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Jeff Mercer, L.L.C. v. State, Department of Transportation and Development

Court of Appeals of Louisiana, First Circuit

June 5, 2015

JEFF MERCER, L.L.C., SPECIALTY CONTRACTORS OF LOUISIANA, L.L.C., GIBSON & ASSOCIATES, INC., AND CECIL D. GASSIOTT, L.L.C.
v.
STATE OF LOUISIANA, DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT ALPHA SERVICE AND PRODUCTS, INC., ET AL
v.
STATE OF LOUISIANA, DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT

Page 1181

On Appeal from the 19th Judicial District Court. In and for the Parish of East Baton Rouge, State of Louisiana. Trial Court No. 612739 c/w No. 624165. Honorable R. Michael Caldwell, Judge Presiding.

Russell W. Wray, Stacey A. Smith, St. Francisville, LA; Harry T. Lemmon, New Orleans, LA; William L. Townsend, III, T. Taylor Townsend, Natchitoches, LA, Attorneys for Plaintiffs-1st Appellants, Specialty Contractors of Louisiana, L.L.C., Gibson & Associates, Inc., and Cecil D. Gassiott, L.L.C. AND Attorneys for Plaintiffs-2nd Appellants, Alpha Service and Products, Inc., and Hames Contracting, Inc.

Bruce R. Hoefer, Jr., Ira J. Rozenzweig, Phillip J. Rew, D. Russell Holwadel, New Orleans, LA, Attorneys for Defendant-Appellee, State of Louisiana, through the Department of Transportation and Development.

BEFORE: WHIPPLE, C.J., HIGGINBOTHAM AND DRAKE, JJ.

OPINION

Page 1182

[2014 1751 La.App. 1 Cir. 3] HIGGINBOTHAM, J.

In this matter, two cases that were consolidated for all purposes, including trial and this appeal, concern one common issue of statutory interpretation: whether La. R.S. 9:2780.1 applies to public works contracts with the State of Louisiana, through the Department of Transportation and Development (DOTD), so as to prevent DOTD from requiring contractors to provide an Owners and Contractors Protective (OCP) liability insurance policy. Pursuant to the law of the case doctrine, we reiterate our holding in a related writ action, Mercer, L.L.C., et al v. State of Louisiana, Department of Transportation and Development, 2013-1108 (La.App. 1st Cir. 11/19/13) (unpublished), wherein we ruled that " La. R.S. 9:2780.1 does not apply to public works contracts with DOTD. La. R.S. 48:250 et seq. and La. R.S. 38:2216(G) govern this matter."

FACTS AND PROCEDURAL HISTORY

This is a consolidated class action suit that has never been certified. It was filed by licensed Louisiana general contractors against DOTD, seeking a declaratory judgment, permanent injunction, and damages. The contractors' claims arise out of DOTD's contractual specification requiring that the contractors furnish an OCP liability policy naming DOTD as the named insured as a condition of contracting with DOTD. The contractors specifically allege that the OCP liability policy requirement violates a statutory prohibition against such provisions found in La. R.S. 9:2780.1(C), which was enacted by 2010 La. Acts, No. 492, § 1, and became effective January 1, 2011.[1] All of the contractors [2014 1751 La.App. 1 Cir. 4] involved in this litigation entered into public works contracts with DOTD after January 1, 2011.

The matter was initiated when four general contractors, Jeff Mercer, L.L.C., Specialty Contractors of Louisiana, L.L.C., Gibson & Associates, Inc., and Cecil D. Gassiott, L.L.C., filed a petition against DOTD on June 7, 2012 (hereafter referred to as " the Mercer lawsuit" ).[2] The contractors

Page 1183

in the Mercer lawsuit contended that La. R.S. 9:2780.1(C) renders unenforceable DOTD's provision in its contractual specifications that requires contractors to procure OCP liability insurance providing coverage for the contractors' operations that are performed for DOTD, and for DOTD's general supervision of those operations. DOTD responded by filing peremptory exceptions raising the objections of no right and no cause of action, contending that La. R.S. 9:2780.1 does not apply to public works contracts involving DOTD, but instead those contracts are governed by Titles 48 (DOTD Public Works Act) and 38 (Public Works Act) of the Louisiana Revised Statutes, which specifically allow for insurance arrangements in public works contracts.

The district court overruled DOTD's exceptions, prompting DOTD to file an application for a writ of supervisory review with this court. A three judge panel of this court granted DOTD's writ application and rendered judgment sustaining DOTD's exceptions and dismissing the Mercer lawsuit ...


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