AP INTERIORS, LLC d/b/a The Paint Store v. CORYELL COUNTY TRADESMEN, LLC, et al.

NO. 2017-CA-0230

Court of Appeal of Louisiana, Fourth Circuit.

MARCH 21, 2018

Kevin C. O'Bryon, O'BRYON & SCHNABEL, PLC, 1010 Common Street, Suite 1950, New Orleans, LA 70112, COUNSEL FOR PLAINTIFF/APPELLEE, AP INTERIORS LLC

Lloyd N. Shields, Michael S. Blackwell, Jessica R. Derenbecker, 650 Poydras Street, Suite 2600, New Orleans, LA 70130, COUNSEL FOR DEFENDANTS/APPELLANTS, ROY ANDERSON CORPORATION, AND TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA

(Court composed of Chief Judge James F. McKay III, Judge Terri F. Love, Judge Regina Bartholomew-Woods)

Judge Terri F. Love *395This appeal arises from a lien placed on a high-rise building by an unpaid material supplier after the termination of the remodeling/construction project. The general contractor utilized a surety to secure a lien release to free the building's title. The material supplier then filed suit for the monies due. Subsequently, the material supplier filed a motion for summary judgment against the general contractor and surety for the unpaid balance. The trial court found that the lien was valid and granted the motion for summary judgment, casting the general contractor and surety liable for the unpaid balance.

The general contractor and surety appealed contending that the material supplier failed to comply with the notice of nonpayment requirements contained in the Public Works Act and that genuine issues of material fact remained.

Our *res nova* interpretation of La. R.S. 9:4802(G)(3) finds that the material supplier was required to give notice of nonpayment to the owner and general contractor. We find that the material supplier failed to meet its burden of proof on the motion for summary judgment, as it lacked evidence of notice. Accordingly, we reverse the motion for summary judgment granted by the trial court and remand for further proceedings.

***FACTUAL BACKGROUND AND PROCEDURAL HISTORY***

225 Baronne Street ("project") in New Orleans, a 549,746 square-foot property, was renovated and reconstructed. Roy Anderson Corporation ("RAC") was the general contractor on the project. RAC subcontracted with Ronald Franks Construction Company, LLC ("RFC"). RFC then sub-subcontracted its work to Coryell County Tradesmen, LLC ("CCT"). CCT purchased materials for the project from material supplier, AP Interiors, LLC d/b/a The Paint Store ("AP"). CCT allegedly failed to pay AP for approximately $40,236.45 in materials.

As a result, AP filed a Statement of Claim and Privilege ("lien") for $41,443.231 in unpaid materials. RAC obtained a bond from Travelers Casualty and Surety Company of America ("Travelers") to remove the lien and clear title to the project. Subsequently, AP filed a petition against CCT, RFC, National American Insurance Company ("National"), RAC, and Travelers, seeking the unpaid principal balance plus attorney's fees and costs.

AP filed a Motion for Summary Judgment2 against RAC and Travelers contending that no genuine issues of material fact existed and that it was entitled to recover $40,236.45. Following a hearing, the trial court found that AP's lien was valid. The trial court granted AP's Motion for Summary Judgment and cast RAC and Travelers in judgment for $40,236.45, plus interest from the date of the demand until *396paid. RAC and Travelers' suspensive appeal followed.

RAC and Travelers contend that the trial court erred by failing to apply La. R.S. 9:4802(G)(3) and because AP failed to meet the burden of proof on summary judgment.

***SUMMARY JUDGMENT***

Appellate courts review the grant of a motion for summary judgment using the *de novo* standard of review. *Descant v. Herrera* , 03-0953, p. 8 (La. App. 4 Cir. 12/22/04), 890 So.2d 788, 793. "Appellate courts are to review summary judgments *de novo* under the same criteria that govern the district court's consideration of whether summary judgment is appropriate." *Id.*

"The summary judgment procedure is designed to secure the just, speedy, and inexpensive determination of actions." *Carter v. Baver* , 02-0765, p. 2 (La. App. 4 Cir. 5/29/02), 821 So.2d 496, 498. "The summary judgment procedure is favored and shall be construed to accomplish these ends." *Id.* "[A] motion for summary judgment shall be granted if the motion, memorandum, and supporting documents 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(A)(3).

