STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
17-529
TROUTH AIR CONDITIONING &
SHEET METAL, INC.
VERSUS
BAY ELECTRIC CO., INC., AND
LA CREOLE HOSPITALITY 1, LLC
**********
SUPERVISORY WRIT FROM THE FOURTEENTH JUDICIAL DISTRICT COURT PARISH OF CALCASIEU, NO. 2017-000075 HONORABLE ROBERT L. WYATT, DISTRICT JUDGE
JOHN D. SAUNDERS JUDGE
Court composed of John D. Saunders, Shannon J. Gremillion and John E. Conery, Judges.
WRIT DENIED. Henry R. Liles 940 Ryan Street Lake Charles, LA 70601 (337) 433-8529 COUNSEL FOR PLAINTIFF/RESPONDENT: Trouth Air Conditioning & Sheet Metal, Inc.
Jeffrey N. Boudreaux John C. Funderburk Joshua J. Coleman Thomas D. Bourgeois Kean Miller LLP P. O. Box 3513 Baton Rouge, LA 70802 (225) 387-0999 COUNSEL FOR DEFENDANT/APPLICANT: LA Creole Hospitality 1, LLC SAUNDERS, Judge.
Defendant-Relator, LA Creole Hospitality 1, LLC, seeks supervisory writs
from the judgment of the Fourteenth Judicial District Court, Parish of Calcasieu,
the Honorable Robert L. Wyatt presiding, which denied Relator’s declinatory
exception of lis pendens.
STATEMENT OF THE CASE
The instant litigation and the connected litigation giving rise to the lis
pendens issue arise out of a construction project (project) in which Relator, as
owner, contracted with Bay Electric Company, Inc. (Bay Electric), as general
contractor, to construct a Marriot Residence Inn in Lake Charles. Bay Electric
then entered into a subcontract with plaintiff, Trouth Air Conditioning and Sheet
Metal, to complete the HVAC work for the hotel. After completion, the project
began experiencing severe water intrusion and leaks. On June 23, 2016, Relator
filed suit against Bay Electric, plaintiff, several other subcontractors, and their
various insurers, for the damages to its property under theories of breach of
contract, breach of warranty, negligence, gross negligence, and failure to warn
(original suit). Therein, Relator specifically alleged plaintiff’s breach of its
subcontract with Bay Electric. Plaintiff answered the original suit but did not
include any reconventional demands against Relator. Thereafter, on January 12,
2017, plaintiff filed the present suit for Breach of Contract and to Enforce Lien
against Bay Electric and Relator, alleging that Bay Electric breached its
subcontract with plaintiff by not paying the full amount due (second suit).
Relevant herein, plaintiff only alleged a Private Works Act lien claim against
Relator, in its capacity as owner of the property subject to the lien.1 After the lien
1 Relator several times throughout its application states that plaintiff sought to collect its full payment from both Bay Electric and Relator; however, it is clear from the transcript that plaintiff was filed, Bay Electric, pursuant to its construction contract with Relator,
purchased a bond, which has now taken the place of the lien on the property. In
response, Relator filed its declinatory exception of lis pendens, claiming both suits
arise out of the same construction project for breach of the same subcontract. After
hearing arguments, the trial court denied the exception, explaining:
Based on the information that has been presented to the court, based on the statement and clarification of [plaintiff’s counsel] of the suit for breach of contract and to enforce lien, . . . the exception of lis pendens is denied at this time.
It’s . . . splitting hairs, I recognize . . . . There are some similarities. It’s likely that in the [original] suit . . . that all of these matters will be addressed. I understand that; but for basic - - just for purposes of what [plaintiff] has sued in the [second] lawsuit against Bay Electric and LA Creole, your . . . exception is denied at this time.
Relator now seeks review of the trial court’s judgment.
SUPERVISORY RELIEF
“The proper procedural vehicle to contest an interlocutory judgment that
does not cause irreparable harm is an application for supervisory writs. See La.
C.C.P. arts. 2087 and 2201.” Brown v. Sanders, 06-1171, p. 2 (La.App. 1 Cir.
