Citadel Recovery Services, LLC v. T.J. Sutton Enterprises, LLC

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

CITADEL RECOVERY SERVICES, LLC CIVIL ACTION

VERSUS NO. 22-914

T.J. SUTTON ENTERPRISES, LLC et al. SECTION “G”(4)

ORDER AND REASONS

This litigation is an interpleader action arising from construction contracts to repair homes

in the U.S. Virgin Islands affected by Hurricanes Irma and Maria in 2017 (“the Project”). Before

the Court is Intervenor Jerry Baptiste’s (“Baptiste”) Motion for Partial Summary Judgment.1

Baptiste seeks summary judgment regarding the liability of Defendant T.J. Sutton Enterprises,

LLC (“TJ Sutton”).2 Baptiste contends that there was a binding oral agreement between him and

TJ Sutton wherein TJ Sutton agreed to pay for all of Baptiste’s out-of-pocket expenses, per diems,

and administrative time related to the project.3 In opposition, TJ Sutton denies that such an

agreement was made with Baptiste.4 For the reasons stated herein, the Court finds that genuine

issues of material fact remain in dispute as to whether TJ Sutton was the party responsible for

paying Baptiste for work related to the project. Having considered the motion, the opposition, the

record, and the applicable law, the Court denies the motion.

1 Rec. Doc. 105.

2 Id.

3 Id.

4 Rec. Doc. 108.

I. Background

In 2017, the United States Virgin Islands suffered catastrophic damage from Hurricanes

Irma and Maria.5 Interpleader Plaintiff-Stakeholder Citadel Recovery Services, LLC (“Citadel”)

alleges, as part of the disaster recovery efforts, the Virgin Islands Housing Finance Authority

(“VIHFA”) contracted with prime contractor AECOM Caribe, LLP (“AECOM”) under the

Emergency Home Repair Virgin Islands program, a program funded by the Federal Emergency

Management Agency (the “FEMA program”).6 Citadel contends that AECOM subsequently

contracted with Citadel (the “Master Subcontract”) as a subcontractor to help provide construction

services in the recovery efforts.7

To satisfy its obligations to AECOM under the Master Subcontract, Citadel contracted with

TJ Sutton on February 25, 2019 (the “Subcontract”) to provide labor and materials to several

construction projects.8 Citadel contends that it “had not received any payments under [the Master

Subcontract] for its work on the [disaster recovery] program” at the time the Subcontract was

executed.9 Citadel alleges that the Subcontract contained “clear and unambiguous ‘paid when paid’

provisions” in which Citadel promised to pay TJ Sutton after AECOM remitted payment to

Citadel.10 Citadel avers that these “paid when paid” provisions prohibited TJ Sutton from filing

liens on repaired properties in the Virgin Islands to recover payment for its work on the FEMA

5 Rec. Doc. 1 at 4.

6 Id.

7 Id.

8 Id. at 4–5.

9 Id. at 5.

10 Id. (emphasis omitted).

program.11 Citadel asserts that it secured Subcontract performance bonds in the amount of ten

million dollars ($10,000,000.00) with Interpleader Defendant-Claimant Travelers Casualty and

Surety Company of America (“Travelers”) “to ensure payment to all subcontractors.”12

On April 6, 2022, Citadel filed a “Complaint of Interpleader & Declaratory Judgment” and

sought leave to deposit $833,504.33 into the registry of the Court.13 This amount consisted of two

payments from AECOM to Citadel for work performed under the Master Subcontract: (1) a March

16, 2021 payment in the amount of $103,233.54 for labor and/or materials supplied by TJ Sutton;

and (2) a $730,270.79 payment from AECOM to Citadel for housing and travel expenses.14

In the Interpleader Complaint, Citadel named TJ Sutton, Gerald Toliver d/b/a Blue Water

Staffing Company (“Blue Water”), Morgado Rentals, Inc. (“Morgado”), Smart Freight Funding,

LLC (“Smart Freight”), and Travelers as Defendant-Claimants.15 “Because there is no privity of

contract between [Citadel] and [TJ] Sutton’s subcontractors and materialmen,” Citadel alleged that

it was “in great doubt as to which defendants are entitled to the property subject to this interpleader

action.”16 Citadel stated that it could not “determine which claims are valid without exposing itself

to potential double litigation and further erroneous and unlawful liens.”17 On February 13, 2023,

11 Id. (emphasis omitted).

12 Citadel Recovery Services LLC v. T.J. Sutton Enterprises, LLC, Case No. 19-12271, Rec. Doc. 1 at 8.

13 Rec. Doc. 1 at 1, 3.

14 Id. at 5–6.

15 Id. at 2–3.

16 Id. at 7.

17 Id.

the Court granted a joint motion to dismiss Smart Freight.18 Originally only Citadel, Travelers,

and TJ Sutton claimed a stake in the interpleader funds.

