Red Dot Buildings, Inc. v. GM & R Construction Company, Inc. et al, No. 2:2014cv02803 - Document 115 (E.D. La. 2016)
Court Description: ORDER AND REASONS granting the Non-Flood Protection Authority's MOTION 80 for summary judgment.. Signed by Judge Sarah S. Vance on 3/28/16. (jjs)
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Red Dot Buildings, Inc. v. GM & R Construction Company, Inc. et al Doc. 115 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA RED DOT BUILDINGS, INC. CIVIL ACTION VERSUS NO. 14-280 3 GM&R CONSTRUCTION COMPANY INC., ET AL. SECTION: R (4) ORD ER AN D REASON S Defendant Non-Flood Protection Asset Management Authority m oves for sum m ary judgment on M&M Concrete Services, Inc. and Tom Branighan, Inc.’s cross-claim that the Non-Flood Protection Authority is liable for certain unpaid claim s of M&M Concrete and Tom Branighan arising out of a public works construction project under the Louisiana Public Works Act, Louisiana Revised Statute § 38:2241, et seq. 1 For the following reasons, the Court grants the Non-Flood Protection Authority’s m otion for sum m ary judgm ent. I. BACKGROU N D This dispute arises out of the “J am es Wedell Hangar Project,” a public works construction project, at the New Orleans Lakefront Airport. As owner 1 R. Doc. 80 . Dockets.Justia.com of the project, defendant-in-cross-claim Non-Flood Protection Authority hired GM&R Construction Com pany to serve as general contractor. 2 GM&R, in turn, hired plaintiffs-in-cross-claim M&M Concrete (for concrete services) and Tom Branighan (for electrical services) as subcontractors. 3 The project began in March 20 12, according to the Non-Flood Protection Authority’s “Notice to Proceed.”4 Despite several delays, the project was substantially com pleted on May 16, 20 14. 5 The Non-Flood Protection Authority filed a “Certificate of Substantial Com pletion” in the parish m ortgage records on May 28, 20 14. 6 M&M Concrete and Tom Branighan both allege that they performed the work required under their respective subcontracts with GM&R, but were never fully paid. M&M Concrete contends that $ 56,572 for its concrete work rem ains unpaid. 7 Tom Branighan claim s an unpaid balance of $ 49,729.20 . 8 2 R. Doc. 80 -3 at 1 ¶ 3 (Declaration of Cornelia Ullm ann). 3 See generally R. Doc. 80 -7; R. Doc. 80 -8. 4 R. Doc. 80 -5. 5 R. Doc. 80 -6. 6 R. Doc. 80 -3 at 2 ¶ 7. 7 R.Doc. 27 at 7 ¶¶ 36-39. 8 R. Doc. 28 at 8 ¶¶ 38 -41. On August 18, 20 14, M&M Concrete notified GM&R and the NonFlood Protection Authority of its unpaid claim s by m ailing both entities a “Statement of Claim .”9 M&M Concrete’s correspondence reflected that it had filed its statem ent of claim in the parish m ortgage records on August 15, 20 14. 10 M&M Concrete also asked the Non-Flood Protection Authority and GM&R to consider its August 18 letter as a “demand for im mediate payment.”11 Som etime before September 24, 20 14, GM&R notified M&M Concrete that the statem ent of claim in the m ortgage records was untim ely because it was filed m ore than forty-five days after the Non-Flood Protection Authority filed its “Certificate of Substantial Com pletion” on May 28, 20 14. According to the Non-Flood Protection Authority, GM&R considered the recorded claim untim ely because Louisiana Revised Statute § 38:2242 states that “after m aturity of [its] claim and within forty-five days after the recordation of acceptance of the work by the governing authority,” a subcontractor seeking payment may file a statem ent of the unpaid am ount in the m ortgage 9 See R. Doc. 80 -9. 10 Id. at 2. 11 Id. at 1. records. 12 La. Rev. Stat. § 38:2242(B). M&M Concrete then notified the Non-Flood Protection Authority and GM&R that “[b]ecause of the tim ing, the Statem ent of Claim will be cancelled from the records of the Recorder of Mortgages. However, M&M has not been paid in full and therefore M&M m aintains its claim for paym ent on the project.”13 Tom Branighan also wrote to GM&R and the Non-Flood Protection Authority about its unpaid claim on September 24, 20 14. The letter states, “Please consider this correspondence as a Statem ent of Claim being served on the Non-Flood Protection Asset Managem ent Authority, the project’s awarding authority (owner), in accordance with the Public Works Act, specifically LRS 28:2242(D).”14 At that tim e, Tom Branighan had not filed its statement of claim in the m ortgage records. On October 7, 20 14, GM&R obtained a “Lien and Privilege Certificate” from the Orleans Parish Clerk of Court and Ex-Officio Recorder. 