J Reed Constructors, Inc. VS Roofing Supply Group, LLC

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STATE OF LOUISIANA COURT OF APPEAL FIRST CIItCUIT NO 2012 CA 2136 J REED CONSTRUCTORS INC 2 VERSUS v ROOFING SUPPLY GROUP L C Judgment Rendered November 1 2013 On Appeal from the 23rd Judicial District Court In and for the Parish of Ascension State of Louisiana Trial Court No 311 103 Honorable Alvin Turner Jr Judge Presiding John S McLindon Baton Rouge Louisiana Stephen F Chiccareili Justin Stephens Attorney for Plaintiff Appellee J Reed Constructors Inc Attorneys for Defendant Appellant ng Roo Supply Group L C Baton Rouge Louisiana and Brandy N Sheely New Orleans Louisiana BEFORE KUHN HIGGINBOTHAM AND THERIOT JJ 8 THERIOT J This is an appeal of the trial court interpretation of the materialman s s nonpayment of notice requirement found in the Louisiana Public Works Act LPWA at La R 38 S 2242 FThe question presented is whether a single notice given within seventy days of the last delivery of roofing supply materials far a five public works project was timely as to the supplier claim for payment on a11 s materials delivered pursuant to the open arrangement For the following account reasons we affirm the district court sjudgment FACTS AND PROCEDURAL HISTORY The relevant facts are not in dispute Plaintiff J Reed Constructors Inc J Reed was the general contractor on a public works project far the owner Ascension Parish School Board School Board which included a roof replacement at East Ascension High School In connection with the project J Reed entered into several subcontracts one of which involved a roofing subcontractor A L Systems Inc A A purchased roofing supplies and materials on open L L account from defendant Roofing Supply Group L RSG At various times C throughout June July August and September 2011 with the last delivery occurring on September 26 2011 RSG delivered roofing supplies and materials to the project site pursuant to multiple purchase orders by A Each delivery was L accompanied by an invoice reflecting due date terms of NET 2ND l OTH along with an actual due date for payment that was the tenth day of the second month after each delivery A failed to pay RSG far all of the supplies and materials L which at the end of the four months of deliveries the unpaid amount totaled 29 056 268 On December 8 2011 RSG sent written notice to J Reed and the School Board informing the general contractor and the project owner of A s L nonpayment of invoices in connection with the deliveries of roofing supplies and materials for the public works project 2 It is undisputed that the notice of I nonpayment letter was received by J Reed and the School Board within seventy five days of the date of RSG last delivery date s When RSG did not receive payment after notifying J Reed and the School Board RSG filed and recorded its s materialman claim in the amount of 268 on December 22 2011 29 056 In response J Reed filed a Rule to Show Cause in the 23rd Judicial District Court as to why RSG lien claim should not be cancelled J Reed maintained that s s RSG notice of nonpayment was untimely under the LPWA contending that the notice must be provided within seventy days of each separate month in which five materials are delivered in order to preserve a materialman claim thus accarding s to J Reed RSG lost its right to file a lien as to deliveries made in June July and August 2011 RSG opposed J Reed rtzle arguing that the LPWA does not s require multiple notices of nonpayment but rather a single notice is required to be given within seventy days from the last day of the last month in which five material is delivered After a hearing in which evidence of the invoices and purchase arders was introduced the district court ruled in favor of J Reed determining that RSG notice was untimely as to all deliveries made before s September 2011 and therefore 148 of RSG claim was not allowed 00 188 s The district court signed a judgment on July 26 2012 which states in part It is the fiurther finding of this Court that all of the remaining invoices totaling 42 867 119 are properly a part of the claim filed by Roofing Supply Group in that the notice to J Reed Constructors Inc was timely as to those deliveries The district court denied RSG motion for new trial in a separate judgment signed on s September 25 2012 RSG appealed both judgments RSG argues that the district court erred in interpreting La R 38 S 2242 Fto require monthly or multiple notices in order to preserve the right to file a lien against a public works project for unpaid supplies and materials RSG also assigned error to the district court s denial of its motion for new trial however RSG did not brief the alleged error regarding the motion for new trial or point to any evidence to suggest the district 3 court abused its discretion in denying the motion for new trial When an appellant fails to brief an assignment of error the