JIMMIE C. PETERS, Judge.
In these consolidated appeals, the Coushatta Tribe of Louisiana appeals a number of trial court judgments which had the ultimate effect of awarding Meyer & Associates, Inc. $10,998,250.00 in contractual damages, $5,585,573.00 in attorney fees, and $57,662.34 in court costs. Meyer & Associates, Inc. answered the appeal seeking a $1,902,339.65 increase in the damage award. For the following reasons, we reverse the trial court's judgments on certain summary judgment issues, vacate the trial court judgments on the merits, and remand the matter to the trial court for further proceedings.
The Coushatta Tribe of Louisiana (hereinafter sometimes referred to as "the Tribe" or "CTOL"
In July of 2001,
In early 2002, members of the Tribal Council and Richard Meyer, the engineering firm's vice president, began preliminary discussions concerning the possibility of designing and constructing a facility to generate electrical power to service the needs of the casino, the individual members of the Tribe, and potential customers on the open market. To that end, and because Meyer & Associates had no experience or in-house expertise in developing or implementing such a project, Mr. Meyer began assembling a team of experts (hereinafter sometimes referred to as the "project team" or "team") to join with the engineering firm and the Tribe in pursuing this new goal.
The project team began exploring the possibilities of developing an electrical power program; and in May of 2002, the team circulated its preliminary findings to the Tribal Council in the form of a Concept Stage Benchmark Feasibility Study (Feasibility Study). Over the next six months, the team continued to assess, update, and modify its initial findings; and at the Tribal Council's December 17, 2002 meeting, Mr. Meyer presented an updated version of the original Feasibility Study for the Tribal Council to consider. This presentation led to the Tribal Council, at its January 14, 2003 meeting, unanimously adopting a formal resolution (hereinafter referred to as "the Resolution") authorizing the development of an electrical power program.
The Resolution further provided that upon the completion of Phase 2 activities, "[t]he CTOL reserves all rights at the time of review to agree to a projected return on investment and to proceed with Phase 3 Program Activity or to modify the Program to achieve the investment return desired or to stop project activity and not execute any final agreements." To emphasize this safeguard, the Resolution provided that "[t]his statement shall be included in all appropriate agreements authorized under this resolution."
As an additional special condition, the Resolution (parenthetical omitted) provided that 101 agreements to be executed by the CTOL shall include appropriate and reasonable Termination Provisions that are generally consistent with the Standards of the Power Industry for Development Programs of this type." The Resolution contained the signatures of Lovelin Poncho as Chairman; William Worfel as Vice Chairman; Bertney Langley as Secretary-Treasurer; and Leonard Battise and Harold John as Tribal Council Members.
Chairman Poncho represented the Tribe and Mr. Meyer represented the engineering firm in the initial subsequent negotiations. Their efforts resulted in the execution of a nine-page interim supplemental agreement (hereinafter referred to as the "Interim Agreement") which modified the General Agreement to include the electrical power project. This Interim Agreement had an effective date of January 14, 2003;
Language in the Interim Agreement made it clear that the parties contemplated executing a definite final agreement for Phases 3, 4, and 5 before work was completed on Phase 2. At the same time, it provided that until the parties reached a final agreement, the Interim Agreement and/or Work Authorizations arising under the Interim Agreement would bind the parties and govern the project. The Interim Agreement further provided that in the event a subsequent final agreement was never executed, it would become the final agreement binding on all parties; and that the terms of Work Authorizations issued pursuant to the General Agreement or Interim Agreement would have the effect of amending the terms of the agreements in place at the time the Work Authorizations were issued. In fact, the parties attached the first of what would ultimately be three Work Authorizations to the Interim Agreement.
Among many other conditions and provisions, the Interim Agreement also provided that its contents would be "governed and construed under the laws of the State of Louisiana[,]" that "any dispute arising [under it] shall be heard by a court of competent jurisdiction in the Parish of Allen, or any other Parish mutually agreed to," and that the Tribe specifically waived sovereign immunity.
The termination provisions are found in Section 1.3 of the Interim Agreement and read as follows:
Chairman Poncho and Mr. Meyer executed the one-page Work Authorization attached to the Interim Agreement (hereinafter referred to as "WA#1"). WA#1 had an effective date of January 14, 2003,
The second Work Authorization (WA#2), executed by Mr. Worfel and Mr. Meyer, became effective on May 1, 2004.
WA#2 also revisited the issue of compensation to the engineering firm by increasing the maximum amount to be paid to it for Phase 2 services from $3,375,000.00 to $13,375,000.00. Additionally, it raised the termination fee to 95% of the remaining unbilled fees authorized by all active work authorizations, as well as all reimbursable expenses and a penalty equal to one third of the Developer Services Compensation based on a 400 megawatt basis or $5,440,000.00.
