Gulf Coast Refrigeration, LLC VS Houma Terrebonne Housing Authority, as principal; Companion Property and Casualty Insurance Company, as surety; and Olympic Commercial & Residential Repair, as agent
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NOT DESIGNATED FOR PUBLICATION STATE OF' LOUISIANA COURT OF APPEAL FIRST C, IRCUIT NO, 21113 GA 1512 GliLF C AST REFRIGERATION, LLC VF. RSUS HOUMA TERREBONNE HOUSING AUTHORITY, AS PRINCIPAL, COMPANION PROPERTY AND CASUALTY INSURANCE COMPANY, AS SURETY, AND OLYMPIC COMMERCIAL & RESIDENTIAL REPAIR, AS AGENT Judgment Rendered: MAR 2 4 p r n Appealed from the 32nd Judicial Distriet Court In and for the Parish Terrebonne State of Louisiana Case No. 167,715 The Honorable John R, Walker, Judge Presiding X t!-,. , 1 C' cJc ¢ e. aF ' X ' 9F ': F c'' ..! Gerard O. Salassi, I Craig X%] Y J. Mordock i fe Sc cT' Counsel for Plaintiff/Appellant Gulf Coast Refrigeration, LLC New Orleans, Louisiana Maura Z. Pelleteri Counsel for Defendant/Appellee Christopher J: Weema Companion Property and Casualty New Orleans, Louisiana Insurance Company Joseph L. Waitz, Jr. Counsel for Defendant/Appellee District Houma Terrebonne Housing Attorney Jacob D. Dagate Authority Special Assistant Distr ct Attorney Houma, Louisiana M* BEFORE: KUHN, HIGGINBOTHAM, AND THERIOT, JJ. THERIOT, J. The plaintiff-appellant, Gulf Coast Refrigeration, LLC ( Gulf Coast), seeks reversal of a judgment of the Thirty- Second Judicial District Court that sustained exceptions of no cause of action and no right of action in favar of the defendants- appellees, Houma Terrebonne Housing Authority (HTHA) and Compamion Property Casualty Insurance Company ( Companion). 1 For the following reasons, we affirm. FACTS AND PROCEDURAL HISTORY On March 15, 2010, HTHA entered into a construction agreement with Olympic Commercial and Residential Repair, LLC ( Olympic), a building contractor, to modernize and renovate ten duplex housing units in Houma, Louisiana, owned by HTHA. It is undisputed in the record that the project qualified as a public work and falls under the authoriry of the Louisiana Public Warks Act.2 Companion became surety of the project by issuing a performance bond in favor of Olympic on March 30, 2010. The bond was for the full amount of the contract, totaling $785, 530. 00. Gulf Coast was a subcontractor on the project, and, as the work progressed, made several charges on the contract for work and materials. Olympic paid Gulf Coast for those charges, until it went into default on the project on February 2, 2012; and was terminated as contractor by HTIIA. HTHA then secured a new contractor and resumed construction on the project, but Gulf Coast was not renewed as a subcontractor. 1 The third defendant, Olympic Commercial and Residential Repair, LLC, was not served at the time of the trial court' s heazing on the exceptions, therefore, the trial court' s ruling was not applied to this defendant. As such, this defendant was not made a party to the instant appeal. Z Title 38 of the Louisiana Revised Statutes. 2 Gulf Coast filed a lien aga% the 1- ourria work site on July 20, 2012 nst for the outstanding balance Gulf Goast ciaimed to be $ 130, 340. 50, 3 and recorded the same in the public records of Terrebonne Parish, Gulf Coast filed its petition for sums due a; ainst all hiee defendants on Septeznber 13, 2012. Companion and HTHA right of action on led ex eptiions o no cause of action and no November 13, 2 i2, and November 19, 2012, respectively. Gulf Coast filed an amended petition on March 6, 2013, two days before the hearing on the exceptions.4 Hearing an the exceptions was held on March 8, 2013. At that time, HTHA and Companion moved to strike Gulf Coast' s supplemental memorandum, but the trial court denied their motion. The trial court sustained the exceptions, finding that since Gu1f Coast had untimely filed its lien, it had no cause of action against HTHA or Companion, and neither did Gulf Coast have a right of action since yt did not fall within a class of plaintiffs that would be er tigled to a remedy