Southern Elec. v. Utilities Bd. of City of Foley, Civil Action No. 07-0575-CG-C.
| Citation | 643 F.Supp.2d 1302 |
| Decision Date | 05 February 2009 |
| Docket Number | Civil Action No. 07-0575-CG-C. |
| Parties | SOUTHERN ELECTRIC CORPORATION, Plaintiff, v. UTILITIES BOARD OF the CITY OF FOLEY, ALABAMA, d/b/a Riviera Utilities, et al., Defendants. Utilities Board of the City of Foley, Alabama d/b/a Riviera Utilities, Defendant/Counter-Plaintiff, v. Southern Electric Corporation, Plaintiff/Counter-Defendant. |
| Court | United States District Courts. 11th Circuit. United States District Court of Southern District of Alabama |
Mark D. Herbert, Adam Stone, Watkins Ludlam Winter & Stennis, PA, Michael Jason Clayton, Jackson, MS, for Plaintiff/Counter-Defendant.
Erin Brook Fleming, Thomas O. Gaillard, III, Galloway, Wettermark, Everest, Rutens & Gaillard, LLP, Annie J. Dike, John C. Pipes, Helmsing, Leach, Herlong, Bryan Daniel Smith, Justin W. Parsons, Philip H. Partridge, Partridge Smith P.C., Mobile, AL, for Defendants.
CALLIE V.S. GRANADE, Chief Judge.
This matter comes before the court on the motions for summary judgment and partial summary judgment filed by Southern Electric Corporation ("SEC") against Utilities Board of the City of Foley, Alabama, d/b/a/ Riviera Utilities ("Riviera"), and by Riviera against SEC. (Docs. 118, 123, and 128). This court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332. No party disputes personal jurisdiction or venue.
SEC brought this diversity action against defendants, Riviera and Custom Engineering Solutions ("CES"). (Doc. 1). Riviera filed a counterclaim against SEC. (Doc. 10). The court will address the motions for summary judgment between CES and SEC in a separate order.
According to the complaint, Riviera hired SEC to provide labor and equipment for the installation of power lines. (Doc. 1, p. 2, ¶ 8). The contract between Riviera and SEC saddled Riviera with the duties of identifying locations to install the utility poles, providing plans for installing power lines, and furnishing all of the materials necessary to complete the project. (Doc. 1, p. 2, ¶ 8).
Riviera, in turn, hired CES to designate where SEC should install the utility poles to which the power lines would be attached. (Doc. 1, pp. 2-3, ¶ 9). The complaint alleges that the locations that CES designated for installation of the utility poles conflicted with a gas line and a fiber optic cable. (Doc. 1, p. 3, ¶ 11). In order to find suitable locations to install the utility poles, CES had to conduct additional surveys, delaying SEC's completion of the project. (Doc. 1, p. 3, ¶ 11). Relocating the utility poles required certain adjustments, which in turn forced SEC to supply additional manpower. (Doc. 1, p. 3, ¶ 12).
In addition to the delays allegedly caused by having to adjust the locations for installation of the utility poles, SEC ran into difficulty in obtaining the materials it needed to complete the job. (Doc. 1, p. 3, ¶ 13). Riviera allegedly did not furnish the materials in a timely manner. Rather, many of the materials were stored roughly 27 miles from the location where they were to be used. (Doc. 1, p. 3, ¶ 13). Other materials were not "in stock," resulting in delay and requiring additional labor, or man hours, from SEC. (Doc. 1, p. 3, ¶ 13).
The complaint brings three counts. The first count is for breach of contract against Riviera. SEC alleges that Riviera's purported failure to provide materials in a timely fashion and Riviera's change in the plan drawings for installation of the utility poles—which Riviera did through its agent, CES—constitutes a breach of contract. (Doc. 1, p. 4, ¶¶ 16-18). Count Two seeks penalty interest pursuant to ALA. CODE § 8-29-3 (1975), because SEC was not paid within 30 days after it requested payment. (Doc. 1, p. 5, ¶¶ 19-20). Count Three alleges that CES breached a duty of care it owed to SEC when it initially indicated locations for installing the utility poles that conflicted with underground utilities in the area. (Doc. 1, p. 5, ¶¶ 21-23).
According to the counterclaim, SEC was contractually required to complete the work outlined in the contract documents and specifications for the project by a date certain. (Doc. 10, p. 8, ¶ 2). SEC allegedly breached its contract with Riviera when it did not perform its work properly or on time. (Doc. 10, p. 8, ¶ 3). Riviera seeks liquidated damages or, in the alternative, compensatory damages for breach of contract. (Doc. 10, pp. 8-9, ¶¶ 4-5).
