Background
The City of New Orleans awarded Durr Heavy Construction, LLC a contract for four categories of residential demolition services after rejecting Hamp’s Construction, L.L.C.’s bid as nonresponsive. Hamp’s challenged the award, but settled with Durr in 2008 in exchange for a subcontract covering demolition services performed under the City’s bid proposal.
Hamp’s later alleged that the subcontract entitled it exclusively to all nonemergency demolition work excluding asbestos. Following a one-day bench trial, the district court found that Durr breached the subcontract by failing to send Hamp’s all work orders in that category and acted in bad faith. Durr appealed the May 1, 2025 judgment.
The Court’s Holding
The Fourth Circuit reversed. Reviewing the subcontract de novo, the court held that its language was clear and unambiguous and contained no provision granting Hamp’s exclusive rights to Category 1 work. The agreement instead provided that work would be performed at Durr’s direction and that the quantities assigned to Hamp’s depended on City work orders.
The court concluded that the district court erred by relying on testimony about pre-contract settlement discussions to create an exclusivity term absent from the written agreement. The subcontract’s merger clause superseded prior proposals, negotiations, and representations. Because Durr did not breach the subcontract, it could not have acted in bad faith. The court dismissed Hamp’s breach-of-contract claim with prejudice.
The court declined to consider Durr’s prescription argument because Durr never filed a formal exception of prescription in either the district court or the appellate court; merely raising prescription in a pretrial outline and appellate brief was insufficient.
Key Takeaways
- A court may not use extrinsic evidence to add an exclusivity obligation to a clear and unambiguous subcontract.
- A merger clause supersedes prior oral and written negotiations, making unincorporated settlement discussions insufficient to alter the executed agreement.
- Prescription raised only in briefing or argument, without a formally filed exception, is not properly before a Louisiana appellate court.
Why It Matters
The decision reinforces that Louisiana courts must enforce an unambiguous construction subcontract according to its written terms. A subcontractor claiming exclusive rights to a category of work should ensure that the agreement expressly states that exclusivity rather than relying on preliminary negotiations or an alleged oral understanding.
It also underscores a procedural requirement for litigants asserting prescription: the issue must be presented through a formal exception, even when the supporting evidence appears in the record.