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AFC, Inc. v. Mathes Brierre Architects

United States District Court, E.D. Louisiana

June 26, 2017


         SECTION I



         Defendant Mathes Brierre was the architect for the Boomtown Casino in Harvey; plaintiff AFC was a subcontractor. (Plaintiffs Ernest and Vonnie Ladner are the principals of AFC.) Alleged construction defects resulted in an arbitration proceeding between the contractor of the Boomtown project and the plaintiffs here. The arbitration ended after the plaintiffs paid the Boomtown contractor to settle the arbitration.

         Plaintiffs, alleging that the construction defects were solely due to the fault of Mathes Brierre, then filed the present lawsuit seeking indemnity from Mathes Brierre. Mathes Brierre now moves[1] for summary judgment as to plaintiffs' various damages theories, arguing that they seek damages that are not recoverable under Louisiana law. For the following reasons, the motion is granted in part and denied in part.


         Summary judgment is proper when, after reviewing the pleadings, the discovery and disclosure materials on file, and any affidavits, the court determines that there is no genuine dispute of material fact. See Fed. R. Civ. P. 56. “[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The party seeking summary judgment need not produce evidence negating the existence of material fact, but need only point out the absence of evidence supporting the other party's case. Id.; Fontenot v. Upjohn Co., 780 F.2d 1190, 1195 (5th Cir. 1986).

         Once the party seeking summary judgment carries its burden pursuant to Rule 56, the nonmoving party must come forward with specific facts showing that there is a genuine dispute of material fact for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The showing of a genuine issue is not satisfied by creating “‘some metaphysical doubt as to the material facts, ' by ‘conclusory allegations, ' by ‘unsubstantiated assertions, ' or by only a ‘scintilla' of evidence.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (citations omitted). Instead, a genuine issue of material fact exists when the “evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The party responding to the motion for summary judgment may not rest upon the pleadings, but must identify specific facts that establish a genuine issue. Id. The nonmoving party's evidence, however, “is to be believed, and all justifiable inferences are to be drawn in [the nonmoving party's] favor.” Id. at 255; see also Hunt v. Cromartie, 526 U.S. 541, 552 (1999).


         Indemnity in Louisiana is an action “founded upon the general obligation to repair the damage caused by one's fault” and “the moral maxim that no one ought to enrich himself at the expense of another.” Nassif v. Sunrise Homes, Inc., 739 So.2d 183, 186 (La. 1999). Thus, for example, where a party is “exposed to liability and compelled to pay damages and statutory attorney fees on account of the negligent act of [another], an implied contract of indemnity [arises] . . . to prevent an unjust enrichment.” Id. at 187. That implied contract of indemnity “shifts the entire loss to the party who is actually at fault.” Id.

         This Court previously determined that there was a genuine dispute of material fact as to whether defendant Mathes Brierre was entirely at fault for the construction defects. See R. Doc. No. 30. The parties now dispute the extent to which plaintiffs may recover certain damages from Mathes Brierre provided that plaintiffs can establish that Mathes Brierre was entirely at fault for the loss.[2]


         Plaintiffs' settlement agreement with the contractor included a provision that plaintiffs would forfeit their final payment from the contractor. The parties dispute whether plaintiffs may recover for the final payment that plaintiffs never actually received due to the settlement. Plaintiffs suggest they can because the forfeited payment constitutes a de facto loss; defendants suggest that plaintiffs' entire loss cannot encompass what plaintiffs never actually had (i.e., since plaintiffs never physically received the final payment, plaintiffs cannot lose that amount).

         Neither side points to case law directly controlling this issue. In the absence of controlling case law, however, this Court rejects Mathes Brierre's approach, which improperly exalts formalism over functionalism. Legal indemnity is ultimately an equitable doctrine that entitles plaintiffs to compensation for an entire damages award occasioned by another party's fault. See Nassif, 739 So.2d at 186-87. Given those equitable roots, the Court sees little reason to adopt a rule that required the plaintiffs to go through the silly process of receiving the last payment from the contractor only to then immediately return it to the contractor as part of a settlement. ...

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