Couvillion Group LLC v. Quality First Construction, LLC

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

COUVILLION GROUP, LLC CIVIL ACTION

VERSUS NO. 19-676-WBV-KWR

QUALITY FIRST SECTION: D (4)

CONSTRUCTION, LLC

FINDINGS OF FACT and CONCLUSIONS OF LAW

This matter was tried before the Court without a jury on November 18, 2019.

The Court has carefully considered the testimony of all of the witnesses and the

exhibits entered into evidence during the trial, as well as the record in this matter.

Pursuant to Rule 52 of the Federal Rules of Civil Procedure, the Court enters the

following Findings of Fact and Conclusions of Law. To the extent that any finding of

fact may be construed as a conclusion of law, the Court hereby adopts it as such. To

the extent that any conclusion of law may be construed as a finding of fact, the Court

adopts it as such.

Findings of Fact

1. Plaintiff, Couvillion Group, LLC (“Couvillion”) is a limited liability company

organized under the laws of the States of Louisiana with its domicile address

in Plaquemines Parish, Louisiana.

2. Timothy Couvillion is the CEO and one of the owners of Couvillion Group, LLC.

3. Okbel Guillen is the office manager and accounts receivable person for

Couvillion.

4. Couvillion Group, LLC is a Louisiana contractor providing various marine

services, including but not limited to marine construction, salvage, repair and

maintenance in the marine industry.

5. Defendant, Quality First Construction LLC d/b/a Quality First Marine

(“QFM”) is a Louisiana limited liability company headquartered in St.

Tammany Parish, Louisiana.

6. At the time of the 2017 project at issue in this case, Darryl Couvillion was an

owner and the Operations Manager of QFM.1

7. Darryl Couvillion is Timothy Couvillion’s brother.

8. As the Operations Manager, Darryl Couvillion had the authority to negotiate

and bind contracts on behalf of QFM.

9. The President and majority owner of QFM at the time of the underlying project

was Christina Couvillion, the former spouse of Darryl Couvillion.

10. Michael Ashcraft was QFM’s project manager for the project.

11. QFM provides marine construction, marine transportation/logistics and other

services to the marine industry.

12. At the time of the 2017 project, Couvillion and QFM had an existing work

relationship and had previously worked together on many projects for several

years.

1 In October 2017, Darryl Couvillion was terminated from QFM by his ex-wife and majority QFM

owner, Christina Couvillion.

13. During those prior projects, Darryl Couvillion of QFM gave verbal

authorizations for work to be performed by Couvillion, which work was

subsequently paid by QFM.

14. In January 2017, QFM contracted with the United States Army Corps of

Engineers (“USACE”) for a project known as the Caernarvon Sector Gate

Project (“the 2017 Project”) in St. Bernard Parish, Louisiana.

15. The 2017 Project involved the relocation of a hydraulic steel flood control gate

along the Mississippi River.

16. Couvillion submitted a Lump Sum Proposal/Day Rate Proposal to QFM,

wherein Couvillion proposed that it could provide equipment/personnel to

QFM for the 2017 Project for a lump sum of $164,735.2

17. QFM accepted Couvillion’s proposal.

18. In order to perform this project, on or about January 24, 2017, QFM entered

into a Subcontract Agreement with Couvillion, wherein Couvillion would,

“Furnish all labor, equipment, supplies and material for performing all

operations necessary, for installing, dewatering, monitoring, rewatering and

removing dewatering components for the Hydraulic Steel Structure.”3

19. Paragraph 2 of the subcontract states: “Price. Contractor [QFM] shall pay

Subcontractor [Couvillion] for the due and full performance of the Work based

2 Trial Exhibit 3.

3 Trial Exhibit 1, Schedule A.

on the amounts reflected in Schedule C (“The Price”). Any variations of the

price must be based on mutual written consent of the parties.”4

20. Schedule C, attached to the Subcontract, reflects the price of $164,735.

21. The $164,735 price was the same price in Couvillion’s Lump Sum Proposal

initially provided to QFM.5

22. Paragraph 8 of the Subcontract provides that:

Contractor [QFM] may . . . order extra or additional work,

deletions, or other modifications to the Work, such changes

to be effective only upon written order of Contractor. Any

adjustment to the Price or to the time for completion of the

Work shall be made in accordance with the applicable

provisions of the Contract, or in the absence of such

provisions, on an agreed or equitable basis.

