Ebony Holmes v. City of New Orleans, Sewerage and Water Board of New Orleans, Hard Rock Construction, LLC, Tidewater Constructors, LLC v. Keeler & Associates, Inc. and Kinsale Insurance Company

• Court: Louisiana Court of Appeal
• Decided: July 16, 2024
• Docket: 2024-CA-0047
• Status: Published

Opinion

EBONY HOLMES * NO. 2024-CA-0047

VERSUS * COURT OF APPEAL CITY OF NEW ORLEANS, * SEWERAGE AND WATER FOURTH CIRCUIT BOARD OF NEW ORLEANS, * HARD ROCK STATE OF LOUISIANA CONSTRUCTION, LLC, ******* TIDEWATER CONSTRUCTORS, LLC, V KEELER & ASSOCIATES, INC. AND KINSALE INSURANCE COMPANY

APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2022-07540, DIVISION “F-14” Honorable Jennifer M. Medley ****** Judge Joy Cossich Lobrano ****** (Court composed of Chief Judge Terri F. Love, Judge Roland L. Belsome, Judge Joy Cossich Lobrano)

Gerald Wasserman LAW OFFICES OF GERALD WASSERMAN, LLC 3939 North Causeway Boulevard, Suite 200 Metairie, LA 70002

Steven E. Psarellis STEVEN E. PSARELLIS, APLC 3939 N. Causeway Blvd., Suite 100 Metairie, LA 70002

COUNSEL FOR PLAINTIFF/APPELLANT

Ethan N. Penn Kathleen D. Lambert MUSGRAVE MCLACHLAN & PENN, LLC 1555 Poydras Street, Suite 2100 New Orleans, LA 70112

COUNSEL FOR DEFENDANT/APPELLEE

VACATED AND REMANDED JULY 16, 2024 This is a property damage claim. Plaintiff/appellant, Ebony Holmes JCL (“Holmes”), appeals the October 12, 2023 order and May 14, 2024 judgment of the TFL

RLB district court, which granted an exception of prescription in favor of

defendant/appellee, Tidewater Constructors, LLC (“Tidewater”), and dismissed

Holmes’ claims against Tidewater with prejudice. For the reasons that follow, we

vacate the judgment and remand this matter for further proceedings.

FACTS AND PROCEDURAL HISTORY

Holmes owns property on Allen Toussaint Boulevard in New Orleans,

Louisiana (the “Property”), which she claims was damaged during a public works

project to repair streets in her neighborhood. On August 19, 2022, Holmes filed a

petition for damages, containing the following allegations.

• The City of New Orleans (the “City”) contracted with Hard Rock Construction, LLC (“Hard Rock”) to replace water and drainage lines at or near the Property.

• Hard Rock subcontracted with Tidewater to perform the work.

• Tidewater further subcontracted laborers and equipment from V Keeler & Associates, Inc. (“V Keeler”).

1 • The laborers were working under the supervision of Tidewater.

• On or about February 26, 2021, one of the laborers was operating the excavator. As the bucket was being raised to dump a load of dirt, it got caught on a power line causing damage to the power line, resulting in a power outage.

• Holmes reported the damage to the City, and the power was restored.

• Holmes first began noticing exterior and interior damage to the Property on or about August 28, 2021. Her doors were not closing properly, her windows would not open, and cracks appeared in her floor tiles, ceilings, and walls.

In her petition, Holmes named as defendants the City, the Sewerage and

Water Board of New Orleans, Hard Rock, Tidewater, V Keeler, and their insurers.

Holmes alleged that the negligence of these defendants caused the accident. She

contended that the defendants “are responsible jointly, severally, and in solido for

the construction and maintenance of the public streets; in particular, plaintiff’s

property. . . . ”

On October 11, 2022, Hard Rock filed a third party demand against

Tidewater and its insurer, arguing that pursuant to the subcontract, Tidewater owes

Hard Rock indemnity and/or contribution for any award to Holmes due to

Tidewater’s negligence. Hard Rock alleged that, pursuant to the subcontract, it

tendered its defense to Tidewater, but the tender was not accepted.

