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Alonso v. Westcoast Corp.

United States District Court, M.D. Louisiana

September 21, 2017

ROLAND A. ALONSO,
v.
WESTCOAST CORPORATION

          RULING AND ORDER

         Before the Court is the Motion for Award of Costs and Attorney's Fees (Doc. 103) filed by Roland A. Alonso and RCS Contractors, Inc. ("Plaintiffs"), the Renewed Motion For Judgment as a Matter of Law, Motion to Amend Judgment, and Alternative Motion for New Trial (Doc. 104) filed by Westcoast Corporation ("Defendant") and the Motion to Alter or Amend Judgment (Doc. 105) filed by Plaintiffs. The parties filed memoranda in opposition, (Docs. 112, 117, 122), replies, (Docs. 123, 124), and a sur-reply, (Doc. 127), where applicable. Jurisdiction is proper under 28 U.S.C. § 1332.

         I. BACKGROUND

         This case arises from a dispute over a construction project to relocate the Baton Rouge West Roosevelt Street Sewer Force Main that was supervised by the United States Army Corp of Engineers. (Doc. 1 at ¶ C-l). On August 23, 2010, Plaintiffs assert that RCS Contractors, Inc. ("RCS") entered into a subcontract with Defendant under which it agreed to provide all of the labor, materials, equipment, and supervision required to complete the Project. Id. at ¶ C-5. Under the terms of the subcontract, Plaintiffs also allege that RCS was required to adhere to plans and specifications provided by the Army Corp of Engineers. Id. Plaintiffs further assert that mismanagement of the Project resulting from deficient plans caused significant delays and extra work that, in turn, caused them to incur unexpected costs. (Doc. 1 at ¶¶ C-6, C-10, C-13, C-17-20). Plaintiffs allege that Defendant knew or should have known about deficiencies in the Project plans but nonetheless ordered work to continue, Id. at C-6-17, and that Defendant failed to timely submit stand-by invoices to the Army Corp of Engineers, Id. at ¶ C-23-26. Because of Defendant's actions, Plaintiffs allege that Defendant is liable for the damages they sustained. Id. at ¶¶ E-l-5; J-l-K-4.

         Trial began on September 20, 2016. (Doc. 96). On September 22, 2016, Defendant filed motions under Federal Rule of Civil Procedure ("Rule") 50(a), seeking judgment as a matter of law on Plaintiffs delayed payment, unjust enrichment, and bad faith breach of contract claims. (Docs. 92-94). The Court granted Defendant's motion on Plaintiffs unjust enrichment claim for reasons stated on the record. (Doc. 98).

         On September 23, 2016, at the conclusion of trial, the jury returned a verdict in favor of Plaintiffs, finding Defendant liable for breach of contract, bad faith breach of contract, failure to timely pay monies owed under the contract, and awarded damages accordingly. (Doc. 101). The jury also awarded reasonable attorney's fees. Id. at ¶ 6. Thereafter, on September 30, 2016, the Court entered the following Final Judgment:

IT IS ORDERED, ADJUDGED, AND DECREED that judgment is entered in the amount of $304, 189.00 for bad faith breach of contract, $66, 450.00 for violation of the Prompt Payment Statute, and $407, 685.00 for home-office overhead, in favor of the Plaintiff Roland Alonso and RCS Contractors and against Defendant Westcoast Corporation, and this action is hereby DISMISSED.

(Doc. 102). The parties timely filed their respective motions shortly after the Court entered the Final Judgment. (Docs. 103-105). The Court will discuss each motion in turn.

