Alfred Conhagen's lawsuit over cost overrun on NASA project returning to New Orleans court

By Karen Kidd | Jan 10, 2019

NEW ORLEANS – A lawsuit filed by Jefferson Parish turbine equipment and parts distributor Alfred Conhagen Inc. of Louisiana against two out-of-state companies is on its way back to a New Orleans court after a state appeals court recently reversed a number of motions in the case.

The Orleans Parish Civil District Court previously dismissed all negligence claims against one of the companies, Waldemar S. Nelson and Company Inc., a design and project management consulting firm based in Houston.

"We recognize that reversing an improperly granted motion for summary judgment after a full trial on the merits places a potential imposition on the resources of the courts and litigants," the Louisiana Fourth Circuit Court of Appeal said in its 10-page opinion issued Dec. 19. "However, the partial granting of Nelson's motion for summary judgment deprived this court of an adequate record upon which we could render a judgment on the merits."

A full trial on all the issues arising in the appeals court's opinion will be required to allow parties in the case "ample opportunity to present evidence" about Nelson's alleged negligence, the opinion said.

"We have no recourse but to remand this matter for further proceedings consistent with this opinion," the opinion said

Appeals court Judge Terri F. Love wrote the opinion in which Judges Joy Cossich Lobrano and Dale N. Atkins concurred.

The appeals court handed down its opinion in two consolidated lawsuits filed by Alfred Conhagen Inc. against Nelson and  Ruhrpumpen Inc., a pump manufacturer based in Tulsa, Oklahoma. The litigation stems from a contract to build a high pressure industrial pump for NASA in which Conhagen was forced to spend more money to complete the project after the final quote came in more than a $1 million over the initial quote, according to the background portion of the appeals court's ruling.

"As a result of the increase of over a million dollars, Conhagen contends that it had to seek other materials at the last minute, which cost a substantial amount of money," the appeals court's ruling said. "Thus, Conhagen filed a petition for damages against Ruhrpumpen and Nelson contending that they were negligent and caused Conhagen to rely to its detriment on the initial quote."

Nelson moved for summary judgment, claiming it had not been negligent. Orleans Parish Civil District Court Judge Piper D. Griffin denied all summary judgment motions except for Nelson's negligence motion and dismissed all of Conhagen's negligence claims against Nelson with prejudice.

After the three-day bench trial, the civil district court found Ruhrpumpen 100 percent liable to Conhagen based on negligence and detrimental reliance and awarded Conhagen approximately $930,000 plus interest and court costs from Ruhrpumpen.

Ruhrpumpen then filed a suspensive appeal, arguing the civil district court was wrong to deny the company's motion for involuntary dismissal, holding it liable and not assigning fault to Conhagen and Nelson for their negligence. Ruhrpumpen also claimed the lower court was wrong in its earlier denials for summary judgment and abused its discretion when it admitted evidence about how Conhagen used the initial quote.

Conhagen also filed a devolutive appeal, seeking to protect its right to receive funds from Nelson should the appeals court find Nelson at fault.

In reference to the earlier grant of summary judgment that relieved Nelson of negligence claims, Nelson argued that dismissal should stand because Conhagen did not provide any evidence of the standard of care that Nelson allegedly breached.

"Nelson maintains that the duty element must be supported by expert testimony," the appeals court's opinion said. "We disagree."

Reversing that grant of summary judgment will raise issues the lower court never got to consider, according to the opinion.

"Conhagen and Ruhrpumpen were then prevented from presenting evidence of Nelson's negligence at the trial on the merits," the opinion said. "A new trial on the issues will allow the admittance of such evidence."

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