Miller Plastering, Inc. v. Amigo Building Corporation

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

09-237

MILLER PLASTERING, INC.

VERSUS

AMIGO BUILDING CORPORATION & PRIOLA CONSTRUCTION
CORPORATION

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APPEAL FROM THE
THIRTIETH JUDICIAL DISTRICT COURT
PARISH OF VERNON, NO: 70,852
HONORABLE JOHN C. FORD, PRESIDING
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SYLVIA R. COOKS
JUDGE

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Court composed of Sylvia R. Cooks, Oswald A. Decuir, and James David
Painter, Judges.
PAINTER J. CONCURS IN THE RESULT. AFFIRMED.

Thomas P. LeBlanc
Loftin, Cain, Gabb & LeBlanc, LLC
113 Dr. Michael Debakey Drive
Lake Charles, LA 70601
(337) 310-4300
(337) 310-4400
COUNSEL FOR DEFENDANTS/APPELLANTS

Daniel G. Brenner
David L. Roberson
Bolen, Parker, Brenner, & Lee, Ltd.
P.O. Box 11590
Alexandria, LA 71315-1590
(318) 445-8236
COUNSEL FOR PLAINTIFF/APPELLEE

COOKS, Judge.

FACTS

Miller Plastering, Inc. (Miller) entered into a written contract with Priola

Construction Corporation (Priola) as a sub-contractor to perform sheet rock,

plastering, and acrylic wall coating work on barrack buildings owned by the U.S.

Army Corps of Engineers (Corps) at Fort Polk. The general contractor for the work

was Amigo Building Corporation (Amigo). Amigo and Priola had a contractual

agreement whereby Priola was responsible for, among other things, the type of

plastering and wall finishing work it sub-contracted to Miller. Under the contract

between Priola and Amigo, the costs of superintendent labor and quality control

management were specifically excluded from Priola’s responsibility. Nevertheless,

both Amigo and Priola had employees on-site at all times while work was being

performed by Miller, and both participated daily in quality control over the project

including quality control over Miller’s work. At no time did any representative of

Priola or Amigo, ever in any way, indicate to Miller that any of its work was

unacceptable or not in compliance with the Corps of Engineers’ plans and

specifications.

Before proceeding with its plaster and acrylic coating work, Miller prepared

a sample which was approved by the Corps. After inadvertently covering over that

sample, another sample was prepared by Miller and approved by the Corps. Amigo

and Priola’s personnel observed the daily progress of Miller’s work and made no

indication that the work was unacceptable to the Corps. In fact, at trial, witnesses for

both Priola and Amigo testified they believed Miller’s work was in compliance with

the Corps’ requirements, matched the approved sample, was not deficient, and did not

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need to be redone.

After Miller fully completed the work on Building No. 2273, the inspector

for the Corps rejected Miller’s work and demanded it be redone. The Corps’ inspector

threatened if Miller caused trouble over this demand he would make it difficult for

Miller to proceed on the remaining work to be done under the main contract between

Amigo and the Corps. Miller, believing it was useless to argue with the Corps’ quality

control person, proceeded to redo the building in question.

All parties admit that Miller incurred substantial expense to redo the entire

building. At no point did either Priola or Amigo object to Miller redoing the building.

Apparently, none of these parties ever discussed who would bear the cost of the redo

following the Corps’ demand. Amigo, as general contractor, and Priola, as sub-

contractor, refused to pay Miller for the cost of redoing the building. Miller filed suit

against Priola and Amigo but did not include the Corps in the suit. Neither Priola nor

Amigo sought to make the Corps a party to this litigation. This case previously came

to our court on writs following the trial court’s denial of defendants’ Motion For

Summary Judgment. Because the jurisdictional amount was below the required limit

for jury trial the case was tried before a judge. The trial court ruled in favor of Miller

and against Amigo and Priola awarding Miller damages equal to the expenses

incurred for materials and labor, under the doctrine of equitable estoppel. Priola and

Amigo appealed the decision asserting the trial court erred in applying the doctrine

of equitable estoppel and in failing to apportion any amount of fault to the Corps

and/or to Miller.

