IOANNIS MAROULIS NO. 20-C-226
VERSUS FIFTH CIRCUIT
ENTERGY LOUISIANA, LLC, ET AL. COURT OF APPEAL
STATE OF LOUISIANA
ON APPLICATION FOR SUPERVISORY REVIEW FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 793-761, DIVISION "C" HONORABLE JUNE B. DARENSBURG, JUDGE PRESIDING
February 10, 2021
ROBERT A. CHAISSON JUDGE
Panel composed of Judges Marc E. Johnson, Robert A. Chaisson, and John J. Molaison, Jr.
WRIT GRANTED; SUMMARY JUDGMENT GRANTED; THIRD-PARTY CLAIMS DISMISSED WITH PREJUDICE RAC MEJ JJM COUNSEL FOR PLAINTIFF/RESPONDENT, IOANNIS MAROULIS William J. Mitchell, II Chet G. Boudreaux Richard F. Zimmerman, III
COUNSEL FOR DEFENDANT/RELATOR, CASTLEMAN, DONLEA AND ASSOCIATES, LLC Andre' C. Gaudin Mindy N. Duffourc Jason R. Tomlinson Bevan W. Sabo
COUNSEL FOR DEFENDANT/RESPONDENT, HOTEL INVESTORS, LLC AND EXPOTEL HOSPITALITY SERVICES, LLC H. Minor Pipes, III Stephen L. Miles Patrick J. Lorio Emily E. Ross
COUNSEL FOR DEFENDANT/RESPONDENT, ENTERGY LOUISIANA, LLC Catharine O. Gracia Darryl M. Phillips Sandra Diggs-Miller John A. Braymer
COUNSEL FOR DEFENDANT/RESPONDENT, SCOTTSDALE INDEMNITY COMPANY Douglas M. Kleeman Katherine K. Quirk
COUNSEL FOR DEFENDANT/RESPONDENT, EVANSTON INSURANCE COMPANY Sidney W. Degan, III Paul A. Eckert Karl H. Schmid Travis L. Bourgeois
COUNSEL FOR DEFENDANT/RESPONDENT, SUNBELT RENTAL SCAFFOLD SERVICES, LLC Douglas K. Williams Cullen J. Dupuy Druit G. Gremillion, Jr. Kelsey A. Clark
COUNSEL FOR DEFENDANT/RESPONDENT, ACE AMERICAN INSURANCE COMPANY Robert I. Siegel Elizabeth A. B. Carville
COUNSEL FOR DEFENDANT/RESPONDENT, AUSI BUILDERS AND CONSTRUCTION, LLC Michael S. Futrell CHAISSON, J.
In this case arising from a construction accident, relator Castleman, Donlea,
and Associates, LLC (“Castleman”) seeks supervisory review of a June 30, 2020
judgment of the trial court denying its motion for summary judgment seeking
dismissal of third-party breach of contract and indemnity claims filed against it by
Hotel Investors, LLC and Expotel Hospitality – HIM, LLC (collectively “Hotel
Investors”). Pursuant to the provisions of La. C.C.P. art. 966(H), this case was
assigned for additional briefing and oral argument. For the following reasons, we
grant this writ application, reverse that portion of the trial court’s ruling that denied
Castleman’s motion for summary judgment, render judgment granting Castleman’s
motion for summary judgment, and dismiss Hotel Investors’ third-party claims
against Castleman with prejudice.
FACTS AND PROCEDURAL HISTORY
This complex, multiparty case arises from a work-related accident that
occurred during the renovation of the Hampton Inn located in Metairie, Louisiana.
Hotel Investors hired Sigur Construction, LLC (“Sigur”) and Castleman as the
general contractors for the project. Castleman, in turn, hired Sunbelt Rentals
Scaffold Services, LLC (“Sunbelt”) as the scaffolding subcontractor for the
project. On April 19, 2018, Ioannis Maroulis, an employee of Sunbelt, suffered an
electrical shock when a piece of scaffolding equipment came into contact with an
overhead power line.