Thereafter, TJ Sutton filed a “Motion to Dismiss for Lack of Subject Matter Jurisdiction or

Alternatively Motion to Transfer.”19 TJ Sutton argued that this Court lacked subject matter

jurisdiction over this action, due to Citadel’s failure to deposit the full amount in controversy in

the registry of the Court.20 On January 17, 2023, the Court issued an Order finding that it lacked

jurisdiction over the interpleader action because the amount deposited in the Court’s registry was

not sufficient to protect the rights of the claimants.21 However, in line with prior jurisprudence,

the Court ordered Citadel to either deposit a sum of $917,926.20 in the Court’s registry or post a

bond in that amount to cure the jurisdictional defect.22 On February 9, 2023, Citadel deposited

$417,926.20 into the registry of the Court and posted a bond for the remaining $500,000.23

On June 19, 2023, Jerry Baptiste (“Baptiste”) filed a Motion for Leave to Intervene,24

pursuant to Rule 24(a) and/or Rule 24(b) of the Federal Rules of Civil Procedure, alleging that he

has an interest in the subject matter of the pending suit, and disposition of the suit may impair that

interest.25 Baptiste contends that he is owed over $700,000 for services performed for the benefit

of Citadel’s Master Subcontract, including administrative fees, unpaid salaries, and expenses

18 Rec. Doc. 46.

19 Rec. Doc. 15.

20 Rec. Doc. 15-1 at 8–9.

21 Rec. Doc. 39.

22 Id.

23 Rec. Doc. 41.

24 Rec. Doc. 52.

25 Rec. Doc. 52-1 at 1.

reimbursements pursuant to a sub-sub-contract between Baptiste and Blue Water.26 Citadel,

Travelers, and TJ Sutton did not oppose Baptiste’s intervention.27 Therefore, the motion was

granted as unopposed on July 5, 2023.28 Baptiste brought a counterclaim against Citadel for breach

of contract, and a crossclaim against Blue Water for breach of contract.29

On September 6, 2023, Baptiste filed an amended crossclaim against TJ Sutton and Gerald

Toliver d/b/a Blue Water Staffing Company alleging breach of contract against both parties.30 On

October 3, 2023, Baptiste filed a brief opposing partial disbursement of interpled funds wherein

he states that he is owed $307,000.31

On October 17, 2023, TJ Sutton and Citadel filed a joint motion for interpleader

disbursement wherein the parties stated that they had compromised their claims against each

other.32 The parties stated that there are no other pending claims to the interpled funds except

Baptiste’s counter and crossclaims.33 The parties stated that the requested partial disbursement

would leave a total sum of $417,926.20, which far exceeds the amount that Baptiste claims is

necessary to protect his interests.34 Baptiste did not file an opposition to the motion. On November

26 Id. at 2.

27 Rec. Doc. 53.

28 Rec. Doc. 56.

29 Rec. Doc. 52-4 at 7–10.

30 Rec. Doc. 77.

31 Rec. Doc. 84.

32 Rec. Doc. 85.

33 Id.

34 Rec. Doc. 85-1 at 3.

8, 2023, this Court entered an Order granting the motion, the amount of $833,504.33 was disbursed

to TJ Sutton and the $500,000 bond was returned to Travelers.35

On May 13, 2024, Baptiste filed the instant motion for partial summary judgment.36 On

June 4, 2024, TJ Sutton filed an opposition to the motion.37

II. Parties’ Arguments

A. Baptiste’s Arguments in Support of the Motion

Baptiste moves for summary judgment establishing that TJ Sutton is liable to Baptiste.38

Baptiste contends that on March 2, 2019, a meeting was held with Baptiste, TJ Sutton, Citadel,

and Gerald Toliver of Blue Water.39 At said meeting, Baptiste asserts that Thomas Sutton, the

owner of TJ Sutton, verbally agreed to pay Baptiste for out-of-pocket expenses, per diems, and

administrative time related to the project.40 Baptiste states that TJ Sutton has now refused to pay

him.41

Baptiste contends that text messages from Citadel’s counsel evidence that said meeting

occurred.42 Baptiste also relies on requests for admissions referencing the meeting, which were

propounded on Citadel but were not responded or objected to.43 Baptiste argues that federal courts

35 Rec. Doc. 89.

36 Rec. Doc. 105.

37 Rec. Doc. 108.

38 Rec. Doc. 105.

39 Rec. Doc. 105-1 at 1.

40 Id.

41 Id.

42 Id. at 2.

43 Id.

have relied on default admissions to support a grant of summary judgment.44 Baptiste avers that

this Court may rely on the deemed-admitted requests for admission.45 Baptiste contends that

