Bossier City v. Camp Dresser & McKee Inc

Filing 122

MEMORANDUM RULING re 83 Fifth MOTION for Partial Summary Judgment filed by City of Bossier City. Signed by Judge S Maurice Hicks on 09/26/2014. (crt,McDonnell, D)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION
CITY OF BOSSIER CITY

CIVIL ACTION NO. 11-0472

VERSUS

JUDGE S. MAURICE HICKS, JR.

CAMP DRESSER & MCKEE INC.

MAGISTRATE JUDGE HORNSBY

MEMORANDUM RULING
Before the Court is a Motion for Partial Summary Judgment (Record Document 83)
filed by the Plaintiff, the City of Bossier City (“the City”). The motion addresses one of the
elements of damages asserted by Defendant, CDM Smith Inc., formerly Camp Dresser &
McKee, Inc. (“CDM”), in connection with its counterclaim that the City improperly terminated
the Standard Form of Agreement Between Owner and Engineer For Study and Report and
Professional Design, Bidding, and Construction Services, dated February 14, 2006 (“WTP
Contract”), as amended by Amendment No. 2 To Agreement Between Owner and
Engineer, dated May 21, 2008 and Amendment No. 3 To Agreement Between Owner and
Engineer, dated November 9, 2009.

See id.

Specifically, CDM claims it is owed

$889,418.05 in connection with the City’s termination of the WTP Contract. See Record
Document 4.
CDM has opposed the City’s Motion for Partial Summary Judgment. See Record
Document 103. After its review of the partial summary judgment record, the Court finds
that no genuine disputes of material fact exist and partial summary judgment in favor of the
City is appropriate as a matter of law. The Motion for Partial Summary Judgment is,
therefore, GRANTED.

BACKGROUND1
From October 2008 to December 2011, Bryan Kauffer (“Kauffer”) was employed by
the City as Director of Public Utilities. During most of 2009, Justin Haydel (“Haydel”) was
employed by CDM and served as a vice-president of CDM. In addition to being vicepresident, he was also Bossier’s Client Services Manager for the projects at issue in this
case. See Record Document 103-1 at ¶ 3. According to CDM, this title meant Haydel was
Bossier’s primary CDM contact on the projects. See id. Haydel had also been employed
by CDM prior to 2009. See id. Haydel resigned his position on December 3, 2009. See
id.
On February 14, 2006, the City and CDM entered into the WTP Contract. The
contract was executed by Mayor Lorenz Walker (“Mayor Walker”) on behalf of the City and
Haydel on behalf of CDM. See Record Document 83, Exh. 1 (Bates # CAMP 14195 CAMP 14220). The WTP provided that the City “intends to Expand and Modify the Bossier
Water Treatment Plant.” Id., Exh. 1 (Bates # CAMP 14195).
On August 15, 2007, the City and CDM entered into Amendment No. 1, which was
executed by Kauffer on behalf of the City and Haydel on behalf of CDM. See id., Exh. 1
(Bates # CAMP 14190 - CAMP 14193). This document amends the WTP Contract.
On May 21, 2008, the City and CDM entered into Amendment No. 2, which was
executed by Mayor Walker on behalf of the City and Haydel on behalf of CDM. See id.,
Exh. 1 (Bates # CAMP 19566 - CAMP 19568). This document amends the WTP Contract.

1

The background section is drawn from the City’s Statement of Material Facts as to
Which There Exists No Genuine Issue to be Tried (Record Document 83-1) and CDM’s
Statement of Contested Material Facts (Record Document 103-1). Many of the City’s facts
went uncontested. Citations to the record will be included for all contested facts.
Page 2 of 14

Amendment No. 2 provided, in pertinent part, that CDM “shall provide design services,
bidding services and general services during construction related to the upgrade and
expansion of the Bossier City Water Treatment Plant.” Id., Exh. 1 (Bates # CAMP 19566).
The payment for the Bossier City Water Treatment Plant Project was set forth in
Amendment No. 2:
Project Name

