The Construction Law Update is published by Pugh Accardo for the benefit of its clients having an interest in the construction industry. It includes discussions of Louisiana state and federal court decisions, and legislative developments concerning construction-related matters.  For further information on the decisions and legislative developments covered in this newsletter, please contact John A. Stewart, Jr. at jstewart@pugh-law.com or (504) 799-4529.  Licensed in Louisiana and Texas (inactive in Texas).

LIMITATION OF LIABILITY CLAUSE

The Louisiana First Circuit Court of Appeal considered the issue of whether damages for flooding property in a subdivision were waived.  The Declaration of Covenants and Restrictions for the subdivision provided by acceptance of title to a lot, each owner waived all claims against and released the subdivision owner from and against any and all liability of any nature arising out of or on account of the rise and fall of the water level of any lake in the common properties, including the flow of water onto and out of any such lake, which could result in or cause damages by flooding or otherwise, to any improvements or personal property on any lot.

Plaintiffs, who purchased a lot which flooded, contended the waiver of claims in the Declaration violated Civil Code art. 2004 because it purported to waive all claims in advance.  Article 2004 states: “Any clause is null that, in advance, excludes or limits the liability of one party for intentional or gross fault that causes damage to the other party.  Any clause is null that in advance excludes or limits the liability of one party for intentional or gross fault that causes physical injury to the other party.”

The court held it was not necessary to find the entire exclusionary provision was null if some terms violate both parts of art. 2004.  It was proper to delete the offending claims for physical injury and property damage caused by bad faith breach of contract or fraud from the exculpatory provision and allowing the remainder of the exculpatory provision to stand, i.e., claims for property damages caused by the good faith breach of the contract.

The court held an act is intentional when the actor either 1) consciously desires the result of his action, regardless of the likelihood of success, or 2) has knowledge to a substantial certainty that the harm will occur, regardless of the desire to achieve that result.  Gross negligence is the want of even slight care and diligence and the want of that diligence which even careless men are accustomed to exercise.  Gross negligence has also been described as an extreme departure from ordinary or even scant care and the entire absence of care that amounts to complete neglect of the rights of others.

The allegations in the petition, according to the court, stated a claim for ordinary negligence, not gross negligence.  There were no factual allegations in the petition to support the conclusion that, if proven, the subdivision owner acted without even slight care or with the entire absence of care that amounted to complete neglect of the plaintiffs’ rights.  Plaintiffs did not allege the subdivision owner consciously desired their homes to flood or that it had knowledge to a substantial certainty their home would flood if the flow of water from the pond was obstructed.  Further, discovery did not contain testimony sufficient to create a genuine issue of material fact as to whether the subdivision owner acted with intentional or gross fault.

The court concluded the summary judgment evidence did not reveal a genuine issue of material fact as to the legal nature of the subdivision owner’s actions.  If proven, plaintiff’s allegations against the subdivision owner would give rise to liability of ordinary negligence.  Therefore, the prohibition of C.C. art. 2004 against the advance waiver of claims arising out of intentional or tort fault was inapplicable.  C.C. art. 2004, a clause relieving a party from liability for damage to property caused through slight fault is valid, unless prohibited by special statutes.  Goings v. Western World Insurance Company, 2025-1082, (La.App. 1 Cir. 5/20/26), ____ So.3d _____, 2026 WL 1441900.

CHARGES FOR OPERATION OF A BORROW PIT

The Plaquemines Parish Council amended its local borrow pit ordinance.  The ordinance regulates borrow pit operations, specifies the permitting process, and the calculation of administrative fees and requirements for borrow pit operations.  Midway Cattle Ranch, LLC owned and operated a borrow pit subject to the ordinance.  It sued Plaquemines Parish alleging the ordinance was unconstitutional and was being applied unconstitutionally in violation of its due process and equal protection rights, particularly with respect to the Parish allowing exemptions or variances from the backfill requirements.

A settlement agreement was reached between Midway and Plaquemines Parish and the lawsuit was dismissed, with the court reserving jurisdiction to enforce the Agreement.  The Agreement provided Midway would release its claims against Plaquemines Parish challenging the constitutionality and legal validity of the ordinance in exchange for the Parish waiving certain requirements of the ordinance, particularly the backfill requirements, in Midway’s favor.  The Agreement provided Midway would be exempted, released from, and granted a variance from the ordinance’s backfill requirements for all sales prior to the effective date of the ordinance and afterwards.  The Agreement obligated Midway to comply with other provisions of the ordinance and would pay to Plaquemines Parish an environmental impact fee of $0.05 per ton of materials sold for projects inside and outside of Plaquemines Parish.  The Agreement did not include a sunset date or outline any events that would terminate its effectiveness.

The ordinance required borrow pit operators to obtain a new permit every seven years.  In December 2025, Midway discovered its permit had lapsed in March, 2025.  On December 23, 2025, Midway submitted a permit application for the same operation with the same footprint as its prior permits.  Plaquemines Parish issued to Midway a temporary and conditional permit that required it to provide a plan for complying with the backfill requirement and a survey, and limited Midway’s sales to federally-funded, active public levee projects in the Parish.  Plaquemines Parish attempted to condition the permit on Midway agreeing to waive the Settlement Agreement that provided Midway with the variance from the backfill requirement.  Midway submitted a plan for complying with the backfill requirement, but reserved its rights and arguments it was exempt from the backfill requirement under the Settlement Agreement.

Plaquemines Parish issued a stop work order to Midway stating it was in violation of the temporary permit because it failed to provide a plan for complying with the backfill requirement, Midway needed to increase its letter of credit from $250,000.00 to $1,500,000.00 because of the new backfill requirement, and it did not build a fence. Midway filed a motion to enforce the Settlement Agreement, along with a motion for a temporary restraining order and preliminary injunction.  The court granted a temporary restraining order that allowed Midway to continue operating the borrow pit on condition, by a certain date, it would erect a fence on the property in compliance with the ordinance and would provide the Parish with an acceptable survey within a reasonable time.

Midway sought an order enforcing the Settlement Agreement as a valid contract and the efforts of Plaquemines Parish to impose the ordinance’s backfill requirements on its sales were in violation of the terms of the Settlement Agreement.  Midway also sought a preliminary and permanent injunction which would allow it to proceed with the borrow pit application unencumbered by the ordinance’s backfill requirements and required Plaquemines Parish to process Midway’s permit application without prejudice to Midway as a result of its having acted to prevent Plaquemines Parish from violating the Settlement Agreement.

Midway argued the Settlement Agreement was a valid, enforceable contract that Plaquemines Parish had authority to enter into to resolve the claims it brought years ago.  Midway contended the Settlement Agreement was the law between the parties and forever exempted it from the ordinance’s backfill requirement.  Plaquemines Parish responded arguing the Settlement Agreement terminated when Midway’s permit expired and it continued to operate without a permit in violation of the ordinance.  Alternatively, Plaquemines Parish argued if the court found the Settlement Agreement granted to Midway a perpetual waiver of the backfill requirements, that was not what the Parish intended so there was no meeting of the minds and no valid contract.

