United States District Court, E.D. Louisiana
ORDER AND REASONS
the Court is a Motion for Judgment on the Pleadings
(Rec. Doc. 67) filed by Intervenor Liberty Mutual Insurance
Company (“Liberty”), an opposition thereto (Rec.
Doc. 70) filed by the Housing Authority of New Orleans
(“HANO”), and a reply (Rec. Doc. 75) filed by
Liberty. Also before the Court is a Motion for Judgment
on the Pleadings and Motion to Dismiss (Rec. Doc. 170)
filed by Liberty, an opposition thereto (Rec. Doc. 189) filed
by HANO, and a reply (Rec. Doc. 194) filed by Liberty. Having
considered the motion and legal memoranda, the record, and
the applicable law, the Court finds that the motion should be
GRANTED in part and DENIED in part.
AND PROCEDURAL BACKGROUND
case arises out of disputes that occurred during the
construction of affordable housing units in New Orleans.
Liberty alleges that on March 4, 2013, HANO entered into a
contract with Parkcrest Builders, LLC
(“Parkcrest”) whereby Parkcrest would serve as
the contractor for the construction of the Florida Avenue:
New Affordable Housing Units (the “Project”).
(Rec. Doc. 32 at 3.) Liberty alleges that because the project
fell within the ambit of the Louisiana Public Works Act,
Parkcrest was obligated to obtain a statutory performance and
payment bond, and that it sought the bond from Liberty.
Id. Liberty avers that it issued a payment and
performance bond naming Parkcrest as principal and HANO as
obligee in connection with the project and that the
bond's penal sum was $11, 288, 000.00. (Rec. Doc. 67-1 at
alleges that the relationship between HANO and Parkcrest
deteriorated during the course of the project, and on April
10, 2015, HANO terminated Parkcrest. On May 8, 2015,
Parkcrest brought this suit against HANO, alleging that the
delays in the project were caused by HANO and that HANO
breached the contract by terminating Parkcrest “for
convenience.” (Rec. Doc. 1.) HANO filed a counterclaim
against Parkcrest, alleging that delays in the project were
attributable solely to Parkcrest. (Rec. Doc. 22) In its
counterclaim, HANO seeks damages for the delays and also
asserts claims that allegedly arose after Parkcrest was
terminated from the project. Id. at 15.
terminating Parkcrest, HANO called upon Liberty to perform
its obligations as surety for Parkcrest. On or about June 9,
2015, HANO and Liberty entered into a Takeover Agreement to
complete the project. Liberty and HANO dispute the factual
details leading up to the Takeover Agreement, the
interpretation of the Takeover Agreement, and the details
surrounding implementation of the Takeover Agreement. These
disagreements create the basis for the instant motion.
the Takeover Agreement was executed, Liberty retained
Parkcrest as its completion contractor. (See Rec.
Doc. 32 at 6.) Liberty alleges that HANO began violating the
Takeover Agreement's terms shortly thereafter by failing
to make required payments, reducing the amounts approved for
payment, failing to timely respond to change order proposals
submitted by Parkcrest, and failing to timely issue punch
lists and grant substantial performance of the project.
Id. at 6-8. Liberty alleges that it was working to
complete items on a punch list that HANO had purposefully
withheld when HANO terminated it from the project on June 29,
2016. Id. at 8-9.
then intervened in this lawsuit to allege breach of the
Takeover Agreement, bad faith breach of contract, and
wrongful termination claims. (Rec. Doc. 32.) In response,
HANO filed a counterclaim against Liberty. (Rec. Doc. 37 at
17.) HANO alleges that Liberty acted as a de-facto contractor
and is therefore liable in amounts in excess of the penal sum
of the bond. Id. HANO further alleges that Liberty
breached the terms of the Takeover Agreement in bad faith and
that it induced HANO to sign the Takeover Agreement through
fraudulent misrepresentation. Id. HANO alleges that
it is due stipulated damages and general damages arising out
of Liberty's failure to perform. Id.
December 19, 2016, Liberty filed an initial motion for
judgment on the pleadings (Rec. Doc. 67) on HANO's
counterclaim. Thereafter, HANO moved to file a first
supplemental and amended counterclaim (“first amended
counterclaim”) which the Magistrate Judge granted.
(See Rec. Doc. 79.) HANO then moved to file a second
supplemental and amended counterclaim (“second amended
counterclaim”), which the Magistrate Judge also
granted. (See Rec. Doc. 124.) Liberty responded by
filing a second motion for judgment on the pleadings, this
time also requesting dismissal of HANO's fraud claim for
failure to state a claim under Federal Rule of Civil
Procedure 12(b)(6). (Rec. Doc. 170). HANO's second
amended counterclaim incorporates the original and the first
amended counterclaims. Accordingly, the Court will analyze
the instant motion for judgment on the pleadings and motion
to dismiss by referring to the briefing for both motions
filed by Liberty and the original, first amended, and second
amended counterclaim. See Johnson v. Moog,
Inc., No. 10-67, 2011 WL 719600, at *1 n.1 (E.D. Tex.
Feb. 22, 2011).
argues that HANO's fraud claim should be dismissed
because Liberty was under no obligation to disclose that its
representative for completing the construction was also
providing Liberty with litigation services. Liberty also
argues that HANO's breach of contract claim should be
dismissed to the extent that HANO alleges that Liberty
breached the contract by using Parkcrest as the completion
contractor. More specifically, Liberty argues that the terms
of the Takeover Agreement explicitly permitted Liberty to use
Parkcrest as the completion contractor. Finally, Liberty
argues that its liability is capped at the penal sum of its
bond because the Takeover Agreement specifically states that
Liberty would not be liable in excess of that amount.
opposition, HANO argues that its fraud claim should not be
dismissed because Liberty withheld the true nature of the
construction representative's and Parkcrest's role in
the project, and that HANO would not have entered into the
Takeover Agreement had it known the entire truth. HANO also
argues that its breach of contract claim states a clear cause
of action. HANO further contends that Liberty is liable in
excess of the penal sum of the bond because it acted as a
de-facto contractor on the project and therefore lost the
benefit of its liability cap.
12(c) provides that “[a]fter the pleadings are closed-
but early enough not to delay trial-a party may move for
judgment on the pleadings.” Fed.R.Civ.P. 12(c). A
motion brought pursuant to Rule 12(c) “is designed to
dispose of cases where the material facts are not in dispute
and a judgment on the merits can be rendered by looking to
the substance of the pleadings and any ...