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LAD Servs. of La., L.L.C. v. Superior Derrick Servs., L.L.C.

Court of Appeal of Louisiana, First Circuit

November 7, 2014


Page 747

On Appeal from the 16th Judicial District Court Parish of St. Mary, Louisiana. Docket No. 120625, Division " H" . Honorable Lori A. Landry, Judge Presiding.


Richard Creed, Jr., Baton Rouge, LA, Attorney for Plaintiff-Appellant, LAD Services of Louisiana, L.L.C.

Tracy P. Curtis, Lewis, Brisbois, Bisgaard & Smith, LLP, Lafayette, LA, Attorney for Defendant-Appellee, Superior Derrick Services, L.L.C.

BEFORE: PARRO, GUIDRY, AND DRAKE, JJ. Guidry, J. concurs in the result.

Page 748

[2013 0163 La.App. 1 Cir. 2] PARRO, J.

In this dispute about three contracts between a drilling rig company and two barge building companies, a jury found the drilling rig company had breached its obligations

Page 749

under the contracts and awarded damages to the barge builders. On the drilling rig company's motion, the trial court granted a judgment notwithstanding the verdict (JNOV), finding that the breach had been by the barge builders, and made an award to the drilling rig company. The plaintiffs/appellants, barge builders LAD Services of Louisiana, L.L.C., and LAD Salvage, L.L.C.,[1] appeal the trial court's entry of the JNOV. For the following reasons, we reverse the JNOV, and we reinstate the March 23, 2012 judgment rendered in accordance with the jury's verdict, affirm that judgment in part, reverse that judgment in part, and remand.


On or about December 4, 2007, Superior Derrick Services, L.L.C. (SDS), entered into the first of three contracts with LAD Services of Louisiana, L.L.C. (LAD). In the initial contract, LAD leased two small deck barges to SDS. In the second and third contracts, SDS engaged LAD to build a barge under each contract. They entered into the second contract on December 5, 2007. In that contract, SDS engaged LAD to build a barge measuring 180' long by 70' wide by 11' deep. Once LAD completed building that barge, SDS intended to add additional equipment to it, then deliver it to an SDS customer, Petroleos de Venezuela (PDVSA). The parties entered into the third contract on March 20, 2008. The third contract was very similar to the second, in that SDS engaged LAD to build it another barge of the same size. For each barge, the parties arranged to have SDS furnish, at the start of the contract, a down payment as well as the funds that LAD would use to pay for the steel to build each barge.[2] For both barges, the contracts provided that SDS would provide progress payments to LAD as construction moved forward.

[2013 0163 La.App. 1 Cir. 3] When the construction of barge one was well along, and the construction of barge two was still in its early stages, SDS advised LAD that it was cancelling the contract for barge two. SDS told LAD that it was cancelling because its customer for both barges, PDVSA, wanted SDS to use a barge builder other than LAD for barge two.[3] LAD stopped work on barge two on June 8, 2008.

Around July 11, 2008, LAD finished barge one and turned it over to SDS. However, when SDS sent LAD its final payment for barge one, it deducted an amount equal to its down payment for barge two, which was $225,600. LAD's owner, Lee Dragna, said at trial he was not aware of that deduction when LAD gave SDS possession of the barge, but once LAD delivered it " there was nothing we could really do about it."

Page 750

The steel that LAD had purchased to go into barge two stayed at LAD's yard. Mr. Dragna said at trial that he asked SDS to pick it up, but SDS said it did not want it. SDS's project manager, Charlie Albert, said at trial that SDS did not want the steel because the quantity was insufficient for LAD's replacement contractor to build barge two.

In about February 2009, LAD ascertained that it had not been sending monthly invoices to SDS for renting the two barges it had leased to SDS in December 2007, and that SDS had not been paying the rent. Mr. Dragna said that when he inquired about the barges, an SDS representative said it would not release them because LAD still owed SDS money from the contract for barge two. Subsequently, LAD did retake possession of its two rental barges from SDS.