Design Fee

Bidding Fee

Construction Services Fee

Water Treatment Plant

$2,123,525

$163,348

$980,089

Id., Exh. 1 (Bates # CAMP 19567). This fee arrangement is reflected in Pay Request Nos.
1-11.2 See id., Exhs. 78-88. The total fee was $3,266,962.
On November 9, 2009, the City and CDM entered into Amendment No. 3, which was
executed by Mayor Walker on behalf of the City and Haydel on behalf of CDM. See id.,
Exh. 1 (Bates # CAMP 02899 - CAMP 02902). This document amends the WTP Contract.
Amendment No. 3 increased CDM’s fee for “General Engineering Services During
Construction and for additional services provided during design phase” by “$1,910,938.”
Id., Exh. 1 (Bates # CAMP 02900). Amendment No. 3 also provided for an additional fee
to CDM of “$1,592,136 to be paid according to the hourly rates shown in Exhibit C” for a
“Resident Engineer and [a] Construction Administration Secretary.” Thus, beginning with
Pay Request No. 12 and continuing through Pay Request No. 18, CDM’s total fees for the
Water Treatment Plant project are reflected as follows:

2

CDM does not contest the Pay Requests. However, CDM “supplements [these]
fact[s] by stating that [the pay requests] and the related invoice[s] do not include all
reimbursable expenses incurred by CDM in connection with . . . the WTP Expansion Project
. . . ; in particular, the pay request[s] and invoice[s] do not include any of the $889,418.05
of reimbursable expenses owed to CDM at issue in [this motion].” Record Document 103-1
at ¶ 8-25.
Page 3 of 14

Design Fee
Bidding Fee
Const Services
Resident Engineer

$3,365,635
$ 258,895
$1,553,370
$1,592,136

Id., Exhs. 89-94; Exh. 51. The total fee, under the terms of Amendment No. 3, was
$6,770,036.
On February 26, 2010, CDM sent the City Pay Request No. 14. See id., Exh. 91.
This pay request reflected that CDM had been fully compensated and paid by the City for
the following in relation to the Water Treatment Plant: Design Fee of $3,365,635 and
Bidding Fee of $ 258,895. Id. The only services which remained to be performed and
billed were construction services and resident engineering. Pay Request Nos. 15-18 reflect
the same. See id., Exhs. 92-94; Exh. 51.
The City contends that all of its contracts with CDM provided for the payment of a
“lump sum” and that CDM billed the City a percentage of that “lump sum” based on the
percentage of work CDM deemed to be completed as of the time of the invoice. Record
Document 83-1 at ¶¶ 33-34. The City alleges “this was not a cost plus job.” Id. at ¶ 34.
The City maintains that neither the WTP Contract, Amendment No. 2, nor Amendment No.
3 “provides for the payment of labor costs and expenses over and above the agreed lump
sum fees.” Id. at ¶ 35.
Conversely, CDM argues that the City’s material facts are incomplete and do not
include all the charges, payments, reimbursements and other terms and conditions
provided for under the contracts. See Record Document 103-1 at ¶¶ 33-34. CDM alleges
that the pay requests and invoices do not include any of the $889,418.05 of reimbursable
expenses owed to CDM and that the City agreed to reimburse CDM for these expenses.
See id. at ¶ 35. CDM further points to the termination clause of the WTP contract, which
Page 4 of 14

provides, in pertinent part:
8.1. Termination
. . . In the event of any termination, [CDM] will be paid for all services
rendered and reimbursable expenses incurred to the date of termination and,
in addition, all reimbursable expenses directly attributable to termination.
Record Document 83, Exh. 1 (Bates # CAMP 14209); see also Record Document 103-1
at ¶ 35. A close review of CDM’s factual statements reveals that it has not contested that
the contracts at issue are lump sum contracts.3
Pay Request Nos. 1-18 do not show a breakdown of CDM’s labor costs and
expenses in connection with the lump sum fees. See Record Document 83, Exhs. 78-94,
51. For example, Pay Request No. 11, dated July 24, 2009,4 reflects the following as to the
bidding fee for the Water Treatment Plant:
Total Fee
$163,348
Percent Complete 75%
Amount Earned
$122,511
Amount Due
$122,511
Id., Exh. 88. Pay Request No. 11 was “for services rendered from April 19, 2009 through
July 18, 2009.” Id. The City argues that the $125,511 invoice was to compensate CDM
for its labor costs and expenses incurred during the time period stated in the invoice/pay
request.
As of Pay Request No. 18, dated June 28, 2010, CDM had invoiced the City the