Mr. Maroulis filed a petition for damages against Hotel Investors, and
various other defendants, alleging various counts of negligence. Hotel Investors
then filed a third-party demand against Castleman and its insurer, Evanston
Insurance Company (“Evanston”), alleging a breach of the construction contract
between Hotel Investors and Castleman and seeking insurance coverage under the
Evanston policy.
20-C-226 1 In response to this third-party demand, Castleman raised the affirmative
defense of an illegal contract. Castleman filed a motion for summary judgment
wherein it argues that the contract it entered into with Hotel Investors is absolutely
null and void ab initio because Castleman, a Texas-based company, is not a
licensed contractor in Louisiana, and Louisiana contracting law, La. R.S. 37:2150,
et seq., requires construction projects costing $50,000 or more to be performed by
a contractor licensed in Louisiana. Castleman supported its motion with copies of
the contract documents as well as excerpts from depositions of Hotel Investors’
representatives.
Following a hearing on the matter, the trial court denied Castleman’s motion
for summary judgment. Castleman filed this timely writ application seeking
supervisory review of that judgment.
DISCUSSION
Appellate courts review summary judgments de novo using the same criteria
that govern the trial court’s determination of whether summary judgment is
appropriate. O’Krepki v. O’Krepki, 16-50 (La. App. 5 Cir. 5/26/16), 193 So.3d
574, 577. A motion for summary judgment will be granted if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to material fact, and that
the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966; Semco,
LLC v. Grand Ltd., 16-342 (La. App. 5 Cir. 5/31/17), 221 So.3d 1004, 1031 (citing
Oubre v. Louisiana Citizens Fair Plan, 11-0097 (La. 12/16/11), 79 So.3d 987,
1002-03).
There are no genuine issues of material fact in dispute here. Neither party
disputes that the cost of the construction project exceeded $50,000 or that
Castleman was not a licensed contractor in Louisiana at the time the contract, a
standard-form AIA construction agreement, was executed. Rather, the arguments
20-C-226 2 made by the parties are legal ones: whether the construction contract between
Castleman and Hotel Investors is null and void, and, if so, what legal effects result
from such a finding. We address these issues in turn in our discussion below.
La. C.C. art. 2030 provides, “[a] contract is absolutely null when it violates a
rule of public order, as when the object of a contract is illicit or immoral. A
contract that is absolutely null may not be confirmed. Absolute nullity may be
invoked by any person or may be declared by the court on its own initiative.” This
is a long standing principle in Louisiana law. See Gravier’s Curator v. Carraby’s
Ex’r, 17 La. 118, 125 (1841).
Louisiana contracting law prohibits engaging in the business of construction
without a valid license. Specifically, La. R.S. 37:2160(A)(1) states, “[i]t shall be
unlawful for any person to engage or to continue in this state in the business of
contracting, or to act as a contractor as defined in this Chapter, unless he holds an
active license as a contractor under the provisions of this Chapter.” Individuals
may not by private agreement set aside the contractor’s licensing rules established
by the legislature. Leija v. Gathright, 51,049 (La. App. 2 Cir. 12/21/16), 211 So.3d
592, 596, writ denied, 17-0144 (La. 3/13/17), 216 So.3d 806 (citing Hagberg v.
John Bailey Contractor, 435 So.2d 580, 584 (La. App. 3d Cir. 1983)). Because the
licensing scheme was enacted to protect the interests of public order, contracts in
violation of them are in contravention of prohibitory laws and therefore void.
Alonzo v. Chifici, 526 So.2d 237, 243 (La. Ct. App. 5th Cir. 1988), writ denied, 527
So.2d 307 (La. 1988); La. C.C. art. 7 (“persons may not by their juridical acts
derogate from laws enacted for the protection of public interest. Any act in
derogation of such laws is an absolute nullity”).
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IOANNIS MAROULIS NO. 20-C-226
VERSUS FIFTH CIRCUIT
ENTERGY LOUISIANA, LLC, ET AL. COURT OF APPEAL
STATE OF LOUISIANA
ON APPLICATION FOR SUPERVISORY REVIEW FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 793-761, DIVISION "C" HONORABLE JUNE B. DARENSBURG, JUDGE PRESIDING
February 10, 2021
ROBERT A. CHAISSON JUDGE
Panel composed of Judges Marc E. Johnson, Robert A. Chaisson, and John J. Molaison, Jr.
