Coast 2 Coast Construction, L.L.C. v. Parish of St. Tammany

STATE OF LOUISIANA

COURT OF APPEAL

FIRST CIRCUIT

NUMBER 2019 CA 1311

COAST 2 COAST CONSTRUCTION, L.L.C.

VERSUS

PARISH OF ST. TAMMANY

Judgment Rendered: JUN 16 2020

Appealed from the
Twenty -Second Judicial District Court
In and for the Parish of St. Tammany
State of Louisiana
Suit Number 2018- 12739

Honorable Martin Coady, Presiding

Ernest S. Anderson Counsel for Plaintiff/Appellee
Slidell, LA Coast 2 Coast Construction, L.L.C.

Ronald S. Hagan Counsel for Defendant/Appellant
Assistant District Attorney St. Tammany Parish Government
Mandeville, LA

BEFORE: WMPPLE, C. J., GUIDRY, AND BURRIS,' JJ

1 William J. Burris, retired, serving pro tempore by special appointment of the Louisiana
Supreme Court.

GUIDRY, J.

Defendant/Appellant, St. Tammany Parish Government ( Parish), appeals

from a judgment of the trial court in favor of plaintiff/appellee, Coast 2 Coast

Construction, LLC ( Coast), granting a writ of mandamus compelling the Parish to

pay the final amount due under a construction contract and awarding Coast

attorney' s fees pursuant to La. R.S. 38: 2191( B). For the reasons that follow, we

reverse and remand.

FACTS AND PROCEDURAL HISTORY

On July 25, 2014, the Parish awarded a public works contract to Coast for

construction of flood control improvements to Huntwyck Village Subdivision Phase

II pursuant to the Louisiana Public Bid Law, La. R. S. 38: 2212. Coast thereafter

commenced work on the project, and on December 30, 2015, the Parish issued a

certificate of substantial completion to Coast, and on October 10, 2016, Coast issued

a clear lien certificate to the Parish.

Coast filed a petition for damages and mandamus on June 1, 2018, naming the

Parish as a defendant and asserting that the Parish had failed to tender final payment

due within forty-five days of its receipt of the clear lien certificate. Coast asserted

that the following had not been paid, despite amicable demand: approved pay

applications and approved change orders in the total amount of $130, 733. 94 and

retainage held by the Parish under the contract in the amount of $107, 371. 83. Coast

also asserted that the Parish continued to contest change orders in the total amount

of $190, 288. 76 without a factual basis. As such, Coast asserted that the total amount

of final payments owed by the Parish under the contract was $ 428, 394. 53. Coast

sought mandamus directing the Parish President to pay the undisputed amount owed

to Coast and to resolve the disputed amounts as required by the terms of the contract.

Coast also sought attorney' s fees pursuant to La. R.S. 38: 2191( B), contractual

z

damages, delay damages, and damages for violation of closed specifications

prohibition.

The Parish thereafter filed an answer, affirmative defenses, and

reconventional demand. In the reconventional demand, the Parish asserted that the

contract included provisions for the assessment of $500. 00/ day in liquidated or

stipulated damages. The Parish asserted that due to the poor and slow performance

of Coast, the contract was cancelled in June 2015, but that the parties reinstituted the

contract and executed an amendment to the contract on September 3, 2015, which

included an extension of sixty days to complete the project. Additionally, liquidated

damages were increased to $ 1, 000. 00/ day. The Parish asserted that Coast did not

complete the project within the updated schedule timelines and was assessed

1, 000. 00 for thirty-one days during the period for which pay application number 6

applied, for a total of $31, 000. 00 in liquidated damages. The Parish asserted that this

amount was withheld from pay application number 6 according to the contract

provisions and no funds were paid to Coast.

The Parish further asserted that Coast issued substantial completion of the

project on November 5, 2015, and received a punch list. The Parish asserted that

Coast failed to complete the punch list items in a timely manner and was assessed

liquidated damages of $1, 000.00/ day for sixty-four days during the period for which

pay application number 7 applied, for a total of $64, 000. 00. The Parish asserted that

this amount was withheld from pay application number 7 according to the contract

provisions and no funds were paid to Coast. Accordingly, the Parish asserted that

under the terms of the contract, it is entitled to have ninety- five days of liquidated

damages, accruing at the rate of $1, 000.00/ day, assessed against Coast.

The trial court held a hearing on Coast' s petition for mandamus on January

30, 2019. The parties stipulated at the hearing that the final amount owed under the

contract is $ 95, 000. 00, which is equal to the amount of liquidated damages claimed

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by the Parish. Following the hearing, the trial court signed a judgment in favor of

Coast and against the Parish, granting the writ of mandamus compelling the Parish

to pay the final amount due under the construction contract in the amount of

95, 000. 00 with judicial legal interest due from October 14, 2016, until paid. The

trial court also awarded Coast $ 12, 450.00 in attorney' s fees pursuant to La. R.S.

38: 2191( B). The Parish thereafter filed a motion for new trial, which the trial court

denied on April 24, 2019. The Parish now appeals from the trial court' s judgment.

DISCUSSION

The payments for public contracts are governed by Louisiana Revised Statues

Title 38, Chapter 10. Specifically, La. R.S. 38: 2191 provides, in part:

A. All public entities shall promptly pay all obligations arising under
public contracts when the obligations become due and payable under
the contract. All progressive stage payments and final payments shall

be paid when they respectively become due and payable under the
contract.