3

The difference between a cost plus a fixed fee contract and a lump sum contract
is that the former type of contract assures the contractor’s profit, whereas on a lump sum
contract it is possible that the contractor’s anticipated and expected profit may turn into a
loss because of a low bid or the rising prices of materials and/or labor. See MKR Servs.,
L.L.C. v. Dean Hart Const., L.L.C., 16 So. 3d 562, 564 (La. App. 2 Cir. 7/8/09).
4

$163,348 was the total fee before it was increased by Amendment No. 3 to
$258,895.
Page 5 of 14

following amounts for the Water Treatment Plant project:
Design Fee
Bidding Fee
Const Services
Resident Engineer
Overtime Inspection

$3,365,635.00
$ 258,895.00
$ 466,011.00
$ 284,231.69
$
2,422.17
$4,377,194.86

Id., Exh. 51 (Bates # CAMP 204946). This same format–breaking down the fees between
design, bidding, and construction services–was used for Pay Request Nos. 1-18. Pay
Request No. 19, dated October 30, 2010, changed the format by lumping the previously
broken down categories into one line item designated “Design Total ITD Costs.” Id., Exh.
51 (Bates # CAMP 204951).
By letter dated June 16, 2010, the City provided CDM thirty (30) days written notice5
of termination of the February 14, 2006 WTP Contract, as amended by Amendment Nos.
1, 2 and 3. See id., Exh. 53 (Bates # CDM 10488 - CDM 10490). The termination was
due to CDM’s failure to perform in accordance with the provisions, terms, and conditions
of the WTP Contract, as amended. This Court previously held that the City was justified
in its termination of the WTP Contract because CDM was in breach of its obligations
concerning three of the projects which were the subjects of Amendment Nos. 2 and 3. See
Record Documents 119-120.
In its counterclaim, CDM alleges that the City wrongfully terminated the WTP
Contract, as amended by Amendment Nos. 2 and 3. See Record Document 4, ¶ XII. CDM
further alleges that the City owes CDM the total amount of $1,302,928.69 in connection

5

Article 8.1 of the WTP Contract provided that “further services under this Agreement
may be terminated by either party upon thirty days’ written notice in the event of substantial
failure by the other party to perform in accordance with the terms thereof through no fault
of the terminating party.” Record Document 82, Exh. 1 (Bates # CAMP 14209).
Page 6 of 14

with services CDM allegedly performed under the WTP Contract, Amendment Nos. 2 and
3.

See id. at ¶ XIII; Record Document 15, ¶ 1.

The amount of $1,302,928.69 is

summarized in the attachment to CDM’s September 30, 2011 letter to the City. See
Record Document 83, Exh. 51 (Bates # CAMP 204942).

This total amount of

$1,302,928.69 includes the amount of $889,418.05 which CDM claims it is owed in
connection with termination of CDM’s work on the Water Treatment Plant. The City’s
Motion for Partial Summary Judgment addresses only CDM’s claim to recover the amount
of $889,418.05.
When asked to identify the origin and details of the $889,418.05 charge, CDM
produced a thirty-eight page document, with backup documents, showing the charge is
comprised of various expenses such as mileage, taxis, park tolls, shipping, postage,
outside professionals; labor; and overtime. See Record Document 83, Exh. 177. The
various expenses and labor outlined in the document were incurred in July 2009 - October
2009 and December 2009 - July 2010. See id.
LAW AND ANALYSIS
I.

Partial Summary Judgment Standard.
Rule 56(a) provides, in pertinent part:
Motion for Summary Judgment or Partial Summary Judgment. 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.

