M. Matt Durand, L.L.C. VS Denton-James, L.L.C., The Louisiana Department of Transportation and Development, Patrick J. Landry and Robert H. Hennigan
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NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2010 CA 0625 M MATT DURAND L C VERSUS DENTONJAMES L THE LOUISIANA DEPARTMENT OF C TRANSPORTATION AND DEVELOPMENT D T O PATRICK J LANDRY AND ROBERT H HENNIGAN Judgment rendered nn DEC 2 2 v On Appeal from the 19 Judicial District Court Parish of East Baton Rouge State of Louisiana Suit Number C547608 Division 25 The Honorable Wilson Fields Judge Presiding Murphy J Foster III Counsel for Plaintiff Appellant Yvonne R Olinde M Matt Durand L C Baton Rouge Louisiana John L Dugas LA Dept of Justice Counsel for Defendants Appellees Baton Rouge Louisiana Transportation and Development T O D Patrick J Landry and Darhlene M Major Timothy Strohschein Baton Rouge Louisiana Robert H Hennigan David C Voss Counsel for Defendant Appellee Baton Rouge Louisiana DentonJames L C The Louisiana Department of BEFORE KUHN PETTIGREW AND KLINE JJ judge William F Kline Jr retired is serving as judge pro lewl by special appointment Of mw the Louisiana SUpreme C ourt KLINE J M Matt Durand LLC Durand appeals a judgment rendered in its favor against the Louisiana Department of Transportation and Development DOTD on the grounds that the award of damages for breach of a road construction contract was inadequate For the following reasons we amend the judgment of the trial court and as amended we affirm PERTINENT FACTS AND PROCEDURAL HISTORY In the aftermath of Hurricane Rita flood damage in 2005 DOTD needed to s promptly repair miles of eroded roadway in Cameron and Calcasieu Parishes One Shoulder Repair from of the repair projects entitled District 07 Embankment Hurricane Rita was let for bid and awarded to Denton James L Durand was C awarded a subcontract for approximately 40 of the project The project required Durand to replace missing embankment and road shoulders with granular aggregate in accordance with the project plan specified design s The initial bid requirements called for Durand to provide 140 cubic 125 yards of limestone as shoulder material over approximately 10 miles of roadway This turned out to be a highly erroneous calculation of material Ultimately the project required only 40 cubic yards of limestone over approximately 30 miles 854 of roadway As a result Durand sought damages resulting from the significant underrun in material and the changes in distance covered Durand claims the entire scope of the job was changed Durand and DOTD did not agree to modify the agreement but DOTD did agree to allow Durand to reserve its right to seek additional compensation for damages arising from the changed requirements Durand completed its portion of the project 2 material and distance When Durand and DOTD could not agree on the terns of a change order Durand filed suit against DOTD and two DOTD engineers After a trial on the merits the trial court entered judgment in favor of Durand and against DOTD awarding Durand 1 This sum represented an award of 5 06 474 072 20 246 764 less the amounts previously paid by DOTD in the amount of 4 The 20 356 661 judgment also dismissed Durand claim against the two engineers This award in s favor of Durand excluded recovery of any compensation for allegedly purchased but unused limestone the full amount claimed for increased utilization of company owned equipment the full amount of the claimed overhead and bid profit Durand now appeals asserting four assignments of error 1 The District Court erred in finding that DOTD was not liable for the negligent acts of its engineers pursuant to Civil Code Article 2320 and the doctrine of respondeat superior 2 The District Court erred in finding that Durand was not entitled to recover amounts expended for purchased but unused limestone in the amount of 5 85 969 237 3 The District Court erred in finding that Durand was not entitled compensation for company owned equipment utilized on the Project in the amount of 109 00 838 to additional 4 Inasmuch as the amount of overhead and bid profit is a stated percentage of the total direct project costs the District Court erred in effectively reducing the amount of overhead and bid profit awarded to Durand due to the reduction of Durand claim for s company owned equipment and elimination of Durand claim sl for purchased but unused limestone by 2 33 814 172 DISCUSSION Measure of Damages for Material Breach We first review Durand claim that DOTD is in material breach of the s contract between the since this determination will control the determination of In Prior it trial the partics entONd tl iOiIII til 01 iIIovr in Dora I cinirri5 