Notwithstanding any inability to agree upon any

adjustment or the basis for an adjustment, Subcontractor

shall, if desired by Contractor, nonetheless proceed in

accordance with the order, and the Price and time of

completion shall be adjusted in accordance with the

foregoing.”6

23. QFM and Couvillion also entered into a written agreement for the use of a

houseboat to support personnel working on the 2017 Project.

24. Under the “On Hire/Time Charter Agreement” (“Charter Agreement”),

Couvillion agreed to provide the houseboat to QFM for a flat rate of $72,508 to

house and feed workers on the 2017 Project, including Couvillion’s workers.7

25. The Charter Agreement provides a start date of January 24, 2017.

4 Trial Exhibit 1.

5 Trial Exhibit 3.

6 Trial Exhibit 1.

7 Trial Exhibit 2.

26. Couvillion and QFM intended for the houseboat to be used for the duration of

the 2017 Project, as agreed to in the Subcontract.

27. Couvillion was paid the $72,508 for the houseboat pursuant to the Charter

Agreement.

28. The 2017 Project experienced some delays associated with the inspections of

welds on the flood gate and its components.

29. According to the parties, these delays were caused by the USACE and another

subcontractor on the 2017 Project.

30. QFM requested that Couvillion keep the houseboat on site for QFM’s use

during the period of delay.

31. In written communication, QFM requested that Couvillion provide the day rate

for the use of the houseboat during the period of delay.

32. Couvillion provided QFM a day rate of $1,500 for the additional days that QFM

used the houseboat.

33. QFM requested that Couvillion provide an invoice for the use of the houseboat

during the period of delay.

34. On May 31, 2017, Couvillion submitted an invoice to QFM in the amount of

$37,500 which reflected the houseboat rental for an additional 25 days due to

the delay.8

35. Couvillion provided the houseboat for QFM’s use for the additional 25 days.

8 Trial Exhibit 4.

36. QFM submitted Couvillion’s houseboat pricing to the USACE and received

payment from the USACE for the use of the houseboat.

37. QFM has not paid Couvillion for the use of the houseboat during the additional

25 days.

38. Couvillion has not been paid by any party for the use of the houseboat during

the standby delay period.

39. A third company, Crescent Coating and Services (“CCS”), was responsible for

scaffolding and sand removal for the 2017 Project.

40. CCS was the blasting and painting subcontractor to QFM.

41. Couvillion performed all of the work requested by QFM for the 2017 Project

pursuant to the Subcontract.

42. QFM requested that Couvillion provide additional equipment and services to

address the delays caused by the USACE and CCS.

43. At the request of Darryl Couvillion, QFM’s owner and Operations Manager,

Couvillion provided additional scaffolding services, work and labor to CCS.

This additional work was outside of the Subcontract agreed to by the parties.

44. Couvillion performed the additional work requested by QFM, which included

the use of a crane for scaffolding work.

45. Couvillion submitted an invoice in the amount of $22,108 to QFM for the costs

associated with the equipment and services provided to CCS.9

46. QFM failed to pay Couvillion any portion of the $22,108 invoice.

9 Trial Exhibit 10.

47. At the request of Darryl Couvillion, owner and Operations Manager of QFM,

Couvillion also worked an extra 62.5 hours assisting CCS with the handling of

sand and removal of scaffolding. This additional work was outside of the

Subcontract agreed to by the parties.

48. Couvillion incurred costs of $25,000 for the additional hours worked assisting

CCS.

49. Couvillion submitted these charges to QFM via email on June 16, 2017, which

included Daily Job Logs.10

50. QFM failed to pay Couvillion any portion of the $25,000 for the extra work

associated with assisting CCS.

51. Darryl Couvillion’s testimony was particularly credible when he testified that,

as owner and Operations Manager of QFM, he requested the additional work

from Couvillion, Couvillion performed the work, and he accepted the work.

