IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 08-30993

In the Matter of: ROY FRISCHHERTZ CONSTRUCTION CO. INC.,

Debtor.

AUDUBON COMMISSION,

Appellant–Cross-Appelle,

v.

ROY FRISCHHERTZ CONSTRUCTION CO. INC.,

Appellee–Cross-Appellant,

OHIO CASUALTY INSURANCE CO.,

Appellee.

Appeal from the United States District Court

for the Eastern District of Louisiana

USDC No. 2:08-CV-89

USDC No. 2:07-CV-9426

Before DAVIS, OWEN, and HAYNES, Circuit Judges.

PER CURIAM:

*

United States Court of Appeals

Fifth Circuit

F I L E D

November 10, 2010

Lyle W. Cayce

Clerk

Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not *

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

Case: 08-30993 Document: 00511290584 Page: 1 Date Filed: 11/10/2010
No. 08-30993

The judgment of the bankruptcy court is reversed in part and we remand

for the following reasons:

1. Section 14.1.1 of the construction contract requires only an actual work

stoppage of thirty consecutive days following a government act or acts that

require work to be stopped. The bankruptcy court did not clearly err when it

determined that the August 28, 2005, “Promulgation of Emergency Orders,”

which instituted a mandatory evacuation of “all of the Parish of Orleans,”

required work to be stopped and that “it was not possible for RFCC to man the

Audubon project” for thirty consecutive days following the evacuation order.

2. The bankruptcy court properly denied Audubon its completion costs and

proof of claim in the main bankruptcy proceeding.

3. The bankruptcy court did not abuse its discretion in excluding Roy

Frischhertz, III’s video deposition testimony from evidence at trial.

4. The bankruptcy court did not err in its determination that the evidence

was insufficient to support RFCC’s claim to compensation for lost overhead and

profit in addition to recovery of the contract price for work actually completed.

5. The bankruptcy court erred in determining that RFCC was not entitled

to the retainage withheld by Audubon. “Retainage is a portion or percentage of

payments due for the work completed on a contract that is held back until the

entire job is completed satisfactorily.” As is typical in construction contracts,

1 2

the agreement between RFCC and Audubon provided for monthly progress

payments and withholding of retainage.

Under the terms of the contract, RFCC has the right to recover retainage

after termination. Specifically, § 14.1.3 provides:

Quality Design & Constr., Inc. v. City of Gonzales ex rel. Berthelot, 06-2211, p. 2 n.1

1

(La. App. 1 Cir. 11/28/07); 977 So. 2d 87, 88 n.1.

See State v. Laconco, Inc., 430 So. 2d 1376, 1381-82 (La. Ct. App. 1983). 2

2

Case: 08-30993 Document: 00511290584 Page: 2 Date Filed: 11/10/2010
No. 08-30993

If one of the reasons described in Section 14.1.1 or 14.1.2 exists, the

Contractor may, upon seven days’ written notice to the Owner and

Architect, terminate the Contract and recover from the Owner

payment for Work executed and for proven loss with respect to

materials, equipment, tools, and construction equipment and

machinery, including reasonable overhead, profit and damages.

Because RFCC properly terminated the contract, this section unequivocally

entitles RFCC to “payment for Work executed,” irrespective of substantial

completion. Therefore, this section allows RFCC to recover the contractually

agreed upon compensation for completed work. Because retainage is simply 5%

of the compensation properly due, the plain language of the provision allows

RFCC to recover retainage. RFCC is entitled to retainage.

* * *

REVERSED in part and REMANDED.

3

Case: 08-30993 Document: 00511290584 Page: 3 Date Filed: 11/10/2010