Windward Group, LLC v. Reva Solutions, Inc
Filing
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ORDER AND REASONS denying 25 Motion for Partial Summary Judgment. Signed by Judge Lance M Africk on 12/13/2017. (blg)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
THE WINDWARD GROUP, LLC
CIVIL ACTION
VERSUS
No. 17-5748
REVA SOLUTIONS, INC.
SECTION I
ORDER & REASONS
Before the Court is a motion for partial summary judgment filed by defendant
Reva Solutions, Inc. (“Reva”) regarding the ability of plaintiff The Windward Group,
LLC (“Windward”) to recover damages for lost profits. For the following reasons, the
motion is denied.
I.
In June 2015, Windward entered into a contract with Murphy USA, Inc.
(“Murphy USA”) to provide support services for Murphy’s content management
program. In connection with its Murphy USA contract, Windward hired Reva as a
subcontractor to provide technical assistance.
Pursuant to its agreement with Windward, Reva submitted invoices to
Windward for the work it performed.
As the project progressed, Murphy USA
allegedly began to question the amounts associated with several invoices submitted
by Reva. Murphy USA ultimately canceled its contract with Windward.
Windward then brought the present lawsuit against Reva alleging breach of
contract, tortious interference with business relations, negligence, detrimental
reliance, and violations of the Louisiana Unfair Trade Practices Act (“LUTPA”).
Windward asserts that Reva overcharged for services it performed and billed for work
not actually performed on the Murphy USA project, thereby leading Murphy USA to
cancel its contract with Windward.
Windward contends that, as a result of Reva’s conduct, it incurred a variety of
damages, including lost profits. Reva now moves for partial summary judgment on
the ground that recovery for lost profits is precluded by the contract in place between
itself and Windward. Windward opposes the motion.
II.
Summary judgment is proper when, after reviewing the pleadings, the
discovery and disclosure materials on file, and any affidavits, the court determines
that there is no genuine dispute of material fact. See Fed. R. Civ. P. 56. “[A] party
seeking summary judgment always bears the initial responsibility of informing the
district court of the basis for its motion, and identifying those portions of [the record]
which it believes demonstrate the absence of a genuine issue of material fact.” Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986). The party seeking summary judgment
need not produce evidence negating the existence of material fact, but need only point
out the absence of evidence supporting the other party’s case. Id.; Fontenot v. Upjohn
Co., 780 F.2d 1190, 1195 (5th Cir. 1986).
Once the party seeking summary judgment carries its burden, the nonmoving
party must come forward with specific facts showing that there is a genuine dispute
of material fact for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986). The showing of a genuine issue is not satisfied by creating “‘some
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metaphysical doubt as to the material facts,’ by ‘conclusory allegations,’ by
‘unsubstantiated assertions,’ or by only a ‘scintilla’ of evidence.” Little v. Liquid Air
Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (citations omitted). Instead, a genuine issue
of material fact exists when the “evidence is such that a reasonable jury could return
a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986). “Although the substance or content of the evidence submitted to support
or dispute a fact on summary judgment must be admissible . . ., the material may be
presented in a form that would not, in itself, be admissible at trial.” Lee v. Offshore
Logistical and Transp., LLC, 859 F.3d 353, 355 (5th Cir. 2017) (quotation omitted).
The party responding to the motion for summary judgment may not rest upon
the pleadings but must identify specific facts that establish a genuine issue.
Anderson, 477 U.S. at 248. The nonmoving party’s evidence, however, “is to be
believed, and all justifiable inferences are to be drawn in [the nonmoving party’s]
favor.” Id. at 255; see also Hunt v. Cromartie, 526 U.S. 541, 552 (1999).
III.
In 2015 Murphy USA issued a request for proposals, seeking bids for document
management and business consulting services.1
In anticipation of submitting a
proposal to Murphy USA, Windward and Reva entered into a “teaming agreement.”2
The agreement reflected the parties desire to “combine their efforts to respond to
1
2
See R. Doc. No. 29-2.
Id.
