Wallace C. Drennan, Inc. Versus Timothy P. Kerner, in His Capacity as Mayor of the Town of Lafitte and the Town of Lafitte

WALLACE C. DRENNAN, INC. NO. 21-CA-664

VERSUS FIFTH CIRCUIT

TIMOTHY P. KERNER, IN HIS CAPACITY AS COURT OF APPEAL
MAYOR OF THE TOWN OF LAFITTE AND
THE TOWN OF LAFITTE STATE OF LOUISIANA

ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT
PARISH OF JEFFERSON, STATE OF LOUISIANA
NO. 808-957, DIVISION "A"
HONORABLE RAYMOND S. STEIB, JR., JUDGE PRESIDING

August 17, 2022

ROBERT A. CHAISSON
JUDGE

Panel composed of Judges Robert A. Chaisson,
Stephen J. Windhorst, and Hans J. Liljeberg

JUDGMENT VACATED; JUDGMENT RENDERED; REMANDED
RAC
SJW
HJL

COUNSEL FOR PLAINTIFF/APPELLANT,
WALLACE C. DRENNAN, INC.
Loretta G. Mince

COUNSEL FOR DEFENDANT/APPELLEE,
TIMOTHY P. KERNER, IN HIS CAPACITY AS MAYOR OF THE TOWN OF
LAFITTE AND THE TOWN OF LAFITTE
Sidney J. Hardy
Katherine L. Swartout
Lynda A. Tafaro

CHAISSON, J.

In this case arising from disputed payments on a construction contract,

Wallace C. Drennan, Inc. (“Drennan”) appeals a June 4, 2022 judgment of the trial

court sustaining an exception of no right of action filed by Timothy P. Kerner, Jr.,

in his capacity as Mayor of the Town of Jean Lafitte, and the Town of Jean Lafitte

(“Lafitte”), dismissing Drennan’s petition with prejudice and also dismissing as

moot a motion for summary judgment filed by Drennan. Defendants have also

filed an answer to Drennan’s appeal in which they seek modification of the June 4,

2022 judgment to include an award of costs and attorney fees as requested by

them. For the following reasons, we vacate the judgment of the trial court, render

judgment overruling defendants’ exception of no right of action, and remand this

matter for further proceedings including consideration of Drennan’s motion for

summary judgment.

BACKGROUND

On January 11, 2019, Drennan and Lafitte entered into a public bid

construction contract for Hurricane Isaac drainage improvements for which Lafitte

agreed to pay $2,062,809.00 in exchange for the project which was to be

completed within one hundred fifty days from commencement pursuant to the

terms and conditions set forth in the contract.1 The contract originally called for a

substantial completion date of July 11, 2019. Three change orders were

subsequently approved, increasing the total contract price to $2,277,284.75 and

changing the substantial completion date to August 13, 2019.

Pursuant to this contract, Meyer Engineers, Ltd. served as Lafitte’s

representative during the project. The terms of the contract required all

1
A liquidated damages provision in the contract requires Drennan to pay Lafitte a sum of
$500.00 for each consecutive calendar day that work was not completed by the contractually
mandated substantial completion date.

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applications for payment to be submitted by Drennan to Meyer Engineers.

Pursuant to this procedure, from March to August of 2019, Drennan delivered

monthly certified applications for payment to Meyer Engineers which were

subsequently paid by Lafitte.

On October 23, 2019, Lafitte executed a Certificate of Substantial

Completion for the project certifying that substantial completion was achieved as

of September 27, 2019. This certificate was recorded on November 5, 2019.

On November 1, 2019, and again on March 19, 2020, Drennan submitted

certified applications for payment (Pay Applications Nos. 8 and 9). A dispute

arose between the parties concerning the final amounts owed under the contract.

In May of 2020, Drennan filed a Petition for Writ of Mandamus (Case No. 806-

417) against defendants praying for the issuance of a writ of mandamus compelling

Lafitte to pay these final two payment applications in accordance with La. R.S.