On August 22, 2023, Tidewater filed an exception of prescription, arguing

that Holmes’ claim is time-barred because she failed to file her lawsuit within one

year of the February 26, 2021 incident regarding the power line. On September 14,

2023, Holmes filed an opposition, arguing that she timely filed her lawsuit within

one year of her discovery of the damage to the doors, windows, tiles, ceilings, and

2 walls of the Property. She also argued, in the alternative, that she timely filed her

lawsuit within two years from completion and acceptance of the public works. In

its September 22, 2023 reply memorandum, Tidewater countered that Holmes

knew or should have known of her property damage at the time of the power line

incident. Tidewater further argued that the two-year prescriptive period for damage

from public works projects applies only to the State and its political subdivisions,

not to private contractors or subcontractors like Tidewater.

On September 29, 2023, a hearing went forward before the district court,

where the parties presented oral arguments but did not introduce any evidence.

Subsequently, the district court rendered an order on October 12, 2023 and

judgment dated May 14, 2024, which granted the exception of prescription and

dismissed Holmes’ claims against Tidewater with prejudice. This appeal follows.1

1 Holmes sets forth five assignments of error on appeal, as follows:

1. The trial court erred in failing to acknowledge that plaintiff’s operative date for damages to her home was August 28, 2021 and not February 26, 2021.

2. The trial court erred in granting the Exception of Prescription when suit was timely filed within one year of the discovery of the damages to plaintiffs home in accordance with La. C.C. Article 3493.

3. The trial court erred in granting the Exception of Prescription that was tolled under the doctrine of Contra Non Valentem when the actions of defendant constituted a continuing tort giving rise to successive damages and prescription is suspended until such time as the harmful conduct is abated.

4. The trial court erred in granting the Exception of Prescription when suit was timely filed within two years in accordance with La. R.S. 9:5624.

5. The trial court erred in granting Defendant’s Exception of Prescription which factual issue should be decided by the jury.

For the reasons discussed in the remainder of this opinion, we find merit in the fifth assignment of error. Accordingly, we pretermit consideration of the remaining assignments.

3 LAW AND ANALYSIS

Standard of Review

The standard of review on appeal turns on whether evidence was introduced

at the hearing of the exception of prescription. Wells Fargo Fin. Louisiana, Inc. v.

Galloway, 17-0413, pp. 7-8 (La. App. 4 Cir. 11/15/17), 231 So.3d 793, 800. When

no evidence was introduced, as was the case here, the judgment is reviewed de

novo to determine whether the district court’s decision was legally correct. Id., p.

8, 231 So.3d at 800. In this circumstance, “the exception of prescription must be

decided on the facts alleged in the petition, which are accepted as true.” Denoux v.

Vessel Mgmt. Servs., Inc., 07-2143, p. 6 (La. 5/21/08), 983 So.2d 84, 88.

Peremptory Exception of Prescription

“As a general rule, the party pleading prescription bears the burden of

proving the plaintiff’s claim has prescribed; however, when a claim has prescribed

on its face, the burden shifts to the plaintiff to demonstrate prescription was

suspended or interrupted.” Lopez v. House of Faith Non-Denomination Ministries,

09-1147, p. 3 (La. App. 4 Cir. 1/13/10), 29 So.3d 680, 681. “[W]hen the plaintiff

alleges specific dates [in the petition], it can be determined whether the petition is

prescribed on its face.” Galloway, 17-0413, p. 9, 231 So.3d at 801. Conversely,

“[w]hen the plaintiff fails to allege specific dates in the petition, it cannot be

determined whether the suit is prescribed on the face of the petition.” Id., p. 9, 231

So.3d at 800-01.

4 “[P]rescriptive statutes are strictly construed against prescription and in

favor of the obligation sought to be extinguished; thus, of two possible

constructions, that which favors maintaining, as opposed to barring, an action

should be adopted.” Carter v. Haygood, 04-0646, p. 10 (La. 1/19/05), 892 So.2d

1261, 1268. “The applicable prescriptive period is determined by the character of

the action pled in the petition.” Galloway, 17-0413, pp. 9-10, 231 So.3d at 801.

The parties’ arguments implicate three prescriptive periods under Louisiana

law.

