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Crescent Property Partners, LLC v. American Manufacturers Mutual Ins. Co.

Supreme Court of Louisiana

January 28, 2015

CRESCENT PROPERTY PARTNERS, LLC
v.
AMERICAN MANUFACTURERS MUTUAL INSURANCE COMPANY, BISON BUILDING MATERIALS OF TEXAS, INC., ET AL. CONSOLIDATED WITH GREYSTAR DEVELOPMENT AND CONSTRUCTION, LP
v.
CRESCENT PROPERTY PARTNERS, LLC, BISON BUILDING MATERIALS OF TEXAS, INC., ET AL. CONSOLIDATED WITH BISON BUILDING MATERIALS OF TEXAS, INC., BISTROL FIBERLITE INDUSTRIES, INC., CHAMPION WINDOW, INC., ET AL.
v.
GREYSTAR DEVELOPMENT AND CONSTRUCTION, LP

Page 799

ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FOURTH CIRCUIT, PARISH OF ORLEANS.

REVERSED.

CHRISTOVICH & KEARNEY, Kevin Richard Tully, Joseph Warren Gardner, Jr., Howard Carter Marshall; For Applicant; (No. 2014-C-0969).

ALLEN & GOOCH, Michael Edward Parker; BLUE WILLIAMS, LLP, Thomas Glenn Buck; COATS, ROSE, YALE, RYMAN & LEE, Daniel Lund, III.; CONNICK & CONNICK, LLC, Michael Scott Futrell; DEGAN, BLANCHARD & NASH, APLC, Foster P. Nash, III.; KRACHT AND FRAZIER LLP, Scott Edward Frazier; PANAGIOTIS & ARMBRUSTER, D. C. Panagiotis; PERRY, ATKINSON, BALHOFF, MENGIS & BURNS, LLC, Daniel R. Atkinson, Jr.; SHIELDS / MOTT LLP, Lloyd Noble Shields; STANLEY, REUTER, ROSS, THORNTON & ALFORD, LLC, Richard Charles Stanley, William Raley Alford, III.; THE MAYHALL LAW FIRM, APLC, John Covington Henry; TRAVELERS INSURANCE CO., Barbara Malik Weller; ZAUNBRECHER TREADAWAY, LLC, Alan Anthony Zaunbrecher; For Respondent. (No. 2014-C-0969).

ALLEN & GOOCH, Michael Edward Parker; Michael David Zelden; BLUE WILLIAMS, LLP, Thomas Glenn Buck, Brett W. Tweedel; CONNICK & CONNICK, LLC, Gregory Charles Fahrenholt; DEGAN, BLANCHARD & NASH, APLC, Karl Howard Schmid; KRACHT AND FRAZIER LLP, Scott Edward Frazier, Gerald Joseph Asay; PANAGIOTIS & ARMBRUSTER, D. C. Panagiotis; PERRY, ATKINSON, BALHOFF, MENGIS & BURNS, LLC, Daniel R. Atkinson, Jr.; TRAVELERS INSURANCE CO, Barbara Malik Weller; For Applicant; (Continued No. 2014-C-0973).

BREAZEALE, SACHSE & WILSON, LLP, Douglas Kent Williams; CHRISTOVICH & KEARNEY, Kevin Richard Tully; SHIELDS / MOTT LLP, Lloyd Noble Shields; STANLEY, REUTER, ROSS, THORNTON & ALFORD, LLC, Richard Charles Stanley, William Raley Alford, III,; For Respondent. (Continued No. 2014-C-0973).

GUIDRY, Justice.[*] Johnson, C.J. concurs and assigns reasons.

OPINION

Page 800

[2014-0969 La. 1] GUIDRY, Justice

We granted writs in these consolidated matters to consider whether the court of appeal correctly vacated the arbitration award, which had been confirmed by the district court. The court of appeal vacated the award on the basis the arbitration panel, in applying a statute of peremption incorrectly, disturbed a vested right of the plaintiff and, thus, the panel violated the plaintiff's due process rights. The court of appeal found the arbitration panel's interpretation of the law placed an impossible [2014-0969 La. 2] burden on the plaintiff, a burden the panel deemed fundamentally unfair, thereby requiring vacatur of the arbitration panel's award. For the following reasons, we find the court of appeal essentially misinterpreted the laws concerning arbitration, and, thus, erred in failing to limit its review to the factors mandating vacatur articulated in La. Rev. Stat. 9:4210. In reversing the court of appeal's decision, we reiterate well-settled law that otherwise fairly and honestly obtained arbitration awards may not be overturned merely for errors of fact or law.

FACTS AND PROCEDURAL HISTORY

A property owner, Crescent City Property Partners, L.L.C. (hereinafter " Crescent" ), and a builder, Greystar Development and Construction, LP (hereinafter " Greystar" ), entered into a contract in March of 2002 for the construction of a mixed-use development in Lafayette, Louisiana. This development was completed in phases and consisted of multiple structures. A Certificate of Occupancy issued

Page 801

upon the completion of each of the five buildings, with the first issuing on February 28, 2003, and the last issuing on July 24, 2003. A Certificate of Substantial Completion was executed on July 31, 2003, but was not recorded into the mortgage records in Lafayette Parish.

Alleging defects in the builder's performance, and pursuant to the arbitration clause in the construction contract, Crescent filed an arbitration claim against Greystar on July 28, 2008, also naming as a defendant Greystar's surety, American Manufacturers Mutual Insurance Company. In response, Greystar filed a third party demand against various subcontractors, including SLI Framing, Inc., Champion Windows, Floorcrete Enterprises, Southern Stucco, Inc., Delta Construction, Bison Building Materials of Texas, Inc., Nationwide Gutter, Inc., and Panel Truss of Texas (Longview), Inc. (hereinafter " the subcontractors" and the applicants in No. 2014-C-0973).

[2014-0969 La. 3] At the time the last Certificate of Occupancy and the Certificate of Substantial Completion issued in July 2003, La. Rev. Stat. 9:2772 provided for a seven-year period of peremption for construction claims. However, on August 15, 2003, the legislature amended La. Rev. Stat. 9:2772 to provide for a peremptive period of five years rather than seven years.[1] On July 11, 2011, shortly before the matter was to be arbitrated, this court handed down Ebinger v. Venus Construction Corp., 10-2516 (La. 7/1/11), 65 So.3d 1279, discussing the retroactivity of the 2003 amendment to La. Rev. Stat. 9:2772.

Relying on language in Ebinger, Greystar, the builder, and its subcontractors filed separate motions for summary judgment with the arbitration panel respectively alleging that Crescent's claims, as well as Greystar's third party claims, were perempted because they were not filed within five years of the issuance of the Certificate of Occupancy. Meanwhile, in response to Ebinger, Greystar had filed an action in the district court seeking to have that court decide the effect of Ebinger [2014-0969 La. 4] on the issue of peremption. Crescent objected, arguing the arbitration panel was " the only entity that may rule on the peremption issue because the issue requires a decision on the merits of the claims in arbitration." The district court granted Crescent's exceptions of lack of subject matter jurisdiction,

Page 802

dismissed Greystar's action, and returned the case to the ...


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