"The burden of proof rests with the mover." La. C.C.P. art. 966(D)(1). "Nevertheless, if the mover will not bear the burden of proof at trial on the issue that is before the court ... the mover's burden on the motion does not require him to negate all essential elements of the adverse party's claim, action, or defense." La. C.C.P. art. 966(D)(1). Rather, the mover must "point out to the court the absence of factual support for one or more elements essential to the adverse party's claim, action, or defense." La. C.C.P. art. 966(D)(1).

***INTERPRETATION OF LA. R.S. 9:4802(G)(3)***

RAC and Travelers assert that the trial court erroneously granted AP's Motion for Summary Judgment because AP failed to comply with the notice of nonpayment requirements of La. R.S. 9:4802(G)(3) of the Louisiana Private Works Act and failed to meet its burden of proof for a summary judgment. Nestled within AP's Motion for Summary Judgment is the interpretation of La. R.S. 9:4802(G)(3). As there are no other cases interpreting the provisions of La. R.S. 9:4802(G) together, we are tasked with conducting a *res nova* interpretation of La. R.S. 9:4802(G)(3).

"The function of statutory interpretation and the construction given to legislative acts rests with the judicial branch of the government." *Anderson v. Ochsner Health Sys.* , 13-2970, p. 3 (La. 7/1/14), 172 So.3d 579, 581. "The paramount question in all cases of statutory interpretation is legislative intent; ascertaining the reason that triggered the enactment of the law is the fundamental aim of statutory interpretation." *Id.* , 13-2970, p. 4, 172 So.3d at 581. "The rules of statutory construction are designed to unveil and enforce the intent of the legislature." *Id.* "Legislation is the solemn expression of legislative will; thus, interpretation of a statute involves primarily a search for the legislature's intent." *Id.*

The Louisiana Revised Statutes provide that "[w]ords and phrases shall be read with their context and shall be construed according to the common and approved usage of the language." La. R.S. 1:3. Further, "[t]echnical words and phrases, and such others as may have acquired a peculiar and appropriate meaning in the law, shall be construed and understood according to such peculiar and appropriate meaning."

*397La. R.S. 1:3. "When the wording of a Section is clear and free of ambiguity, the letter of it shall not be disregarded under the pretext of pursuing its spirit." La. R.S. 1:4.

In addition to these general statutory interpretation guidelines, the Private Works Act requires specific considerations. This Court opined that:

> The Private Works Act was enacted to facilitate construction of improvements on immovable property and does so by granting to subcontractors, among others, two rights to facilitate recovery of the costs of their work from the owner with whom they lack privity of contract. The first right is a statutory "claim"-the right to personally sue the owner for the amount that is owed-that is provided by La. R.S. 9:4802(A)(1) ; particularly, this statute provides that subcontractors have a claim against the owner and a claim against the contractor to secure payment of the price of their work. The second right is the privilege provided by La. R.S. 9:4802(B), which states that "[t]he claims against the owner shall be secured by a privilege on the immovable on which the work is performed."

*Byron Montz, Inc. v. Conco Const., Inc.* , 02-0195, p. 6 (La. App. 4 Cir. 7/24/02), 824 So.2d 498, 502. "Because the PWA is in derogation of general contract law, it must be strictly construed." *Buck Town Contractors & Co. v. K-Belle Consultants, LLC* , 15-1124, p. 5 (La. App. 4 Cir. 4/6/16), 216 So.3d 981, 984. "However, it should not be construed so as to defeat the purpose of the statute, which is to protect materialmen, laborers and subcontractors who engage in construction projects." *Id.* Moreover, "[t]heir provisions must be interpreted rigidly and the privileges conferred thereby are not to be extended or enlarged either by implication or the application of equitable considerations." *Sec. Homestead Ass'n v. Schnell* , 232 So.2d 898, 900 (La. App. 4th Cir. 1970).

Generally, we begin with the language contained in the statute. *Billeaudeau v. Opelousas Gen. Hosp. Auth.* , 16-0846, p. 10 (La. 10/19/16), 218 So.3d 513, 520. The Louisiana Private Works Act provides that sellers of movables:

> have a claim against the owner and a claim against the contractor to secure payment of the following obligations arising out of the performance of work under the contract ... for the price of movables sold to the contractor or a subcontractor that become component parts of the immovable, or are consumed at the site of the

> immovable, or are consumed in machinery or equipment used at the site of the immovable.