F.R.C.P. 56(a) (emphasis added); see also Quality Infusion Care, Inc. v. Health Care Serv.

Page 7 of 14

Corp., 628 F.3d 725, 728 (5th Cir.2010).6 “A genuine issue of material fact exists when the
evidence is such that a reasonable jury could return a verdict for the nonmoving party.”
Quality Infusion Care, Inc., 628 F.3d at 728. “Rule 56[(a)] mandates the entry of summary
judgment, after adequate time for discovery and upon motion, against a party who fails to
make a showing sufficient to establish the existence of an element essential to that party’s
case, and on which that party will bear the burden of proof at trial.” Patrick v. Ridge, 394
F.3d 311, 315 (5th Cir.2004).
If the movant demonstrates the absence of a genuine dispute of material fact, “the
nonmovant must go beyond the pleadings and designate specific facts showing that there
is a genuine issue for trial.” Gen. Universal Sys., Inc. v. Lee, 379 F.3d 131, 141 (5th
Cir.2004). Where critical evidence is so weak or tenuous on an essential fact that it could
not support a judgment in favor of the nonmovant, then summary judgment should be
granted. See Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir.2005).
“A partial summary judgment order is not a final judgment but is merely a pre-trial
adjudication that certain issues are established for trial of the case.” Streber v. Hunter, 221
F.3d 701, 737 (5th Cir.2000). Partial summary judgment serves the purpose of rooting out,
narrowing, and focusing the issues for trial. See Calpetco 1981 v. Marshall Exploration,
Inc., 989 F.2d 1408, 1415 (5th Cir.1993).

6

The Court notes that amended Rule 56 requires that there be “no genuine dispute
as to any material fact,” but this change does not alter the Court’s analysis. F.R.C.P. 56(a)
and Advisory Committee Notes.
Page 8 of 14

II.

Interpretation of Contracts.7
Under Louisiana law, the “[i]nterpretation of a contract is the determination of the

common intent of the parties.” La. C.C. Art. 2045. “When the words of a contract are clear
and explicit and lead to no absurd consequences, no further interpretation may be made
in search of the parties’ intent.” La. C.C. Art. 2046. “When a contract can be construed
from the four corners of the instrument without looking to extrinsic evidence, the question
of contractual interpretation is answered as a matter of law.” Wooley v. Lucksinger, 61
So.3d 507, 558 (La. 2011). “A contract is ambiguous only if its terms are unclear or
susceptible to more than one interpretation, or the intent of the parties cannot be
ascertained from the language employed.” Gebreyesus v. F.C. Schaffer & Assocs., Inc.,
204 F.3d 639, 643 (5th Cir.2000).
Under Louisiana law, “a doubtful provision must be interpreted in light of . . . the
conduct of the parties before and after the formation of the contract.” La. C.C. Art. 2053.
Civil Code Article 2056 further provides that “in case of doubt that cannot be otherwise
resolved, a provision in a contract must be interpreted against the party who furnished its
text. A contract executed in a standard form of one party must be interpreted, in case of
doubt, in favor of the other party.” See also Wampold v. E. Eric Guirard & Associates, 442
F.3d 269, 272-273 (5th Cir. 2006).
III.

Analysis.
The City has submitted pay requests, invoices, and proof of payment establishing

that from May 2008 to June 2010, CDM invoiced the City in connection with the Water
7

This diversity case is governed by Louisiana substantive law. See Erie R. Co. v.
Tompkins, 304 U.S. 64, 585 S.Ct. 817; Holt v. State Farm Fire & Cas. Co., 627 F.3d 188,
191 (5th Cir.2010).
Page 9 of 14