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED.R.CIV.P. 56(c). The movant bears "the initial burden to show the district court, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial." Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.1991).
As succinctly stated by the Eleventh Circuit:
A factual dispute is genuine only if "a reasonable jury could return a verdict for the nonmoving party." United States v. Four Parcels of Real Property, 941 F.2d 1428, 1437 (11th Cir.1991) (citation omitted). The moving party bears the burden of proving that no genuine issue of material fact exists. O'Ferrell v. United States, 253 F.3d 1257, 1265 (11th Cir.2001). In evaluating the argument of the moving party, the district court must view all evidence in the light most favorable to the non-moving party, and resolve all reasonable doubts about the facts in its favor. Burton v. City of Belle Glade, 178 F.3d 1175, 1187 (11th Cir.1999). Assuming the moving party has met its burden, the non-movant must then show a genuine dispute regarding any issue for which it will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
Info. Sys. and Networks Corp. v. City of Atlanta, 281 F.3d 1220, 1224-25 (11th Cir. 2002). The purpose of summary judgment "is to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587, 592 (11th Cir.1995), cert. denied sub nom. Jones v. Resolution Trust Corp., 516 U.S. 817, 116 S.Ct. 74, 133 L.Ed.2d 33 (1995).
In opposing a motion for summary judgment, "a party may not rely on his pleadings to avoid judgment against him." Ryan v. Int'l Union of Operating Engrs., Local 675, 794 F.2d 641, 643 (11th Cir.1986). There is no burden upon the district court to distill every potential argument that could be made based upon the materials before it on summary judgment. Blue Cross & Blue Shield v. Weitz, 913 F.2d 1544, 1550 (11th Cir.1990). Rather, the onus is upon the parties to formulate arguments; grounds alleged in the complaint but not relied upon in summary judgment are deemed abandoned. Road Sprinkler Fitters Local Union No. 669 v. Indep. Sprinkler Corp., 10 F.3d 1563, 1568 (11th Cir.1994)(citing Lazzara v. Howard A. Esser, Inc., 802 F.2d 260, 269 (7th Cir.1986)), cert. denied, 513 U.S. 868, 115 S.Ct. 189, 130 L.Ed.2d 122 (1994).
Id. at 599. The "complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The failure by the nonmoving party to make a sufficient showing on an essential element of its action entitles the moving party to judgment as a matter of law. Id. at 323, 106 S.Ct. 2548.
SEC's motion for summary judgment argues that the liquidated damages provision in the contract between SEC and Riviera is unenforceable. (Doc. 118). As such, SEC seeks judgment on Riviera's claim for liquidated damages, which would leave Riviera with the burden of establishing actual damages for breach of contract. The liquidated damages provision at issue provides as follows:
It is mutually agreed between the parties hereto that time is the essence of this CONTRACT, and in the event the construction of the Work is not completed within the time specified in the Proposal, it is agreed that from the compensation otherwise to be paid to the CONTRACTOR, the OWNER may retain the sum of $500 per day for each day thereafter, Sundays and holidays included, that the Work remains uncompleted.
(Doc. 118-2, p. 1; Doc. 158-2, p. 7).
The Supreme Court of Alabama set out the relevant law in Camelot Music, Inc. v. Marx Realty & Improv. Co., 514 So.2d 987 (Ala.1987).
It is true in Alabama that, because penalty provisions are void as against public policy, "Courts ... are disposed to lean against any interpretation of a contract which will make the provision one for liquidated damages and, in all cases of doubtful intention, will pronounce the stipulated sum a penalty." In Alabama, liquidated damages are a sum to be paid in lieu of performance, while a penalty is characterized as a security for the performance of the agreement or as a punishment for default. The courts generally identify three criteria by which a valid liquidated damages clause may be distinguished from a penalty. First, the injury caused by the breach must be difficult or impossible to accurately estimate; second, the parties must intend to provide for damages rather than for a penalty; and, third, the sum stipulated must be a reasonable pre-breach estimate of the probable loss. Determining whether a liquidated damages provision is valid is a question of law to be determined by the trial court based on the facts of each case.
Id. at 990 (alteration in original; citations omitted). See also Milton Constr. Co. v. State Highway Dep't, 568 So.2d 784, 790-91 (Ala.1990) (applying Camelot Music) overruled in part on other grounds by Ex parte Ala. DOT, 978 So.2d 17, 23 (Ala. 2007); Sutton v. Epperson, 631...
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