WRIT GRANTED; SUMMARY JUDGMENT GRANTED; THIRD-PARTY CLAIMS DISMISSED WITH PREJUDICE RAC MEJ JJM COUNSEL FOR PLAINTIFF/RESPONDENT, IOANNIS MAROULIS William J. Mitchell, II Chet G. Boudreaux Richard F. Zimmerman, III
COUNSEL FOR DEFENDANT/RELATOR, CASTLEMAN, DONLEA AND ASSOCIATES, LLC Andre' C. Gaudin Mindy N. Duffourc Jason R. Tomlinson Bevan W. Sabo
COUNSEL FOR DEFENDANT/RESPONDENT, HOTEL INVESTORS, LLC AND EXPOTEL HOSPITALITY SERVICES, LLC H. Minor Pipes, III Stephen L. Miles Patrick J. Lorio Emily E. Ross
COUNSEL FOR DEFENDANT/RESPONDENT, ENTERGY LOUISIANA, LLC Catharine O. Gracia Darryl M. Phillips Sandra Diggs-Miller John A. Braymer
COUNSEL FOR DEFENDANT/RESPONDENT, SCOTTSDALE INDEMNITY COMPANY Douglas M. Kleeman Katherine K. Quirk
COUNSEL FOR DEFENDANT/RESPONDENT, EVANSTON INSURANCE COMPANY Sidney W. Degan, III Paul A. Eckert Karl H. Schmid Travis L. Bourgeois
COUNSEL FOR DEFENDANT/RESPONDENT, SUNBELT RENTAL SCAFFOLD SERVICES, LLC Douglas K. Williams Cullen J. Dupuy Druit G. Gremillion, Jr. Kelsey A. Clark
COUNSEL FOR DEFENDANT/RESPONDENT, ACE AMERICAN INSURANCE COMPANY Robert I. Siegel Elizabeth A. B. Carville
COUNSEL FOR DEFENDANT/RESPONDENT, AUSI BUILDERS AND CONSTRUCTION, LLC Michael S. Futrell CHAISSON, J.
In this case arising from a construction accident, relator Castleman, Donlea,
and Associates, LLC (“Castleman”) seeks supervisory review of a June 30, 2020
judgment of the trial court denying its motion for summary judgment seeking
dismissal of third-party breach of contract and indemnity claims filed against it by
Hotel Investors, LLC and Expotel Hospitality – HIM, LLC (collectively “Hotel
Investors”). Pursuant to the provisions of La. C.C.P. art. 966(H), this case was
assigned for additional briefing and oral argument. For the following reasons, we
grant this writ application, reverse that portion of the trial court’s ruling that denied
Castleman’s motion for summary judgment, render judgment granting Castleman’s
motion for summary judgment, and dismiss Hotel Investors’ third-party claims
against Castleman with prejudice.
FACTS AND PROCEDURAL HISTORY
This complex, multiparty case arises from a work-related accident that
occurred during the renovation of the Hampton Inn located in Metairie, Louisiana.
Hotel Investors hired Sigur Construction, LLC (“Sigur”) and Castleman as the
general contractors for the project. Castleman, in turn, hired Sunbelt Rentals
Scaffold Services, LLC (“Sunbelt”) as the scaffolding subcontractor for the
project. On April 19, 2018, Ioannis Maroulis, an employee of Sunbelt, suffered an
electrical shock when a piece of scaffolding equipment came into contact with an
overhead power line.
Mr. Maroulis filed a petition for damages against Hotel Investors, and
various other defendants, alleging various counts of negligence. Hotel Investors
then filed a third-party demand against Castleman and its insurer, Evanston
Insurance Company (“Evanston”), alleging a breach of the construction contract
between Hotel Investors and Castleman and seeking insurance coverage under the
Evanston policy.
