92-1103 La.App. 5 Cir. 1/12/94, Rivnor Properties v. Herbert O'Donnell, Inc.
| Citation | 633 So.2d 735 |
| Parties | 92-1103 La.App. 5 Cir |
| Decision Date | 12 January 1994 |
| Court | Court of Appeal of Louisiana — District of US |
Warren A. Goldstein, David Robinson, New Orleans, for plaintiffs-appellants Riverside Life Ins. Co., Rivnor Properties and Northwestern Mut. Life Ins. Co., individually and in their capacities as assignees of (1) Herbert O'Donnell, Inc. and its insurers, Maryland Cas. Co., American Gen. Corp. and Republic Ins. Co., and (2) George A. Saunders and his insurer, Continental Cas. Co.
Henri Wolbrette, Arthur H. Leith, McGlinchey Stafford Lang, New Orleans, for defendant-appellant Belou & Co. Acoustics, Inc.
John A. Stewart, Jr., Hulse, Nelson & Wanek, New Orleans, for defendants-appellants George A. Saunders and Continental Cas. Co.
Craig J. Cimo, Gretna, for defendant-appellant Parish of Jefferson.
Gerard T. Gelpi, C. Gordon Starling, Jr., James D. Bercaw, Gelpi, Sullivan, Carroll & Gibbens, New Orleans, for defendant-appellee Republic Ins. Co.
Samuel M. Rosamond, III, Edward A. Rodrigue, Jr., Boggs, Loehn & Rodrigue, New Orleans, for defendant-appellee Ceco Corp.
Stephen K. Conroy, Metairie, for defendant-appellee Howmet Aluminum Corp. and Royal Ins. Co.
Leon A. Crist, Metairie, for defendant-appellee Republic Roofing Co.
David F. Bienvenu, Renee Summer Melchiode, Hoffman, Sutterfield, Ensenat & Bankston, New Orleans, for defendant-appellee Maryland Cas. Co.
Bernard J. Williams, Duplass, Witman, Zwain & Williams, Metairie, for defendant-appellee Aetna Cas. & Sur. Co.
Before KLIEBERT, GAUDIN and DUFRESNE, JJ.
[92-1103 La.App. 5 Cir. 1] KLIEBERT, Chief Judge.
This appeal resulted from multi-party litigation surrounding the alleged defective design and construction of a three-story office building in Metairie, Louisiana. Following a lengthy bench trial, the trial court rendered judgment finding numerous defects in the building; assessing liability among the general contractor, architect, and numerous subcontractors; and setting monetary damages suffered by the building owner at $1,994,946.00. 1 Additionally, the trial court rendered judgment concerning the interpretation of a number of insurance policy provisions. 2 For the following reasons, we reverse in part, modify, and, as modified, affirm.
In April 1981 Riverside Life Insurance Company (hereafter Riverside), as owner, and Herbert O'Donnell, Inc. (hereafter O'Donnell), as contractor, entered into an agreement for the design and construction of a three-story office building in Metairie, Louisiana (hereafter Honeywell Building). The contract provided for O'Donnell to construct the building for a specified price. The Honeywell Building was substantially complete [92-1103 La.App. 5 Cir. 2] in September 1981. Thereafter, on December 22, 1982, Riverside and Northwestern Mutual Life Insurance Company (hereafter Northwestern) formed a partnership, i.e., Rivnor Properties. The partnership purchased the Honeywell Building. Subsequently, Riverside sold its interest in the partnership to Northwestern. Hereinafter the term "owners" or "Rivnor" refers collectively to Rivnor, Riverside, and/or Northwestern.
In addition to the contract between Riverside and O'Donnell, O'Donnell contracted with the architect, George A. Saunders (hereinafter Saunders), for plans and specifications at a fixed price, with no contractual supervisory obligations incident to construction. O'Donnell also contracted directly with several subcontractors, who in turn, contracted with subcontractors and/or manufacturers or suppliers. There was no contract between the owners of the building and Saunders, any subcontractors, or suppliers/manufacturers.
Shortly before completion of the building and for some protracted period thereafter, the original owner, Riverside and the subsequent owners of the Honeywell Building complained to O'Donnell and Brandt Glass Company, Inc. (I. Brandt & Sons, Inc.) (hereinafter Brandt), the installer of the exterior curtain wall system of the Honeywell Building, about water leaks into the building. Over a period of approximately three years O'Donnell responded to the owners' complaints by referring the complaints primarily to Brandt, and also to Saunders (who, in turn, communicated with Howmet, the designer and fabricator of the curtain wall system) and to some of the other subcontractors. Brandt and Republic Roofing Company, Inc. (hereinafter Republic Roofing) did some patch work on the cap flashing, drilled holes in the curtain wall, and installed caulking around the building in an effort to stop the leaking. With the passage of time, the owners also complained of excessive glass breakage and discoloration, a cosmetic problem (discoloration) which occurred just below the Honeywell sign on the building.
