Justia Construction Law Opinion SummariesArticles Posted in Louisiana Supreme Court
Lamar Contractors, Inc. v. Kacco, Inc.
Lamar Contractors, Inc. was general contractor on a construction project, and entered into a subcontract with Kacco, Inc. to provide metal framing and drywall work on the project. The subcontract included a “pay-if-paid” payment provision, which afforded Lamar ten days to remit payment to its subcontractors after receipt of payment from the owner. Kacco began work on the project but experienced recurring problems with providing manpower and paying for supplies. Kacco submitted an invoice for work that reflected that forty-five percent of the work had been performed. Lamar paid the invoice prior to receiving payment from the owner. Lamar sent Kacco an email noting its concerns with whether Kacco would be able to perform under the subcontract. Kacco notified Lamar that Kacco was waiting on another payment so that it could order and pay for supplies to finish the project. Lamar had received payment from the owner on January 26; however, pursuant to the subcontract, Lamar was not required to make payment to Kacco until February 9, ten business days later. Lamar officially terminated Kacco’s subcontract in a letter dated February 5. After termination of the subcontract with Kacco, Lamar hired another contractor to complete the work. Lamar then sued Kacco for breach of the subcontract. Kacco countersued Lamar for allegedly failing to pay for work performed under the contract, and that failure to pay caused it to breach. After a bench trial, the district court entered judgment on the main demand for Lamar for $24,116.67 with interest, $7,681.75 for attorney’s fees, and $3,105.81 in costs. Additionally, the district court entered a judgment in the amount of $60,020.00 plus interest in favor of Kacco on its countersuit. Lamar appealed but the court of appeal affirmed. Under the circumstances of this case, it was clear to the Supreme Court that Lamar did not violate any obligation owed under the contract to make payment to Kacco and could not have negligently contributed to Lamar’s breach of its obligations under the contract. Accordingly, the district court erred in reducing Lamar’s award of damages. The case was remanded for further proceedings. View "Lamar Contractors, Inc. v. Kacco, Inc." on Justia Law
Posted in: Construction Law, Contracts, Louisiana Supreme Court
Pierce Foundations, Inc. v. JaRoy Construction, Inc.
This matter stemmed from a public works project for the construction of a gymnasium in Terrytown. JaRoy Construction Inc. served as the general contractor, and pursuant to statute, furnished a surety bond to Jefferson Parish. Ohio Casualty Insurance Company was the surety. JaRoy entered into a written subcontract with Pierce Foundations, Inc. to provide and install pilings for the project. Once finished, Pierce alleged JaRoy failed to pay certain funds due under the subcontract. Pierce sued both JaRoy and Ohio Casualty Insurance, alleging they were jointly and severally liable to Pierce. JaRoy filed for bankruptcy, leaving only Ohio Casualty Insurance as party to the suit. When the project was substantially completed, the Jefferson Parish government filed a notice of acceptance of work with the Jefferson Parish mortgage records office. This occurred over a year after Pierce amended its lawsuit to add Ohio Casualty as a defendant. Pierce never filed a sworn statement of claim in the mortgage records. Ohio Casualty filed a motion for summary judgment, contending that Pierce was required to comply with statutory notice and recordation, and because it failed to do so within 45 days of Jefferson Parish’s acceptance of the project, Pierce could not recover from Ohio Casualty. Pierce argued that the statute did not affect its right to proceed in contract. After a bench trial, the trial court rendered judgment in favor of Pierce for sums owed under the contract plus judicial interest from the date of the original judgment. Ohio Casualty appealed, arguing that the trial court erred in not dismissing Pierce's claims. The court of appeal reversed and ruled in Ohio Casualty's favor. The Supreme Court, however, disagreed and affirmed the trial court judgment. View "Pierce Foundations, Inc. v. JaRoy Construction, Inc." on Justia Law
Solieau v. Smith True Value & Rental
Plaintiff Mary Soileau was injured while working for the Town of Mamou when a front-end loader detached from a tractor and struck her in the leg. She named the tractor manufacturer, the Town, Smith's Hardware (where the Town rented the tractor for employees' use), the hardware store's owners and their insurance company. Trial began with only the owners and their insurer as the remaining defendants in the suit. On the third day, Plaintiff moved to dismiss the owners and their company in the presence of the jury, stating that she did not seek any damages personally against them. Hearing no objections, the trial court granted the request, but made no written (and therefore signed) judgment of dismissal. On day four, the insurer moved for a directed verdict, based on contract language that it was obligated to pay only if its insureds were legally obligated to pay. The insurer's motion was denied, and ultimately over $9 million in damages were awarded to Plaintiff. Concluding that the trial court erred in denying the insurer's motion, the appellate court reversed, dismissing the insurance company. The issue before the Supreme Court centered on the effect Plaintiff's in-court dismissal of the insured parties was during her personal injury action. Upon review, the Supreme Court concluded that the appellate court erred in its analysis, reversed and remanded the case for further proceedings. View "Solieau v. Smith True Value & Rental" on Justia Law
