L&G Drywall, Inc. v. Gray Ins. Co.

• Decision Date: 18 March 2020
• Docket Number: NO. 19-CA-441,19-CA-441
• Citation: 293 So. 3d 775
• Parties: L&G DRYWALL, INC. v. The GRAY INSURANCE COMPANY as Bonding Agent for Insite New Orleans One, LLC
• Court: Court of Appeal of Louisiana — District of US

293 So.3d 775

L&G DRYWALL, INC.

v.The GRAY INSURANCE COMPANY as Bonding Agent for Insite New Orleans One, LLC

NO. 19-CA-441

Court of Appeal of Louisiana, Fifth Circuit.

March 18, 2020

COUNSEL FOR PLAINTIFF/APPELLANT, L&G DRYWALL, INC., Carey R. Holliday, Baton Rouge.

COUNSEL FOR DEFENDANT/APPELLEE, THE GRAY INSURANCE COMPANY, Richard J. Tyler, P. Michael Boyd, Joseph J. Lowenthal, Jr., New Orleans.

Panel composed of Judges Marc E. Johnson, Robert A. Chaisson, and Hans J. Liljeberg

LILJEBERG, J.

In this suit brought pursuant to the Louisiana Private Works Act, plaintiff seeks review of the trial court's judgment granting defendant's exception of no right of action and dismissing plaintiff's claims.For the following reasons, we reverse the trial court's judgment and remand for further proceedings.

FACTS AND PROCEDURAL HISTORY

Plaintiff, L&G Drywall, Inc.("L&G"), is in the business of drywall installation.L&G asserts that it contracted with Thompson's Drywall ("Thompson") to perform work on property owned by Insite New Orleans One, L.L.C. ("Insite")at 1300 Canal Street in New Orleans.According to L&G, its employees supplied materials and performed work on Insite's property in November of 2017.L&G billed Thompson, as the general drywall contractor, for its work in the amount of $43,776.00, but L&G did not receive any payment.

On or about December 11, 2017, pursuant to the Louisiana Private Works Act, La.R.S. 9:4801, et seq ., L&G filed a Statement of Claim and Privilege in the amount of $43,776.00, against Insite's property in the Orleans Parish Mortgage Records.Shortly thereafter, on December 21, 2017, Insite, as principal, and the Gray Casualty and Surety Company("Gray Casualty and Surety"), as surety, filed a Release of Lien Bond in the Orleans Parish Mortgage Records, requesting cancellation of L&G's Statement of Claim and Privilege pursuant to La.R.S. 9:4835.

On October 23, 2018, L&G filed this lawsuit against the Gray Insurance Company("Gray Insurance"), "as Bonding Agent for Insite New Orleans One, L.L.C."In its petition, L&G asserted that Gray Insurance was Insite's surety on the Release of Lien Bond and argued that "[p]ursuant to the contract of bond, the Gray Insurance Company is justly and truly indebted to the plaintiff for the full sum and amount of the lien and privilege."In response, on January 18, 2019, Gray Insurance filed several peremptory exceptions, an answer, and affirmative defenses to the petition.In its exception of no right of action, Gray Insurance asserted that Gray Casualty and Surety, not Gray Insurance, issued the Release of Lien Bond and thus, L&G has no right of action against it.It also argued that L&G has no right of action because it failed to preserve its claim and privilege pursuant to La.R.S. 9:4823(A).In its exception of peremption, Gray Insurance argued that L&G's claims under the Private Works Act are extinguished because it did not file suit against the owner, Insite, before expiration of the one-year peremptive period imposed by La.R.S. 9:4823(A).In its exception of no cause of action, Gray Insurance argued that L&G did not have a cause of action against it because it is not the entity that issued the Release of Lien Bond.Finally, in its exception of nonjoinder, Gray Insurance argued that Thompson is an indispensable party and should have been joined in this lawsuit.

