Ilgen Constr., LLC v. Raw Materials, LLC

ILGEN CONSTRUCTION, LLC v. RAW MATERIALS, LLC AND THE HONORABLE JASON B. HARRIS,IN HIS OFFICIAL CAPACITY AS THE CLERK OF COURT FOR LIVINGSTON PARISH

2020 CA 0862

STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT

April 16, 2021

NOT DESIGNATED FOR PUBLICATION

ON APPEAL FROM THE TWENTY-FIRST JUDICIAL DISTRICT COURT

NUMBER 165190, DIVISION F, PARISH OF LIVINGSTON

STATE OF LOUISIANA

HONORABLE ELIZABETH P. WOLFE, JUDGE

David J. Shelby, II

Leah C. Cook

T. Coulter McMahen

Kari A. Bergeron

Baton Rouge, Louisiana

Counsel for Plaintiff-Appellee

Ilgen Construction, LLC

Danial C. Vidrine

Baton Rouge, Louisiana

Counsel for Defendant-Appellant

Raw Materials, LLC

Eric L. Pittman

Denham Springs, Louisiana

Counsel for Defendant-Appellee

The Honorable Jason B. Harris, in

his official capacity as the Clerk of

Court for Livingston Parish

BEFORE: WHIPPLE, C.J., WELCH, AND CHUTZ, JJ.

Disposition: AFFIRMED.

CHUTZ, J.

In this suit for a writ of mandamus and for damages, one of the defendants appeals a trial court judgment ordering the cancellation of two liens and a notice of lis pendens filed under the Private Works Act (PWA) and awarding damages and attorney fees to the plaintiff. For the following reasons, we affirm.

FACTS AND PROCEDURAL BACKGROUND

Ilgen Construction, LLC (Ilgen) is the owner of two tracts of immovable property located in Livingston Parish. Ilgen and Raw Materials, LLC (RML) entered into an oral agreement¹ for RML to perform clearing and dirt work preparatory to the development of residential lots on the two properties. According to invoices submitted by RML, the price for work on the property the parties referred to as the Milton Road project was $72,000.00, and the price for work on the property the parties referred to as the Burgess Road project was $18,500.00. Ilgen maintained the agreed price for the work on the Burgess Road project was $5,500.00.

RML is not a licensed contractor in Louisiana. Nevertheless, RML began work on the two projects and received payments totaling $40,000.00. Ilgen was dissatisfied with RML's work, however, and on March 12, 2018, terminated RML's services. RML claimed there were only a few days remaining before it would have completed the contracted work, and it demanded payment for the balance due under the contract. After Ilgen made no further payments, RML filed a materialman's lien² in the Livingston Parish mortgage records on April 10, 2018, in the amount of $50,500.00 on the two tracts of property owned by Ilgen. Pursuant to invoicesattached to the lien, RML claimed Ilgen owed $18,500.00 for work RML performed on the Burgess Road project and $32,000.00 for work RML performed on the Milton Road project. RML did not link the amounts claimed to the specific tract of property on which the work was performed.

On May 25, 2018, Ilgen's counsel sent a demand letter to RML requesting RML have the lien canceled within ten days of receipt. RML declined to request cancelation of the lien. On August 2, 2018, RML filed a damages suit against Ilgen seeking a money judgment for the work it performed. Additionally, on September 10, 2018, RML filed a second materialman's lien on the same two tracts of property owned by Ilgen, as well as a notice of lis pendens. The second lien was duplicative of the first lien, except that it correctly spelled Ilgen's name, which had been misspelled as "Ilgin" in the first lien. On October 15, 2018, Ilgen's counsel sent RML a demand letter requesting that RML have the second lien canceled within ten days of receipt. RML did not comply with the request to have the lien cancelled.

Subsequently, Ilgen filed a petition for a writ of mandamus naming the Honorable Jason B. Harris, the Clerk of Court for Livingston Parish (Clerk of Court), and RML as defendants and seeking an order directing the Clerk of Court to cancel the first and second liens, as well as the notice of lis pendens. Ilgen also requested an award for damages resulting from the filing of the improper liens and for attorney fees.

Following a hearing, the trial court ruled in favor of Ilgen. On February 7, 2020, the trial court signed a judgment ordering that the first and second lien and the notice of lis pendens filed by RML be extinguished and directing the Clerk of Court to cancel them from the mortgage records. Additionally, Ilgen was awarded $4,294.13 in damages, as well as costs and attorney fees, in an amount to bedetermined at a separate hearing and set forth in a separate judgment.³ RML took an appeal from the February 7, 2020 judgment.⁴

Subsequently, a hearing was held to set attorney fees and costs. The trial court signed a judgment on April 20, 2020, awarding Ilgen $29,506.03 in attorney fees and costs, plus an additional $1,500.00 for attorney fees and costs associated with Ilgen's motion to tax attorney fees and costs. RML did not appeal the April 20, 2020 judgment.