         II. DISCUSSION

         A. Renewed Motion for Judgment as a Matter of Law

         Defendant argues that there is insufficient evidence to support the jury's verdict that Defendant breached the subcontract agreement it had with Plaintiffs in bad faith. (Doc. 104-1 at p. 3-4). Plaintiffs bad faith breach of contract claims stem from Defendant's alleged failure to submit all change orders, extensions of time, and cost requests submitted by Plaintiffs to Garner Services, the contractor, who was then obligated to submit requests to the Army Corp of Engineers, the owner, as outlined in the subcontract agreement. (Doc. 1). Defendant maintains that the evidence demonstrates that it performed its obligations under the subcontract agreement, and that there was no evidence to support the jury's finding that any failure to perform these obligations was done in bad faith. (Doc. 104-1 at p. 3-4). In support of this claim, Defendant cites the relevant provision of the subcontract agreement, which provides that "the Contractor (Defendant) under [Section 11 of the contract] merely acts as a conduit to provide the Subcontractor (Plaintiff) access to the Owner, Army Corp of Engineers, to seek reimbursement or damages incurred or delays caused by the Owner and/or its agents." (Doc. 104-1 at p. 7).

         Defendant also cites the deposition and trial testimony of Michael Meredith, Defendant's Project Manager, in which he testified that that he forwarded all change order submittals from RCS "up the ladder" to Garner Services, who then forwarded the change orders to the Army Corp of Engineers. Id. Plaintiffs counter, arguing that the operative term in the subcontract agreement forming the basis of Plaintiffs breach of contract claim was the portion of Section 11 in which Defendant agreed to "provide the Subcontractor (Plaintiff) access to the Owner[.]" (Doc. 122 at p. 9) (emphasis added). Plaintiffs cite the trial testimony of Roland Alonso, who testified that despite numerous efforts to gain access to the Army Corp of Engineers regarding its numerous change orders, Defendant failed to facilitate access in accordance with Plaintiffs' requests. Id. It is in this manner, Plaintiffs argue, that Defendant breached its contractual obligation under Section 11 of the subcontract agreement.

         Defendant also argues that it is entitled to judgement as a matter of law on Plaintiffs claim that Westcoast unlawfully delayed payment without reasonable cause. (Doc. 104-1 at p. 4). Defendant maintains that because RCS never completed the West Roosevelt Project, Westcoast had reasonable cause to withhold payments and/or deduct payments owed to RCS. Id. at 4-5.

         A motion under Rule 50(b) "in an action tried by jury is a challenge to the legal sufficiency of the evidence supporting the jury's verdict." Flowers v. S. Reg'l Phys. Servs., Inc., 247 F.3d 229, 235 (5th Cir. 2001) (quoting Ford v. Cimarron Ins. Co., 230 F.3d 828, 830 (5th Cir. 2000)). Therefore, under Rule 50(b), "judgment as a matter of law is proper after a party has been fully heard by the jury on a given issue, and there is no legally sufficient evidentiary basis for a reasonable jury to have found for that party with respect to that issue." Id. In evaluating a Rule 50(b) motion, a court must "consider all of the evidence, drawing all reasonable inferences and resolving all credibility determinations in the light most favorable to the non-moving party." Id. Because all reasonable inferences and credibility determinations should be resolved in favor of the non-movant in a Rule 50(b) motion for judgment as a matter of law, "judgment as a matter of law should not be granted unless the facts and inferences point so strongly and overwhelmingly m the movant's favor that reasonable jurors could not reach a contrary conclusion." Id.

         The Court finds that there is sufficient evidence in the record to support the jury's finding that Defendant breached the contract with Plaintiffs, and Defendant unlawfully delayed payment without reasonable cause, and therefore the jury's verdict on this claim should not be disturbed. Specifically, there is ample evidence that would allow the jury to find that Defendant failed to facilitate direct access to the Army Corp of Engineers under Section 11 of the subcontract agreement. (See Doc. 122 at p. 9). Indeed, Roland A. Alonso testified as much. (Doc. 122 at p. 9). The Court also finds that whether Plaintiffs can recover for bad faith and delayed payment turns on questions of fact, and therefore the jury's decision shall stand. The Renewed Motion for Judgement as a Matter of Law is denied.