ANALYSIS

We review the trial court’s decision under the manifest error-clearly wrong

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standard of review. Stobart v. State through DOTD, 617 So.2d 880 (La.1993). In

order to set aside the trial court’s findings of fact we must examine the record and

determine that there is no reasonable factual basis for the trial court’s findings and

that the trial court’s findings are clearly wrong. Id.

We find the record supports the findings of the trial court. Amigo clearly

had responsibility for quality control of all work on the project. Both Amigo and

Priola had personnel on-site daily observing Miller’s work and were indeed

contractually obligated to provide such oversight. Miller was told the sample

submitted was acceptable, and Miller proceeded to do its work in accordance with

the approved sample. At no time did any employee or representative of Priola or

Amigo express any concern to Miller about the quality or appropriateness of

Miller’s work, nor did any representative of the Corps express any dissatisfaction

with Miller’s work until after the work was completed on Building 2273. Both

Priola and Amigo had constant contact with the Corps’ quality control person, Mr.

Smith. Miller reasonably relied on Amigo’s and Priola’s silence as approval of his

original work. Further, Miller reasonably relied on Amigo’s and Priola’s silence

as it undertook to completely redo Building 2273 at the Corps’ insistence. Amigo

was contractually bound in its contract with the Corps to give a satisfactory finished

product subject to the Corp’s approval. Priola was contractually bound to give

Amigo and the Corps a satisfactory product as well. Amigo and Priola’s failure to

object to the Corps’ demand or to Miller’s efforts to comply with the Corps’ demand

by redoing the work, prevents them from protesting now that the subsequent work

was neither authorized nor required. Amigo and Priola direct our attention to article

8 of Miller’s contract, which provides:

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Warranty. Subcontractor [Miller] warrants its work
against all deficiencies and defects in materials and/or
workmanship and agrees to satisfy same without cost to
Owner [Corps] or Contractor [Priola] for a period of one
(1) year from date of Substantial Completion of the
Project or per Contract Document, whichever is longer.

The contract also provides in Article 2 that the Subcontractor (Miller) was to

perform and complete its work in accordance with Contract Documents and “under

the general direction of Contractor (Priola).” Additionally, an addendum to the

contract dated November 14, 2001 reads as follows:

With respect to all services performed and to be
performed under this agreement/contract by Miller for
Priola, the latter is recognized as a statutory employer of
Contractor’s employees, including but not limited to the
Contractor’s direct employees, immediate employees and
statutory employees.

Priola, by express written agreement, was the statutory employer of

Miller’s employees performing the work on Building 2273 and provided constant

supervision over those employees and the quality of their work as Priola’s contracts

with Miller and Amigo required it to provide. Additionally, the president of Priola,

Nicki Priola, Jr., testified it was his understanding that Section 8 of the contract with

Miller means that Miller would only have to redo his work at no cost if the work

was defective or deficient. He further testified Miller’s work was not defective or

deficient but simply was not to the Corps’ satisfaction.

Though not urged in its brief, Priola asserted at oral argument that the

contract between it and Miller required Miller to submit a change order before

beginning the redo of building 2273. Article 4 of the noted contract states:

Contractor (Priola), without nullifying Agreement, may
direct Subcontractor (Miller) in writing to make changes
to Subcontractor’s work. Adjustment, if any, in the
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contract price or contract time resulting from such
changes shall be set forth in a Subcontract Change Order
pursuant to the Contract Documents. (Emphasis added)

The contract places the onus on Priola to direct Miller in writing to make

changes to his work. It does not speak on what Miller is required to do if Priola

fails to request changes in writing (which it may do) but oversees the changes

without objection. Further, in the contract between Priola and Amigo, Priola

expressly provides in Sections 23 and 24:

Section 23. Sub-Contractor (Priola) unconditionally warrants
and guarantees all labor and/or material and/or services
employed and furnished by or to it in performing the work and
agrees promptly to amend and make good, upon demand by the
Contractor (Amigo) or Owner (Corps) and at Sub-Contractor’s
expense, any and all defects due to imperfect workmanship
and/or materials and/or damages resulting therefrom, to the
entire approval and acceptance of the Contractor and Owner
and/or architect or their authorized representatives. Should the
Sub-Contractor refuse or neglect to proceed at once with the
correction of rejected or defective materials and/or
workmanship, after receiving notice to do so, then the
Contractor shall have the defects remedied or changes made at
the expense of the Sub-Contractor, and the Sub-Contractor
agrees to pay Contractor on demand any and all loss and/or
expenses paid or incurred by Contractor in remedying such
defects and/or making such changes.

Section 24. The obligation of the Sub-Contractor to perform
and complete all work covered by this Sub-Contract to the
satisfaction of Contractor and Owner is absolute and
without exception. (Emphasis added)

Priola further agreed in its contract with Amigo:

Section 36. The sub-Contractor shall give its personal
superintendence to the work or have a competent foreman or
superintendent, satisfactory to the Contractor, on the work being
performed at all times, with authority to act for it.

Section 39. Contractor shall not be liable to this Sub-Contractor,
its materialmen, laborers, or sub-contractors for any damages,
loss or expenses sustained by any of them resulting from acts or
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omissions, whether or not negligent, failure to perform, delays
in performance or defaults of another sub-contractor,
materialman, or supplier of service in connection with the
performance of any of the work covered by the General
Contract.

Although it would appear from reading these provisions, Priola bears sole

responsibility for the cost of the redo of building 2273, in its contractual agreements

with the Corps and Priola, Amigo assumed full responsibility for quality control

over the project. Neither Amigo nor Priola can rely on the provisions of Article 8

of the Miller/Priola contract when both, despite daily oversight and daily

observation, remained silent and acknowledge that Miller’s original work was

satisfactory and not deficient.

The trial court correctly applied the law on equitable estoppel to the facts

of the case. In American Bank v. Trinity Universal Insurance Company, 205 So.2d

35 (La.1967), our Supreme Court explained equitable estoppel:

Equitable estoppel may be defined as the effect of the
voluntary conduct of a party whereby he is precluded
from asserting rights against another who has justifiably
relied upon such conduct and changed his position so that
he will suffer injury if the former is allowed to repudiate
the conduct. Founded upon good faith, the doctrine is
designed to prevent injustice by barring a party, under
special circumstances, from taking a position contrary to
his prior acts, admissions, representations, or silence.
(Emphasis added).

This court, relying on the state supreme court’s decision in Wilkinson v.

Wilkinson, 323 So.2d 120 (La.1975), previously identified the three elements

required when applying equitable estoppel as (1) A representation by conduct or

work; (2) Justifiable reliance thereon; and (3) A change of position to one’s

detriment because of the reliance. John Bailey Contractor, Inc. v. State of

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Louisiana through DOTD, 425 So.2d 326 (La.App. 3 Cir. 1982). We further noted

in John Bailey Contractor, 425 So.2d 326 at 328:

Equitable estoppel has no application unless the persons
invoking it relied, and had a right to rely, upon the
representations or conduct of the person, or persons,
sought to be estopped. Hence, there is no compliance
with this rule requiring reliance upon representations,
express or implied, as an element of estoppel where the
persons pleading the estoppel had actual knowledge or
convenient means of acquiring knowledge of the facts
concerning which the representations were made. Rodden
v. Davis, 293 So.2d 578 (La. App. 3rd Cir. 1974).