In March of 2005, three members of the Tribal Council acted favorably on the following five resolutions, which are summarized as follows:
At approximately the same time these resolutions were being acted on, Mr. Worfel and Mr. Meyer executed the third and final Work Authorization (WA#3), with an effective date of April 1, 2005. This six-page final Work Authorization took effect in the face of the upcoming Tribal Council election and slightly more than two months before the entire project completely unraveled. WA#3 began by ratifying and incorporating that which had been set out in the previous resolutions and contractual documents executed between the parties, including particularly WA#2. This final Work Authorization also referenced the six resolutions enacted by the Tribe,
(Emphasis added.)
WA#3 also addressed the confidentiality of certain financial information being shared between the Tribe and the engineering firm and ended that discussion with the comment that:
Additionally, WA#3 increased the termination fee due Meyer & Associates with the following language:
WA#3 made no changes to the previous agreement that any disputes arising between the Tribe and the engineering firm would be governed by Louisiana law, but did make a significant change to the venue provision of the previous agreements. Both the Interim Agreement and WA#2 provided that the venue for any disputes between the parties would be "the Parish of Allen, or any other Parish mutually agreed to[.]" However, WA#3 amended the language found in WA#2 to read `that any dispute arising hereunder shall be heard by the Fourteenth Judicial District Court, State of Louisiana[.]'" This language gave Meyer & Associates the benefit of litigating any dispute in its home parish, the location of the Fourteenth Judicial District Court, and is the reason this litigation was filed in Calcasieu Parish rather than in Allen Parish as previously contemplated.
The parties never executed a definitive final agreement, and this litigation arises because a tribal election in the Spring of 2005 resulted in the election of three new individuals to office, including a new Council Chairman.
The Tribe responded to Meyer & Associates' original petition on July 7, 2006, by filing declinatory exceptions of lis pendens and lack of subject matter jurisdiction.
Resolution of the jurisdictional issues delayed the litigants proceeding with the state trial court proceeding for almost three years, but with jurisdiction firmly established in the trial court, matters began moving forward on May 7, 2009, when the Tribe answered the petition of Meyer & Associates and filed a reconventional demand against both the engineering firm and Mr. Meyer.
Meyer & Associates and Mr. Meyer responded to the Tribe's reconventional demand in separate filings on June 1, 2009, and in separate ways. Meyer & Associates filed an answer directly addressing the assertions in the reconventional demand, and Mr. Meyer filed exceptions of no right of action, insufficiency of citation, and improper cumulation of actions. From this point forward, the trial court record expanded exponentially, with both sides filing multiple pleadings, memoranda, and exhibits.
By a supplemental and amending pleading filed on March 26, 2010, the Tribe added the assertion of fraud as both an affirmative defense and as a claim under the reconventional demand. A second supplemental and amending pleading filed by the Tribe on February 19, 2013, added error, mistake, estoppel, extinguishment of the obligation, and the Tribe's sovereign immunity as additional affirmative defenses.
The first of a series of exceptions and motions for summary judgment began to be filed by the litigants in 2012. These can be summarized as follows:
The disposition of these filings comprise an integral part of the issues now before us, and in response to the buildup of these preliminary matters, the trial court held a hearing on September 13, 2013, wherein it attempted to address all of the pending motions and exceptions. At the end of the hearing, the trial court orally ruled that all claims by the Tribe in its reconventional demand for fraud had prescribed, but that its affirmative defense of fraud remained viable; that its claim for negligent breach of fiduciary duty had prescribed, but that its claim for intentional breach of fiduciary duty remained viable; and that the engineering firm's claim for reimbursement of expenses had not prescribed. However, the trial court did not immediately execute a written judgment on these rulings, and all of the remaining issues before the court were either stipulated to or taken under advisement.
On the issues of agency and joint venture, the trial court orally issued a ruling wherein the motions were granted in part and denied in part. The trial court recognized the Tribe, Meyer & Associates, and members of the project team as participants in a joint venture and that each owed a fiduciary duty to the other, but did not reach the Tribe's claim in its motion for summary judgment that Meyer & Associates breached a fiduciary duty. For oral reasons assigned, the trial court also denied the Tribe's peremptory exception of prescription.
On September 24, 2013, the trial court issued a written ruling entitled
This language is followed by a line which states that the ruling was "[r]endered in Chambers" on September 24, 2013, and with a signature line for the trial court. Although the signature line bears a signature, it carries the notation "for" in front of the signature
On September 27, 2013, the trial court executed and filed eleven written judgments addressing some of the issues orally ruled on at the September 13, 2013 hearing. Of the eleven, four are pertinent to the issues now before the court. The first relates to the fiduciary duty issues and reads in pertinent part as follows:
Before the trial court executed a written judgment on any of the other oral rulings issued on September 13, 2013, or on the rulings expressed in the written reasons of September 24, 2013, the parties participated in an October 3, 2013 pretrial conference in anticipation of the trial on the merits scheduled for October 15, 2013.
This language was also followed with an executed signature line for the trial court, but without the notation "for" which appeared on the September 24, 2013 judgment.
On the same day the trial court filed the revised reasons for judgment, the trial court upset the October 15, 2013 trial date; set January 21, 2014, as the new date for the trial on the merits; and executed and filed the first of three judgments addressing the rulings on the issues considered at the September 13, 2013 hearing.