Citadel’s failure to respond to the requests for admission and Citadel’s confirmatory texts and

emails establish that TJ Sutton is legally obligated to pay Baptiste’s out-of-pocket expenses, per

diems, and administrative time related to the project.46 Baptiste requests that the Court grant his

motion and order mediation or another settlement conference.47

B. TJ Sutton’s Arguments in Opposition to the Motion

In opposition, TJ Sutton argues that Baptiste’s filings indicate that he did not contract with

Citadel or TJ Sutton, so there is no contractual basis for an obligation to pay Baptiste.48 TJ Sutton

contends that there was never an agreement to pay Baptiste during a meeting, as any staffing

agreement was made with Blue Water.49 TJ Sutton avers that the agreement with Blue Water

provides for payment of roofing work at an agreed rate based on square footage, not reimbursement

of administrative services or any other work.50

TJ Sutton asserts that Baptiste’s pleadings indicate that he entered into subcontracts with

Total Restoration Services, which is not a party to this litigation, and Blue Water.51 TJ Sutton

44 Id. at 4.

45 Id.

46 Id.

47 Id. at 5.

48 Rec. Doc. 108 at 1.

49 Id.

50 Id.

51 Id. at 2.

contends that Baptiste does not allege that he contracted with Citadel or TJ Sutton.52 TJ Sutton

argues that payment to Baptiste would potentially prejudice Blue Water’s claim to the interpled

funds.53

TJ Sutton asserts that Baptiste is an employee of Blue Water, and this evidences that he

has no independent basis to payment directly from TJ Sutton.54 TJ Sutton states that the payment

terms are contained in the staffing agreement attached to the opposition.55

III. Legal Standard

Summary judgment is appropriate when the pleadings, discovery, and affidavits

demonstrate “no genuine dispute as to any material fact and the movant is entitled to judgment as

a matter of law.”56 To decide whether a genuine dispute as to any material fact exists, the court

considers “all of the evidence in the record but refrain[s] from making credibility determinations

or weighing the evidence.”57 All reasonable inferences are drawn in favor of the nonmoving

party.58 Yet “unsupported allegations or affidavits setting forth ‘ultimate or conclusory facts and

conclusions of law’ are insufficient to either support or defeat a motion for summary judgment.”59

If the entire record “could not lead a rational trier of fact to find for the non-moving party,” then

52 Id.

53 Id. at 4.

54 Id. at 5.

55 Id.

56 Fed. R. Civ. P. 56(a); see also Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).

57 Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398–99 (5th Cir. 2008) (citing

Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)).

58 Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007) (quoting Reeves, 530 U.S. at

150).

59 Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); Little, 37 F.3d at 1075.

no genuine issue of fact exists and, consequently, the moving party is entitled to judgment as a

matter of law.60 The nonmoving party may not rest upon the pleadings.61 Instead, the nonmoving

party must identify specific facts in the record and articulate the precise manner in which that

evidence establishes a genuine issue for trial.62

The party seeking summary judgment always bears the initial responsibility of showing the

basis for its motion and identifying record evidence that demonstrates the absence of a genuine

issue of material fact.63 “To satisfy this burden, the movant may either (1) submit evidentiary

documents that negate the existence of some material element of the opponent’s claim or defense,

or (2) if the crucial issue is one on which the opponent will bear the ultimate burden of proof at

trial, demonstrate that the evidence in the record insufficiently supports an essential element of the

opponent’s claim or defense.”64 If the moving party satisfies its initial burden, the burden shifts to

the nonmoving party to “identify specific evidence in the record, and to articulate” precisely how

that evidence supports the nonmoving party’s claims.65 The nonmoving party must set forth

“specific facts showing the existence of a ‘genuine’ issue concerning every essential component

of its case.”66

The nonmovant’s burden of demonstrating a genuine issue of material fact is not satisfied

60 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting First Nat’l Bank of

Ariz. v. Cites Serv. Co., 391 U.S. 253, 289 (1968)).

61 Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).

62 See id.; Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998).

63 Celotex Corp., 477 U.S. at 323.

64 Duplantis v. Shell Offshore, Inc., 948 F.2d 187, 190 (5th Cir. 1991) (internal citation omitted).

65 Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994), cert. denied, 513 U.S. 871 (1994); see also Morris v.

Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998).