The court held the Settlement Agreement between Midway and Plaquemines Parish could be enforced on a finding a binding, written agreement existed under Louisiana law.  The court found a settlement agreement, which is called a compromise, is a contract whereby the parties, through concessions made by one or more of them, settle a dispute or an uncertainty concerning an obligation or other legal relationship.  C.C. art. 3071.  A compromise is the law between the parties and must be interpreted according to the parties’ intent.  When a party fails to perform a compromise, the other party may act either to enforce the compromise or to dissolve it and enforce its original claim.  C.C. art. 3081.

The court found the dispute came down to one simple question: whether Midway’s admitted failure to maintain a current permit terminated the Settlement Agreement?  The court held the answer was “no.”  The Settlement Agreement’s reciprocal obligations required Midway to release its litigation claims and pay the negotiated environmental impact fees in exchange for Plaquemines Parish granting to it a variance from the ordinance’s backfill requirement.  The Settlement Agreement, further, explained Midway remained subject to all other requirements of the Ordinance.  Nowhere did the Settlement Agreement condition its continued existence on Midway’s compliance with the Ordinance. The Settlement Agreement was not tied to the existence of a specific permit.  There was nothing in the Settlement Agreement specifying when or under what conditions it would terminate.  The court described Plaquemines Parish as having buyer’s remorse and was attempting to use Midways inadvertent permit lapse as an escape hatch from the Settlement Agreement’s terms.

The Settlement Agreement required Midway to abide by every provision of the ordinance with the exception of the backfill requirement.  Plaquemines Parish, for its part, could not condition Midway’s continued operation, including the issue and of future permits on Midway’s relinquishment of the backfill variance they bargained for in the Settlement Agreement. Midway Cattle Ranch, LLC v. Plaquemines Parish Government, 17-7468 (ED.La. 2026), 2026 WL 1583900.

LOUISIANA PROMPT PAYMENT ACT

SRP Environmental Co. contracted with Claremont Property Co. to perform industrial hygiene services for three condominium projects for the benefit of property owners who were Claremont’s clients.  Claremont failed to fully pay SRP for its work.  SRP sued Claremont and claimed it was entitled to penalties and attorneys’ fees under the Louisiana Prompt Payment Act, L.R.S. 9:2784(C).

The Prompt Payment Act provides if a contractor or subcontractor, without reasonable cause, fails to make any payment to his subcontractors and suppliers within fourteen consecutive days from the receipt of payment from the owner for improvements to immovable property, the contractor or subcontractor shall pay to the subcontractors and suppliers, in addition to the payment, a penalty in the amount of one-half or one percent of the amount due, per day, from the expiration of the period allowed for payment after the receipt of payment from the owner.  The total penalty shall not exceed fifteen percent of the outstanding balance due and reasonable attorneys’ fees.  In the event the court finds any such claim to be without merit, the claimant shall be subject to all reasonable costs and attorneys’ fees for the defense of the claim.  The provisions of the law are not applicable to improvements to an immovable that is used for residential purposes.  The Act does not define “residential purposes.”

The court found the condominiums and townhomes where SRP performed its work were not used as commercial office buildings where business is conducted.  Instead, residents live in the condominiums and townhomes independently.  The court stated it did not believe the legislature intended to limit or restrict the definition of “residential purposes.”  The court believed the omission of such a limitation or restriction was intentional and held it would honor the plain language of the statute, i.e. not imposing a restriction that is not there.  Thus, the Act was inapplicable, and SRP’s motion for partial summary judgment was denied.  SRP Environmental Co. v. Claremont Property Co., 23-1475 (WD.La 2026), 2026 WL 1557726.

APPLICATION FOR WRIT OF MANDAMUS

Bossier Parish filed a lawsuit against Boggs & Poole Contracting Group, Inc. (B&P) alleging B&P owed liquidated damages for 151 days of unexcused delays, failed to install a dry pipe sprinkler system as set forth in the construction contract, failed to complete several items of work and was responsible for construction defects all in connection with a project for the construction of a new Central branch public library in Bossier Parish.  B&P filed a petition for a writ of mandamus seeking final payment of $626,378.00 under the construction contract.  Bossier Parish opposed the petition for a writ.  The trial court concluded mandamus was not proper at the time because the contract required approval by the architect which had not been given and rendered judgment overruling the exceptions of Bossier Parish to the petition for a writ.  B&P appealed.

A writ of mandamus is an extraordinary remedy that is directed to a public officer to compel the performance of a ministerial duty required by law.  Ministerial duties are those in which no element of discretion is left to the public officer.  If a public officer is vested with any element of discretion, mandamus will not lie.  Where statutory interpretation is at issue in a mandamus proceeding, a de novo standard of review is used on appeal.

L.R.S. 38:2191 provides, in part, any public entity failing to make any progressive-stage payments arbitrarily or without reasonable cause, or any final payment when due as provided therein, shall be subject to mandamus to compel the payment of the sums due.  Here, a final payment was at issue.  The Louisiana Second Circuit Court of Appeal interpreted the statute to mean final payment can be c0mpelled only when final payment is due under the contract.  Here, final payment was not due under the contract because the project architect, within its discretion, had not approved the final payment application.  The judgement of the trial court was affirmed.  Bossier Parish by and through the Bossier Parish Police Jury v. Boggs & Poole Contracting Group, Inc., 56,765 (La.App. 2 Cir. 2/25/26), 429 So.3d 885, writ denied, 2026 WL 00420 (6/2/26), 2026 WL 1584387.

STIPULATION POUR AUTRUI AND PEREMPTION AND PRESCRIPTION

The City of Shreveport, in complying with a consent decree from the United States District Court for the Western District of Louisiana, undertook extensive engineering, modeling and repairs of its sewer system.  Burke-Kleinpeter, Inc. (BKI) was hired by the City to create a hydraulic model as part of the work.  BKI subcontracted with Black & Veatch Corporation (B&V) to perform consulting, engineering, construction management and program management services.  The City sued B&V alleging it was a third-party beneficiary to the agreement between BKI and B&V.  B&V contended the City was not a third-party beneficiary to the contract and its claim against B&V was prescribed.  The trial court sustained the exception of no right of action of B&V and its exception of prescription.  The City appealed.

In its exception of no right of action, B&V claimed the City had no contract with it and, thus, no right to bring a breach of contract claim against it.  The City argued the contract between BKI and B&V was intended to benefit the City and created a stipulation pour autrui (a third-party benefit) in favor of the City.  The court of appeal found a stipulation pour autrui is never presumed.  The person claiming the benefit has the burden of proof.  The court of appeal found the subcontract between BKI and B&V stipulated a benefit for the City as it was specifically geared toward services that would benefit the City.  The subcontract in question referenced the prime agreement between the City and BKI numerous times and also mentioned the project numerous times.  The subcontract provided B&V was furnished a copy of the City’s plans for the project and would continue to receive drawings, specifications, schedules, and other materials that would be pertinent to B&V to provide its services under the subcontract.  The record showed the subcontract acknowledged BKI’s ability to timely perform the project for the City under the prime agreement was dependent upon the timely performance of B&V’s services pursuant to the subcontract.  Additionally, the subcontract conditioned payment to B&V on payment by the City to BKI.  The subcontract provided it would terminate automatically upon termination of the prime agreement.  The court of appeal found the subcontract between BKI and B&V was specifically geared toward services that would benefit the City and manifested an intention to benefit the third party.  The subcontract referred specifically to the project and terminated automatically upon termination of the prime agreement.

