State Through Div. of Admin. v. McInnis Bros. Const.

• Citation: 701 So.2d 937
• Parties: 97-0742 La
• Decision Date: 21 October 1997
• Court: Supreme Court of Louisiana

Page 937

701 So.2d 937

97-0742 La. 10/21/97

STATE of Louisiana Through the DIVISION OF ADMINISTRATION v. McINNIS BROTHERS CONSTRUCTION.

No. 97-CC-0742.

Supreme Court of Louisiana.

Oct. 21, 1997.

Rehearing Denied Dec. 12, 1997.

Milton C. Roberts, Jr., Mayer, Smith & Roberts, Shreveport, for Applicant.

Pamela M. Perkins, Baton Rouge, Billy R. Pesnell, Hargove, Pesnell & Wyatt, Shreveport, Larry G. Canada, Galloway, Johnson, Tompkins & Burr, New Orleans, William B. Monk, Stockwell, Sievert, Viccellio, Clements & Shaddock, Lake Charles, Jason B. Davis, Davis & Flanagan, Shreveport, Edward E. Rundell, Gold, Weems, Burser, Sues & Rundell, Alexandria, Jackson B. Bolinger, Lafayette, Donald J. Armand, Jr., Peter J. Rotolo, III, Shreveport, Blanchard, Walker, O'Quinn & Roberts, Shreveport, Brian D. Smith, Lunn, Irion, Johnson & Salley, Shreveport, for Respondent.

W.P. Wray, Jr., Christopher P. Pierce, Wray & Kracht, Baton Rouge, for La. Associated Gen. Contractors, Inc., Amicus Curiae.

[97-0742 La. 1] KIMBALL, Justice. ^*

We granted applicants' writ to determine if the time limitation provided in La. R.S. 38:2189for the filing by the State of a suit against a general contractor and a surety on a public works contract is peremptive or prescriptive. Considering the language of the statute, the legislative intent behind the statute, the public policy supporting that intent, we conclude the statute establishes a period of peremption and is therefore not susceptible to suspension by operation of contra non valentem.

FACTS

On June 3, 1982, McInnis Brothers and the State entered into a contract for the construction of the Northwestern State University Nursing Education Center in Shreveport, Louisiana. Pursuant to La. R.S. 38:2216, McInnis Brothers secured a bond from the Great American Insurance Company in part "for the faithful performance" of its duties under the contract. The Center was constructed, and notice of acceptance was recorded by the State in the office of the clerk of court in Caddo Parish on May 9, 1985.

The State alleges that in March of 1991, maintenance personnel at the school noticed that bricks in the exterior walls of the building had begun to move and shift. On July 18, 1994, the State filed suit against McInnis Brothers and Great American Insurance Co. alleging McInnis improperly constructed the exterior of the building, particularly that portion of the construction [97-0742 La. 2] involving brick wall and window installation, brick ties, brick shelf angles, through-wall flashing and window flashing. McInnis answered the suit, filed third party demands against several subcontractors and their insurers, and filed a peremptory exception of prescription alleging the State's claim was prescribed under La. R.S. 38:2189 which provides a five year time period from notice of acceptance, substantial completion or notice of default of the contractor in which to file suit against the contractor or the surety on the contract or the bond. The State opposed the exception, arguing that under an application of the "discovery rule" of contra non valentem, the five year prescriptive period did not begin to run until discovery of the defects in March of 1991; therefore, the suit filed in July of 1994 was timely.

The trial judge denied the exception of prescription, and the second circuit court of appeal denied defendants' application for a supervisory writ. This court granted defendants' writ application and remanded the matter to the second circuit for briefing, argument and opinion. 96-1822 (La.10/25/96), 681 So.2d 350. Upon remand, the court of appeal issued an opinion affirming the trial court's ruling. 690 So.2d 927 (La.App. 2d Cir.1997). We subsequently granted defendants' writ application to determine whether the time limitation established in La. R.S. 38:2189 is susceptible to suspension by operation of the "discovery rule" of contra non valentem. 97-0742 (La.5/9/97), 693 So.2d 779.

