270 So. 3d 637
La. Ct. App.2018Background
- Unisys contracted with Louisiana DPS/OMV (NGMV project phases II & III) and a consolidated Consulting Services Contract was in effect by April 1, 2008.
- Parties mutually agreed to terminate the contract in December 2008; Department sent written notice invoking the contract’s termination-for-convenience provision (Section 4.2) effective 30 days after Jan 14, 2009.
- Unisys submitted an inventory (Mar 11, 2009) seeking ~$8.77M for work in progress, including: ~$1.32M for four approved deliverables, ~$2.72M withheld retainage on accepted deliverables, and ~$4.47M for other work in progress.
- Commissioner of Administration awarded Unisys $1,320,083 for four approved deliverables but denied retainage and other claimed amounts; Unisys sought judicial review in the Nineteenth JDC.
- Procedural history: district court affirmed the Commissioner; the Department and Unisys both appealed; this court affirms in part, amends to expressly award $1,320,083 to Unisys, denies retainage claims, and awards legal interest from Mar 11, 2009 until paid.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction / cause of action: whether judicial review under PSPC allows a money judgment | Unisys: statutory administrative process (R.S. 39:1524–1526) applies; judicial review may produce enforceable money judgments | Department: PSPC doesn’t authorize adjudication of money judgments via judicial review; contract disputes are original-jurisdiction civil matters | Held: PSPC procedure governs; district court has appellate jurisdiction under R.S. 39:1526 to enter money judgment on review; exception of no cause of action denied. |
| Payment for four deliverables (~$1.32M): whether Unisys was entitled after termination | Unisys: deliverables were accepted/approved; termination-for-convenience entitles payment for deliverables satisfactorily performed | Department: Unisys repudiated contract (anticipatory breach) so not entitled; signatures on approvals were invalid because not by Director required by Section 3.1 | Held: Commissioner reasonably found mutual termination and implied acceptance by department personnel modified approval requirement; Unisys awarded $1,320,083. |
| Retainage (~$2.7M–$2.91M): whether retainage withheld must be paid on termination | Unisys: retainage is earned portion of approved payments; Department prevented completion/warranty so condition to payment was frustrated by Department fault (C.C. art. 1772) | Department: retainage tied to post-completion 12-month warranty and reports; no warranty work performed so no entitlement; Unisys anticipatorily breached | Held: Contract language unambiguous—retainage disbursed only during 12-month warranty after project completion; no entitlement on termination-for-convenience. Retainage claim denied. |
| Prejudgment/legal interest: whether interest accrues and from what date | Unisys: entitled to legal interest from termination date (Feb 13/14, 2009) on amounts due | Department: opposed (implicitly) given administrative process and timing of submission | Held: Interest awarded at legal rate; accrual begins Mar 11, 2009 (date Unisys submitted inventory/claim) until paid; district court erred by denying interest. |
Key Cases Cited
- United Healthcare Ins. Co. v. State, Div. of Admin., 103 So.3d 1095 (La. App. 1st Cir. 2012) (administrative decision review standard; scope of commissioner authority)
- Catamaran PBM of Maryland, Inc. v. State, Office of Group Benefits, 174 So.3d 683 (La. App. 1st Cir. 2015) (agency deference; arbitrary and capricious review)
- State, ex rel. Guste v. Texaco, Inc., 433 So.2d 756 (La. App. 1st Cir. 1983) (R.S. 39:1524–1526 provide vehicle for money claims under professional services contracts)
- Fleming v. JE Merit Constructors, Inc., 985 So.2d 141 (La. App. 1st Cir. 2008) (modification of written contract may be shown by conduct)
- Quality Design & Constr., Inc. v. City of Gonzales, 146 So.3d 567 (La. App. 1st Cir. 2014) (award of legal interest mandatory where prayed for or provided by law)