251 So. 3d 493
La. Ct. App.2018Background
- Roy Anderson Corp. (RAC) was the general contractor on a $61.3M renovation of 225 Baronne; RAC subcontracted portions of the work to Ronald Franks Construction Co., LLC (Franks Construction).
- RAC filed a Petition to Enforce Lien against owner 225 Baronne alleging nonpayment; the recorded contract notice referenced an attached payment bond.
- Franks Construction filed to intervene in RAC's petition asserting connexity and that the outcome would affect its ability to recover ~ $8.37M in alleged damages, including "pass-through" claims; Franks was also pursuing arbitration against RAC and a separate suit against the payment bond.
- 225 Baronne moved a peremptory exception of no right of action, arguing that because RAC had furnished and recorded the statutorily required payment bond, La. R.S. 9:4802(C) bars subcontractors from direct actions against the owner and limits their remedies to the bond and claims against the contractor.
- The district court sustained the exception and dismissed Franks Construction's intervention with prejudice; Franks appealed.
- On de novo review, the appellate court affirmed, holding that La. R.S. 9:4802(C) specifically displaces intervention rights under La. C.C.P. art. 1091 for subcontractors seeking to proceed directly against an owner where the bond and notice were properly provided and recorded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Franks may intervene in RAC's Petition to Enforce Lien under La. C.C.P. art. 1091 | Franks: judgment may affect its recovery and it has a justiciable, connex claim; intervention is permitted to protect pass-through and other claims | 225 Baronne: LPWA (La. R.S. 9:4802(C)) bars subcontractor direct actions when bond and notice are furnished and recorded; Franks' remedies are against the bond and RAC | Held: No right to intervene; the specific LPWA provision prevails and precludes direct action against owner where bond/notice complied with statute |
| Whether the court improperly relied on non-record evidence (the bond/recordation) to sustain the exception | Franks: district court relied on bond recordation not offered into evidence; mover bears burden of proof | 225 Baronne: court may take judicial notice of public records and pleadings; petition and answers admitted recordation and Franks did not contest it | Held: Judicial notice of public records and filings was proper; reliance on bond/recordation was permissible |
| Whether dismissal with prejudice was improper without leave to amend | Franks: under La. C.C.P. art. 934, should be allowed to amend to cure grounds for exception | 225 Baronne: statute extinguishes right to sue owner; no facts could be pleaded to cure deficiency | Held: Amendment would be futile because La. R.S. 9:4802(C) eliminates the claimed right; dismissal with prejudice proper |
Key Cases Cited
- Two Canal Street Investors, Inc. v. New Orleans Bldg. Corp., 212 So.3d 611 (La. App. 4th Cir. 2017) (exception of no right of action tests whether plaintiff belongs to class the law grants the cause of action)
- Louisiana Citizens Prop. Ins. Corp. v. LAA Shoring, LLC, 223 So.3d 17 (La. App. 4th Cir. 2017) (right of action is a question of law; de novo review of exception)
- Mendonca v. Tidewater, Inc., 862 So.2d 505 (La. App. 4th Cir. 2003) (determination of right of action is legal and reviewed de novo)
- N. Clark, L.L.C. v. Chisesi, 206 So.3d 1013 (La. App. 4th Cir. 2016) (standard of review for exception of no right of action)
- Pumphrey v. City of New Orleans, 925 So.2d 1202 (La. 2006) (statutes on same subject must be harmonized; specific controls general)
- Channelside Servs., LLC v. Chrysochoos Group, Inc., 194 So.3d 751 (La. App. 4th Cir. 2016) (specific statutory scheme controls over broader statutes when conflict exists)
- City of New Orleans v. La. Assessors' Ret. & Relief Fund, 986 So.2d 1 (La. 2008) (statutes must be read in their entirety and given effective meaning)
- Jefferson Door Co., Inc. v. Forman Constr., Inc., 836 So.2d 552 (La. App. 5th Cir. 2002) (where bond/notice timely filed and recorded, owner avoids personal liability; subcontractor remedies limited to surety and privity against GC)