Union Pacific Railroad Co v. Taylor Truck Line Inc et al

Filing 320

MEMORANDUM RULING re 181 , 185 , 196 , and 208 Motions for Partial Summary Judgment on claims brought by R & L Properties of Oak Grove LLC and R & L Builders Supply Inc, filed by Prewett Enterprises Inc, Hulcher Services Inc, College City Leasing LLC, Daniel Shackleford, Taylor Logistics Inc, Taylor Truck Line LLC, Taylor Consolidated Inc, and Union Pacific Railroad Co. Signed by Judge Robert G James on 5/17/2017. (crt,Crawford, A)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
MONROE DIVISION
UNION PACIFIC RAILROAD COMPANY

CIVIL ACTION NO. 15-0074

VERSUS

JUDGE ROBERT G. JAMES

TAYLOR TRUCK LINE, INC., ET AL.

MAG. JUDGE KAREN L. HAYES

--(consolidated with)-R & L BUILDERS SUPPLY, INC., ET AL.

CIVIL ACTION NO. 15-2460

VERSUS

JUDGE ROBERT G. JAMES

UNION PACIFIC RAILROAD COMPANY,
ET AL.

MAG. JUDGE KAREN L. HAYES

RULING
Pending before the Court are motions for partial summary judgment [Doc. Nos. 181, 185,
196 & 208] filed by Prewett Enterprises, Inc. (“Prewett”), Hulcher Services, Inc. (“Hulcher”),
College City Leasing, LLC (“College City”), Daniel Shackleford (“Shackleford”), Taylor Logistics,
Inc. (“Taylor Logistics), Taylor Truck Line, LLC (“Taylor Truck”), Taylor Consolidated, Inc.
(“Taylor Consolidated”)1, and Union Pacific Railroad Co. (“Union Pacific”). Prewett, Hulcher, the
Taylor Entities, and Union Pacific move the Court for summary judgment on claims by R & L

1

Collectively, the Court will refer to College City, Shackleford, Taylor Logistics, Taylor
Truck, and Taylor Consolidated as “the Taylor Entities.”
Taylor Consolidated is not listed as a movant in the motion for partial summary judgment
[Doc. No. 196] filed by the other Taylor entities. This appears to be a clerical error. To the
extent that claims of business loss are asserted against Taylor Consolidated, those claims are
subject to dismissal for the same reasons set forth below, and the Court finds no prejudice to the
non-movants by entry of judgment in its favor as well.

Properties of Oak Grove, LLC (“Properties”) and R & L Builders Supply, Inc. (“Builders Supply”)
for “past and future loss of revenues from the anticipated expansion of the business operations [of
Builders Supply.]” [Doc. No. 1, ¶ XXXV(f)].
For the following reasons, the motions for partial summary judgment on past and future loss
of revenues are GRANTED IN PART and DENIED IN PART.
I.

FACTS AND PROCEDURAL HISTORY
On October 5, 2014, a collision occurred in Mer Rouge, Louisiana, when a Union Pacific

train collided with a 2013 Kenworth tractor with trailer and dolly (hereinafter “tractor-trailer”) which
had become lodged on the highway/railway grade crossing when the driver, Daniel Shackleford,
attempted to cross.2 The tractor-trailer was owned by College City and leased to Taylor Truck.
As a result of the collision, approximately 17 railroad cars and 2 locomotives left the railroad
tracks, cargo spilled, and a tank car leaked Argon onto surrounding property. Properties owns the
land located along Church Street in Mer Rouge3 (“the Church Street Land”) where at least some of
the cars and other debris came to rest after the collision. Builders Supply operates a building supply
and equipment facility on Andrews Lane in Mer Rouge across the street from the Church Street
Land. At the time of the collision, Builders Supply sold hardware, lumber, and other items necessary

2

The facts surrounding the collision are set forth more fully in the Court’s previous
rulings in this matter.
3

The legal description of the land is as follows:

Lots 1 through 12, Block 23 inclusive of the T.H.B. Andrews Addition to Mer
Rouge, Louisiana, as per plat thereof recorded in the Office of the Clerk of Court
of Morehouse Parish, Louisiana, LESS AND EXCEPT the North 75 feet of Lots
10, 11, and 12, the North 75 feet of the East 5 feet of Lot 9, and the North 30 feet
of Lots 7, 8 and 9 of said Block 23.
2

to build a home. Builders Supply consists of the hardware store and three additional buildings which
provide storage for the inventory of doors, sheet rock, treated lumber, and 2 x 4s. Sales at Builders
Supply’s Andrews Lane location were not affected by the derailment because its sales were
significantly higher in April through June 2016 than they were doing the same months in 2014 and
2015.
Approximately one year before the accident, Properties purchased the Church Street Land
for the purpose of expanding Builders Supply’s business operations. Builders Supply intended to
expand the business by constructing a new store location, adding more storage, and offering new
items for sale, including septic tanks, culverts, and steps. However, Builders Supply did not have
a valid lease of the Church Street Land, no financing had been obtained for the expansion, and no
construction had begun.
Randle McLarrin (“McLarrin”), principal of Properties and Builders Supply,4 offered his
opinion that Builders Supply would have an increase in revenues after the expansion based on his
“guesswork.” [Doc. No. 181-4 Randle McLarrin Depo., p. 160]. McLarrin assumed that business
would “double” at the new location and performed some calculations on a scratch pad which he did
not retain. [Doc. No. 181-8 Builders Supply Corporate Depo., pp. 42-43]. Builders Supply did not
retain an expert to estimate lost revenues in connection with the delayed expansion.
Prior to and at the time of the accident, Builders Supply was storing used cross ties on the
Church Street Land. There was also topsoil discovered on the Church Street Land which Properties
sold through Builders Supply.
4

McLarrin and his wife, Linda, are members of Properties, a limited liability company
organized under Louisiana law. The McLarrins are also officers of Builders Supply, a Louisiana
corporation.
3

On January 14, 2015, Union Pacific brought the instant suit against Shackleford, and the
entities that otherwise owned, leased, or had another interest in the tractor-trailer, Taylor Truck,
Taylor Logistics, Inc., and College City.5 On November 4, 2015, a lawsuit filed by Properties and
Builders Supply was consolidated with this lawsuit.
On February 27, 2017, the Court issued a Ruling and Judgment [Doc. Nos. 287 & 288],
finding that there was no valid lease of the Church Street Land from Properties to Builders Supply
and dismissing any claims asserted by Builders Supply for damage to the Church Street Land. The
Court allowed Builders Supply to proceed with any claims for damages to cross ties it had stored on
the Church Street Land.
On May 9, 2017, the Court issued a Ruling and Judgment [Doc. Nos. 306 & 307] dismissing
any claims by Properties and Builders Supply for loss of lease payments relating to the Builders
Supply expansion.
In the instant motions, Union Pacific and its contractors, Prewett and Hulcher, as well as the
Taylor Entities move for summary judgment on the claims asserted by Properties and Builders
Supply for lost profits from the anticipated expansion of Builders Supply to the Church Street Land,
as well as lost profits from topsoil sales from the Church Street Land.
The motions have been fully briefed, and the Court is prepared to rule.

5

Union Pacific, Builders Supply, and Properties all later amended to assert claims against
the Robert G. Taylor Irrevocable Trust and against Robert G. Taylor, individually and as trustee
of the Robert G. Taylor Irrevocable Trust. Those claims have since been dismissed either with or
without prejudice and are no longer pending in this Court.
4

II.

LAW AND ANALYSIS
A.

Standard of Review

Under Federal Rule of Civil Procedure 56(a), “[a] party may move for summary judgment,
identifying each claim or defense--or the part of each claim or defense--on which summary judgment
is sought. The court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The
moving party bears the initial burden of informing the court of the basis for its motion by identifying
portions of the record which highlight the absence of genuine issues of material fact. Topalian v.
Ehrmann, 954 F.2d 1125, 1132 (5th Cir. 1992); see also Fed. R. Civ. P. 56(c)(1) (“A party asserting
that a fact cannot be . . . disputed must support the assertion by . . . citing to particular parts of
materials in the record . . . ). A fact is “material” if proof of its existence or nonexistence would
affect the outcome of the lawsuit under applicable law in the case. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). A dispute about a material fact is “genuine” if the evidence is such that
a reasonable fact finder could render a verdict for the nonmoving party. Id.
B.

