{"id":893343,"date":"2017-12-13T15:13:20","date_gmt":"2017-12-13T22:13:20","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=893343"},"modified":"2017-12-13T15:13:20","modified_gmt":"2017-12-13T22:13:20","slug":"federal-court-holds-louisiana-law-contractor-need-not-show-total-work-stoppage-recover-extended-home-office-overhead-eichleay","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/federal-court-holds-louisiana-law-contractor-need-not-show-total-work-stoppage-recover-extended-home-office-overhead-eichleay\/","title":{"rendered":"Federal Court Holds That, Under Louisiana Law, a Contractor Need Not Show a Total Work Stoppage to Recover Extended Home Office Overhead Under Eichleay"},"content":{"rendered":"<p>Jane Fox Lehman | <a href=\"https:\/\/www.lexology.com\/library\/detail.aspx?g=c2e8ce2e-88b3-440a-9da2-d1154ba3d462&amp;utm_source=Lexology+Daily+Newsfeed&amp;utm_medium=HTML+email+-+Body+-+General+section&amp;utm_campaign=Lexology+subscriber+daily+feed&amp;utm_content=Lexology+Daily+Newsfeed+2017-12-11&amp;utm_term=\" target=\"_blank\">Pepper Hamilton LLP<\/a> | December 7, 2017<\/p>\n<p><em>Team Contrs., L.L.C. v. Waypoint NOLA, L.L.C.<\/em>, No. 16-1131, 2017 U.S. Dist. LEXIS 162172 (E.D. La. Oct. 2, 2017).<\/p>\n<p>Waypoint NOLA (\u201cWaypoint\u201d) was the owner of a hotel construction project in New Orleans (the \u201cProject\u201d). Waypoint contracted with Team Contractors (\u201cTeam\u201d) to serve as the Project general contractor and HC Architecture (\u201cHCA\u201d) to serve as the Project architect. HCA, in turn, subcontracted with KLG to prepare the mechanical, electrical, and plumbing (\u201cMEP\u201d) plans.<\/p>\n<p>HCA delivered a complete set of specifications, including KLG\u2019s MEP plans, to Team, and Team began work. It was later discovered that the MEP plans did not comply with code requirements. Team was forced to remove and reconstruct the MEP work before proceeding with its work as scheduled.<\/p>\n<p>Team filed suit for breach of contract against Waypoint and for negligence against Waypoint, HCA, and KLG. Team alleged it experienced delay and incurred damages when it was forced to remove and reconstruct the MEP work. Its damages included extended home office overhead related to the delay. Team\u2019s expert used the\u00a0<em>Eichleay<\/em>\u00a0formula to calculate these damages.<\/p>\n<p>In Louisiana, courts apply a three-prong test to determine if a claimant is entitled to recover damages under\u00a0<em>Eichleay<\/em>: First, the contractor must demonstrate that there was an unexcused delay. Second, the contractor must show that it incurred additional overhead expenses. Third, the contractor must establish that it was required to remain \u201con standby\u201d during the delay. To show that it was \u201con standby,\u201d a contractor must show (1) the delay was of an indefinite duration, (2) the contractor was required to return to work at full speed and immediately during the delay, and (3) most, if not all, of the contract work was suspended.<\/p>\n<p>The Defendants filed a motion for summary judgment, arguing that Team could not recover damages under\u00a0<em>Eichleay<\/em>, because there was no suspension or stoppage of the work. In response, Team presented evidence that there was, at minimum, a \u201cfunctional\u201d stoppage of \u201call or most of the work performed\u201d pursuant to the contract.<\/p>\n<p>The District Court determined that Louisiana court decisions had not decided whether a \u201cfunctional\u201d work stoppage would satisfy\u00a0<em>Eichleay<\/em>, and if so, what degree of work stoppage would be sufficient. As such, the District Court was required to predict how the Louisiana Supreme Court would resolve the issue. The District Court noted that the Louisiana courts which had decided the application of\u00a0<em>Eichleay<\/em>had adopted the doctrine from the federal courts without alteration, and accordingly, federal analyses of this issue should weigh heavily in a prediction of what the Supreme Court of Louisiana would hold.<\/p>\n<p>Because the federal courts applying\u00a0<em>Eichleay<\/em>\u00a0had held that a claimant need not show a total stoppage of work to recover extended overhead damages, the District Court held that it is sufficient, for purposes of establishing standby, if a contractor can demonstrate that work has stopped or significantly slowed. Because Team had presented evidence of such a functional stoppage, the District Court denied the Defendants\u2019 motion for summary judgment.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Jane Fox Lehman | Pepper Hamilton LLP | December 7, 2017 Team Contrs., L.L.C. v. Waypoint NOLA, L.L.C., No. 16-1131, 2017 U.S. Dist. LEXIS 162172 (E.D. La. Oct. 2, 2017). Waypoint NOLA (\u201cWaypoint\u201d) was the owner of a hotel construction project in New Orleans (the \u201cProject\u201d). Waypoint contracted with Team Contractors (\u201cTeam\u201d) to serve as&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/federal-court-holds-louisiana-law-contractor-need-not-show-total-work-stoppage-recover-extended-home-office-overhead-eichleay\/\">Continue reading <span class=\"screen-reader-text\">Federal Court Holds That, Under Louisiana Law, a Contractor Need Not Show a Total Work Stoppage to Recover Extended Home Office Overhead Under Eichleay<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14],"tags":[9895,18,6602,10319],"class_list":["post-893343","post","type-post","status-publish","format-standard","hentry","category-construction-2","tag-advise-consult","tag-contractor","tag-louisiana","tag-work-stoppage","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Federal Court Holds That, Under Louisiana Law, a Contractor Need Not Show a Total Work Stoppage to Recover Extended Home Office Overhead Under Eichleay - Advise &amp; 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