Amitech U.S.. v. Nottingham Constr. Co..

• Decision Date: 28 March 2011
• Docket Number: No. 2009 CA 2048.,2009 CA 2048.
• Parties: AMITECH U.S.A., LTD.v.NOTTINGHAM CONSTRUCTION COMPANY.
• Court: Court of Appeal of Louisiana — District of US

57 So.3d 1043

AMITECH U.S.A., LTD.
v.
NOTTINGHAM CONSTRUCTION COMPANY.

No. 2009 CA 2048.

Court of Appeal of Louisiana, First Circuit.

Oct. 29, 2010.Rehearing Denied March 28, 2011.

[57 So.3d 1047]

Michael D. Hunt, A. Paul LeBlanc, Jr., Baton Rouge, Louisiana, for Plaintiff/1st Appellant Amitech U.S.A., Ltd.Murphy J. Foster, III, J. Mark Robinson, Baton Rouge, Louisiana, for Defendant/2nd Appellant Nottingham Construction Company, Inc.Before WHIPPLE, McDONALD, and McCLENDON, JJ.McCLENDON, J.

[1 Cir. 2] A contractor appeals a trial court judgment that rescinded an alleged settlement agreement between said contractor and an owner for whom the contractor had constructed a pipe manufacturing facility. The owner also appeals a judgment following a trial on the merits, which awarded the contractor $893,520.00 after the amounts the trial court determined the parties owed to each other were offset. For the following reasons, we affirm the judgment that rescinded the purported settlement agreement, but amend the trial courts judgment following the trial on the merits to reflect that the owner is entitled to an award of $5,560.00 after the awards are offset.

FACTS AND PROCEDURAL HISTORY

Amitech U.S.A., Ltd. (Amitech) was created to bring certain foreign pipe-manufacturing processes (the Meyer and Flowtite processes) to North America. In 2001, Amitech hired Ron Cormier, who resided in Ohio, as a manager,¹ and it began considering locations within the United States to build a pipe manufacturing plant that would utilize the Meyer and Flowtite processes.

Richard Vanek, a former business acquaintance of Cormier, suggested that Baton Rouge, Louisiana may be an attractive location for a plant because remedial work was required on the city's sewer systems and infrastructure, which could result in the use of Amitech's products. Vanek also suggested that Nottingham Construction, L.L.C. (Nottingham), a general contractor with experience in municipal and industrial construction, was a contractor in Baton Rouge that could construct Amitech's facilities. In February 2001 and again in April 2001, Cormier traveled to Baton Rouge to meet with Ted Hicks, who was the principal of Nottingham.²

In May 2001, Nottingham representatives, at Cormier's request and Nottingham's expense, agreed to travel to Europe to tour pipe manufacturing [1 Cir. 3] facilities that employed the Meyer and Flowtite processes. After returning from Europe, Nottingham

[57 So.3d 1048]

submitted a proposal to Amitech, containing an estimate of costs for the construction of certain elements of the Meyer and Flowtite facilities in East Baton Rouge Parish.

In June 2001, Cormier traveled to Europe and made presentations to Amitech's parent company, Saudi Arabian Amiantit Company (Amiantit), which owns pipe manufacturing facilities throughout the world. Cormier's presentation reflected that “the total project cost for commissioning a North American production facility is assumed to be $26.02 million.” At the conclusion of the presentation to Amiantit, Cormier was provided with verbal authorization to proceed with the efforts to construct a pipe manufacturing facility in North America.

In November 2001, at Cormier's request, Nottingham representatives, along with design professionals, took another trip to Europe to tour Meyer and Flowtite facilities. The representatives spent approximately one day touring a Meyer facility and one day touring a Flowtite facility. Amitech reimbursed Nottingham and the design professionals for their expenses incurred for this second trip.

Following the November 2001 trip to Europe, Nottingham and Amitech negotiated and entered into a Design–Build Contract, which was executed by the parties on February 26, 2002. The primary dispute at issue arises out of the scope of the work Nottingham was required to complete in accordance with the Design–Build Contract.

In the spring of 2003, Nottingham and Amitech reached an impasse concerning the amount due Nottingham for its work under the Design–Build Contract. As a result, the parties engaged in a several-month-long process to resolve the claims between them, resulting in two agreements, namely a letter agreement dated June 30, 2003, and an agreement styled “Program [1 Cir. 4] Management Agreement” dated July 2, 2003.³ Both the letter and the agreement (sometimes collectively referred to as “the settlement agreement”) were signed by Cormier in his capacity as “President” of Amitech.

On July 31, 2003, Amitech filed the instant action against Nottingham to rescind the settlement agreement, alleging that Cormier did not possess the requisite authority to bind Amitech to the settlement agreement. Nottingham filed an answer and a reconventional demand, wherein it sought to enforce the settlement agreement. Amitech amended its petition to assert claims for breach of fiduciary duty, breach of contract, and, alternatively, rescission of the Design–Build Contract.