52. Darryl Couvillion was also credible when he testified,

[T]here was undoubtedly consent. Whether it be in writing

or not, if I give someone my word, painstakingly or not I

have always abided by that when it came to my business.

So was there an agreement? Yes. . . . They did the work.

It doesn’t matter if it is in writing. They deserve the

money. So I don’t know what you are getting after with

that. That’s—it is upsetting.11

53. Darryl Couvillion further testified, “Right now I’m thinking to myself, what are

we doing? Are we kidding? This really is simple. We have oral conversations

all the time. We agree to something and there is so many emails that follow

10 Trial Exhibit 12.

11 Draft trial testimony of Darryl Couvillion.

up confirming all these conversations. Mike [Ashcraft] and I put together.” He

later testified that, “They did the work. We owe them the money. Do you think

I like to say that being an owner of Quality First Marine? That takes [money]

out of my pocket.”12

54. Darryl Couvillion was also credible when he testified that he advised and

obtained the consent from the majority owner of QFM, Christina Couvillion,

for the oral modifications of the Subcontract, testifying that, “We talked about

this all the time. She was just as involved as me and Mike [Ashcraft] dealing

with these modification as I was. So she knew about them. So, just like I said

before, if we tell someone our word and go back and rely on this paper, that’s

awful.”13

55. Prior to the 2017 Project, QFM had entered into hundreds of written contracts

with subcontractors, including many with Couvillion, which it amended by

subsequent oral agreements.

56. With respect to the 2017 Project, QFM asked Couvillion to assist with work

that was outside the scope of work in the Subcontract, both by written and oral

communication.

57. Couvillion agreed to provide the additional work and equipment requested by

QFM for the 2017 Project.

58. Couvillion expended time, effort and monies performing these additional

services and providing the equipment.

12 Id.

13 Id.

59. QFM benefitted from the additional services and equipment provided by

Couvillion and QFM has made no payment for these services and equipment.

Conclusions of Law

A. Jurisdiction and Venue

1. This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1333

because this is an admiralty and maritime case within the meaning of Rule

9(h) of the Federal Rules of Civil Procedure, as the claim involves a dispute

regarding a contract for marine services.

2. Venue is appropriate in the Eastern District of Louisiana.

B. Count 1 – Breach of Maritime Contract

1. The Subcontract at issue is a maritime contract, as a crane barge plays a

substantial role in the fulfillment of the contract, and the gate work on the

Caernarvon Canal facilitates activities on navigable waters. Barrios v.

Centaur, 942 F.3d 670, 680 (5th Cir. 2019); In re Larry Doiron, 879. F.3d 568

(5th Cir.) (en banc), cert. denied, 138 S.Ct. 2033, 201 L.Ed.2d 280 (2018).

3. The Fifth Circuit has held that the interpretation of a maritime contract is a

question of law. Barrios, 942 F.3d at 680 (quotation omitted).

4. When interpreting maritime contracts, federal admiralty law, rather than

state law, applies. LLOG Exploration Company, LLC v. Signet Maritime

Corporation, 673 Fed.Appx. 422, 425 (5th Cir. 2016) (quoting International

Marine, LLC v. Delta Towing, LLC, 704 F.3d 350, 354 (5th Cir. 2013)) (internal

quotation marks omitted).

5. The Fifth Circuit has clarified that, “In maritime contract disputes, federal

courts apply general principles of contract law. However, to the extent that it

is not inconsistent with admiralty principles, state contract law may be

applicable to maritime contracts.” In re Tasch, Inc., 2002 WL 1973464, at *2,

46 Fed.Appx. 731 (5th Cir. 2002) (citations omitted).

6. According to the Fifth Circuit, “A maritime contract . . . whether governed by

federal maritime or Louisiana law, should be read as a whole and its words

given their plain meaning unless the provision is ambiguous.” LLOG

Exploration Company, LLC, 673 Fed.Appx. at 425 (quoting Weathersby v.

Conoco Oil Co., 752 F.2d 953, 955 (5th Cir. 1984)) (internal quotation marks

omitted).

7. “Louisiana law requires that each provision of a contract be read in light of

others so as to give each the meaning reflected by the contract as a whole.”