38:2191(D).2 Drennan also demanded statutory interest and attorney fees in

connection with Pay Applications 8 and 9 and the six prior pay applications for

Lafitte’s alleged failure to make payments within forty-five days following the

receipt of the certified request for payment, as required by La. R.S. 38:2191(B).3

Defendants answered this petition contending that the action was premature

because the parties are contractually bound to engage in mediation prior to

litigation and that there was no right or cause of action because Drennan requested

2
La. R.S. 38:2191(D) states:
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.
3
La. R.S. 38:2191(B) states:
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 and 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.

21-CA-664 2

amounts beyond that which had been appropriated for the contract. Lafitte also

argued that there were no amounts currently due or owing under the contract

because, in part, Drennan owed Lafitte liquidated damages for failure to complete

the project within the contractually mandated timeframe.

On July 20, 2020, the parties reached an interim settlement agreement

concerning Drennan’s claims. The trial court entered an order dismissing the

Petition for Mandamus which stated:

IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:

The Petition for Writ of Mandamus filed by Wallace C. Drennan, Inc.
is dismissed without prejudice to Wallace C. Drennan, Inc.’s right to
file additional pleadings and/or proceedings seeking relief relative to
its claims against Defendants, including but not limited to its claim for
full payment of all amounts due under the Contract, its claim for
statutory interest under section 38:2191, claims for additional
attorney’s fees and costs, and any claim against Defendants that was
not resolved as part of the Parties’ interim settlement.

Following this interim settlement agreement, on August 4, 2020, Drennan

filed a Petition for Recovery of Interest and Attorney’s Fees Pursuant to La. R.S.

38:2191, which is the petition at issue in this appeal (Case No. 808-957). This

petition was filed as an ordinary proceeding wherein Drennan specifically seeks

$153,993.87 in statutory interest for Lafitte’s alleged failure to timely pay the

certified applications, as well as attorney fees and judicial interest. In their answer

to this petition, defendants denied interest was owed under La. R.S. 38:2191(B)

and disputed the dates on which payments were made. Defendants further averred

that no amounts were currently due or owing on the contract and that they at no

time acted arbitrarily, capriciously, or without reasonable cause.

While this case was still pending, on December 1, 2020, Drennan filed a

Second Petition for Writ of Mandamus (Case No. 812-650) against the defendants

praying for the issuance of a writ of mandamus requiring Lafitte to pay funds due

and owing under the contract as well as “an award of attorney’s fees and other

21-CA-664 3

relief” as provided by La. R.S. 38:2191. In this petition, Drennan made new

allegations concerning payments owed pursuant to Change Order No. 4, which was

executed on July 9, 2020, as well as resolutions approved by the Jefferson Parish

Council increasing the funds appropriated to reflect Change Order No. 4. Drennan

sought $137,000.00 as additional amounts owed under Pay Applications 8 and 9,

as well as costs, judicial interest, and attorney fees as permitted by La. R.S.

38:2191(B). Defendants again opposed this petition.

A bench trial on the Second Petition for Writ of Mandamus was held on

December 11, 2020, after which the court allowed the parties an opportunity to

submit additional briefs.4 On February 26, 2021, the trial court entered a judgment

in favor of Drennan and issued an alternative writ of mandamus ordering the

defendants to pay Drennan the sum of $137,000.00 plus judicial interest. The trial

court also rendered judgment in favor of Drennan and awarded it $10,000.00 in

attorney fees. In its written reasons for judgment, the trial court conducted an

extensive review of the contract’s general conditions and the parties’ claims for

amounts due and made specific findings with respect to the party’s obligations

under the contract. In these written reasons, the trial court also made statements

regarding Drennan’s claims for statutory late-payment interest under La. R.S.

38:2191(B) that were not included in the relief requested in the Second Petition for

Writ of Mandamus. Specifically, the trial court stated, in part:

There was no evidence that Drennan had made a timely Claim or
brought a dispute to the Engineer for the interest it claimed was due
but unpaid, as required by the General Conditions, §§ 9.09 and 10.05
as a condition precedent for any assertion of its rights to such interest
in this Court.