against HTHA or Companion. The trial courk dismissed HTHA and Companion from Gulf CoasYs lawsuit with prejudice, awarding them co rt costs and attorney fees, and ordered the Terrebonne T' arish Clerk af Lourk to caneel the lien filed by Gulf Coast against the Houar 2013. proper[y work site. Tk e judgment was signeci March 28, Gulf Coast fi] ed a motio fr r reconsideration and/or motion to supplement record, challenging tbe trial court' s decision on the exceptions. The trial court denied Gulf Coast' s motion on May 30, 2013, awarding additional costs and attomey fees to HTHA and Companion, and designated 3 The date of the lien' s filing appears enoneously in Companion' s brief as August 20, 2012; however, since the appellees contend that Gulf CoasYs lien became untimely as of March 19, 2012, the error is of little significance. 4 In the amended petition, Gulf Coast added as defendants Alford Petroleum Equipment, Inc., and North American Specialty Insurance Company, who were the second contractor hired and its surety, respectivel.y. 3 its rulings from March 28 and May 30 fiaial and appealable. Gulf Coast timely appealed. ASSIG' MENTS OF ERROR v Gulf Coast assigns erro to the ?rial court' s March 28, 2013 judgment only. Gulf Coast' s six assignrnentS are as f lloaxs: 1. It was error for the rrial court to rar.t the exceptic n of no right of action and no cause of action filed on behalf of both Companion and HTHA; 2. It was error for the trial court to consider matters outside the petition in making its determinarion on the exceptions of no right of action and no cause of action; 3. It was error for the trial eourt to allow the supplemental and amending petition of Gulf Coast except as to HTHA, and Companion; 4. It was error for the t iai ourt te refuse Gulf Coast' s request for leave to amend; 5. It s,vas errar for the trial court to order cancellation of Gulf Coast' s lien; 6. It was error for the trial court to award fees and costs to HTHA and Companion in connecrion with the exceptions of no right of action and no eause of action. STANDARD OF REVIE' V When the facts alleged in the petition provide a remedy under the law to someone, but the plaintiff who seeks the relief for himself or herself is not the person in whose favor the law extends the remedy, the proper objection is no right of action ar want of interest in the plaintiff to institute the suit. The proper objection is no cause of action when the law does not provide a 4 remedy to anyone under the facts alleged in the petitlon. i Frank L. Maraist and Harry T Lemmon, Louisiancr Civil Law Treatise. Civil Procedure § 6: 7 2d ed. 2012) ¢ Tha function of the perenlptory excaption of no cause of action is to questiorz whether the law rem dy to anyone ura ier the factual extends allegations, of' the petition., The standard o" xeview for sustainir ar denying a peremptory exception of no cause of action is de novo because it raises a question of law. Kinchen v. Livingston Parish Council, 2007- 0478, p. 2 La. 10/ 16/ 07), 967 So. 2d 1137, 113&. petition fails to state a cause of The burden of demonstrating that a action is upon the mover. DeCaire, 2003- 1299, p, 7 ( La: 3/ 19/ 04), 869 So. 2d 114, 119. Ramey v. A peremptory exception of no right of action is subject to de novo review. Parker v. State, 2011- 1475, p. 1 ( La App. 4 Cir. 3/ 7/ 12), 86 So3d 791, 793, writ denied, 2012- 0957 ( La. 6/]_SJ12), 90 Sa. 3d 1067. DISCUSSION Louisiana Revised Statutes, 38: 224'2( B), provides that any claimant may after the maturity of his claizn amd within forty-five days after the recordation of acceptance of the work by the governing authority or of notice of default of the contractor or subcontractor, file a sworn statement of the amount due him with the goveming authority having the work done and record it in the office of the recorder of nortgages far the parish in which the wark is done. It is obvious from th.e record that Gulf Coast filed and recorded its dien well beyand the forty-five days after whicfi Olympic went into default, In order to proceed on the bond, the