Southwestern Eng’g Co. v. Cajun Elec. Power Co-op., Inc., 915 F.2d 972, 980

(5th Cir. 1990) (citing La. Civ. Code art. 2050).

8. Louisiana law also provides that each provision of a contract must be given a

meaning that renders it, along with all other provisions, effective rather than

meaningless. See Lewis v. Hamilton, 94-2204 (La. 4/10/95), 652 So.2d 1327,

1330 (citing La. Civ. Code arts. 2049-2050).

9. The Supreme Court has long-held that maritime law generally regards oral

contracts as valid. Kossick v. United Fruit Co., 365 U.S. 731, 734, 81 S.Ct. 886,

6 L.Ed.2d 56 (1961).

10. “It is well-settled that a plaintiff suing on a contract, whether written or oral,

is required to establish the basic elements of a contract, i.e., offer, acceptance,

and consideration,” In re Tasch, Inc., 2002 WL 1973464, at *3, 46 Fed.Appx.

731 (5th Cir. 2002) (citation omitted).

11. A written contract can be modified by oral contracts and by the conduct of the

parties, even when the written contract contains a provision that modifications

must be in writing. See In re Tasch, Inc., 2002 WL 1973464, 46 Fed.Appx. 731

(finding that a subsequent oral agreement to perform additional work valid

even though the contract entered into between the parties provided that any

alterations must be in writing.); Taita Chem. Co., Ltd. v. Westlake Styrene

Corp., 246 F.3d 377, 387 (5th Cir. 2001) (“Moreover, it is well established that

even if the written contract contains a provision requiring that all

modifications be in writing . . . either oral agreement or conduct can

nonetheless prove modification.”); Lantech Const. Co., L.L.C. v. Speed, 08-811

(La. App. 5 Cir. 5/26/09), 15 So.3d 289, 293-94 (recognizing oral modifications

to a contract that required written requests for modification, but did not

expressly prohibit oral modification).

12. Under Louisiana law, “The written contract can be modified through ‘silence,

inaction, or implication’ and whether it was modified ‘is a question of fact.’”

Alonso v. Westcoast Corporation, 920 F.3d 878, 886 (5th Cir. 2019) (citing

Driver Pipeline Co. v. Cadeville Gas Storage, LLC, 49,375 (La. App. 2 Cir.

10/1/14), 150 So.3d 492, 501).

13. In such instances, parole evidence is admissible and the party urging

modification must establish that the parties mutually consented to the

agreement as modified. CNH Capital Am., LLC v. Wilmot Farming Ventures,

LLC, Civ. A. No. 07-611, 2008 WL 2386166, at *3 (W.D. La. June 11, 2008)

(quoting Taita Chem. Co. v. Westlake Styrene Corp., 246 F.3d 377, 387 (5th Cir.

2001)). “This consent may be made orally, be manifested by a writing, or be

manifested by ‘action or inaction that under the circumstances is clearly

indicative of consent.’” CNH Capital Am., LLC, Civ. A. No. 07-611, 2008 WL

2386166 at *3 (quoting Taita Chem. Co., 246 F.3d at 386). “Thus, even if a

contract requires modifications to be signed by the parties, Louisiana courts

will recognize modifications by other means as long as the evidence is ‘clearly

indicative’ that the parties to the contract consented to the modification.” CNH

Capital Am., LLC, Civ. A. No. 07-611, 2008 WL 2386166 at *3.

14. “It is fundamental contract law that a party that breaches a contract is liable

for the damages caused by its failure to satisfy its contractual obligations.”

Tidewater Marine, Inc. v. Sanco Int’l, Inc., 113 F. Supp. 2d 987, 999 (E.D. La.

2000) (citing Ogea v. Loffland Bros. Co., Inc., 622 F.2d 186, 189 (5th Cir. 1980)).

15. The Court finds that: (1) there was a valid written contract between Couvillion

and QFM; (2) that written contract was modified by an oral contract between

Couvillion and QFM; (3) Couvillion fully performed under the contract; (4)

QFM accepted and benefitted from the services and equipment provided by

Couvillion; (5) QFM’s non-payment for the services and equipment provided by

Couvillion constitutes a breach of the terms of the contract; and (6) Couvillion

sustained damages as a result of QFM’s breach of the contract.

