Durr Heavy Constr. v. Willow Grove - N., LLC

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DURR HEAVY CONSTRUCTION, LLC v. WILLOW GROVE - NORTH, LLC

No. 2024 CA 0090

Court of Appeals of Louisiana, First Circuit

August 6, 2024

NOT DESIGNATED FOR PUBLICATION

On Appeal from the Nineteenth Judicial District Court In and for the Parish of East Baton Rouge State of Louisiana No. 726344 Sec. 32 The Honorable William Jorden, Judge Presiding

Luis Etienne Balart

Taylor K. Wimberly

New Orleans, Louisiana

and

Brandon K. Black

C Parker Kilgore

Baton Rouge, Louisiana

Attorneys for Plaintiff/Appellee Durr Heavy Construction, LLC

Shelton Dennis Blunt

Kelsey Komick Funes

Brad M. Boudreaux

A. Paul LeBlanc, Jr.

Anthony J. Gambino, Jr.

Baton Rouge, Louisiana

Attorneys for Defendant/Appellant Willow Grove - North, LLC

BEFORE: WELCH, WOLFE, AND STROMBERG, JJ.

STROMBERG, J.

The defendant, Willow Grove - North, LLC, appeals a judgment of the district court that vacated an arbitration award. The plaintiff, Durr Heavy Construction, LLC, answered the appeal praying that the judgment be modified, revised, or reversed in part as it pertains to the confirmation of the uncontested portion of the arbitration award. For the following reasons, we reverse the judgment of the district court and confirm the arbitration award. We decline to address the answer to appeal due to our holding in this matter.

FACTS AND PROCEDURAL HISTORY

On December 1, 2022, Durr filed a pleading^[1] entitled "APPLICATION PURSUANT TO LOUISIANA REVISED STATUTE 9:4210 TO VACATE ARBITRATION AWARD" against Willow Grove arguing that the district court should vacate the arbitration award rendered on November 8, 2022.^[2] In its petition, Durr asserted that it entered into a contract with Willow Grove on March 5, 2020, wherein the parties agreed to arbitration in the event of any contractual disputes. On August 20, 2021 Durr initiated an arbitration proceeding against Willow Grove. The parties arbitrated the dispute on September 26-28, 2022.^[3] On November 8, 2022, the arbitrator issued an award, which stated, in pertinent part, the following:

The parties entered into a contract for relocating and replacing approximately a one-half mile stretch of Dawson Creek in Baton Rouge[,] which included clearing and grubbing, new drainage servitude, backfill of existing servitude, erosion control, 60" ACCMP piping, construction access, and Waskey Bridge demolition[.]

Durr filed a demand against Willow Grove on August 20, 2021 claiming $120,187.89 for breach of contract due to nonpayment, open account, and quantum merit. Willow Grove filed a counterclaim on November 22, 2021 in the amount of $521,500.00 for Durr's failure to complete and/or for defectively performed work. It [was] the position of Willow Grove that Durr [was] not entitled to any of the $120,187.89, and instead owe[d] Willow Grove $521,500.00. Willow Grove also [sought] to have the lien that Durr filed cancelled.

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Based on the evidence, it is apparent Durr failed to accurately determine how much fill was needed to meet the in-place fill volumes reflected in the plans. Accordingly, the award is as follows:

Durr Heavy Construction, LLC to pay:

1. Cost to complete fill work and achieve final grades

$480,000.00

2. Performance punchlist items 1-4

$27,877.66

3. Cost of maintenance bond

$4,142.00

4. Estimated cost to perform items 5-10

$0.00

5. Minus amounts withheld from Durr pay applications 9 R1 & 10

($120,187.89)

Subtotal:

$391,831.77

Legal interest is awarded from November 22, 2021 until paid.

It is further ordered that Durr Heavy Construction, LLC cancel its lien.

Attorney's fees are awarded to Willow Grove-North, LLC in the amount of $96,923.00.

The administrative fees and expenses of the American Arbitration Association totaling $14,200.00 and the compensation and expenses of the arbitrator totaling $10,513.90 shall be borne by Durr[.] Therefore, Durr shall reimburse Willow Grove ... the additional sum of $16,456.95, representing that portion of said fees and expenses in excess of the apportioned costs previously incurred by Willow Grove[.]

Durr alleged that the arbitration award was not based on any agreed contractual terms, rather the award was based on correspondence between the parties before the contract was entered into. Therefore, Durr requested that the district court vacate the arbitration award.