appellate court may deem that assignment abandoned See Uniform Rules Courts of Appeal Rule 2 We find the 4 12 assignment of error pertaining to the denial of the motion for new trial abandoned Accordingly we will only consider RSG specification of error regarding the s district court interpretation ofthe notice requirement found in La s nonpayment of S 2242 R 38 F LAW AND ANALYSIS The judgment of the district court was based on its interpretation ofLa R S F 2242 38 The interpretation of a statute is a question of law Clements v Folse ex rel Succession of Clements 2001 p 5 App 1 Cir 8 830 1970 La 02 14 2d So 307 312 writ denied 2002 La 11 829 So 437 Appellate 2328 02 15 2d review of questions of law is simply to deternune whether the district court was legally correct or legally incorrect Id On legal issues the appellate court gives no special weight to the findings of the district court but exercises its constitutional duty to review questions of law de novo and renders judgment on the record Id Times Picayune Pub Corp v Board of Sup of Louisiana State rs University 2002 p 6 App 1 Cir 5 845 So 599 605 writ 2551 La 03 9 2d denied 2003 La 9 852 So 1044 1589 03 5 2d In Louisiana public construction contracts are governed by the LPWA La S 2241 R 38 which is sui generis and provides exclusive remedies to parties 3410 in litigation arising out of a public work State Through Div ofAdmin v Mclnnis Bros Const 97 p 9 10 701 So 937 944 P contract 0742 La 21 97 2d ublic laws are to be strictly construed such that the privileges granted are not extended beyond the statutes Id uaotin Wilkin v Dev Con Builders Inc 561 So 66 2d 71 La 1990 In the LPWA a includes any person to whom money is claimant due pursuant to a contract with the owner contractor or subcontractor for furnishing materials or supplies far construction of any public works 4 La R S A 2242 38 Additionally any claimant may after the maturity of his claim and within sworn five forty days statement of the after the recordation of amount due him acceptance of the work file a and record it La R 38 S 2242 B However the materialman claimant must first comply with the notice and recordation requirements of La R 38 S 2242 Band F in order to preserve the right to file a privilege or lien See In School Supply Co v Guitreau erstate s Const Consulting Co Inc 542 So 138 La App 1 Cir 1989 Teche Elec 2d Supply L v M Descant Inc 2008 p 9 App 3 Cir 12 2 C D 171 La 08 11 3d So 516 522 writ denied 2009 La 3 5 So3d 141 Electric Supply 0086 09 27 Co Inc v Great American Ins Co Inc 42 pp 5 La App 2 Cir 727 6 07 12 973 So 827 830 2d 31 The relevant portion of the LPWA that specifically pertains to the right to file a materialman slien is outlined at La R 38 which provides S 2242 F F In addition to the other provisions of this Section if the materialman has not been paid by the subcontractor and has not sent notice of nonpayment to the general contractor and the owner then the materialman shall lose his right to file a privilege or lien on the immovable property The reYurn receipt indicating that certified mail was properly addressed to the last known address of the general contractor and the owner and deposited in the U mail on or before S five seventy days from the last day of the month in which the material was delivered regardless of whether the certified mail was actually delivered refused or unclaimed satisfies the notice provision hereof or no later than the statutory lien period whichever comes first The provisions of this Subsection shall apply only to disputes arising out of recorded contracts Emphasis added Clearly notice to the general contractor and owner is required by nonpayment of La R 38 if the materialman desires to preserve his lien S 2242 F Although interpretation of the notice requirement in La R nonpayment of S Fpresents a res nova issue our inquiry is guided by well 2242 38 established principles of statutory interpretation The function of statutory interpretation and the construction to be given to legislative acts rests with the judiciary Livingston Parish Council on Aging v Graves 2012 p 3 12 105 So3d 683 0232 La 4 12 Subsection F was added by La Acts 1999 No 1134 5 2 685 The rules of statutory construction are designed to ascertain and enfarce the intent of the legislature as well as determine the reasons that prompted the legislature to enact the law to begin with Id at p 4 State v Dick 2006 pp 2223 9 8 La 1 951 So 124 130 The starting point in the interpretation of 07 26 2d any statute is the language of the statute itself Dick at p 9 951 So at 130 2d Words and phrases shall be read in context and shall be construed according to the common and approved usage of the language La RS 13 Moreno v Entergy Corp 2012 p 12 La 12 105 So3d 40 48 The words of a law must 0097 12 4 be given their generally prevailing meaning La C art 1 l G We find La R 38 is cleaz and unambiguous S 2242 F To preserve his right to file