United States District Court, E.D. Louisiana
ORDER & REASONS
E. Fallon U.S. District Court Judge
the Court is a motion seeking reconsideration of the
Court's partial denial of summary judgment filed by
Defendant John T. Campo (“Campo”). R. Doc. 200.
The motion is opposed. R. Doc. 209. Campo has filed a reply.
R. Doc. 218. The Court now rules as follows.
Cotton Exchange Investment Properties LLC (“Cotton
Exchange”) alleges its hotel was damaged as a result of
faulty workmanship performed by Defendants Campo and
Commercial Renovation Services, Inc. (“CRS”)
during the hotel's renovation. R. Doc. 23 at 2. Plaintiff
contends the hotel also sustained damages as a result of
defective maintenance and repairs to the hotel's HVAC
system performed by Defendant Xcel Air Conditioning Services,
complaint, Plaintiff alleges that in 2014, Supreme Bright New
Orleans LLC (“Supreme Bright”), which owned the
hotel at the time, executed several contracts for the
hotel's renovation. Id. In January 2014, Supreme
Bright contracted with Xcel to provide HVAC services,
including the maintenance of the hotel's cooling tower,
roof top units, and chilled water pumps. R. Doc. 1 at 3. That
same month, Supreme Bright entered into a contract with Campo
for Campo to provide architectural, design, and engineering
services. R. Doc. 23 at 4. A few months later, Supreme Bright
contracted with CRS to serve as general contractor for the
project. R. Doc. 23 at 2.
2015, Pacific Hospitality Group (“PHG”) entered
into a purchase agreement with Supreme Bright to buy the
hotel, whereby PHG would assume the rights to all three
contracts. R. Doc. 1 at 3. PHG subsequently assigned all of
its rights, title, and interest in the purchase to Cotton
Exchange, including the contracts with Xcel, Campo, and CRS.
Thereafter, Cotton Exchange executed the purchase agreement
with Supreme Bright (the “Assignment and Assumption
Agreement”). Id. at 4. On January 31, 2017,
Cotton Exchange and Supreme Bright entered into a settlement
agreement resolving a matter unrelated to the issue at bar,
wherein the parties amended the Assignment and Assumption
Agreement's terms by adding the following language:
Assignor hereby assigns, transfers and conveys all of
Assignor's rights, title and interest in and to the
Assigned Property, including all contractual and personal
rights in and/or related to the Hotel, including without
limitation the personal right to sue for damages, that
Assignor has against CRS, subcontractors and vendors to CRS,
and any other contractors or vendors engaged by [Supreme
Bright] prior to the Closing Date.
R Doc. 199-8 at 4-5.
Exchange alleges that under the terms of their respective
contracts, Cotton Exchange was indemnified by all three
Defendants for any property damage caused by their negligent
acts or omissions related to the scope of their work. R. Doc.
1 at 5; R. Doc. 23 at 3-4. According to Cotton Exchange, the
hotel suffered serious moisture damage as a result of
Defendants' faulty workmanship, including water-damaged
walls and floors due to exposed chilled water piping, missing
or improperly sealed insulation, and cracked or leaking
draining pans. R. Doc. 23 at 7. Plaintiff claims it had to
close the hotel because of this extensive damage.
Id. at 6. In December 2015, Plaintiff alleges it
canceled the HVAC contract with Xcel pursuant to its terms
and notified Xcel of the damage on three occasions. R. Doc. 1
at 5, 6. Xcel allegedly did not respond to the demand for
indemnity. Id. at 6. Additionally, Plaintiff avers
it demanded indemnity from CRS and Campo, but was also
unsuccessful in these demands. R. Doc. 23 at 7. As a
consequence, Plaintiff filed suit on December 16, 2016,
bringing breach of contract and negligence claims against all
three Defendants and breach of warranty of good workmanship
claims against CRS and Campo. Id. at
March 29, 2019, Defendant Campo filed a motion for summary
judgment, R. Doc. 162, which the Court granted in part and
denied in part, R. Doc. 190. With respect to Cotton
Exchange's breach of contract and breach of warranty
claims against Campo, the Court granted summary judgment
because Campo and Supreme Bright's agreement contained
language requiring Supreme Bright to obtain Campo's
explicit consent before assigning their agreement to a third
party. Id. at 8. With respect to Cotton
Exchange's negligence claims against Campo, however, the
Court denied summary judgment because Cotton Exchange's
complaint alleges, in part, that the hotel sustained damage
caused by Campo during Cotton Exchange's ownership of the
property. Id. at 10.
instant motion, Campo seeks reconsideration of the
Court's denial of summary judgment on Cotton
Exchange's negligence claims against Campo. R. Doc. 200.
Alternatively, Campo moves the Court to certify the issue for
interlocutory appeal. Id. Campo argues this Court
committed legal error in denying its motion with respect to
Cotton Exchange's negligence claims, reiterating its
argument that the subsequent purchaser rule bars these claims
and again pointing to Eagle Pipe & Supply, Inc. v.
Amerada Hess Corp., 2010-2267 (La. 10/25/2011), 79 So.3d
246. R. Doc. 200 at 3.
opposition, Cotton Exchange states, “should this Court
decide to reconsider its ruling on Campo's motion for
Summary Judgment, [it] asks that [the Court] also reconsider
(1) its ruling that [Cotton Exchange] was not assigned
[Supreme Bright's] right to enforce Campo's
statutorily implied warranty of good workmanship and (2) [the
Court's] failure to rule on [Cotton Exchange's]
contention that [it] was assigned the right to sue Campo in
tort via the January 31, 2017 Settlement and Release
Agreement.” R. Doc. 209 at 1-2.
LAW & ANALYSIS
Court first considers the issue of whether it committed a
manifest error of law, as Campo and Cotton Exchange both
contend, before considering whether to certify for
interlocutory appeal the issue of whether Cotton Exchange may