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VP Buildings, Inc. v. Norco Construction, Inc.

United States District Court, E.D. Louisiana
Nov 10, 2005
Civil Action No. 03-2446 Section "C" (3) (E.D. La. Nov. 10, 2005)

Opinion

Civil Action No. 03-2446 Section "C" (3).

November 10, 2005


ORDER


This matter comes before the Court on motion for summary judgment filed by Woodward Designs, L.L.C. ("Woodward") and its employee, Paul Flower ("Flower"). Having considered the record, the memoranda of counsel and the law, the Court has determined that summary judgment is appropriate for the following reasons.

Woodward and Flower move for dismissal of a third-party complaint filed by St. Bernard Port, Terminal and Harbor District "("St. Bernard"). Boasso had agreed to lease a facility to be constructed on Port property. The Port hired Burk Kleinpeter Associates ("BKI") as engineer to design the project and supervise construction, and Gibbs Construction Company was hired as builder. Gibbs subsequently contacted with Norco Construction Company as builder, and Norco contracted with VP Buildings, Inc. ("VP") to purchase the building. During construction, Norco went bankrupt, issues surrounding the propriety of the VP building arose, and VP filed this suit seeking payment from Gibbs.

At the same time, Woodward alleges it had contracted with Boasso American Corporation ("Boasso"), "to provide design certain specifications for the office area of the prefabricated metal shop building, and to consult with the contractors employed by the Port, on behalf of Boasso. (Rec. Doc. 136, Memo., p. 2). The Port filed its third-party complaint against Woodward and Flower alleging that the designs made by them were "for the benefit of the Port" and "made so that, in concept, the said buildings met the approval of the Port" and that the movers "were supervised and coordinated by BKI." (Rec. Doc. 111, p. 4, ¶ 3). This is repeated in opposition to this motion, where the Port argues that the work performed by Woodward and Flower was for the benefit of the Port, entitling it to sue them directly. (Rec. Doc. 144, p. 4).

Woodward and Flower pray for dismissal of the Port's tort indemnity/contribution claims against them as well. The Port does not address these claims, which the Court construes as a lack of opposition to their dismissal.

It is undisputed that Woodward had no contract with the Port, BKI, or Gibbs. Neither its memorandum of understanding with Boasso nor its agreement with architect Mouton/Albert provides for obligations owed to the Port. It is also undisputed that there is no relevant contractual provision elsewhere in favor of the Port. In fact, the Boasso-Mouton/Albert agreement specifically provided that "[n]othing contained in the Agreement shall create a contractual relationship with or cause of action in favor of a third party against either the Construction Manager or Architect." (Rec. Doc. 136, Exh. C, p. 7). The Port looks for support in a letter from Woodward and Boasso that it claims allegedly reflects that it would own the building that its tenant Boasso was to occupy and that the work would be "acceptable and economically feasible for the Port." (Rec. Doc. 144, p. 4).

The Court previously dismissed Richard A. Albert, whose predecessor company was Mouton/Albert, on grounds virtually identical to those contained herein. (Rec. Doc. 129).

Again, the Louisiana Civil Code provides that "[a] contracting party may stipulate a benefit for a third person called a third party beneficiary." La. Civ. Code art. 1978. A stipulation pour autrui gives the third party beneficiary the right to demand performance from the promisor and is never presumed. Smith v. State Farm Insurance Companies, 869 So.3d 909, 912-913 (La. AP. 4th Cir. 2004); Whitney National Bank v. Howard Weil Financial Corp., 631 So.2d 1308 (La.App. 4th Cir. 1994). It must be in writing and "clearly express intent" that it is for the benefit of another. Fontenot v. Marquette Casualty, 247 SO. 572 (La. 1971). Not every promise for the benefit of a third party, however, will create in the third party an actionable right; the benefit must be direct and not merely incidental to the contract, and the contract mus clearly provide that this benefit forms the condition or consideration of the contract. Liquid Drill, Inc. v. U.S. Turnkey Exploration, Inc., 48 F.3d 927, 931 (5th Cir. 1995). The party demanding performance bears the burden of proving the existence of this obligation. Smith, supra. Considerations relevant to the determination whether a stipulation pour autrui exists include (1) the existence of a legal relationship between the promisee and the third party involving an obligation owed by the promisee to the beneficiary which performance of the promise will discharge; (2) the existence of a factual relationship between the promisee and the third person where (a) there is a possibility of future liability either personal or real on the part of the promisee to the beneficiary against which performance of the promise will protect the former (b) securing an advantage for the third person may beneficially affect the promisee in a material way; (c) ther are ties of kinship or other circumstances indicating that a benefit by way of gratuity was intended. Liquid Drill, 48 F.3d at 931.

The Port is left without the proof necessary to prove the existence of a stipulation pour autrui. As indicated hereinabove, the contract between Woodward and the architect Mouton/Albert specifically provides against such an understanding, and nothing in the correspondence between Boasso and Woodward addresses the subject, much less provides evidence of the clear intention required under Louisiana law. The Port's reliance on the law that an oral contract can be binding does not provide support in light of this shortcoming.

Finally, the Court notes that the Port's argument that a stipulation pour autrui exists by virtue of Woodward's alleged guarantee to Boasso to prevent bids from coming in over budget. (Rec. Doc. 137, Exh. A; Rec. Doc. 144, Exh. 1). Assuming the existence of this specific guarantee relevant to bids, there is no allegation that it is relevant to the Port's broader claims against Woodward or Flower that they "insure[d] that [the] committment concerning the building costs would be met" and that "[t]his simply could not have been done except to the benefit of the Port." (Rec. Doc. 144, p. 9).

Accordingly,

IT IS ORDERED that the motion for summary judgment filed by Woodward Designs, L.L.C. and Paul Flower is GRANTED.


Summaries of

VP Buildings, Inc. v. Norco Construction, Inc.

United States District Court, E.D. Louisiana
Nov 10, 2005
Civil Action No. 03-2446 Section "C" (3) (E.D. La. Nov. 10, 2005)
Case details for

VP Buildings, Inc. v. Norco Construction, Inc.

Case Details

Full title:VP BUILDINGS, INC. v. NORCO CONSTRUCTION, INC., ET AL

Court:United States District Court, E.D. Louisiana

Date published: Nov 10, 2005

Citations

Civil Action No. 03-2446 Section "C" (3) (E.D. La. Nov. 10, 2005)