La. R.S. 9:4802(A)(3). Further, La. R.S. 9:4802(G) reads as follows:

> G. (1) For the privilege under this Section or R.S. 9:4801(4) to arise, the lessor of the movables shall deliver notice to the owner and to the contractor not more than ten days after the movables are first placed at the site of the immovable for use in a work. The notice shall contain the name and mailing address of the lessor and lessee and a description sufficient to identify the movable property placed at the site of the immovable for use in a work. The notice shall state the term of rental and terms of payment and shall be signed by the lessor and lessee.

> (2) For the privilege under this Section or R.S. 9:4801(3) to arise, the seller of movables shall deliver a notice of nonpayment to the owner at least ten days before filing a statement of his claim and privilege. The notice shall be served by registered or certified mail, return receipt requested, and shall contain the name and address of the seller of movables, a general description of the materials *398provided, a description sufficient to identify the immovable property against which a lien may be claimed, and a written statement of the seller's lien rights for the total amount owed, plus interest and recordation fees. The requirements of this Paragraph (G)(2) shall apply to a seller of movables sold for use or consumption in work on an immovable **for residential purposes.**

> (3) In addition to the other provisions of this Section, if the seller of movables has not been paid by the subcontractor and has not sent notice of nonpayment to the general contractor and the owner, then the seller shall lose his right to file a privilege or lien on the immovable property. The return receipt indicating that certified mail was properly addressed to the last known address of the general contractor and the owner and deposited in the U.S. mail on or before seventy-five days from the last day of the month in which the material was delivered, regardless of whether the certified mail was actually delivered, refused, or unclaimed satisfies the notice provision hereof or no later than the statutory lien period, whichever comes first. The provisions of this Paragraph shall apply only to disputes arising out of recorded contracts. (Emphasis added).

Section (2) contains the clause "for residential purposes." The clause has been interpreted as a limitation on application that requires the sellers of movables to comply with section (2) only if the work at issue was on an immovable "for residential purposes." *Bear Indus., Inc. v. Hanover Ins. Co.* , 17-0301, pp. 7-8 (La. App. 1 Cir. 1/4/18), --- So.3d ----, ----, 2018 WL 301332, *4. *See also**Standard Materials L.L.C. v. C & C Builders, Inc.* , unpub., 10-0250 (La. App. 1 Cir. 12/22/10), 2010 WL 5479903. Contrariwise, section (3) does not contain the residential limitation.

AP maintains that a proper interpretation of La. R.S. 9:4802(G)(3) requires the imputation of the residential limitation of section (2) into (3). However, the statute specifically provides that the residential limitation applies to the requirement contained in (G)(2): "The requirements of this Paragraph (G)(2) shall apply to a seller of movables sold for use or consumption in work on an immovable for residential purposes."

1

The amount sued upon differs from the amount listed in the lien.

2

Another motion for summary judgment and numerous exceptions were filed, but are not pertinent to this appeal.

Moreover, even though section (3) begins with the phrase, "In addition to the other provisions of this Section," section (3) continues by enumerating additional burdens placed on the sellers of movables; thereby removing the possibility that section (3) simply adds to the requirements contained in sections (1) and (2). Section (1) does not apply to sellers of movables. Additionally, the Louisiana Legislature could have easily incorporated the residential limitation into section (3), as was done in section (2). However, the Legislature did not do so. As such, we find that La. R.S. 9:4802(G) is clear and unambiguous.

We find that the strict meaning of section (3) requires the sellers of movables to provide notice of nonpayment to the general contractor and owner in order to retain the "right to file a privilege or lien." Reading the statute alternatively would enlarge the rights granted to the materialmen, which would contravene our guidelines. *See**Sec. Homestead Ass'n* , 232 So.2d at 900.

AP also contends that notice was not required because no notice requirement is contained in La. R.S. 9:4822. La. R.S. 9:4822 is entitled "[p]reservation of claims and privileges" and cites to 9:4802 numerous times. Section A of § 4822 also contains the following language: "the persons to whom a claim or privilege is granted by R.S. 9:4802 shall ...." Thus, it is clear *399that the two statutes must be read in conjunction with one another. § 4822 enumerates the time period in which parties granted a right to a claim or privilege, pursuant to § 4802, must file the claim or privilege.3 Conversely, § 4802(G)(3) contains a specific requirement placed upon sellers of movables whose products were consumed during work on an immovable or incorporated into the immovable during construction.