Prior to trial, Amitech filed a motion for partial summary judgment, seeking to dismiss Nottingham's suit to the extent it sought enforcement of the settlement agreement. On September 19, 2008, the trial court granted Amitech's motion and rescinded the settlement agreement. Specifically, the trial court found that Amitech had not provided written authority to Cormier to settle, and absent such authority,

[57 So.3d 1049]

Cormier could not enter into a valid settlement agreement. Moreover, in its September 25, 2008 judgment, the trial court ordered Nottingham to return the $409,000.00 that Nottingham had received from Amitech pursuant to the purported settlement.

In response to the trial court's grant of Amitech's motion for partial summary judgment, Nottingham amended its reconventional demand, asserting that in the event the settlement agreement was not enforceable, Nottingham was entitled to damages in the amount of its claims existing prior to the parties' settlement of disputes.

A bench trial was conducted between September 29 and October 8, 2008. After trial, the court took the matter under advisement, and subsequently issued [1 Cir. 5] its written reasons for judgment. The judgment awarded Nottingham $1,040,000.00 less an amount recoverable by Amitech of $146,480.00, resulting in a net amount awarded to Nottingham of $893,520.00.

ASSIGNMENTS OF ERROR

Nottingham has appealed to seek enforcement of the putative settlement agreement and has assigned three errors, raising the following issues for review:

(1) Whether, in the absence of written evidence authorizing an agent to enter into a settlement agreement, a third party may enforce the settlement agreement against the principal based upon the theory of apparent authority?

(2) Whether, in the absence of written evidence authorizing an agent to enter into a settlement agreement, a third party may enforce the settlement agreement against the principal based upon estoppel and detrimental reliance as permitted by La. Civil Code art. 1967.

(3) Whether Nottingham demonstrated genuine issues as to material facts prohibiting Amitech from an award of summary judgment which rescinded a settlement agreement in conjunction with Issue Nos. 1 and 2.

Amitech has also appealed, assigning the following as errors:

(1) The trial court erred in finding that no fiduciary duty existed between Amitech and Nottingham.

(2) The trial court erred in failing to properly interpret the Design–Build Contract, and as a consequence further erred by finding that Amitech was not owed reimbursement for Nottingham's failure to deliver the scope of the work contemplated by the contract price.

(3) Alternatively, the trial court erred in not rescinding the Design–Build Contract.

(4) The trial court erred in awarding Nottingham $800,000 for “Extra Fill and Site Work.”

(5) The trial court erred in awarding Nottingham $240,000 as part of an “early completion bonus.”

THE PURPORTED SETTLEMENT AGREEMENT

Nottingham has appealed to seek review of the trial court's failure to enforce the purported settlement agreement entered into between the parties. In response, Amitech has filed a motion to dismiss Nottingham's appeal, asserting that Nottingham waived its right to appeal the settlement issue by proceeding to trial on the post rescission demand. We disagree. The granting of [1 Cir. 6] the motion for partial summary judgment was a partial final judgment from which no right to appeal existed absent a designation by the trial court. See LSA–C.C.P. arts. 1911 and

[57 So.3d 1050]

1915.⁴ We recognize that the trial court declined to designate the partial summary judgment—an interlocutory ruling—as final for purposes of an immediate appeal pursuant to LSA–C.C.P. art. 1915(B). However, after an appealable judgment is rendered in a case, the correctness of any interlocutory judgment can also be considered on appeal. Vanderbrook v. Jean, 2006–1975, p. 6 n. 4 (La.App. 1 Cir. 2/14/07), 959 So.2d 965, 968, n. 4; People of Living God v. Chantilly Corp., 251 La. 943, 947–48, 207 So.2d 752, 753 (1968). Accordingly, once the trial court signed the final judgment following the trial on the merits, Nottingham could seek review of the prior interlocutory ruling with regard to the settlement issue. Therefore, Amitech's motion to dismiss Nottingham's appeal is hereby denied.

Nottingham contends that the trial court, by focusing solely on whether Cormier possessed express authority to enter into the agreement, failed to consider whether Nottingham could enforce the settlement agreement against Amitech based upon the theory of apparent authority. The judicial understanding of the principles of apparent authority are analogous to the concept of putative mandatary set forth in LSA–C.C. art. 3021. See Walton Constr. Co., L.L.C. v. G.M. Horne & Co., Inc., 07–0145, p. 12 (La.App. 1 Cir. 2/20/08), 984 So.2d 827, 836. Under this theory, an agent is empowered to bind his principal in a transaction with a third person when the principal has made a manifestation to the...