Opinion
CIVIL ACTION NO. 03-1214 SECTION: E/3
December 1, 2003
REASONS FOR JUDGMENT
Oral argument was heard on November 26, 2003, on the following motions: (1) defendant BFI's 12(b)(6) motion to dismiss for failure to state a claim based on the Louisiana Unfair Trade Practices Act, LSA-R.S. 51-1401 et seq. (R.d. #31), which was not opposed and was GRANTED; (2) plaintiff Horizon's motion to appeal the magistrate judge's ruling denying plaintiff's motion to compel discovery of defendant's insurance policies (R.d. #45) which was DENIED; and (3) BEI's motion for summary judgment on Horizon's breach of contract claim (R.d. #32). The motion for summary judgment was GRANTED in PART AND DENIED in PART for the reasons that follow.
Facts and Procedural Background
This case began as a contract dispute in 24th JDC of Jefferson Parish. Horizon claims that in 1993 it entered into a contract with BFI for certain waste disposal services. The contract provided for periodic increases in the price of BFI's services under certain conditions and with certain notifications to Horizon. Horizon alleged that during the last nine years the price charged by BF1 for its services has increased from $106.53 per month to over $300.00 per month, in violation of the contract provisions and without proper explanation to Horizon for the price increases.
After service of the complaint on BFI, Horizon received a letter from BFI notifying it of yet another "unjustified" increase in its monthly charges. Horizon responded by amending its complaint to include a request for class action; BFI withdrew its notice of increase in its monthly charges, and subsequently removed the case to the district court.
ANALYSIS
A motion for summary judgment is properly granted only if there is no genuine issue as to any material fact. An issue is material if its resolution could affect the outcome of the action. In deciding whether a fact issue has been created, we must view the facts and the inferences to be drawn therefrom in the light most favorable to the nonmoving party.4
Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L. Ed.3d 265 (1986).
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
The contract language at issue (Article VI — Rate Adjustments) is as follows:
Because disposal and fuel costs constitute a significant portion of the cost of BFI's services provided hereunder, Customer agrees that BFI may increase the rates hereunder proportionately to adjust for any increase in such costs or any increases in transportation costs due to changes in location of the disposal facility. Customer agrees that BFI may also increase the rates from time to time to adjust for increases in the Consumer Price Index, and Customer agrees that BFI may also proportionally pass through to Customer increases in the average weight per container yard of Customer's Waste Materials, increases in BFI's costs due to changes in local, state or federal rules, ordinances or regulations applicable to BFI's operations or the services provided hereunder, and increases in taxes, fees or other governmental charges assessed against or passed through to BFI (other than income or real property taxes). BFI may only increase rates for reasons other than those set forth above with the consent of the Customer. Such consent may be evidenced verbally, in writing or by the actions and practices of the parties.
BFI argues that while the reasons for the various price increases are clearly a matter of dispute between the parties, the dispositive and undisputed fact is that Horizon paid the invoices with the periodic price increases for services every month without complaint or protest until June 2.8, 2002, when it sent a letter of complaint to BFI. This "action or practice" of Horizon, according to BFI's argument, is a clear manifestation of Horizon's consent to the periodic price increases under the contract language and under Louisiana's Civil Code and jurisprudence.
Horizon argues that there is a factual dispute as to whether it actually consented to the price increases when those increases were really "overcharges" and were not for the reasons expressly enumerated contract, as Horizon believed at the time. Whether or not the price increases were really overcharges is not material to the issue of consent as that term is contemplated in the contract and Louisiana law.
A contract is formed by the consent of the parties established through offer and acceptance.
Unless the law prescribes a certain formality for the intended contract, offer and acceptance may be made orally, in writing, or by action or inaction that under the circumstances is clearly indicative of consent.
Unless otherwise specified in the offer, there need not be conformity between the manner in which the offer is made and the manner in which the acceptance is made.
Under the clear and unambiguous language of the contract, BFI can increase its rates for any reason with the consent of the customer, which under both the terms of the contract and Louisiana law, can be evidenced verbally, in writing, or by the actions and practices of the parties. See La. Civ. Code arts. 2045, 2046 and 2047. There is no language in the contract that requires BFI to explain or justify each price increase absent a request by the customer. Horizon consented to the price increases when it continued to pay the periodically increasing invoices without question or complaint for nine years. See, e.g., McDonald Sales Corp. v. D.H. Holmes Co. Ltd., 665 So.2d 1, 3, 94-0981 (La.App. 4 Cir. 1995) (supplier who unilaterally notified buyer of change in the terms of payment, but continued to accept payment under the prior agreement for several years without protest, consented to a continuation of payment under the prior agreement); Ceco Corporation v. Mid-Gulf Construction. Inc., 396 So.2d 474, 478 (La.App. 4 Cir. 1981) (construction company's acceptance of deliveries of steel materials and its payment of invoices reflecting escalating charges without protest constituted acquiescence of the escalation of the price); Stupp Corp, v. Con-Plex, Division of U.S. industries, 344 So.2d 394, 396 (La.App. 4 Cir. 1971) (where defendant accepted and used seventeen shipments of supplies from plaintiff and paid for the first fifteen at the increased invoice price, it consented to that price and was obligated to pay the same price for the last two shipments).
Accordingly, BFI's motion for summary judgment was GRANTED as to the invoices submitted by BFI to Horizon and paid by Horizon prior to June 28, 2002, and DENIED as to BFI's invoices to Horizon subsequent to June 28, 2002.
New Orleans, Louisiana,