LAW

A person's right to assert a cause of action may be lost with the passage of time by the operation of either prescription or peremption. The Louisiana Civil Code defines peremption as a "period of time fixed by law for the existence of a right." La. C.C. art. 3458. When the peremptive period has run, the cause of action itself is extinguished unless timely exercised. As a result, peremption need not be pleaded and may be supplied by a court at any time. La. C.C. art. 3460. Most significantly, however, peremption may not be renounced, interrupted, or suspended. La. C.C. art. 3461. In contrast, liberative prescription is a period of time fixed by law for the exercise of a right. Article 3447 of the Civil Code defines liberative prescription as a "mode of barring of actions as a result of inaction for a period of time." Thus, while peremption destroys the right itself, prescription merely prevents the enforcement of a right such that a natural obligation remains after prescription has run. Consequently, prescription must be specially pleaded and cannot be supplied by the court, La. C.C. art. 3452 and La. C.C.P. art. 927. Additionally, prescription may be [97-0742 La. 3] renounced, La. C.C. arts. 3449-51, interrupted, La. C.C. arts. 3462-66, and suspended, La. C.C. arts. 3467-72.

One type of suspension which may apply to a prescriptive period but which, by its very nature, does not apply to a peremptive period, is the doctrine of contra non valentem agere nulla currit praescriptio. In Corsey v. State, through Dept. of Corrections 375 So.2d 1319 (La.1979), this court reiterated the three categories of situations to which contra non valentem had been traditionally applied to suspend the running of liberative prescription: (1) where there was some legal cause which prevented the courts or their officers from taking cognizance of or acting on the plaintiff's action; (2) where there was some condition coupled with the contract or connected with the proceedings which prevented the creditor from suing or acting; and (3) where the debtor himself has done some act effectually to prevent the creditor from availing himself of his cause of action. Corsey, 375 So.2d at 1321.

In Corsey, this court also formally recognized for the first time, although the seeds of this approach had been sown in earlier cases, ¹ a fourth category in which contra non valentem suspends the running of prescription: "Where the cause of action is not known or reasonably knowable by the plaintiff, even though his ignorance is not induced by the defendant." Corsey, 375 So.2d at 1322. ² Application of contra non valentem under these particular circumstances is now commonly known as the "discovery rule." As can be seen from the above discussion, contra non valentem has always been a judicially created equitable doctrine applied to ameliorate the harshness which would result from the strict application of prescription in certain situations.

Although we have not hesitated to apply the doctrine where the circumstances warrant it, we are not unmindful of the role it should play in our law, for, as comment (d) to Article 3467 notes, it should be applied only in "exceptional circumstances." Nor do we fail to recognize the need for certainty in actions fulfilled by and the stabilizing societal effect provided by subjecting claims to prescriptive periods. Consequently, where the particular time limitation at issue reveals a legislative intent to require strict adherence to the particular time period and where that intent is supported by [97-0742 La. 4] a public interest in having certain claims adjudicated within a limited period of time, the doctrine of contra non valentem is simply not applicable regardless of whether the time limitation possesses the characteristics of a peremptive statute or is merely prescriptive.

Although the Civil Code now recognizes in Articles 3458-61 the previously existing jurisprudentially-created doctrine of peremption, the Code gives no guidance on how to determine whether a particular time limitation is prescriptive or peremptive. Additionally, more often than not, the language used in a particular statutory time limitation does not easily admit on its face of a conclusion as to its prescriptive or peremptive nature. Consequently, this court has resorted to an exploration of the legislative intent and public policy underlying a particular time limitation, for it is primarily whether the legislature intended a particular time period to be prescriptive or peremptive that is the deciding factor in such a case. A review of some of the significant cases in this area reveals certain characteristics a time limitation may possess which this court has found to be relevant in determining whether a time limitation is prescriptive or peremptive.

The series of cases which formed the basis for the formation of the doctrine of peremption in Louisiana began in 1897 and involved interpretation and application of Act 106 of 1892 which allowed for a challenge to the validity of an election provided the action was commenced "within three months after the promulgation of the result of the election contested." The seminal case by this court was Guillory v. Avoyelles Ry. Co., 104 La. 11, 28 So. 899 (1900) wherein plaintiffs filed a suit challenging the election almost five years after promulgation of the election results. In response to defendants' argument that their suit was not timely filed under the Act, plaintiffs argued the time limitation was suspended by the pendency of other suits brought by other parties contesting the same election. This court held that the right to contest the election was "lost" after the expiration of the three month time period set forth in the act, noting:

When a statute creates a right of action, and stipulates the delay within which that right is to be executed, the delay thus fixed is not, properly speaking, one of prescription, but is one of peremption. Statutes of prescription simply bar the remedy. Statutes of...