T.L. James & Co., Inc. v. Traylor Bros. Inc.

• Decision Date: 02 July 2002
• Docket Number: No. 00-30773.,00-30773.
• Citation: 294 F.3d 743
• Parties: T.L. JAMES & COMPANY, INC., Plaintiff, v. TRAYLOR BROS. INC.; et al., Defendants, Traylor Brothers, Inc., Defendant-Third Party Plaintiff-Appellant, v. Board of Commissioners of the Port of New Orleans, Defendant-Third Party Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 743

294 F.3d 743

T.L. JAMES & COMPANY, INC., Plaintiff, v. TRAYLOR BROS. INC.; et al., Defendants, Traylor Brothers, Inc., Defendant-Third Party Plaintiff-Appellant, v. Board of Commissioners of the Port of New Orleans, Defendant-Third Party Defendant-Appellee.

No. 00-30773.

United States Court of Appeals, Fifth Circuit.

July 2, 2002.

Robert E. Winn (argued), Sharon Cormack Mize, Sessions, Fishman & Nathan, New Orleans, LA, for Traylor Brothers, Inc.

Richmond M. Eustis (argued), Eustis, O'Keefe & Gleason, New Orleans, LA, for Board of Com'rs of Port of New Orleans.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before EMILIO M. GARZA, BENAVIDES and STEWART, Circuit Judges.

CARL E. STEWART, Circuit Judge:

Plaintiff-Appellant, Traylor Brothers, Inc. ("Traylor"), appeals from the district court's final judgment and order denying Traylor additional compensation for alleged extra work performed pursuant to a construction contract between Traylor and Defendant-Appellee, the Board of Commissioners of the Port of New Orleans ("Port"). For the reasons stated herein, we affirm.

FACTS AND PROCEDURAL BACKGROUND

On April 6, 1994, the Port announced the Nashville Avenue Terminal Complex Wharf and Shed C project ("Project") and solicited bids nationwide. The work involved (1) driving piles both in the Mississippi River and on land, (2) laying a concrete deck on top of the piles, and (3) building a large terminal shed on top of the deck with railroad tracks and a large truck loading area. Drainage and ancillary services for plumbing, electricity, portable water, and fire protection were also required. The Port provided a set of contract documents ("Bid Package") for all prospective bidders, which included the plans and specifications for the Project. The documents also advised the bidders that there were "unknown infrastructures" at the site and that there were "numerous steel and timber piles removed to the approximate existing mudline in the area of the required dredging."¹ The Port agreed to compensate the contractor up to $100,000 for "removal, relocation, or for reconstruction of [unknown] infrastructures encountered during the construction phase which were not indicated or shown, or differs substantially from the contract document." The Port defined "unknown infrastructures" as "any man-made objects encountered during the required work excluding objects and materials indicated on the Contract Drawings and/or reasonably known by the Contractor through a pre-bid inspection of the site which conflict with new construction." (emphasis added). For a more detailed map of the area, the bidders were referred to the Port's maps and archives room. The documents also provided that any costs incurred due to cutting off piles were to be the responsibility of the bidder. After visiting the construction site, Traylor submitted the lowest bid and was awarded the contract.² Construction was to begin on July 11, 1994, and was to be completed on January 31, 1996. If the Project was not completed timely, the contract provided for liquidated damages in the amount of $2,000 for each day of delay.

Traylor subcontracted with T.L. James & Company ("TL") to do the dredging work for the Project. Shortly after construction commenced, Traylor began to encounter a significant amount of obstructions which Traylor maintains were not evidenced in the plans and specifications for the job. It contends that these obstructions discovered during the dredging work performed by TL, and during Traylor's pile driving work, caused a "ripple effect" and set off delays, which impacted the entire Project. Traylor further alleges that prior to inviting bids, the Port had information regarding these latent obstructions including blue prints, drawings, and overlays, which it failed to produce prior to accepting Traylor's bid. The largest problem encountered was the existence of a concrete slab in the middle of the dredge site. The Port was informed of the slab on December 22, 1994 and on March 31, 1995, it was removed by an outside subcontractor. Because of the delay in removing the obstruction, TL demobilized and left the site on March 14, 1995. However, TL later returned to the site and completed the dredging on September 18, 1995. The Project was eventually finished in March of 1997, over a year after the expected completion date.