tip h coll d dirk c IFi III Is I IIII LIIa1 S CI leI ic ct t DO 11 avoichll the roccr its to include tilt ol Contractor Delitol Jalne 1 1 in dice lilk flion raj C t hi juclw appealed is a partial tidal iuilw nt B order dated Dtxc 1010 tttc n iA court cc flw y iirher cl rtiiic ut 9r17t jud Is tin pultiu lilt to 1 C art 19151 ll a l 3 1 his court tllcrc ha jtlrkdioioll to clitertaill thi al e lirl 7pcal since kc c 11w certitictttion r as proper de lt tll 3 damages We note that the trial court found in its written reasons that a a s result of the deficiencies and design changes in the DOTD plans and specifications Durand became entitled to a renegotiated price for the work that it was perl orming and notified DOTD of its demand for such a renegotiated price The trial court then found that DOTD has thus far unjustly refused to issue a unilateral change order or pay sums that DOTD determined that it owed Durand even though Durand had fully performed its obligations under the contract From our review of the record we conclude the trial court did not err in finding that Durand was entitled to a renegotiated contract Accordingly we conclude that DOTD did materially breach its contract with Durand Section 1 of the Louisiana Standard Specifications for Roads and 03 09 Bridges generally governs compensation for altered quantities and provides in pertinent part as follows When alterations in quantities result in an increase or decrease of more than 25 percent in the contract quantity as awarded on any major item of the contract a supplemental agreement to the Department and the contractor at the request of either party prior to performance of contract may be executed between the any work in excess of 25 percent of the contract quantity When the supplemental agreement is executed the consent of the contractor s surety shall be obtained and furnished to the engineer A Major Item is an item included in the contract as awarded with a total cost equal to or greater than 10 percent of the original total contract amount Any adjustment in unit price will be made on only that portion of the major item exceeding 25 increase or in the case of a decrease of the item by 25 percent or more the remaining portion will be adjusted The actual costs shall be itemized in accordance with Subsection 109 Headings a through g except that projected 04 costs will be used in case of an increase in quantity Emphases added Durand argues however that due to DOTD material breach of contract s resulting from its gross miscalculation of limestone needed and distance covered it is entitled to damages including its expected profits 4 Durand asserts that it repeatedly requested a new design and pricing structure because performed was totally different from that which was initially bid the work Durand and DOTD were unable to renegotiate an acceptable contract Durand points to several first circuit cases we find persuasive In Ronald Adams Contractor Inc v State Dept of Transp and Development 457 2d So 778 780 81 La 1 Cir 1984 this court found that a contractor was App entitled to additional compensation where a significant difference exceeding 25 existed between proposed and actual quantities of aggregate In Con Plex Div of S U Industries Inc v Louisiana Dept of Transp Development 439 So 2d 567 570 La 1 Cir 1983 this court ruled that where DOTD has failed to App provide sufficiently definite and explicit plans and specifications as required by the public bidding law the DOTD is liable for the additional cost incurred In Sullivan v State Through Dept of Transp and Development 623 So 28 2d 30 31 La I Cir 1993 this court cited ConPlex approvingly and further App held that because of such ambiguities the trial court was correct in looking beyond the original agreement to determine the true intent of the parties We also note that Standard Specification 109 set out above entitled 03 Durand to negotiate a new agreement which DOTD declined to do We therefore conclude that Durand was entitled to damages it could prove in excess of the amount provided in the contract Where no contract controls La C art 1994 establishes and obligor liability This article provides as follows s An obligor is liable for the damages caused by his failure to Pei a conventional obligation A failure to perform results from nonperformance defective performance or delay in performance La C art 1995 provides the legal measure of damages as follows Damages are measured by the loss sustained by the obligee and the profit of which he has been deprived 5 s Accordingly we conclude the trial court erred in evaluating Durand damages by applying Standard Specifications 109 and 109 03 04 We now turn our analysis to Durand specific arguments on appeal