Considering these facts, the court of appeal found, despite the contract between BKI and B&V which provided nothing in the contract would be construed to give any rights or benefits of the agreement to anyone other than the engineer and consultant (BKI and B&V), and all duties and responsibilities undertaken pursuant to the agreement would be for the sole benefit of the parties to the contract and not the benefit of any other party, the subcontract between BKI and B&V stipulated a benefit for the City as it was specifically geared toward services that would benefit the City.  Louisiana law was clear each provision in a contract must be interpreted in light of the other provisions so each is given the meaning suggested by the contract as a whole.  In this case, the subcontract, as a whole, clearly established a benefit to the City.  Any ambiguity created by the contract should be resolved in the City’s favor as a third-party beneficiary who did not supply its text.  The subcontract was clearly intended to benefit the owner of the project, the City.  The court of appeal agreed with the City’s assertion the subcontract between BKI and B&V was specifically designed for B&V to perform a subset of the project as defined in the prime agreement between the City and BKI.  Accordingly, the City was a third-party beneficiary of the subcontract.

As to the argument of B&V the claims against it were perempted under L.R.S. 9:5607, the court of appeal referenced its earlier decision in City of Shreveport v. CDM Smith, Inc., 56,154 (La.App. 2 Cir. 7/16/25), 417 So.3d 86, writ denied, 421 So.3d 533 (La. 11/25/25), reported in the July 2025 issue of the Construction Law Update, which held the five-year peremptive period under L.R.S. 9:5607 for actions against professionals such as architects and engineers superseded actions against such parties in tort under C.C. art. 3492.  Thus, the court found the claims of the City were not prescribed.  City of Shreveport v. CDM Smith Inc., 56,567 (La.App. 2 Cir. 11/19/25), 426 So.3d 186, writ denied, 2025-01608 (La. 3/18/26), 427 So.3d 1247.

CLAIM FOR UNJUST ENRICHMENT

            Venture Global Plaquemines LNG, LLC is the owner and developer of a liquified natural gas (LNG) facility.  Venture contracted with KZJV, LLC as its engineering procurement and construction contractor for the facility.  KZJV entered into a subcontract with Instafab Company, Inc. to secure fabricated steel for the facility.  Instafab contracted with Thompson Metal Fab, Inc. to supply fabricated steel necessary for the facility. Instafab served as the intermediary between KZJV and Thompson.  Thompson claimed it fulfilled all of its obligations to KZJV, but was not paid despite Instafab having received payment from KZJV for the work.  The balance owed Thompson was $608,272.92.

Thompson sued Instafab for the sum due, but, Instafab was later placed in receivership.  Thompson filed another lawsuit, this time against KZJV and Venture for the sum due.  Thompson asserted the funds were due as an enrichment without cause, i.e. a claim for unjust enrichment.  Venture and KZJV filed motions to dismiss Thompson’s unjust enrichment claim against them.

Louisiana law requires an unjust enrichment claim consist of five elements: 1) an enrichment of the defendant; 2) an impoverishment of the plaintiff; 3) a connection between the enrichment and the resulting impoverishment; 4) an absence of justification or cause for the enrichment and impoverishment; and 5) no other remedy is available at law.

The court found there was cause for Venture’s alleged enrichment, i.e., KZJV’s obligation to procure steel pursuant to the Venture-KZJV contract, Venture’s enrichment was justified and, therefore, Thompson’s claim was dismissed.  The United States Fifth Circuit Court of Appeals and the Louisiana Supreme Court have also explained an enrichment is justified if it is a result of, or finds its explanation in, the terms of a valid juridical act between the impoverishee and the enrichee or between a third party and the enrichee.  Because the enrichment was the result of a contract between Venture (the enrichee) and KZJV (a third party), the enrichment was justified and not without cause.

Thompson argued the enrichment at issue was broader than the value of the steel provided and contracted for and went beyond its promises in the contract by expediting fabrication, working through difficult design files and working overtime which enriched Venture without a valid basis.  To the extent Thompson’s unjust enrichment claim rested, in part, on additional expenses incurred that were not covered by the contract, that claim was rejected.  An unjust enrichment claim cannot lie simply because a contract was poorly written.  It was clear there was a contract that governed the rights of the parties. The court found Thompson could not recover under a theory of unjust enrichment.  Thomspon Metal Fab, Inc. v. Venture Global Plaquemine, LLC, 25-1772 (ED.La. 2026), 2026 WL 1700506.

NO CONTRACT OF ADHESION

Jones Company sued Signature Flight Support for damages to its airplane which occurred when it was being serviced by Signature at the New Orleans Lakefront Airport and moved for summary judgment.  A “landing card” signed by the pilot provided Signature would not be liable for “indirect, incidental, consequential, special or exemplary damages … “such as, but not limited to, loss of revenue, loss of use or anticipated profits, demunition or loss of value, travel room and meal accommodations or costs associated with substitution of replacement aircraft.”  Jones contended the provision was a contract of adhesion and null, void and unenforceable.

The court held a contract of adhesion is a standard contract, usually in printed form, prepared by a party of superior bargaining power for adherence or rejection of the weaker party, which may raise a question as to whether or not the weaker party actually consented to the terms.  The party challenging the contract has the burden of proving lack of consent.  Lack of consent focuses on the following factors:  1) the physical characteristics of the clause, including the font size; 2) the distinguished features of the clause; 3) the mutuality of the clause, in terms of relative burdens and advantages conferred by the clause upon each party; and 4) the relative bargaining strength of the parties.  Jones did not receive the landing card prior to landing in New Orleans, but the pilot stated he was familiar with the landing card and had signed similar agreements at many other airports.  Further, Signature stated it would have serviced the aircraft in the same manner regardless of whether the landing card was signed, as it had done when other customers refused to sign the landing card.  Jones was not, therefore, forced to agree to the terms of the clause which was signed by the pilot.  A party who signs a written instrument is presumed to know its contents and cannot avoid its obligation by contending he did not read it, he did not understand it, or the other party failed to explain it to him.  The pilot’s statements, at a bare minimum, indicated there was a genuine dispute as to whether he consented to the terms of a landing card.

The court found Jones Company failed to meet its burden of establishing there existed no genuine dispute of material fact with respect to its summary judgment and it consented to the terms of the landing card.  The motion for summary judgment of Jones Company was denied.  Jones Company v. Signature Flight Support, LLC, 25-1645 (ED.La. 2026), 2026 WL 936411.

NEW HOME WARRANTY ACT AND THE FAILURE TO PROVIDE NOTICE

The New Home Warranty Act, L.R.S. 9:3145(A), provides that before undertaking any repair himself or instituting any action for breach of warranty, the owner shall give the builder written notice by registered or certified mail within one-year after knowledge of the defect advising him of all defects and giving the builder a reasonable opportunity to comply with the provisions of the law.  The Louisiana First Circuit Court of Appeal held absent compliance with the statute, recovery under the New Home Warranty Act is precluded.