TL brought suit against Traylor and its surety Aetna Casualty and Surety Company ("Aetna"), Traylor's insurer, in state court seeking additional costs incurred due to the delay in dredging. As a result, Traylor and Aetna filed a third party demand against the Port for any amounts Traylor might owe to TL and for additional compensation due Traylor for delay in construction. Traylor then removed the case to federal court. Before trial, TL settled and dismissed its claim against all parties. After TL filed its stipulation of dismissal, Aetna dismissed its third party demand against the Port and the Port filed a counter-claim against Traylor for liquidated damages. The claims were heard by the district court without a jury.

At trial, Traylor argued that the Port knew that there were significant obstructions in the site area, but failed to advise Traylor of the obstructions in its plans and specifications. Traylor contended that it had no obligation to investigate or otherwise rely on information not set out in the plans and specifications provided by the Port concerning possible obstructions. Representatives of the Port testified that if any obstructions are shown in the plans, or otherwise identified in the contract, the obstructions cannot be considered "unknown infrastructures", thus, the cost for removal and disposal would not be borne by the Port. They further interpreted the contract to mean that even if an obstruction is not evidenced in the Bid Package, the obstruction is still not an "unknown infrastructure" if it could have reasonably been discovered by searching the Port's maps and archives room.

The district court awarded Traylor $287,032.50 plus interest and costs, finding that the Port wrongfully assessed Traylor with barge demurrage charges. However, the district court dismissed Traylor's claim for additional compensation and the Port's claim for liquidated damages. Thereafter, Traylor filed a motion for new trial, which was denied. However, the district court amended Traylor's award to include prejudgment interest under Louisiana law. Traylor now appeals.³

STANDARD OF REVIEW

A district court's interpretation of a contract is reviewed de novo. Musser Davis Land Co. v. Union Pacific Resources, 201 F.3d 561, 563 (5th Cir.2000). Thus, this court must "review the record independently and under the same standard that guided the district court." Am. Totalisator Co., Inc. v. Fair Grounds Corp., 3 F.3d 810, 813 (5th Cir.1993) (citing Walker v. Sears, Roebuck & Co., 853 F.2d 355, 358 (5th Cir.1988)). A de novo standard of review is also applied to a court's conclusions of law. Reich v. Lancaster, 55 F.3d 1034, 1045 (5th Cir.1995). We will not set aside a district court's factual findings, unless they are clearly erroneous. United States v. Hill, 258 F.3d 355, 357 (5th Cir.2001).

DISCUSSION

I. Unjust Enrichment

Under an unjust enrichment theory, Traylor argues that it is entitled to compensation for extra work performed, which was necessary for the completion of the Project. The contract defines "extra work" as work neither shown on the drawings nor reasonably implied elsewhere in the contract and for which no price had been named in the agreement. To establish a claim for unjust enrichment, the plaintiff must prove: (1) the defendant was enriched, (2) the plaintiff was impoverished, (3) a connection between the enrichment and resulting impoverishment, (4) no justification exists for the enrichment and the impoverishment, and (5) there is no other remedy at law. Schiro-Del Bianco Enter., Inc. v. NSL, Inc., 765 So.2d 1087, 1092 n. 3 (La.Ct.App.2000) (citing Minyard v. Curtis Products, Inc., 251 La. 624, 205 So.2d 422 (1967)).

Traylor asserts that (1) the Port was unjustly enriched because it received a completed wharf structure; (2) Traylor was impoverished because the Port refused to compensate it for additional costs incurred due to cutting of concrete piles; and (3) there was no justification for the enrichment because the Port had knowledge of certain obstructions, the Port selected the piles and the length, and the Port set the pile driving criteria.

The Port maintains that Traylor has not met its burden under this theory for several reasons. First, it argues that it has not been "enriched," as it only received what it paid for under the contract: a completed wharf structure. In addition, the Port contends that even assuming arguendo that there was an "enrichment," a claim for unjust enrichment was nullified by the contract. We agree. Traylor has not met the first and second elements of an unjust enrichment claim. The Port was not enriched — it received what it bargained for under the contract, a wharf structure, and nothing more. In addition, since the contract provided a remedy for any additional costs incurred by Traylor, it has failed to meet the fifth element, i.e., no remedy at law. Morphy, Makofsky & Masson, Inc. v. Canal Place 2000, 538 So.2d 569, 575 (La.1989) (action de in rem verso, a counterpart to unjust enrichment, is not available where there is an independent remedy at law, i.e., a contract exists). Accordingly, we find that Traylor is not entitled to additional compensation under this theory.

II. Adequate plans and specifications

Next, Traylor argues that the plans and specifications provided by the Port, prior to the submission of its bid, were insufficient in that they failed to give an accurate account of the conditions of the Project site. Because of the alleged inadequate contract documents, Traylor asserts that it suffered substantial...