The October 3, 2013 judgment reads in pertinent part as follows:
The trial court executed a second judgment four days later on October 7, 2013. That judgment reads in pertinent part as follows:
The trial court signed yet another judgment on October 11, 2013, which was filed for record on October 15, 2013, and again addressed issues raised in the various pleadings. That judgment reads in pertinent part as follows:
On the same day the last judgment was filed, the Tribe amended its pleadings to assert the affirmative defense that the termination fee sought to be collected by Meyer & Associates was "manifestly unreasonable, punitive, and against public policy."
While the individual judgments themselves are difficult to equate to the particular claims raised in the exceptions and summary judgment motions, the litigants agree that the effect of all of the rulings on these preliminary motions was to reduce the trial to the sole issue of the damages sustained by Meyer & Associates. The three-day trial on this issue began on January 21, 2014, and at the conclusion of the evidentiary phase, the trial court took the matter under advisement. On February 19, 2014, the trial court issued written reasons awarding Meyer & Associates $10,603,250.00 in damages and $395,000.00 in reimbursable expenses. The trial court also awarded the engineering firm attorney fees, but did not set the amount. Instead, the trial court left the "amount to be determined either by agreement between the parties or in a future proceeding with the Court."
The trial court executed a judgment corresponding to its reasons for judgment on March 3, 2014.
In its answer to this first appeal, Meyer & Associates raised two assignments of error:
After this initial appeal began moving through the appellate process, Meyer & Associates filed a motion to have the attorney fee award set. The trial court heard this motion on June 10, 2014, and for oral reasons stated that day, awarded Meyer & Associates an attorney fee judgment against the Tribe in the amount of $5,585,573.00. The trial court executed a judgment to that effect on June 23, 2014, and thereafter, the Tribe perfected the second of the two consolidated appeals now before us. In that appeal, the Tribe raises three assignments of error:
Because we find it dispositive of the issues before us, we will consider the Tribe's third assignment of error in its initial appeal first. In this assignment of error, the Tribe first argues that the trial court erred in changing its prior ruling by the issuance of the written reasons of October 3, 2014, without first holding a new hearing on the motion. Next, the Tribe argues that the trial court erred in granting summary judgment relief to Meyer & Associates on the issues of fraud and misrepresentation, thereby rejecting its right to claim fraud and misrepresentation as an affirmative defense at a trial on the merits; that the trial court erred in granting summary judgment relief to Meyer & Associates on the issue of fiduciary duty, thereby rejecting its right to claim breach of fiduciary duty as a cause of action and as an affirmative defense at a trial on the merits; and that the trial court erred in granting summary judgment relief on the issue of breach of contract, thereby rejecting its right to assert at a trial on the merits that it did not breach the contract.
The first part of this assignment of error addresses the trial court's reversal of position without holding a new hearing. The Tribe argues that because the trial court reversed its position without any litigant requesting reconsideration of the previous ruling on the issue of intentional breach of fiduciary duty, the original ruling of the trial court should be reinstated and the matter remanded for trial on that issue. The Tribe's argument on this issue overlaps its argument that the trial court erred in granting the engineering firm summary judgment relief on the breach of fiduciary duty issue and, therefore, we will consider them together.
There exists a fundamental difference between reasons for judgment, oral or written, and the final judgment. In Bellard v. American Central Insurance Co., 07-1335, 07-1399, p. 25 (La. 4/18/08), 980 So.2d 654, 671, the supreme court stated that there exists "the well-settled rule that the district court's oral reasons or written reasons for judgment form no part of the judgment, and that appellate courts review judgments, not reasons for judgment." Additionally, it has long been recognized that "where there are only written reasons and no separate signed judgment, there is no final judgment[,]" and that "[p]rior to final judgment, a trial judge may, at his discretion, change the substance or the result of interlocutory rulings. A trial judge may also sign a judgment based on written reasons which differ substantially from previously stated oral reasons." Bordelon v. Dauzat, 389 So.2d 820, 822 (La.App. 3 Cir. 1980) (citations omitted).
In this case, the trial court had rendered a written judgment on the fiduciary duty issue before the October 3, 2013 pretrial hearing. In that September 27, 2013 judgment, the trial court recognized the power project to be that of a joint venture, and ruled that the parties involved in the project owed reciprocal fiduciary duties.
The Tribe filed the first motion addressing the issue of fiduciary duties on November 19, 2012. In that motion, the Tribe only sought a judgment establishing that the legal relationship between the parties was that of a joint venture. Meyer & Associates filed a cross-motion for summary judgment on August 30, 2013, wherein it also sought recognition of the project as a joint venture. However, the engineering firm did not seek a judgment finding that the Tribe had breached any fiduciary duties created by the joint venture arrangement. Thus, not only did the trial court change its previously issued judgment without a hearing or new filing, but it granted relief not prayed for. We find merit in the Tribe's argument that the trial court erred in granting the summary judgment finding that the Tribe had violated fiduciary duties it owed to Meyer & Associates. In reaching this decision, we need not consider whether genuine issues of material fact exist as to this issue.