DISCUSSION

The trial court's written reasons for judgment indicate it concluded RML's failure to file a notice of contract in the mortgage records was "fatal" to RML's claim for a privilege under the PWA. The trial court further concluded the liens were extinguished under La. R.S. 9:4823(A)(2)⁵ by RML's failure to file a suit to enforce the liens within one year of their filing.

In order for a general contractor to enjoy a privilege under the PWA, La. R.S. 9:4811(D) required the filing (in the mortgage records of the parish where the work was to be performed) of written notice of the contract between the general contractor and the owner if the price of the contract exceeded $25,000.00. See also La. R.S. 9:4811(A) & La. R.S. 9:4831(A). RML contends this provision was not applicable in this case because it only applies to general contractors, and RML was a subcontractor. In arguing it was not a general contractor on the Milton Road and Burgess Road projects, RML emphasizes that it only contracted with Ilgen to perform "dirt work," and not to perform all or substantially all of the work necessary for the construction of the houses to be built on the lots.

Regardless, our review of this matter indicates it is unnecessary to determine whether RML was a general contractor or subcontractor or whether the liens were extinguished by a failure to file a timely suit to enforce the liens. Even if the trial court erred in making those determinations, the liens were nevertheless fatally defective due to the fact that RML was not a licensed contractor in Louisiana.

In Louisiana, the licensing provisions for contractors were enacted to protect the interests of public order. Leija v. Gathright, 51,049 (La. App. 2d Cir. 12/21/16), 211 So.3d 592, 596, writ denied, 17-0144 (La. 3/13/17), 216 So.3d 806; see also La. R.S. 37:2150. Louisiana Civil Code article 2030 provides that a contract in violation of a rule of public order is an absolute nullity. Moreover, an absolutely null contract may not be confirmed. La. C.C. art. 2030; see also La. C.C. art. 7. Thus, individuals may not by private agreement set aside the licensing provisions enacted by the legislature. Maroulis v. Entergy Louisiana, LLC, 20-226 (La. App. 5th Cir. 2/10/21), ___ So.3d ___, 2021 WL 484332, at *2.

Under La. R.S. 37:2160(A)(1), it is unlawful in Louisiana for a person to engage in the business of contracting or to act as a contractor⁶ without an active contractor's license. Quaternary Resource Investigations, LLC v. Phillips, 18-1543 (La. App. 1st Cir. 11/19/20), ___ So.3d ___, 2020 WL 6797271, at *11, writ denied, 20-01450 (La. 3/2/21), ___ So.3d ___, 2021 WL 791249. Further, it is well established that a construction contract made with an unlicensed contractor is an absolute nullity. Quaternary Resource Investigations, LLC, ___ So.3d at ___, 2020 WL 6797271, at *9; Maroulis, ___ So.3d at ___, 2021 WL 484332, at *2; see also Leija, 211 So.3d at 597.

In this case, it is undisputed that RML did not possess a Louisiana contractor license. Accordingly, the contract between RML and Ilgen was an absolute nullity.See Quaternary Resource Investigations, LLC, ___ So.3d at ___, 2020 WL 6797271, at *9; Maroulis, ___ So.3d at ___, 2021 WL 484332, at *2. Under La. C.C. art. 2033, an absolutely null contract is deemed never to have existed.

Given the special nature of the rights provided by the PWA, its provisions must be strictly construed. Landco Construction, LLC v. Precision Construction & Maintenance, LLC, 19-0403 (La. App. 1st Cir. 11/15/19), 290 So.3d 1185, 1191, writ denied, 19-01977 (La. 2/10/20), 292 So.3d 67. The PWA grants contractors and subcontractors a lien on immovable property for the price of the work performed on the immovable. La. R.S. 9:4801(1) and La. R.S. 9:4802(A)(1) & (B). Since the PWA defines a contractor as "one who contracts with an owner to perform all or part of a work," the lien granted to contractors by La. R.S. 9:4801(1) plainly "presupposes a direct contractual relationship between the [lien] holder and the owner." La. R.S. 9:4801, Comment (a) (1981); La. R.S. 9:4807(A). Additionally, a subcontractor is defined as one who by contract directly with or emanating from a contractor through a series of contracts is bound to perform all or a part of a work contracted for by the contractor. La. R.S. 9:4807(C). Louisiana Revised Statutes 9:4802(A)(1) & (B) grants a lien to subcontractors to secure "obligations arising out of the performance of work under the contract." These provisions demonstrate that the liens granted to contractors and subcontractors under the PWA are to secure debts or principal obligations arising from contracts. Leija, 211 So.3d at 597. Therefore, in the absence of a valid and enforceable contract, a contractor or subcontractor cannot assert a valid lien under the PWA.⁷ Leija, 211 So.3d at 597; see also La. R.S. 9:4801(1) & Comment (a) (1981); La. R.S. 9:4802(A)(1) &(B); and La. R.S. 9:4807.

Moreover, the two liens filed by RML were also defective because they merely claimed a privilege on two separate tracts of immovable property in the lump sum of $50,500.00....