Loss of Revenue or Profits from Anticipated Expansion

Although Builders Supply operates a store on Andrews Street, it is not seeking to recover
damages for lost profits6 at that location, other than a loss of sales of topsoil. Instead, Properties and
Builders Supply seek to recover damages for the lost profits that could have been realized if the
expansion on the Church Street Land had moved forward in the time they anticipated.
The moving parties argue that Properties has no right to make this claim because any lost
6

The terms “loss of revenues” and “lost profits” are used interchangeably. The Court uses
lost profits generally because that is the term used in the case law. However, Properties and
Builders Supply referred to loss of revenues in their Complaint.
5

profits would belong to Builders Supply. They argue further that Builders Supply cannot prevail on
its lost profits claim because this claim is too speculative.
Properties and Builders Supply oppose the motions and argue, first, that there was an
enforceable lease in place. Further, they contend that they have provided sufficient evidence to
support their claim for lost profits based on McLarrin’s testimony, Dr. Randolph Rice’s economic
model using McLarrin’s figures, and the testimony at trial of Builders Supply’s accountant, James
Michael Gowdy. Finally, they argue that lost profits is no different than an individual’s loss of
earning capacity, and there is sufficient evidence to support these claims.
The moving parties respond that McLarrin’s testimony is insufficient to support Builders
Supply’s claim because his estimates are based on his own feelings, not credible evidence. They
point out that Properties and Builders Supply admit that Dr. Rice’s economic projections were never
intended to prove that losses would be incurred; instead, that information comes only from McLarrin
and the deposition of his accountant which was to be held after briefing on the instant motions was
complete.
First, the Court finds that, if the lost profits could be established, such a claim clearly belongs
to Builders Supply, which owns and operates the store. Properties, as the owner of the Church Street
Land, has no basis for asserting this claim, and the motions for partial summary judgment are
GRANTED as to Properties.
On the other hand, Builders Supply could potentially recover lost profits if it can meet the
evidentiary standard. Under Louisiana tort law, a plaintiff must prove a claim for lost profits with
reasonable certainty. Borden, Inc. v. Howard Trucking Co., Inc., 454 So.2d 1081, 1092 (La. 1983);
see also Wasco, Inc. v. Economic Development Unit, Inc., 461 So.2d 1055, 1056-57 (La.App. 4
6

Cir.1984) (stating “the loss of profits is recoverable as an element of damages, if they are proven
with reasonable certainty.”); Branton v. Fox, 2006-1353 (La. App. 1 Cir. 11/21/07) (While lost
profits may not always be susceptible of proof to a mathematical certainty, the lost profits must
nonetheless be proven to a reasonable certainty). “A claim for lost profits based solely on the
testimony of the injured party and unsubstantiated by other evidence does not constitute reasonable
certainty.” New Orleans Riverwalk Associates v. Robert P. Guastella Equities, Inc., 664 So.2d 151,
157 (La. App. 4th Cir. 1995) as supplemented on denial of reh'g (Dec. 19, 1995), writ granted,
96-0199 (La. 4/8/96), 671 So. 2d 327(citing Louisiana Joint Underwriters of Audubon Ins. Co. v.
Gant, 439 So.2d 1153, 1157 (La.App. 4 Cir.), writ denied, 443 So.2d 589 (La.1983).7 “Although
the absence of independent corroborative evidence is not always fatal, the lack of even a minimal
degree of detail and specificity in the plaintiff's testimony, regarding the issue of lost profits, would
preclude recovery of this item of damages.” White Haute, LLC v. Mayo, 09-955 (La. App. 5 Cir.
3/23/10), 38 So. 3d 944, 9538 (emphasis added) (citing Wasco, Inc. v. Economic Development Unit,
Inc., 461 So.2d 1055, 1056 (La.App. 4 Cir.1984), writ denied, 465 So.2d 738 (La. 1985)).
Furthermore, a “mere estimate of [plaintiff’s] loss will not support a claim for lost profits.” In re
Watermeier v. Mansueto, 562 So.2d 920, 924 (La. App. 5 Cir. 1990); see also Wasco, 461 So.2d at
1056-57 (stating “claim for loss of profits will not be supported by mere estimates of loss.”). When

7

In Gant, the plaintiff sought recovery of lost income from rental units in a building that
was destroyed by fire. Although she testified as to the rental rates and related expenses, she
provided no records to support her claim. 439 So.2d at 157.
8