a privilege or lien on the immovable property the materialman SHALL deposit in the U mail via certified mail notice of nonpayment before seventy S five days from the last day of the month in which material was delivered or no later than the statutory lien period whichever comes first Regardless of the month of delivery ar the number of deliveries the seventy period commences on day five the last day of that month When a law is clear and unambiguous and its application does not lead to absurd consequences the law shall be applied as written and no further interpretation may be made in search of the intent of the legislature La C art 9 It is not the function of the judicial branch to legislate by inserting provisions into statutes where the legislature has chosen not to do so See Carter v Duhe 0390 2005 p 10 La 1 921 So 963 970 It is for the legislative branch 06 19 2d to remedy the deficiencies in the statutory scheme if it should so desire Foti v Holliday 2009 p 13 La 10 27 So 813 821 0093 09 30 3d CONCLUSION Accordingly we affirm the judgment of the district court All costs of this appeal are to be paid by defendant Roofing Supply Group L appellant C AFFIRMED 6 J REED CONSTRUCTORS INC STATE OF LOUISIANA COURT OF APPEAL VERSUS FIRST CIRCUIT ROOFING SUPPLY I I PC GROL L 2012 CA 2136 BEFORE KUHN HIGGINBOTHANI AND THERIOT JJ 1 HIGGINBOTHAM J DISSENTS AND ASSIGNS REASONS HIGGINBOTHAM J I respectfully disagree with the majoriry opinion and for the following reasons I would reverse the district court judgment because I find that the s s supplier single notice within 75 days of the last delivery was nonpayment of timely as to all unpaid deliveries of materials The statute at issue is ambiguous It is not clear whether subsection P of La R 38 requires that only one notice as to all deliveries is S 2242 nonpayment of required to be issued within 75 days of the last day of the month of the last delivery or whether multiple notices must be sent within 75 days of each nonpayment of month in which material is delivered I find that the relevant portion of subsection F is poorly drafted and is susceptibie to different interpretations The ambiguity in the meaning and grammatical structure of the provision makes both parties constructions of the statute at least possible when viewing the disputed section in isolation Either of the stated interpretations requires the ins of extra or rtion different words to reach the desired result i inserting all of before the e material was delivered or notices in place of notice and each month instead of the month However as the majority points out it is not the function of the judicial branch to legislate by inserting provisions into statutes where the legislature has chosen not to do so Carter v Duhe 2005 La 1 921 0390 06 19 2d So 963 970 It is for the legislative branch to remedy the deficiencies in the 1 statutory scheme if it should so desire Foti v Holliday 2009 La 0093 09 30 10 27 So 13 821 3d This particular issue e eliness th ticr oi a natice under an nonpayment of open account arrangement between a snpplier arici subcontractur on a public warks project has never been addressed by a Lstate court zzisiana In Teche Elec Supply L v VI Descant Inc 2008 La r 3d Cir 12 2 C D 171 pp 08 11 3d So 516 518 writ denied 2409 La 3 5 So3d 141 the issue was 0086 09 27 listed as an assignment of error raised by the defendants however the case was resolved without reaching the merits of the issue because the defendants in that case failed to fumish any notice of nonpayment before they filed their lien Id 2 3d So at 522 In VVP America Inc v Design Build Development Services Ine 41 La App 2d Cir 1 951 So 461 468 the facts were similar 652 07 31 2d in that a roofing subcontractor abtained supplies from a roofing supply company pursuant to an open account arrangerr on a public works project involving a ent school addition In that ease the materialmads Iien was filed before the letter demanding payment was sent to the gencral c however the court did not r untract discuss the notice requirement n subsection Fj because the 1999 nonpayment of amendment to the sYatute dACd not become effective unt after the last delivery of il materials occurred in that case hus I th court in VVP Amer 951 So at ca 2d 470 469 was bound by the prior law when it held that the supplier was entitled to recover for all of the material it furnished for the public works projecY even though the supplier filed the lien befor sending the additional notice required by a different statute La R 38 See Teche Elec Supply 2 So at 522 S 2247 3d Our res nova inquiry into the proper interpretation of La R 38 is S 2242 F i established guided by well principles of statutory interpretation that are designed I I to ascartain and enforce the intent of the legislature as well as determine the reasons that prompted the legislature to 2 enact the law to begin with See Livingston Parish Council on Aging v