found that, through their actions and oral discussions,
Big “D” and Westwood “modified the written notice requirement to, in effect, do
away with its necessity.” Id. at 14. The court indicated that Westwood provided
evidence that Big “D” was orally told of DOTD’s rejection of the work; that both
parties attended a lunch meeting where remediation measures were discussed;
that, although not necessary, Big “D” never requested written notice; and the
fact that Big “D” attempted to contract a third party to do the remediation work
six weeks after notification (when remediation was required within seven days)
belied its contention that the contract was not modified. Id. at 14-15.
We agree with the district court that Big “D” Dirt Services is
distinguishable. In that case, Westwood presented evidence that Big “D” had
acted inconsistently with the notice provisions, and thus believed the provisions
were modified. Guinn has presented no such evidence that Jones acted in a way
consistent with its argument that the notice provisions had been modified, and
thus has failed to demonstrate that the parties mutually agreed to modify the
contract. See, e.g., Taita Chem. Co., 246 F.3d at 386. Guinn argues that Plan
Change No. 2 and the issue with the control points indicates that the
subcontract was modified. While this evidence does indicate that the parties
may have modified the subcontract with respect to the layout, deadlines,
materials, and other aspects of the construction of the project, it does not
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No. 07-30931
demonstrate a mutual agreement to modify the strict notice provisions. See L
& A Contracting Co. v. Ram Indus. Coatings Inc., 762 So. 2d 1223, 1233 (La.
App. 2000) (holding that although parties had orally modified contract to include
additional work, no agreement was made with regards to when payment was
due). None of the documents and letters pointed to by Guinn discuss such a
modification of the claim notice provisions. In sum, the record is devoid of any
evidence which supports Guinn’s argument that the parties orally modified the
subcontract to remove the notification provision.
Therefore, because Guinn failed to present sufficient evidence to create a
genuine issue of material fact as to whether the parties orally modified the
notice provisions of the subcontract, the district court correctly found that the
notice provision is valid. Thus, as discussed above, with the exception of Guinn’s
April 2, 2001 to April 26, 2001 control point delay claim, Guinn’s delay claims
are barred because of its failure to comply with the notice provision and the
district court’s grant of summary judgment was proper. However, because
Guinn provided sufficient notice under the subcontract of the April 2, 2001 to
April 26, 2001 control point delay claim, the district court erred in granting
summary judgment to Jones on this claim.
VI.
In conclusion, we REVERSE the district court’s grant of summary
judgment with regard to Guinn’s claims for lost profits and lost materials.
Further, with the exception of Guinn’s April 2, 2001 to April 26, 2001 control
point delay claim, we AFFIRM the district court’s grant of summary judgment
with regard to these claims. With respect to Guinn’s April 2, 2001 to April 26,
2001 control point delay claim, we REVERSE the district court’s grant of
summary judgment. This case is REMANDED to the district court for further
proceedings not inconsistent with this opinion.
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