15 The certificate provides that, according to the parish m ortgage records at that tim e, “there [we]re no uncancelled mechanic’s liens and/ or privileges for 12 See R. Doc. 80 -1 at 3. 13 R. Doc. 81-3 at 1. 14 R. Doc. 80 -11. 15 R. Doc. 80 -13. labor and/ or m aterials furnished in connection with” GM&R’s construction contract for the J am es Wedell Hangar Project. 16 This lien and privilege certificate did not reflect the claim that M&M Concrete filed two m onths earlier, presumably because M&M Concrete had cancelled it. GM&R subm itted the lien and privilege certificate to the Non-Flood Protection Authority on October 8. 17 According to the Non-Flood Protection Authority, it was then obligated to pay GM&R under Louisiana Revised Statute § 38:2191, which provides that “[a]ll public entities shall prom ptly pay all obligations arising under public contracts when the obligations becom e due and payable under the contract.” Section 2191 further provides that “[a]ny public entity failing to m ake any final paym ents after form al final acceptance and within forty-five days following receipt of a clear lien certificate by the public entity shall be liable for reasonable attorney fees.” La. Rev. Stat. § 38:2191(B). The Non-Flood Protection Authority contends that, in accordance with section 2191, it prom ptly paid GM&R on October 16, 20 14, after receiving the lien and privilege certificate on October 8. 16 Id. at 1. 17 R. Doc. 80 -2 at 3 ¶ 15. On December 24, 20 14, M&M Concrete again wrote to GM&R and the Non-Flood Protection Authority about its unpaid claim . M&M Concrete indicated that cancelling its earlier filing in the parish m ortgage records “m ay have been in error,” and M&M Concrete refiled its claim in the m ortgage records on Decem ber 23, 20 14. M&M Concrete’s December 24 letter asked GM&R and the Non-Flood Protection Authority to “consider this Statement of Claim as dem and for paym ent in full of the am ount owed.”18 Tom Branighan also form ally filed its statem ent of claim in the parish m ortgage records on December 23, 20 14, and mailed a copy of its filed claim to both GM&R and the Non-Flood Protection Authority the next day. 19 To date, M&M Concrete’s and Tom Branighan’s claim s remain unpaid. The subcontractors filed suit against the Non-Flood Protection Authority to recover the am ounts of their unpaid claims on April 13, 20 15. The Non-Flood Protection Authority now m oves for sum m ary judgment, arguing that, under the Louisiana Public Works Act, M&M Concrete and Tom Branighan untim ely filed their claim s and therefore cannot recover their unpaid debts from the Non-Flood Protection Authority. 20 18 R. Doc. 80 -10 at 1. 19 See R. Doc. 80 -10 . 20 See generally R. Doc. 80 -1. M&M Concrete and Tom Branighan oppose the m otion, arguing that the NonFlood Protection Authority became liable for the subcontractors’ debts when the Authority had actual knowledge of their unpaid claim s before it paid GM&R for the project in October 20 14. II. LEGAL STAN D ARD Sum m ary judgment is warranted when “the m ovant shows that there is no genuine dispute as to any m aterial fact and the m ovant is entitled to judgm ent as a m atter of law.” Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 10 69, 10 75 (5th Cir. 1994). When assessing whether a dispute as to any m aterial fact exists, the Court considers “all of the evidence in the record but refrain[s] from m aking credibility determ inations or weighing the evidence.” Delta & Pine Land Co. v. Nationw ide Agribusiness Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 20 0 8). All reasonable inferences are drawn in favor of the nonm oving party, but “unsupported allegations or affidavits setting forth ‘ultim ate or conclusory facts and conclusions of law’ are insufficient to either support or defeat a m otion for sum m ary judgment.” Galindo v. Precision Am . Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); see also Little, 37 F.3d at 10 75. “No genuine dispute of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the non-m oving party.” EEOC v. Sim baki, Ltd., 767 F.3d 475, 481 (5th Cir. 20 14). III. D ISCU SSION The m aterial facts are not in dispute here. The parties disagree about the proper interpretation of Louisiana Revised Statute § 38:2242, which im poses liability on the awarding authority of a public works project if it pays a general contractor for that project without taking certain precautions to protect an unpaid subcontractor. Section 2242 provides in relevant part: A. “Claim ant” . . . m eans any person to whom m oney is due pursuant to a contract with the owner or a contractor . . . for doing work, perform ing labor, or furnishing m aterials or supplies for the construction, alteration, or repair of any public works . . . . B. Any claim ant m ay after the m aturity of his claim and within forty-five days after the recordation of acceptance of the work by the governing authority . . . file a sworn statement of the am ount due him with the governing authority having the work done and record it in the office of the recorder of m ortgages for the parish in which the work is done. .... D. When an awarding authority m akes final paym ent to the contractor without deducting the total am ount of all outstanding claim s so served on it or without obtaining a bond from the contractor to cover the total am ount of all outstanding claim s, the awarding authority shall become liable for the am ount of these claim s. La. Rev. Stat. § 38:2242(A)-(B), (D) (em phasis added). Here, the Non-Flood Protection Authority argues that subsection 2242(D) m ust be read along with subsection 2242(B)—an “outstanding claim so served on [the awarding authority]” is one that a claim ant has filed in the m ortgage records “after the m aturity of his claim and within forty-five days after recordation of acceptance of the work.” The subcontractors argue that subsections (B) and (D) provide separate m eans by which a claim ant m ay pursue an unpaid debt from the awarding authority. Thus, according to M&M Concrete and Tom Branighan, to preserve a claim against an awarding authority for an unpaid debt, a public works claim ant can either, under subsection 2242(B), file its claim in the m ortgage records within forty-five days after the awarding authority records its acceptance of the work or, under subsection 2242(D), otherwise notify the awarding authority of the claim ant’s outstanding claim before the authority issues final paym ent to the general contractor. The Court concludes that subsections 2242(B) and (D) m ust be read together and that the only “outstanding claim s” for which an awarding authority of a public works project m ay be liable are those that have been tim ely filed with the governing authority. “The fundam ental question in all cases of statutory [interpretation] is legislative intent and the reasons that prom pted the legislature to enact the law.” In re W hitaker Const. Co., 411 F.3d 197, 20 4-0 5 (5th Cir. 20 0 5) (citing In re Succession of Boy ter, 756 So.2d 1122, 1128 (La. 20 0 0 )). The starting point is the language of the statute itself. Moreno v. Entergy Corp., 10 5 So.3d 40 , 48 (La. 20 12). “Words and phrases shall be read [in] context and shall be construed according to the com m on and approved usage of the language.” La. Rev. Stat. § 1:3. “When a law is clear and unam biguous and its application does not lead to absurd consequences, the law shall be applied as written.” La. Civ. Code art. 9; La. Rev. Stat. § 1:4; see also In re W hitaker, 411 F.3d at 20 5 (“[S]tatutes m ust be interpreted . . . to render their m eaning rational, sensible, and logical.”). When the statutory language is ambiguous, a court m ust determ ine its m eaning “by exam ining the context in which [the language] occurs and the text of the law as a whole.” La. Civ. Code art. 12. The court “should give effect to all parts of a statute and should not adopt a statutory construction that m akes any part superfluous or m eaningless.” In re W hitaker, 411 F.3d at 20 5. In addition, the law “m ust be interpreted as having the meaning that best conforms to the purpose of the law.” La. Civ. Code art. 10 . The purpose of the Louisiana Public Works Act is two-fold. First, the Act protects those not in direct privity with the governing authority or the