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 grant of summary judgment filed by
Plaintiff Cotton Exchange Investment Properties LLC
(“Cotton Exchange”). R. Doc. 229. Defendant John
T. Campo (“Campo”) opposes the motion. R. Doc.
237. 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 6, 10, 16.
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, Inc. (“Xcel”).
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. at 2. 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 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 renovation
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.
Id. at 4. Thereafter, Cotton Exchange executed the
purchase agreement with Supreme Bright (the “Assignment
and Assumption Agreement”). Id. Notably,
section 10.3 of the contract Campo held with Supreme Bright
addresses the issue of the assignment of rights, stating:
The Owner [Supreme] and Architect [Campo], respectively, bind
themselves, their agents, successors, assigns and legal
representatives to this Agreement. Neither the Owner nor the
Architect shall assign this Agreement without the written
consent of the other, except that the Owner may assign this
Agreement to a lender providing financing to the Project if
the lender agrees to assume the Owner's rights and
obligations under this Agreement.
R. Doc. 162-5 at 16. Section 10.5 of the contract states,
“[n]othing contained in the Agreement shall create a
contractual relationship with or cause of action in favor of
a third party against either the Owner or Architect.”
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
Assignor hereby assigns, transfers, and conveys to Assignee
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 6. Plaintiff claims it had to
close the hotel because of this extensive damage.
Id. at 6. In December 2015, Plaintiff alleges it
terminated 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. Consequently,
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 7-16.
March 29, 2019, Defendant Campo filed a motion for summary
judgment, R. Doc. 162, which the Court granted in part and
denied in part on May 3, 2019, 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 sections 10.3 and 105 of 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, which Supreme
Bright never obtained. Id. at 8. With respect to
Cotton Exchange's negligence claims against Campo,
however, the Court denied summary judgment ...