MELTON FRANK D/B/A FRANK BUILDING AND REMODELING VERSUS BILL TRAN

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

07-983

MELTON FRANK D/B/A FRANK BUILDING AND REMODELING

VERSUS

BILL TRAN

**********

APPEAL FROM THE
THIRTY-FIRST JUDICIAL DISTRICT COURT
PARISH OF JEFFERSON DAVIS, NO. C-422-04
HONORABLE ANNE LENNAN SIMON, JUDGE PRO TEMPORE

**********

MARC T. AMY
JUDGE

**********

Court composed of John D. Saunders, Marc T. Amy, and Billy Howard Ezell, Judges.

REVERSED AND REMANDED.

Steve Gunnell
Cassidy & Gunnell
Post Office Box 1446
Jennings, LA 70546
(337) 824-7322
COUNSEL FOR DEFENDANT/APPELLEE:
Jeff Davis Bank & Trust Company

Timothy O'Dowd
921 Ryan Street, Suite D
Lake Charles, LA 70601
(337) 310-2304
COUNSEL FOR PLAINTIFF/APPELLEE:
Melton Frank

Blaine A. Doucet
Doucet, Lorio & Moreno
One Lakeshore Drive, Suite 1695
Lake Charles, LA 70629
(337) 433-0100
COUNSEL FOR DEFENDANT/APPELLEE:
Rick Rion

Kendrick J. Guidry
Plauche, Smith & Nieset
Post Office Drawer 1705
Lake Charles, LA 70602
(337) 436-0522
COUNSEL FOR DEFENDANT/APPELLEE:
Charles Duhon

Melanie Smith Daley
127 West Broad Street, Suite 801A
Lake Charles, LA 70601
(337) 721-8183
COUNSEL FOR DEFENDANT/APPELLEE:
George Jones

Robert W. Higgason
4747 Research Forest Drive
Suite 180, No. 289
The Woodlands, TX 77381
(281) 363-3200
COUNSEL FOR DEFENDANT/APPELLANT:
Bill Tran

Sera H. Russell, III
Post Office Box 53866
Lafayette, LA 70505-3866
(337) 237-7171
COUNSEL FOR DEFENDANT/APPELLANT
Bill Tran

AMY, Judge.

The plaintiff home builder alleged that the defendant failed to make the two

final payments on the contract entered into for construction of the defendant’s home.

The defendant filed a reconventional demand relating to what he contends were

deviations from the construction contract and/or plans for the home. The trial court

granted the plaintiff’s motion for summary judgment, awarding the sum due on the

contract. The trial court also dismissed the defendant’s reconventional demand,

finding the defendant’s notice of the alleged deficiencies inadequate under the New

Home Warranty Act. The defendant appeals. For the following reasons, we reverse

and remand for further proceedings.

Factual and Procedural Background

Melton Frank d/b/a Frank Building and Remodeling and Bill Tran entered into

a home construction contract on May 27, 2003, wherein Mr. Frank agreed to

construct Mr. Tran’s home in Jennings, Louisiana. The contract established the bid

price as $136,000, payable in five draws after completion of designated portions of

the contract. The parties completed an addendum the following month.

While work on the home proceeded and the first three payments on the contract

were made, the record reveals that Mr. Tran began making complaints regarding the

construction. Ultimately, he failed to make the final two payments. In July 2004, Mr.

Frank filed the petition instituting this matter, alleging that only minor detail work

remained uncompleted on the house and that Mr. Tran had denied him access to the

home to complete the work. He sought the $34,000 remaining under the contract.

Mr. Tran denied the petition’s allegation, asserting that Mr. Frank failed to

“perform the work as specified in the contract and addendum” and that Mr. Frank’s

refusal to “perform the work called for in the contract and its addendum was the

reason why he[] was not allowed back into the home.” Mr. Tran asserted that Mr.

Frank failed to satisfactorily complete construction as designated by the contract’s

payment schedule and, therefore, additional payments were not due under the

contract. In a reconventional demand, Mr. Tran and his wife alleged that Mr. Frank

failed to comply with the building plans in a number of respects, including a number

of areas identified in the demand. Mr. Tran asserted that Mr. Frank refused to repair

or rectify the problems and, therefore, he was contractually liable for damages

associated with the “incomplete and incorrect construction” of the home. Mr. Tran

and his wife sought damages and attorney’s fees pursuant to the New Home Warranty

Act. In response, Mr. Frank alleged that the New Home Warranty Act provided Mr.