In the remaining two summary judgments challenged by the Tribe, the issue is whether genuine issues of material fact exist which preclude the grant of summary judgment relief. In evaluating the record before us, we apply the de novo standard of review, and because of the evidentiary limitations placed on the analysis of each of these motions by the amendments to La.Code Civ.P. art. 966, we consider each separate from the other. In doing so, we find genuine issues of material fact exist in the issues addressed in both motions for summary judgment and find merit in the Tribe's argument that the trial court erroneously granted relief to Meyer & Associates.
The procedural aspects of the law applicable to summary judgment have changed with each legislative session over the past three years,
The 1996 version of La.Code Civ.P. art. 966(A)(2) proclaimed that "[t]he summary judgment procedure is designed to secure the just, speedy, and inexpensive determination of every action, except those disallowed by Article 969[,]" and that "[t]he procedure is favored and shall be construed to accomplish these ends." That language remained unchanged in both the 2012 and 2013 amendments, and at the time of the trial on the motions before us, it was still incorporated into La.Code Civ.P. art. 966(A)(2).
The 2012 and 2013 amendments did not change the nature of the evidence that could be considered by the trial court in a summary judgment proceeding, but did establish procedural rules for the admissibility of that evidence. Between 1996 and 2012, La.Code Civ.P. art. 966(B) (emphasis added) provided that the trial court could render a summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact, and the mover is entitled to judgment as a matter of law." The 2012 amendments renumbered Subsection B as (B)(2), removed the words "on file" from that part of the article and changed La.Code Civ.P. art. 966(E)(2) to provide that "[o]nly evidence admitted for purposes of the motion for summary judgment shall be considered by the court in its ruling on the motion." However, the 2013 amendments moved the evidentiary requirements to La.Code Civ.P. art. 966(F)(2) (emphasis added), which reads as follows:
This was the evidentiary requirement of the summary judgment procedure at the time of the September 13, 2013 hearing.
The intended effect of the 2012 and 2013 amendments was to establish that no longer could a trial court (or reviewing court for that matter) consider any and all pleadings, depositions, answers to interrogatories, admissions, and affidavits in the record when considering a motion for summary judgment. Instead, the analysis of the motion was limited to consideration of only the pleadings, depositions, answers to interrogatories, admissions, and affidavits properly admitted for the purpose of the motion for summary judgment.
While the legislature significantly changed the procedural aspects of summary judgment law in 2012 and 2013, the recent amendments did not substantially change the long-standing burden of proof imposed on the mover in a summary judgment motion, and at the time of the trial of the motions at issue, it was set out in La.Code Civ.P. art. 966(C)(2) and read as follows:
Furthermore, all of the recent changes to La.Code Civ.P. art. 966 did not change the well-settled rule that in evaluating a summary judgment issue, the trial court is precluded from making credibility determinations and must evaluate inferences from undisputed facts in a light most favorable to the party opposing the motion. Indep. Fire Ins. Co. v. Sunbeam Corp., 99-2181, 99-2257 (La. 2/29/00), 755 So.2d 226. Nor did they change the long-standing rationale that "[a] motion for summary judgment is rarely appropriate for a determination based on subjective facts, such as intent, motive, malice, knowledge, or good faith." Baldwin v. Bd. of Supervisors for Univ. of La. Sys., 06-961, p. 7 (La.App. 1 Cir. 5/4/07), 961 So.2d 418, 422. As noted in Smitko v. Gulf South Shrimp, Inc., 11-2566, p. 7 (La. 7/2/12), 94 So.3d 750, 755, "[a]ppellate review of the granting of a motion for summary judgment is de novo, using the identical criteria that govern the trial court's consideration of whether summary judgment is appropriate."
The prohibition against the trial court considering anything other than the evidence admitted for the purpose of a particular summary judgment, as set forth in La.Code Civ.P. art. 966(F)(2), directly affects the review of the judgments at issue because they were all heard and considered in one hearing. At the September 13, 2013 hearing, the trial court attempted to address what the court minutes of that day describe as "all outstanding Motions and/or Exceptions filed on behalf of the Parties[.]" At the beginning of that hearing, the trial court attempted to address the issues in some semblance of order. However, when argument on the issues began, everything simply overlapped. The result was that at the end of the day-long hearing, all of the issues had been lumped together and it is somewhat unclear as to which evidence was considered for which motion. However, because the review by this court is de novo, we can address the issues without regard to these drawbacks.
With regard to the fraud and misrepresentation claims asserted by the Tribe in its answer and reconventional demand, the trial court initially granted the engineering firm's exception of prescription as to the reconventional demand claims, but rejected the exception as to the affirmative defense claims. However, the trial court then eliminated fraud and misrepresentation as an affirmative defense by granting the engineering firm's September 12, 2012 motion for summary judgment. The Tribe asserts that the trial court erred in granting that summary judgment.