On August 28, 2009, LAD sued SDS for amounts it claimed SDS owed under all three contracts. It alleged generally that SDS was liable for: (1) underpaying it by $235,000 for barge one; (2) causing LAD to lose profits from the cancellation of the contract for barge two; (3) failing to pay $100 per day for each of the two barges it leased from LAD, subject to a 60-day credit on the first rental barge; (4) storage fees [2013 0163 La.App. 1 Cir. 4] for storing the steel for barge two in LAD's yard; and (5) the cost of two trips LAD was required to make to retrieve its two rental barges.

SDS reconvened, alleging generally that LAD was liable for: (1) $704,000 that SDS had paid to LAD to start work on barge two, which LAD had not returned after the contract for barge two was cancelled; (2) $20,000 for LAD's breach of the barge one contract by using inferior materials; and (3) liquidated damages for delivering barge one after the construction period specified in the contract.

The parties tried their claims to a jury in November 2011. At the conclusion of LAD's case in chief, SDS moved for a directed verdict on two issues related to the contract for barge two: (1) whether PDVSA's not wanting SDS to use LAD to build the second barge constituted a fortuitous event that either made SDS's performance impossible, or constituted a failure of cause; and (2) whether LAD had breached the security agreement provision in the barge two contract. The trial judge denied the motion for directed verdict on the first issue, namely, impossibility or failure of cause. However, the trial judge granted the motion for directed verdict on the second issue, finding that LAD breached the security agreement provision in the barge two contract. Nonetheless, the trial judge permitted that issue to go to the jury.

The jury found in favor of LAD.[4] It awarded LAD $99,700 for SDS's breach of the barge rental contract, $204,600 for SDS's breach of the contract for barge one, and $566,806.50 for SDS 1s breach of the contract for barge two. Further, the jury found LAD did not breach the contract for barge one or barge two.

Subsequently, SDS moved for a new trial, a JNOV, or remittitur. The trial judge granted the motion for JNOV. In that JNOV, the trial judge vacated the jury verdict in its entirety, dismissed all claims against SDS, directed that LAD return $624,300 to SDS, and found SDS was entitled to attorney fees and costs.[5]

Page 751

LAD filed the present suspensive appeal, asserting three assignments of error:

[2013 0163 La.App. 1 Cir. 5] 1. The trial judge erred in granting a directed verdict in favor of SDS.
2. The trial judge erred in vacating the jury verdict, and granting a JNOV in favor of SDS.
3. The jury erred in failing to award bad faith damages to LAD.


Assignment One: Directed Verdict

As noted, LAD's first assignment of error urges that the trial judge erred in granting a directed verdict of favor of SDS.

Louisiana Code of Civil Procedure article 1810 provides:

A party who moves for a directed verdict at the close of the evidence offered by an opponent may offer evidence in the event that the motion is not granted, without having reserved the right so to do and to the same extent as if the motion had not been made. A motion for a directed verdict that is not granted is not a waiver of trial by jury even though all parties to the action have moved for directed verdicts. A motion for a directed verdict shall state the specific grounds therefor. The order of the court granting a motion for a directed verdict is effective without any assent of the jury.

This court summarized the jurisprudence on directed verdicts in McNeely v. Ford Motor Co., Inc., 98-2139 (La.App. 1st Cir. 12/28/99), 763 So.2d 659, 664, writ denied, 00-0780 (La. 4/28/00), 760 So.2d 1182 (citations omitted):

A trial court has much discretion in determining whether to grant a motion for directed verdict. A motion for directed verdict is appropriately granted in a jury trial when, after considering all evidentiary inferences in the light most favorable to the party opposing the motion, it is clear that the facts and inferences are so overwhelmingly in favor of the moving party that reasonable men could not arrive at a contrary verdict. However, if there is substantial evidence opposed to the motion, that is, evidence of such quality and weight that reasonable and fair-minded jurors in the exercise of impartial judgment might reach different conclusions, the motion should be denied, and the case submitted to the jury.
On appeal, the standard of review for directed verdicts is whether, viewing the evidence submitted, the appellate court concludes that reasonable people could not reach a contrary verdict. Furthermore, the propriety of a directed verdict must be evaluated in ...

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