Team Contractors, LLC v. Waypoint Nola, LLC

TEAM CONTRACTORS, LLC, Plaintiff v. WAYPOINT NOLA, LLC, ET AL., Defendants

CIVIL ACTION NO. 16-1131 SECTION: "E"(2)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

September 22, 2017

ORDER AND REASONS

Before the Court is Plaintiff-in-Crossclaim Waypoint NOLA, L.L.C.'s ("Waypoint") Motion for Partial Summary Judgment.¹ Waypoint seeks summary judgment on liability in its crossclaim against Defendants-in-Crossclaim HC Architecture, Inc. ("HCA") and Salas O'Brien South, successor in interest to KLG, L.L.C. ("KLG").² The motion is opposed by both HCA³ and KLG.⁴ The Court heard oral argument on August 18, 2017, during which the Court instructed the parties to submit additional briefing on the issue of HCA's liability for its subcontractors.⁵ The parties duly submitted additional memoranda.⁶ The Court has considered the briefs, record, and applicable law, and now issues its ruling. For the reasons that follow, the Motion for Partial Summary Judgment is DENIED.

BACKGROUND

This case involves the development and construction of the Hyatt House hotel in downtown New Orleans, Louisiana ("the Project"). It is undisputed that Team Contractors, L.L.C. ("Team"), the owner of the Project, entered into a contract withWaypoint for the construction and/or renovation of seven floors of the property located at 1250 Poydras Street, New Orleans, Louisiana.⁷ Team alleges it incurred damages during construction in the form of additional subcontractor work, hourly labor at Team's expense, and other related costs, when it was directed to remove deficient plumbing and mechanical systems ("MEP systems") and re-install revised systems.⁸ Specifically, Team claims the original plumbing system designs did not comply with ventilation requirements in the New Orleans plumbing code,⁹ and the mechanical designs omitted more than 150 smoke dampers, in violation of other applicable municipal codes.¹⁰ Team filed a complaint in this Court to recover these costs from Waypoint, the owner; HCA, the architect with which Team contracted; and KLG, HCA's mechanical, electrical, and plumbing engineering subcontractor.¹¹

Waypoint filed a crossclaim against HCA and KLG, and a third-party demand against Bobby Beach and Danny Lundstrom, two licensed engineers who provided engineering services for KLG and HCA on the Project.¹² Waypoint alleges that HCA breached its duty to Waypoint by providing substandard plans and specifications for the Project, failing to properly oversee its subcontractors, failing to properly coordinate the design of the project, and failing to timely remedy the relevant design errors.¹³ As to KLG, Waypoint alleges that KLG negligently performed its duties as engineer by producing MEP system designs that did not comply with local codes.¹⁴

On August 2, 2017, Waypoint filed a Motion for Partial Summary Judgment on the liability of HCA and KLG.¹⁵ Waypoint argues there is no genuine dispute of material fact as to the liability of HCA and KLG, and that it is thus entitled to judgment as a matter of law on its crossclaim.¹⁶

LEGAL STANDARD

Summary judgment is appropriate only "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."¹⁷ "An issue is material if its resolution could affect the outcome of the action."¹⁸ When assessing whether a material factual dispute exists, the Court considers "all of the evidence in the record but refrains from making credibility determinations or weighing the evidence."¹⁹ All reasonable inferences are drawn in favor of the nonmoving party.²⁰ There is no genuine issue of material fact if, even viewing the evidence in the light most favorable to the nonmoving party, no reasonable trier of fact could find for the nonmoving party, thus entitling the moving party to judgment as a matter of law.²¹

If the dispositive issue is one on which the moving party will bear the burden of persuasion at trial, the moving party "must come forward with evidence which would 'entitle it to a directed verdict if the evidence went uncontroverted at trial.'"²² If the moving party fails to carry this burden, the motion must be denied. If the moving party successfully carries this burden, the burden of production then shifts to the nonmovingparty to direct the Court's attention to something in the pleadings or other evidence in the record setting forth specific facts sufficient to establish that a genuine issue of material fact does indeed exist.²³