Graves 2012 La 12 105 0232 2 1 4 So3d 683 685 State v Dick 20f16 iLa 1 951 So2d 124 130 23 2 07 26 Thus when the judiciary a a statute to a specific set of facts it is necessary to plies interpret the statute in a manner Yhat is consistent with the legislative intent Thz Louisiana Supreme C has already detennined z years ago that ourt y iar the LPWA is intentled to protect those supplyin labe and furnishizig materials for r public works projects See Wilkin v Dev Con Builders Inc 561 So 66 70 2d La 1990 See also Slagle Lumber Co Inc v Landis Const Co Johnson Inc 379 So 479 486 n La 1979 on rehearing The statute provides a 2d method by which a materialman can recover sums due for materials furnished to a subcontractor on a public warks project While protecting those who supply labor and furnish materials the risk of loss is shifted to the general contractor and the surety It is witb this stated legislative intenY in triind that we should interpret the nonpayment of notice provision in La R 3to determine whether the S 2242 F s materialman statutory notice provision is triggered by each nonpayment of month of unpaid deliveries or by the month of the final delivery of unpaid materials The majority correctl states that the starting point in the interpretation of y any statute is the language of the statute itself Dick 951 2d So at 130 Furthermore woxds and phrases shall be read in context and shall be construed according to the common and approved usage of the language La RS 1 3 Moreno v Entergy Corp 2012 La 12 105 So 40 48 VGhen a 0097 12 4 3d law is susceptible Co different meanings it must be interpreted as having the meaning that best conforms to the purpose of the law La Civ Code art 10 Moreover w the words of a law are ambiguous their meaning must be hen sought by examining the context in which they occur and the text of the law as a whole La Civ Code art 12 Courts should give effect to all parts of a statute 3 and should noY adopt a stah cthat makes any art superfluous or tory nstructiora meaningless if that result can be avoided SW 24 Shreveport Bossier Inc v P A Bond 2000 La 6 R0 So 29 3 Additianally courts should 1695 O1 29 2d F 2 avoid corastructions that render l tian isl absurd xathzr statu sh be es uld interpreted in a max that renders t mea ratrQnal sensible and logical ner ie iri State Through Dept of Public Safetv and C Offiee of State Police orrections Riverboat Gaming Div v Louisiana Riverboat Gaming Com and Horseshoe n Entertainment 94 La 5 655 So 292 1872 95 22 2d 302 With these principles in mind my focus turns to the controversial and confusing text found in subsection F tating that the materialman of snotice nonpayment sent to the general contractor nd the owner on or before seventy five days fi the last day of the month in whieh the material was delivered om satisfies the notice provision thereby preserving the materialman sright to file a lien on the immovable property that is the subject of the pnblic works project La S 2242 R 38 Femphasis added Siiice th is no Louisiana case interpreting re this particular statute under an open account arrangement I have looked for guidance in federal case 1aw wher the federal cour have interpreted a parallel statute the Miller Act at 4Q C S U 2formerly cited as 40 U bj 3133 C S b 270 along v similar provisions in other states statutes The federal case ith law is helpful since the various versions c iridividual state statut strongly f s resemble the model Mi11 Act all w t same remedial pur of protecting r th he ose suppliers of labor and materials Like the LPV the Mi11er Act requires w notice zo the prime A ritten contractor by a claimant who has a contractual relationship with a subcontractor on a public works project and has noY received payment for delivery of materials The Miiler Act and its predecessor the Heard Act are the federal equiv to our own public lents contract iaw See Wilkin S61 So at 71 Although not binding I find jurispxudenca from the 2d federal courts interpreting the similar federal statute to be extremely persuasive in this matter I However rather than 75 days from t last day of month in which the material e Yhe was delivered the Miller Act requires the xiotice to be given within 90 days from the date the claimant performed the last labor or furrished or supplied the last of the material for which the claim is mad See 40 U C S 2 B 3133 emphasis supplied Nevertheless under both the Nla Act and the LFWA fixlfiiling the 11er notice provision is a strict condition precedent to recovery See U for Use and S Ben of Water Worl Supply Corp v George Hyman Const Co 131 F 28 s 3d 31 lst Cir 1997 establishes The norice provision serves an a firm date after which the general important purpose it contractor may pay its subcontractors without fear of further liability to the materialmen or suppliers of those subcontractors Id 131 F3d at 32 While there has been a split in federal decisions throughout