Team Contractors, L.L.C. v. Waypoint NOLA, L.L.C.
2:16-cv-01131
E.D. La.Oct 2, 2017Background
- Team Contractors contracted with Waypoint to renovate seven floors of the Hyatt House in New Orleans; HCA was the architect and subcontracted MEP design to KLG.
- HCA delivered MEP plans (KLG) that contained code noncompliance (ventilation, omitted smoke dampers); construction had already begun when defects were discovered.
- Waypoint issued construction change directives requiring removal and reinstallation of defective MEP work, which Team says caused additional work, recurring expenses, and an extended performance period.
- Team’s damages expert applied the Eichleay formula to calculate extended home office overhead damages for the alleged delay.
- Defendants (HCA, KLG successor, Beach, Lundstrum) moved for partial summary judgment arguing Team cannot meet Eichleay’s prerequisites (no suspension/stoppage); Team responded with testimony asserting a functional stoppage or significant slowdown.
- The court denied summary judgment, finding disputed material facts as to whether work stopped or significantly slowed and whether Team was on standby, so Eichleay entitlement is a factual question for trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to extended home office overhead under Eichleay | Team says MEP corrections caused delay, additional overhead, and a requirement to remain on standby, warranting Eichleay damages | Defendants say there was no suspension or stoppage; work continued (supervisors/subcontractors remained busy), so Eichleay prerequisites not met | Denied summary judgment — genuine disputes of material fact exist about stoppage/standby and damages entitlement |
| Degree of work stoppage required | Team contends a "functional" stoppage/ significant slowdown suffices | Defendants assert lack of total stoppage defeats Eichleay recovery | Court adopts federal view that total stoppage not required; significant slowdown or functional stoppage can suffice; factual question for trial |
| Applicability of Eichleay in private-contract context | Team applied Eichleay formula to calculate overhead damages | Defendants did not contest Eichleay’s applicability here; instead challenged proof of prerequisites | Court assumed Eichleay may apply and focused on prerequisites; did not foreclose private-contract use but required plaintiff to prove entitlement at trial |
| Appropriateness of summary judgment on damages | Team relies on deposition and expert opinion showing slowdown and overhead costs | Defendants relied on deposition testimony they say shows no stoppage and ongoing work | Summary judgment improper because factual disputes about stoppage, standby, and causation remain for jury/trier of fact |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Anderson v. Liberty Lobby, 477 U.S. 242 (standard for genuine issue of material fact)
- First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253 (summary judgment jurisprudence)
- Gilchrist Constr. Co., LLC v. State, Dep’t of Transp. & Dev., 166 So. 3d 1045 (La. App. 1 Cir. 2015) (Louisiana’s three-prong Eichleay prerequisites and reluctance to broaden Eichleay)
- JMR Constr. Corp. v. United States, 117 Fed. Cl. 436 (Fed. Cl. 2014) (Eichleay recovery permissible where work stopped or significantly slowed; minor tasks do not defeat standby)
- P.J. Dick Inc. v. Principi, 324 F.3d 1364 (Fed. Cir. 2003) (Eichleay analysis: work slowed can satisfy standby)
- Altmayer v. Johnson, 79 F.3d 1129 (Fed. Cir. 1996) (Eichleay jurisprudence)