* * *

Drennan, on the other hand, in addition to failing to file a Claim or
Dispute, also failed to file any pleading asserting the statutory interest

4
On December 29, 2020, on an unopposed motion, the present case involving the Petition for
Recovery of Interest was transferred to the same division considering the writ of mandamus.

21-CA-664 4

it claimed was due on both the Final and Progress Stage Payments,
requesting only judicial interest in its Petition for Mandamus.

** *

Drennan, conversely, did not make a Claim for the interest it claimed
was due on progress stage payments, and such a Claim was a
condition precedent to asserting its rights in this Court.

Despite these statements made in its reasons for judgment, the trial court did not

include any decretal language in its February 26, 2021 judgment regarding

Drennan’s statutory interest claims.

On March 23, 2021, Drennan filed a Motion for Summary Judgment in the

instant case requesting that the trial court render a judgment on its claim for

$153,993.87 in statutory interest for alleged late payments pursuant to La. R.S.

38:2191(B) as well as an award of attorney fees and judicial interest. In its

memorandum in support of the motion, Drennan argued that there were no genuine

issues of material fact remaining and that, as a matter of law, the terms of the

contract did not require Drennan to submit its requests for statutory late-payment

interest to Meyer Engineers. As part of its argument, Drennan also recognized the

trial court’s statements regarding its statutory interest claims in the reasons for

judgment issued in Case No. 812-650, but argued that the trial court improperly

addressed these claims as they were not alleged. Drennan further argued that the

doctrines of res judicata and law of the case did not apply because the trial court’s

statements in the reasons for judgment were not part of the official or actual

judgment.

On May 12, 2021, defendants responded by filing a peremptory exception of

no right of action in which they argued that, according to the court’s findings in its

reasons for judgment in Case No. 812-650, Drennan failed to satisfy the

contractual provisions precedent to filing the suit (including making a timely claim

21-CA-664 5

to Meyer Engineers for the statutory interest Drennan claimed was due but unpaid)

and thus had no right of action.

In its opposition to the exception, Drennan argued that defendants’ exception

is procedurally flawed because: 1) as a contractor under a public bid contract with

a public entity, it is indisputably within the particular class of persons to whom the

law grants a remedy under La. R.S. 38:2191 and therefore has a right to bring a

claim for statutory interest; and 2) defendants’ argument that Drennan failed to

satisfy the conditions precedent to the contract is an affirmative defense that goes

solely to the merits of the case and is not properly raised through an exception of

no right of action.

The trial court set the motion for summary judgment and exception of no

right of action for hearing on May 27, 2021. Though defendants did not file a

peremptory exception of res judicata, and the trial court did not notice such an

exception on its own motion as allowed under La. C.C.P. art. 927, both Drennan

and defendants made brief arguments in their supporting memoranda for and

against the preclusive effect of the trial court’s statements in its February 26, 2021

reasons for judgment, quoted above, on Drennan’s statutory interest claims.5

At the conclusion of oral argument, the trial court stated, “I believe we did

address the statutory interest question in our reasons for judgment in the prior case.

I find that this matter is res judicata and that I’m going to grant the defendants’

exception of no right of action.” The trial court subsequently issued its June 4,

5
At oral argument, the trial court questioned Drennan’s counsel as to why Drennan did not
include statutory interest claims in the second mandamus proceeding (Case No. 812-650). During
the discussion, the trial court mentioned this court’s prior ruling in Handy v. Parish of Jefferson,
20-122 (La. App. 5 Cir. 6/1/20), 298 So.3d 380, and questioned whether this case required
Drennan to litigate all of its claims arising out of the same transaction or occurrence in one suit.
In response, Drennan’s counsel argued that Drennan could not cumulate ordinary claims for
statutory interest with a summary proceeding seeking mandamus relief. Counsel further claimed
that defendants objected to the cumulation of these claims in response to Drennan’s first
mandamus proceeding that the parties settled and dismissed without prejudice. We do not find
the Handy decision applicable to the present matter as it involved specific circumstances with two
lawsuits filed against different defendants, and therefore, did not involve the identity of the
parties that exists in the present matter.