On December 6, 2022, Willow Grove, as the plaintiff-in-reconvention, filed a Motion to Confirm Arbitration Award. In its motion, Willow Grove asserted that pursuant to La. R.S. 9:4209^[4] and La. R.S. 9:4212,^[5] the district court had jurisdiction to confirm the arbitration award. Willow Grove requested that a contradictory hearing be set at the same time as the hearing on Durr's Application to Vacate Arbitration Award, and that there be judgment rendered in its favor, and against Durr, in the amount of $505,211.72, together with legal interest from November 22, 2021, as well as all court costs incurred by Willow Grove in this matter. Willow Grove further requested attorney's fees against Durr for the filing and prosecuting of its Application to Vacate Arbitration Award.

In support of its motion, Willow Grove filed a memorandum, which asserted the following:

[t]he record show[ed] that the [a]ward was rendered as a result of a fair and honest [a]rbitration, to which both parties submitted the dispute, which [was] evidenced by the initiation of the arbitration by Durr, and then assertion of the [c]ounterclaim by [Willow Grove]. The [a]ward [was] for damages arising from breach of what the [a]rbitrator found to be Durr's obligations under the [c]ontract, which provide[d] for binding arbitration of disputes between the parties. Therefore, it [was] presumed to be valid. Without any showing by Durr that one of the narrow grounds for challenging the [a]ward [was] met, it must be incorporated into a judgment of the [c]ourt.

Therefore, Willow Grove prayed that the district court grant its motion and that the award be incorporated into a judgment, along with attorney's fees and court costs.

On July 26, 2023, Durr filed a memorandum to support its Application to Vacate Arbitration Award pursuant to La. R.S. 9:4210. Durr asserted in its memorandum that based on the contract, both parties were aware that if imported fill was required to meet elevations set forth in the plans, that would constitute a change in conditions and that Willow Grove would be required to purchase it at an additional cost. Durr asserted that the parties executed two change orders to harvest dirt from other areas of the Willow Grove property and use that fill at the old creek. Durr performed this work, but was never paid for it. Having no ability to harvest any more fill from the land, Durr's work was complete under the contract, as amended by the agreed upon change orders. Willow Grove refused to accept the work and attempted to back-charge Durr. The arbitrator awarded $480,000.00 to Willow Grove to complete fill work and achieve final grades. However, Durr argued that this scope of work was excluded by the parties' contract. Durr argued that the arbitrator used extrinsic evidence from years before the contract was executed to determine the contract terms. Specifically, Durr alleged that the arbitrator used extrinsic evidence to interpret an exhibit to the parties' contract, paragraph 9(b) of the proposal, which stated that "[t]his proposal does not provide for any import soils to achieve lines/grades as required by the plans." Durr argued that the arbitrator improperly used a proposal from 2017 that was sent several years before the contract was executed, as well as an email sent months prior to the contract being executed that was not made part of the contract, to interpret paragraph 9(b) of the proposal.

On August 14, 2023, Willow Grove filed an opposition memorandum to Durr's Application to Vacate Arbitration Award. Willow Grove contended that Durr's argument that the arbitrator committed legal error in considering extrinsic evidence to interpret the contract was insufficient grounds to vacate the arbitration award pursuant to La. R.S. 9:4210. Willow Grove asserted that the arbitrator properly considered such evidence due to the ambiguity of the contract related to the obligation to bring in offsite fill. Willow Grove further argued that it was proper for the arbitrator to look at communications that were outside of the contract in order to determine the intention of the parties. Willow Grove asserted that in any case of doubt about the contract, any ambiguity must be interpreted against Durr, who provided the text of paragraph 9(b). Therefore, Willow Grove prayed that the district court deny Durr's Application to Vacate Arbitration Award and that its Motion to Confirm Arbitration Award be granted, along with additional attorney's fees and court costs.

On August 17, 2023, Durr filed a reply memorandum in further support of its Motion to Vacate Arbitration Award pursuant to La. R.S. 9:4210, wherein it argued that the arbitrator had no authority to make such an award not based on the contract between the parties. Despite allegedly finding that Durr "breached" the contract, the arbitrator awarded Durr the balance of the contract price. Durr argued that "[t]his conclusion [could not] be squared with a finding that Durr somehow failed to perform a contractually required scope of work." Durr further argued that contrary to Willow Grove's argument, no such agreement was ever made between the parties for imported fill to finish the job.

On August 21, 2023, the district court held a hearing on Durr's Application to Vacate Arbitration Award and Willow Grove's Motion to Confirm Arbitration Award. After counsel for the parties presented their arguments, the district court made an oral...