Opinion
CIVIL ACTION NO. 01-2171 SECTION "F"
February 5, 2003
ORDER REASONS
Before the Court is defendant OMNOVA Solutions, Inc.'s Motion for Summary Judgment as to Redhibition Liability. For the following reasons, the motion is DENIED.
I.
New Orleans Assets, L.L.C. owns the building leased to the FBI for its New Orleans Regional Headquarters. The building was constructed according to specifications furnished by the FBI through the U.S. General Services Administration. The building's vinyl wall covering, manufactured by OMNOVA, was selected by representatives from NOA, GSA, the general contractor Carl E. Woodward, L.L.C., and Atha Architecture. After construction, the building was beset by mildew and leaks. NOA sued numerous insurers, contractors, and product manufacturers, including OMNOVA. NOA's suit against OMNOVA alleges redhibition, fraud, and negligent misrepresentation. OMNOVA now moves for partial summary judgment on the redhibition claim.
II.
Federal Rule of Civil Procedure 56 instructs that summary judgment is proper if the record discloses no genuine issue as to any material fact such that the moving party is entitled to judgment as a matter of law. No genuine issue of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586 (1986). A genuine issue of fact exists only "if the evidence is such that a reasonable jury could return a verdict for the non-moving party."Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 248 (1986).
The Court emphasizes that the mere argued existence of a factual dispute does not defeat an otherwise properly supported motion. See id. Therefore, "[i]f the evidence is merely colorable, or is not significantly probative," summary judgment is appropriate. Id. at 249-50. Summary judgment is also proper if the party opposing the motion fails to establish an essential element of his case. See Celotex Corp. v. Catreet, 477 U.S. 317, 322-23 (1986). In this regard, the non-moving party must do more than simply deny the allegations raised by the moving party. See Donaghey v. Ocean Drilling Exploration Co., 974 F.2d 646, 649 (5th Cir. 1992). Rather, he must come forward with competent evidence, such as affidavits or depositions, to buttress his claims. Id. Hearsay evidence and unsworn documents do not qualify as competent opposing evidence. See Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir. 1987). Finally, in evaluating the summary judgment motion, the court must read the facts in the light most favorable to the non-moving party. See Anderson, 477 U.S. at 255.
III.
Under Louisiana law, sellers impliedly warrant buyers against redhibitory defects, or vices, in the thing sold. La. Civil Code art. 2520. Moreover, sellers are deemed to know that the thing they sell has redhibitory defects when they are also the manufacturer of that thing. La. Civil Code art. 2545. Liability in redhibition occurs when: 1) the seller sold a thing to the plaintiff and it is either absolutely useless for its intended purpose or its use is so inconvenient or imperfect that, judged by the reasonable person standard, had the plaintiff known of the defect, he would never have purchased it; 2) the thing contained a non-apparent defect at time of sale; and 3) the seller was given an opportunity to repair the defect. See, e.g., Ford Motor Credit v. Laing, 705 So.2d 1283, 1285 (La.App. 2 Cir. 1998); Jackson v. Slidell Nissan, 693 So.2d 1257, 1262 (La.App. 1 Cir. 1997).
OMNOVA contends that the redhibition articles are not applicable, as a matter of law, because its wall covering did not contain a hidden defect. La. Civ. Code art. 2521; Ford Motor Credit, 705 So.2d at 1285. In Louisiana, a buyer is under a duty to make an inspection for defects that is reasonable in light of all the circumstances surrounding the sale. See, e.g., Pursell v. Kelly, 152 So.2d 36, 41 (La. 1963); Crowe v. Laurie, 729 So.2d 703, 707-08 (La.App. 1 Cir. 1999). Whether an inspection is reasonable depends on the facts of each case and includes such factors as the knowledge and expertise of the buyer, the opportunity for inspection, and the assurances made by the seller. See Merlin v. Fuselier Const., Inc., 789 So.2d 710, 715 (La.App. 5 Cir. 2001); see also LeMaire v. Breaux, 788 So.2d 498, 501 (La.App. 5 Cir. 2001) (requiring the buyer to conduct an investigation that "would be conducted by a reasonably prudent buyer acting under similar circumstances").
OMNOVA has not produced evidence that NOA would have purchased the wall covering even if it had known of the defect. Thus, OMNOVA's summary judgment motion rests upon the apparency of the defect.
OMNOVA has offered evidence that NOA was highly sophisticated, and that it had extensive time to inspect the vinyl wall covering. OMNOVA also asserts that the media has thoroughly documented the relationship between vinyl wall covering and mold. This evidence, however, does not establish that the defect was apparent as a matter of law.
