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Spinks Construction, Inc. v. Quad States Construction, LLC

Court of Appeals of Louisiana, First Circuit

December 21, 2017

SPINKS CONSTRUCTION, INC.
v.
QUAD STATES CONSTRUCTION, LLC, ET AL.

         Appealed from the 21st Judicial District Court In and for the Parish of Tangipahoa, Louisiana Trial Court Number 2015-0000675 Honorable Brenda Bedsole Ricks, Judge

          Russel W. Wray Jacob A. Altmyer St. Francisville, LA and Craig J. Robichaux Mandeville, LA Attorneys for Appellant Plaintiff-Spinks Construction, Inc.

          Douglas T. Curet Hammond, LA Attorney for Appellees Defendants - Dale Lancaster, James Richard Lancaster and Kris Ainsworth

          BEFORE: McCLENDON, WELCH, AND THERIOT, JJ.

          WELCH, J.

         The plaintiff/appellant, Spinks Construction, Inc., appeals a district court judgment sustaining a peremptory exception raising the objection of no cause of action filed by the defendants/appellees, Dale Lancaster, James Richard Lancaster, and Kris Ainsworth. For reasons that follow, we affirm in part, reverse in part, and remand the matter to the district court for further proceedings.

         FACTUAL AND PROCEDURAL BACKGROUND

         Spinks Construction, Inc. ("Spinks") entered into a subcontract agreement with Quad States Construction, LLC ("Quad States") on June 2, 2008, to furnish labor, materials, equipment, and services in connection with Belvedeere Estates located in Kentwood, Louisiana. Belvedeere Estates was a new construction project of twenty-four single family homes and an office structure. On March 9, 2010, the owner of Belvedeere Estates filed an "Affidavit of Substantial Completion and Termination of Work" in the Tangipahoa Parish mortgage records.

         On March 5, 2015, Spinks filed a petition for damages, naming as defendants Quad States, Dale Lancaster, James Richard Lancaster, and Kris Ainsworth. The petition sought recovery of sums allegedly due under the subcontract agreement. Spinks alleged that in reliance of the plans, specifications, estimated quantities, and contract documents provided by Quad States, it submitted a proposal to perform work and provide materials in May of 2008 in accordance with the contract documents. As per the subcontract agreement, Spinks agreed to perform site work for an initial subcontract price of $587, 000.00. The petition alleged that a notice to proceed was issued on June 30, 2008, and that various change orders and deductions were issued on the project, which resulted in an increase in the subcontract total. Spinks averred that it performed all work contemplated by the subcontract, as well as additional work "necessary to proper completion" of the project. The petition alleged that Quad States continued to pay Spinks in accordance with the applications for payment until March 20, 2009. Spinks asserted that it submitted applications for payment totaling $606, 043.80 and that Quad States paid only $510, 843.60 of the amount due, leaving a balance of $162, 597.40, including retainage. Spinks prayed for payment on the balance owed by Quad States to Spinks, all other sums due, plus interest, attorney fees, and all costs of the proceedings.

         As to the individual defendants, Dale Lancaster, James Richard Lancaster, and Kris Ainsworth, the petition made no factual assertions regarding alleged actions performed by these defendants. Instead, the petition asserted only that Dale Lancaster was the "sole manager" of Quad States and that James Richard Lancaster and Kris Ainsworth were "qualifying parties" for the company. Attached as exhibits to the petition were the following documents: (1) the June 2, 2008 subcontract agreement between Spinks and Quad States, (2) Spinks' itemized proposals dated May 6, 2008, and (3) a copy of the "Affidavit of Substantial Competition and Termination of Work" executed by the owner and evidence of its filing in the public records on March 9, 2010.

         All four of the defendants answered the petition, and in October of 2015, the individual defendants filed a peremptory exception raising the objection of no cause of action. In their exception, the individual defendants argued that the petition asserted a cause of action against only Quad States to recover sums owed under the subcontract agreement. Further, the exception averred that under La. R.S. 12:1320, members, managers, employees, and agents of limited liability companies are not personally liable for the debts and obligations of the company; therefore, there was no legal basis for a claim against either Dale Lancaster in his capacity as a member of Quad States, or against Kris Ainsworth in his capacity an employee. With regard to James Richard Lancaster, the defendants maintained that he was not an employee, member, or manager of the company at the time of the events at issue in the suit. At the March 21, 2016 hearing on the exception before the district court, Spinks argued that its cause of action against the individual defendants arose under La. R.S. 9:4814, which provided it a direct cause of action against the agents of a contractor for knowingly failing to apply money received on a construction contract to settle the claims of a seller of movables or laborer.[1]

         In a judgment signed on May 9, 2016, the district court sustained the exception of no cause of action and dismissed with prejudice the claims against the individual defendants. In written reasons for judgment, the district court found that a cause of action under La. R.S. 9:4814 was subject to the requirements of the Louisiana Private Works Act ("LPWA"). In particular, the district court's written reasons found that the requirements for filing a claim or privilege under the LPWA under La. R.S. 9:4822, as well as the attendant one-year prescriptive period under La. R.S. 9:4823(A)(2) for filing an action to enforce a claim or privilege, were applicable to a claim brought under La. R.S 9:4814. On that basis the district court held that the suit against the individual defendants was prescribed because Spinks had not filed an action to enforce its claim within the applicable prescriptive period. Furthermore, the district court did not grant Spinks an opportunity to amend its petition under La. C.C.P. art. 934. Spinks filed a motion for new trial, which was denied by the trial court in a judgment signed on September 28, 2016. Spinks timely filed the instant devolutive appeal.[2]

         ISSUES ON REVIEW

         Spinks assigns three errors to the district court's judgment. The first and second assignments of error relate to that portion of the district court's written reasons for judgment indicating that Spinks claims against the individual defendants were prescribed. First, Spinks contends that the district court erred in conditioning an action under La. R.S. 9:4814 upon the filing and enforcement of a lien under the LPWA, and thereby applying the one-year prescriptive period contained in La. R.S. 9:4823. Second, Spinks argues that the district court improperly supplied an objection of prescription sua sponte. In its third assignment of error, Spinks challenges the district court's ruling, sustaining the exception of no cause of action and dismissing the action against the individual defendants with prejudice without first allowing Spinks the opportunity to amend.

         The reviewing court conducts a de novo review of a district court's ruling sustaining an exception of no cause of action, because the exception raises a question of law, and the lower court's decision is based only on the sufficiency of the petition. Adams v. Owens-Corning Fiberglas Corp., 2004-1296 (La.App. 1stCir. 9/23/05), 921 So.2d 972, 976, writ denied, 2005-2501 (La. 4/17/06), 926 So.2d 514. With regard to Spinks' first and second assignments of error, we note that appellate courts review judgments, not reasons for judgment. Wooley v. Lucksinger, 2009-0571 (La. 4/1/11), 61 So.3d 507, 572. Further, judgments are often upheld on appeal for reasons different than those assigned by the district court. Id. Because we conclude the judgment correctly sustained the exception of no cause of action filed by the individual defendants, we need not address the district court's findings regarding prescription. Thus, we decline to consider the issues raised in Spinks' first and second assignments of error, and consider only the propriety of the district court's decision to sustain the exception of no cause of action and to not allow amendment of the petition under La. C.C.P. art. 934.

         LAW ...


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