3/23/07), 960 So.2d 931, 933. But see La.Code Civ.P. art. 2083, comment (b),
“Irreparable injury continues to be an important (but not exclusive) ingredient in an
application for supervisory writs.” (Citation omitted.) A court of appeal has
plenary power to exercise supervisory jurisdiction over trial courts and may do so
at any time, according to the discretion of the court. When the trial court’s ruling is
arguably incorrect, a reversal will terminate the litigation, and there is no dispute of
fact to be resolved, judicial efficiency and fundamental fairness to the litigants
dictate that the merits of the application for supervisory writs should be decided in
an attempt to avoid the waste of time and expense of a possibly useless future trial
was only pursuing its lien claim against Relator as owner of the property subject to the lien, which Relator does ultimately concede. 2 on the merits. Herlitz Const. Co., Inc. v. Hotel Inv’rs of New Iberia, Inc., 396
So.2d 878 (La.1981) (per curiam).
ON THE MERITS
Louisiana Code of Civil Procedure Article 531 sets forth the rudiments of lis
pendens:
When two or more suits are pending in a Louisiana court or courts on the same transaction or occurrence, between the same parties in the same capacities, the defendant may have all but the first suit dismissed by excepting thereto as provided in Article 925. When the defendant does not so except, the plaintiff may continue the prosecution of any of the suits, but the first final judgment rendered shall be conclusive of all.
In Aisola v. LA Citizens Prop. Ins. Corp., 14-1708, p. 4 (La. 10/14/15), 180 So.3d
266, 269, the supreme court instructed:
The doctrine of lis pendens prevents a plaintiff from litigating a second suit when the suits involve the same transaction or occurrence between the same parties in the same capacities. For lis pendens to apply, La.Code Civ. Proc. art. 531 requires that (1) two or more suits are pending in a Louisiana court or courts; (2) on the same transaction or occurrence; and (3) between the same parties in the same capacities. The “test” established to determine if an exception of lis pendens should be sustained is the same as that for res judicata; thus, an exception of lis pendens should be sustained if “a final judgment in the first suit would be res judicata in the subsequently filed suit.”
“[O]ur law states that lis pendens is stricti juris and ‘any doubt concerning the
application of lis pendens must be resolved against its application.’” Rayner v.
Evangeline Bank and Trust Co., 17-75, p. 4 (La.App. 3 Cir. 5/10/17), ___ So.3d
___ (quoting Robbins v. Delta Wire Rope, Inc., 15-1757, p. 7 (La.App. 1 Cir.
6/3/16), 196 So.3d 700, 705). The determination of whether to stay a proceeding
under the doctrine of lis pendens rests within the trial court’s sound discretion, and
its decision should not be overturned absent a clear abuse of that discretion. Rivers
v. Bo Ezernack Hauling Contractor, LLC, 09-1495 (La.App. 3 Cir. 5/5/10), 37
So.3d 1088.
3 Relator argues the trial court erred in denying its exception, as the two
lawsuits at issue meet all three elements required to sustain the exception: (1) both
actions are pending in Louisiana courts; (2) both involve the same exact parties in
the same capacities—owner and subcontractor; and (3) both arise from the same
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STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
17-529
TROUTH AIR CONDITIONING &
SHEET METAL, INC.
VERSUS
BAY ELECTRIC CO., INC., AND
LA CREOLE HOSPITALITY 1, LLC
**********
SUPERVISORY WRIT FROM THE FOURTEENTH JUDICIAL DISTRICT COURT PARISH OF CALCASIEU, NO. 2017-000075 HONORABLE ROBERT L. WYATT, DISTRICT JUDGE
JOHN D. SAUNDERS JUDGE
Court composed of John D. Saunders, Shannon J. Gremillion and John E. Conery, Judges.
WRIT DENIED. Henry R. Liles 940 Ryan Street Lake Charles, LA 70601 (337) 433-8529 COUNSEL FOR PLAINTIFF/RESPONDENT: Trouth Air Conditioning & Sheet Metal, Inc.
Jeffrey N. Boudreaux John C. Funderburk Joshua J. Coleman Thomas D. Bourgeois Kean Miller LLP P. O. Box 3513 Baton Rouge, LA 70802 (225) 387-0999 COUNSEL FOR DEFENDANT/APPLICANT: LA Creole Hospitality 1, LLC SAUNDERS, Judge.
Defendant-Relator, LA Creole Hospitality 1, LLC, seeks supervisory writs
from the judgment of the Fourteenth Judicial District Court, Parish of Calcasieu,
the Honorable Robert L. Wyatt presiding, which denied Relator’s declinatory
exception of lis pendens.