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[Murphy USA’s request] and further to enter into an agreement under which the
parties will perform services pursuant to any contract awarded by Murphy USA.”3
In support of its motion for summary judgment, Reva relies exclusively on a
provision of the teaming agreement, which provides:
In no event shall either party, its affiliates, agents or
subcontractors, or any of their partners, principals or other
personnel be liable for consequential, special, indirect,
incidental, punitive or exemplary damages, costs, expenses
or losses (including, without limitation, lost profits and
opportunity costs), nor shall they be liable for any claim or
demand against the other by any third party. The
provisions of this [paragraph] shall apply regardless of the
form of action, damage, claim, liability, cost, expense, or
loss, whether in contract, statute, tort (including, without
limitation, negligence) or otherwise.4
Reva insists that the teaming agreement was its only contract with Windward and,
therefore, it governed the relationship between the parties with respect to the work
ultimately performed for Murphy USA.5 Therefore, Reva contends, Windward is
barred from recovering damages for lost profits under the terms of the teaming
agreement.
Windward does not dispute that it entered into the teaming agreement with
Reva or that the teaming agreement included the aforementioned provision regarding
lost profits. Rather, Windward argues that the teaming agreement “was merely a
Id.
Id. ¶ 15.
5 Reva cites deposition testimony in which a Windward representative indicates that
the teaming agreement was executed by a Windward employee; that Windward
“operated under” it; and that he was unaware of any other written agreements
between the parties.
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4
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preliminary contract, or letter of intent, meant to govern the terms upon which
Windward was to submit a proposal to [Murphy USA].”6 In Windward’s view, the
teaming agreement “pertained only to the submittal of Windward’s proposal to
[Murphy USA]” and did not relate to the work performed by the parties on the
Murphy USA project.7
Several provisions of the teaming agreement support Windward’s argument.
For example, the first paragraph of the agreement states:
“The sole purpose of this Agreement is to submit a proposal
to [Murphy USA] in response to the [r]equest . . . and to
receive a contract award from [Murphy USA] and to enter
into an agreement with [Murphy USA] . . . and, in turn, to
have [Windward] enter into a contract with [Reva] to
provide a portion of those [s]ervices . . . This agreement
relates only to the [p]roposal.”8
The agreement later contemplates that, if Murphy USA were to accept the Windward
and Reva bid, they would then negotiate a separate contract.
Specifically, the
agreement reads: “In the event of the [contract] award to [Windward], the [p]arties
will make every reasonable effort to negotiate a [s]ubcontract [a]greement.”9 Hence,
Windward maintains that “[i]t was never either party’s intention for the [t]eaming
[a]greement to apply to anything other than Windward’s initial proposal.”10
The Court concludes that Windward has identified a genuine dispute of
material fact—namely, whether the teaming agreement, which seemingly precludes
R. Doc. No. 29, at 4.
Id. at 5.
8 R. Doc. No. 29-2 ¶ 1 (emphasis added).
9 Id. ¶ 11.
10 R. Doc. No. 29, at 6.
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recovery of lost profits, governed the contractual relationship between Windward and
Reva with respect to all work completed for Murphy USA or only as it related to the
submission of Windward’s proposal to Murphy USA. On the one hand, the teaming
agreement can be read to bar recovery for lost profits only in the event that one of the
parties were to breach the teaming agreement itself. For example, if Windward or
Reva were to have failed to meets its obligations under the agreement causing
Murphy USA to accept another bid, the other party would not be able to recover any
resulting lost profits. On the other hand, the parties conceivably could have meant
for the lost profits provision to apply to the entirety of their relationship. In the
Court’s view, the question of the parties’ intent when entering into the teaming
agreement is one better left to the trier of fact. Summary judgment is, therefore,
inappropriate.11
Accordingly,
IT IS ORDERED that Reva’s motion for partial summary judgment is
DENIED.
New Orleans, Louisiana, December 13, 2017.
_______________________________________
LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE
Because the Court determines that a genuine dispute of material fact has been
presented with regard to the scope of the teaming agreement, it need not address
Windward’s arguments regarding Louisiana Civil Code Article 2004 or the general
recoverability of lost profits in tort claims. Nor must the Court consider Reva’s
argument concerning contract modification, as “[a]rguments raised for the first time
in a reply brief are generally waived.” Jones v. Cain, 600 F.3d 527, 541 (5th Cir.
2010).
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