general contractor of a public works project. W ilkin v. Dev Con Builders, Inc., 561 So. 2d 66, 71 (La. 1990 ); see also In re W hitaker, 411 F.3d at 20 5 (explaining protection is necessary because unpaid claimants cannot seize public property to secure paym ent). At the same tim e, for a governing authority that com plies with its provisions, the Act protects the authority from incurring liability for a contractor’s failure to perform its subcontracts. W ilkin, 561 So. 2d at 71. Section 2242 of the Act achieves both purposes by allowing a claim ant to collect its unpaid debt from the governing authority if that authority does not take certain precautions to ensure the claim ant is paid. Yet an unpaid claim ant m ust also take certain steps to preserve its claim; the imposition of liability on the governing authority is not without lim its. For a claim ant seeking to recover his unpaid claim from the governing authority, subsection 2242(B) requires, at a m inim um , that the claim ant “file a sworn statement of the am ount due him with the governing authority” “after the m aturity of his claim and within forty-five days after the recordation of acceptance of the work.” See generally La. Rev. Stat. § 38:2242(B). Subsection 2242(D) provides that an awarding (or governing) authority m ay be liable for “all outstanding claim s so served on it.” Subsection 2242(B) and subsection 2242(D) do not stand alone, as M&M Concrete and Tom Branighan suggest. Here, subsection (D)’s reference to claim s “so served” m eans served by the m ethod stated in subsection (B). See generally La. Civ. Code art. 12 (courts m ust exam ine statutory language in context and “exam in[e] . . . the text of the law as a whole”); La. Rev. Stat. § 1:3 (“Words and phrases shall be read with their context . . . .”). To read subsection (D) as the subcontractors suggest would delete the word “so” before “served.” Further, to construe subsection 2242(D) as allowing a claim ant to notify a governing authority of its outstanding claim however and whenever it chooses, so long as the governing authority has not yet paid the general contractor, would render subsection 2242(B), with its specific requirements, meaningless. See In re W hitaker, 411 F.3d at 20 5 (“Courts should give effect to all parts of a statute and should not adopt a statutory construction that m akes any part superfluous or m eaningless.”). Moreover, the doctrine of ejusdem generis, a well-established principle of statutory construction, warns against “expansively interpreting” broad language that follows narrow and specific terms. “To the contrary, this maxim . . . counsels courts to construe the broad in light of the narrow, in a com m onsense recognition that general and specific words, when present together, are associated with and take color from each other.” United States v. Insco, 496 F.2d 20 4, 20 6 (5th Cir. 1974) (collecting cases). At least one Louisiana appellate court has reached the sam e conclusion regarding the interaction of subsections 2242(B) and (D). In Gulf Coast Refrigeration, LLC v. Houm a Terrebone Housing Authority , the state trial court found that a subcontractor who filed its claim outside of the forty-fiveday window of tim e in subsection 2242(B) could not sustain a claim against the Houm a Terrebone Housing Authority, the governing authority of the public works project at issue. See No. 20 13 CA 1512, 20 14 WL 1175898, at *1 (La. App. 1 Cir. Mar. 24, 20 14). On appeal, the subcontractor in Gulf Coast argued, like M&M Concrete and Tom Branighan do here, that subsection 2242(D) allowed the subcontractor m ore tim e to file its claim so long as the governing authority had not yet paid the contractor. See id. at *3. The Louisiana First Circuit Court of Appeal held that the subcontractor’s argument was “a misreading of the statute and . . . ignore[d] what is clearly required by La. R.S. 38:2242(B).” Id.; see also In re W hitaker Const. Co., Inc., 411 F.3d 197, 20 6 (5th Cir. 20 0 5) (“[Section] 2242 m andates that a claim ant file written claim statem ents after the m aturity of his claim s and within 45 days from the recordation of acceptance.” (em phasis added)). The court also explained that the subcontractor’s interpretation of the statute “would essentially render La. R.S. 38:2242(B) pointless if it m eant that a subcontractor could secure funds with an untim ely filed lien.” 20 14 WL 1175898, at *3. To resist this conclusion, M&M Concrete and Tom Branighan rely on another Louisiana appellate opinion. In VVP Am erica, Inc. v. Design Build Developm ent Services, Inc., a roofing subcontractor recorded its claim nearly one year after the governing authority recorded its certificate of substantial com pletion. 