20-C-226 1 In response to this third-party demand, Castleman raised the affirmative
defense of an illegal contract. Castleman filed a motion for summary judgment
wherein it argues that the contract it entered into with Hotel Investors is absolutely
null and void ab initio because Castleman, a Texas-based company, is not a
licensed contractor in Louisiana, and Louisiana contracting law, La. R.S. 37:2150,
et seq., requires construction projects costing $50,000 or more to be performed by
a contractor licensed in Louisiana. Castleman supported its motion with copies of
the contract documents as well as excerpts from depositions of Hotel Investors’
representatives.
Following a hearing on the matter, the trial court denied Castleman’s motion
for summary judgment. Castleman filed this timely writ application seeking
supervisory review of that judgment.
DISCUSSION
Appellate courts review summary judgments de novo using the same criteria
that govern the trial court’s determination of whether summary judgment is
appropriate. O’Krepki v. O’Krepki, 16-50 (La. App. 5 Cir. 5/26/16), 193 So.3d
574, 577. A motion for summary judgment will be granted if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to material fact, and that
the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966; Semco,
LLC v. Grand Ltd., 16-342 (La. App. 5 Cir. 5/31/17), 221 So.3d 1004, 1031 (citing
Oubre v. Louisiana Citizens Fair Plan, 11-0097 (La. 12/16/11), 79 So.3d 987,
1002-03).
There are no genuine issues of material fact in dispute here. Neither party
disputes that the cost of the construction project exceeded $50,000 or that
Castleman was not a licensed contractor in Louisiana at the time the contract, a
standard-form AIA construction agreement, was executed. Rather, the arguments
20-C-226 2 made by the parties are legal ones: whether the construction contract between
Castleman and Hotel Investors is null and void, and, if so, what legal effects result
from such a finding. We address these issues in turn in our discussion below.
La. C.C. art. 2030 provides, “[a] contract is absolutely null when it violates a
rule of public order, as when the object of a contract is illicit or immoral. A
contract that is absolutely null may not be confirmed. Absolute nullity may be
invoked by any person or may be declared by the court on its own initiative.” This
is a long standing principle in Louisiana law. See Gravier’s Curator v. Carraby’s
Ex’r, 17 La. 118, 125 (1841).
Louisiana contracting law prohibits engaging in the business of construction
without a valid license. Specifically, La. R.S. 37:2160(A)(1) states, “[i]t shall be
unlawful for any person to engage or to continue in this state in the business of
contracting, or to act as a contractor as defined in this Chapter, unless he holds an
active license as a contractor under the provisions of this Chapter.” Individuals
may not by private agreement set aside the contractor’s licensing rules established
by the legislature. Leija v. Gathright, 51,049 (La. App. 2 Cir. 12/21/16), 211 So.3d
592, 596, writ denied, 17-0144 (La. 3/13/17), 216 So.3d 806 (citing Hagberg v.
John Bailey Contractor, 435 So.2d 580, 584 (La. App. 3d Cir. 1983)). Because the
licensing scheme was enacted to protect the interests of public order, contracts in
violation of them are in contravention of prohibitory laws and therefore void.
Alonzo v. Chifici, 526 So.2d 237, 243 (La. Ct. App. 5th Cir. 1988), writ denied, 527
So.2d 307 (La. 1988); La. C.C. art. 7 (“persons may not by their juridical acts
derogate from laws enacted for the protection of public interest. Any act in
derogation of such laws is an absolute nullity”).
It is well established in Louisiana law that a construction agreement made
with an unlicensed contractor is null and void. See Quaternary Res. Investigations,
LLC v. Phillips, 18-1543 (La. App. 1 Cir. 11/19/20); Korrapati v. Augustino Bros.
20-C-226 3 Constr., LLC, 19-426 (La. App. 5 Cir. 7/31/20), 302 So.3d 147, 153; Leija v.
Gathright, supra; and J. Caldarera & Co., Inc. v. Hosp. Serv. Dist. 2 of Par. of
Jefferson, 97-1025 (La. App. 5 Cir. 2/11/98), 707 So.2d 1023, 1026.