[92-1103 La.App. 5 Cir. 3] Finding the remedial efforts unsuccessful in stopping the water leakage, the owner hired its own testing companies, and subsequently hired Ladd P. Ehlinger and Associates (Ehlinger) to determine the cause and extent of the water leakage problem in the building and to recommend methods of correcting same. Ehlinger proceeded to make an in depth examination of the causes of the water leakage into the building. During the investigation he found, in his opinion, numerous defects, and recommended solutions to remedy the alleged defects. The owners proceeded to perform the work recommended by Ehlinger.
As a result of the lack of success in the attempted repairs of the building, Rivnor filed suit in April 1985 against O'Donnell for breach of contract and express and implied warranties, praying for damages covering the cost of repairs and diminution of value of the building. O'Donnell, in turn third partied Saunders, Brandt, Republic Roofing and Howmet. Thereafter, other subcontractors, suppliers and their sureties and insurers were added as parties. In general, as other parties were brought into the litigation Rivnor amended its petition to name these parties as defendants.
The Rivnor-initiated litigation spurned claims and cross-claims against the sureties, additional subcontractors, and between claimants and/or the insureds against their insurers. Additionally, Saunders made the Parish of Jefferson a party defendant contending the Parish of Jefferson failed to comply with the duties and obligations undertaken when it passed zoning ordinances and building codes and issued building permits. In turn, the Parish reconvened against Saunders. Mechanical Construction Company of New Orleans sued its air-conditioning consulting engineer. Finally, Republic Insurance Company sued Maryland Casualty seeking contribution for a portion of the settlement reached between their insureds, and the plaintiffs-O'Donnell.
During the course of a trial covering a period of approximately one year and prior to the issuance of the trial [92-1103 La.App. 5 Cir. 4] court's judgments, the owners (Riverside, Rivnor and Northwestern) settled their differences with O'Donnell and its insurer, Maryland Casualty, and Saunders and its insurer, Continental Casualty Company, in separate agreements. These settlement agreements provided for the full reservation of the owners' rights against the non-settling defendants, and for the assignment of all other claims of O'Donnell, and Saunders, and their insurers against all other non-settling defendants. The settlement with Saunders specifically reserved Rivnor's right to contest the Continental policy provisions regarding the reduction of the policy limits for attorney's fees and expert fees incurred by Continental in defending the claims asserted against Saunders.
At the conclusion of a lengthy trial, the trial judge rendered judgment on February 8, 1990 finding:
1. O'Donnell, the general contractor, liable to the owner, for all of Rivnor's damages, losses, expenses and costs, as itemized in the judgment, for a total amount of $1,994,946.00.
2. As between O'Donnell, Saunders, and the subcontractors, the trial court found the following parties were liable to O'Donnell for the following percentages of the owners' damages, losses and expenses:
a. Saunders, Architect 25%
b. Brandt Glass, Subcontractor who furnished and installed the exterior 35%
curtain wall system (manufactured by Howmet) and the glass
(manufactured by PPG)
c. Belou and Company Acoustics, Inc., the dry wall contractor who also 25%
installed metal stud walls behind the exterior curtain wall system
at the east and west ends of the Building
and absolved the following subcontractors or designers of liability:
a. Howmet Aluminum Corporation, supplier who designed, manufactured and furnished to Brandt the patented curtain wall system used in the building;
[92-1103 La.App. 5 Cir. 5] b. Republic Roofing Company, the roofer who had installed a portion of the cap flashing;
c. Mechanical Construction of New Orleans, Inc., the installer of the air conditioning system.
The total damages awarded to the owners by the trial court amounted to $1,994,946.00 and was computed as follows:
Repairs to Honeywell Building (including costs of tests to $1,200,000.00
determine deficiencies)
Architect Fees 200,000.00
Attorney Fees 200,000.00
Expert Fees 14,500.00
Loss Rental Income-- Past $165,866.00
1989 82,933.00
1990 41,647.00
Rental Income rebated to Honeywell 90,000.00
(prime tenant)
----------------------
$380,446.00 380,446.00
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