"A contract is an agreement by two or more parties whereby obligations are created, modified, or extinguished." La.Civ.Code art. 1906. It "is formed by the consent of the parties established through offer and acceptance." La.Civ.Code art. 1927. Fraud is one of the three vices of consent in a contractual relationship. La.Civ.Code art. 1948. Louisiana Civil Code Article 1953 defines fraud as "a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other. Fraud may also result from silence or inaction." With regard to the burden of proving fraud, La.Civ.Code art. 1957 provides that "[f]raud need only be proved by a preponderance of the evidence and may be established by circumstantial evidence." This court noted in Sepulvado v. Procell, 12-271, p. 5 (La.App. 3 Cir. 10/3/12), 99 So.3d 1129, 1134, that:
Thus, in order to be successful in obtaining summary judgment relief from the Tribe's assertions of fraud, Meyer & Associates had "to point out to the court that there is an absence of factual support for one or more" of the three elements required to be proven by the Tribe. La.Code Civ.P. art. 966(C)(2).
The misrepresentation cause of action has been recognized as arising from La.Civ.Code arts. 2315 and 2316, and was discussed in the context of a Bank's obligations in Succession of McKnight, 33,802, pp. 5-6 (La.App. 2 Cir. 10/4/00), 768 So.2d 794, 798, writ denied, 00-3072 (La. 2/9/01), 785 So.2d 822, with the following analysis:
To be successful under a duty/risk analysis, a plaintiff must establish five elements: (1) that defendant had a duty to conform his conduct to a specific standard; (2) that defendant's conduct failed to conform to that standard; (3) that defendant's substandard conduct was a cause-in-fact of the plaintiff's injuries; (4) that the defendant's substandard conduct was a legal cause of the plaintiff's injuries; and (5) that the plaintiff sustained damage. Hanks v. Entergy Corp., 06-447 (La. 12/18/06), 944 So.2d 564. Thus, in order to be successful in obtaining summary judgment relief from the Tribe's assertions of misrepresentation, Meyer & Associates had "to point out to the court that there is an absence of factual support for one or more" of the five elements required to be proven by the Tribe. La.Code Civ.P. art. 966(C)(2).
The Tribe's primary assertions of fraud related to facts surrounding the General Agreement and the manner in which the engineering firm caused the Tribe to pass the Resolution which gave Chairman Poncho the authority to enter into the subsequent agreements with Meyer & Associates. Thus, the issue was whether the original contracts were entered into with the requisite consent. However, Meyer & Associates did not address this assertion in its motion for summary judgment on the fraud issue. Instead, it addressed only the claims of continuing fraud and misrepresentation after passage of the initial Resolution.
Meyer & Associates filed its motion for summary judgment on these issues on September 12, 2012. By that time, the 2012 amendments to La.Code Civ.P. art. 966 had come into effect, requiring the actual filing of any evidence offered in support of, or in opposition to, a summary judgment. La.Code Civ.P. art. 966(E)(2). It was not until the effective date of the 2013 amendments that an attachment to the motion and/or memorandum satisfied the filing requirement. Meyer & Associates attached three exhibits to its original motion, and counsel for the engineering firm moved for the filing of these into evidence at the September 13, 2013 hearing. The exhibits are described as follows:
The last exhibit does not fit within any of the categories of admissible evidence listed in La.Code Civ.P. art. 966(B)(2).
Mr. Poncho asserted in his affidavit that he served as the Council Chairman from June of 1986 through June of 2005, and that during that time, the Tribal Council commonly negotiated commercial contracts, and that many of those contracts contained provisions pertaining to dispute resolution and the waiver of sovereign immunity. He claimed to have personally negotiated some of the contracts in his capacity as Chairman, and on most occasions these contracts contained dispute resolution and sovereign immunity provisions included without obtaining the prior approval through a tribal resolution. He further asserted that either he or his designee was given full authority in the unanimously adopted January 14, 2003 Resolution to enter into any agreement required for the development of the power project. Pursuant to this authority, he executed the Interim Agreement on behalf of the Tribe as well as Memorandums of Understanding (MOUs) with potential offtakers Valley Electric and the Cities of Natchitoches, Minden, and Ruston.
According to Mr. Poncho's affidavit, a dissident faction of the Tribe began interfering with the administrative affairs of the Tribal Council in early February of 2004, and that because of their concern over the effect these dissidents might have on the power project, he, Mr. Battise, and Mr. Worfel issued letters to the offtakers reasserting their authority over the project and the affairs of the Tribe and informing the offtakers of steps the Tribe would be taking to insulate the power project from Tribal politics, including creating corporations to take over the power project. He stated that both WA#2 and WA#3 were entered into in an effort to further enhance the stability of the power project in the eyes of the offtakers; as was the passage of Resolutions 2005-A, 2005-B, 2005-C, 2005-D, and 2005-E.
Mr. Poncho did not assert that Resolutions 2005-A through E were passed in a regular or specially called Tribal Council meeting. Instead, he simply asserted that they were agreed upon by a majority of the members of the Tribal Council (Mr. Poncho, Mr. Battise, and Mr. Worfel).
Finally, Mr. Poncho asserted in his affidavit that no outside entity would enter into a large financial commitment with the Tribe, such as the power project, unless the Tribe agreed to include a waiver of sovereign immunity and forum selection provisions in the contract. He provided no corroboration for this position.
