Fisk Electric Company v. Woodrow Wilson Construction Company, Inc. et al

Filing 86

ORDER and REASONS - Presently before the Court are the parties' submissions relative to the issue of whether a penalty and/or attorney's fees are to be awarded pursuant to the Louisiana Prompt Pay Statute, La. R.S. 9:2784. IT IS ORDERED tha t Plaintiff Fisk Electric Company's motion (Rec. Doc. 75) is GRANTED IN PART and DENIED IN PART. IT IS FURTHER ORDERED that Defendant Woodrow Wilson Construction Company, Inc.'s motion (Rec. Doc. 74) is DENIED, as stated within document. Signed by Judge Kurt D. Engelhardt on 1/23/2015. (cbs)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
FISK ELECTRIC COMPANY

CIVIL ACTION

VERSUS

NO. 13-86

WOODROW WILSON CONSTRUCTION COMPANY, INC.
and HANOVER INSURANCE COMPANY

SECTION "N" (1)

ORDER AND REASONS
Presently before the Court are the parties' submissions relative to the issue of whether
a penalty and/or attorney's fees are to be awarded pursuant to the Louisiana Prompt Pay Statute, La.
R.S. 9:2784. See Rec. Docs. 73-75.1 As stated herein, IT IS ORDERED that Plaintiff Fisk Electric
Company's motion (Rec. Doc. 75) is GRANTED IN PART and DENIED IN PART. IT IS
FURTHER ORDERED that Defendant Woodrow Wilson Construction Company, Inc.'s motion
(Rec. Doc. 74) is DENIED.
I. Summary Judgment Standard
Pursuant to Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment
shall be granted "if the movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(a). The materiality of facts

1

Plaintiff's request for this relief is set forth in Count Three of its Amended Complaint
(Rec. Doc. 41). See Stipulations (Rec. Doc. 73), ¶40. The parties reached a settlement of Counts
One and Two of Plaintiff's Complaint and Amended Complaint, and the counterclaims asserted by
Defendant and co-defendant Hanover Insurance Company, on or about February 4, 2014. See
Stipulations (Rec. Doc. 73), ¶¶ 40-41.
1

is determined by the substantive law's identification of which facts are critical and which facts are
irrelevant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material if it "might
affect the outcome of the suit under the governing law." Id.
If the dispositive issue is one on which the nonmoving party will bear the burden of
proof at trial, the moving party may satisfy its summary judgment burden by merely pointing out that
the evidence in the record contains insufficient proof concerning an essential element of the
nonmoving party's claim. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 325,
(1986); see also Lavespere v. Liberty Mut. Ins. Co., 910 F.2d 167, 178 (5th Cir. 1990). Once the
moving party carries its burden pursuant to Rule 56(a), the nonmoving party must "go beyond the
pleadings and by [his] own affidavits, or by the 'depositions, answers to interrogatories, and
admissions on file,' designate 'specific facts showing that there is a genuine issue for trial.'" Celotex,
477 U.S. at 324; see also Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574,
587(1986); Auguster v. Vermillion Parish School Bd., 249 F.3d 400, 402 (5th Cir. 2001).
When considering a motion for summary judgment, the Court views the evidence in
the light most favorable to the nonmoving party, Gillis v. Louisiana, 294 F.3d 755, 758 (5th Cir.
2002), and draws all reasonable inferences in favor of that party. Hunt v. Rapides Healthcare System,
L.L.C., 277 F.3d 757, 764 (2001). Factual controversies are to be resolved in favor of the nonmoving
party, "but only when there is an actual controversy, that is, when both parties have submitted
evidence of contradictory facts." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994)
(citations omitted). The Court will not, "in the absence of any proof, assume that the nonmoving
party could or would prove the necessary facts." See id. (emphasis in original) (citing Lujan v. Nat'l
Wildlife Fed'n, 497 U.S. 871, 888 (1990)).

