United States District Court, E.D. Louisiana
ORDER AND REASONS
E. Fallon U.S. District Court Judge
the Court is a motion for partial summary judgment filed by
Defendant Xcel Air Conditioning Services, Inc. R. Doc. 247.
The motion is opposed. R. Doc. 260. Defendant filed a reply.
R. Doc. 265-2. 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 Commercial
Renovation Services, Inc. (“CRS”) and John T.
Campo & Associates (“Campo”) during the
hotel's renovation. R. Doc. 23 at 2. Cotton Exchange
further contends the hotel also sustained damages as a result
of defective maintenance and repairs to the hotel's HVAC
system performed by Defendant Xcel. Cotton Exchange filed
suit, seeking recovery for its damages.
complaint, Plaintiff alleges that in 2014, Supreme Bright New
Orleans LLC (“Supreme Bright”), which owned the
hotel at the time, executed several contracts for its
renovation. R. Doc. 23 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, whereby
Campo would 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
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”). R.
Doc. 1 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. Cotton Exchange claims it had to close the hotel
because of this extensive damage.
R. Doc. 23 at 6.
Exchange canceled the HVAC contract pursuant to its terms in
December 2015 and notified Xcel of the damage on three
occasions. R. Doc. 1 at 5, 6. Xcel did not respond to the
demand for indemnity. R. Doc. 1 at 6. Additionally, Cotton
Exchange 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 ...