Court Opinion

ID: 33804
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:09:10+00
Date Added: 2024-06-11T16:50:09.885660
License: Public Domain

United States Court of Appeals
                                                                Fifth Circuit
                                                             F I L E D
               IN THE UNITED STATES COURT OF APPEALS         January 7, 2004
                       FOR THE FIFTH CIRCUIT
                                                         Charles R. Fulbruge III
                        ___________________                      Clerk
                            No. 02-31262
                          Summary Calendar
                       _____________________

                Roxco Ltd; Nobel Insurance Company,

                     Plaintiffs - Appellants,

                              versus

 Harris Specialty Chemicals, Inc; Senergy, A Division of Harris
                    Specialty Chemicals Inc,

                      Defendants - Appellees.

_________________________________________________________________

           Appeal from the United States District Court
               for the Western District of Louisiana
                   District Court No. 00-CV-1921
_________________________________________________________________

Before HIGGINBOTHAM, DAVIS and PRADO, Circuit Judges.

PER CURIAM.1

     Appellants Roxco, Ltd. and Nobel Insurance Company appeal

from two rulings of the district court.   First, they argue that

the district court erred in determining, after a bench trial,

that they failed to prove their detrimental reliance claim.

Second, they argue that the district court erred in determining

     1
      Pursuant to 5th Cir. R. 47.5, this 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that this opinion should not be published and is not precedent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.

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that their tort claims had prescribed.    Finding no error, we

affirm.

     The parties’ dispute arose from a construction project on

Barksdale Air Force Base in Bossier City, Louisiana.    Appellant

Roxco Ltd., a general contractor, received a contract to build

base housing.   Roxco, then, subcontracted with Exterior/Interior

Specialties, Inc. (“Exterior/Interior”) to provide exterior

insulation and finish system (EIFS) for the housing.

Exterior/Interior chose to use ThoroWall, a product manufactured

by Appellee Harris Specialty Chemicals, Inc., for the EIFS work.

The government contract contained two approval requirements

relating to EIFS: first, the product had to be government-

approved, and second, the EIFS manufacturer had to approve the

applicator.   Harris issued a certificate that it had trained and

approved Exterior/Interior.    The certificate also contained a

disclaimer underneath the signatures of Harris employees.      This

disclaimer read: “[t]his is an independent contractor and Harris

Specialty Chemicals cannot control the manner of their work, or

guarantee that they will correctly apply and handle all ThoroWall

products with specifications.”

     Yet Harris provided no training to Exterior/Interior before

it issued the certificate.    Harris contends, and presented

evidence in support of its contention, that it did provide some

training to Exterior/Interior employees before work on the

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project began.   Harris also contends that Exterior/Interior

personnel had performed similar work in the past and that Harris’

technical representative had inspected some of

Exterior/Interior’s other work.

     The parties appear to agree that Exterior/Interior’s work

under the subcontract was unacceptable.   In the fall of 1995,

Harris’ technical representative noted problems with

Exterior/Interior’s work during a visit to the site and noted

those problems in an internal memorandum that indicated various

problems with Exterior/Interior and suggested that Harris supply

additional training.   Despite these problems, Harris subsequently

recertified Exterior/Interior as an applicator.   Eventually,

however, the government and Roxco noticed the problems with

Exterior/Interior.   Roxco terminated Exterior/Interior’s contract

on March 14, 1997.   According to Roxco, it cost approximately

$965,000 to solve the problems that Exterior/Interior created.

     On October 3, 1997, Roxco sued Exterior/Interior, its

principals, and Nobel Insurance Company, who had issued

Exterior/Interior’s bond.   Roxco and Nobel settled in March 1998,

and under that agreement, both parties agreed to sue Harris for

the remediation costs.   Roxco and Nobel.2 complied with this

     2
      Because Nobel has no claim apart from Roxco’s claim, we
will refer to both Appellants collectively as “Roxco.”

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agreement and brought the present suit against Harris3 on May 21,

1998.4   In this suit, Roxco brought claims based on negligence,

imputed liability, refusal to warrant Exterior/Interior’s work,

and delay in inspecting the remedial EFIS work.   In the original

suit, Roxco eventually dismissed its claims against

Exterior/Interior on July 19, 1999.