In A Better Place, Inc. v. Giani Investment Company, 445 So.2d 728, 732
(La.1984), the Louisiana Supreme Court articulated the evidentiary burden for a
party seeking to invoke the illegality of a contract as a defense to an action for
enforcement:
Louisiana jurisprudence is replete with cases which have treated contracts tainted with illegality in object or cause as null, void and of no effect. E.L. Burns Co. v. Cashio, 302 So.2d 297 (La.1974) (contract in contravention of prohibitory law setting prescription is null); Rosenblath v. Sanders, 150 La. 882, 91 So. 252 (1922) (lease for prostitution); Martin v. Seabaugh, 128 La. 442, 54 So. 935 (1911) (gambling partnership); Milne v. Davidson, 5 Mart. (N.S.) 409 (La.1827) (lease violating zoning for hospitals); Lamy v. Will, 140 So.2d 794 (La.App. 4th Cir.1962) (gambling); J.R. Watkins Co. v. Brown, 13 La.App. 244, 126 So. 587 (1930) (wholesaler cannot recover price in illegal drug sale). … Nevertheless, the law presumes that men in their business transactions do not intend to violate the law or to make contracts for the enforcement of which the law refuses a remedy. Hence, when one party charges that the contract is illegal, the burden of proof is imposed upon him to establish this contention. Baucum & Kimball v. Garrett Mercantile Co., 188 La. 728, 178 So. 256 (1937). Thus, illegality is an affirmative defense and as with other affirmative defenses, the defendant who pleads it has the burden of proving it by a preponderance of the evidence. La.Code Civ.P. art. 1005; Prestenbach v. Sentry Ins. Co., 340 So.2d 1331 (La.1976); J.P. Barnett Co. v. Ludeau, 171 La. 21, 129 So. 655 (1930).1
Thus, at trial the evidentiary burden for Castleman on its affirmative defense
would be to show by a preponderance of the evidence that the Prime Contract
construction agreement it entered into with Hotel Investors was an illegal violation
of Louisiana contracting law. In support of its motion for summary judgment,
Castleman attached as exhibits: a copy of the AIA contract between Castleman and
1 While A Better Place and the examples cited therein involve contracts which have traditional immoral objects such as sale of illegal drug paraphernalia, gambling, and prostitution, many other courts have found that if a contract has as its cause or object circumvention of state law, it will be held as an absolute nullity in contravention of the public order. See Wynne v. New Orleans Clerks & Checkers Union, Local 1497, Int’l Longshoremen’s Ass’n, AFL-CIO, 550 So.2d 1352, 1355 (La. App. 4th Cir. 1989), writ denied, 558 So.2d 1125 (La. 1990) (and cases cited therein.) This is consistent with the express language of La. C.C. art. 2030.
20-C-226 4 Hotel Investors; depositions of Brett Chittenden, the representative of Hotel
Investors who signed the agreement, David Sigur, a licensed Louisiana contractor,
Charles Floca, the Hotel Investors representative who purportedly approved the
contract, and Linda Castleman Donlea, the Castleman representative. These
depositions indicate that the representatives for Hotel Investors were aware that
Castleman was not a licensed commercial contractor in the state of Louisiana at the
time the AIA agreement was signed and that Louisiana law required that
construction agreements in the state of Louisiana exceeding $50,000 could only be
entered into with licensed Louisiana contractors.
At the trial on the motion for summary judgment, and in its opposition to the
writ application, Hotel Investors’ primary argument against Castleman’s
affirmative defense does not refute the evidence presented. Rather, Hotel Investors
argues that all work on the renovation project was lawfully performed under a
valid contractor’s license because it had also hired Sigur, which is licensed in
Louisiana, to act as the general contractor as part of a joint venture-like endeavor.
We reject Hotel Investors’ argument.
