Citations
- 192 F. Supp. 3d 690
Full opinion text
RULING AND ORDER
BRIAN A. JACKSON, CHIEF JUDGE,
UNITED STATES DISTRICT COURT, MIDDLE DISTRICT OF LOUISIANA
Before the Court are cross motions to alter or amend judgment filed by Plaintiff Factor King, LLC (“Factor”) and Defendant Block Builders, LLC (“Builders”). (Docs. 85, 86). The motions are unopposed. Oral argument is not necessary. Jurisdiction is proper under 28 U.S.C. § 1332. For the reasons assigned, the motions are DENIED.
I. BACKGROUND
On February 29, 2016, this Court issued an Order and Ruling (Doc.- 82) granting in part and denying in part Factor’s and Builders’ cross motions for summary judgment. Relevant for the purposes of the subject motions are the Court’s findings that: (1) third party subcontractor, BMP Construction, LLC (“BMP”), validly assigned its accounts receivable to Factor subject to a provision in the subcontract that required progress payments to be made to third party suppliers before BMP; and (2) Builders failed to produce any evidence of the damages sustained as a result of BMP’s impartial performance on the work reflected on Invoice # 17.
Factor and Builders timely filed the subject motions pursuant to Federal Rule of Civil Procedure (“Rule”) 59(e), seeking the reconsideration and reversal of portions of the Order and Ruling. Specifically, Factor moves the Court to find that the Invoice Letter was an enforceable contract that permitted it to receive $215,077.82 from Invoice #7, independent of the terms in the subcontract. (Doc. 85). Builders moves the Court to find that it was not required to prove damages for BMP’s impartial performance because the subcontract entitled it to unilaterally reduce Invoice # 7. (Doc. 86).
II. LEGAL STANDARD
“A Rule 59(e) motion ‘calls into question the correctness of a judgment.’ ” Templet v. HydroChem Inc., 367 F.3d 473, 478 (5th Cir. 2004) (quoting In re Transtexas Gas Corp., 303 F.3d 571, 581 (5th Cir. 2002)). “A Rule 59(e) motion ‘must clearly establish either a manifest error of law or fact or must present newly discovered evidence’” and cannot be used to “raise issues that ‘could, and should, have been made before the judgment issued.’ ” Advocare Int'l LP v. Horizon Labs., Inc., 524 F.3d 679, 691 (5th Cir. 2008) (quoting Rosenzweig v. Azurix Corp., 332 F.3d 854, 863 (5th Cir. 2003)). “Relief under Rule 59(e) is also appropriate when there has been an intervening change in the controlling law.” Schiller v. Physicians Res. Grp., Inc., 342 F.3d 563, 567 (5th Cir. 2003).
A “ ‘manifest error’ is not shown by the ‘disappointment of the losing party,’ ” rather it is the “wholesale disregard, misapplication, or failure to recognize controlling precedent.” Shaw v. Broadcast.com, Inc., No. 98-cv-2017-P, 2005 U.S. Dist. LEXIS 34553, at *5 (N.D. Tex.Dec. 20, 2005) (quoting Oto v. Metro. Life Ins. Co., 224 F.3d 601, 606 (7th Cir.2000)); see also Guy v. Crown Equip. Corp., 394 F.3d 320, 325 (5th Cir. 2004) (defining “manifest error” in the appellate review context as “one that is plain and indisputable, and that amounts to a complete disregard of the controlling law” (citation and internal quotation marks omitted)). Courts have significant discretion in deciding whether to grant a motion to reconsider under Rule 59(e). Templet, 367 F.3d at 479. Nevertheless, granting a motion for reconsideration is “an extraordinary remedy that should be used sparingly.” Id. Thus, in determining whether to grant a motion to reconsider, courts must balance “the need to bring litigation to an end” and “the need to render just decisions on the basis of all the facts.” Id.
III. DISCUSSION
A. FACTOR’S RULE 59(e) MOTION
Factor seeks to alter the judgment on the grounds that the Court failed to find that the Invoice Letter was an independent, enforceable agreement. (Doc. 85-1 at p. 2): Factor further contends that it is not bound by the Joint Payment Agreements between Builders, BMP, and the third party suppliers, and that the parties’ conduct did not establish a course of dealing. (Id. at pp. 5-7): The Court shall clarify its ruling on the enforceability of the Invoice Letter and the binding effect of Joint Payment Agreements. The Court shall not, however, address Factor’s course of dealing argument because Factor has not presented new evidence or directed the Court to a manifest error of law, and clarification is not needed.
i. Invoice Letter
Factor argues that the Invoice Letter was a contractually binding agreement between Factor and Builders. (Doc. 85-1 at p. 4). Factor contends that the Court overlooked language in Louisiana Revised Statute § 10:9-404 (“§ 10:9-404”) that states “[u]nless an ' account debtor has made an enforceable agreement not to assert defenses or claims,” the rights of an assignee are subject to all terms of the agreement between the account debtor and assignor. (Id. at p. 2); La. R.S. § 10:9-404(a). The Court, however, did not overlook this portion of the statute as Factor suggests. Rather, the Court read § 10:9-404 in light of Comment 2, which states “[o]f course an account debtor may waive its right to assert defenses or claims against an assignee under Section 9-403 or other applicable law.” La. R.S. § 10:9-404 cmt 2. And under Louisiana Revised Statute § 10:9-403, only agreements between an account debtor and an assignor are contemplated, not an agreement between an account debtor and an assignee, , ,
Nevertheless, the enforceability of the Invoice Letter was subject to the terms of the subcontract and was limited to BMP’s accounts receivable. Articles 12.1 and 12.2 of the subcontract required that all assignments be subject to the provisions therein. (Doc. 58-3 at p. 11). Furthermore, according to the Notices of Assignment and the Invoice Letter, BMP only assigned its accounts receivable. (Doc. 58-3 at pp. 37-42). An account receivable is “[a]n account reflecting a balance owed by a debtor; a debt owed by a customer to an enterprise for goods or services.” Account Receivable, Black’s Law Dictionary (10th ed. 2014). BMP’s accounts receivable were limited to the debt it was owed, exclusive of the debt owed to the suppliers. Although BMP submitted Invoice # 7 in globo, its account receivable on the invoice was the net of the sum due to the suppliers.
. Lastly, Factor’s reliance on Commercial Capital Holding Corp. v. Team Ace Joint Venture, No. CIV. A. 99-3040, 2000 WL 726880 (E.D. La. June 2, 2000), .does not account for a crucial factual distinction. Unlike here, Commercial Capital did not involve third party suppliers who were provided a right to precursory payments under the underlying subcontract. If the Court followed Commercial Capital, as Factor urges the Court to do, the Court would be required to ignore the rights of the suppliers, as bargained for, and award Factor a sum in excess of BMP’s account receivable.
ii. Joint Payment Agreements
Factor asserts that, under Louisiana Revised Statute § 10:9-405 (“§ 10:9-405”), it is not bound by the Joint Payment Agreements between BMP, the suppliers and Builders. (Doc. 85-1 at p. 6). Section 10:9-405 provides in pertinent part:
(a) Effect of modification on assignee. A modification of or substitution for an assigned contract is effective against an assignee if. made in good faith. The assignee acquires corresponding rights under the modified or substituted contract ....
(b) Applicability of Subsection (a). Subsection (a) applies to the. extent that:
(1) the right to payment or a part thereof under an assigned contract has not been fully earned by performance; or
(2) the right to payment or a