If the dispositive issue is one on which the nonmoving party will bear the burden of persuasion at trial, the moving party may satisfy its burden of production by either (1) submitting affirmative evidence that negates an essential element of the nonmovant's claim, or (2) demonstrating there is no evidence in the record to establish an essential element of the nonmovant's claim.²⁴ When proceeding under the first option, if the nonmoving party cannot muster sufficient evidence to dispute the movant's contention that there are no disputed facts, a trial would be useless, and the moving party is entitled to summary judgment as a matter of law.²⁵ When, however, the movant is proceeding under the second option and is seeking summary judgment on the ground that the nonmovant has no evidence to establish an essential element of the claim, the nonmoving party may defeat a motion for summary judgment by "calling the Court's attention to supporting evidence already in the record that was overlooked or ignored by the moving party."²⁶ Under either scenario, the burden then shifts back to the movant to demonstrate the inadequacy of the evidence relied upon by the nonmovant.²⁷ If the movant meets thisburden, "the burden of production shifts [back again] to the nonmoving party, who must either (1) rehabilitate the evidence attacked in the moving party's papers, (2) produce additional evidence showing the existence of a genuine issue for trial as provided in Rule 56(e), or (3) submit an affidavit explaining why further discovery is necessary as provided in Rule 56(f)."²⁸ "Summary judgment should be granted if the nonmoving party fails to respond in one or more of these ways, or if, after the nonmoving party responds, the court determines that the moving party has met its ultimate burden of persuading the court that there is no genuine issue of material fact for trial."²⁹

"[U]nsubstantiated assertions are not competent summary judgment evidence. The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports the claim. 'Rule 56 does not impose upon the district court a duty to sift through the record in search of evidence to support a party's opposition to summary judgment.'"³⁰

LAW AND ANALYSIS

A. Duty/Risk Analysis Under Louisiana Law

Waypoint seeks summary judgment that HCA and KLG are liable to it for damages caused by the two firms' negligence. Because jurisdiction in this matter is based on diversity, the Court will apply Louisiana negligence law.³¹ Louisiana law employs a duty-risk analysis in determining liability for negligence.³² This test requires a plaintiff to prove five elements:

(1) the defendant had a duty to conform his or her conduct to a specific standard of care; (2) the defendant failed to conform his or her conduct to the appropriate standard of care; (3) the defendant's substandard conduct was a cause-in-fact of the plaintiff's injuries; (4) the defendant's substandard conduct was a legal cause of the plaintiff's injuries; and (5) actual damages.³³

The question of whether a duty is owed, and the scope of that duty, is a question of law. Whether there was a breach of the duty, whether the substandard conduct was the cause-in-fact and legal cause of the damages, and whether damages resulted, are questions of fact.³⁴

Louisiana courts have recognized that the five-factor negligence inquiry presents a particularly difficult challenge at the summary judgment stage, because "a negative answer to any of the inquiries of the duty/risk analysis results in a determination of no liability."³⁵ Moreover, Louisiana courts have made clear that summary judgment should not be granted on particular elements of a negligence claim, because, "by dividing the issue of liability into smaller issues. . . . [t]here is a possibility of confusion arising out of the factual interrelationship between the adjudicated element and the unadjudicated element that could lead to inconsistent rulings and piecemeal litigation."³⁶ In other words, summary judgment "may not be granted for purposes of determining a particular element of liability where such a determination is not completely dispositive of the question of liability between the parties concerning the claim and where other issues such as comparative fault remain unresolved."³⁷ Thus, to succeed on summary judgment, Waypoint must provide undisputed evidence entitling it to judgment as a matter of lawwith respect to all five elements of the negligence analysis under Louisiana law. Waypoint has not met this burden, however, because Defendants-in-Crossclaim raise disputes of material fact regarding the causation prong of the negligence inquiry, and factual issues regarding comparative fault and superseding cause remain unresolved.

B. Causation

Waypoint's motion does not directly address the causation element of the negligence test and, instead, appears to assume a causal connection between the code-deficient MEP drawings and its damages. HCA and KLG disagree and provide summary judgment evidence they say shows that the fault of Waypoint, Team, and Team's mechanical and plumbing subcontractor caused the damages. This evidence creates a genuine dispute of material fact regarding the cause of Waypoint's damages.

It is undisputed that Team retained Ray & Sons Heating & Air Conditioning ("Ray"), a Georgia-based contractor, as the mechanical, plumbing, and heating and air conditioning subcontractor...