2

Although the Court is to consider the full record in ruling on a motion for summary
judgment, Rule 56 does not obligate it to search for evidence to support a party's opposition to
summary judgment. See Fed. R. Civ. P. 56(c)(3) ("court need consider only the cited materials");
Malacara v. Garber, 353 F.3d 393, 405 (5th Cir. 2003) ("When evidence exists in the summary
judgment record but the nonmovant fails even to refer to it in the response to the motion for summary
judgment, that evidence is not properly before the district court."). Thus, the nonmoving party
should "identify specific evidence in the record, and articulate" precisely how that evidence supports
his claims. Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir.), cert. denied, 513 U.S. 871 (1994).
The nonmovant's burden of demonstrating a genuine issue is not satisfied merely by
creating "some metaphysical doubt as to the material facts," "by conclusory allegations," by
"unsubstantiated assertions," or "by only a scintilla of evidence." Little, 37 F.3d at 1075. Rather, a
factual dispute precludes a grant of summary judgment only if the evidence is sufficient to permit a
reasonable trier of fact to find for the nonmoving party. Smith v. Amedisys, 298 F.3d 434, 440 (5th
Cir. 2002).
II. Analysis
With its motion, Plaintiff seeks to be awarded the penalty and attorney's fees
authorized by the Louisiana Prompt Pay Statute, La. R.S. 9:2784, based on Defendant's failure to pay
– between August 20, 2012 and January 13, 2014 – the contract balance of $555,397.17 owed
pursuant to a subcontract2 for labor and materials entered into by it and Defendant.3
2

The prime contract is between Defendant and the Orleans Parish School Board. See
Stipulations (Rec. Doc. 73), ¶¶ 1-2.
3

On January 13, 2014, Defendant tendered a check to Plaintiff in the amount of $459,
832.80. See Stipulations (Rec. Doc. 73), ¶ 38. Although the parties did not settle Counts One and
Two of Plaintiff's Complaint and Amended Complaint, and the counterclaims asserted by Defendant
3

The statute, La. R.S. 9:2784, provides:
§2784 Late payment by contractors to subcontractors and
suppliers; penalties
A. When a contractor receives any payment from the owner for
improvements to an immovable after the issuance of a certificate of
payment by the architect or engineer, or when a contractor receives
any payment from the owner for improvements to an immovable
when no architect or engineer is on the job, the contractor shall
promptly pay such monies received to each subcontractor and
supplier in proportion to the percentage of work completed prior to
the issuance of the certificate of payment by such subcontractor and
supplier, or by the owner if no architect or engineer is on the job.
Further, whenever a subcontractor receives payment from the
contractor, the subcontractor shall promptly pay such monies
received to each sub-subcontractor and supplier in proportion to the
work completed.
B. If for any reason the contractor receives less than the full payment
from the owner, then the contractor shall be obligated to disperse
only the funds received on a prorated basis with the contractor,
subcontractors, and suppliers each receiving a prorated portion based
on the amount due on the payment.
C. If the contractor or subcontractor without reasonable cause fails to
make any payment to his subcontractors and suppliers within fourteen
consecutive days of the receipt of payment from the owner for
improvements to an immovable, the contractor or subcontractor shall
pay to the subcontractors and suppliers, in addition to the payment,
a penalty in the amount of one-half of one percent of the amount due,
per day, from the expiration of the period allowed herein for payment
after the receipt of payment from the owner. The total penalty shall
not exceed fifteen percent of the outstanding balance due. In addition,
the contractor or subcontractor shall be liable for reasonable attorney
fees for the collection of the payments due the subcontractors and
suppliers. However, any claim which the court finds to be without
merit shall subject the claimant to all reasonable costs and attorney
fees for the defense against such claim.

and co-defendant Hanover Insurance Company, until February 4, 2014, Plaintiff's penalty request
addresses the time period between August 20, 2012, and January 13, 2014. See Rec. Doc. 75-1.
Accordingly, the Court likewise considers this time period.
4