White Haute arises out of the breach of a lease contract. The Court is cognizant of the
fact that “[t]he allowance of loss of profits as an element of damages is more liberal in tort
actions than actions for breach of contract.” Louisiana Farms v. La. Dep’t. of Wildlife and
Fisheries, No. 95-845 (La. App. 5th Cir. 10/9/97), 685 So.2d 1086, 1106 (citations omitted).
Nevertheless, the statement of the law is correct.
7

considering the issue of damages regarding lost profits, the proper measure of lost profits is net loss.
Louisiana Smoked Products Inc., v. Savoie Sausage and Food Products Inc., 673 So.2d 248, 253
(La. App. 3rd Cir. 1996).
To the extent that Builders Supply relies on its alleged lease from Properties to support its
claim, the Court has determined that there was insufficient evidence to establish the existence of a
valid lease of the Church Street Land or a valid agreement to lease in the future. [Doc. No. 287, pp.
8-11].
The Court has also considered the remainder of Builders Supply’s evidence in the form of
the McLarrin’s testimony; the testimony of Builders Supply employee, Sam Harris (“Harris”); Dr.
Rice’s economic analysis; and the potential testimony of Builders Supply’s accountant, Gowdy.
However, Dr. Rice’s projections are based on McLarrin’s figures, which he admits are “guesswork.”
Likewise, Gowdy, although an accountant, has no basis to offer testimony about projected losses
from a business which has not yet expanded, although he could testify as to the revenues of the
Builders Supply store at the current location. Nevertheless, Builders Supply’s claim for lost profits
rests almost entirely on the testimony of McLarrin and his employees.
McLarrin testified that the new location would be about four times the size of the Andrews
Lane location, which is approximately 6,000 square feet. [Doc. No. 232-8, McLarrin Depo., p. 221].
McLarrin himself admits that he tried to calculate lost profits “to a certain extent,” but that his
estimate was “guesswork.” [Doc. No. 181-4, McLarrin Depo., pp. 126, 160]. Certainly, McLarrin
has experience in the general building supply business and the Court has considered that the Builders
Supply location at Andrews Lane has had growth and increase in revenues, but McLarrin offers no
evidence, only his belief, that the expansion would double (or triple) the profits of Builders Supply.
8

Further, to the extent that Builders Supply intended to sell new products9 once the expansion
was complete, it has offered no evidence of the expenses or costs associated with acquiring these
new products, nor has it offered sufficient evidence of the demand for the new products. McLarrin
offered only his own testimony that these products could be successfully sold in the new location,
but not the costs of acquiring the products or the market evidence to support the demand for the
products. See Louisiana Smoked Prods., 673 So.2d at 254 (“The proper measure of damages is . .
. gross profit minus expenses.”); Marcel v. Becnel, No. 96-CA-1139 (La. App. 3rd Cir. 3/27/97), 691
So.2d 1344, 1349 (“[L]oss of profits is generally calculated by deducting the expenses that would
have been incurred from the gross revenues that could have been realized.”; there must also be
“credible evidence showing, with reasonable certainty, the production and operational costs involved
in making the invention a marketable product.”). Harris confirmed that the store had “requests for
steps and septics and different culverts that” were not “in stock,” but he could not identify a single
customer who said he or she would do more business with Builders Supply if it carried more
inventory. [Doc. No. 232-9, Sam Harris Depo., pp. 68-69].
Builder Supply argues that McLarrin testified that the expanded business operations of
Builders Supply would have been “up and running within 30 days of the crash,” [Doc. No. 232, p.
11] and points out that surveying, staking, and site preparation work had been completed, and
construction materials were on site. [Doc. No. 232-19, ¶4]. However, McLarrin actually testified,
as corporate representative of Builders Supply, that a storage shed, not the new building, would be
completed in that time period and that it would take 3-4 months to build the new store. [Doc. No.

9

In the words of McLarrin, Builders Supply would offer “tremendously different kinds of
material” at the Church Street Land location. [Doc. No. 232-8, McLarrin Depo., p. 222].
9

232-8, McLarrin Depo., pp. 21-22]; [Doc. No. 242-1, Builders Supply Corporate Depo., p. 98]; see
also [Doc. No. 181-6, Danny Parker Depo., p. 50 (McLarrin was going to build a store at first, but
changed his mind and decided to build a storage shed)]. Further, as noted, the objective evidence
shows that no construction of any kind had begun, no financing had been obtained, and no lease had
been prepared. 10 [Doc. No. 232-19, ¶¶ 4-5].
To the extent that Builders Supply intends to assert a loss of storage claim based on the delay
in building the shed, no valuation number was provided.11
In sum, while the Court accepts McLarrin’s testimony and the other evidence that Builders
Supply had plans to expand, the evidence is too speculative to show net losses it might have suffered
by the delay in expansion and loss of storage capacity. As Builders Supply cannot establish the loss
to a reasonable degree of certainty, the motions for partial summary judgment are also GRANTED
as to Builders Supply’s claim for loss of future profits from the expansion of the store and lack of
storage.