951 So. 2d 461, 464-65 (La. App. 2 Cir. 20 0 7). The Louisiana Second Circuit Court of Appeal noted that “the different notice provisions under the [Louisiana Public Works Act] are designed to work in tandem so that the general contractor, surety and owner are all aware of what is going on and each can take steps to preserve their rights against each other.” Id. at 469. Nonetheless, without referring to the text of the statute and relying on two nearly century-old cases, the court held that a governing authority with actual knowledge of an unpaid claim and with enough funds to satisfy the debt is liable to the subcontractor for the unpaid am ount. 21 Id. 21 The cases on which the Louisiana Second Circuit relied are even less helpful to the relevant issue. In Uvalde Rock Asphalt Co. v. City of Shreveport, 172 La. 977 (1931), the appellant argued that the claim s of certain m aterialm en were not recorded “in accordance with law.” The alleged noncom pliance pertained to whether the am ounts claim ed were for m aterials actually used in the public work and whether the claim s were “in proper form ” (i.e., sworn statem ents). The Louisiana Suprem e Court found the appellant’s argum ents “unsound.” See id. at 984-85. at 469-70 . In light of the statutory text and the reasoning of the Louisiana First Circuit in Gulf Coast Refrigeration, the Court does not find VVP Am erica to be persuasive or controlling here. It is undisputed that M&M Concrete and Tom Branighan did not tim ely file their claim s in accordance with subsection 2242(B). The Non-Flood Protection Authority recorded its acceptance of work, via its “Certificate of Substantial Com pletion,” in the m ortgage records on May 28, 20 14. At the earliest, M&M Concrete served the Non-Flood Protection Authority with a sworn statement of its claim on August, 18, 210 4, nearly three m onths later. Tom Branighan did not serve the Authority with its claim until Septem ber 24. 22 Because M&M Concrete and Tom Branighan failed to com ply with the In Fidelity & Deposit Co. v. Claiborne Parish School Board, 35 F.2d 376 (W.D. La. 1929), the district court found that the parish school board with actual knowledge of unpaid subcontractor claim s was liable for those debts under general principles of civil law—“a tort or quasi offense and breach of contract within the m eaning of the code.” On appeal, the Fifth Circuit affirm ed, finding that as a result of the bond executed by the governing authority, the general contractor, and the surety, as well as prevailing civil law principles and “general principles of equity,” the governing authority was liable to the surety for the am ount of the unpaid claim s that the surety paid to subcontractors. Claiborne Parish School Board v. Fidelity & Deposit Co. 40 F.2d 577 (5th Cir. 1931). 22 The Non-Flood Protection Authority em phasizes in its brief that claim ants seeking to recover from a governing authority m ust file its claim with the authority and record its claim in the m ortgage records within the forty-five-day period. See generally R. Doc. 80 -1. Because it is undisputed that M&M Concrete and Tom Brangihan did neither within forty-five days of applicable deadline, the Court grants sum m ary judgment on the cross-claim for their outstanding debts against the Non-Flood Protection Authority. IV. CON CLU SION For the foregoing reasons, the Court GRANTS the Non-Flood Protection Authority’s m otion for summ ary judgm ent. 28th New Orleans, Louisiana, this _ _ _ day of March, 20 16. ____________________________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE the Non-Flood Protection Authority’s acceptance of the work, the Court need not reach the issue of whether tim ely recordation of their unpaid claim s is also required to recover from the Authority.
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