Expert Riser Solutions, LLC v. Techcrane Int'l, LLC
Docket: 2018 CA 0612
Court: Louisiana Court of Appeal; December 27, 2018; Louisiana; State Appellate Court
The plaintiff, ExPert Riser Solutions, LLC, appeals a trial court judgment that upheld the defendant Techcrane International, LLC's exception of prescription regarding ExPert’s redhibition claim, dismissed the remaining claims with prejudice, and did not rule on Techcrane's exception of no cause of action. The appellate court affirms the dismissal based on prescription but reverses the dismissal of the petition and remands for further proceedings.
ExPert entered a contract with Weatherford in December 2012 to provide dockside services, agreeing to have a dedicated crane that met specific load requirements. Unable to meet these requirements, ExPert solicited bids and accepted Techcrane’s proposal in March 2012 for a specialized crane priced at $1,699,000. The crane was intended to lift 100 tons but was later found incapable of such due to design flaws, including an undersized boom tip that prevented the installation of an eight-part line. Following installation in April 2013, ExPert experienced various mechanical issues, including unusual noises and overheating, which Techcrane initially downplayed. An inspection by Southern Crane and Hydraulics in October 2013 revealed significant defects and improper installations, leading ExPert to realize it had not received what was promised by Techcrane.
Problems with the crane led to significant downtime and maintenance costs for ExPert over two years. In October 2016, ExPert hired Oil States Skagit Smatco, LLC to inspect the crane, which determined it was improperly constructed and unfit for service, identifying the roller bearing as the source of rotation issues and noting defective welds with structural cracks. After repairs, the crane was downgraded to light duty, and Oil States advised that the rotating bearing needed repair, which ExPert chose to replace the crane instead of fixing for $1 million. ExPert filed suit against Techcrane on March 20, 2017, alleging eight causes of action, including breach of contract, redhibition, and fraud. Techcrane responded with exceptions of no cause of action and prescription, arguing that ExPert's claims were barred by the Louisiana Products Liability Act (LPLA) and that the claims were prescribed due to ExPert's prior knowledge of defects. ExPert contended that the LPLA did not apply as their claims were not solely based on Techcrane's products and argued they were unaware of the defects until receiving the Oil States report in April 2016. A hearing on the exceptions occurred on October 26, 2017, resulting in the trial court granting the exception of prescription, dismissing ExPert's suit with prejudice. ExPert filed a motion for a new trial for clarification on the exception of no cause of action, asserting that other claims remained viable. The court denied this motion. ExPert subsequently filed for a devolutive appeal, arguing the District Court erred in granting the Exception of Prescription, as evidence showed they were unaware of the crane's unfitness until the April 2016 report.
The District Court incorrectly dismissed Expert's Petition for Damages with Prejudice, neglecting to address Techcrane's Exception of No Cause of Action. The Exception of Prescription did not impact the other timely claims, including breach of contract, negligence, and violations of the Louisiana Unfair Trade Practices Act, which remain viable. The burden of proof for the Exception of Prescription typically lies with the party asserting it, but if claims appear prescribed on the petition's face, the plaintiff must then demonstrate that the prescriptive period has not expired. Expert claimed unawareness of the crane's defect until April 2016, indicating that the redhibition claim was not time-barred. Techcrane, as the manufacturer, is presumed to know of any redhibitory defects, which are defined as defects that render a product useless or significantly diminish its value. The prescriptive period for such claims is one year from the discovery of the defect. The commencement of this period is based on either actual or constructive knowledge of the defect, with constructive knowledge defined as any notice that would prompt inquiry from the injured party.
The prescriptive period for legal claims begins when a party has enough information to reasonably inquire about a claim, rather than when the facts are fully revealed. Constructive knowledge is assessed based on the reasonableness of the party's actions in context. Techcrane presented a report from Southern Crane dated October 31, 2013, which detailed numerous issues with a crane inspected by ExPert, including improper installation of components, leaks, and the need for further investigation into unusual noises. Southern Crane emphasized the urgency of addressing these concerns before further crane use. ExPert acknowledged the need for investigation into a significant noise issue, which ultimately led to the crane's decommissioning in October 2016 after being advised by Oil States that a bearing replacement was necessary. The high repair cost prompted ExPert to opt for a crane replacement to avoid operational shutdowns. Techcrane's evidence indicated that ExPert had constructive notice of a defect after receiving the report. ExPert claimed ignorance of the defect's cause before Oil States' involvement, but this argument was not convincing.
ExPert failed to investigate Southern Crane's advice, resulting in its inability to claim ignorance regarding the crane's defects. The trial court determined that ExPert had constructive knowledge of a redhibitory defect after discovering the crane could not meet a 100-ton lifting capacity shortly after installation in 2013. ExPert acknowledged awareness of this issue after a failed attempt to enhance the crane's capacity, admitting to actual knowledge more than a year prior to filing suit against Techcrane. Consequently, the judgment affirming this finding is upheld.
The exception of no cause of action evaluates whether legal remedies apply to the factual allegations in the petition. It holds that all facts in the petition and any attached documents must be accepted as true. The exception should only be granted if it is clear that no facts could support a claim for relief. The petition is interpreted in favor of sufficiency, allowing the plaintiff to present evidence at trial. Techcrane contended that ExPert's claims fell solely under the Louisiana Products Liability Act (LPLA) and redhibition, rendering other claims—such as breach of contract and fraudulent inducement—invalid. ExPert countered that the LPLA did not govern its claims, seeking to maintain alternative recovery theories. The trial court did not rule on the exception, and the appellate court also refrained from addressing it.
The trial court erred by dismissing ExPert's petition with prejudice without addressing the merits of the no cause of action exception. Consequently, any claims not dismissed by Techcrane's prescription exception remain pending. The appellate court affirmed the portion of the November 10, 2017 judgment that upheld Techcrane's prescription exception and dismissed the claim in redhibition, but reversed the dismissal of ExPert's petition and remanded for further proceedings. Techcrane claimed that ExPert's exclusive remedies were redhibition and the Louisiana Products Liability Act (LPLA), yet ExPert's petition did not specifically invoke the LPLA, and there was a dispute over its applicability. The trial court's ruling on the exception of prescription lacked a determination on whether ExPert's claims fell under the LPLA. It was noted that multiple minor defects could collectively support a redhibitory action, as established in Young v. Ford Motor Co. Inc. Additionally, ExPert asserted the crane was defective enough to require replacement and identified specific defects in its design. The trial court did not provide reasoning for granting Techcrane's exception of prescription, and although Techcrane contested ExPert's claim regarding the crane's lifting capacity, this was deemed immaterial since ExPert acknowledged awareness of the issue from April 2013. Appellate review of the no cause of action exception is conducted de novo, as it presents a legal question.