Treatment Plant project the total sum of $4,377,194.86. From July 2009 to July 2010, the
last year of the project, CDM invoiced the City the total sum of $2,253,668.86. CDM now
seeks to recover an additional $889,418.05 representing labor costs and expenses incurred
during the same time period of July 2009 to July 2010. The City argues that CDM should
not be permitted to recover the additional labor costs and expenses because it “would
result in the double recovery by CDM of its labor costs and expenses.” Record Document
83-2 at 11. In other words, CDM’s recovery of the $889,418.05 would constitute a windfall
to CDM.
The City notes that Pay Request Nos. 1-16, representing the time period of May
2008 through April 17, 2010, have been paid by the City. See Record Document 83, Exhs.
78-93.8 Thus, CDM would not be entitled to recover its labor costs and expenses incurred
during this time period, “as such would constitute a windfall amounting to double recovery.”
Record Document 83-2 at 12. The City did not pay the amounts invoiced in Pay Request
Nos. 17 and 18 and concedes that “if CDM’s claim is successful, [CDM] may arguably be
entitled to the fees regarding work under the WTP Contract invoiced on Pay Request Nos.
17 and 18,” i.e., $80,139.73 on Pay Request 17 and $110,023.01 on Pay Request 18.
Record Document 105 at 7; Record Document 83, Exhs. 94 & 51; Exh. 175 at ¶¶ 23 & 24.
Yet, the City maintains that CDM “cannot recover these amounts and recover, in addition
to these amounts, [its] labor expenses and costs incurred for these pertinent time periods.”
Record Document 83-2 at 12.
The City also relies upon general principles of contractual interpretation to support

8

CDM does not contest that the City paid all of the invoices that were submitted in
connection with the WTP Contract prior to May 2010. See Record Document 103-1 at ¶¶
8-23.
Page 10 of 14

its argument. See Record Document 105. The City argues that any reliance by CDM upon
Article 8.1 of the WTP Contract to support its counterclaim for the $889,418.05 is misplaced
in light of the contract as a whole. Article 6 of the WTP Contract provides:
6.1.1. For Basic Services.
[The City] shall pay [CDM] for Basic Services performed or furnished
under Article 2 on the basis set forth in Exhibit A.
6.1.2. For Special Services.
[The City] shall pay [CDM] for Special Services performed or furnished
under Article 3 on the basis set forth in Exhibit A.
6.1.3. For Reimbursable Expenses.
In addition to payments provided for in paragraphs 6.1.1 and 6.1.2,
[the City] shall pay [CDM] for Reimbursable Expense incurred by
[CDM] and [CDM’s] Subcontractors as set forth in Exhibit A. The
amount payable for Reimbursable Expenses will include a factor to the
extent so indicated in Exhibit A.
Record Document 83, Exh. 1 (Bates # CAMP 14208) (emphasis added). The term
“Reimbursable Expenses” is defined in the WTP Contract as “the expenses incurred
directly in connection with the performance or furnishing of Basic and Additional Services
for the Project for which [the City] shall pay [CDM] as indicated in Exhibit A.” Id., Exh.
1 (Bates # CAMP 14196) (emphasis added). Based on this clear contractual language, the
specific terms of compensation for reimbursable expenses was not set forth in the general
provisions of the WTP Contract, but rather in Exhibit A.
Section 4 of Exhibit A set forth the “method of payment for services rendered” for
each task CDM was to perform under the WTP Contract. Id., Exh. 1 (Bates # CAMP
14216). For Task 1 (Process Evaluation Report and Preliminary Design Report), CDM was
to receive $350,740. See id. For Tasks 2 - 8, the payment was “to be negotiated at the
completion of Task 1.” Id. These tasks include design, bidding, construction, resident
engineering, and surveying. See id. There is no reference in Exhibit A to reimbursable
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expenses.
Amendment No. 2 established the initial fee for the design, bidding, and general
construction services provided by CDM under the WTP Contract. As set forth previously,
CDM was to be paid a design fee of $2,123,525; a bidding fee of $163,348; and a
construction services fee of $980,089. See id., Exh. 1 (Bates # CAMP 19567). The total
lump sum fee due to CDM was $3,266,962. Amendment No. 3 then increased CDM’s fee
for design, bidding, and general construction services. See id., Exh. 1 (Bates # CAMP
02900). There is no reference in Amendment Nos. 2 or 3 to reimbursable expenses.
Based on these contractual provisions and the general principles of contractual
interpretation set forth above, the City argues that Exhibit A’s silence on the issue of
reimbursable expenses is fatal to CDM’s counterclaim for $889,418.05. See Record
Document 105 at 4. The WTP Contract clearly provides that CDM was entitled to only
those reimbursable expenses “as indicated [or set forth] in Exhibit A.” See id. Because no
reimbursable expenses were set forth in Exhibit A, CDM has no claim for any such
expenses, whether the claim is based on Article 8.1 or any other provision. See id.
Moreover, the City contends that any question as to whether CDM is entitled to
reimbursable expenses must be resolved in favor of the City because the WTP Contract
and its amendments are form documents prepared by CDM. See id.; see also La. C.C. Art.
2056.
In opposing the City’s motion, CDM argues that the $889,418.05 amount
“constitute[s] actual reimbursable expenses incurred by CDM (for services performed by
CDM under the contract directly related to the expansion of Bossier’s water treatment plant)
that CDM was never paid or reimbursed for and that are specifically provided for under the