21-CA-664 6

2021 judgment sustaining the exception of no right of action and dismissing

Drennan’s motion for summary judgment as moot. Drennan’s timely appeal

followed.

DISCUSSION

Exception of No Right of Action

On appeal, Drennan argues that the trial court legally erred in sustaining

defendants’ exception of no right of action for various procedural and substantive

reasons, including an assignment of error that the trial court erred to the extent it

sustained defendants’ exception of no right of action on the basis that Drennan’s

claim for statutory interest was or should have been adjudicated in the prior

mandamus proceeding. In support of this assignment of error, Drennan notes that

the trial court stated in its reasons that it sustained the exception of no right of

action on res judicata grounds and argues that this was a procedural error because

the defendant did not plead an exception of res judicata. We agree.

It is clear from the record that the trial court applied the incorrect legal

standard when sustaining the exception as res judicata instead of applying the

standard applicable to an exception of no right of action. When the trial court

commits legal error by applying the incorrect legal standard, the appellate court

should make its own independent de novo review of the record, if the record is

otherwise complete, to determine whether the mover has met their burden by a

preponderance of the evidence. Lennie v. Exxon Mobil Corp., 17-204 (La. App. 5

Cir. 6/27/18), 251 So.3d 637, 646, writ denied, 18-1435 (La. 11/20/18), 256 So.3d

994.

The peremptory exception of no right of action functions as a test of whether

the plaintiff has a real and actual interest in the action. La. C.C.P. art. 927. The

determination of whether a plaintiff has a right of action is a question of law,

which the appellate court reviews de novo. Khoobehi Props., LLC v. Baronne Dev.

21-CA-664 7

No. 2, L.L.C., 16-506 (La. App. 5 Cir. 3/29/17), 216 So.3d 287, 296. In examining

an exception of no right of action, a court focuses on whether a plaintiff belongs to

a particular class of persons to whom the law grants the cause of action asserted in

the suit, and the court assumes that the petition states a valid cause of action.

Louisiana Paddlewheels v. Louisiana Riverboat Gaming Com’n, 94-2015 (La.

11/30/94), 646 So.2d 885.

La. R.S. 38:2191 governs payments under a public bid contract in Louisiana.

In the same way a prior provision, La. R.S. 38:2188, grants a public entity the right

to file a writ of mandamus to compel the performance of a public works contract,

La. R.S. 38:2191 grants persons that contract with the public entity the right to

compel payment for work performed under the contract. The statute states in part:

A. All public entities shall promptly pay all obligations including
approved change orders, 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 and 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.

(2) Any interest received by the contractor pursuant to Paragraph
(1) of this Subsection, shall be disbursed on a prorated basis among
the contractor and subcontractors, each receiving a prorated
portion based on the principal amount due within ten business days
of receipt of the interest.

By this language, Drennan, the contractor with whom Lafitte contracted for

the hurricane drainage work, is clearly the party to whom the law grants the right

of action to recover interest for late payments. Therefore, on our de novo review,

21-CA-664 8

we vacate the judgment of the trial court and render judgment overruling

defendants’ exception of no right of action.

While both parties have made arguments relating to res judicata, both before

the trial court and even more extensively in their appellate briefs before this Court,

and the trial court apparently rendered its decision on the exception of no right of

action applying the legal standards for an exception of res judicata, it is clear from

the record that defendants did not file an exception of res judicata, and the trial

court did not notice the exception on its own motion. Presumably because the

exception of res judicata was never properly raised in the trial court, the parties did

not fully brief their arguments relating to the application of this doctrine before the

trial court and did not introduce any evidence directly in support of or in

opposition to the required elements of res judicata.6 In light of these deficiencies,

we express no opinion as to whether grounds to grant an exception of res judicata

exist in this matter, we decline to notice the exception of res judicata, and we

decline to address the merits of the parties’ arguments on that issue in the absence

of a properly raised exception.7

Motion for Summary Judgment

In light of our reversal of the trial court’s ruling on defendants’ exception of

no right of action, Drennan’s motion for summary judgment is no longer moot.