"Rules of statutory construction provide that where two statutes deal with the same subject matter, they should be harmonized if possible, but that if there is a conflict the statute specifically directed to the matter at issue must prevail as an exception to the statute more general in character." *Delta Dev. Co., Inc. v. Plaquemines Par. Comm'n Council* , 451 So.2d 134, 138 (La. App. 4th Cir. 1984). Harmonizing these two statutes is not problematic. When read in congruence, § 4802(G)(3) places additional requirements upon a party attempting to secure a valid lien if the party was 1) a seller of movables, 2) unpaid by the subcontractor, 3) dealing with a recorded contract, and 4) the materials supplied were used to improve an immovable. Therefore, we find this assertion lacks merit. Thus, we find that La. R.S. 9:4802(G)(3) requires that the seller of movables provide notice of nonpayment to the owner and general contractor in order to preserve the right to a lien.

***BURDEN OF PROOF ON SUMMARY JUDGMENT***

Having found that notice of nonpayment is required pursuant to La. R.S. 9:4802(G)(3), we now examine whether AP met the burden of proof required on a motion for summary judgment.

RAC obtained a bond from Travelers to remove AP's lien and clear title to the project. The "Release of Lien" completed by RAC and Travelers contains the following proviso:

> Now the condition of the above obligation is such that in the event the legality of the aforesaid claim of Lien is established by suit or otherwise, this bond shall remain in full force and effect to protect the interest of the claimant in the premises, and to secure payment of said claim.

Thus, we must determine whether AP presented sufficient evidence to show that the lien was valid such that there were no remaining genuine issues of material fact and that AP was entitled to judgment as a matter of law.

The trial court stated the following at the hearing on AP's Motion for Summary Judgment:

> Well, I'm going to be honest with you. I think that they have a good lien. I do. I do. I mean, you just can't-I do. When it says that, I mean, we're not talking about a mom and pop shop. We're not talking about a little three bedroom, two and a half bath home, we're talking about a-you said 60 Million. You know, so this is commercial. This is serious commercial. And so somebody got to pay them. And now it's a part of the building. So what, you just get them for free?

> * * *

> But it's a lien. And like I said, I believe it's a lien. So now we need to move forward; need to go to the next step. So I'm going to grant that Summary Judgment.

As evidence to support its Motion for Summary Judgment against RAC and Travelers, AP attached the invoices of the *400materials purchased by CCT for the project. AP also attached the affidavit of Brent Isaaks, a member of AP. Mr. Isaaks stated that the materials were delivered to the project. However, AP did not produce evidence that notice of nonpayment was given. Thus, the burden on RAC and Travelers was "to produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law." La. C.C.P. art. 966(D)(1).

RAC and Travelers attached the affidavit of Frank Dudenhefer, III, the Vice President of RAC. Mr. Dudenhefer stated that, "[b]ased upon my personal knowledge, RAC did not receive any notices of nonpayment from AP Interiors concerning any alleged amounts owed to AP Interiors before AP Interiors recorded its Lien." Thus, a genuine issue of material fact then existed as to whether the required notice was given. Once this burden shifted again, AP could not produce evidence to confirm notice of nonpayment. This lack of evidence is fatal to a motion for summary judgment.

We find that the trial court erroneously found that AP's lien was proven valid on summary judgment because genuine issues of material fact exist as to whether the proper notice was given. Accordingly, we reverse the judgment of the trial court granting AP's Motion for Summary Judgment and remand the matter for further proceedings.

***DECREE***

For the above-mentioned reasons, we find that notice of nonpayment is required pursuant to La. R.S. 9:4802(G)(3). Further, we find that the trial court erroneously granted AP's Motion for Summary Judgment, as genuine issues of material fact exist as to whether the proper notice was given. The judgment of the trial court is reversed, and we remand for further proceedings.

**REVERSED AND REMANDED**

3

§ 4822 also includes the criteria for "substantial completion," "notice of termination of the work," as well as other requirements not pertinent to this appeal.