STATEMENT OF THE CASE
The instant litigation and the connected litigation giving rise to the lis
pendens issue arise out of a construction project (project) in which Relator, as
owner, contracted with Bay Electric Company, Inc. (Bay Electric), as general
contractor, to construct a Marriot Residence Inn in Lake Charles. Bay Electric
then entered into a subcontract with plaintiff, Trouth Air Conditioning and Sheet
Metal, to complete the HVAC work for the hotel. After completion, the project
began experiencing severe water intrusion and leaks. On June 23, 2016, Relator
filed suit against Bay Electric, plaintiff, several other subcontractors, and their
various insurers, for the damages to its property under theories of breach of
contract, breach of warranty, negligence, gross negligence, and failure to warn
(original suit). Therein, Relator specifically alleged plaintiff’s breach of its
subcontract with Bay Electric. Plaintiff answered the original suit but did not
include any reconventional demands against Relator. Thereafter, on January 12,
2017, plaintiff filed the present suit for Breach of Contract and to Enforce Lien
against Bay Electric and Relator, alleging that Bay Electric breached its
subcontract with plaintiff by not paying the full amount due (second suit).
Relevant herein, plaintiff only alleged a Private Works Act lien claim against
Relator, in its capacity as owner of the property subject to the lien.1 After the lien
1 Relator several times throughout its application states that plaintiff sought to collect its full payment from both Bay Electric and Relator; however, it is clear from the transcript that plaintiff was filed, Bay Electric, pursuant to its construction contract with Relator,
purchased a bond, which has now taken the place of the lien on the property. In
response, Relator filed its declinatory exception of lis pendens, claiming both suits
arise out of the same construction project for breach of the same subcontract. After
hearing arguments, the trial court denied the exception, explaining:
Based on the information that has been presented to the court, based on the statement and clarification of [plaintiff’s counsel] of the suit for breach of contract and to enforce lien, . . . the exception of lis pendens is denied at this time.
It’s . . . splitting hairs, I recognize . . . . There are some similarities. It’s likely that in the [original] suit . . . that all of these matters will be addressed. I understand that; but for basic - - just for purposes of what [plaintiff] has sued in the [second] lawsuit against Bay Electric and LA Creole, your . . . exception is denied at this time.
Relator now seeks review of the trial court’s judgment.
SUPERVISORY RELIEF
“The proper procedural vehicle to contest an interlocutory judgment that
does not cause irreparable harm is an application for supervisory writs. See La.
C.C.P. arts. 2087 and 2201.” Brown v. Sanders, 06-1171, p. 2 (La.App. 1 Cir.
3/23/07), 960 So.2d 931, 933. But see La.Code Civ.P. art. 2083, comment (b),
“Irreparable injury continues to be an important (but not exclusive) ingredient in an
application for supervisory writs.” (Citation omitted.) A court of appeal has
plenary power to exercise supervisory jurisdiction over trial courts and may do so
at any time, according to the discretion of the court. When the trial court’s ruling is
arguably incorrect, a reversal will terminate the litigation, and there is no dispute of
fact to be resolved, judicial efficiency and fundamental fairness to the litigants
dictate that the merits of the application for supervisory writs should be decided in
an attempt to avoid the waste of time and expense of a possibly useless future trial
was only pursuing its lien claim against Relator as owner of the property subject to the lien, which Relator does ultimately concede. 2 on the merits. Herlitz Const. Co., Inc. v. Hotel Inv’rs of New Iberia, Inc., 396
So.2d 878 (La.1981) (per curiam).
ON THE MERITS
Louisiana Code of Civil Procedure Article 531 sets forth the rudiments of lis
pendens:
When two or more suits are pending in a Louisiana court or courts on the same transaction or occurrence, between the same parties in the same capacities, the defendant may have all but the first suit dismissed by excepting thereto as provided in Article 925. When the defendant does not so except, the plaintiff may continue the prosecution of any of the suits, but the first final judgment rendered shall be conclusive of all.
In Aisola v. LA Citizens Prop. Ins. Corp., 14-1708, p. 4 (La. 10/14/15), 180 So.3d
266, 269, the supreme court instructed:
The doctrine of lis pendens prevents a plaintiff from litigating a second suit when the suits involve the same transaction or occurrence between the same parties in the same capacities. For lis pendens to apply, La.Code Civ. Proc. art. 531 requires that (1) two or more suits are pending in a Louisiana court or courts; (2) on the same transaction or occurrence; and (3) between the same parties in the same capacities. The “test” established to determine if an exception of lis pendens should be sustained is the same as that for res judicata; thus, an exception of lis pendens should be sustained if “a final judgment in the first suit would be res judicata in the subsequently filed suit.”