This court has previously addressed the question of what Louisiana
contracting law requires of “joint ventures” like the one described by Hotel
Investors. In J. Caldarera & Co., Inc. v. Hospital Service Dist. 2 of Parish of
Jefferson, supra, we held that a joint venture is properly licensed when each of its
members holds a valid license and that each member performs work in the
classification for which it is licensed. 707 So.2d at 1026. Under this Court’s
holding in J. Caldarera, the “joint venture” described by Hotel Investors would
have only complied with the statutory requirements if both of the contractors
involved in the “joint venture,” Sigur and Castleman, were properly licensed.2
2 This court’s holding in J. Caldarera & Co. was consistent with the testimony of the Administrator of the Louisiana Licensing Board for Contractors, who stated that the Licensing Board has “consistently interpreted its rules to provide that two contractors may perform as a
20-C-226 5 This is true regardless of any purported contractual agreement between Castleman
and Sigur for Sigur to act as the general contractor. Castleman was not acting as a
subcontractor in this matter, as evidenced by the signed AIA agreement between
Castleman and Hotel Investors.3
Hotel Investors argues that it didn’t intend to enter into an illegal agreement
with Castleman to circumvent the law, and that it believed it was acting in
accordance with the law in light of the “joint venture” agreement between
Castleman and Sigur. However, what Hotel Investors intended is immaterial in
this instance. Under La. C.C. art. 2030, a contract is absolutely null when it
violates a rule of public order, as when the object of the contract is illicit or
immoral. The object of the agreement between Castleman and Hotel Investors, the
provision of construction services by an unlicensed, out-of-state contractor, is
exactly the circumstance which Louisiana contracting law has proscribed in the
name of public safety.
Hotel Investors further argues that public policy considerations should
prevent this court from declaring the contract a nullity. Specifically, it argues that
Castleman contractually assumed sole responsibility for ensuring the safety of the
workers, and nullifying the contract would allow Castleman to escape liability for
worker injury and failing to ensure a safe jobsite. This argument ignores that an
injured party may bring his own claim against Castleman for such failures, and
also ignores that Hotel Investors disregarded public policy when it elected to hire
an out-of-state, unlicensed contractor. As previously noted, the licensure
requirements were enacted with the express purpose of protecting the public. La.
R.S. 37:2150, concerning the laws governing contracting, states:
joint venture without a separate license, provided that each member is licensed, and that each member perform work only in the classification for which they are licensed.” 707 So.2d at 1026. 3 Notably, Hotel Investors has nowhere addressed or refuted the holding of J. Caldarera & Co.
20-C-226 6 The purpose of the legislature in enacting this Chapter is the protection of the health, safety, and general welfare of all those persons dealing with persons engaged in the contracting vocation, and the affording of such persons of an effective and practical protection against the incompetent, inexperienced, unlawful, and fraudulent acts of contractors with whom they contract. …
The express purpose of the contractor licensing scheme would be defeated
by allowing parties to circumvent its requirements, and a failure to declare such
contracts null and void could inadvertently incentivize parties to disregard the
requirements of Louisiana contracting laws. This argument by Hotel Investors is
without merit.
Hotel Investors next argues that, even assuming Castleman is correct and the
contract is null, Castleman cannot invoke nullity to avoid the obligations it
knowingly undertook, and was paid for, because it knew it was an unlicensed
contractor at the time it signed the contract. This argument relies on the language
of La. C.C. art. 2033, which delineates the effects of an absolute nullity. La. C.C.
art. 2033 states:
An absolutely null contract, or a relatively null contract that has been declared null by the court, is deemed never to have existed. The parties must be restored to the situation that existed before the contract was made. If it is impossible or impracticable to make restoration in kind, it may be made through an award of damages.
Nevertheless, a performance rendered under a contract that is absolutely null because its object or its cause is illicit or immoral may not be recovered by a party who knew or should have known of the defect that makes the contract null. The performance may be recovered, however, when that party invokes the nullity to withdraw from the contract before its purpose is achieved and also in exceptional situations when, in the discretion of the court, that recovery would further the interest of justice.
Absolute nullity may be raised as a defense even by a party who, at the time the contract was made, knew or should have known of the defect that makes the contract null.