Tran’s exclusive remedy and that he was precluded from recovery thereunder as he

did not provide notice by registered or certified mail as required by La.R.S. 9:3145.

Mr. Frank filed a motion for summary judgment on his claim and that of Mr.

Tran. He supplemented the motion with the construction contract, the addendum of

June 2003 and a deposition excerpt in which a bank official describes negotiations

between the parties regarding an inspection of the complained of areas. Mr. Frank

also submitted his own affidavit wherein he explained in part that he had “caused

substantial performance of the obligations he owed[.]” He further stated that “[P]rior

to February 1, 2007, Bill Tran had not caused to be delivered to Melton Frank written

notice, by registered or certified mail advising him of all defects and giving him a

reasonable opportunity to comply with the New Home Warranty Act.” Mr. Tran

opposed the motion for summary judgment with various exhibits, including the

depositions of Mr. Frank and the bank officer assigned to the project who explained

that a list of Mr. Tran’s complaints were delivered via facsimile to Mr. Frank.

2

The trial court granted Mr. Frank’s motion for summary judgment, finding that,

due to substantial completion of the project, he was entitled to the remaining

payments on the contract. The trial court awarded the sums due on the construction

contract together with judicial interest. The trial court also dismissed Mr. Tran’s

reconventional demand, finding that the notice requirements of the New Home

Warranty Act were not met.

Mr. Tran appeals, assigning the following as error:

1. The Trial Court improperly allowed the general contractor
to contest the homeowner’s alleged non-compliance with La.R.S. 9:3145
through a Motion for Summary Judgment. The sole proper procedural
mechanism for contesting non[-]compliance with La.R.S. 9:3145 is
through an Exception of Prematurity.

2. The Trial Court failed to recognize that the homeowner
complied with L[a]R.S. 9:3145 because the general contractor had actual
knowledge of and undertook repair of the defects prior to the filing of
Bill Tran’s reconventional demand.

3. The Trial Court improperly allowed the contractor to shield
himself from liability for numerous defects for which the contractor had
actual knowledge of and had actual time to remedy, merely because the
defects were not itemized in written notice prior to the homeowner’s
reconventional demand.

4. The Trial Court improperly granted the plaintiff general
contractor’s Motion for Summary Judgment on his contractual
obligation claim against the homeowner, while applying the certified
mail notice requirement of the New Home Warranty Act to preclude the
homeowner’s defenses against that contractual claim.

5. The Trial Court improperly granted the general contractor’s
Motion for Summary Judgment against the homeowner’s reconventional
demand where the contractor waived written notice by certified mail, by
bringing a contractual obligation claim against the homeowner after
having actual knowledge of the numerous problems with the incomplete
home.

6. The Trial Court erred by granting the general contractor’s
Motion for Summary Judgment because [the] contractor had the
opportunity to “fix first” but did not do so.

3

Discussion

Reconventional Demand

Mr. Tran contests the trial court’s determination that his claims were precluded

by failure to give appropriate notice under the New Home Warranty Act. He chiefly

asserts that the trial court erred in strictly applying the New Home Warranty Act’s

notice requirements when Mr. Frank had actual notice of his various complaints.

Louisiana Code of Civil Procedure Article 966(B) provides that the trial court

shall render summary judgment “if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that

there is no genuine issue as to material fact, and that mover is entitled to judgment as

a matter of law.” Article 966(C)(2) further provides:

The burden of proof remains with the movant. However, if the
movant will not bear the burden of proof at trial on the matter that is
before the court on the motion for summary judgment, the movant’s
burden on the motion does not require him to negate all essential
elements of the adverse party’s claim, action, or defense, but rather to
point out to the court that there is an absence of factual support for one
or more elements essential to the adverse party’s claim, action, or
defense. Thereafter, if the adverse party fails to produce factual support
sufficient to establish that he will be able to satisfy his evidentiary
burden of proof at trial, there is no genuine issue of material fact.