“[O]ur law states that lis pendens is stricti juris and ‘any doubt concerning the
application of lis pendens must be resolved against its application.’” Rayner v.
Evangeline Bank and Trust Co., 17-75, p. 4 (La.App. 3 Cir. 5/10/17), ___ So.3d
___ (quoting Robbins v. Delta Wire Rope, Inc., 15-1757, p. 7 (La.App. 1 Cir.
6/3/16), 196 So.3d 700, 705). The determination of whether to stay a proceeding
under the doctrine of lis pendens rests within the trial court’s sound discretion, and
its decision should not be overturned absent a clear abuse of that discretion. Rivers
v. Bo Ezernack Hauling Contractor, LLC, 09-1495 (La.App. 3 Cir. 5/5/10), 37
So.3d 1088.
3 Relator argues the trial court erred in denying its exception, as the two
lawsuits at issue meet all three elements required to sustain the exception: (1) both
actions are pending in Louisiana courts; (2) both involve the same exact parties in
the same capacities—owner and subcontractor; and (3) both arise from the same
transaction or occurrence in that the damage claims arise out of (a) the same prime
construction contract of which the subcontract is a portion, and (b) the same
construction project, which forms the operative set of facts underlying both suits.
Moreover, Relator points out that, pursuant to La.Code Civ.P. art. 1061, plaintiff is
required to file its compulsory reconventional demands against Relator in the
original suit, and La.Code Civ.P. art. 425 likewise provides that plaintiff had to
assert therein all causes of action arising out the transaction that is the subject
matter of the original suit, i.e., the construction project.
Next, Relator claims the trial court abused its discretion in denying the
exception based upon a distinction between (a) the contract and tort claims asserted
in the original suit, and (b) the Private Works Act claims asserted in the second suit.
However, Relator claims such a distinction is immaterial because the proper focus
of the analysis should be on the set of facts giving rise to the suits—the factual
subject matter—not on the nature of the claims. Relator concludes by arguing that
practical considerations weigh in favor of granting its exception, given the likely
potential for differing results and relief, which would have res judicata effect, in
these identical, parallel suits, creating needless confusion and extra costs to all
parties.
Although both suits are pending in Louisiana courts, plaintiff, in its
opposition, argues that neither of the other two elements for lis pendens apply.
Plaintiff explains that the suits do not arise out of the same transaction or
occurrence in that the transaction or occurrence in the original suit is plaintiff’s 4 alleged failure to perform its construction obligations, while the transaction or
occurrence in the second suit is the contractor’s failure to pay plaintiff for its
services, giving rise to the now-bonded lien on Relator’s property. And, though
the parties are the same, plaintiff asserts that they are not sued in the same capacity
given that (1) in the original suit, Relator filed its claim for damages in its capacity
as tort victim against plaintiff in its capacity as tortfeasor, but (2) in the second suit,
plaintiff, in its capacity as materialman and laborman, sued Relator, in its capacity
as owner of the property subject to the lien. Moreover, according to plaintiff, its
success in enforcing its lien rights against the property would have no res judicata
effect on Relator’s suit for damages. Further, plaintiff states that it has no
contractual relationship with Relator and, now, no right to proceed against the real
property in light of the bond. Thus, plaintiff avers that it has no reconventional
demand claim to assert against Relator, so a lis pendens claim is meaningless.
Simply put, plaintiff’s argument is that, while both parties had some indirect
relationship to the construction of a hotel, this is not sufficient for a successful
judgment of lis pendens.
Ultimately, the issue in this writ application comes down to whether the trial
court abused its discretion in denying the exception. And given that the lien—the
sole basis upon which plaintiff brought suit against Relator—has been bonded by
the general contractor, the trial court did not abuse its discretion in denying the
exception. This is because it follows that Relator’s exception has now essentially
been rendered moot in that (1) plaintiff will have to move against the bond, not the
property or its owner, for the materials and labor it provided to the project, and (2)
plaintiff has made it abundantly clear it is not seeking payment from Relator.
Because any doubt must be resolved against the application of the discretionary
doctrine of lis pendens, this writ is denied. 5 WRIT DENIED. We find no error in the trial court’s judgment.