Driver Pipeline Co. v. Cadeville Gas Storage, LLC

• Decision Date: 01 October 2014
• Docket Number: No. 49,375–CA.,49,375–CA.
• Parties: DRIVER PIPELINE COMPANY, INC., Plaintiff–Appellant v. CADEVILLE GAS STORAGE, LLC, Defendant–Appellee.
• Court: Court of Appeal of Louisiana — District of US

150 So.3d 492

DRIVER PIPELINE COMPANY, INC., Plaintiff–Appellant
v.
CADEVILLE GAS STORAGE, LLC, Defendant–Appellee.

No. 49,375–CA.

Court of Appeal of Louisiana, Second Circuit.

Oct. 1, 2014

Reversed and remanded.

[150 So.3d 493]

Shotwell, Brown & Sperry, Monroe, By: George Wear, Jr., C.A. Martin, III, for Appellant.

Jones, Walker LLP By: Joshua A. Norris, for Appellee.

Before LOLLEY, PITMAN and GARRETT, JJ. GARRETT, J.

The plaintiff, Driver Pipeline Company, Inc. (“Driver”), appeals from the grant of a partial summary judgment in favor of the defendant, Cadeville Gas Storage, LLC (“Cadeville”), dismissing several of Driver's claims. For the following reasons, we reverse and remand to the trial court for further proceedings.

FACTS

On November 9, 2012, Driver and Cadeville entered into a contract for Driver to construct natural gas pipelines and related facilities in connection with a natural gas storage facility owned by Cadeville in Ouachita Parish. The contract price was $5,430,130. Cadeville's obligations included furnishing the actual pipe and all necessary permits and licenses. The contract set forth the specific number of feet of pipeline to be installed and other materials included in the contract price to be furnished

[150 So.3d 494]

by Driver. The work was to be substantially completed by February 1, 2013, and the final completion date was February 28, 2013.

Driver was not able to complete the work by the scheduled deadlines. Driver contended that the delay was caused by Cadeville's failures to timely furnish materials it was required to provide, to furnish suitable materials in some instances, and to timely acquire all necessary permits as required by the contract.

In April 2013, Driver submitted several change orders to Cadeville totaling more than $3 million. Some of the work represented by the change orders was done by Driver in January 2013. Cadeville refused to approve and pay the change orders.

On May 31, 2013, Driver filed the present suit against Cadeville. Driver alleged that Cadeville breached the contract by failing to provide timely, complete, and accurate engineering drawings and alignment sheets; failing to provide materials it was obligated to provide; failing to deliver pipe in accordance with the specifications of the contract; failing to notify Driver when Cadeville finally obtained the materials it was obligated to provide; making changes in the specifications of the surface facilities covered by the contract; requiring additional erosion control measures beyond the scope of the original contract; instructing Driver to prematurely demobilize for a federal inspection; failing to obtain permits to enter and exit public roads at the most convenient locations; failing to comply with the terms of the contract resulting in Driver and its subcontractors having to demobilize and remobilize during the course of the project; failing to compensate Driver for accelerations in the schedule necessitated by Cadeville's failure to provide materials required by the contract; failing to have subcontractors under Cadeville's control perform their work properly; and refusing to execute change orders for extra work and materials required by Cadeville's default in its obligations. Driver alleged that, according to the extra charges and change orders caused by Cadeville's default in its obligations, Cadeville owed $4,042,536.95 and an unbilled retention of $3,037.10, for a total claim of $4,045,574.05. Driver sought to recover this amount, along with legal interest and attorney fees.

On July 11, 2013, Cadeville answered the petition and filed a reconventional demand, claiming that Driver breached the contract by not reaching substantial completion on the date specified, failing to provide prompt notice of change orders, charging for items that should have been identified in the bid process, denying Cadeville the right to inspect and/or audit Driver's books or records of subcontractors as provided in the contract, failing to employ only competent and skilled supervisors and forepersons, and failing to perform all work in a good and workmanlike manner. Cadeville claimed that it sustained additional costs and damages caused by Driver's failures under the contract. On September 6, 2013, Cadeville filed a first amended and supplemental answer and reconventional demand.