An appellate court reviews summary judgments de novo, using the same criteria that

governed the trial court’s consideration of whether genuine issues of material fact

exist and whether the mover is entitled to judgment as a matter of law. Supreme

Services and Spec. Co., Inc. v. Sonny Greer, Inc., 06-1827 (La. 5/22/07), 958 So.2d

634.

The legislature set forth the purpose of the New Home Warranty Act, La.R.S.

9:3141, et seq., as follows:

4

The legislature finds a need to promote commerce in Louisiana by
providing clear, concise, and mandatory warranties for the purchasers
and occupants of new homes in Louisiana and by providing for the use
of homeowners’ insurance as additional protection for the public against
defects in the construction of new homes. This need can be met by
providing a warranty for a new home purchaser defining the
responsibility of the builder to that purchaser and subsequent purchasers
during the warranty periods provided herein. The warranty, which is
mandatory in most cases, shall apply whether or not building code
regulations are in effect in the location of the structure, thereby
promoting uniformity of defined building standards. Additionally, all
provisions of this Chapter shall apply to any defect although there is no
building standard directly regulating the defective workmanship or
materials.

La.R.S. 9:3141. Although the New Home Warranty Act delineates several warranties

on behalf of the builder to the owner, those identified “establish minimum required

warranties and shall not be waived by the owner or reduced by the builder . . . .”

La.R.S. 9:3144(C). The New Home Warranty Act further provides that it establishes

“the exclusive remedies, warranties, and peremptive periods as between builder and

owner relative to home construction and no other provisions of law relative to

warranties and redhibitory vices and defects shall apply.” La.R.S. 9:3150.

Central to the arguments surrounding the summary judgment dismissing Mr.

Tran’s reconventional demand is the Act’s notice provision which provides that:

Before undertaking any repair himself or instituting any action for
breach of warranty, the owner shall give the builder written notice, by
registered or certified mail, within one year after knowledge of the
defect, advising him of all defects and giving the builder a reasonable
opportunity to comply with the provisions of this Chapter. The builder
shall give the owner written notice of the requirements of this Chapter
at the time of the closing.

La.R.S. 9:3145.

Mr. Frank supported his motion for summary judgment with his own affidavit

wherein he stated that: “Prior to February 1, 2007, Bill Tran had not caused to be

delivered to Melton Frank written notice, by registered or certified mail advising him

5

of all defects and giving him a reasonable opportunity to comply with the New Home

Warranty Act.”

In opposition, Mr. Tran presented the deposition of Gerald Theunissen, Vice

President of Jeff Davis Bank and Trust Company, who was involved in the

construction loan. He explained that, as the lender, he or another bank employee

made periodic inspections of the home during construction and that Mr. Tran voiced

complaints during that time. At Mr. Tran’s request, he discussed the complaints with

Mr. Frank. Mr. Theunissen also explained that Mr. Tran compiled a list of his

concerns and asked him to convey to Mr. Frank that he would like the items

corrected. Mr. Theunissen faxed a cover sheet along with Mr. Tran’s list and other

documents to Mr. Frank. In discussing these documents, attached to the deposition

as exhibits, Mr. Theunissen commented that they included his confirmation report

indicating that six pages were sent to Mr. Frank on February 27, 2004. The faxed

materials, attached to the deposition, are contained in the record.1 Mr. Theunissen

1
The document following the cover sheet and discussed by Mr. Theunissen indicates:

February 27, 2004

1. Install chimney cover
2. Apply floor sealer (12 gallons) Clean floor first.
3. Reimburse for stove vent. $51.00 + $150.00 = $201.00
4. Install bathroom towel, toilet paper and toothbrush holders or pay for Bill to
buy and install himself.
5. Install glass door on fireplace.
6. Finish dirt work (6 truckloads)
7. Run cable TV and telephone lines inside bricks. (But not together)
8. Install vent along garage.

If the above is done, Bill Van Tran will pay the 15% draw and sign agreement that
the job is complete and no further payment will be owed to anyone. If not, lawsuit
will be filed.

Another document included in the faxed notification provides:

Below is a list of items completed in my house, that do not match up with the
blueprint or contract, Mr. Melton Frank.

