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Expert Riser Solutions, LLC v. Techcrane International, LLC

Court of Appeals of Louisiana, First Circuit

December 28, 2018

EXPERT RISER SOLUTIONS, LLC
v.
TECHCRANE INTERNATIONAL, LLC

          Appeal from the Twenty-Second Judicial District Court In and for the Parish of St. Tammany State of Louisiana Docket No. 2017-11295 Honorable William H. Burris, Judge Presiding

          Lawrence R. DeMarcay, III New Orleans, Louisiana Counsel for Plaintiff/ Appellant ExPert Riser Solutions, LLC

          J. Scott Loeb Lauren Fajoni Bartlett Mandeville, Louisiana Counsel for Defendant/ Appellee Techcrane International, LLC

          BEFORE: WHIPPLE, C.J., McCLENDON, AND HIGGINBOTHAM, JJ.

          MCCLENDON, J.

         In this case involving allegations of a defective crane, the plaintiff appeals the trial court's judgment which granted the defendant's exception of prescription as to the plaintiff's redhibition cause of action, pretermitted ruling on the defendant's exception of no cause of action on the plaintiff's remaining claims, and dismissed the plaintiff's petition with prejudice.[1] For the following reasons, we affirm the portion of the judgment that grants the defendant's exception of prescription, reverse the portion of the judgment that dismisses the plaintiff's petition, and remand to the trial court for further proceedings.

         FACTS AND PROCEDURAL HISTORY

         ExPert Riser Solutions, LLC, supplies marine risers to the oil and gas industry. In December 2012, ExPert entered a contract with Weatherford wherein ExPert agreed to provide dockside facilities and services to Weatherford at ExPert's facility in Port Fourchon, Louisiana. ExPert further agreed to have a dedicated crane to support the services outlined in the Weatherford contract. Because it did not have a crane that met the contract's load requirements, ExPert solicited bids from several crane manufacturers, including the defendant, Techcrane International, LLC, to have a new crane constructed.

         Techcrane issued a written proposal to ExPert in January 2012 for the production and installation of an API 2C Monogramed Crane Model L300-160 Pedestal Mounted Hydraulic Marine Crane for the price of $1,699,000. As set forth in the proposal, a standard L-300-160 model crane includes a main hoist equipped with an 80-ton traveling block and a maximum lifting weight of 140,000 pounds (70 tons) using a four-part line. According to ExPert, the parties agreed that the crane would be constructed to accommodate an eight-part line with a 150-ton traveling block (purchased separately) which would allow the crane to lift 100 tons. According to the petition, "ExPert's operational needs required a crane at its facility that is capable of lifting 100 tons due to the weight of telescopic joints of riser that are routinely handled at the facility." The crane was to be built in accordance with industry requirements and standards, including all welds, and have a minimum design life of 25 years.

         ExPert accepted Techcrane's proposal in March 2012 and installation and commissioning began in April 2013. Almost immediately, ExPert began experiencing mechanical and technical problems with the crane, including "popping" noises emanating from the crane's rotating gears and twisted bridle sheaves. Techcrane advised ExPert that the twists in the bridle were normal and explained that the noise was caused by the rotating gears "seating" with each other. Techcrane assured ExPert the noise would subside once the gears were fully "seated."

         Soon after installation in 2013, ExPert learned that the crane could not be fitted with an eight-part line and, therefore, could not reach the agreed-upon 100-ton lifting capacity. At the time, Techcrane's service mechanics advised ExPert that the boom tip on the crane was too small and too narrowly designed to accommodate the eight-part reeving. The crane was also damaged during Techcrane's effort to retrofit the crane and, as a result, its lifting rating was reduced to 75 tons.

         The mechanical problems with the crane persisted, including hydraulic fluid overheating and leaks, which caused the hydraulic motors, pumps, brakes, and clutches to fail prematurely. As a result of the on-going problems with the crane, and at ExPert's request, Southern Crane and Hydraulics, LLC performed an inspection of the crane in October 2013 and provided ExPert with a list of items that required repair and/or further investigation. Significantly, in October 2013, Southern Crane advised ExPert that the pendent line twisting problems and the noise from the rotating gears or bearings needed further investigation. Southern Crane also identified several parts of the crane that were improperly installed and items that were included in Techcrane's proposal but not actually delivered or installed by Techcrane. According to ExPert, it was "unaware that it had been shortchanged by Techcrane until receiving the Southern Crane report."

         Problems with the crane continued, resulting in periods of extensive down time and costing ExPert thousands of dollars in maintenance expenses over the next two years. In October 2016, ExPert retained Oil States Skagit Smatco, LLC to perform an inspection and engineering study on the crane to determine whether it was defective. Oil States concluded that the crane was constructed improperly and was unfit for service. Among other things, Oil States identified the roller bearing as the cause of the crane's on-going rotation problems, not "seating" of the rotating gears, and observed signs of defective or damaged welds, some of which were determined to be structural cracks. After the cracks and welds were repaired, the crane was placed back into service, but its capacity was downgraded to light duty operations. Oil States further advised that the crane's rotating bearing needed to be repaired before the crane could be used reliably. However, in lieu of spending $1 million to fix the rotating bearing, ExPert elected to replace the crane in October 2016.

         ExPert filed suit against Techcrane on March 20, 2017. The petition specifically identified eight causes of action: breach of contract, redhibition, negligent misrepresentation, fraud/fraudulent inducement, breach of express warranties, tort negligence, and the Louisiana Unfair Trade Practices Act.

         In response to ExPert's petition, Techcrane asserted exceptions raising the objections of no cause of action and prescription. In its exception of no cause of action, Techcrane argued that ExPert's claims were governed by the LPLA and redhibition, and as a result, the exclusivity provisions of the LPLA barred the remaining causes of action asserted by ExPert. In its exception of prescription, Techcrane asserted that ExPert's redhibition and LPLA causes of action were prescribed because ExPert was aware of the alleged defects in the crane more than one year before filing suit.

         ExPert opposed both exceptions. In response to the exception of no cause of action, ExPert maintained that the LPLA did not apply because its claims were not based on damages caused Z?/Techcrane's products. Accordingly, ExPert argued that its additional theories of recovery were not barred by the LPLA and, instead, may proceed along with a claim for redhibition. With regard to the exception of prescription, ExPert contended that it was not aware that the crane was defective until it received Oil States' report in April ...


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