However, because the trial court did not previously rule on the merits of this

6
Five elements must be satisfied for a finding that a second action is precluded by res judicata:
(1) the judgment is valid; (2) the judgment is final; (3) the parties are the same; (4) the cause or
causes of action asserted in the second suit existed at the time of the final judgment in the first
litigation; and (5) the cause or causes of action asserted in the second suit arose out of the
transaction or occurrence that was the subject matter of the first litigation. La. R.S. 13:4231;
State O/b/o T. J. & T. J. v. Johnson, 20-154 (La. App. 5 Cir. 12/16/20), 309 So.3d 838, 841.

Furthermore, La. R.S. 13:4232 provides three exceptions to the general principle of res judicata
set forth in La. R.S. 13:4231.
7
Appellees have argued that the trial court did not err in sustaining the exception of no right of
action because “Drennan was required to present its claims for the additional sums due under the
contract to the Engineer.” Such an argument is properly made in a dilatory exception of
prematurity. To the extent this argument relies upon the findings of the separate case on the
second writ of mandamus, it is also part of the res judicata arguments we decline to consider
here.

21-CA-664 9

motion, we decline to consider the motion in the first instance and remand this

matter to the trial court for consideration of Drennan’s motion for summary

judgment. See Falcon v. Town of Berwick, 03-1861 (La. App. 1 Cir. 6/25/04), 885

So.2d 1222, 1225.

Answer to Appeal

Having vacated the trial court’s judgment on defendants’ exception of no

right of action, we decline their request for the award of costs and attorney fees.

CONCLUSION

We find that the trial court legally erred when it sustained the exception of

no right of action by applying the incorrect legal standard. Applying the correct

legal standard, upon de novo review of the evidence, we find that Drennan is of the

class of persons authorized by La. R.S. 38:2191 to file a suit against defendants for

statutory interest for late-payments on a public bid contract. We therefore vacate

the judgment of the trial court and overrule defendants’ exception of no right of

action. We decline to consider arguments relating to res judicata where the issue

was not raised by a properly filed exception.

Additionally, we decline to rule on the merits of Drennan’s motion for

summary judgment in the first instance and decline to award costs and fees as

requested by defendants in their answer to this appeal. Lastly, we remand this case

to the trial court for further proceedings.

JUDGMENT VACATED;
JUDGMENT RENDERED;
REMANDED

21-CA-664 10

SUSAN M. CHEHARDY CURTIS B. PURSELL

CHIEF JUDGE CLERK OF COURT

MARY E. LEGNON
FREDERICKA H. WICKER
INTERIM CHIEF DEPUTY CLERK
JUDE G. GRAVOIS
MARC E. JOHNSON
ROBERT A. CHAISSON SUSAN S. BUCHHOLZ
STEPHEN J. WINDHORST
FIRST DEPUTY CLERK
HANS J. LILJEBERG
JOHN J. MOLAISON, JR. FIFTH CIRCUIT
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IN ACCORDANCE WITH UNIFORM RULES - COURT OF APPEAL, RULE 2-16.4 AND 2-16.5 THIS DAY
AUGUST 17, 2022 TO THE TRIAL JUDGE, CLERK OF COURT, COUNSEL OF RECORD AND ALL PARTIES
NOT REPRESENTED BY COUNSEL, AS LISTED BELOW:

21-CA-664
E-NOTIFIED
24TH JUDICIAL DISTRICT COURT (CLERK)
HON. RAYMOND S. STEIB, JR. (DISTRICT JUDGE)
LORETTA G. MINCE (APPELLANT) LYNDA A. TAFARO (APPELLEE) SIDNEY J. HARDY (APPELLEE)

MAILED
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