     The district court partially granted Harris’ motion for

summary judgment, ruling that all of Roxco’s tort claims were

barred by Louisiana’s one-year prescriptive period.   The court

permitted Roxco’s quasi-contractual detrimental reliance claim to

proceed to trial.5

     After the first day of trial, the parties agreed to a bench

     3
      Roxco sued both Harris and Senergy, Inc., Harris’s former
competitor. In November 1997, Harris acquired Senergy, which
then became a division of Harris.
     4
      Roxco originally filed this suit in Mississippi state
court. Harris removed the case to the United States District
Court for the Southern District of Mississippi and filed a motion
to dismiss for lack of personal jurisdiction. The district court
granted this motion and transferred the case to the Western
District of Louisiana.
     5
      From the complaint, it does not appear that Roxco ever
actually pleaded this claim. In fact, the district court’s
summary judgment order noted as much, indicating, “[i]n the
present action, Roxco and Nobel are suing HSC on the following
bases: (1) negligent certification, (2) negligent inspection, (3)
imputed liability, (4) refusal to warrant work of certified
contractor, (5) delay in warranty inspection and (6) punitive
damages.” (Order at 3). Nevertheless, later in its order, the
district court noted that it “recognize[d] that the plaintiffs
have sought relief in both contract and in tort. Indeed, the
plaintiffs have alleged a prima facie case of detrimental
reliance.” (Order at 7) Harris never objected to this ruling.

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trial.    After both sides presented evidence, the district court

heard argument and asked questions on November 22, 2002.       The

district court then addressed the parties, giving them

opportunity to respond, on November 26. The district court found

for Harris and entered judgment to that effect.    Roxco timely

appealed.

     Neither party has objected to the district judge’s failure

to make separate findings of fact and conclusions of law.

Instead, the district judge, on November 26, 2002, summed up his

conclusions, beginning “Here’s where I think I am.” The judge

then described his findings, but permitted Roxco’s counsel to try

to change his mind.    Roxco’s counsel did not succeed in this

effort.    The judgment in this case also states that it is “for

the reasons stated in open court on November 26.”     Thus,

statements made during argument on November 22, 2002 are not part

of the judge’s findings.    Although the better practice might have

been to make clear, separate findings of fact and conclusions of

law, we determine that the judge’s statements on the record on

November 26 permit us to conduct a review of this case.

Standard of Review

     We review the grant of summary judgment de novo, using the

same standards as the district court.    Hanks v. Transcon. Gas

Pipe Line Corp., 953 F.2d 996, 997 (5th Cir. 1992).    To be

entitled to summary judgment, the movant must show the absence of

                                  5
any genuine issue of material fact.          Taylor v. Gregg, 36 F.3d

453, 457 (5th Cir. 1994).           We review the district court’s

findings of fact after a bench trial for clear error.          Canal

Barge Co., Inc. v. Torco Oil Co., 220 F.3d 370, 375 (5th Cir.

2000).    Under this standard, we reverse “only if we have a

definite and firm conviction that a mistake has been committed.”

Id.

Detrimental Reliance

      Roxco’s detrimental reliance claim is based on Louisiana

Civil Code Article 1967, which reads:

      A party may be obligated by a promise when he knew or
      should have known that the promise would induce the other
      party to rely on it to his detriment and the other party
      was reasonable in so relying. Recovery may be limited to
      the expenses incurred or the damages suffered as a result
      of the promisee's reliance on the promise. Reliance on a
      gratuitous promise made without required formalities is
      not reasonable.

