Pace Builders v. Westco Trucking & Contracting, LLC

NOT DESIGNATED FOR PUBLICATION

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

16-265

PACE BUILDERS

VERSUS

WESTCO TRUCKING & CONTRACTING, LLC

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APPEAL FROM THE
NINTH JUDICIAL DISTRICT COURT
PARISH OF RAPIDES, NO. 241,135
HONORABLE GEORGE C. METOYER JR., DISTRICT JUDGE

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BILLY HOWARD EZELL
JUDGE

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Court composed of Elizabeth A. Pickett, Billy Howard Ezell, and Phyllis M. Keaty,
Judges.

AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.

Jason P. Waguespack
Frederick W. Swaim III
Alexander L. Williams
Galloway, Johnson, Tompkins, Burr & Smith
701 Poydras St., 40th Floor
New Orleans, LA 70139
(504) 525-6802
COUNSEL FOR PLAINTIFF/APPELLANT:
Healtheon, Inc.

Jonathan D. Stokes
Max S. Antony
Gold, Weems, Bruser, Sues & Rundell
P. O. Box 6118
Alexandria, LA 71307
(318) 445-6471
COUNSEL FOR DEFENDANT/APPELLEE:
Westco Trucking & Contracting, LLC

Josh Pace
In Proper Person
3050 Hoyt Road
Boyce, LA 71409
DEFENDANT/APPELLEE

EZELL, Judge.

In this matter, Healtheon, Inc., appeals the decision of the trial court denying

it attorney fees under its contract with Westco Trucking and Contracting, LLC For

the following reasons, we affirm the decision of the trial court in part, reverse in

part, and remand for further proceedings in accordance with our ruling below.

In January of 2010, Healtheon was awarded a public contract by the U.S.

Army Corps of Engineers to perform storm proofing work on pump stations in

Jefferson Parish. Healtheon entered into a subcontract with Westco to provide and

manage labor, materials, and equipment for the job. The contract included

indemnification and duty to defend provisions in favor of Healtheon. Westco then

entered into another subcontract with Pace Builders to perform work on the project.

On March 18, 2011, Pace filed a suit on an open account against both Westco and

Healtheon. Healtheon answered the suit and further filed an incidental demand

against Westco, seeking indemnification under the contract. Westco answered

both claims, denying Healtheon was entitled to indemnification in the suit.

Healtheon later filed a motion for summary judgment on its incidental

demand, which was opposed by Westco. The trial court granted Healtheon’s

motion for summary judgment, ruling that it was entitled to indemnification for all

claims asserted by Pace, including attorney fees and costs. The attorney fees were

to be determined at a later hearing. When that hearing occurred, the trial court

ruled that because Healtheon failed to properly demand a defense from Westco, it

was not entitled to recover any attorney fees for its claims. From that decision,

Healtheon appeals.

Healtheon asserts one long assignment of error containing three overlapping

assertions. Healtheon claims that the trial court erred in interpreting the contract

between it and Westco; that the trial court erred in finding that Healtheon failed to

properly demand a defense from Westco against the Pace lawsuit; and that the trial

court erroneously denied it attorney fees associated with this suit.

Questions of contractual interpretation are questions of law
which are subject to a de novo standard of review. Mitchell v.
Patterson Ins. Co., 00-612 (La.App. 3 Cir. 12/6/00), 774 So.2d 366.
Contracts have the force of law between the parties, and the courts are
bound to interpret them according to the common intent of the parties.
La.Civ.Code arts. 1983 and 2045. If the words of the contract are clear,
unambiguous, and lead to no absurd consequences, the court need not
look beyond the contract language to determine the true intent of the
parties. La.Civ.Code art. 2046. “Each provision in a contract must be
interpreted in light of the other provisions so that each is given the
meaning suggested by the contract as a whole.” La.Civ.Code art. 2050.
Whether or not a contract is ambiguous is a question of law. La. Ins.
Guar. Ass’n v. Interstate Fire & Cas. Co., 93-911 (La.1/14/94), 630
So.2d 759. These general rules that govern the interpretation of most
contracts apply to contracts of indemnity. Soverign Ins. Co. v. Tex.
Pipe Line Co., 488 So.2d 982 (La.1986).

Boykin v. PPG Indus., Inc., 08-117, pp. 4-5 (La.App. 3 Cir. 6/18/08), 987 So.2d

838, 842, writs denied, 08-1635, 08-1640 (La. 10/31/08), 994 So.2d 537.

However, “factual findings which are pertinent to the interpretation of a

contract will not be disturbed absent manifest error.” Campbell v. Melton, 01-2578,

p. 12 (La. 5/14/02), 817 So.2d 69, 78. “In applying the manifest error rule to the

trial court’s interpretation, the Court of Appeal may not simply substitute its own

view of the evidence for the trial court’s view, nor may it disturb the trial court’s

finding of fact so long as it is reasonable.” French Quarter Realty v. Gambel, 05-

933, pp. 3-4 (La.App. 4 Cir. 12/28/05), 921 So.2d 1025, 1028.

We find that the trial court’s determination that Healtheon failed to demand

a defense from Westco to be reasonable based on the scant record before this court.