the country I find the better view holds that if a Miller Act claimant is making a series of deliveries under an open account arNangement that claimant need only give nonpayment of notice within 90 days of the last deiivery to recover for all previous deliveries under the contract as long as there has not been a delivery gap of over 90 days See Specialty Products Insulation Co v St Paul Fire Marine Ins Co 99 N 459 465 7 E 604 607 758 N 255 25 2d Y 8 2d 2d S Y 2003 By far tha weight of authority in federal case law holds that notice for the entire unpaid portion for deliveries made on an open account runs from the last delivery of materials See George Hyman Const 131 F at 34 U for Use of 3d S A M Petroleum Inc v Santa Fe Engineers Inc 822 F 547 548 Sth Cir 2d 1987 I agree with this interpretation especially when considered alongside the legislative objective of protecting and promoting prompt payment to laborers and material suppliers See Specialty Products 99N at 465 788 N at 607 2d Y 2d E 758 N at 258 2d S Y Additionally I note that this is the conclusion of most 5 federal courts considering this same issue under the Miller Act when comparing similar state statutes Id 99 1V at 466 788 N at 608 758 N at 2d Y 2 E 2d S Y 259 n This conclusion places the general contractors nezd for fixing a final 6 liability date as secondary to the protectiun of laborers and material suppliers Id See also Noland Co v Allied Contractors Inc 273 F 917 92Q 4th Cir 2d 921 1959 where the court reasoned fhat although a strict reading f the notice provision might offer more protection to the general contractar the goal of a specific provision with ambiguities must take a back seat to the purpose of the overall statute which is to provide recovery for suppliers who have provided materials but not received compensation I find that this interpretation of the statute best comports with the purpose of the LPWA as a whole and prevents absurd results For instance it would be absurd to require a materialman to provide notice at the end of each month that an unpaid delivery is made when the due date for the supplies and materials ardered pursuant to an open account arrangement are not due until two months following the delivery as in the case before us with the due date term of NET 2ND lOTH In addition to the absurdity of the requirement it would be unduly burdensome on suppliers using open aacounts to require them to give separate notices of nonpayment within 75 days of each month that unpaid materials are delivered when they have continuous and ongoing invc for future deliveries and before ices they are even aware thaY a previous delivery is past due A materialman cannot give notice for unpaid supplies and materials when the invoiced amounts have not had time to accrue Such a construction requiring repetitious notices abrogates much ofthe broad protection given materialmen by the statute For these reasons I find that La R 38 requires a materialmads S 2442 F nonpayment of notice concerning deliveries pursuant to an open account arrangement with a subcontractor to be sent to the general contractor and owner 6 within 75 days of the last day of the month in which all of the materials are delivered for the public works pxoject or in other words when the claim for unpaid deliveries is mature because the supplier has made its in delivery Thus l s notice RSG single was nonpaymerii af tiirraeii t all unpaid deli in this s eri case and the district court erred in d the full arnoutaY owed for the unpaid sallowang materials I believe this ri irz keepin with the legislature purpose in sult s s enacting the LPWA to protect the interests of those who supply materials to public works projects with a limit on the time for enforcing the materialman s claim for unpaid materials Accordingly I respectfully dissent from the majority and would reverse the judgment of the district court and render judgment in favor uf RSG for the full amount past due 268 fQr the supplies they delivered to the public works 29 056 proj ect z This interpretation is consistent with ehe language in ubsection B of the same statute where the claimant may onlp file a claim after the maturity oj his claim and within forty days five after the recordation of acceptance of the work by the governing authority or of notice of defauk of the contractor ox subcontractor See La R 382242 emphasis added The record S Bl sub fudice does not contain evidence of the date of the recorded acceptance of this public woxk and the parties have not made an issue of whether RSG timely filed its statutory lien Because of this lack of evidence the additional language in La R 382242 or no later than the S F statutoxy lien period whichever comes first is not relevant Co the analysis 3 The record contains no indication that any of the invoices or charges for the roofing supplies and materials was ever disputed 7

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