In the matter presented, the court found, while there may have been some opportunity for the contractor to return to the home after it was inspected, it was prevented from making any repairs despite several requests. Further, at one point, the contractor was not allowed to return to the home.  As a result, the contractor was not given a reasonable opportunity to repair any defects.  The judgment of the trial court dismissing the claims against the contractor was affirmed.  Whitton v. The Louisiana Housing Finance Agency, 2025-0056, (La.App. 1 Cir. 11/07/25), 423 So.3d 1274.

CLAIMS FOR INDEMNITY AND THE LOUISIANA ANTI-INDEMNITY ACT

Magnolia River Services, Inc. was working on a pipeline project for CenterPoint when gas leaked from a service pipe damaged by directional boring equipment caused an explosion at a nearby building.  Several groups of plaintiffs sued alleging negligence of the defendants, including CenterPoint and Magnolia, caused their damages.  Valley Forge Insurance Co. issued a CGL policy to Magnolia. Continental Insurance Company issued an excess policy.  CenterPoint issued a demand to Magnolia and its insurers for defense and indemnity pursuant to CenterPoint’s contract with Magnolia.

Valley Forge and Continental filed a declaratory action seeking declarations the claims for indemnity coverage under the policies were prohibited by the Louisiana Construction Anti-Indemnity Act.  L.R.S. 9:2780.1.  The Act invalidates any provision, clause, covenant or agreement contained in, collateral to, or affecting a construction contract which purports to indemnify, defend or hold harmless the indemnitee from liability arising from the indemnitee’s own negligence or the acts or omissions of a third-party over whom the indemnitor has no control.  It also prohibits contractual provisions that purport to require an indemnitor to procure liability insurance covering the acts or omissions, or both, of the indemnitee, its employees or agents.

The opponents to the declaratory action first contended the contract was not a construction contract or collateral to such an agreement.  The United States District Court for the Western District of Louisiana held, although the Magnolia/CenterPoint contract was labeled as one for inspection services, Magnolia’s obligations encompassed design and repair work falling under construction activities as defined by the Act.  Accordingly, the Act applied and could be used to avoid provisions within the Magnolia/CenterPoint contract.

Next, CenterPoint argued the insurers waived their policy defenses after three years of participation in the litigation.  The court found the statutory text of the Act provides a clear expression of the legislative will these provisions would be rendered unenforceable in any contract.  The Act arises from the same public policy concerns as the Louisiana Oilfield Indemnity Act, both of which were prompted by service providers who would otherwise be excluded from contracts unless they absolved the liability of the project owners.  The legislature’s decision to act in defense of such providers signals the importance of the decision in both leveling the field in contract negotiations, as well as insuring the proper party stands to answer for a construction accident.  Thus, the applicable provisions of the Act are imperative and cannot be waived.

The court, further, found the Act, although it invalidates certain provisions of a construction contract, does not prevent an indemnitor from indemnifying an indemnitee from the indemnitor’s own negligence or intentional acts or omissions, or those of an agent or employee of the indemnitor, or a third-party over which the indemnitor has control.

The Act also prohibits certain insurance procurement requirements, but does not apply against any clause in a construction contract containing the indemnitor’s promise to indemnify, defend or hold harmless the indemnitee, or an agent or employee of the indemnitee, if the contract also requires the indemnitor to obtain insurance to insure the obligation to indemnify and there is evidence the indemnitor recovered the cost of the required insurance in the contract price.  However, the indemnitor’s liability under such clause, is limited to the amount of the proceeds that were available under the insurance policy or policies that the indemnitor was required to obtain.

The contract also limited Magnolia’s indemnification obligations to the fullest extent permitted by law which would include the Act.  The indemnity provision was valid to the extent it pertained to losses or liability not arising from CenterPoint’s fault, and the insurance procurement provisions were valid as they related to the indemnity obligation, if such insurance coverage is provided only when the indemnitor (Magnolia) is at least partially at fault.  These issues had not yet been determined, and the court agreed summary judgment was premature.  Valley Forge Insurance Co. v. Magnolia River Services, Inc., 25-00167 (WD.La. 2026), 2026 WL 75850.

CLAIMS FOR BREACH OF A VERBAL CONTRACT, UNJUST ENRICHMENT AND DETRIMENTAL RELIANCE

In considering a claim the parties’ conduct amounted to an oral contract, a magistrate for the United States District Court for the Western District of Louisiana held a contract is formed by the consent of the parties established through offer and acceptance.  Unless the law proscribes otherwise, offer and acceptance may be made orally, in writing, or by action or inaction and under the circumstances is clearly indicative of consent.  In this particular case, the alleged verbal contract was distinct from the obligation undertaken in the original written contract.  The contractor who brought the claim alleged the party against whom the claim was made breached the agreement by failing to make the agreed upon payment despite the contractor’s performance and the breach caused the contractor damages.  The magistrate found the claim for breach of a verbal contract pled the requisite elements and had sufficient facial plausibility to survive a motion to dismiss.  The magistrate recommended to the court the motion to dismiss be denied as to that claim.

The contractor, in the alternative, brought a claim for unjust enrichment.  To state a claim for unjust enrichment a plaintiff must plead: 1) the enrichment on the part of the defendant: 2) an impoverishment on the part of the plaintiff; 3) a causal relationship between the enrichment received by the defendant and the plaintiff’s impoverishment; 4) an absence of justification or cause for the enrichment and impoverishment; and 5) a lack of other remedy at law.  The magistrate found the claim did not explain how the respondent, a third party, could have been enriched by the receipt of the contractor’s services.  The benefit of the contractor’s work necessary flowed to the owner of the property whom the contractor acknowledged was another entity.  The magistrate recommended the court find the claim did not plausibly allege the respondent’s enrichment and the contractor’s unjust enrichment claim should be dismissed for failure to adequately plead the first element.

In the further alternative, the contractor brought a claim for detrimental reliance.  Such a claim requires: 1) a representation by conduct or word; 2) justifiable reliance; and 3) a resulting change in position to the claimant’s detriment.  The magistrate cited a Fifth Circuit U.S. Court of Appeals decision finding the existence of a promise is a necessary element of a detrimental reliance claim, defining “promise” to mean “an assurance to do or not to do something in the future.”  A detrimental reliance claim is designed to prevent injustice by barring a party from taking a position contrary to his prior acts, admissions, representations or silence and usually functions in the absence of an enforceable contract between the parties.  The magistrate found the contractor alleged the respondent induced the contractor to return to work after it demobilized from the project because of lack of payment by promising the contractor would be paid a certain sum of money.  The magistrate found the amended allegations plausibly pled the second and third elements by alleging the contractor justifiably relied on these representations to its detriment returning to work at the property thereby suffering damages in the form of uncompensated work.  It was recommended the motion to dismiss as to that claim be denied.  Mirus Lake Charles, LLC v. J4 Development Inc., 24-00125 (WD.La. 2025), 2025 WL 3784488, adopted 1/2/26, 2026 WL 19377.