In support of its “clean hands” argument, Hotel Investors also invokes the
following official revision comment to La. C.C. art. 2033:
20-C-226 7 (c) Under this Article, a party who knew or should have known at the time of contracting of a defect that made the contract absolutely null may not avail himself of the nullity when the purpose of the illegal contract has been accomplished. See Boatner v. Yarborough, 12 La.Ann. 249 (1857); Gravier’s Curator v. Carraby’s Executor, 17 La. 118 (1841); Mulhollan v. Voorhies, 3 Mart. (N.S.) 46 (1824). This conclusion flows naturally from the principle expressed in the traditional Roman maxim, nemo propriam turpitudinem allegare potest (no one may invoke his own turpitude), sometimes called the “clean hands” doctrine. If a performance has been rendered under such a contract by a party with knowledge of the cause of nullity, the other party may keep that performance, in accordance with the complementary Roman maxim, in pari causa turpitudinem potior est conditio possidentis (in case of equal wrongdoing the one in possession is in a better position). See 2 Litvinoff, Obligations 163- 169 (1975). The philosophy underlying those principles is not to reward the recipient of the performance, who by hypothesis is as guilty as the renderer, but to protect the court from mediating disputes between dealers in iniquity. See Gravier’s Curator v. Carraby’s Executor, 17 La. 118 (1841). See also Tzarano, Étude sur la règle: “Nemo auditur propriam turpitudinem allegans” 103-115 (1926); Le Tourneau, La règle: “Nemo auditur ...” 178-179 (1970).
Hotel Investors’ reliance on the “clean hands” doctrine is misplaced here. A
typical example of a party attempting to “avail themselves of the nullity” in the
context of a construction project involves a situation where an unlicensed
contractor has entered into a construction agreement with a property owner,
rendered construction services, and then the owner refuses to pay the contractor
because the construction agreement was null and void. See Alonzo v. Chifici,
supra, and Hagberg, supra. In such circumstances, this Court and others have
affirmed the declaration of the construction agreement as null and void because it
was done by an unlicensed contractor; however, the contractors were allowed to
recover its costs for labor, services and materials (but not profit) under the theory
of unjust enrichment. The recovery cannot be achieved under the theory of breach
of contract, because a contract made in violation of a prohibitory law is illegal and
its enforcement is precluded, even though work has been done or materials
furnished. Quaternary Res. Investigations, LLC v. Phillips, 18-1543 (La. App. 1
20-C-226 8 Cir. 11/19/20) (citing Boxwell v. Dep’t Highways, 203 La. 706, 14 So.2d 627, 631
(1943)).
These examples are distinguishable from the case sub judice. The
performance sought by Hotel Investors, contractual indemnity for the claims
brought by Mr. Maroulis against Hotel Investors, has not been rendered. Instead,
Hotel Investors has petitioned the court to enforce the terms of an illegal contract.
There is no support in Louisiana jurisprudence for such enforcement. On the
contrary, in considering a construction case between a construction company
providing architectural services without a licensed architect and the West Baton
Rouge School Board, the Louisiana Supreme Court found that the effect of having
an AIA construction contract declared null and void ab initio was to have the
execution of its arbitration clause enjoined. W. Baton Rouge Par. Sch. Bd. v. T. R.
Ray, Inc., 367 So.2d 332, 335 (La. 1979).4 Similarly, under this reasoning, Hotel
Investors’ attempt to enforce the terms of a null and void AIA contract it signed
with Castleman, including those contractual terms which require indemnity against
claims brought by injured workers, must also fail.
CONCLUSION
For the aforementioned reasons, we find the January 31, 2018 written
construction contract between Hotel Investors and Castleman null and void ab
initio for its violation of Louisiana’s laws of contractor licensing enacted to protect
the interests of public order. Upon de novo review, we also find that there are no
genuine issues of material fact, and Castleman is entitled to summary judgment as
a matter of law. Hotel Investors’ claims for contractual indemnity and breach of
contract are unenforceable. Accordingly, we grant this writ application, reverse
that portion of the trial court’s ruling that denied Castleman’s motion for summary
4 The Court went on to note that both parties appeared to have contracted in good faith and that recourse for one party seeking recompense for money paid, even though architectural services were not rendered, may be possible under a theory of unjust enrichment.