On September 16, 2013, Cadeville filed the motion for partial summary judgment. The motion sought to dismiss with prejudice Driver's claims related to disputed change orders. Cadeville argued that the parties specified in their contract that change orders were highly discouraged and that prior written approval was necessary before changes could be implemented. Cadeville contended that Driver ignored the terms of the contract and on April 1, 2013, submitted seven change orders for which Cadeville's prior written approval was not obtained:

Change Order 17	$ 16,341.00	2514' Additional Silt Fence
Change Order 18	$ 4,132.00	285 Hay Bales
Change Order 19	$ 33,300.00	Additional 24? River Weights
Change Order 20	$ 120,750.00	Pierce to Accelerate Schedule
Change Order 21	$ 188,926.18	Jones Brothers Trucking Extra Costs
Change Order 22	$ 131,600.00	376 Additional Mats
Change Order 23	$ 22,944.00	24 Additional 24? Welds

[150 So.3d 495]

On April 12, 2013, Driver submitted four more change orders:

Change Order 24	$ 358,759.21	Blue Fin Charges
Change Order 25	$2,045,877.00	Driver Acceleration
Change Order 26	$ 132,480.00	Pierce to accelerate schedule
Change Order 27	$ 120,689.60	Pierce to accelerate schedule

Cadeville contended the contract required that Driver provide a cost estimate and obtain written approval from Cadeville before doing any additional work or using additional materials. Because Driver did not comply with the requirements of the contract concerning change orders, Cadeville argued it was entitled, as a matter of law, to a partial summary judgment dismissing with prejudice Driver's claims regarding the 11 change orders.

The parties were also embroiled in unresolved discovery disputes. Driver filed a motion to compel discovery on November 12, 2013, and an opposition to the motion for partial summary judgment on November 25, 2013. Hearings on both motions were held on December 4, 2013. Driver's motion to compel was argued first and was granted.¹ The trial court then granted partial summary judgment in favor of Cadeville, dismissing Driver's claims as to Change Orders 17–27. The trial court adopted Cadeville's position that there could be no oral modification of the agreement. The judgment was certified as an appealable final judgment.

Driver appealed, urging two separate issues: (1) the trial court should not have considered the motion for partial summary judgment on the same date that it granted the motion to compel discovery; and (2) the trial court erred in granting the motion for partial summary judgment. We will address the second argument first. Because we find that the trial court erred in granting the motion for partial summary judgment, we pretermit discussion of the first issue.

CHANGE ORDERS AND SUMMARY JUDGMENT

Driver argues that the trial court erred in granting the motion for partial summary judgment as to the “adder” and “extra work” change orders, as well as for the “extra cost” change orders, because there are genuine issues of material fact as to

[150 So.3d 496]

whether, under the various terms of the contract, Cadeville was required to pay for these items. These arguments have merit.

Legal Principles

A motion for summary judgment is a procedural device used when there is no genuine issue of material fact for all or part of the relief prayed for by a litigant. Samaha v. Rau, 2007–1726 (La.2/26/08), 977 So.2d 880; Amos v. Crouch, 46,456 (La.App.2d Cir.6/29/11), 71 So.3d 1053; Carter Enterprises, LLC v. Scott Equipment Co., LLC, 46,862 (La.App.2d Cir.4/11/12), 91 So.3d 1134. Summary judgment procedure is favored and is designed to secure the just, speedy and inexpensive determination of actions. La. C.C.P. art. 966(A)(2); Finley v. Racetrac Petroleum, Inc., 48,923 (La.App.2d Cir.4/9/14), 137 So.3d 193; Jenkins v. Willis Knighton Med. Ctr., 43,254 (La.App.2d Cir.6/4/08), 986 So.2d 247, writ not cons., 2008–1507 (La.10/10/08), 993 So.2d 1273. Appellate courts review summary judgments de novo, under the same criteria that govern a district court's consideration of whether summary judgment is appropriate. Costello v. Hardy, 2003–1146 (La.1/21/04), 864 So.2d 129; Finley v. Racetrac Petroleum, Inc., supra; Jenkins v. Willis Knighton Med. Ctr., supra. A court must grant a motion for summary judgment if the pleadings, depositions, answers to interrogatories, and admissions, together with the affidavits, if any, admitted for the purposes of the motion for summary judgment, show that there is no genuine issue of material fact, and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(B); Finley v. Racetrac Petroleum, Inc., supra. A fact is material if its existence or nonexistence may be essential to the plaintiff's cause of action under the applicable theory of recovery. Amos v. Crouch, supra; Carter Enterprises, LLC v. Scott Equipment Co., LLC, supra.

The moving party bears the burden of proof. However, if the movant will not bear the burden of proof at trial on the matter before the court on the motion for summary judgment, the movant is not required to negate all essential elements of the adverse party's claim, action, or defenses; he need only point out an absence of factual support for one or more essential elements of the adverse party's claim, action or defenses. If the adverse party then fails to produce factual support sufficient to establish that he will be able to satisfy his evidentiary burden at trial, there is no genuine issue of material fact and summary judgment is appropriate. La. C.C.P. art. 966(C)(2); Carter Enterprises, LLC v. Scott Equipment Co., LLC,...