Mr. Battise, a former Tribal Council Member from June of 1997 through June of 2005, and former Vice Chairman from June of 2003 through June of 2005, concurred with the statements contained in Mr. Poncho's affidavit; as did Mr. Worfel, a former Council Member from June of 1998 through August 10, 2005, during which time he also served as Vice Chairman and Secretary-Treasurer.
The answers to the requests for admissions propounded by Meyer & Associates to the Tribe established the following facts: (1) the Tribal Council is the sole governing body of the Tribe, and all of the Tribe's governmental authority rests with the Tribal Council; (2) three members of the Tribal Council constitute a quorum at a properly noticed and called meeting of the Tribal Council and, therefore, can conduct the business of the Tribe; (3) in June 2005, David Sickey, as Council Member, directed the cancellation of a "Participants Meeting with Offtakers at Coushatta Casino Resort[;]" (4) on or about September 17, 2005, one or more members of the Tribal Council released a document entitled, "Payments to Bracewell & Ieyoub[,]" to persons who were not Tribal Council Members; and (5) at a Tribal Council meeting on October 10, 2005, the Tribal Council replaced Mr. Worfel with Mr. Sickey as the Tribe's authorized representative on the power project and adopted Resolution 2005-66.
As previously stated, this evidence does not address the fraud and misrepresentation issues raised by the Tribe in its answer and reconventional demand. That being the case, we do not find that Meyer & Associates ever met its burden of proof as set forth in La.Code Civ.P. art. 966(C)(2), "to point out to the court that there is an absence of factual support for one or more elements essential to [the Tribe's] claim, action, or defense." Thus, the burden never shifted to the Tribe to establish that it "will be able to satisfy [its] evidentiary burden of proof at trial[.]" Id.
Nor do we find that the attempted introduction of Chairman Poncho's deposition testimony cures this defect in the engineering firm's motion on these issues. First, that deposition was attached to an opposition to another filing not related to the issues of fraud and misrepresentation, and to allow it to be introduced as the only proof of the engineering firm's position on the issues of fraud and misrepresentation would amount to trial by ambush. Equally important, while Meyer & Associates filed the opposition timely pursuant to District Court Rule 9.9, as provided for in La.Code Civ.P. art. 966(B)(1), that Rule only allows for the filing of a "reply memorandum" and not additional exhibits.
Because we find that Meyer & Associates did not present sufficient evidence to cause the burden of proof to shift to the Tribe on the issue of fraud and misrepresentation, we find that the trial court erred in granting summary judgment relief to the engineering firm on these issues. That being the case, we need not consider the evidence presented by the Tribe in opposition to the engineering firm's motion.
Finally, the Tribe asserts that genuine issues of material fact exist concerning whether it breached the contract through the actions of the newly-elected Tribal Council suspending work on the power project at its first Tribal Council meeting in June of 2005. That being the case, the Tribe argues, the trial court erred in granting summary judgment to Meyer & Associates on this issue.
Louisiana Civil Code Article 1983 provides that "[c]ontracts must be performed in good faith." A party having obligations under a contract "is liable for the damages caused by his failure to perform a conventional obligation." La.Civ.Code art. 1994. Furthermore, "[a] failure to perform results from nonperformance, defective performance, or delay in performance." Id. A party to a contract breaches that contract by (1) undertaking an obligation to perform; (2) failing to perform that obligation; and (3) the party entitled to performance suffers damages from the failure to perform. Sanga v. Perdomo, 14-609 (La.App. 5 Cir. 12/30/14), 167 So.3d 818, writ denied, 15-222 (La. 6/19/15), 172 So.3d 650.
In an attempt to meet its summary judgment burden on the issue of breach of contract by the newly elected Tribal Council, Meyer & Associates attached eight exhibits to its motion for summary judgment:
Mr. Meyer's affidavit establishes that he is a registered civil and environmental engineer and the vice president of Meyer & Associates. He became the general consultant and project manager for the Tribe's power project through the authority of the Interim Agreement. However, even before entering into the Interim Agreement, Mr. Meyer, on behalf of Meyer & Associates, consulted experts knowledgeable in developing power plants and obtaining customers to purchase the power; and he prepared a Feasibility Study based on the information he obtained. Additionally, he contacted potential power offtakers and obtained MOUs from Minden, Natchitoches, Ruston, and Valley Electric. The Interim Agreement was authorized by the unanimous Tribal Council's adoption of the Resolution formally approving the power project.
Mr. Meyer asserted in his affidavit that the Interim Agreement merely amended the General Agreement to add the electrical power project to the list of projects that Meyer & Associates had contracted to complete with and/or on behalf of the Tribe. The purpose of the Work Authorizations, according to Mr. Meyer, was to supplement the Interim Agreement by identifying the specific work to be performed at a given stage of the project's development.
