United States District Court, W.D. Louisiana, Lake Charles Division
MATHESON TRI-GAS, INC.
WILLIAMSON GENERAL CONTRACTORS, INC.
KATHLEEN KAY JUDGE
the court is a Motion for Summary Judgment [doc. 61] filed by
plaintiff Matheson Tri-Gas, Inc. (“Matheson”) and
opposed by defendant Williamson General Contractors, Inc.
(“Williamson”). The matter has been referred to
the undersigned for review, report, and recommendation in
accordance with the provisions of 28 U.S.C. § 636.
action began as a breach of contract suit relating to
Matheson's Phase I construction of a new gas plant
(“Pelican project”) in Westlake, Louisiana. On
May 27, 2015, Williamson project manager Joey Quick submitted
a bid to provide construction services on the mechanical
installation at the plant, for the lump sum price of $15.8
million. Doc. 61, att. 3, pp. 3-7. Matheson accepted
Williamson's bid by purchase order issued on May 29,
2015. Doc. 61, att. 4, p. 3. Construction commenced but was
complicated by several design drawing revisions from
Matheson. Doc. 61, att. 2, p. 2, ¶ 6; doc. 61, att. 3,
p. 1, ¶ 6. Williamson responded with requests for change
orders, which Matheson disputed. Doc. 61, att. 3, p. 1,
¶ 7. The parties entered into a “Change Order
Agreement” effective February 2, 2016, under which
Matheson agreed to pay Williamson an additional $3.4 million
for costs incurred by certain revisions up to that date.
Id. at pp. 1-2, ¶¶ 8-11; see Id.
at pp. 8-9 (copy of agreement). The agreement specifically
excluded certain costs anticipated to be incurred after its
effective date, and further provided that “[a]ny
modifications made or issued after Feb. 2, 2016 will be
charged at the cost plus rates.” Id. at 8-9.
April 21, 2016, Matheson issued a letter of intent to award
the mechanical portion of the Pelican Phase II project to
Williamson. Doc. 61, att. 4, pp. 320-21. On June 30, 2016,
Williamson demanded an additional sum of approximately $6.5
million to continue work on the Phase I project. Id.
at 310-12. By email dated July 4, 2016, Matheson stated that
it would need a few days to evaluate the information
presented and directed Williamson not to return to the
project until advised to do so by Matheson. Doc. 86, att. 2,
p. 5, ¶ 24; doc. 86, att. 9. The following day, Matheson
advised Williamson that it was terminating the parties'
business relationship effective immediately and rescinding
the letter of intent relating to Phase II. Doc. 86, att. 10.
then filed suit in this court, asserting federal diversity
jurisdiction. Doc. 1. In the complaint Matheson maintains
that it paid Williamson all sums due and owing under their
agreements but that Williamson continued to demand
“additional unreasonable sums” to complete the
facility and then breached the agreements by abandoning the
project on or about June 30, 2016. Id. at p. 3,
¶¶ 7-8. As a result, Matheson asserts, several of
Williamson's subcontractors have filed or threatened to
file liens against the facility to recover sums that they
allege are owed by Williamson. Id. at pp. 3-4,
¶ 9. Accordingly, Matheson seeks damages incurred from
Williamson's alleged breaches and subrogation to the
rights of any subcontractors it must satisfy based on the
above liens. Id. at pp. 4-5, ¶¶ 10-16. It
has also amended its complaint to add claims of indemnity and
bad faith breach of contract. Doc. 20.
brings counterclaims against Matheson for breach of contract,
bad faith breach of contract, detrimental reliance,
fraud/fraudulent inducement, cardinal change, open account,
unjust enrichment, quantum meruit, and
negligence. Docs. 6, 24. Matheson now moves for
summary judgment on all counterclaims raised by Williamson,
stating that it has honored all binding agreements between
the parties and that Williamson has no evidence to support
its remaining counterclaims. Doc. 61, att. 1. Williamson
opposes the motion. Doc. 84.