CONSULTING EXPERT AND WORK PRODUCT DOCTRINE

The United States District Court for the Western District of Louisiana held Federal Rules of Civil Procedure, Rule 26(b)(4)(D) creates a safe harbor whereby facts and opinions of non-testifying, consulting experts are shielded from discovery except upon a showing of exceptional circumstances.  The insurer, in that instance, contended a witness was neither a fact witness nor an expert witness, and, further, it had the prerogative to re-designate the witness as a consulting non-testifying expert.

Where a party re-designates a testifying expert as a non-testifying consulting expert, the jurisprudence has routinely held, if the expert provided an expert report prior to the re-designation, that expert was subject to deposition and other discovery because the protections of the Rule had been waived. The court found it appeared the witness was retained to act as an adjuster, not a consulting expert.  Further, the insurer voluntarily produced the experts opinion of loss when pressed by the plaintiffs about its belated suggestion the witness was a consulting expert.  The court concluded Rule 26 did not apply in this situation.

The insurer also contended the plaintiffs sought the discovery of protected work product.  The work-product doctrine insulates a lawyer’s research, analysis of legal theories, mental impressions, notes and memoranda of witness’ statements from an opposing counsel’s inquiries.  The doctrine does not protect all materials prepared by a clients lawyer or agent.  It focuses solely on materials assembled and brought into being in anticipation of litigation.  The doctrine does not protect materials assembled in the ordinary course of business.  Simply claiming a blanket privilege or protection over all documents produced, without any information as to what those documents contained, is not sufficient to enable plaintiffs or the court to assess the applicability of the privilege or protection, contrary to the insurer’s unsupported assertion otherwise.

Because the insurer had not informed the court what information the witness actually provided to plaintiffs in response to the subpoena, it was impossible for the court to determine whether the documents were protected by the work-product doctrine.  Accordingly, the doctrine was inapplicable to the situation at hand because the insurer had not satisfied its burden of establishing the permissible scope of discovery excluded the material the witness produced.  Lakyn Houston v. Southern Fidelity Insurance Co., 22-01198 (WD.La. 2024), 2024 WL 7051050.

DISMISSAL FOR FAILURE TO RESPOND TO DISCOVERY

The United States District Court for the Western District of Louisiana in a lawsuit brought by an owner for hurricane repairs dismissed, with prejudice, the claims against the contractor as a result of the failure of the owner to respond to discovery.  The court found the defendant-contractor had been substantially prejudiced by the owner’s failure to produce the relevant discovery.  Additionally, the owner failed to comply with the court’s deadlines, violated multiple court orders and ignored the rules of civil procedure, all without any reasonable explanation and/or justification.  The court also ordered the owner to pay the defendant’s costs and expenses in connection with seeking the motion to dismiss.  St. Charles Housing, LP v. Elite Contractors, LLC, 21-03416 (WD.La. 2026), 2026 WL 973497, appeal filed.

DISCOVERY

The Louisiana Fifth Circuit Court of Appeal considered whether requests for production of documents sent by plaintiffs, who consisted of various transportation and trucking companies, to defendants, who owned and operated several borrow pits, should be allowed.  Plaintiffs claimed they had the exclusive rights to all trucking and transportation contracts related to the borrow pits.  Plaintiffs averred the defendants breached the trucking agreements by refusing to refer all trucking contracts to them as previously agreed resulting in significant damages to plaintiffs.  The defendants filed a reconventional demand seeking damages, including amounts improperly collected by plaintiffs as commissions and fees.

The plaintiffs sought to discover documents involving the damages resulting from the activities of defendants and the veracity and truthfulness of the defendants’ witnesses.  The defendants opposed the motion of plaintiffs to compel the discovery.  According to the defendants, the discovery sought wide-ranging and essentially unrestricted access to records related to the internal management, finances and operations of the defendants.  The trial court granted plaintiffs’ motion to compel.  The defendants filed a writ application seeking review of the trial court’s ruling.

The court of appeal held the test of discoverability is not the admissibility of the particular information sought, but whether the information appears reasonably calculated to lead to the discovery of admissible evidence pursuant to La. C.C.P. art. 1422.  There are limitations to the rule when justice requires a party or other person be protected from annoyance, embarrassment, oppression, or undue burden or expense.  In determining whether the trial court erred in ordering discovery, courts must balance the information sought in light of the factual issues involved and the hardships that would be caused by the court’s order.  This balancing approach allows courts to fashion appropriate relief through protective orders to allow discovery of relevant financial information while protecting confidential business data.

La. C.C.P. art. 1426 provides various protective mechanisms, and specifically authorizes courts to seal documents, restrict the disclosure of confidential information, including the power to order a trade secret or other confidential research, development or commercial information not be disclosed or be disclosed only in a designated way.  This broad authority allows courts to fashion protective orders and balance discovery needs with confidential concerns.  Fashioning a protective order applying to pre-trial discovery is within the broad discretion of the trial court, and is not limited by the particular relief affirmatively requested by the parties.

The court of appeal found the trial court did not err in its determination plaintiffs established relevancy existed between the documents requested from the defendants to the claims at issue between the parties so as to allow production of some of the documents sought.  Due to the confidential nature of the documents requested, however, the court granted the writ application in part for the limited purpose of ordering the trial court to issue a protective order for the production of these documents, fashioned to preserve and safeguard the confidentiality of the information disclosed, at the same time, insuring the rights of each party to a fair trial.  Protective orders serve as an effective safeguard to preserve confidentiality while allowing discovery, in particular, the documents ordered to be produced pursuant to plaintiffs’ discovery requests are to be protected and should not be released to the general public during the discovery phase of the case.

The court of appeal denied the writ application, in part, of the defendants to the extent it found no abuse of the trial courts vast discretion in granting plaintiff’s motion to compel, but granted the writ application, in part, for the sole purpose of remanding the matter to the trial court with instructions to issue a protective order pursuant to La. C.C.P. art. 1426, to keep the records produced by the defendants out of the public’s eye while discovery is pending.  Kensington Capital Advisors, LLC v. Delos Capital Management, LP, 25-429 (La.App. 5 Cir. 10/31/25), 2025 WL 3042517.

EXPERT TESTIMONY REJECTED

An insurer challenged the testimony of an estimator with respect to the cost of repairs to a church following Hurricane Laura.  The insurer contended the estimates did not meet the daubert standards for expert testimony under the Federal Rules of Evidence, Rule 702, which was applicable since the matter was pending in Federal court.  The Louisiana Rules of Evidence, are, for the most part, identical to the Federal rules.  The Louisiana courts typically rely upon the interpretation and application of the Federal rules in evaluating the admissibility of evidence.

Here, the estimator admitted he had never been to the site, either before or after the hurricane.  He admitted, in order to duplicate his numbers, he would be needed; his numbers could not be repeated.  When asked in his deposition to identify certain “trade partners” from whom he obtained his pricing, he testified he would rather not say, or he talked with whoever answered his calls.  He knew his own labor rates for framing for wood and metal studs.  When asked if he took notes during phone calls to obtain his pricing, he said, very little or if he was on the phone with someone he called, they would give him an answer and he plugged it in.  He testified he would call certain vendors on the phone and ask them what the going rate was for that day, but he had no documentation to support his numbers, relying solely on verbal quotes over the telephone.