66 Morris, 144 F.3d at 380; see also Bellard v. Gautreaux, 675 F.3d 454, 460 (5th Cir. 2012).

merely by creating “some metaphysical doubt as to the material facts,” “by conclusory allegations,

by unsubstantiated assertions, or by only a scintilla of evidence.”67 Moreover, the nonmoving party

may not rest upon mere allegations or denials in its pleadings.68

IV. Analysis

Baptiste seeks summary judgment on the issue of liability. Baptiste contends that there was

a verbal agreement with TJ Sutton wherein Thomas Sutton agreed to pay Baptiste’s out-of-pocket

expenses, per diems, and administrative time related to the project.69 Baptiste attaches a sworn

declaration signed by himself,70 requests for admissions propounded on Citadel,71 an email from

Robert “Bob” Ellis, and a text message from “Troy Citadel Owner” in support of his argument.72

In opposition, TJ Sutton denies entering any verbal agreement directly with Baptiste.73 TJ

Sutton concedes that a meeting occurred, but the staffing agreement was with Blue Water.74 TJ

Sutton denies any agreement to reimburse Baptiste for administrative services or any other work.75

TJ Sutton attaches a declaration from Thomas J. Sutton, and a Blue Water staffing agreement in

support of its argument.76

67 Little, 37 F.3d at 1075 (internal citations and quotation marks omitted).

68 Morris, 144 F.3d at 380.

69 Rec. Doc. 105.

70 Rec. Doc. 105-5.

71 Rec. Doc. 105-6.

72 Rec. Doc. 105-7.

73 Rec. Doc. 108 at 1.

74 Id.

75 Id.

76 Rec. Doc. 108-1.

The Court finds that there are genuine issues of material fact in dispute as to whether a

verbal agreement existed between Baptiste and TJ Sutton. Baptiste’s self-serving declaration and

the ambiguous emails and text messages attached to the motion are insufficient to support

summary judgment. While the text messages and emails could lead to the conclusion that a meeting

occurred, they do not demonstrate that TJ Sutton agreed to pay Baptiste for work related to the

project.77

In opposition, TJ Sutton attaches a staffing agreement between Blue Water and TJ Sutton,

which lists Baptiste as an assigned employee.78 The staffing agreement states that the “Staffing

Firm [Blue Water] will pay Assigned Employees’ wages and provide them with the benefits as

required per applicable laws and labor regulations.”79 This demonstrates that there are genuine

issues of material fact in dispute as to whether TJ Sutton is the party responsible for paying Baptiste

for the work on the project.

Baptiste also relies on unanswered requests for admissions that were propounded upon

Citadel. Under Federal Rule of Civil Procedure 36(a), requests for admissions are deemed admitted

if not answered within 30 days.80 Any matter admitted under Federal Rule of Civil Procedure 36

is deemed conclusively established unless the court permits withdrawal of the admission.81

Further, if the requests for admissions concern an essential issue, the failure to respond to requests

77 See Rec. Doc. 105-7.

78 Rec. Doc. 108-1.

79 Id. at 3.

80 See Hulsey v. Texas, 929 F.2d 168, 171 (5th Cir. 1991) (“Under Federal Rule of Civil Procedure 36(a), a

matter in a request for admissions is admitted unless the party to whom the request is directed answers or objects to

the matter within 30 days.”).

81 Fed. R. Civ. P. 36(b).

for admission can lead to a grant of summary judgment against the non-responding party.82 While

facts deemed admitted due to a failure to respond to requests for admission could support a grant

of summary judgment, summary judgment is typically granted against the non-responding party.

Here, Baptiste propounded requests for admission on Citadel, to which Citadel failed to respond.

This cannot be used as a basis for summary judgment against TJ Sutton.

Baptiste asked Citadel to admit that two of its employees heard Thomas Sutton verbally

agree to pay Baptiste.83 Even if the admissions could be used against TJ Sutton, the admissions by

Citadel contradict the written staffing agreement and the declaration of Thomas Sutton that he did

not verbally agree to pay Baptiste. Therefore, genuine issues of material fact remain in dispute

regarding whether TJ Sutton is liable to Baptiste.

Finally, Baptiste requests that the Court order mediation or another settlement conference.

The Scheduling Order instructs the parties to contact the Magistrate Judge six weeks before the

pretrial conference date to schedule a settlement conference. The parties are free to schedule a

mediation as soon as the Magistrate Judge is available. Accordingly, no further order is necessary.

82 Dukes v. South Carolina Ins. Co., 770 F.2d 545, 548–49 (5th Cir.1985).

83 Rec. Doc. 105-5.

V. Conclusion

For the reasons stated herein, genuine issues of material fact remain in dispute regarding

whether TJ Sutton is liable to Baptiste. As such, the Court must deny summary judgment.

Accordingly,

IT IS HEREBY ORDERED that Baptiste’s Motion for Partial Summary Judgment is

DENIED.

NEW ORLEANS, LOUISIANA, this 11th day of July, 2024.

1 ple Be

NANNETTE JOLI TE BROWN □□□

CHIEF JUDGE

UNITED STATES DISTRICT COURT

13