cl imant must cornply with the notice and reeordation requirements 38: 2247; John F. Sanchez Plumbing of La. R. S. 38; 2242( B). Co., Inc. v. La. R. S. Aetna Cas. & Sur. Co., 564 So. 2d 1302, 1303 ( La. App. 1 Cir. 1990), writ denied, 567 So.2d 1128 ( La. 5 1990). Based on the law aiid ju isprudence, it is clear that for statutory reasons Gulf Coast does not have a right of action against either HTHA or Companion. Howev r, the standard c f review f r the exception of no cause of action eonfines us to the four corrzers of the petitian itself; with the presumptiotA that all facts contained in the etitzon are true. See F' rd Motor o Credit Co. v. Louisiana Tar Commission, 251 So. 2d 392, 396 ( La. App. 1 Cir. 1971); See also Everything on. WheeZs Subaru, Inc. v. Subaru South, Inc., 616 So. 2d 1234, 1235 ( La, 1993); See also Wells v. Flitter, 2005- 2525, p. 4 ( La. App. 1 Cir. 9/ 27/ 06), 950 o.2d 679, 681, writ denied, 2007- 0312 La. 11/ 2/07), 966 So.2d 598. Ln its petition, Gulf Coast alleges that it filed a lien pursuant to the Louisiana Public Works Act with the recorder of mortgages in Terrebonne Parish. The petition itself does not contain the date on which the lien was filed, but attached to the petition as an exhibit is the lien affidavii with the recording information. The recordation date is shown as July 20, 2012. Where the getitaon is silent as to the lien' s filing date, we can rely on the attached exhibit to see that Gulf Coast' s lien was untimely filed. See Donnaud' s Inc. v. Gulf Coast ank and Trust Co., 2003- 0427, p. 5 ( La. App: 5 Cir. 9/ 16! 03), 8S8 Soa2d 4, 5, writ denied, 2003- 2862 ( La. 1/ 9/ 04), 862 So, 2d 985. Gulf Coast has failed Lo state a right of action far the same deficiencies in the petition, as it fails to allege speci ic facts to sho v a right of action against any defendant. See Well., at 681. Because Gulf Coast did not timely file and recard its lien, it cannot be afforded the right of action provided in La. R. S. 382247 against Companion 5 Louisiana Revised Statutes 3&: 2247 states, in pertinent part: 6 and/ or HTHA. S Gulf Coast cannot avail itself of the one- year prescriptive period provided in La. R.S. 38: 2247 because it did not secure its right of action by filing the lien within forty- five days of Olympic' s default. Gulf Coast attempts to cireumvent the requirement of La. R.S. 38: 2242( B) by arguing that La. R.S. 38: 2242(D)6 allowed more time to file and record the lien since HTHA was still holding onto money that had to be paid to the contractor and subcontractors. This is a misreading of the statute and it ignores what is clearly required by La. R. S. 38: 2242( B). After HTHA terminated its contract with Olympic, a notice of contractor default was recorded in Terrebonne Parish which acknowledged all valid and outstanding liens, privileges, and encumbrances against Olympic and H" IIIA, of which Gulf Coast not included. was HTHA as awarding authority was therefore liable for those claims under La. R.S. 38: 2242( D) and was not holding any secured funds for Gulf Coast. Once HTHA obtained a new contractor; it no longer had privity of contract with Olympic or Gulf Coast. HTHA then incurred the obligations to pay funds to the new contractor and subcontractors. There were no longer, nor were there ever, any funds reserved, secured, or earmarked for Gulf Coast that HTHA had retained, La. R.S. 38: 2242( D) is therefore inapplicable to Gulf Coast, and Gu1f Coast' s interpretation of the statute would essentially render La. R.S. Nothing in this part shall be construed to deprive any claimant... who has complied with the notice and recordation requirements of R.S. 38: 2242(B), of his right of action on the bond pursuant to this Part, provided that said action must be brought against the surety or the contractor or both within one year from the registry of acceptance of the work or of notice of default of the contractor,... 