16. In maritime cases, “As a general rule, prejudgment interest should be awarded

in admiralty cases – not as a penalty, but as compensation for the use of funds

to which the claimant was rightfully entitled.” Ziegler v. Subalipack (M) SDN

BHD, Civ. A. No. H-16-2598, 2018 WL 2933349, at *10 (S.D. Tex. June 12,

2018) (quoting Noritake Co. v. M/V Hellenic Champion, 627 F.2d 724, 728 (5th

Cir. 1980)).

17. The Fifth Circuit has recognized the “bedrock premise” that an award for

prejudgment interest in actions under general maritime law is the rule rather

than the exception, and that prejudgment interest must be awarded unless

unusual circumstances make an award inequitable. Ryan Walsh Stevedoring

Co., Inc. v. James Marine Servs., Inc., 792 F.2d 489, 492 (5th Cir. 1986).

18. Admiralty courts have broad discretion in setting the prejudgment interest

rate. Platoro Ltd., Inc. v. Unidentified Remains of a Vessel, Her Cargo,

Apparel, Tackle, & Furniture, in a Cause of Salvage, Civil & Mar., 695 F.2d

893, 907 (5th Cir. 1983) (particular rate lies within the district court’s

discretion after it evaluates the circumstances of the case); Todd Shipyards

Corp. v. Auto Transp., S.A., 763 F.2d 745, 753 (5th Cir. 1985) (affirming use of

state interest rate compounded daily to account for uncommonly high rate of

return during the applicable period); see also Reeled Tubing, Inc. v. M/V Chad

G, 794 F.2d 1026, 1029 (5th Cir. 1986) (affirming prejudgment interest at

federal statutory postjudgment interest rate); Complaint of M/V Vulcan, 553

F.2d 489, 491 (5th Cir. 1977) (affirming award of interest at rate equivalent to

injured party’s actual cost of borrowing).

19. The essential rationale for awarding prejudgment interest is to ensure that an

injured party is fully compensated for its loss.... [P]rejudgment interest is not

awarded as a penalty; it is merely an element of just compensation. City of

Milwaukee v. Cement Div., Nat. Gypsum Co., 115. S. Ct. 2091 (1995).

20. This Court will assess prejudgment interest at the legal rate established under

28 U.S.C. § 1961 at the time of final judgment. See In re M/V Nicole Trahan,

10 F.3d 1190, 1196-97 (5th Cir. 1994) (affirming award of prejudgment interest

at federal rate when there was no evidence to support a different rate).

21. The Court finds that Couvillion is entitled to an award of prejudgment interest

as provided by law as just compensation.

22. Accordingly, prejudgment interest shall be calculated from January 29, 2019,

the date Couvillion filed its Complaint,14 through the date of the entry of

judgment, at a rate equal to the weekly average 1-year constant maturity

Treasury yield, as published by the Board of Governors of the Federal Reserve

System, for the calendar week preceding the date of the judgment. 28 U.S.C.

§ 1961(a); See Reeled Tubing, Inc. v. M/V Chad G, 794 F.2d 1026, 1029 (5th

Cir. 1986) (citing Howell v. Marmpegaso Compania Naviera, S.A., 578 F.2d 86

(5th Cir. 1978) (recognizing the usual rule requiring an award of prejudgment

14 R. Doc. 1.

interest from the date of loss, but that there are circumstances when a trial

court can exercise its discretion to award prejudgment interest only from the

date of judicial demand).

23. Under 28 U.S.C. § 1961(a), postjudgment interest “shall be allowed on any

money judgment in a civil case recovered in a district court. . . . Such interest

shall be calculated from the date of the entry of the judgment . . . . ” Generally,

“[C]osts—other than attorney’s fees—should be allowed to the prevailing

party.” Fed. R. Civ. P. 54(d).

24. The Court finds that Couvillion is entitled to damages in the amount of

$84,608, plus prejudgment and postjudgment interest calculated pursuant to

28 U.S.C. § 1961(a).

C. Count 2 – Relief Under Louisiana’s Open Account Statute, La. R.S. 9:2781

1. “Reasonable attorney fees may be recovered if an open account existed and

plaintiffs complied with the requirements of the applicable statute.” Advance

Polybag, Inc. v. LTD Packaging Corp., Civ. A. No. 91-2148, 1992 WL 125316

(E.D. La. June 3, 1992).