      LA. CIV. CODE   ART.   1967

      A claim under this provision is based on promissory

estoppel, not tort.6          Breaux v. Schlumberger Offshore Servs.,

817 F.2d 1226, 1229 (5th Cir. 1987);          Stokes v. Georgia-Pacific

Corp., 894 F.2d 764, 770 (5th Cir. 1990) (detrimental reliance

claim is not based on tort).           The elements of a detrimental

reliance claim are: 1) that the defendant made a promise, (2)

that the plaintiff’s         reliance on this represented promise was

      6
      This distinction permits Roxco to get around Louisiana’s
one-year prescriptive period for tort actions.

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reasonable, and (3) that the plaintiff’s reliance caused a change

in position to its detriment.     Industrias Magromer Cueros y

Pieles, S.A. v. Louisiana Bayou Furs, Inc., 293 F.3d 912, 921

(5th Cir. 2002).   Roxco, however, points to cases that describe

the first element in terms of “representation.”     Stokes, 894 F.2d

at 768; Breaux, 817 F.2d at 1230 (5th Cir. 1987).    But in these

cases, the representations are clearly representations related to

promises or contracts.     In Stokes, the representation was that

the defendant would provide the plaintiff a long-term contract.

Stokes, 894 F.2d at 766.     In Breaux, the defendant represented

that it agreed to enter into a lease.     Breaux, 817 F.2d at 1230.

The statute, too, by its language, requires the representations

to be promises.    See Dugas v. Guillory, 719 So.2d 719, 725 (La.

App. 3d Cir. 1998) (elements of a detrimental reliance claim are

“the existence of a promise and an individual's reasonable

reliance thereon that promise to his detriment”); Oliver v.

Central Bank, 658 So.2d 1316, 1323, 26,932 (La. App. 2d Cir.

1995) (“A condition precedent to proving a claim for detrimental

reliance is demonstrating the existence of a promise upon which

the injured party could reasonably rely.”)

     The district court found that only two of the alleged

misrepresentations were promises – the two certificates were

promises to instruct Exterior/Interior.    But the district court

also found that Roxco could not reasonably rely on these promises

                                   7
as a warranty of the work, particularly since both certificates

expressly state that the certificate provides no guarantee that

the independent contractor would adequately perform the work.

Evidence at trial amply supports this conclusion, which we only

review for clear error.   See In re Cotson, 991 F.2d 257, 260-61

(reasonableness of reliance is generally a question of fact).

The district court did not err when it concluded that Roxco

failed to establish the elements of its detrimental reliance

claim.

Prescriptive Period

     In its summary judgment ruling, the district court concluded

that Roxco’s tort claims had prescribed.   The court determined

that Roxco’s claims accrued on March 14, 1997, when Roxco

terminated its contract with Exterior/Interior.   Louisiana has a

one-year prescriptive period for tort claims,7 so unless the

prescriptive period was interrupted, Roxco’s claims had

prescribed when it sued Harris on May 21, 1998.

     Roxco contended that its suit against Harris’s joint

tortfeasor Exterior/Interior interrupted the prescriptive period.

The district court disagreed and ruled that Harris and

Exterior/Interior were not joint tortfeasors.   On appeal, Roxco

challenges this conclusion.

     Under Louisiana Civil Code article 2324(c), “[i]nterruption

     7
      LA. CIV. CODE ANN. art. 3492.

                                  8
of prescription against one joint tortfeasor is effective against

all joint tortfeasors.” Roxco sued Exterior/Interior within the

one-year prescriptive period.    According to Roxco, its suit

against Exterior/Interior interrupted prescription against Harris

because Harris and Exterior/Interior were joint tortfeasors.

Because the claims had clearly prescribed, Roxco bore the burden

of showing that prescription was interrupted.    Vincent v. Tusch,

618 So.2d 385, 385 (La. 1993).

     Harris contends that interruption was ineffective because

Roxco’s lawsuit against Exterior/Interior was for breach of

contract, not for tort claims.    Roxco agrees that its original

complaint against Exterior/Interior only contained breach of

contract claims.   Roxco argues, however, that it amended the

complaint to include tort claims against Exterior/Interior.

Nevertheless, Roxco never attached the amended complaints to its

response to the summary judgment motion.    Nor are the amended

complaints in the record.   The record only contains the original

complaint against Exterior/Interior and a docket sheet showing

the dates when Roxco amended its complaint.    The district court,

thus, had no evidence before it that Exterior/Interior was a

joint tortfeasor or that Roxco had sued it for tort claims.

Therefore, summary judgment was proper.

AFFIRMED

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