On April 9, 2019, Gray Insurance's exceptions came for hearing.At the conclusion of the hearing, the trial court took the matter under advisement.Thereafter, on April 29, 2019, the trial court rendered a judgment granting the exception of no right of action, dismissing plaintiff's claims with prejudice, and finding the exceptions of peremption, no cause of action, and nonjoinder to be moot.In its reasons for judgment, the trial court stated that L&G "has failed to state a right of action" against Gray Insurance, because it did not name the proper surety in connection with its Statement of Claim and Privilege.L&G appeals.

LAW AND DISCUSSION

On appeal, L&G argues that the trial court erred by granting Gray Insurance's exception of no right of action and dismissing its lawsuit.It claims that although it filed suit against Gray Insurance, instead of Gray Casualty and Surety as listed on the Release Lien Bond, these companies are "sister companies" that share the same offices, the same attorneys, the same agents for service of process, and the same owners.It asserts that the factual allegations are identical regardless of which company was sued, and it complains that the "coordinated defense strategy of both companies is to prey on the confusion caused by their names."L&G also claims that it should be allowed to amend its petition to add Gray Casualty and Surety as a defendant because it had notice of this lawsuit and would not be prejudiced by the amendment.

Gray Insurance responds that the trial court correctly granted the exception of no right of action, because Gray Insurance did not file the Release of Lien Bond in this matter and thus, L&G filed suit against the wrong defendant.It contends that L&G has no right against Gray Insurance under the Private Works Act or any other provision of Louisiana law because Gray Insurance was not Insite's surety.It also argues that L&G has no right of action under the Private Works Act because any such rights have been extinguished by L&G's failure to sue Insite within one year of the filing of its Statement of Claim and Privilege, as per La.R.S. 9:4823.

The determination of whether a plaintiff has a right of action is a question of law, which an appellate court reviews de novo .Johnson v. Motiva Enterprises, L.L.C. , 13-305(La. App. 5 Cir.10/30/13), 128 So.3d 483, 488, writ denied , 13-2791 (La.2/14/14), 132 So.3d 966.The function of an exception of no right of action is to determine whether the plaintiff belongs to the class of persons to whom the law grants the cause of action asserted in the suit.Badeaux v. Southwest Computer Bureau, Inc. , 05-612, 05-719(La.3/17/06), 929 So.2d 1211, 1217.The burden of proof of establishing the exception of no right of action is on the exceptor.Roubion Shoring Company, L.L.C. v. Crescent Shoring, L.L.C., et al. , 16-540, 16-541(La. App. 5 Cir.5/17/17), 222 So.3d 921, 926.

The exception of no right of action assumes the petition states a valid cause of action for some party and questions whether the plaintiff is a member of the class that has a legal interest in the subject matter of the litigation.Marks v. ThirdDist. Volunteer Fire Dept. , 13-383(La. App. 5 Cir.12/30/13), 131 So.3d 1099, 1101, writ denied , 14-88 (La.3/14/14), 135 So.3d 606;Lasalle v. G.E.C., Inc. , 18-564, 18-565, 18-566(La. App. 5 Cir.4/24/19), 271 So.3d 328, 333, writ denied , 19-859 (La.9/17/19), 279 So.3d 378.An exception of no right of action does not raise the question of the plaintiff's ability to prevail on the merits or question whether the defendant may have a valid defense.Cutitto v. Boyes , 97-63(La. App. 5 Cir.5/28/97), 695 So.2d 1080.

The Louisiana Private Works Act is designed to facilitate the construction of improvements on immovable property by granting certain rights to enumerated persons to assist in recovery of the costs of their work from an owner with whom they lack privity of contract.Metropolitan Erection Co., Inc. v. Landis Const. Co., Inc. , 627 So.2d 144, 148(La.1993);Simms Hardin Co., L.L.C. v. 3901 Ridgelake Drive, L.L.C., et al. , 12-469, 12-548, 12-607(La. App. 5 Cir.5/16/13), 119 So.3d 58, 65, writ denied , 13-1423...