The court found the estimator’s pricing did not meet the requirements of Rule 702.  The fixed-price bid could not be repeated and could not be tested.  The court found the methodology used by the estimator was flawed and the pricing was unreliable and, therefore, inadmissible.  Pentecostal Church of DeQuincy v. Church Mutual Insurance Co. S I, 22-02782 (W.D.La. 2026), 2026 WL 297869.

STATUTORY EMPLOYER RELATIONSHIP

An individual who was working as a security guard for Stratigos Dynamics, Inc., a contractor hired by Venture Global Plaquemines LNG, LLC, sued Venture Global for injuries.  Venture Global contended it was the statutory employer of the individual and, thus, was immune from tort liability.  The plaintiff contended the work undertaken by Stratigos was not an integral part or essential to the ability of the principal, Venture Global, to generate its goods and products and Venture Global was not, therefore, her statutory employer.

The United States District Court for the Eastern District of Louisiana found the Louisiana legislature specifically rejected a restrictive application of the Workers’ Compensation law in favor of a more liberal interpretation of the words “integral” and “essential.”  Even work that is ancillary to the statutory employer’s operations may be essential and integral to those operations.  Even the most peripheral tasks by a contractor for its statutory employer is essential and integral to the employer’s ability to generate its services.  Courts have repeatedly held construction projects are an integral part of the principal’s business.

Construction of a building or facility is obviously essential to the ability of Venture Global to generate its goods, products or services; without a building or facility, it would be virtually impossible for it to process its chemicals and produce its products for transportation and sale.  It follows if both security services and construction projects are integral to a principal’s business, then so to is security for the principal’s construction project.  The court found the security services in which plaintiff was engaged, were integral and essential to Venture Global’s business.  Plaintiff had not carried her burden to overcome the presumption Venture Global was her statutory employer.  Williams v. Starr Indemnity & Liability Co., 24-2869 (ED.La. 2026), 2026 WL 456574.

OWNER FOUND TO BE THE STATUTORY EMPLOYER OF A CONTRACTOR’S EMPLOYEE

M.A. Patout & Son Limited, LLC operated a number of entities involved in the harvesting and processing of sugar cane.  Cleveland J. Billiot, III General Contracting, Inc. contracted with Patout to perform work at one of the facilities.  Justin Fabret, an employee of Billiot, was injured when he fell through the roof.  Patout alleged Fabret was its statutory employee and immune from suit pursuant to the workers’ compensation law.  Patout moved for summary judgment which was granted by the trial court.  Fabret appealed.

The workers’ compensation law requires, in order for a party to be found a statutory employer and, thus, immune from tort liability, the work must be considered part of the principals trade, business or occupation, which depends upon whether it is an integral part or essential to the ability of the principal to generate its goods, products or services.  Further, the law does not provide for immunity if the injury was substantially certain to occur.

With respect to the work, Billiot indemnified Patout for Billiot’s own negligence, fault or other liability, whether strict liability or otherwise.  Further, Patout agreed to indemnify and hold harmless Billiot for the owner’s own negligence, fault or other liability, whether strict liability or otherwise.  Still further, Billiot acknowledged and agreed its work was part of Patout’s trade, business or occupation.  As such, Billiot’s work was an integral part and essential to Patout’s business and ability to generate Patout’s goods, products and services.  It was expressly understood and agreed Patout was the statutory employer of Billiot and its employees and Patout’s legal status as the statutory employer of the contractor’s employees in no way affected Billiot’s status as an independent contractor, nor did it give Patout the right to direct or control the operations of Billiot or its employees, agents or representatives.

The court of appeal found there were no genuine issues of material fact as to whether Billiot’s repair work was an integral part of or essential to Patout’s business.  The court, in support of this finding, cited jurisprudence which holds it would be virtually impossible for a principal to possess and produce its products without a building or facility, and it would be similarly impossible for Patout to maintain its business without a roof overhead, negating Fabret’s contention there were genuine issues of material fact regarding whether Billiot’s repair work was an integral part of or essential to Patout’s business.  Fabret also argued the circumstances of Patout sending Fabre onto the faulty roof raised genuine issues of material fact as to whether Fabre’s fall was substantially certain to occur which would also negate Fabre’s argument his injuries were substantially certain to occur which would result in the intentional act exception to the exclusive remedy for a work-related injury.  Believing someone may, or even probably will, eventually get hurt if a workplace practice is continued does not rise to the level of an intentional act, but instead falls within the range of negligent acts that are covered by workers’ compensation.  Substantial certainty that the consequences will follow from an act expresses the concept an actor with such certainty cannot be relieved if he knew the consequences would follow.  “Substantially certain to follow” requires more than a reasonable probability that an injury will occur and “certain” has been defined to mean “inevitable” or “incapable of failing.”  An employer’s mere knowledge that a machine is dangerous and that its use creates a high probability that someone will eventually be injured is not sufficient to meet the “substantial certainty” requirement.  Further, the mere knowledge and appreciation of a risk does not constitute intent, nor does reckless or wanton conduct by an employer constitute intentional wrongdoing.

Patout knew of the roof’s alleged aged condition, hence the need for repair due to leaking.  Fabre also demonstrated he denied having any roofing experience and that Patout sent him onto the roof for the repair over his protestations.  Although two of Fabre’s experts identified various safety breaches associated with Fabre’s assignment, and Fabre did in fact sustain serious injury, did not indicate Fabre’s injuries were substantially certain to occur.  A high probability of injury is insufficient under the standard.  Even violation of safety standards and disregard of known safety risks that may constitute gross negligence do not constitute an intentional act or meet the substantial certainty test.  Summary judgment in favor of Patout was affirmed.  Fabre v. M.A. Patout & Son Limited, 2025-556 (La.App. 3 Cir. 5/27/26), ___ So.3d____, 2026 WL 1475138.

COURT ORDERS INSURER TO DEFEND CLAIMS

            The Succession of Jesse L. Wimberly, IV filed a lawsuit against, among others, Southern Excel Steel Systems, LLC, for damages relating to deficiencies in the design and construction of a law office in Mandeville, LA.  The Succession alleged Southern Excel was the designer, fabricator and/or manufacturer of certain portions of the office’s metal components.  The Succession, further, alleged Southern Excel failed to follow the applicable architectural and engineering designs and specifications and proceeded with fabrication and installation of the steel framing without first receiving engineering approval.

Southern filed a third-party claim against its insurer, Crumb & Forster Specialty Insurance Company and Southern filed a motion for partial summary judgment against Crumb seeking a declaration Crumb was obligated to defend Southern in the underlying litigation.  The trial court granted summary judgment in favor of Southern and against Crumb finding it had a duty to defend Southern.  Crumb appealed.

The court found the allegations of the Succession could be reasonably construed as stating Southern committed an act, error or omission in rendering or failing to render professional services as the designer which was defined by the court as one who creates and often executes plans for a project or structure and/or a consultant, one who gives professional advice or services.

