151 So. 3d 959
La. Ct. App.2014Background
- Landis Construction Co., L.L.C. entered a public-bid contract with St. Bernard Parish to repair the courthouse damaged by Hurricane Katrina.
- The contract text, furnished by the Parish, required Landis to provide ALL RISK builder’s risk insurance; the Parish assumed the remainder of policy duties.
- Seven years later, Hurricane Isaac damaged the courthouse; insurer paid losses minus a 3% windstorm deductible ($367,029.26).
- Dispute arose over who bears the losses not covered by the deductible: Landis or the Parish; both sides sought summary judgment.
- The contract language, incorporating an AIA form but modified by the Parish, was ambiguous as to who bears deductible losses; the court conducted de novo interpretation and favored Landis.
- The court held the Parish furnished the text and that the contract should be read against the Parish and in favor of Landis, awarding Landis $367,029.26.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who bears losses not covered due to the deductible? | Landis argues Parish bears deductible losses under the text. | Parish argues Landis bears deductible losses per its own text. | Ambiguous; interpreted in Landis’s favor against Parish. |
| Is the contract ambiguous on the deductible allocation? | Ambiguity favors Landis due to text ambiguity. | Ambiguity exists; Parish emphasizes its text's meaning. | Contract ambiguous as to deductible-loss allocation. |
| What interpretive rule applies when the contract is standard-form but altered by one party? | Interpret against the party who furnished the text (Parish). | Interpretation should align with the overall text and intent. | Interpretation against Parish and in favor of Landis under Civil Code Art. 2056. |
Key Cases Cited
- Lalla v. Calamar, N.V., 5 So.3d 927 (La.App. 4 Cir. 2009) (contract interpretation as law; ambiguity leads to favorable interpretation against drafter)
- American Deposit Ins. Co. v. Myles, 783 So.2d 1282 (La. 2001) (meaning of contract terms and reliance on four corners)
- Jones v. Vela’s Garage & Rental, Inc., 717 So.2d 246 (La.App. 4 Cir. 1998) (interpretation of contracts and parol evidence constraints)
- Edwards v. Daugherty, 883 So.2d 932 (La. 2004) (ambiguous contracts and legal standard for interpretation)
- Campbell v. Melton, 817 So.2d 69 (La. 2002) (contract ambiguity and determining intent)
- Lamarque v. Barbara Enterprises, Inc., 958 So.2d 708 (La.App. 4 Cir. 2007) (standard-form contracts and public bidding context)