Pierce Foundations, Inc. v. Jaroy Construction, Inc.
169 So. 3d 580
La. Ct. App.2015Background
- Jefferson Parish contracted with JaRoy Construction to build a public gymnasium; JaRoy furnished the statutory performance/payment bond with Ohio Casualty as surety.
- JaRoy subcontracted pile installation to Pierce Foundations for $371,487; Pierce completed 621 piles by November 3, 2008 but remained unpaid.
- Pierce sued JaRoy on July 23, 2009 and later added Ohio Casualty as a defendant (amended petition July 22, 2010) asserting bond liability.
- JaRoy filed bankruptcy; Jefferson Parish recorded acceptance of the work on October 17, 2011. Pierce never filed a sworn statement of its claim with the governing authority nor recorded one in the mortgage records as required by La. R.S. 38:2242(B).
- Trial resulted in judgment for Pierce against Ohio Casualty for contract damages and idle time; on appeal the Fifth Circuit reversed and rendered judgment for Ohio Casualty, dismissing Pierce’s action with prejudice because Pierce failed to comply with Public Works Act notice/recordation requirements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether compliance with La. R.S. 38:2242(B) is a prerequisite to sue on a public works bond | Pierce: The statutes do not create a strict prerequisite; suit may proceed without filing/recording when other notice is given | Ohio Casualty: The statute and La. R.S. 38:2247 make the notice/recordation requirements necessary conditions to bring bond claims | Held for Ohio Casualty: compliance with 38:2242(B) is required; Pierce’s failure to file/record deprived it of a right to sue on the bond |
| Whether trial court erred denying Ohio Casualty’s summary judgment | Pierce: earlier denial/inaction should bind review; suit could proceed on other grounds | Ohio Casualty: summary judgment appropriate because of statutory noncompliance | Held: Trial court erred; Ohio Casualty was entitled to summary judgment at motion time, but court declined to render it because a full merits trial occurred; appellate court nonetheless rendered final judgment for Ohio Casualty |
| Whether Burko precedent excuses strict compliance with filing/recording | Pierce: Relies on Burko to argue substantial notice suffices | Ohio Casualty: Burko is inconsistent with strict construction and distinguishable on facts | Held: Burko rejected; strict construction controls and facts are distinguishable |
| Whether interest date should be modified on appeal | Pierce: sought modification of interest commencement date | Ohio Casualty: did not prevail on merits so contest not reached | Held: Not addressed separately because principal judgment reversed and rendered for Ohio Casualty |
Key Cases Cited
- Oubre v. La. Citizens Fair Plan, 79 So.3d 987 (La. 2011) (statutory interpretation principles govern analysis)
- McInnis Bros. Constr. v. State, 701 So.2d 937 (La. 1997) (lien and public contract statutes construed strictly)
- Wilkin v. Dev. Con Builders, Inc., 561 So.2d 66 (La. 1990) (public works bond requirement for public contracts)
- Honeywell, Inc. v. Jimmie B. Guinn, Inc., 462 So.2d 145 (La. 1985) (pre-amendment rule allowing subcontractor to sue on bond without filing/recording)
- Interstate School Supply Co. v. Guitreau's Constr. & Consulting Co., 542 So.2d 138 (La. App. 1 Cir.) (compliance with 38:2242(B) required to pursue bond claim)
- John F. Sanchez Plumbing Co. v. Aetna Cas. & Sur. Co., 564 So.2d 1302 (La. App. 1 Cir.) (subcontractor lacked cause against surety for failure to comply with 38:2242(B))
- "K" Constr. v. Burko Constr., 629 So.2d 1370 (La. App. 4 Cir.) (contrasting decision finding substantial notice could suffice; distinguished and rejected by court)