The policy issued by Crumb contained an exclusion which provided the policy did not apply to damages, defense expenses, cleanup cost or any other loss, cost or expense or any claim or suit subject to the Faulty Workmanship Exclusion and Products Exclusion.  The Faulty Workmanship Exclusion applied to the cost to repair or replace any faulty workmanship, construction or work not in accordance with professional services.  The Products Exclusion precluded coverage for damage based upon or arising out of Southern’s product which was defined as any goods or products, other than real property, manufactured, sold, handled, distributed or disposed by Southern.  The court of appeal held the exclusions may arguably preclude coverage for certain aspects of plaintiff’s claims, such as allegations Southern negligently fabricated and/or manufactured metal components of the office, but were not broad enough to unambiguously exclude coverage for Southern’s allegedly negligent design of the metal components.

Because the evidence supporting the motion showed a reasonable interpretation of the policy, when applied to the undisputed facts, could afford coverage summary judgment sought by Crumb was not appropriate.  The court of appeal concluded the trial court properly granted Southern’s motion for partial summary judgment finding Crumb had a duty to defend.  Succession of Jesse L. Wimberly, IV v. William Chad Brown, 2025-0295 (La.App. 1 Cir. 4/24/26), ___ So.3d ____, 2026 WL 1292341.

CONSTRUCTIVE NOTICE OF AN UNREASONABLE RISK OF HARM

Although it did not involve construction issues, the Louisiana Fifth Circuit Court of Appeal considered a claim for injuries resulting from a defective chair.  The plaintiff alleged the owner knew or should have known the chair was defective.  The court held the concept of constructive knowledge imposes a reasonable duty to discover apparent defects in things under the defendant’s garde.  Constructive knowledge can be found if the conditions causing the injury existed for such a period of time those responsible, by the exercise of ordinary care and diligence, must have known of the their existence in general and could have guarded the public from injury.

The court denied the defendant’s motion for summary judgment stating there were genuine issues of material fact regarding the element of constructive knowledge that precluded summary judgment.  Parker v. K&K Insurance Group, Inc., 26-166 (La.App. 5 Cir. 5/11/26), 2026 WL 1289934.

WORK PRODUCT EXCLUSIONS AND PRODUCTS-COMPLETED OPERATIONS HAZARD COVERAGE

In a class action proceeding, plaintiffs sued the Make It Right foundation and several individuals and related entities, including Brad Pitt, alleging the defendants hired architects and contractors to build over 100 residences for plaintiffs and construction defects in the houses resulted in damages to their homes, other personal property and bodily injuries.  Defendants sued their insurers for coverage.  The insurers moved for summary judgment alleging they had no duty to defend and indemnify the defendants based on the allegations raised in the petitions.  The trial court granted the motions finding the insurers had no duty to defend or indemnify the defendants for the claims asserted in the relevant petitions.  A supervisory writ was sought from the court of appeal.

The court of appeal found the personal injury liability provisions of the policies provided coverage for plaintiffs’ emotional distress claims.  Those claims triggered the possibility of the insurers’ liability under the insurers’ contracts.  Under the work product exclusion, the insured or its subcontractors become liable for damages to their work or its products caused by the faulty workmanship.  Under the Products-Completed Operations Hazard provision, damages other than the faulty product or work itself, arising out of the faulty workmanship, are covered by the policy.  The Operations Hazard coverage applies not to the faulty work, but damages arising out of the faulty work.  Damage to real property arising out of the faulty work would not be excluded as it would be covered under the Products-Completed Hazard.  The court of appeal found it could not say the policies unambiguously precluded any duty for respondents to defend and indemnify the defendants.  They found merit to their position the trial court erred because genuine issues of facts remained and the policies provisions do not conclusively preclude coverage for the claims raised in the petitions.  Lloyd Francis v. Make It Right-New Orleans, LLC, 2026-0052 (La.App. 4 Cir. 4/16/26), ___ So.3d ____, 2026 WL 1030689.

FAA EXEMPTION

The Federal Arbitration Act provides it does not apply to contracts of employment of seaman, railroad employees or any other class of workers engaged in foreign or interstate commerce.  The Supreme Court has interpreted “foreign or interstate commerce” to exempt only contracts of employment of transportation workers.  The Court has defined “transportation worker” as one who is actively engaged in transportation of … goods across borders via the channels of foreign or interstate commerce.”  An exempt worker must at least play a direct and necessary role in the free-flow of goods across borders.  The Supreme Court has held the inquiry should focus on the work performed by the employee rather than the industry of the employer.

In this instance, the employee contended as a safety coordinator, he traveled between job sites across state lines to his employers worksites.  As part of his job, he was tasked with ensuring worksites were fully stocked with necessary supplies.  In doing so, he ordered supplies, received the ordered goods, and then transferred them across state lines in his vehicle to the job sites he visited.  Plaintiff argued because he both initiated the flow of goods in interstate commerce, and transported those goods himself across state lines, he was within the class of workers exempted by the FAA.

The United States District for the Eastern District of Louisiana held the employee took too broad a view of the transportation worker exemption.  The exemption should be construed to afford narrow construction.  While it is true the employee moved goods across state borders, the court could not say he played a direct and necessary role in interstate commerce, like a railroad employee or a seaman.  Plaintiff was in a class of workers who transports safety equipment across state lines to their employer’s worksites.  The goods are then used at those worksites and do not continue to move through commerce.  The employees of the employer are the end consumers of the goods, and the employee did not play a role in the free flow of goods across borders.  The employee’s work was more in line with transporting tools and supplies which other courts have found insufficient to qualify as a transportation worker under the FAA.

Plaintiff did not belong to a class of transportation workers and was not exempt from arbitration.  The court found arbitration was appropriate.  Rotolo v. Energy Erectors, Inc., 25-2213 (ED.La. 2026), 2026 WL 904510.

MOTION TO TRANSFER VENUE

Nationwide Mutual Insurance Company sued Cody Fortier for breach of an indemnity agreement between Nationwide and Fortier with respect to indemnification of Nationwide by Fortier for surety bonds issued for two projects, the Pontchartrain project in Louisiana and another in Houston, TX.  Nationwide alleged Fortier failed to reimburse Nationwide for its costs incurred related to the surety bonds for the two projects.  The lawsuit was filed in the United States District Court for the Eastern District of Louisiana.  Fortier moved the matter be transferred to the Western District of Louisiana.

Nationwide argued the Indemnity Agreement contained a forum selection clause which provided it could bring an action in the Eastern District of Louisiana court and Fortier waived his right to challenge the venue according to the forum selection clause.  Alternatively, it argued the complaint provided sufficient facts to show a substantial portion of the events giving rise to the claims occurred in the Eastern District.  Those claims were related to the Pontchartrain project which was in the jurisdiction of the District Court for the Eastern District of Louisiana.

The court found the Eastern District was a proper venue, and even if it was not a statutorily proper venue, Fortier was barred from making venue objections pursuant to the forum selection clause.  Venue can lie in a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of the property that is the subject of the action is situated.  Nationwide averred a substantial portion of the property that was the subject of the action was with respect to the Pontchartrain project which was located within the geographical bounds of the Eastern District.  The chosen venue does not have be the place where the most relevant events took place, but the contacts with respect to the selected court must still be substantial.  The inquiry is more qualitive than quantitative.  The failure to pay certain suppliers and subcontractors for the Pontchartrain project occurred in the Eastern District of Louisiana.  Multiple payment bond claims were submitted which caused Nationwide to incur substantial losses and expenses.  The Eastern District was found to be a proper venue for the action.

