Opinion
Civil Action No. 03-2570, Section "K"(2).
June 9, 2004
Before the Court is a Motion for Rule 59 New Trial and Rule 60 Relief from Judgment (Rec. Doc. 8) filed by plaintiff Gottfried Corporation. Having reviewed the pleadings, memoranda, and relevant law, the Court DENIES defendant's motion.
I. BACKGROUND
The instant dispute arises out of a subcontract entered into between Gottfried Corporation ("Gottfried") and Mansfield Industrial Coatings, Inc. ("Mansfield") on July 25, 2002, for the surface preparation and painting of petroleum fuel tanks at the Barksdale Air Force Base. The facts relevant to that contract and this motion have been addressed previously by the Court. See Rec. Doc. 7.
Plaintiff Gottfried moved for Summary Judgment as to the issuance of an enforceable performance bond on December 4, 2003, and the Court took this motion under submission on December 24, 2003. Having reviewed the motion, memoranda and applicable legal standards, the Court denied plaintiff's motion by Minute Entry dated March 15, 2004 (Rec. Doc. 7). On March 29, 2004, plaintiff filed the instant motion pursuant to Federal Rules of Civil Procedure 59 and 60 (Rec. Doc. 8). This motion was set for hearing April 14, 2004 on the briefs.
II. LEGAL STANDARD AND ANALYSIS
Although plaintiff's motion is denominated as a "Motion for FRCP 59 New Trial and FRCP 60 Relief from Judgment," the court must clarify which subsection of these rules control. Here, plaintiff requests that the Court reverse its ruling denying a motion for summary judgment. Rule 59 provides for the granting of a new trial or amendment of judgment. Since this Court has neither tried nor entered judgment on the issue of whether defendant Travelers issued a performance and payment bond that is both valid and enforceable to the benefit of Gottfried as obligee, Rule 59 is inapplicable. Rule 60, however, provides for relief from a court order such as the one at issue denying summary judgment.
Under Rule 60(b), a court will grant relief from an order only upon a showing of one of the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment.
Fed.R.Civ.P. 60(b). The burden of establishing at least one of these reasons is on the moving party, and the determination of whether that burden has been met rests within the discretion of the court. See Lavespere v. Niagara Mach. Tool Works, Inc., 910 F.2d 167, 173-74 (5th Cir. 1990), abrogated on other grounds by Little v. Liquid Air Corp., 37 F.3d 1069, 1075 n. 14 (5th Cir. 1994) (en banc); NORCOM, Inc v. CRG International, Inc., 2003 WL 21241795, *2 (E.D.La. 2003).
Because this is a motion to alter or amend a summary judgment denial, the Rule 56 standard bears consideration. Summary judgment should be granted "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 any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Substantive law determines the materiality of facts, and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
When deciding a motion for summary judgment, the Court must avoid a "trial on affidavits. Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts" are tasks for the trier-of-fact. Anderson, 477 U.S. at 255. To that end, the Court must resolve disputes over material facts in the non-movant's favor. "The party opposing a motion for summary judgment, with evidence competent under Rule 56, is to be believed." Leonard v. Dixie Well Service Supply, Inc., 828 F.2d 291, 294 (5th Cir. 1987).
In the case at bar, plaintiff Gottfried moved for judgment as a matter of law that defendant Travelers issued a performance and payment bond that is both valid and enforceable to the benefit of Gottfried as obligee. In a Minute Entry dated Mach 15, 2004 the Court denied plaintiff's Motion for Summary Judgment on the grounds that genuine issues of material fact exist as to whether the parties entered into a suretyship agreement under Louisiana Civil Code article 3039. See Rec. Doc. 7. Specifically, the Court held that suretyship cannot be established by inference and that a question of fact exists as to whether the purported insured, Mansfield, accepted the surety bond at issue.
On March 29, 2004, plaintiff Gottfried filed the instant motion challenging the Court's summary judgment ruling. The gravamen of plaintiff's motion to alter or amend judgment is the allegation that the Court committed "simple, but critical, errors of law." Gottfried's Memorandum in support essentially reiterates plaintiff's original arguments in favor of summary judgment and contends that the issues of fact found by the Court are not material. The Court disagrees and upholds its earlier ruling.
This Court denied plaintiff's Motion for Summary Judgment based on the existence of a question of fact as to whether Mansfield intended to accept the surety bond sent by Travelers. The evidence presented regarding Mansfield's acceptance is insufficient to meet the standard for summary judgment. There is no absolute expression of an intent to be bound by Mansfield. Consequently, a genuine issue of material fact exists regarding whether the document entitled "Copy of Mansfield Contract Bond" received by Gottfried on February 11, 2003, qualifies as a "writing evidencing the surety's obligation" under La. Civ. Code art 3039. Because the evidence presented is unclear as to whether Travelers and Mansfield actually entered into a suretyship agreement, summary judgment is inappropriate here.
The crux of plaintiff's argument for summary judgment is the principle that, under Louisiana Civil Code article 3039, the creditor's acceptance is presumed and no notice of acceptance is required. However, plaintiff fails to recognize that suretyship's presumption of acceptance is rebuttable. Here, a genuine issue of material fact exists as to whether the presumed acceptance occurred in fact. As the Court noted previously, a surety's contract "must contain an absolute expression of intent to be bound." Custom-Bilt Cabinet Supply, Inc. v. Quality Built Cabinets, Inc., 748 So.2d 594, 599 (La.App. 2nd Cir. 1999) (citing Ball Marketing Enterprise v. Rainbow Tomato Co., 340 So.2d 700 (La.App. 3d Cir. 1976)). Suretyship cannot be established by inference. Jimco, Inc. v. Gentilly Terrace Apartments, Inc., 230 So.2d 281 (La.App. 4th Cir. 1970).
Gottfried also challenges the Court's reliance on Way v. Reliance Insurance Company, 884 F.2d 866 (5th Cir. 1989), by questioning that decision's applicability here. Again, the Court disagrees with plaintiff's reasoning. This court cited Way for the proposition that "the United States Fifth Circuit has proven reluctant to find that partially executed surety bonds bind surety companies." See Rec. Doc. 7 at 6. In Way, the Fifth Circuit held that "implied acceptance does not result from circumstances unknown to the offeror." Way, 884 F.2d at 868. In denying summary judgment, this Court held that "[n]othing in the record here indicates that Mansfield accepted Travelers offer to issue a surety bond, if such an offer even existed, or that Mansfield's actions as offeree were known to Travelers as offeror." Clearly, Way is instructive. Accordingly, the Court reiterates its reliance on Way and upholds its previous ruling.
In conclusion, the Court notes that a genuine issue of material fact exists as to whether the parties entered into a suretyship agreement. Nothing in the record here indicates that Mansfield accepted Travelers offer to issue a surety bond or that Mansfield's actions as offeree were known to Travelers as offeror. Thus, given the Fifth Circuit's strict standard for Rule 56 summary judgment and Rule 60 relief from an order,
IT IS ORDERED that plaintiff's Motion for Rule 59 New Trial and Rule 60 Relief from Judgment (Rec. Doc. 8) is hereby DENIED.