According to Mr. Meyer, the actions of a dissident tribal faction began to cause potential offtakers to express concerns about the project by February of 2004; and when these offtakers requested assurances from the Tribal Council that the power project would continue despite the actions of the dissidents, members of the then Tribal Council provided letters of reassurance. Mr. Meyer asserted that when the letters of reassurance failed to lessen the offtakers' fears, he and members of the then Tribal Council took steps to amend the existing agreements to increase the scope of the power project based on the addition of LEPA as an offtaker.
Mr. Meyer asserted that this amendment effort resulted in the adoption of WA#2, which took effect on May 1, 2004. He acknowledged that WA#2 included substantial penalty provisions favorable to Meyer & Associates; and that these provisions were intended to bolster the offtaker's support for the project and to discourage the dissident faction from derailing the project. He understood WA#2 to provide that a mere interruption of Phase 2 activities by the Tribe would trigger the penalties owed to the engineering firm.
Apparently WA#2 was not sufficient to reassure the offtakers because Mr. Meyer asserted in his affidavit, that the purpose of the adoption of five resolutions in March of 2005, and the execution of WA#3 was also necessary in order to insulate the power project from tribal politics. Mr. Meyer stated that "[t]he Tribal Council believed that its actions in adopting the various resolutions and executing [WA#3] were in the best interest of the Tribal Membership in securing the completion of the Power Program to conclusion." Mr. Meyer asserted that the June 2005 action of the newly-elected Tribal Council, to suspend the power project constituted a breach of the contractual agreements, particularly WA#2 and WA#3.
Kevin Sickey replaced Mr. Poncho as Tribal Council Chairman in the 2005 election. In excerpts from his deposition offered by Meyer & Associates on the issue of breach of contract, Mr. Sickey acknowledged that the newly-elected Tribal Council desired to lead the Tribe in a direction different from its predecessors. Although he did not recall making the statement at the first Tribal Council meeting after the election, he acknowledged that the minutes of that June 14, 2005 meeting state that he said, "I want you to halt all Richard Meyer projects for now." He further acknowledged that at the time of the meeting, the power project was the only Tribal project in which Mr. Meyer had an involvement.
Mr. Sickey testified that he had no recollection of Mr. Meyer scheduling a meeting with the offtakers on Tribal property or if that meeting was canceled by his brother, David Sickey.
The Tribe's amended responses to Meyer & Associates' requests for admissions established that it is governed by a Tribal Council, with the Tribal Council Chairman as the chief executive officer; that a tribal ordinance or resolution can be acted upon by three members of the Tribal Council, but only if the vote occurs at a properly noticed meeting with a quorum present; and that only the Tribal Council has the authority to enter into contracts or spend the Tribe's money. The responses further established that David Sickey canceled the power project meeting scheduled with the offtakers in June of 2005, and that a council member released information pertaining to "Payments to Bracewell & Ieyoub," to non-council members on September 17, 2005. However, the admissions further established that while the Tribe was represented by counsel during the development of the power project, Mr. Meyer admitted to the Tribal Council, after Mr. Sickey's election, that none of the power project agreements were reviewed by counsel for the Tribe prior to their execution.
Mr. Epperson testified in his deposition that Valley Electric was definitely interested in pursuing the power project with the Tribe. However, he stated that by December 20, 2005, Valley Electric was not sure that the Tribe would complete the project based on the new Tribal Council's announcement that it was withdrawing its support for the project and its cancelation of the power project meeting.
Mr. Grand testified that the intent of the power project meeting was to provide face-to-face time between the team members and the people they would ultimately be contracting with. Although he did not recall the reason behind the meeting's cancelation, he stated that this marked the beginning of the project's ending.
In opposition to Meyer & Associates' motion, the Tribe introduced a total of nineteen exhibits, with only the first five complying with the evidentiary requirements of La.Code Civ.P. art. 966(B)(2):
Dr. Tabors' November 12, 2012 affidavit establishes that he is a former member of the research staff and faculty of Massachusetts Institute of Technology (MIT) in Cambridge, Massachusetts; and at the time he submitted his affidavit, he served as the President and a principal owner of Across the Charles, an energy, water, and wastewater consulting group in Cambridge, Massachusetts.
In his affidavit, Dr. Tabors concentrated primarily on the events leading up to the Tribe's passage of the January 2003 Resolution. It was his opinion that Meyer & Associates made numerous misrepresentations to the Tribe during the early discussions concerning the electrical power project, and that these misrepresentations continued through the passage of the Resolution and the negotiation of the Interim Agreement. Specifically, Dr. Tabors concluded that Mr. Meyer misrepresented and overstated the conclusions of the Feasibility Study and the overall feasibility of the power project, and based his recommendations on the perceived advantages the Tribe would receive from the Native American Energy Bill (Energy Bill) under consideration at that time in the United States Congress. According to Dr. Tabors, the Energy Bill had many restrictions and requirements not taken into consideration by Mr. Meyer in presenting the project to the Tribe.
Dr. Tabors further asserted in his affidavit that numerous conclusions found in the Feasibility Study, while basically accurate as far as they went, constituted a suppression of the facts surrounding the complete situation. Dr. Tabors listed the following assertions contained in the Feasibility Study, but with the addition of what he considered the obvious drawbacks not divulged to the Tribe:
(Parentheticals omitted.)