6

recalled, too, that the parties discussed engaging a third party to inspect the home and

identify areas requiring correction by Mr. Frank. Mr. Tran also supplied the

deposition of Mr. Frank, who testified that Mr. Tran began having complaints during

the installation of the drywall. Mr. Frank testified extensively regarding Mr. Tran’s

complaints that the roof was inadequately braced. The affidavit of Mr. Tran’s

attorney indicates that, by April 2004, he had forwarded a similar notification to Mr.

Frank’s attorney as well.

1. He did not rent the bulldozer to do [] foundation.
2. All the window[s] should have steel under bricklayer, he did not put all of
them, he put some windows, and in the blueprint 2 front side windows should
separate. But it is not correct.
3. The shower is smaller than the one drown [sic] on the blueprint. Because the
drain was put in the wrong place.
4. The attic stairs were put in the wrong place.
5. The vet [sic] running form [sic] the kitchen island to outside wall was put at
90 degree angle to the outside wall instead of a 45 degree angle
6. Regular sheet rock was used around the showers there is no moisture
protection
7. The cement in the garage is the same level as the house. The blueprints
shows [sic] a 4O drop in levels
8. Some 2x6 rafters that are 46 inches and 45 inches, are not correct
9. ½O × 8 A bolts at 4O oe [sic] are not install wood base shoe [sic].
10. Brick laying is not correct
11. 2×4 S.Y.P. studs are some 16O some 17O, 18O, they are not correct.
12. 2×6 garage wood joists have been eaten by termites
13. Sheetrock did not straight and not level
14. Some door and windows are not level and leaking air
15. Molding are not straight
16. Some corner valley not go all the way
17. Kitchen tray are not correct and reset lights put wrong place
18. Laundry room does not have the window
19. Air duct dryer should goes [sic] out the brick wall, but it goes up to the attic
20. The front door framer and the 2 back doors are not nailed to the studs.
21. Kitchen cabinet builder did not correct. Because in the back cabinets did not
have woods
22. The electrical man drill a lot of hole in 2×4 studs and didn’t use than [sic]
23. The [sic] didn’t spray termites after the plumbing finish, and he pour the
foundation
24. He build . . . my house, he use cheap woods (Type “3”)
25. He did my floor that very bad job
26. He did not connect 2×6 joists in the attic
27. He did not finish my house air roof

7

Without question, La.R.S. 9:3145 requires that an owner provide written notice

defects by “registered or certified mail.” These are the clear and explicit words of the

statute. However, Article 9 of the Louisiana Civil Code instructs that:

When a law is clear and unambiguous and its application does not
lead to absurd consequences, the law shall be applied as written and no
further interpretation may be made in search of the intent of the
legislature.

(Emphasis added.)

In this instance, a determination that Mr. Tran is precluded from pursuit of his

New Home Warranty Act claims for failure to provide this type of technical notice

in the face of actual verbal and written notice would lead to an absurd consequence.

Mr. Theunissen’s and Mr. Frank’s depositions detail a history of complaints during

construction. Mr. Tran also presented the fax transmissions which included specific,

delineated complaints. Given the date of the initial fax, it cannot be determined at

this point that Mr. Frank was not provided with an opportunity to remedy the alleged

deficiencies. While Mr. Frank contends that he was ultimately prevented from re-

entering the home, this did not occur until April 2004.

The fourth circuit has recently reached a similar conclusion in Barrack v. J.F.

Day & Co., Inc., 07-97 (La.App. 4 Cir. 8/29/07), 966 So.2d 1064, a case in which the

homeowners began working with their builder to remedy faulty windows in their

newly constructed home. However, the homeowners failed to provide formal notice

of the defects by registered or certified mail. The trial court granted summary

judgment in favor of the contractor, finding that the failure to provide notice by

registered or certified mail was fatal to the homeowners’ claim under the New Home

Warranty Act. The fourth circuit reversed the determination as the homeowners

provided verbal notice of the defects within the time limits required by the statute and

8

provided the builder with the opportunity to remedy the defects. The fourth circuit

further remarked that the homeowners provided written notice to the builder “albeit

after the time limitations of the statute had run, but before filing suit.” Id. at 1066.

Given these actions, the homeowners were found to be “in compliance with the

meaning and intent of the New Home Warranty Act, and should not be precluded

from pursuing an action” for any claim thereunder for any actions not perempted. Id.

at 1068.