The OMNOVA vinyl wall covering was selected in October 1998; samples of the wall covering were submitted to CEW's painting and wall covering subcontractor in January 1999; and the wall covering was installed in the FBI Building in August 1999.
For instance, real estate expert Patrick Eagan testified that the correlation between vinyl wall covering and mold was not publicly known during the 1990's. Moreover, a trier of fact could conclude that NOA' s inspection of the wall covering was reasonable considering OMNOVA's assurances. Finally, Mr. Risi's report cannot be ignored. Thus, a genuine issue of fact strongly exists as to whether the wall covering's defect was apparent or not.
OMNOVA's warranty stated that the vinyl-wall covering "shall not., support the growth of mildew when [it is] installed on sound wall, adequately maintained and used under normal conditions."
Accordingly, OMNOVA's Motion for Summary Judgment as to Redhibition Liability is DENIED.
OMNOVA Solutions, Inc.'s Motions for Partial Summary Judgment as to Fraudulent Concealment and Negligent Misrepresentation and for Partial Summary Judgment on Punitive Damages, set for hearing February 5, 2003, are hereby continued to February 10, 2003, to be heard in conjunction with New Orleans Assets, L.L.C.'s Motion to Review Magistrate's Order. The motions will be resolved on the briefs.
Before the Court is defendant OMNOVA Solutions, Inc.'s Motion for Summary Judgment. For the following reasons, the motion is DENIED.
New Orleans Assets, L.L.C. owns the building leased to the FBI for its New Orleans Regional Headquarters. The building was constructed according to specifications furnished by the FBI through the U.S. General Services Administration. The building's vinyl wall covering, manufactured by OMNOVA, was selected by representatives from NOA, GSA, the general contractor Carl E. Woodward, L.L.C., and Atha Architecture. After construction, the building was beset by mildew and leaks. NOA sued numerous insurers, contractors, and product manufacturers, including OMNOVA. NOA's suit against OMNOVA alleges redhibition, fraud, and negligent misrepresentation. OMNOVA now moves for summary judgment under the government contractor defense.
NOA contends that OMNOVA is barred from asserting the government contractor affirmative defense because it was not pleaded in accordance with Federal Rule of Civil Procedure 8(c). Rule 8(c) provides that "[i]n pleading to a preceding pleading, a party shall set forth affirmatively [various specific affirmative defenses] and any other matter constituting an avoidance or affirmative defense." Failure to follow this rule generally results in a waiver. See Allied Chemical Corporation v. MacKay, 695 F.2d 854, 855 (5th Cir. 1983)
OMNOVA failed to plead the government contractor defense in any of its numerous answers. Between October 2001 and August 2002, OMNOVA filed answers to CEW's cross-claim, NOA's original and first amended complaints, NOA's second and third amended complaints, NOA's fifth amended complaint, and CEW's supplemental and amended cross-complaint. None of these pleadings referenced the government contractor defense.
Moreover, the government contractor defense was not discussed at the November 7, 2002 settlement conference, or in OMNOVA's prior summary judgment motions.
Despite Rule 8(c)'s clear directive regarding the pleading of affirmative defenses, the Fifth Circuit has stated that "[w]here the matter is raised in the trial court in a manner that does not result in unfair surprise . . . technical failure to comply precisely with Rule 8(c) is not fatal." Id. The Fifth Circuit noted that, in construing the federal rules to do substantial justice, a court should determine whether the defendant raised the defense in "a pragmatically sufficient time" without prejudicing the plaintiff in his ability to respond. Id. at 856;Perry v. Bo-Truc, Inc., 1992 WL 56055, at *1 (E.D.La., March 11, 1992)
In Kerr v. Smith Petroleum, this Court ordered summary judgment on the basis of an affirmative defense not previously raised because the defendant asserted it "shortly after learning" of the facts supporting the defense. 896 F. Supp. 602, 604 (E.D.La. 1995); see also Funding Systems Leasing Corp. v. Pugh, 530 F.2d 91, 96 (5th Cir. 1976) (permitting a defendant to raise an affirmative defense in a motion for summary judgment "only when the motion for summary judgment is the initial pleading tendered by defendant")
OMNOVA asserted the affirmative government contractor defense on the final day which motions could be filed in compliance with this Court's scheduling order, and just one week before, the discovery cut-off date. Moreover, OMNOVA has not produced evidence that the facts supporting the defense emerged only recently.