D. The provisions of this Section shall not be applicable to
improvements to an immovable that is used for residential purposes.
As an initial matter, the Court emphasizes that it has carefully reviewed the
stipulations and memoranda submitted by the parties regarding the relief sought pursuant to La. R.S.
9:2784. Unfortunately, however, the parties' submissions do not provide sufficient information for
the Court to determine, with specificity, the entirety of the exact amounts and chronology of the
work completed by Plaintiff, the exact dates on which Defendant sought and received payment, in
full, pursuant to the prime contract, for the work completed by Plaintiff, or the exact dollar amounts
and dates on which Plaintiff affirmatively sought payment from Defendant.
Nevertheless, the Court, considering its prior rulings (Rec. Doc. 61) on Plaintiff's
motion for partial summary judgment, and construing the additional information now presented by
the parties in the light most favorable to Defendant, as well as drawing all reasonable inferences in
Defendant's favor, is able to conclude that Defendant lacked "reasonable cause" for not paying
Plaintiff in the amounts and for the time periods specified below. Accordingly, Plaintiff is entitled
to the monetary penalty authorized by La. R.S. 9:2784. Given this determination, the Court likewise
concludes that Defendant is not entitled to the award of attorney's fees and costs sought by it
pursuant to La. R.S. 9:2784(C).
Plaintiff is additionally entitled to recover the reasonable attorney's fees incurred by
it in collecting the payments due to it under to the subcontract. Given that La. R.S. 9:2784 does not
expressly authorize recovery of attorney's fees incurred in seeking the penalties and attorney's fees
allowed thereunder, however, those fees shall not be included in the amount to be awarded to
Plaintiff.

5

Specifically, IT IS ORDERED that Plaintiff's motion is GRANTED to the extent
that the Court finds Defendant owes Plaintiff a statutory penalty of one-half of one percent of the
amount due, per day, for the following sums and time periods:4
(1) 8/20/12 - 1/13/14:5 The unpaid amount billed in Fisk Application for Payment
Nos. 18 and 20, totaling $145,829.70,6 less the amount of (a) the Sworn Statement of Claim and
lien filed by Plaintiff's subcontractor, Chubb, A UTC Fire and & Security Company ("Chubb") on
June 15, 2012, totaling $82,071.28;7 (b) Defendant's $61,383.37 counterclaim, as valued by its
expert;8 (c) the outstanding "punch list" amount attributable to Plaintiff during this time period;9 and
(d) the premium cost incurred by Defendant to obtain a bond for Chubb's lien.10

4

The total amount owed is, of course, capped by the statutory maximum of 15% of the
outstanding balance due. See La. R.S. 9:2784(C).
5

This time period reflects the August 20, 2012 and January 13, 2014 dates utilized by
Plaintiff in the memorandum supporting its motion. See Rec. Doc. 75-1.
6

See Rec. Doc. 74-1, pp. 4-5,10 and 13, nn. 6-7 and 13. Although Defendant contends
that it did not receive Plaintiff's Application for Payment Nos. 18 and 19 during this time period, the
amounts billed in those applications are reflected in Plaintiff's Application for Payment No. 20,
dated March 14, 2012, which Defendant received prior to the June 20, 2012 recordation of Plaintiff's
Statement of Claim. See Rec. Doc. 74-1, pp. 5 and 10; Rec. Doc. 49-3, ¶9. Defendant additionally
contends that its payment for the work billed in Plaintiff's Application for Payment No. 19 was
included in the amount that it paid to Plaintiff on April 4, 2012. See Rec. Doc. 74-1, p. 4, n. 6; see
also Stipulations (Rec. Doc. 73), ¶¶ 14-15.
7

See Stipulations (Rec. Doc. 73), ¶ 19.

8

See Rec. Doc. 74-1, p. 11.

