Foster Construction, Inc. v. Town of Richwood

117 So. 3d 607, 2013 WL 3200117, 2013 La. App. LEXIS 1307
CourtLouisiana Court of Appeal
DecidedJune 26, 2013
DocketNo. 48,171-CA
StatusPublished
Cited by2 cases

This text of 117 So. 3d 607 (Foster Construction, Inc. v. Town of Richwood) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Foster Construction, Inc. v. Town of Richwood, 117 So. 3d 607, 2013 WL 3200117, 2013 La. App. LEXIS 1307 (La. Ct. App. 2013).

Opinions

STEWART, J.

_JjAt issue is whether the plaintiff, Foster Construction, Inc. (“Foster”), is entitled to a writ of mandamus as authorized by La. R.S. 38:2191(D) to compel the Town of Richwood (“Richwood”) to pay the final balance due on a contract for the construction of a multipurpose building. Because the record does not show any appropriation by Richwood for the award or execution of the contract, we affirm the trial court’s judgment denying Foster’s rule for mandamus relief.

FACTS

On August 4, 2011, Foster sued Rich-wood to obtain payment of $49,174.28, the balance due, referred to as the retainage, under a contract for the construction of a multipurpose building. The petition alleged that Richwood refused to pay because it did not have sufficient funds. The contract, which was introduced into evidence, stated that the cost of the construction project was $495,751.

On January 3, 2012, Foster filed a supplemental and amending petition requesting issuance of a mandamus order under La. R.S. 38:2191(D) to compel Richwood to pay the amount due. The petition also named additional defendants against whom alternative relief was sought in the event the request for mandamus would be denied. The additional defendants included three aldermen who, according to the petition, voted to accept Foster’s bid after it had been disclosed during a special meeting on July 20, 2010, that Richwood did not have sufficient funds to pay the bid.

A hearing on Foster’s request for mandamus relief was held on April 17, 2012. Steven B. Hunter, the mayor of Richwood, [608]*608testified that he signed |2the construction contract on behalf of Richwood and that he believed at the time of contracting, and based on information from the town clerk, that Richwood had money to fund the construction. However, he testified that the town did not now have the funds to pay the balance due.

When asked about how the construction contract was funded, Mayor Hunter explained to the trial court that Richwood’s prior administration had borrowed money to pay off the town’s substantial debts. The money remaining was used to fund the construction of the multipurpose building. Disbursements during construction were handled by a trustee with the Bank of New York, which is presumably where the funds used for the construction project were held. When the funds held by the Bank of New York ran out, Richwood made two payments to Foster from its general fund. Richwood paid $20,203.53 on January 14, 2011, and an additional $1,257 on March 17, 2011. The mayor testified that there was no additional unallocated money in the general fund to pay the remaining contract balance.

The owner of Foster, Michael D. Foster (“Mr. Foster”), testified that he demanded payment of the retainage after getting the certificate of substantial completion and a lien-free certificate. Instead of payment, he received a letter from Mayor Hunter dated June 24, 2011, informing him that Richwood could not pay the balance due. Mayor Hunter’s letter attributed Rich-wood’s inability to pay to delays in opening a new bingo hall. The letter requested more time to submit the payment. Mr. Foster |3testified that he had not been told that the town was running out of money and that he would have stopped construction if he had been told the facts.

The record shows that the certificate of substantial completion was recorded on February 25, 2011, and that the lien-free certificate was filed on April 15, 2011.

At the close of the hearing, the trial court took the matter under advisement and ordered the parties to submit memo-randa. While the matter was under advisement, Richwood filed an exception of no right of action. It asserted that La. R.S. 38:2191 did not provide a right to seek a writ of mandamus at the time the contract was confected and that the amendment to provide for such relief did not become effective until August 15, 2011, after the contracted project was completed. It further asserted that the amendment was substantive in nature and not subject to retroactive application.

The trial court entered a written ruling on August 9, 2012, denying Foster mandamus relief. The trial court agreed with Richwood’s argument that the amendment to La. R.S. 38:2191, adding the right to seek mandamus relief, was a substantive change in the law and could not be applied retroactively to this case. Additionally, the trial court determined that, even if applied retroactively, Foster would not be entitled to relief because no funds had been appropriated by Richwood for payment of the balance owed. Judgment denying Foster’s request for mandamus relief was signed on October 5, 2012. The judgment was designated a final judgment for purposes of an immediate appeal.

|4On appeal, Foster asserts that the trial court erred in determining the amendment of La. R.S. 38:2191 to be substantive, rather than procedural and applicable to this matter. Foster also asserts error in the trial court’s finding that Richwood had not appropriated funds to pay the contract.

DISCUSSION

Public entities who enter public contracts are required to promptly pay obli-| [609]*609gations, including progressive stage payments and final payments, when they become due and payable under such contracts. La. R.S. 38:2191(A). A public entity that fails to make a final payment after formal final acceptance and within 45 days following receipt of a clear lien certificate shall be liable for reasonable attorney fees. La. R.S. 38:2191(B). These statutory provisions shall not be waived by contract. La. R.S. 38:2191(0).

By Acts 2011, No. 184, § 1, subsection (D) was added to provide for mandamus relief. La. R.S. 38:2191(D) states:

D. Any public entity failing to make any progressive stage payments arbitrarily or without reasonable cause, or any final payment when due as provided in this Section, shall be subject to mandamus to compel the payment of the sums due under the contract up to the amount of the appropriation made for the award and execution of the contract.

This provision became effective on August 15, 2011, which was after Foster completed the work under the contract and after it filed this suit for payment of the balance due.

Ordinarily, we would endeavor to determine whether the new law is procedural or interpretive such that it may be applied retroactively to the cause of action, or whether it is substantive and subject to prospective | ¿application only. La. C.C. art. 6; Burks v. Christus Health Monroe, 39,540 (La.App.2d Cir.4/6/05), 899 So.2d 775, writ denied, 2005-1184 (La.11/28/05), 916 So.2d 146. However, we pretermit this determination in this instance because, even if subsection (D) may be applied to the cause of action before us, mandamus relief is still not available to Foster on this record.

Under La. R.S. 38:2191(D), mandamus relief is available to compel payment “up to the amount of the appropriation made for the award and execution of the contract.” This provision presupposes that the public entity made an appropriation for the contract when awarded. Thus, we must determine whether the record shows that the town appropriated funds for the award and execution of the contract.

The Town of Richwood is a municipality governed by a mayor and aldermen form of government. Therefore, it is subject to the provisions of La. R.S. 33:321 et seg., pertaining to local governments. Regarding appropriations, La. R.S.

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117 So. 3d 607, 2013 WL 3200117, 2013 La. App. LEXIS 1307, Counsel Stack Legal Research, https://law.counselstack.com/opinion/foster-construction-inc-v-town-of-richwood-lactapp-2013.