2. An “open account” includes “any account for which a part or all of the balance

is past due, whether or not the account reflects one or more transactions and

whether or not at the time of contracting the parties expected future

transactions.” La. R.S. 9:2781(D).

3. Louisiana Revised Statute 9:2781, entitled, “Open accounts; attorney fees;

professional fees; open account owed to the state,” also provides, in pertinent

part, that:

A. When any person fails to pay an open account within

thirty days after the claimant sends written demand

therefor correctly setting forth the amount owed, that

person shall be liable to the claimant for reasonable

attorney fees for the prosecution and collection of such

claim when judgment on the claim is rendered in favor of

the claimant. Citation and service of a petition shall be

deemed written demand for the purpose of this Section. If

the claimant and his attorney have expressly agreed that

the debtor shall be liable for the claimant’s attorney fees in

a fixed or determinable amount, the claimant is entitled to

that amount when judgment on the claim is rendered in

favor of the claimant. Receipt of written demand by the

person is not required.

4. In accordance with La. R.S. 9:2781(A), more than thirty (30) days have passed

since QFM’s receipt of Couvillion’s written demands, setting forth the amounts

owed by QFM on the open account, and no amount of the outstanding debt has

been paid.

5. The Court finds that Couvillion has strictly complied with the provisions of La.

R.S. 9:2781(A), in that the demand letters set forth the correct amount owed

and included invoices documenting the delinquent transactions. Advance

Polybag, Inc. v. LTD Packaging Corp., Civ. A. No. 91-2148, at *3, 1992 WL

125316 (E.D. La. June 3, 1992).

6. Couvillion is entitled to attorneys’ fees, costs and interest in accordance with

La. R.S. 9:2781(A).

7. The amount of attorney’s fees awarded under La. R.S. 9:2781(A) is left to the

discretion of the Court. Advance Polybag, Inc., Civ. A. No. 91-2148, 1992 WL

125316 at *3.

D. Count 3 – Quantum Meruit/Unjust Enrichment

1. Under Louisiana law, five elements must be satisfied in order to establish a

claim for unjust enrichment: “(1) an enrichment of the defendant, (2) an

impoverishment of the plaintiff, (3) a connection between the enrichment and

the impoverishment, (4) an absence of justification or cause for either the

enrichment or the impoverishment, and (5) no other remedy available at law.”

Aqua–Terra Constr. and Eng'g Sys., Inc. v. Oak Harbor Inv. Props., L.L.C., Civ.

A. Nos. 06-1864, 06-8883, 2008 WL 3539728, at *3 (E.D. La. July 31, 2008)

(citations omitted).

2. The Court concludes that Couvillion cannot recover under its quantum

meruit/unjust enrichment claim, since Couvillion has another remedy

available to it under the law. Thus, it has not established the five factors

required to prevail on an unjust enrichment claim.

Conclusion

The Court finds that defendant, Quality First Construction LLC d/b/a Quality

First Marine, is liable to plaintiff, Couvillion Group, LLC, in the full amount of

$84,608, plus taxable costs and prejudgment interest at the rate of as set forth in 28

U.S.C. § 1961 from the date of filing this lawsuit, January 29, 2019, through the date

of entry of this judgment, postjudgment interest at the same rate from the date of

this Court’s final judgment until it is paid in full, and reasonable attorney’s fees.

Couvillion Group, LLC, shall have seven (7) days from the date of this judgment to

file a motion for attorney’s fees. Additionally, Couvillion Group, LLC shall have five

(5) business days from the date of the ruling on the motion for attorney’s fees to

provide the Court with a proposed Final Judgment that is commensurate with the

Court’s Findings of Fact and Conclusions of Law. Couvillion Group, LLC shall send

the proposed Final Judgment to the Court's email address, efile-

Vitter@laed.uscourts.gov.

New Orleans, Louisiana, September 11, 2020.

Cenk Be Vict

WENDY B. VITTER

United States District Judge

18