LANDIS CONSTRUCTION COMPANY, L.L.C.
ST. BERNARD PARISH
APPEAL FROM ST. BERNARD 34TH JUDICIAL DISTRICT COURT. NO. 120-066, DIVISION " B" . Honorable Robert J. Klees, Judge Pro Tempore.
Paul A. Tabary, III, Elizabeth R. Borne, Lacey Tabary, TABARY & BORNE, L.L.C., Chalmette, LA; John W. Waters, Jr., BIENVENU FOSTER RYAN & O'BANNON, LLC, New Orleans, LA, COUNSEL FOR PLAINTIFF/APPELLEE.
William M. McGoey, Scott M. Smith, Chalmette, LA, COUNSEL FOR DEFENDANT/APPELLANT.
(Court composed of Chief Judge James F. McKay, III, Judge Dennis R. Bagneris, Sr., Judge Paul A. Bonin, Judge Madeleine M. Landrieu, Judge Joy Cossich Lobrano).
Paul A. Bonin, Judge.
[2014-0096 La.App. 4 Cir. 1] Landis Construction Company, L.L.C., executed a public-bid contract with the
governing authority of St. Bernard Parish to repair and renovate the parish's courthouse which was badly damaged in 2005 during Hurricane Katrina. Because the construction contract was a public-bid contract, its text was wholly furnished by the Parish. The contract required that Landis (and not the Parish) furnish " ALL RISK" builder's risk insurance, which Landis did. Exactly seven years after Katrina, and before completion of repairs, Hurricane Isaac severely damaged the courthouse. The insurance company covered the losses, less the 3% windstorm deductible which amounted to $367,029.26.
The issue for us, as it was for the trial judge, is to decide which of the parties to the contract--Landis or the Parish--bears the cost of those losses not covered due to the deductible. The parties filed cross-motions for summary judgment in which each argued that it was entitled to a judgment as a matter of law under what each described as the clear and unambiguous provisions of the contract. Each party could plausibly read the same contractual provisions to arrive at a conclusion [2014-0096 La.App. 4 Cir. 2] favorable to its position. On our de novo review of the contract and the cross-motions, we find that the contract's allocation of responsibility for bearing those losses not covered due to the deductible, as the contract is written, is susceptible to more than one interpretation and is therefore ambiguous. And because this particular contract did not involve bilateral negotiations, which might otherwise aid in the determination of the intent of both parties, we conclude that we must interpret the contract's provision respecting the allocation of losses not covered due to the deductible against the Parish as the party who furnished the text and in favor of Landis.
We therefore affirm the trial court's granting of Landis' motion for summary judgment, its denial of the Parish's motion, and its award of $367,029.26 to Landis. We explain our decision in greater detail below.
In drafting the contract for the courthouse's repair and renovation, the Parish utilized some of the forms suggested by the American Institute of Architects (or AIA). One of the suggested forms considered for use by the Parish was AIA Form A201, which provides that it is the obligation of the " owner" to obtain the " ALL RISK" builder's risk insurance. And this form at § 220.127.116.11 further includes the following provision: " If the property insurance requires deductibles, the Owner shall pay costs not covered because of such deductibles." The final contract as signed by Landis included AIA Form A201 within its four corners, but the Parish indisputably rejected Form A201 as written and substituted its own text.
[2014-0096 La.App. 4 Cir. 3] The Parish's customized text deviates from Form A201 in that it shifts the obligation of providing the " ALL RISK" builders risk insurance for the full-completed value of the entire work from the Owner, which is the Parish, to Landis. But unlike Form A201, the Parish's text does not make explicit a correlative obligation that Landis, ...