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Village Shopping Center Partnership v. Kimble Development, LLC

Court of Appeals of Louisiana, Fifth Circuit

April 24, 2019

VILLAGE SHOPPING CENTER PARTNERSHIP
v.
KIMBLE DEVELOPMENT, LLC AND MICHAEL KIMBLE

          ON APPEAL FROM THE TWENTY-NINTH JUDICIAL DISTRICT COURT PARISH OF ST. CHARLES, STATE OF LOUISIANA NO. 82, 418, DIVISION "C" HONORABLE EMILE R. ST. PIERRE, JUDGE PRESIDING

          COUNSEL FOR PLAINTIFF/APPELLEE, VILLAGE SHOPPING CENTER PARTNERSHIP Leonard A. Davis Charles M. King

          COUNSEL FOR DEFENDANT/APPELLANT, KIMBLE DEVELOPMENT, LLC David C. Fleshman David B. Phelps Ross A. Dooley

          Panel composed of Judges Fredericka Homberg Wicker, Robert A. Chaisson, and John J. Molaison, Jr.

          JOHN J. MOLAISON, JR. JUDGE

         In this action based upon an alleged breach of a service contract between a landowner and commercial developer, the developer appeals the granting of a summary judgment in favor of the landowner on the issue of reimbursement of certain construction costs. For the reasons that follow, we affirm.

         PROCEDURAL HISTORY

         Appellant, Kimble Development, LLC. ("Kimble"), entered into a Contract for Development with appellee, Village Shopping Center Partnership ("Village"), in 2013 for the purpose of building an O'Reilly Auto Parts store on Village's property in St. Charles Parish. The contract provided that Village would pay Kimble a development fee of $35, 000, and that Kimble would be responsible for all construction costs of the building that exceeded $688, 944, with the exception of "unforeseen" or "uncontrollable costs" such as asbestos or environmental mitigation and site clean-up. A contract addendum executed by the parties in June of 2015, adjusted the project cost to $711, 576.71 when power lines at the site were required to be run underground and the store's windows had to be upgraded according to building code standards. A subsequent change order dated August 4, 2015, increased the amount again by $1, 837.77, for a total of $713, 413.71. When the final price of the project reached $751, 900.00, Village called upon Kimble for a reimbursement of $40, 324.28, which was the amount exceeded in the contract addendum that Village had paid to Kimble, the general contractor as well as the vendors and subcontractors that Kimble hired for the project. After unsuccessfully trying to resolve the matter, Village filed the instant lawsuit on December 21, 2016, which further sought penalties, interest, attorney's fees and costs.

         On February 17, 2017, Kimble filed a peremptory exception of no right of action, which was denied on May 17, 2017. After Kimble filed an answer to Village's petition for damages, Village filed a motion for summary judgment, which was granted by the trial court on July 20, 2018. Kimble timely sought the instant devolutive appeal from that judgment.

         FACTS

         Kimble asserts that the exceeded estimates in this matter occurred as a result of the cost of materials that it was required to purchase from O'Reilly, referred to as O'Reilly National Account items, which included components such as the building's shell and HVAC system. In the deposition testimony of Kimble's owner, Michael Kimble, he stated that in his prior experience developing O'Reilly's Auto Parts stores, the invoice for the National Account items at the end of the project never exceeded the $100, 000 estimated amount. Mr. Kimble testified that in the construction of the O'Reilly's store on Village's property, however, the cost exceeded the estimated amount because the square footage of the building increased from 6, 800 square feet to 7, 125 square feet. Kimble contends that it "neither foresaw nor controlled the cost of the National Account items as is required under Section 5 of the Contract to hold Kimble Development responsible."

         Conversely, Village argues that the cost overruns were the result of Kimble incorrectly conveying the correct square footage of the store to O'Reilly. As explained by Village in its brief:

Although the contract lists the size at 6, 800 square feet, by early 2013, Kimble was aware that the building was actually 7, 125 square feet. In April 2013, O'Reilly Auto Parts emailed Peter Glaser of Village a copy of a "Draft New Construction Building Lease Agreement for 7, 125 square foot building," and Kimble's project manager, Scott Russell, was copied on the email.

         In confirming these facts during his deposition testimony, Mr. Kimble acknowledged that the failure to adjust the estimate to 7, 125 square feet was an "oversight." Village also contends that the contract between the parties specifically stated that Kimble, as the project's contractor, was responsible for all construction costs, which the National Account items were a part of.

         In its motion for summary judgment, Village asserted that certain facts were undisputed: 1) whether Kimble had warranted that the final cost of the project would not exceed $713, 413.71; 2) whether the total cost of the project paid by Village amounted to $761, 700.99, and; 3) whether the costs of the project were foreseeable and controllable. In support of its motion for summary judgment, Village attached several exhibits, which were referenced at the hearing and in the trial court's reasons for judgment.[1] Conversely, in opposing Village's motion for summary judgment, Kimble argued that the cost overruns for the project were both unforeseen and uncontrollable.

         Assignment ...


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