20-C-226 9 judgment, render judgment granting Castleman’s motion for summary judgment,
and dismiss Hotel Investors’ claims for contractual indemnity and breach of
contract against Castleman with prejudice.
WRIT GRANTED; SUMMARY JUDGMENT GRANTED; THIRD-PARTY CLAIMS DISMISSED WITH PREJUDICE
20-C-226 10 SUSAN M. CHEHARDY CURTIS B. PURSELL
CHIEF JUDGE CLERK OF COURT
NANCY F. VEGA FREDERICKA H. WICKER CHIEF DEPUTY CLERK JUDE G. GRAVOIS MARC E. JOHNSON ROBERT A. CHAISSON SUSAN BUCHHOLZ STEPHEN J. WINDHORST FIRST DEPUTY CLERK HANS J. LILJEBERG JOHN J. MOLAISON, JR. FIFTH CIRCUIT MELISSA C. LEDET JUDGES 101 DERBIGNY STREET (70053) DIRECTOR OF CENTRAL STAFF POST OFFICE BOX 489 GRETNA, LOUISIANA 70054 (504) 376-1400
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NOTICE OF JUDGMENT AND CERTIFICATE OF DELIVERY I CERTIFY THAT A COPY OF THE OPINION IN THE BELOW-NUMBERED MATTER HAS BEEN DELIVERED IN ACCORDANCE WITH UNIFORM RULES - COURT OF APPEAL, RULE 2-16.4 AND 2-16.5 THIS DAY FEBRUARY 10, 2021 TO THE TRIAL JUDGE, CLERK OF COURT, COUNSEL OF RECORD AND ALL PARTIES NOT REPRESENTED BY COUNSEL, AS LISTED BELOW:
20-C-226 E-NOTIFIED 24TH JUDICIAL DISTRICT COURT (CLERK) HONORABLE JUNE B. DARENSBURG (DISTRICT JUDGE) RICHARD F. ZIMMERMAN, III MINDY N. DUFFOURC (RELATOR) H. MINOR PIPES, III (RESPONDENT) (RESPONDENT) STEPHEN L. MILES (RESPONDENT) DARRYL M. PHILLIPS (RESPONDENT) PATRICK J. LORIO (RESPONDENT) SIDNEY W. DEGAN, III (RESPONDENT) TRAVIS L. BOURGEOIS (RESPONDENT) DOUGLAS M. KLEEMAN (RESPONDENT) DOUGLAS K. WILLIAMS (RESPONDENT) DRUIT G. GREMILLION, JR. CULLEN J. DUPUY (RESPONDENT) ROBERT I. SIEGEL (RESPONDENT) (RESPONDENT) ELIZABETH A. B. CARVILLE MICHAEL S. FUTRELL (RESPONDENT) (RESPONDENT)
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ANDRE' C. GAUDIN (RELATOR) PAUL A. ECKERT (RESPONDENT) CHET G. BOUDREAUX (RESPONDENT) BEVAN W. SABO (RELATOR) ATTORNEY AT LAW WILLIAM J. MITCHELL, II JASON R. TOMLINSON (RELATOR) 5555 HILTON AVENUE (RESPONDENT) ATTORNEYS AT LAW SUITE 620 ATTORNEYS AT LAW 5213 AIRLINE DRIVE BATON ROUGE, LA 70808 5656 HILTON AVENUE METAIRIE, LA 70001 BATON ROUGE, LA 70808 CATHARINE O. GRACIA (RESPONDENT) JOHN A. BRAYMER (RESPONDENT) ATTORNEY AT LAW KELSEY A. CLARK (RESPONDENT) SANDRA DIGGS-MILLER (RESPONDENT) 639 LOYOLA AVENUE ATTORNEY AT LAW ATTORNEYS AT LAW SUITE 2600 ONE AMERICAN PLACE, 23RD FLOOR 639 LOYOLA AVENUE NEW ORLEANS, LA 70113 POST OFFICE BOX 3197 26TH FLOOR BATON ROUGE, LA 70821-3197 NEW ORLEANS, LA 70113