s Alleged Negligence ofDOTD Although the trial court judgment dismissed the negligence claims against s DOTD project engineers with prejudice Durand argues in its first assignment of error that their alleged negligence should be imputed to DOM Durand is not seeking to reverse this aspect of the judgment but it asserts that DOTD is liable on principles of respondeat superior Here both Durand and DOTD offered expert testimony on the issue of the project engineers negligence Durand points out the major discrepancies between the original plans calling for 140 cubic yards of limestone over 10 miles of 25 1 road and the actual project using 40 cubic yards of limestone over 30 miles of 854 road It notes that the estimates were not developed by survey data but by a quick and dirty windshield survey Durand expert testified that given the significant s differences between the estimated and actual quantities of limestone the project engineers conduct fell below the applicable standard of care for engineers Conversely DOTD points to the exigent circumstances arising from the emergency nature of the project One of DOTD experts testified that under the s circumstances an engineer would act very much as did the project engineers and that the project engineers acted reasonably under the circumstances In reviewing for manifest error the issue to be resolved by the reviewing court is not whether the trier of fact was right or wrong but whether the s factfinder conclusion was a reasonable one I slan specification 109 provicics OW Cor Coil ald 1 0 do ttt Stobart v State Department of for 11t ri ratid tlic t u ontr pecihcalion plovido the nedl tnt detcrttt ill in tttc aJO Cost in Iiv c tt I odolm d tl 1 ai orie tl insuralict and tay C W a ials dg cac and e nti ll tc k rricnt tit t cc t o 6 I h h bond Transportation and Development 617 So 880 882 La 1993 If the factual 2d findings are reasonable in light of the record reviewed in its entirety a reviewing court may not reverse even though convinced that had it been sitting as the trier of fact it would have weighed the evidence differently Id at 882 883 Where there are two permissible views of the evidence the factfinder choice between them s cannot be manifestly erroneous Id at 883 From our review of the record we cannot conclude the trial court was clearly wrong in dismissing Durand negligence claims against the project s engineers The trial court conclusion that DOTD engineers were not negligent s s is reasonable and supported by the record Therefore they have no negligence to impute Accordingly Durand first assignment of error is without merit s Purchase ofLimestone In its second assignment of error Durand argues that DOTD should be required to complete the purchase of the limestone called for in the bid proposal but not needed for the road construction project Apart from the bid profit and overhead discussed below we conclude the trial court did not err in failing to require DOTD to purchase and take possession of the limestone at issue As discussed previously DOTD is liable to Durand for any loss it sustained as a result of DOTD breach La C arts 1994 and 1995 s Here on review of the record however we cannot conclude that Durand has suffered any loss In its written brief and at oral argument Durand acknowledged that the agreed price reflected the current fair market value of the limestone Durand also acknowledged that it has made little attempt to sell the limestone of which DOTD has declined to take possession In this regard La C art 2002 imposes a duty on Durand to mitigate its damages as follows An obligee must make reasonable efforts to mitigate the damage caused by the obligor failure to perform When an obligee s 7 fails to make these efforts the obligor may demand that the damages be accordingly reduced Emphasis added Further we recognize the trial court finding Durand payments on the s s limestone were all made after Durand knew of the change in amount of limestone that would be needed for this project We also recognize Special Provision Item 5 401 included in the letter bid proposal which states as follows Payment for the accepted quantities will be made at the contract price that includes furnishing the equipment labor and materials necessary to complete the item No direct payment shall be made for acquisition of materials stockpiling and rehandling of materials precautionary measures to protect other facilities or furnishing necessary equipment required to complete the work In sum since there is no evidence in the record to show that Durand has sustained a loss on the limestone other than bid profit and overhead and since Durand has apparently made little effort to mitigate any damages it might have sustained we cannot