MCI Communications Services, Inc. v. Hagan
The Supreme Court accepted a certified question from the Fifth Circuit U.S. Court of appeals in "MCI Communications Services, Inc. v. Hagan" (641 F.3d 112 (5th Cir. 2011)): "[i]s the proposed jury instruction in this case, which state[d] that '(a) Defendant may be held liable for an inadvertent trespass resulting from an intentional act,' a correct statement of Louisiana law when the trespass at issue is the severing of an underground cable located on property owned by one of the alleged trespass[e]rs, and the property is not subject to a servitude by the owners of the underground cable but only to the contractual right to keep it, as an existing cable, underneath the property?" MCI alleged that co-Defendant James Joubert negligently excavated with a backhoe in violation of the Louisiana Damage Prevention Act. MCI alleged Defendant Wayne Hagan was vicariously liable because Joubert was acting as his agent at the time. The underground cable at issue was buried under land owned by Hagan. After a trial in the federal district court, a jury found for Hagan and Joubert. MCI appealed to the Fifth Circuit. Upon review of the issue presented by the Fifth Circuit, the Supreme Court answered the certified question in the negative: the proposed jury instruction in this case was not a correct statement of Louisiana law. View "MCI Communications Services, Inc. v. Hagan" on Justia Law
Posted in: Communications Law, Construction Law, Injury Law, Louisiana Supreme Court
Ebinger v. Venus Construction Corp.
In 1995, Charles and Charlene Ebinger contracted with Venus Construction Corporation to build a home. The couple moved into their new residence in 1997. In 2003, the Ebingers filed suit against Venus alleging defects in the home's foundation. Venus sought indemnification from one of its subcontractors. At issue in this case is whether the construction company's third-party demand against its subcontractor was time-barred by state law that established a peremptive period for actions against residential building contractors. The peremptive period was established originally at ten years, but subsequent amendments shortened its duration. A 1999 amendment reduced the period to seven years; a 2003 amendment reduced it to five years. Upon consideration of the trial record and the applicable legal authority, the Supreme Court found that the latest version of the statute applied in this case (2003). Consequently, the court held that the construction company's right to indemnity from its subcontractor was extinguished and its third party demand was perempted. View "Ebinger v. Venus Construction Corp." on Justia Law
Posted in: Business Law, Construction Law, Contracts, Louisiana Supreme Court
Louisiana Division of Administration, Office of Facility Planning & Control v. Infinity Surety Agency, LLC
The State, through its Division of Administration, Office of Facility Planning & Control, (State), issued a project manual to solicit bids for the removal and replacement of cabins at Bayou Segnette State Park. The manual included a bid form that set the procedure and conditions for submitting bids for the project. A joint venture of several companies submitted the lowest bid. Respondent Infinity Surety Agency (Infinity) wrote the bid-bond to the joint venture's winning bid. The State would later discover that Infinity was not qualified to write surety bonds on public works projects. The State notified the joint venture and Infinity that its bid was forfeited, and it rebid the entire project at a higher price. The State subsequently sued the joint venture and Infinity for the difference between its bid and the total of the rebid. The joint venture and Infinity filed peremptory exceptions of "no cause of action," alleging that the State's petition failed to state a claim upon which relief could be granted. Respondents argued that the State should have rejected their bid, rather than incur damages when it found the surety bond was deficient. The trial court found that the bid was "non-responsive" and should not have been accepted by the State. The appellate court agreed, holding that the State should have been more careful when reviewing bids. The Supreme Court found that Respondents' exceptions should have been overruled. "Rather than focusing on the allegations in the petition, both courts below apparently made a factual determination that [the joint venture's] bid was non-responsive... and then based their rulings sustaining the exceptions on that determination." The Court concluded that using the exceptions to dismiss the State's claims was improper. Accordingly it reversed the holdings of the lower courts and remanded the case for further proceedings.
Posted in: Construction Law, Government Contracts, Louisiana Supreme Court