The Bad Decision Crushing Louisiana Subcontractors on Public Works Projects
A Louisiana appellate court recently made a bad decision that will have a serious effect on subcontractors working on public works projects. This ruling impacts the ability of such subcontractors to enforce bond claims against project owners, one of the most crucial protections they had to ensure payment in the past. Here at Smiley Law Firm we want you to get the best possible outcome in your bond or lien claims, so this post will tell you what you need to know about the “Gootee Construction” case.
In Gootee Construction, Inc. v. Dale N. Atkins, the Louisiana Fourth Circuit made it harder for subcontractors seek timely payment under the Louisiana Public Works Act (“LPWA”). The LPWA is designed to protect parties who perform work on public contracts by offering them a way to recover money owed to them for materials or labor spent on behalf of the public works project.
Prior to the decision, a subcontractor who finished their work to the satisfaction of the public agency could file a sworn statement of claim if they were not paid on time, and courts generally held such claims were valid as long as they were filed within 45 days after completing the work. Under Gootee, subcontractors now must wait until the public agency records a “notice of acceptance” before filing their sworn statement of claim. This change means that unpaid Louisiana subcontractors on public works projects will have to wait even longer to get compensated for their hard work.
The court based its decision on a reinterpretation of the LPWA’s language that says notice of claims “must be filed within forty-five days after the acceptance” by the public agency (emphasis added). The court reasoned that allowing subcontractors to file claims prior to the public agency filing a notice of acceptance would require the LPWA to read “within forty-five days of the acceptance” rather than its actual language “after”.
This interpretation may be in keeping with a strict reading of the language of the statute, but it wreaks havoc with the rights of claimants to perfect their claims against project owners. It is a serious departure from prior interpretations of the Act, and from previous holdings by other Louisiana appellate courts. Accordingly, this decision will now govern all new cases filed within the jurisdictional area of the fourth circuit, encompassing the Orleans Parish.
In sum, the Gootee Construction case is a troubling development in the area of Louisiana construction law. Review of the decision is now being sought before the Louisiana Supreme Court. Unless the Gootee Construction Case is reversed by the Supreme Court, or repealed by some act of the state legislature, we will have no choice but to face this new reality, which will be binding authority in the fourth circuit for the foreseeable future.
If you are a subcontractor seeking payment for a public works project then you should contact a Louisiana construction lawyer immediately. Your case will be affected by this decision, and you need an experienced attorney to review your case and advise you on the next best steps. Here at Smiley Law Firm, we successfully represent subcontractors and help them get the compensation they deserve.
Contact us today for a free case evaluation and consultation.