• La. C.C. art. 3492. Delictual actions

Delictual actions are subject to a liberative prescription of one year. This prescription commences to run from the day injury or damage is sustained. . . .

• La. C.C. art. 3493. Damage to immovable property; commencement and accrual of prescription

When damage is caused to immovable property, the one year prescription commences to run from the day the owner of the immovable acquired, or should have acquired, knowledge of the damage.

• La. R.S. 9:5624. Actions for damages to property damaged for public purposes

When private property is damaged for public purposes any and all actions for such damages are prescribed by the prescription of two years, which shall begin to run after the completion and acceptance of the public works.

Holmes argues that, under Article 3493, prescription did not begin to run

until she discovered defects in her doors, windows, and various cracks throughout

the Property, and she filed her petition within one year of that date. She points out

that her petition lacks any allegation that the incident involving the power line

5 damaged her Property; she alleged only damage to the power line. She further

contends that her property damage was ongoing through the construction, and the

continuing tort doctrine applies. Alternatively, she claims that if Section 5624

applies, her petition was timely filed within two years.

Tidewater counters that the power line incident was the type of actual and

appreciable damage that should have placed Holmes on guard, even though she

came to a more precise realization of further damage later. See, e.g., Hogg v.

Chevron USA, Inc., 09-2632, p. 13 (La. 7/6/10), 45 So.3d 991, 1001. According to

Tidewater, the power line incident started the running of prescription under La.

C.C. arts. 3492 and 3493, and Holmes failed to timely file suit within that time.

Tidewater also argues that Holmes failed to argue in the lower court a continuing

tort theory and her petition lacks factual allegations to support that theory. Lastly,

Tidewater asserts that Section 5624 does not apply to private contractors.

To determine which prescriptive period applies, we must examine the

character of the action alleged. See Galloway, 17-0413, pp. 9-10, 231 So.3d at 801.

After the appropriate prescriptive period is determined, the dispute regarding

timeliness hinges on when the prescriptive period began. Holmes alleged damage

to the Property, an immovable, in the course of a public works project, pursuant to

a contract between the City and Hard Rock and ensuing subcontracts of that work.

She alleged that V Keeler (a private sub-subcontractor) supplied the equipment and

laborers performing the work and that the laborers were under the control of

Tidewater (a private subcontractor). The petition claims that the negligence of all

6 the defendants caused Holmes’ damages and that all of the defendants “are

responsible jointly, severally, and in solido for the construction and maintenance of

the public streets; in particular, plaintiff’s property. . . .”

The character of this action sounds in property damage. However, reviewing

the face of the petition alone and taking its allegations as true, we cannot discern at

this stage whether the allegations implicate the prescriptive period for damage to

immovable property (Article 3493) or for damage from public works (Section

5624). We find it premature to determine which prescriptive period applies until

factual issues of causation of damages, and the date of Holmes’ discovery of

damages, are resolved. Holmes correctly points out that her petition contains no

allegations that the incident involving the power line damaged the Property.

Rather, Holmes explicitly alleged that the power line was damaged. We cannot

intuit from the face of the petition whether the power line incident caused the

damage Holmes allegedly observed in August 2021 or whether Holmes knew or

should have known that the disputed construction damaged the Property at an

earlier time. These are factual disputes, which must be decided with evidence.

Moreover, at this juncture and on the face of the petition alone, we can

neither decide nor reject the argument that Section 5624 applies to Tidewater or

other private contractors. Tidewater relies on three Supreme Court cases for the

proposition that Section 5624 is intended to provide a peremptive period of two

years in which claims must be brought against the State and its political

subdivisions. See Avenal v. State, 03-3521 (La. 10/19/04), 886 So.2d 1085; City of

7 New Orleans v. T.L. James & Co., 96-1112 (La. 1/14/97), 685 So.2d 111; Lyman v.

Town of Sunset, 500 So.2d 390 (La. 1987). Despite Tidewater’s insistence

otherwise, none of those cases stated a bright line rule that Section 5624 is

inapplicable to private contractors. Earlier Louisiana cases, under their particular

facts, have applied a prior version of Section 5624 to claims against private

contractors. See Florsheim v. Dep’t of Highways, 201 So.2d 155 (La. App. 2d Cir.

