Pellerin Const., Inc. v. Witco Corp.

Decision Date11 April 2001
Docket NumberNo. Civ.A. 00-0465.,Civ.A. 00-0465.
Citation169 F.Supp.2d 568
PartiesPELLERIN CONSTRUCTION, INC. v. WITCO CORPORATION and Fluor Enterprises, Inc. f/k/a Fluor Daniel
CourtU.S. District Court — Eastern District of Louisiana

John A. Stewart, Jr., Hulse & Wanek, Lloyd Noble Shields, Daniel Lund, III, Mark S. Senter, Stuart Glen Richeson, Shields Mott Lund, LLP, New Orleans, LA, for Plaintiff.

Dominic Joseph Gianna, John Dennis Person, Michele A. Engnath, Middleberg, Riddle & Gianna, Sherman Gene Fendler, Shannon Skelton Holtzman, Carol Welborn Reisman, Kenneth Todd Wallace, Liskow & Lewis, Sarah Ann Lowman, Helen Wynne Eikel, Middleberg, Riddle & Gianna, New Orleans, LA, for Defendants.

Hibernia National Bank c/o Brion Workman, New Orleans, LA, for Garnishee.

ORDER AND REASONS

VANCE, District Judge.

Before the Court are two motions for summary judgment by defendant Witco Corporation and defendant Fluor Daniel, Inc. to dismiss plaintiff's claims. On March 23, 2001, the Court entertained the parties' oral arguments on these motions. For the following reasons, the Court grants defendants' motions for summary judgment.

I. Background

In 1996, defendant Witco Corporation, a manufacturer of specialty chemicals, embarked upon a program to close fifteen of its facilities and to expand and modernize thirty others. To carry out this program, Witco contracted with defendant Fluor Daniel, Inc. in 1997 to provide engineering, procurement, and construction management services and to perform certain portions of the construction, including structural steel erection. Witco also appointed Fluor Daniel "as its Agent to issue contracts and to procure materials and equipment in the name of and on behalf of WITCO." (Fluor Daniel's Mem. Supp. Mot. Summ. J., Ex. B at 10, Ex. C at 3.) Under the original terms of this agreement, Witco compensated Fluor Daniel on a cost reimbursable/performance fee basis, but in the fall of 1998 the parties changed the compensation to a lump sum. (Id., Ex. B at 2; Pl.'s Mem. Opp'n Defs.' Mots. Summ. J., Ex. L.)

One of the projects on which Fluor Daniel was engaged was the relocation and upgrade of a Witco processing plant from a forty-year-old facility in Brooklyn, New York to Taft, Louisiana. This relocation involved the erection of two structures in Louisiana: a liquids processing building and a solids processing building. It also involved the erection of a raw material storage area, a finished product storage area, and an interconnecting pipe rack.

Witco published a request for proposals in which it solicited bids for the mechanical services component of this project, and plaintiff Pellerin Construction, Inc. responded with a bid to perform those services. In preparing its bid, Pellerin had access to the draft contract, forms for bids, specifications, description of work, and drawings, as well as certain other information that it requested. (Witco's Mem. Supp. Mot. Summ. J., Ex. D at 113, Ex. I at 30-33, 189-92.) It also attended a bid clarification meeting. (Fluor Daniel's Reply Mem. Supp. Mot. Summ. J., Ex. I at 117-19.) After reviewing the bids, Witco awarded the contract to Pellerin.

Fluor Daniel, acting as Witco's agent, then entered into an eight hundred page contract with Pellerin to provide mechanical services on the project for a lump sum price of $4,145,000.00. The parties anticipated that Pellerin would substantially complete its work by December 31, 1998, although the parties foresaw that some equipment would not be delivered for installation until January and February 1999. (Defs.' Joint Resp. Pl.'s Post-Hr'g Submission, Ex. A at 2.) Pellerin's services included the installation of equipment supplied by Fluor Daniel or Witco, preparation of piping isometric drawings, pipe fabrication, and the installation of piping in the liquids building, the solids building, and the pipe rack. (Def. Fluor Daniel's Mem. Supp. Mot. Summ. J., Ex. A; Pl.'s Mem. Opp'n Defs.' Joint Mot. Strike, Ex. A [hereinafter "Contract"], Part I.) Although the effective date of the contract was August 7, 1998, Pellerin did not sign the contract until October 15, 1998. (Contract at 2.) The terms of the contract are governed by Louisiana law. See LA.REV. STAT. § 9:2779.