The fourth circuit found the factual background in Barrack distinguishable

from the matter before the Louisiana Supreme Court in Carter v. Duhe, 05-0390 (La.

1/19/06), 921 So.2d 963, a case urged by Mr. Frank. In Carter, the supreme court

reviewed a case in which the builder failed to “give the owner written notice of the

requirements of this Chapter at the time of the closing” as specified in La.R.S.

9:3145. The homeowners asserted that because of this failure, the New Home

Warranty Act was inapplicable. Finding the argument without merit, the supreme

court observed that, whereas the Act does not permit a homeowner to recover for a

defect unless the builder is notified and offered an opportunity to remedy the

deficiency, the Act does not provide a similar penalty for a builder who fails to

provide the notice required of it under the statute. The supreme court declined to

insert such a penalty into the statute. In light of this focus, it is apparent that the

supreme court did not consider the question before this court, i.e., whether strict

application of the mailing requirements of La.R.S. 9:3145 renders an absurd result in

the face of actual notice of defects.

For these reasons, we conclude that the trial court erred in dismissing Mr.

Tran’s reconventional demand for failure to satisfy La.R.S. 9:3145. Here, we observe

9

that Mr. Frank’s motion for summary judgment on the reconventional demand

focused on the New Home Warranty Act. The trial court dismissed the entirety of the

reconventional demand due to failure to strictly comply with the notice requirements

of the Act. For these reasons, the above discussion has focused on whether summary

judgment was appropriate in light of the New Home Warranty Act. The motion for

summary judgment does not squarely present the question of whether the

reconventional demand, which suggests the existence of both warranty and other

contractual claims, must be resolved by reference to the New Home Warranty Act

alone. Accordingly, we do not determine here, applicability of the New Home

Warranty Act’s exclusive remedy language to the reconventional demand, as it is not

the immediate issue before us. See La.R.S. 9:3150. See also Thorn v. Caskey, 32,310

(La.App. 2 Cir. 9/22/99), 745 So.2d 653. Nor do we make a determination as to any

warranty commencement date. See La.R.S. 9:3143 and La.R.S. 9:3144.

Contractual Obligation

In addition to dismissing Mr. Tran’s reconventional demand, the trial court also

entered summary judgment on Mr. Frank’s contractual claim, awarding him the sums

remaining due under the contract. Mr. Tran appeals this determination as well.

It is uncontested that Mr. Tran did not provide the final two payments due

under the contract. While Mr. Frank has alleged that he has rendered substantial

performance under the contract and that payment is required, genuine issues of

material fact remain in this regard. Mr. Tran began occupying the home in April

2004. However, the question of whether this occupancy and Mr. Frank’s allegations,

alone, reveal that the contract was satisfied remains an open one. In particular, Mr.

10

Tran supplied the affidavit and report of an architect who identified specific

deficiencies and concluded as follows:

The standard of construction was found to be substandard in quality and
not in compliance with the local residential building codes. The basic
wall and roof framing is not properly braced or supported by the load
bearing walls below creating the potential for a complete structural
failure.

The items listed above are either in conflict with common building
construction practices, governing codes or deviations in the building
plans. The contractor omitted windows, lights and light switches as
indicated on the plans.

No destructive investigation was conducted; therefore, the conditions in
the walls and below grade could not be confirmed to be built according
to the plans or local building code requirements.

Extensive repairs or modifications are recommended to correct the
observed list of inconsistencies.

The final product is not complete or built to common industry standards.
The list of observations should be corrected to bring the residence to a
level of acceptable standards. Some of the items are not achievable at
this state of construction without extensive demolition and
reconstruction.

These observations evidence the existence of genuine issues of material fact as to

substantial completion and, therefore, entitlement to recovery. Accordingly, we

reverse the summary judgment awarding Mr. Frank sums due under the contract.

DECREE

For the foregoing reasons, we reverse the summary judgment entered in favor

of Melton Frank d/b/a Frank Building and Remodeling and dismissing the

reconventional demand of Bill Tran. All costs of this proceeding are assessed to the

appellee, Melton Frank d/b/a Frank Building and Remodeling. This matter is

remanded for further proceedings.

REVERSED AND REMANDED.

11