Page 12 of 14

contract.” Record Document 103 at 2. CDM maintains that due to the City’s wrongful and
unilateral termination of the WTP Contract, CDM did not recover the full amount of the fees
and amounts agreed to under the contract. See id. at 3-4. Relying upon the affidavit of its
Regional Performance Manager, Domenic Dicenso (“Dicenso”), CDM contends that its
“invoices did not include/reflect all the actual expenses incurred by CDM to complete the
percentage of work designated as completed in each invoice.” Id. at 4. CDM also points
to Article 8.1 of the WTP Contract to support its counterclaim for the $889,418.05 and notes
that Dicenso stated in his affidavit that “CDM has not been paid or compensated for
$889,418.05 in reimbursable expenses directly incurred on the WTP Expansion Project.”
Id. at 5-7.
Based on the foregoing, the Court finds that the City is entitled to partial summary
judgment as a matter of law in relation to CDM’s counterclaim for $889,418.05. The Court
believes that the contract speaks for itself. The language employed in the contract clearly
evidences a lump sum contract, not a cost plus a fixed fee contract. CDM’s position is
defeated by the clear language of the contract, namely because Exhibit A and Amendment
Nos. 2 and 3 are all silent on the issue of reimbursable expenses. Dicenso’s affidavit is
unnecessary extrinsic evidence. See Wooley, 61 So.3d at 558 (“When a contract can be
construed from the four corners of the instrument without looking to extrinsic evidence, the
question of contractual interpretation is answered as a matter of law.”). Moreover, CDM’s
proffered contractual construction would result in a windfall recovery, thereby leading to an
absurd result. See La. C.C. Art. 2046 (“When the words of a contract are clear and explicit
and lead to no absurd consequences, no further interpretation may be made in search of
the parties’ intent.”).

Page 13 of 14

Moreover, any doubt as to the issue of reimbursable expenses must be resolved in
favor of the City. Under Article 2053, this Court believes that CDM’s conduct, as evidenced
by its billing practices in Pay Request Nos. 1-18, contradicts its position as to the
$889,418.05. Likewise, because the WTP Contract and its amendments were form
documents prepared by CDM, any doubtful provision must be interpreted against CDM.
See La. C.C. Art. 2056.
CONCLUSION
The Court believes that the WTP Contract, as amended, speaks for itself and is
clearly a lump sum contract, not a cost plus a fixed fee contract. CDM’s position is
defeated by the clear language of the contract. Thus, the Court finds no genuine disputes
of material fact exist and that partial summary judgment in favor of the City is appropriate
as a matter of law.
Accordingly,
IT IS ORDERED that the Motion for Partial Summary Judgment (Record Document
83) filed by the City be and is hereby GRANTED.

CDM’s counterclaim to recover

$889,418.05 be and is hereby DISMISSED.
THUS DONE AND SIGNED, Shreveport, Louisiana, this 26th day of September,
2014.

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