6 Louisiana Revised Statutes 38: 2242( D) states: When an awarding authority makes final payment to the contractor without deducting the total amount of all outstanding claims so served on it or without obtaining a bond from the contractor to cover the total amount of all outstanding claims, the awarding authority shall become liable for the amount of these claims. 7 38: 2242( B) pointless ir? rr eant tllat a subcontractor could secure funds with x an untimely filed lien. AppelPate courts have concluded that La. C. C.P. art. 934 daes not require meanin court ta give leave ta aniend a petition if doing so would be futile, Af it is appar nt thak the defecx could ziot be ozrecteci by amendment. : nlagill v. Lowery, 43, 261, p. 4, n. 2, ( La. t pp. 2 Cir. 5/ 7/ 08), 990 So.2d 18, 20, n. 2 writ denied, 2008- 1237 ( La. 10/ 10/ 08), 993 So.2d 1283. Gulf Coast' s defect in its perition is the date on which it filed and recorded the lien, and that is an unchangeabi_ fact. Allowing Gulf Coast to e further amend its petition would be futile. HTHA and Companion successfully requested attomey fees from the trial court, claiming that both Gulf Coast' s original petition and motion to reconsider and/or suppl_ ement the record were vithout any reasonable basis. If the trial court finds that an action brought under the Loaisiana Public Works Act was brought by azay c3.aimant - ikhout just cause or in bad faith, the trial judge slaall aw rd the priracipal t r sure y a reasonable amount as attorn y fees for defendin such arz La. R.S. 38: 2246( B). actic n. purpose of the attorr e} r fee prvvisioa The Qf the Public Works ,Act is to encourage arad promote amicable settlement of ciaims from public works contracts to the end that persons fiarnishing materials, supplies, and labor on such projects wi11 be pa:d promptly, thus avoiding inconvenience, delay and expense occasioned by litigation. Because it is penal in nature, the attarney fee provision is subjeot to the rule of strict construction. Glencoe Educ. Foundation, Inc. v. Clerk of Court and Recorder of Mortgages.for Parish of St. Mary, 2010- 1872, p. 16 ( La. App. 1 Cir. Sl6/ 11), 6 So. 3d 225, 234, writ denied, 2011- 1142 ( La. 10' 21%11), 73 So. 3d 3$ 3. 8 We find that it was obvious tq all panies inti olved that Gulf Coast was untimely with its lien and as result had no right of action or cause of action against Companion and HTHA; nevertheless, Gulf Coast proceeded with an action it either knew or should ha ¢ t.reasona&lv known could not have been successful. Furthermore, Gulf Coast went forward w; t? the motion to reconsider and/ or suppiement the record wher. there had been no new evidence or law presented that could have changed the substance of the trial court' s ruling. Gulf Coast' s actions against Companion and HTHA were brought without just cause, and the trial court did not abuse its discretion under La. R. S. 382246 to award costs and reasonable attorney fees to the defendants. Lastly, we find that the trial court was correct to cancel Gulf Coast' s lien on HTHA' s property, since th'e Iien was untimely filed and Gulf Coast had no right or cause of action against HTHA or Companion. The lien unnecessarily encumbered the property, and it was proper for the trial court to cancel the lien following its rul:ng on the exceptions. CONCLL SION Regardless of any amendment or Iegal argument on the part of Gulf Coast, it is an inescapable fact that Csutf Coast did not abide by the clear requirements of La. R. S. 3$: 2 22( B). By not filing a lien within forty- five days of Olympic' s default, Gul£ Coast lost its privilege to recover its expenses from the bond and could not be included in the class of plaintiffs who could recover from the bond. As such; Gulf Coast had an incurable defect in i*s petition, and the trial court ivas correct to dismiss HTHA and Companion from the suit an.d cancel the lien. 9 DECREE The trial court' s judgment in favor of tkie Hourna-"Terrebon: e Housing Authonry and Coznpanion (; asualty Insur nce Corn any and against Gulf Coast Refr g ration, LLC' is affirzr ed AE costs of' this ppe Y are assessed to the ap ellat t. AFFIRMED. lo
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