799 F.2d 194 (5th Cir. 1986), 85-3514, Fischbach and Moore, Inc. v. Cajun Elec. Power Co-op., Inc.

Docket Nº:85-3514.
Citation:799 F.2d 194
Party Name:FISCHBACH AND MOORE, INC., Plaintiff-Appellant, v. CAJUN ELECTRIC POWER COOPERATIVE, INC., et al., Defendants-Appellees.
Case Date:September 10, 1986
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 194

799 F.2d 194 (5th Cir. 1986)

FISCHBACH AND MOORE, INC., Plaintiff-Appellant,


CAJUN ELECTRIC POWER COOPERATIVE, INC., et al., Defendants-Appellees.

No. 85-3514.

United States Court of Appeals, Fifth Circuit

September 10, 1986

Page 195

Wickwire, Gavin & Gibbs, Jon M. Wickwire, David M. Latzko, Daniel E. Toomey, Vienna, Va., McCollister, McCleary, Fazio & Holliday, William C. Shockey, Baton Rouge, La., for plaintiff-appellant.

Michael R. Allweiss, Alan D. Ezkovich, New Orleans, La., for amicus.

Schwab & Walter, John W. Schwab, Baton Rouge, La., for defendants-appellees.

Appeal from the United States District Court for the Middle District of Louisiana.

Before GEE, POLITZ and GARWOOD, Circuit Judges.


POLITZ, Circuit Judge:

In this Louisiana diversity jurisdiction case, Fischbach and Moore, Inc. appeals an adverse summary judgment dismissing its claims against Cajun Electric Power Cooperative, Inc. and Burns & Roe, Inc. For the reasons assigned, we reverse and remand.


In 1981, Fischbach undertook to furnish the labor, material, and equipment required for certain electrical work on a coal-fired electrical generating plant being constructed for Cajun, pursuant to drawings and specifications prepared by Burns & Roe. The contract, denominated G3-82, consisted of two agreements, one for the equipment and the other for the construction work. Fischbach's work was substantially complete on April 11, 1983 when Cajun terminated the contract.

During the summer and fall of 1983 Cajun and Fischbach discussed the sum each believed due under the contract. At that time they were about $5.5 million apart. Negotiations intensified over the next nine months. Fischbach advanced eight claims. By May 1984 three were settled and paid. Cajun rejected the remaining five, Fischbach's claims for: (1) acceleration costs, $2,035,643.67; (2) premium time, $513,709.06; (3) vendor support and start-up, $314,531.01; (4) termination costs, $130,419.10; and (5) interest, $166,128.44. These claims totalled in excess of $3 million. In addition to the three claims which were paid and the five which were rejected, the parties agreed on three items which were not part of the eight claims, namely, Fischbach's demand for the remaining retention sum under the contract, and its demand for the value of certain conduit and scrap cable.

The retention sum was undisputed, $1,052,951.45, and at a meeting on May 10, 1984, the parties agreed to payment of $39,320.25 for the cable and conduit. In accordance with their agreement, on July

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12, 1984, Fischbach submitted two invoices, number 35132 for "remaining retention on Contract G3-82," in the amount of $1,052,951.45, and invoice number 35130 for "conduit," $30,320.25, and "scrap cable," $9,000. These two invoices totalled $1,092,271.70.

By letter dated July 31, 1984, Cajun sent a check to Fischbach for $1,092,271.71, one penny more than the total of the two invoices. The stub attached to the check described the two July 12, 1984 invoices by date, number, and the exact agreed amount. These references appeared immediately below the notation: "The attached check is in payment of items described below." Nothing other than the two invoices was listed.

The transmittal letter contained two different statements about the enclosed check. As they appear in the letter, these stated:

The attached check includes the final retention and the agreed upon amount for conduit remaining in bank and F & M [Fischbach] scrap sold by Cajun.

The check constitutes full and final settlement of any obligation or claims which F & M has asserted or may assert in the future concerning Contract G3-82.

Fischbach received the letter and enclosed check, which it deposited on August 6, 1984. On that same day Fischbach wrote Cajun stating:

We have received your check No. 34529 dated July 27, 1984 in the amount of $1,092,271.71.

As stated on the stub attached to the check, this amount represents only the total amounts due for retention on Contract G3-82 and for the cable scrap and the conduit remaining in the bank. Since this amount is currently due and payable from CEPCO [Cajun] to Fischbach and Moore, Inc., we are accepting the check in satisfaction of these obligations. We do not, however, accept this check in satisfaction of any other claims by Fischbach and Moore, Inc. against CEPCO.

* * *

* * *

Since CEPCO's check includes only the correct amount due for retention, scrap and conduit, the check cannot possibly constitute "full and final settlement" of the other previously submitted but as yet unpaid claims.

Fischbach and Moore, Inc. accepts CEPCO's check as payment only of the amounts and invoices stated on the check stub, and with a full reservation of Fischbach and Moore, Inc. rights to payment of...

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