9

Defendant contends that amounts for "punch list work" were deducted from the
payments received by it in August and October 2012. See Rec. Doc. 82-2, pp. 1-2.
10

See Rec. Doc. 82, p. 4; Rec. Doc. 82-2, p. 3.
6

(2) 1/16/13 - 1/13/14: The unpaid subcontract balance owed as January 16, 2013,11
less the amount of (a) the Sworn Statement of Claim and lien filed by Chubb on June 15, 2012,
totaling $82,071.28;12 (b) Defendant's $61,383.37 counterclaim, as valued by its expert; (c) the
outstanding "punch list" amount attributable to Plaintiff during this time period; (d) the premium
cost incurred by Defendant to obtain a bond for Chubb's lien; (e) the subcontract retainage amount;13
and (f) the change order amounts identified as the additional payment amounts sought in Plaintiff's
June 6, 2013 Application for Payment No. 21.14
(3) 11/8/13 - 1/13/14: The unpaid subcontract balance owed as November 8, 201315
less (a) Defendant's $61,383.37 counterclaim, as valued by its expert; (b) the outstanding "punch
list" amount attributable to Plaintiff during this time period; and (c) the premium cost incurred by
Defendant to obtain a bond for Chubb's lien.16

11

January 16, 2013 is the date on which Plaintiff commenced this action. See Rec. Doc.

1.
12

Chubb did not file a motion to dismiss the state court suit commenced by it against
Plaintiff and Defendant until June 13, 2013, following Plaintiff's satisfaction of the outstanding
amounts owed to Chubb. See Stipulations (Rec. Doc. 73), ¶ 32.
13

The parties' submissions do not sufficiently make clear the exact date(s) on which
Defendant received this sum, the exact payment amount(s) received by Defendant on particular
dates, or the exact date of Defendant's first receipt of Plaintiff's June 6, 2013 Application for
Payment No. 22, identifying retainage of $266,833.60 as the additional payment amount requested
therein. See Rec. Doc. 47-8, pp. 2–6.
14

See Rec. Doc. 47-8, pp. 7-11. The date on which Defendant was paid for this amount
is not made clear in the parties' submissions. The same is true of the date of Defendant's first receipt
of Plaintiff's June 6, 2013 Application for Payment No. 21.
15

This period commences on November 8, 2013, because it is the last date on which
Defendant received money for change order work done by Plaintiff that is identified in the parties'
stipulations. See Stipulations (Rec. Doc. 73), ¶35.
16

Although the bond obtained by Defendant for Chubb's lien and claim was not
cancelled until December 23, 2013, the amount of the lien and claim are not subtracted for this time
7

IT IS FURTHER ORDERED that Plaintiff's motion is GRANTED to the extent
that Plaintiff shall be awarded the attorney's fees reasonably incurred by it collecting the additional
payments due to it under the subcontract with Defendant. Within fourteen (14) days from entry of
this Order and Reasons, Plaintiff shall submit an application for that award. Upon its filing, the
application shall be referred to the assigned United States Magistrate Judge for preparation of a
Report and Recommendation relative to the reasonable monetary amount to be awarded.
IT IS FURTHER ORDERED that Plaintiff's motion is DENIED to the extent that
Plaintiff seeks to recover penalties pursuant to La. R.S. 9:2784 in an amount exceeding that awarded
herein. The award ordered by the Court reflects the amount found appropriate based on the
evidentiary showing made.
IT IS FURTHER ORDERED that Plaintiff's motion is DENIED to the extent that
Plaintiff seeks an award of the attorney's fees incurred by it in seeking recovery of the penalties and
attorney's fees allowed by La. R.S. 9:2784. Because recovery of such fees is not expressly
authorized by that statute, those fees shall not be included in the amount to be awarded to Plaintiff.
Given the Court's rulings relative to Plaintiff's motion, IT IS FURTHER
ORDERED that Defendant's motion, seeking an award of attorney's fees and costs pursuant to La.
R.S. 9:2784(C), is DENIED.

period because Chubb had dismissed its state court claims against Plaintiff and Defendant on June
13, 2013, following Plaintiff's satisfaction of the outstanding amounts owed to it. See Stipulations
(Rec. Doc. 73), ¶¶ 32 and 37.
8

Because the Court does not have the information readily available to calculate the
actual dollar amount of the penalties awarded to Plaintiff, as set forth above, IT IS FINALLY
ORDERED that, within fourteen (14) days from entry of this Order and Reasons, the parties shall
submit a stipulation as to that amount.
New Orleans, Louisiana, this 23rd day of January 2015.

_________________________________
KURT D. ENGELHARDT
United States District Judge

9