While the government contractor defense is roughly similar to the specification defense to redhibition claims, it nonetheless requires a unique factual inquiry. Permitting OMNOVA to plead this unique affirmative defense in the final days of discovery would unduly prejudice NOA and CEW. Thus, OMNOVA has failed to comply with Rule 8(c), and the government contractor defense is deemed waived.
Accordingly, OMNOVA'S Motion for Summary Judgment is DENIED.
Before the Court are defendant Hardin Construction Company, Inc.'s Motions for Summary Judgment and for Prevailing Party Fees and Costs. For the following reasons, the motion for summary judgment is GRANTED IN PART and DENIED IN PART, and the motion for fees and costs is DENIED.
New Orleans Assets, L.L.C. owns the building leased to the FBI for its New Orleans Regional Headquarters. Hardin entered a subcontract with Carl E. Woodward, L.L.C., the project's general contractor, to install drywall on the building's interior walls. After construction, the building was beset by mildew and leaks. NOA sued CEW, numerous insurers, subcontractors, and product manufacturers. CEW in turn filed a third party interpleader against Hardin. Hardin then filed a counterclaim against CEW for attorney's fees and costs pursuant to their subcontract's "prevailing party" clause. Hardin now moves for summary judgment and for fees and costs.
Federal Rule of Civil Procedure 56 instructs that summary judgment is proper if the record discloses no genuine issue as to any material fact such that the moving party is entitled to judgment as a matter of law. No genuine issue of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586 (1986). A genuine issue of fact exists only "if the evidence is such that a reasonable jury could return a verdict for the non-moving party."Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)
The Court emphasizes that the mere argued existence of a factual dispute does not defeat an otherwise properly supported motion. See id. Therefore, "[i]f the evidence is merely colorable, or is not significantly probative," summary judgment is appropriate. Id. at 249-50. Summary judgment is also proper if the party opposing the motion fails to establish an essential element of his case. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). In this regard, the non-moving party must do more than simply deny the allegations raised by the moving party. See Donaghey v. Ocean Drilling Exploration Co., 974 F.2d 646, 649 (5th Cir. 1992). Rather, he must come forward with competent evidence, such as affidavits or depositions, to buttress his claims. Id. Hearsay evidence and unsworn documents do not qualify as competent opposing evidence. See Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir. 1987). Finally, in evaluating the summary judgment motion, the court must read the facts in the light most favorable to the non-moving party. See Anderson, 477 U.S. at 255.
CEW's first claim is that Hardin's installation of wet drywall promoted the growth of mold. While Hardin does not contest that stored drywall became wet in the FBI Building after a March 1999 storm, it has produced substantial evidence to demonstrate that all the wet drywall was removed prior to installation. CEW, however, contends that the testimonies of Dean Hart, Jr. and Christopher M. Penrose establish a genuine issue whether Hardin actually installed wet drywall in the FBI Building. The Court disagrees.
Hart, a former CEW employee and CEW's assistant project executive on the FBI Project, stated that he saw drywall "laying in the puddle of water, the bottom couple of pieces." His deposition, however, further states:
Q. You also testified yesterday regarding some sheetrock that you saw that had water marks on it, and that had otherwise been wet in someway before being installed. Did you actually see any of that sheetrock being installed?
A. Did I physically see them hang it?
Q. Yes.
A. No.
Moreover, Penrose, an NOA principal, testified accordingly:
Q. Were you ever personally present in observing when the drywall was actually being hung?
A. Yes, I was. I saw a lot of sheetrock being hung.
Q. And when you were seeing the sheetrock being hung, did you ever see wet sheetrock being hung?
A. Personally, no.
Q. Did you ever speak to Mr. Hardin or any of his crew.
A. Yes, I did.
Q. Did you ever have any complaints to Mr. Hardin?
A. I don't think I ever did have any complaints to the Hardins.
The testimonies of Hart and Penrose fail to establish a genuine issue of material fact whether Hardin installed wet drywall in the FBI Building. Thus, the Court finds that summary judgment is appropriate as to Hardin's liability for the installation of wet drywall.
CEW also claims that Hardin's improper installation of the building's foil-faced insulation promoted the growth of mold. While the merits of CEW's insulation claim are suspect, it has established, through the testimony of Paul Flower, that a genuine issue of material fact does exist. Thus, summary judgment is denied as to Hardin's liability for foil-faced insulation.
Because the motion for summary judgment as to Hardin's liability is denied in part, Hardin's motion for prevailing party fees and costs is not ripe.
Accordingly, Hardin' s motion for summary judgment is GRANTED IN PART and DENIED IN PART, and its motion for prevailing party fees and costs is DENIED.