Pacific Lining Co., Inc. v. Algernon-Blair Const. Co., ALGERNON-BLAIR
| Decision Date | 22 June 1987 |
| Docket Number | Nos. 85-3740,86-3025,ALGERNON-BLAIR,s. 85-3740 |
| Citation | 819 F.2d 602 |
| Parties | PACIFIC LINING CO., INC., Plaintiff-Appellee, Cross-Appellant, v.CONSTRUCTION COMPANY and United States Fidelity & Guaranty Company, Defendants-Appellants, Cross-Appellees. AESCO STEEL, INC., Plaintiff-Appellee, v. J.A. JONES CONSTRUCTION COMPANY and Fidelity & Deposit Company of Maryland, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Donald A. Meyer, Shushan, Meyer, Jackson, McPherson & Herzog, New Orleans La., for Algernon-Blair Const. Co. and U.S. Fidelity & Guar. Co.
William S. Marshall, Jr., New Orleans, La., for Pacific Lining Co., Inc.
William W. Messersmith, III, Terrence L. Brennan, Deutsch, Kerrigan & Stiles, New Orleans, La., for J.A. Jones Const. Co. and Fidelity & Deposit Co. of Maryland.
H. Bruce Shreves, Simon, Peragine, Smith & Redfearn, New Orleans, La., for Aesco Steel, Inc.
Appeals from the United States District Court for the Eastern District of Louisiana.
Before THORNBERRY, JOHNSON and WILLIAMS, Circuit Judges.
These consolidated cases involve claims by subcontractors against general contractors with the Louisiana World Exposition, the 1984 World's Fair in New Orleans. The Exposition became bankrupt and was not able to pay in full the general contractors. In turn, the general contractors, Algernon-Blair Construction Company and J.A. Jones Construction Company, refused to make final payments to their subcontractors, asserting that under Louisiana law the contract clauses involved were "pay when paid" clauses which constituted suspensive conditions to obligations arising under the contracts. The subcontractors brought suit against the contractors and their bonding companies for full payment of the subcontracts. We held that the bonding companies were not liable to the subcontractors in the absence of liability of the contractors. We then certified to the Louisiana Supreme Court the question whether the "pay when paid" contract clause provisions contained in the subcontracts created suspensive conditions to the obligations arising under the contracts.
The Louisiana Supreme Court denied our certification, 506 So.2d 505, but on the same day decided two other cases resolving the same issue. The Court cited its decision in those two cases as controlling these two cases we had sought to certify. We now decide the two cases before us in accordance with that controlling Louisiana precedent.
The Louisiana Supreme Court held that the "pay when paid" clauses constituted only provisions having to do with time of payment of the obligations. It specifically held that they do not...
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