should grant a motion for summary judgment when the movant
shows “that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” Fed.R.Civ.P. 56. The party moving for
summary judgment is initially responsible for identifying
portions of pleadings and discovery that show the lack of a
genuine issue of material fact. Tubacex, Inc. v. M/V
Risan, 45 F.3d 951, 954 (5th Cir. 1995). The court must
deny the motion for summary judgment if the movant fails to
meet this burden. Id.
movant makes this showing, however, the burden then shifts to
the non-moving party to “set forth specific facts
showing that there is a genuine issue for trial.”
Anderson v. Liberty Lobby, Inc., 106 S.Ct. 2505,
2511 (1986) (quotations omitted). This requires more than
mere allegations or denials of the adverse party's
pleadings. Instead, the nonmovant must submit
“significant probative evidence” in support of
his claim. State Farm Life Ins. Co. v. Gutterman,
896 F.2d 116, 118 (5th Cir. 1990). “If the evidence is
merely colorable, or is not significantly probative, summary
judgment may be granted.” Anderson, 106 S.Ct.
at 2511 (citations omitted).
may not make credibility determinations or weigh the evidence
in ruling on a motion for summary judgment. Reeves v.
Sanderson Plumbing Prods., Inc., 120 S.Ct. 2097, 2110
(2000). The court is also required to view all evidence in
the light most favorable to the non-moving party and draw all
reasonable inferences in that party's favor. Clift v.
Clift, 210 F.3d 268, 270 (5th Cir. 2000). Under this
standard, a genuine issue of material fact exists if a
reasonable trier of fact could render a verdict for the
nonmoving party. Brumfield v. Hollins, 551 F.3d 322,
326 (5th Cir. 2008).
Erie Railroad Co. v. Tompkins, 58 S.Ct. 817 (1938),
a federal court sitting in diversity jurisdiction applies the
substantive law of the forum state. See Cates v. Sears,
Roebuck & Co., 928 F.2d 679, 687 (5th Cir. 1991).
Thus, the court applies Louisiana law to determine whether
Williamson's claims should survive this motion for
Breach of Contract Claims
raises three claims of bad faith breach of contract, based on
Matheson allegedly doing the following: (1) failing to pay to
Williamson “the full amount of the contract price under
the Agreement, as modified, ” (2) mismanaging the Phase
I project, resulting in “a grossly unreasonable number
of changes and revisions, ” and (3) unilaterally
rescinding the Letter of Intent to award Williamson
additional work on Phase II of the project. Doc. 24, pp. 4-7.
Matheson moves for summary judgment on these claims,
maintaining that Williamson cannot show an underlying breach
on any of them. Doc. 61, att. 1, pp. 14-17.
Louisiana law, the essential elements of a breach of contract
claim are defined as (1) the obligor's undertaking of an
obligation to perform, (2) the obligor's failure to
perform the obligation (the breach), and (3) resulting
damages to the obligee. Boudreaux v. Flagstar Bank
FSB, 623 Fed. App'x 235, 237 (5th Cir. 2015)
(internal citations omitted). Louisiana law also requires
that contracts be performed in good faith. La. Civ. Code art.
1983. Bad faith “means more than mere bad judgment or
negligence, it implies the conscious doing of a wrong for
dishonest or morally questionable motives.” MKR
Servs., LLC v. Dean Hart Const., LLC, 16 So.3d 562, 566
(La. Ct. App. 2d Cir. 2009). An actor contracts in bad faith
when he evinces “an intentional and
malicious” failure to perform. La. Civ. Code art.
1997, cmt. (b). Bad faith in contracting is only actionable,
however, when preceded by a finding that the actor breached
the contract. Favrot v. Favrot, 68 So.3d 1099, 1110
(La. Ct. App. 4th Cir. 2011). “The only differences
between a typical breach-of-contract claim and a bad-faith