B. ( 1) Any public entity failing to make any progressive stage payment
within forty-five days following receipt of a certified request for
payment by the public entity without reasonable cause shall be liable
for reasonable attorney fees and interest charged at one- half percent
accumulated daily, not to exceed fifteen percent. Any public entity
failing to make any final payments after formal final acceptance within
forty-five days following receipt of a clear lien certificate by the public
entity shall be liable for reasonable attorney fees and interest charged
at one- half percent accumulated daily, not to exceed fifteen percent.

C. The provisions ofthis Section shall not be subject to waiver by contract.

D. Any public entity failing to make any progressive stage payments
arbitrarily or without reasonable cause, or any final payment when due
as provided in this Section, shall be subject to mandamus to compel the
payment of the sums due under the contract up to the amount of the
appropriation made for the award and execution of the contract,
including any authorized change orders.

The Parish contends that the trial court erred in granting mandamus ordering

it to pay Coast $ 95, 000. 00, because the $ 95, 000. 00 was not due and payable under

the contract, as it was properly deducted as liquidated damages from the contract

amount pursuant to the terms of the contract.

4

This court recently addressed this identical issue in Law Industries, LLC v.

Board of Supervisors of Louisiana State University, 18- 1756 ( La. App. 1st Cir.

3/ 2/ 20), So. 3d , wherein the defendant had likewise alleged in a mandamus

proceeding that no amounts were due under the public contract because it was

entitled to withhold that amount as liquidated damages in accordance with the terms

of the parties' contract. The trial court, agreeing with the defendant, denied the

plaintiffs petition for mandamus. On appeal, however, this court found that it was

bound to apply La. R. S. 38: 2191( D) as written, which states that a public entity shall

be subject to a mandamus to compel the payment of any sums due under the contract.

This court further found that in a case where liquidated damages are at issue, in order

to determine the amount owed or " due" under the parties' contract, the trial court

must determine the amount of liquidated damages, as provided for in the contract,

which is owed to the defendant. Law Industries, LLC, 18- 1756 at pp. 13.

Accordingly, this court found in Law Industries, LLC that if a plaintiff elects

to use a mandamus proceeding, the trial court must determine in a summary

proceeding the sum owed under the parties' contract, including the amount of

liquidated damages payable under the contract' s provisions. If, after a summary

hearing, the trial court determines that a sum is due to the plaintiff under the public

contract, the trial court may order a judgment making the writ of mandamus

peremptory. Thereafter, the public officer or entity shall pay the amount ordered.

Law Industries, LLC, 18- 1756 at p. 14.

In the instant case, the trial court found in its reasons for judgment that the

request by Coast for mandamus under La. R.S. 38: 2191( D) for final payment due

under the contract is distinct from the Parish' s separate claim against Coast for

liquidated damages and as such, the Parish' s claim must be adjudicated separately

from the mandamus proceeding. In light of this court' s previous decision in Law

Industries, LLC, we find that the trial court legally erred in failing to consider the

5

Parish' s claim for liquidated damages in determining the amount due to Coast in the

mandamus proceeding. Accordingly, we reverse the trial court' s judgment and

remand this matter to the trial court to determine the sum owed under the parties'

contract in a mandamus proceeding in accordance with La. R.S. 38: 2191( D) and to

enter judgment accordingly. See Law Industries, LLC, 18- 1756 at pp. 14- 15. 2

CONCLUSION

For the foregoing reasons, we reverse the judgment of the trial court and

remand this matter to the trial court for further proceedings consistent with this

opinion. All costs of this appeal are assessed to Coast 2 Coast Construction, LLC.

REVERSED AND REMANDED.

2
Considering our determination that the trial court legally erred in failing to determine the
amount of liquidated damages payable under the contract requiring reversal of the judgment
herein, we pretermit discussion of the remaining assignments of error.
N

STATE OF LOUISIANA

COURT OF APPEAL

FIRST CIRCUIT

NUMBER 2019 CA 1311

COAST 2 COAST CONSTRUCTION, L.L.C.

VERSUS

PARISH OF ST. TAMMANY

BURRIS, J., concurring.
J1

I agree that this court is bound to follow the holding of Law Industries, LLC

v. Board of Supervisors of Louisiana State University, 2018- 1756 ( La. App. 1 st

Cir. 3/ 2/ 20), So. 3d , 2020 WL 1024901. See Pontchartrain Natural Gas

System v. Texas Brine Co., LLC, 2018- 0001 ( La. App. 1st Cir. 6/ 4/ 18), 253 So. 3d

156, writ denied, 2018- 1124 ( La. 9/ 28/ 18), 253 So. 3d 147 ( recognizing this court is

bound by the " law of the circuit" doctrine to follow its prior decisions.) Therefore,

I concur with the result reached herein.

However, I write separately to note my agreement with Judge Welch' s dissent

in Law Industries that a claim for liquidated damages should be tried as an ordinary

proceeding, separate from the mandamus proceeding provided for in La. R. S.

38: 2191 to recover amounts due under the contract. As noted by Judge Welch,

litigating the various issues that may arise in a contract dispute in a summary

proceeding in order to determine what sums are owed under a public contract thwarts

the purpose of the speedy resolution of contractual claims via mandamus envisioned

by La. R.S. 38: 2191. Law Industries, So. 3d , 2020 WL 1024901, * 10.