1967); Oswalt v. Irby Const. Co., 424 So.2d 348 (La. App. 2d Cir. 1982). The

courts have also recognized an important caveat for Section 5624 to apply: the

damage to private property must be the intentional or necessary consequence of

construction work incidental to a public purpose. Roberts v. Murphy Oil Corp., 577

So.2d 308, 310 (La. App. 4th Cir. 1991)(citing Lyman, 500 So.2d 390; Oswalt, 424

So.2d 348); see also Perkins v. Simon, 265 So.2d 804, 808 (La. App. 3d Cir.

1972)(holding that Section 5624 “is not applicable to a claim for damages resulting

exclusively from the negligent acts or omissions of the principal, or its agents or

employees”). These considerations further implicate factual questions of causation,

which must be decided on the evidence.2

In the particular procedural posture presented to this Court, we find it

imprudent to decide the legal question of prescription based on the allegations in

the petition, which are entangled with the merits of the case. We conclude that the

district abused its discretion in failing to refer the exception of prescription to the

merits at trial.

2 Further, no date for the completion and acceptance of the public works is alleged in the

petition. See La. R.S. 9:5624.

8 Louisiana courts have long recognized that “the judge’s options in deciding

the trial of the exception [of prescription] include referring the exception to the

merits in appropriate cases.” Short v. Griffin, 95-0680, p. 2 (La. 6/16/95), 656

So.2d 635, 636. Where the facts relating to the exception of prescription are

separate and distinct from the alleged facts relating to the potential liability of the

defendants, courts have found that delaying trial of the exception inappropriate, as

it does not serve judicial economy. Kirt v. Metzinger, 22-0855, pp. 3-4 (La. App. 4

Cir. 2/2/23), 357 So.3d 493, 495; In re Med. Rev. Panel for Claim of Dede, 98-

0830, p. 2 (La. App. 4 Cir. 5/20/98), 713 So.2d 794, 795; Velocity Agency, LLC v.

St. John, unpub., 21-658, p. 4 (La. App. 5 Cir. 12/2/21), 2021 WL 5831407, at *3.

Such is not the case here. Conversely, where the question of prescription is so

intertwined with the merits of the plaintiff’s claim, the exception of prescription

should be referred to the merits. S. Peters Hotel Invs., LP v. Roy Anderson Corp.,

08-1035 (La. 6/6/08), 983 So.2d 908; Lodrigues v. Duhe', 08-0916 (La. 6/27/08),

983 So.2d 1287, 1288; Short, 95-0689, pp. 2-3, 656 So.2d at 636; Canal St. Land

Co. v. MAPP Constr., LLC, 22-0445, p. 7 (La. App. 4 Cir. 12/14/22), 353 So.3d

1055, 1060, writ denied, 23-00049 (La. 3/28/23), 358 So.3d 506, and writ denied,

23-00054 (La. 3/28/23), 358 So.3d 509, and writ denied, 23-00051 (La. 3/28/23),

358 So.3d 511. In such cases, evidence on prescription and evidence on the merits

are so interrelated that “it would be a waste of judicial economy to try the two

matters in separate proceedings.” Short, 95-0680, p. 3, 656 So.2d at 636; Canal St.

Land Co., 22-0445, pp. 6-7, 353 So.3d at 1060 (evidence to prove causation in

9 negligence claim was substantially interrelated with evidence to prove

prescription).

In the matter on appeal, the evidence required to resolve the exception of

prescription is so intertwined with the evidence required to prove the merits of

Holmes’ property damage claims against the public entities and respective

contractors that judicial economy is not served in adjudicating prescription at this

juncture. The district court abused its discretion in failing to refer the exception to

the merits. The judgment granting the exception of prescription must be vacated.

See Canal St. Land Co., 22-0445, p. 7, 353 So.3d at 1060.

CONCLUSION

Accordingly, for the reasons set forth in this opinion, we vacate the

judgment granting the exception of prescription and dismissing the claims against

Tidewater. We remand this case to the district court for further proceedings

consistent with this opinion.

VACATED AND REMANDED