         B. Motion for New Trial/Remittitur

         Defendant argues that there was insufficient evidence to support the jury's verdict, and therefore Defendant is entitled to a new trial. (Doc. 104-1 at p. 5). In a diversity case, a district court must apply the new trial and remittitur standard of the forum in which it sits. Fair v. Allen, 669 F.3d 601, 604 (5th Cir. 2012). Louisiana law provides that a new trial shall be granted "[w]hen the verdict or judgment appears clearly contrary to the law and the evidence, " La. Code Civ. P. art. 1972, and permits the court to grant a new trial "in any case if there is good ground therefor, except as otherwise provided by law, " id. art. 1973. When granting a new trial, trial courts have broad discretion. Davis v. Wal-Mart Stores, Inc., 774 So.2d 84, 93 (La. 2000). The court can evaluate the evidence, draw its own inferences and conclusions, and determine whether the jury "erred in giving too much credence to an unreliable witness." Joseph v. Broussard Rice Mill, Inc., 772 So.2d 94, 104 (La. 2000). However, a "jury's verdict should not be set aside if it is supportable by any fair interpretation of the evidence." Davis, 774 So.2d at 93 (quoting Gibson v. Bossier City Gen. Hasp., 594 So.2d 1332, 1336 (La. Ct. App. 1991)).

         Defendant also argues that the Court should lower the jury's verdict in each category of damages. (Doc. 104-1 at p. 14). The Court will therefore construe the Motion for a New Trial, as a motion for remittitur in the alternative. See Thomas v. Texas Dep't of Criminal Justice, 297 F.3d 361, 368 (5th Cir. 2002) (holding that courts have the discretion to convert a motion for new trial to a motion for remittitur). Under La. Code Civ. P. art. 1814, remittitur is an alternative to a new trial, when the "trial court is of the opinion that the verdict is so excessive or inadequate that a new trial should be granted for that reason only." Id. The remedy "is to be entered only if the issue of quantum is clearly and fairly separable from other issues in the case." Id. Further "the Louisiana statutory scheme requires the consent of the party adversely affected by an additur or remittitur." Falterman v. Schunemeyer, 153 So.3d 1284, 1285 (La. Ct. App. 2014) (quoting Accardo u. Cenac, 722 So.2d 302, 306 (La. Ct. App. 1998). If the adversely affected party does not consent to remittitur, it can choose to hold a new trial. Id.

         a. Breach of Contract and Prompt Payment Act

         Defendant argues that the $304, 189.00 awarded for breach of contract is excessive because only one change order was in dispute at trial totaling $107, 779.99. (Doc. 104-1 at p. 6). But as Plaintiffs point out, they maintained that there were numerous change orders in dispute. (Doc. 122 at p. 7). Defendant next contends that they are not liable for the costs of flagmen because Schedule A, Section 50 of the contract provides that the subcontractor is responsible for these costs. (Doc. 104-1 at p. 6). However, based on the testimony of Roland Alonso, who testified that RCS was never asked to reimburse anyone for these costs, and that the coordination of flaggers was solely the responsibility of Westcoast, the verdict is not excessive. (See Doc. 122-3 at 55:15-57:3). Defendant also asserts that the $66, 450 awarded as a penalty for delayed payments is contrary to the Prompt Payment Act, and is excessive. (Doc. 104-1 at p. 10). Specifically, Defendant argues that Plaintiffs only presented evidence that Defendant may have unlawfully delayed payment of $127, 025.86 and because the Prompt Payment Statute caps penalties at fifteen percent of the outstanding balance, the most Defendant could be liable for in this category of damages is $19, 053.88. Id. at p. 11. However, the Court is satisfied that sufficient evidence was presented from which the jury could conclude that there were delayed payments in excess of $127, 025.86. (Doc. 122-1 at p. 13-14). Indeed, evidence was presented that multiple change orders were withheld. Id. The Motion for a New Trial is denied relative to the breach of contract and Prompt Payment Act claims.

         b. Home Office ...


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