Miller had a right to rely on the conduct and representations made by

Priola and Amigo through their daily supervision and observation of Miller’s work

and their failure to voice any objection to the quality of Miller’s work as they both

admitted at trial. It was Amigo and Priola’s obligation under their respective

contracts to make sure the Corps was pleased with the work being done. The

“Quality Control Plan” submitted by Amigo to the Corps and provided to Priola,

provides at Paragraph 1:

The purpose of the Quality Control Program is to insure
conformance with the applicable specifications and drawings
with respects to material, workmanship, acceptable construction,
practice, finish, and functional performance on Barracks
Upgrade, Fort Polk, LA per Contract Number DACA63-01-C-
0012, in accordance with requirements of the contract drawings
and specifications. In order to obtain this conformance, the
Quality Control Staff will maintain continuous inspection and
testing throughout for [sic] term of the contract. ... Constant
coordination between Production and Quality Control will assure
establishment of the high quality level of construction that is
expected and required by the Government and Amigo’s Jim
Cryar, will administer the Quality Control Program at the job
site.

Additionally, the Organizational Chart depicting the job site

responsibilities places Joshua Sanchez, President of Amigo, at the top of the chart.

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On the next level of equal responsibility, the chart lists Terrell Breaux,

Superintendent (Amigo); Nickey Priola, Jr., Subcontractor (Priola); and James

Cryar, Chief Quality Control (Amigo). On the next line down, the chart lists Danny

Benoit, Priola’s Area Superintendent. Miller cannot be faulted for assuming that its

work was satisfactory as it proceeded on the project when those responsible for

making that daily determination failed to discern that the Corps was not satisfied

with the work for whatever reason. No one presented any evidence at trial offering

any explanation as to why the Corps did not express displeasure with the work

sooner nor as to whether Amigo or Priola made any effort to discern whether the

Corps was satisfied with Miller’s work as it progressed. As to assigning any degree

of fault to the Corps, the defendants failed to put forth any evidence as to why any

fault should be allocated to the Corps. In fact, we note that in both the contracts

between Amigo and the Corps and Amigo and Priola, both Amigo and Priola are

obligated to perform all work to the Corps’ full satisfaction.

Moreover, the express contract provisions between the Corps and Amigo,

and Amigo and Priola, make it clear that both have a contractual obligation to

satisfy the Corps with the final product. Although the interest of Amigo and Priola

may be in conflict, they have elected to “sink or swim” together in advancing a

defense to Miller’s claim during trial. Further, they have not argued as error on

appeal the trial court’s assignment of fault vis a vis each other, seeking review only

on the court’s failure to assign any fault to Miller and the Corps. The evidence

introduced placed the contractual burden and cost of quality control squarely on

Amigo in its contract with the Corps as the general contractor and in its contract

with Priola, its subcontractor. Priola, in its contract with Miller, required that

Miller’s work be done “under the general direction” of Priola and specifically

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provided that Miller’s employees were recognized as Priola’s statutory employees.

As this court has previously held:

A person who by his deed or conduct has induced another
to act in a particular manner will not be permitted to adopt
an inconsistent position, attitude or course of conduct and
thereby cause loss or injury to the other. Humble Oil &
Refining Company v. Baudoin, 154 So.2d 239 (LA. App.
3 Cir. 1963); Babin v. Montegut Insurance Agency, Inc.,
271 So.2d 642 (La. App. 1 Cir. 1973).

G.J. Deville Lumber Company, Inc. V. Chatelain, 308 So.2d 428 (La.App. 3 Cir.

1975).

We conclude that there is a reasonable basis supporting the factual findings

of the trial court and its application of equitable estoppel which correctly results in

holding Amigo and Priola responsible for the costs of the redo of Building 2273.

As to defendants’ argument that plaintiff did not specially plead equitable estoppel,

we find that even if plaintiff were required to specially plead it, the pleadings have

been enlarged to include such a plea without timely objection prior to or during trial.

G.J. DeVille v. Chatelain, at 432-433.

AFFIRMED.

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