10

Danny Parker, Ricky Sawyer, and Clay Hale, McLarrin’s employees, testified that
McLarrin changed his mind about what to do with the Church Street Land. See [Doc. No. 1815, Ricky Sawyer Depo., pp. 69-70 (“Randle changes his mind. One time he said he was going to
put the lumber yard over there. One time he said he was going to build just a new store.”; When
asked if he heard anything about storage on the Church Street Land, Sawyer said “No.”)]; [Doc.
No. 181-7, Harold Clayton Hale, Jr. Depo., p. 114 (“Q. . . What is your understanding of what
was going to go on the Church Street land if the collision hadn’t happened? A. A building. A
big storage building. Q. Okay. So a storage building. Anything else? A. Well, now this is
Randle talking so, I mean–and it was never put in stone, I guess you’d say. He had talked
about–At one time he talked about building a bigger store over there.”)].
11

Although McLarrin talked about a discount available for buying lumber in greater
quantities, he also admitted that he already receives the discount on at least 25% of his lumber
sales. [Doc. No. 242-1, Builders Supply Corporate Depo., pp. 21, 98, 103, 104 (McLarrin
estimated that the building of the storage shed would take 30 days, and he could get a 10%
discount if lumber is bought in bulk, but he was already receiving the discount “[m]ost of the
time” or “[s]ometimes,” which he then said was about 25%)].
10

C.

Loss of Sales of Topsoil

Properties and Builders Supply also claim that they suffered financial losses from the
inability to sell topsoil from the Church Street Land.
First, to the extent that Builders Supply asserts this claim, the Court has found that it has no
interest in the Church Street Land and thus cannot seek damages for this alleged loss. To this extent,
the moving parties’ motions for partial summary judgment are also GRANTED.
Properties, as the owner of the Church Street Land, can assert such a claim if it meets its
evidentiary burden. However, the moving parties point to the speculative nature of a claim for
damages in the amount of approximately $248,000, when McLarrin could produce only four receipts
of $200 each.12 [Doc. No. 181-11; Doc. No. 181-2]. The moving parties also point out that there
is no evidence as to the quality of the topsoil before or after the derailment.
McLarrin testified that the topsoil in question was found on the Church Street Land after it
was purchased. He explained that when wild flowers were planted in the soil, “they just took off.”
[Doc. No. 232-8, McLarrin Depo., p. 198]. McLarrin testified that Builders Supply sold two or three
loads of topsoil day for $200 each. However, he could not produce all the receipts because many
sales were cash. Following the derailment, however, McLarrin contends that the topsoil had cross
ties and cars on top of it, and that there were rocks in the soil from the clean up process. Harris also
testified that they did not sell the topsoil after the derailment.
First, to the extent that McLarrin alludes to the environmental contamination of the topsoil,
the Court has dismissed any claims for environmental contamination.
However, consistent with the Court’s ruling on the trespass claim, Properties has raised a
12

One receipt was for $216, which included $16 for tax.
11

genuine issue of material fact for trial whether Properties lost sales of topsoil because rocks were left
in the soil after the derailment and clean up. Such claim will be limited to the reasonable amounts
of sales that Properties can prove at trial.13 Under these facts, the motions for partial summary
judgment on Properties’ sale of topsoil is DENIED.
III.

CONCLUSION
For the foregoing reasons, the motions for partial summary judgment on Properties’ and

Builders Supply’s claims for past and future loss of revenues from the anticipated expansion of the
business operations [Doc. Nos. 181, 185, 196 & 208] filed by Prewett, Hulcher, College City,
Shackleford, Taylor Logistics, Taylor Truck, Taylor Consolidated, and Union Pacific are
GRANTED IN PART AND DENIED IN PART. To the extent that Properties seeks to recover
damages for the loss of sales of topsoil, the motions are DENIED. The motions are otherwise
GRANTED, and Properties’ and Builders Supply’s claims for past and future loss of revenues from
the anticipated expansion are DISMISSED WITH PREJUDICE.
MONROE, LOUISIANA, this 17th day of May, 2017.

13

While the moving parties have characterized this claim as “speculative,” their objection
is that Properties seeks damages of such a large amount compared to the objective evidence
supporting its claim of topsoil sales. However, the receipts that were produced support
McLarrin’s testimony that he had at least some sales of topsoil prior to the derailment. Further,
the Court rejects any claim that Properties was required to perform soil testing to show the
quality of the soil. The jury can consider McLarrin’s testimony that customers would and did
purchase the topsoil prior to the derailment, but would not purchase topsoil with rocks in it.
12