The contract anticipated various construction difficulties and incorporated provisions addressing incomplete engineering drawings, the sequence and scheduling of work, crowded work conditions, delays, late delivery of equipment and materials, and changes in the scope of work. Specifically, Part I, articles 1.1 and 3.3.12 and Part III, article 5.1 acknowledge the incomplete project engineering. Article 1.1 requires Pellerin to verify the routing of piping plan layouts because "the location of equipment, structural steel, piping and electrical installations ... may or may not be shown on drawings provided by [Fluor Daniel]." Article 3.3.12 states: "Several of the listed drawings are drawings of existing equipment that are being relocated from the Brooklyn N.Y. facility to the new facility at Taft. Some of these drawings are two decades old and are not totally readable." Article 5.1 notes that "[t]he specifications and drawings may not be complete in every detail." Notwithstanding this incomplete engineering, Pellerin represents in Part III, article 3.0 that regardless of any negligence by Fluor Daniel or Witco, it will perform the work for the contract price without recourse to Fluor Daniel or Witco:

[Pellerin] has carefully examined the drawings and specifications for the Work and has fully acquainted itself with all other conditions relevant to the Work, and its surroundings, and [Pellerin] assumes the risk of such conditions and will, regardless of such conditions, the expense, difficulty of performing the Work, or negligence, if any, of [Fluor Daniel] or [Witco], fully complete the Work for the stated Contract Price without further recourse to [Fluor Daniel] or [Witco]. Information on the site of the Work and local conditions at the site furnished by [Fluor Daniel] or [Witco] in specifications, drawings or otherwise is not guaranteed by [Fluor Daniel] or [Witco] and is furnished only for the convenience of [Pellerin].

In Part III, articles 10.1, 10.2, and 10.3, the parties give defendants the right to coordinate and schedule the work to meet the needs of the overall project schedule:

10.1 [Fluor Daniel] shall schedule and coordinate the details of the Work being performed to meet the schedule requirements set forth in PART I of this Contract ....

10.2 ... In the event [Pellerin's] performance of the Work is not in compliance with the schedule established for such performance, [Fluor Daniel] may, in writing, require the Contractor to submit its plan for schedule recovery, or specify in writing the steps to be taken to achieve compliance with such schedule, and/or exercise any other remedies under this Contract. [Pellerin] shall thereupon take such steps as may be directed by [Fluor Daniel] or otherwise necessary to improve its progress without additional cost to [Fluor Daniel] or [Witco].

10.3 [Pellerin] recognizes that [Fluor Daniel], [Witco], other contractors and subcontractors may be working concurrently at the jobsite. [Pellerin] agrees to cooperate with [Fluor Daniel], [Witco] and other contractors so that the project as a whole will progress with a minimum of delays. [Fluor Daniel] and [Witco] reserve the right to direct [Pellerin] to schedule the order of performance of its Work in such a manner as not to interfere with the performance of others.

Part I, article 12.2 further emphasizes that Pellerin will have to work in an operating plant and that it agrees to allow for interruptions in its work as required by other contractors or operating plant personnel to benefit project progress or continuing operations of the existing plant:

Contractor is advised that this work will be performed adjacent to and/or in an operating plant with other Contractors present. Contractor shall cooperate with the operating plant and other Contractors and allow for occasional interruptions in the work, required either by other Contractors or operating plant personnel, so as to benefit the overall progress of the project or to ensure the safe and continuing operations of the existing plant.

In addition, under Part I, article 3.6.10, the parties agree that delays due to congestion at the worksite will not be a basis for claims by Pellerin:

Considerable congestion will exist in many areas of the job, and must be allowed for in planning of work activities. Others may be performing work in the immediate area of the jobsite which shall require coordination to limit delays in performing work. Extent of congestion is not intended to be represented in drawings. Delays due to congestion shall not be a basis for claims by [Pellerin].

Two other provisions also address delays — Part I, article 3.3.1 and Part III, article 12.3. Article 3.3.1 states that late deliveries of some equipment will "inevitably" occur and that Pellerin's installation plans will be "flexible" in dealing with this situation:

[Pellerin] shall maintain a flexible plan of equipment installation since some of the equipment will inevitably arrive in the field later than the target delivery dates. [Fluor Daniel] will maintain and issue a current delivery list and will notify [Pellerin] as soon as possible of the expected delivery dates of the equipment.

In article 12.3, Pellerin waives damages for delay: "[Pellerin] shall not be entitled to, and hereby expressly waives recovery of, any damages suffered by reason of delays of any nature, and extension of time shall constitute the sole liability of [Fluor Daniel] and [Witco] and [Pellerin's] sole remedy for delays."

The contract also provides that the "Scope of Work shall be subject to change by additions, deletions or revisions thereto by [Fluor Daniel]." (Contract, Part III, art. 15.1.) The remainder of article...

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