conclude the trial court erred in awarding payment to Durand for only the limestone used in the road construction project s Durand second assignment of error is without merit Company Owned Equipment Durand next argues in its third assignment of error that the trial court erred in adopting DOTD computation of damages arising from company owned s equipment Here both Durand and DOM put on evidence of the value of the reimbursable cost of Durand equipment s We conclude the trial court did not err in accepting DOTD computation and valuation for these damages s s Durand expert testified to a method for calculating the costs of the company owned equipment to include time during which the equipment was on site regardless of whether it was being utilized because large construction equipment is not easily moved such as excavators dozers and graders 8 s DOTD expert in contrast applied a different systematic method more aligned with the actual operating time over which the equipment was used In its written reasons the trial court adopted the DOTD methodology and s valuation for company owned equipment as follows The Court finds that DOTD calculations of the shop costs and the s equipment use in this Project seem to be more in line with the actual costs of this project The trial court factual finding that accepts DOTD calculation for the use s s of company owned equipment was not manifestly erroneous s Durand third assignment of error is without merit Overhead and Bid Profit In rendering judgment the trial court stated in its written reasons that it took into account all of the direct and indirect costs associated with the project except a yard lease barge costs and superior yard repair As stated above pursuant to La C arts 1994 and 1995 Durand is entitled to recover the loss he sustained including the profit of which he has been deprived Durand put on expert testimony and evidence showing that Durand made the following allocations in its bid proposal stated as percentages of the total direct project costs indirect shop overhead at 5 33 home office overhead at 4 43 bid profit at 30 87 Durand also put on evidence through invoices showing the value of unused but proposed limestone at 5 By reducing the amount of Durand clairn 85 969 237 s the trial court erred in effectively reducing the overhead and bid profit Accordingly we conclude Durand is entitled to an increased award in the amount of 2 calculated as follows 14 187 128 9 Indirect shop overhead 0533 x 5 85 969 237 Home Office overhead 0443 x 5 85 969 237 Bid Profit 3087 x 5 85 969 237 Total increase in award 79 183 279 06 042 232 29 961 616 1 14 187 128 2 DECREE For the foregoing reasons we amend the judgment of the trial court to increase the damage award by 2 14 187 128 Accordingly we vacate the judgment insofar as it awards Durand 1 and render judgment as 00 890 102 follows IT IS HEREBY ORDERED ADJUDGED AND DECREED that Louisiana Department of Transportation and Development is liable to M Matt Durand LLC in the amount of 3 plus 14 077 231 interest and costs the appropriate amount of costs to be determined by the Court on post trial hearing As amended we affirm the judgment of the trial court Costs of this appeal are assessed to the Louisiana Department of Transportation and Development in the amount of 7 82 594 AMENDED AFFIRMED AS AMENDED 10 M MATT DURAND L C FIRST CIRCUIT VERSUS COURT OF APPEAL DENTONJAMES L Tf IE C STATE OF LOUISIANA LOUISIANA DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT T O D PATRICK J LANDRY AND ROBERT 11 HENNIGAN NO 2010 CA 0625 KUHN J concurring in part and dissenting in part 1 concur in the majority opinion insofar as it increases the trial court s award but I would increase the award further by awarding the sums that Durand seeks related to the unused limestone Durand is not required to mitigate its damages as the majority reasons in order to be able to recover compensation for the purchased but unused limestone The terms of the contract control As part of its damages for DOTD breach of contract Durand is entitled to recover the costs s associated with the limestone in the full amount ordered pursuant to the quantities stated in the initial bid requirements Durand satisfied its contractual obligations but DOTD seeks to deny recovery based on the I that Durand still has act possession of the limestone limestone Although Durand has the obligation to deliver the e i the object of the completed sale it also sought to deliver the limestone at the price and the quantity agreed upon DOTD cannot frustrate the completed sale by refusing to accept delivery The buyer is bound to pay the price and to take delivery of the thing La C art 2549
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