Section 15.3 of the contract deals with Westco’s duty to defend Healtheon and

provides (emphasis ours):

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In all such cases where [Westco’s] indemnity obligation
under this Subcontract Agreement apply, [Westco] shall, upon
demand by Healtheon, provide a competent defense of all
Claims covered by [Westco’s] indemnity and shall remain
responsible for all the Costs of defense of the Claim, and any
damages awarded to the claimant by settlement, mediation,
arbitration, litigation or otherwise. Should [Healtheon] be
required to retain an attorney to defend any Claims,
[Westco] shall reimburse any reasonable Costs incurred by
[Healtheon] to defend such claims.

In Healtheon’s incidental demand, it mentioned, but did not demand or pray

for a defense to be provided by Westco. Only indemnification was prayed for.

Likewise, in its subsequent demand letter to Westco seeking attorney fees,

Healtheon demanded reimbursement for costs incurred, but again did not demand

that a defense be provided by Westco. There is no other evidence in the record that

indicates that Healtheon was ever required or actually called for Westco to provide

it a defense in the suit by Pace. Therefore, we can find no manifest error in the

trial court’s factual finding that Healtheon failed to properly demand that Westco

provide it a defense. Accordingly, Healtheon is not entitled to costs associated

with its defense of the Pace claim itself.

However, after reviewing the record and the plain terms of the contract, we

find that the trial court did err in ruling that Healtheon was not entitled to any

attorney fees, as the contract clearly provided for attorney fees should any party be

forced to sue to enforce the provisions of the contract. The contract provided, in

pertinent part:

15. INDEMNIFICATION.

15.1 General. Subcontractor [Westco] hereby agrees to
indemnify, save and hold harmless, and defend [Healtheon] from and
against any and all liabilities, Claims, damages, including, but not
limited to . . . suits and the costs and expenses incident thereto,
including, without limitation, costs of defense, settlement, and
attorneys’ and paralegals’ fees, arising out of or connected in any way

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whatsoever with this Subcontract Agreement and/or [Westco’s]
performance hereunder, whether such Claims may be initiated by
[Westco] or any third-party. . . .

Section 26 of the contract further states, in pertinent part (emphasis ours):

(e) Attorney’s Fees. Should either party employ an attorney
to institute suit or demand arbitration to enforce any of this [sic]
Subcontract Agreement provisions hereof, to protect its interest in
any matter arising under this Subcontract Agreement or to collect
damages for the breach of this Subcontract Agreement . . . the
Prevailing Party shall be entitled to receive, as part of any award or
judgment, its reasonable attorneys’ and paralegals’ fees, costs, charges,
and expenses expended or incurred in handling the dispute.

The words of the contract are clear, unambiguous, and lead to no absurd

consequences. The contract clearly provides that any party required to “institute

suit . . . to enforce any of this Subcontract Agreement . . . to protect its interest in

any matter arising under this Subcontract Agreement” shall be entitled to attorney

fees and other associated costs incurred in enforcing the contract. Healtheon

clearly had to sue to protect its interests under the contract, as it had to sue to

enforce the indemnification provision when it was sued by Pace. Westco openly

sought to deny that it owed indemnification. Westco denied that indemnification

was owed in both its answer to Healtheon’s incidental demand and later when it

opposed Healtheon’s motion for summary judgment on the issue. Healtheon

prevailed on its claim seeking indemnification, as the trial court granted summary

judgment in its favor and ruled that indemnification was required under the plain

language of the contract. The ruling that Healtheon is owed indemnification has

not been appealed and is a final, settled determination. Accordingly, under the

plain terms of the contract with Westco, Healtheon is entitled to recover attorney

fees and costs associated with enforcing the indemnity provision of the contract,

even if it is not entitled to recover its costs of defense against the original Pace

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claim. The trial court seems to have failed to take note of Section 26(e) in its

decision, as it seems to have relied on the demand provisions of Section 15.3 alone.

The trial court thus failed to properly interpret all the relevant contract provisions

concerning attorney fees together and, thus, erred in failing to allow Healtheon to

recover attorney fees for the enforcement of the indemnification provision under

Section 26(e) of the contract.

Louisiana Code of Civil Procedure Article 2164 provides that an “appellate

court shall render any judgment which is just, legal, and proper upon the record on

appeal.” Under that Article, the Louisiana Supreme Court has explained that an

appellate court may remand a matter to the trial court to permit that court to take

additional evidence where necessary to reach a just decision. See Alex v. Rayne

Concrete Serv., 05-1457, 05-2344, 05-2520 (La. 1/26/07), 951 So.2d 138. Here,

the record lacks the evidence that would allow us to determine the suitable amount

of attorney fees Healtheon incurred for its indemnification suit against Westco,

while excluding those sought to defend against the original Pace suit. Since the

record lacks the evidence necessary to properly calculate the attorney fees, we

must remand this case to the trial court for a post-judgment hearing on the

appropriate and reasonable amount of attorney fees that are owed.

For the above reasons, we affirm the trial court’s finding that Healtheon did

not properly demand defense against the Pace lawsuit; we reverse the trial court’s

finding that Healtheon was not entitled to any attorney fees under the contract; and

we remand this matter to the trial court for the taking of evidence on the issue of

the appropriate amount of attorney fees for the enforcement of the indemnification

provision alone, and for the rendering of a new judgment on that issue. Costs of

this appeal are hereby assessed against Westco.

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AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.

This opinion is NOT DESIGNATED FOR PUBLICATION. Uniform
Rules—Courts of Appeal. Rule 2-16.3.

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