Dr. Tabors stated that had these drawbacks been divulged, anyone with an understanding of the scope of the project who read the Feasibility Study would have questioned the project's feasibility. This would have been especially true of an experienced power development team. Dr. Tabors opined in his affidavit that there were at least three major problems with the power project:
Other instances of fraud and or misrepresentation pointed out by Dr. Tabors in his affidavit included, but were not limited to, the following:
Finally, Dr. Tabors stated that Meyer & Associates' misrepresentations to the Tribe resulted in violations of the following Code of Ethics of Professional Engineering provisions:
The Tribe basically introduced the same excerpts from the depositions of Mr. Epperson and Mr. Grand as did the engineering firm. Mr. Epperson did testify, however, that the causes of the failure of the power project could be traced to both the delays and revisions to the project as well as the changes in the Tribal Council. Mr. Grand added the assertion that, in 2006, when it became apparent that the Tribe no longer supported the power project, Mr. Meyer discussed the possibility of continuing the project.
In his November 16, 2012 affidavit, Dr. Tabors addressed the dispute between the engineering firm and the Tribe over the reimbursement of certain expenses claimed by Meyer & Associates.
Dr. Tabors also concluded in this affidavit that Meyer & Associates failed to invoice the Tribe in a timely manner in that when the contractual relationship dissolved, he billed for reimbursement of these amounts beginning in August of 2003 and extending into June of 2007. Many of these, according to Dr. Tabors were not properly documented. Furthermore, he opined that Meyer & Associates continued to maintain the project long after it was clear it had ceased to be viable.
In its initial written reasons for judgment, the trial court couched the breach of contract issue in the context of the events surrounding the initial negotiations leading up to the passage of the Resolution and the negotiation of the Interim Agreement. The trial court found factually that the initial agreement was an "arms-length transaction" and that "there [was] no genuine issue of material fact that [Meyer & Associates] made misrepresentations or omissions of facts to the CTOL at this stage of the program." The trial court did find in those same written reasons that there did exist "genuine issues of material fact regarding the work authorizations entered into between the CTOL and [Meyer & Associates] subsequent to the interim agreement of January 14, 2003 and whether [Meyer & Associates] breached its fiduciary duty owed to the Tribe, specifically on the issue of [Meyer & Associates'] compensation and the CTOL's exposure under the contract." However, in its written reasons of October 3, 2013, the trial court reversed the second part of its analysis and concluded that there existed no genuine issue of material fact but that the Tribe breached the contracts by halting all Meyer & Associates projects, cancelling the meeting of the offtakers, and removing Mr. Worfel as the Tribe's authorized representative.
We find that the trial court erred in reaching its ultimate conclusions. Dr. Tabors' November 12, 2012 affidavit raises genuine issues of material fact concerning the manner in which the project was presented to the Tribe, and that which occurred thereafter would have given a new administration cause to suspend action on the project and investigate the full nature of the project. This is particularly true given the fact that the evidence presented by Meyer & Associates in support of this motion for summary judgment establishes that the changes in the project accomplished by the adoption of WA#2 and WA#3 benefited only one party, the engineering firm. These changes did not "define the scope of services to be provided and method and amount of compensation and other appropriate terms and conditions consistent with the agreement" as a work authorization is defined in Article 9.1 of the General Agreement. Rather, as suggested by Mr. Meyer in his affidavit, the changes created a situation such that even an interruption of Phase 2 activities would trigger the newly increased and extremely severe penalty provisions in favor of the engineering firm. This fact, coupled with the fact that WA#2 pulled tasks from Phase 3 back into Phase 2, and thereby kept the penalty provisions viable, clearly established genuine issues of material fact concerning the appropriateness of the reaction of the newly-elected Tribal Council to the status of the project.
We find that the trial court erred in granting the engineering firm's motion for summary judgment on the issue of breach of contract.
Having found that the trial court erred in granting Meyer & Associates relief in the three motions for summary judgment addressed herein, we need not consider the assignments of error arising from the trials that followed. In fact, our reversal of the summary judgments herein mandates that we also vacate both judgments on the merits.
Based on the foregoing, we reverse the grant of summary judgment to Meyer & Associates, Inc. on the issue of fraud and misrepresentation, finding that Meyer & Associates, Inc. failed to prove that no genuine issues of material fact remain on these issues; we reverse the grant of summary judgment to Meyer & Associates, Inc. on the issue of breach of fiduciary duties because this issue was not properly before the trial court; and we reverse the grant of summary judgment to Meyer & Associates, Inc. on the issue of breach of contract, finding that genuine issues of material fact still remain on this issue. Based on these reversals, we vacate the March 3, 2014 judgment awarding Meyer & Associates, Inc. $10,603,250.00 in damages and $395,000.00 in reimbursable expenses; and vacate the June 23, 2014 judgment awarding Meyer & Associates, Inc. $5,585,573.00 in attorney fees and $57,662.34 in court costs; and remand the matter to the trial court for further proceedings. Costs of this appeal are assessed to Meyer & Associates, Inc.
