Roxco Ltd. v. Harris Specialty Chemicals, Inc. , 85 F. App'x 375 ( 2004 )

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that this opinion should not be published and is not precedent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.
1
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.”
3
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
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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.
6
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
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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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