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The Lathan Co., Inc. v. State

Court of Appeals of Louisiana, First Circuit

December 6, 2017

THE LATHAN COMPANY, INC.
v.
STATE OF LOUISIANA, DEPARTMENT OF EDUCATION, RECOVERY SCHOOL DISTRICT & JOHN WHITE IN HIS OFFICIAL CAPACITY AS THE STATE OF LOUISIANA SUPERINTENDENT OF EDUCATION GUARANTEE COMPANY OF NORTH AMERICA
v.
STATE OF LOUISIANA, DEPARTMENT OF EDUCATION, RECOVERY SCHOOL DISTRICT

         On Appeal from the Nineteenth Judicial District Court In and for the Parish of East Baton Rouge State of Louisiana No. 612, 067 c/w 635, 780 Honorable R. Michael Caldwell, Judge Presiding

          Lloyd N. Shields, Elizabeth L. Gordon, Andrew G. Vicknair, Adrienne C. May Counsel for Plaintiff/Appellant The Lathan Company, Inc.

          John B. Dunlap, III Jennifer A. Fiore, Hunter R. Bertrand, Baton Rouge Counsel for Plaintiff/Appellee Guarantee Company of North America

          Steven F. Griffith, Jr. Benjamin W. Janke, Carnalla M. Kimbrough Counsel for Defendants/ Appellees Jacobs/CSRS Consortium, Marvin Daniels & Nick Amort

          Kaye C. Templet, Aaron J. Lawler, Douglas K. Foster Counsel for Defendant/ Appellee Progressive Insurance Company

          Jimmy A. Castex, Jr. Scott J. Hedlund, Brian S. Schaps Counsel for Defendant/Appellee Billes Partners, LLC

          Tina Crawford White, Michael E. Botnick, J. Douglas Rhorer Counsel for Defendant/ Appellee State of Louisiana, Department of Education, Recovery School

          BEFORE: WHIPPLE, C.J., GUIDRY, McCLENDON, CHUTZ, and PENZATO, JJ.

          WHIPPLE, C.J.

         Plaintiff, The Lathan Company, Inc., appeals a judgment of the trial court granting summary judgment in favor of Jacobs Project Management Co./CSRS Consortium and dismissing with prejudice plaintiffs claims against this defendant. For the following reasons, we reverse and remand.

         FACTS AND PROCEDURAL HISTORY

         On August 13, 2010, The Lathan Company, Inc., entered into a public works contract with the State of Louisiana, Department of Education, Recovery School District ("the RSD") to renovate William Frantz School in New Orleans, Billes Partners, LLC ("Billes") served as architect on the project. Jacobs Project Management Company/CSRS Consortium ("Jacobs"), through a contract with the RSD, served as the construction manager on the project.

         On May 14, 2012, Lathan filed a "Petition for Mandamus, " naming the RSD and John White, in his official capacity as the Louisiana Superintendent of Education, as defendants, seeking an order requiring the RSD to make payment of all undisputed amounts owed for Lathan's work. In an amended petition filed on August 1, 2014, Lathan added Billes and Jacobs as defendants.

         Lathan's lengthy amended petition, consisting of twenty-five pages and two hundred eighteen paragraphs, alleged, in pertinent part, that Jacobs owed a duty to Lathan to conduct constructability reviews and to oversee and administer the project according to the standard of care of similar professionals in the industry, which Jacobs did not do. In pertinent part, the amended petition alleged:

(1.) The original bid documents and design drawings contained flaws, including the failure to disclose certain mold conditions and an underground fuel tank, which resulted in Lathan performing additional work, and for which Lathan's contract was not adequately extended for the time required to address these undisclosed conditions;
(2.) As a result of the faulty design documents, Lathan submitted in excess of 400 requests for information ("RFIs") to Billes and despite numerous promises to timely respond by Billes and Jacobs, Lathan's RFIs were not timely responded to, resulting in project delays;
(3.) Billes and Jacobs did not perform inspections in the manner prescribed by industry standards; and
(4.) Billes and Jacobs failed to review, certify and/or approve the amounts due to Lathan, causing Lathan to incur additional costs, delaying the project, and preventing Lathan from having access to contract funds to pay subcontractors and suppliers.

         Lathan summarized Jacobs's wrongful acts as: (1.) its unreasonable refusal to approve Lathan's payment applications and schedules; (2.) its extremely delayed responses to Lathan's questions and submittals; (3.) its refusal to give needed responses to reasonable questions; (4.) its refusal to properly recommend substantial completion; (5.) its refusal to properly manage the oversight of the project; and (6.) its overall interference with the progress and completion of the project. Accordingly, Lathan alleged that it was entitled to damages under general tort law for Jacobs's negligent professional undertaking and under the Louisiana Unfair Trade Practices Act ("LUTPA").

         In response, Jacobs filed a motion for summary judgment, seeking a dismissal of Lathan's claims against it. In its memorandum in support of its motion, Jacobs asserted that Lathan's general negligence claims must fail because Jacobs owed no duty to Lathan, since Lathan was not a party to the contract between Jacobs and the RSD. Jacobs additionally urged that because it owed no duty to Lathan, Lathan's LUTPA claims must fail as a matter of law. Notwithstanding whether a duty was owed, Jacobs also argued that Lathan's allegations did not rise to the level of an unfair trade practice that is actionable under LUTPA. Alternatively, Jacobs argued that a majority of Lathan's claims against it were prescribed.

         Lathan opposed the motion, contending that Jacobs owed it a duty given the high degree of control and power that Jacobs, as a learned professional, held and had exercised (or failed to exercise) over Lathan, Additionally, Lathan argued that its claims against Jacobs were timely because: (1) Billes and Jacobs are joint tortfeasors and thus, the 2012 suit against Billes interrupted prescription as to Jacobs; and (2) Jacobs was still performing work on the project and thus, Lathan's claims against Jacobs are governed by the continuing tort doctrine.

         Following argument, the trial court granted Jacobs's motion for summary judgment, finding that Jacobs owed Lathan no duty. As such, the trial court concluded that in the absence of a duty, Lathan could not recover under its negligence theory or LUTPA claims.[1]

         On September 24, 2015, the trial court signed a judgment granting Jacobs's motion for summary judgment and dismissing Lathan's claims against Jacobs with prejudice. However, the written judgment was silent as to the prescription argument that was raised by Jacobs in support of the motion of summary judgment, and which the trial court stated, in its oral reasons for judgment, that it would deny. Lathan subsequently filed a motion for new trial, which was denied by the trial court.

         Lathan then filed the instant appeal, assigning the following as error:

(1) The trial court improperly granted Jacobs's motion because Jacobs, being and acting as a licensed construction professional, and under the facts of this case, owed a duty to Lathan.
(2) The trial court improperly granted Jacobs's motion by making a credibility determination as to the record evidence.
(3) The trial court improperly granted Jacobs's motion by making an improper factual determination of disputed evidence on summary judgment concerning Jacobs's scope of duties properly reserved for the trier of fact - here, a jury.
(4) The trial court erred in failing to deny Jacobs's motion as premature considering the woefully inadequate state of discovery.
(5) The trial court erred in denying Lathan's motion because the underlying summary judgment ruling was contrary to binding First Circuit authority.
(6) The trial court erred in denying Lathan's motion by finding that newly-discovered evidence on the issue of Jacobs's professional duties did not present an ...

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