Parties may, according to the court, waive their right to challenge venue through a forum selection clause even when the chosen forum would not be considered a proper venue.  Other district courts have persuasively held venue is proper in any agreed upon district under a forum selection clause even if that district would not have been proper under the statute.  In the absence of precedent of the United States Fifth Circuit Court of Appeals, the court found venue was proper in the Eastern District of Louisiana even if it determined the district was not statutorily proper.

The forum selection clause clearly provided Nationwide with the option to file suit in New York state and federal courts and provided Fortier, by signing the agreement, waived venue objections to those venues.  The forum selection clause, further, provided Nationwide with three less defined forum options: 1) any state where an indemnitor has substantial contacts; 2) any state where a project covered by a bond subject to the agreement is located; or 3) any state where a claimant brings suit against a surety on a bond covered by the agreement and the indemnitors agree to submit to the jurisdiction of the courts in such a state.  Here, Nationwide invoked the second option because a bond issued pursuant to the indemnity agreement covered the project in Pontchartrain, LA.  The forum selection clause provided the Eastern District of Louisiana was a contractually permissible forum because it is a court in a state where a project covered by a bond subject to the agreement was located.  Fortier contractually waived any venue objections in the United States District Court for the Eastern District of Louisiana via the binding forum selection clause in the indemnity agreement.

The court next determined if the forum selection clause was enforceable.  The court found it was valid and enforceable unless the party opposing its applicability shows it is unreasonable.  A district court may consider arguments about public-interest factors; however, these factors will rarely defeat a forum selection clause.  The factors are: 1) the administrative difficulties flowing from court congestion; 2) the local interest in having localized interests decided at home; 3) the familiarity of the forum with the law that will govern the case; and 4) the avoidance of unnecessary problems in conflict of laws or the application of foreign law.  Fortier did not address the public-interest factors in his briefing, and the court did not find any of the factors overwhelmingly disfavored the bargained-for forum options in the indemnity agreement which resulted in the Eastern District being one of the bargained-for venues.  The court held it would not transfer the case to the district court for the Western District of Louisiana.  Nationwide Mutual Insurance Company v. Fortier, 25-2498 (ED.La. 3/18/26), 2026 WL 763766.

DAMAGES

A dispute existed between the Plaquemines Parish Government (PPG), the owner, and Couvillion Group, LLC, the general contractor, as to the assessment of delay damages.  Couvillion was awarded a contract by PPG for the reconstruction of the Port Eads dock facility which was damaged during Hurricane Katrina.  Couvillion sued PPG to recover for delay damages incurred during the course of the project.  Following a bench trial, the district court rendered judgment in favor of Couvillion and against PPG awarding damages of $2,782,724.00 plus legal interest and attorneys’ fees.  PPG appealed.  Various issues regarding the award of damages were the subject of the appeal.  Only a few are discussed here.

The first was delay damages for home office overhead.  PPG contended the Eichleay formula requires the contractor’s workforce be completely shutdown to collect those damages.  The court found it is sufficient for purposes of establishing standby, if a contractor can demonstrate work was stopped or significantly slowed.  The court found there was a reasonable basis for the district court to rely upon the testimony of one of the experts in awarding standby damages in instances where a contractor’s workforce is not completely idle.

PPG argued extra mobilization costs were necessary because Couvillion chose to use a larger crane on larger jobs rather than leaving it on site on standby.  Couvillion contended the decision to relocate the larger crane actually saved PPG tens of thousands of dollars because of the higher daily costs to leave it on site unused.  The court of appeal found the award of the district court for additional cost for mobilizing and demobilizing the larger crane was neither a double payment nor unreasonable.

PPG objected to the district court’s award of attorneys’ fees and legal interest.  It was not until 2018 that L.R.S. 38:2191 was amended to specifically provide for the payment of stipulated interest when a public entity fails to make progressive stage payments within forty-five days following receipt of a certified request for payment by the public entity without reasonable cause.  The statute in effect which was applicable to the claims, L.R.S. 38:2191, did not provide for interest.  There is, however, implicit in any public contract, a requirement providing for delay damages.  C.C. Art. 2000 provides for the payment of judicial interest for damages.  See also, C.C. art. 1994.  The court concluded Couvillion was entitled to judicial interest from the date of substantial completion.  Couvillion Group, LLC v. Plaquemines Parish Government, 2025-0356, (La.App. 4 Cir. 1/7/26), 430 So.3d 1175, writ denied, 2026-0217 (La. 5/12/26), 430 So.3d. 1090.

CLAIMS FOR DELAY DAMAGES AND LOST PROFITS AND OTHER CONSEQUENTIAL DAMAGES DISMISSED

A subcontractor claimed the general contractor was liable for bad faith and intentional breach of contract and damages for the unpaid balance of the subcontract, as well as consequential damages including lost profits and higher costs.  The general contractor asserted counterclaims for breach of contract and breach of a performance bond by a subcontractor and its surety.  The general contractor moved to dismiss the claims of the subcontractor except to the extent they stated a breach of contract claim for the unpaid balance of the subcontract.  The general contractor alleged delay damages were not available under the subcontract and the subcontractor failed to state a claim for lost profits or other consequential damages caused by bad faith or intentional breach of contract.

The subcontract provided if the subcontractor’s work was delayed, disrupted or interfered with solely as the result of the acts or omissions of the general contractor, the subcontractor would receive an extension of time equal to the actual delay as determined by the general contractor.  Further, an extension of time as determined by the general contractor, or the decision that no extension shall be allowed, would be the subcontractor’s sole remedy for the delay as determined by the general contractor.  In exchange for these conditions, the subcontractor waived its rights to bring a claim for damage for delay against the general contractor or its surety.  Further, the contract provided the general contractor would not be liable to the subcontractor for damage for delay, disruption or interference caused by any number of circumstances, including weather conditions, change orders, and the act, or omission or fault of the owner.

Louisiana Civil Code art. 2004 nullifies any contractual clause which, in advance, excludes or limits the liability of one party for intentional or gross fault that causes damage to the other party.  The court found gross fault as used in art. 2004 encompasses not only gross negligence, but also bad faith, breach of contract or fraud.  A no-damages-for-delay clause may not be invalidated because it permits a party to stipulate an exemption for its own negligence.  Instead, such clauses are enforceable in the absence of evidence of intentional or gross fault.

The United States District Court for the Western District of Louisiana held, to the extent the subcontractor alleged its damages were due to delays or other interferences created by the general contractor, its claim fell within the contractual provisions.  The allegations fell within the gross fault exception to the extent they stated a claim for bad faith breach of contract.  Under Louisiana law, such a claim requires that the obligor intentionally and maliciously failed to perform his obligation under C.C. art. 1997.  Bad faith is not mere bad judgment or negligence.  It implies the conscious doing of a wrong for dishonest or morally questionable motives.  Accordingly, a plaintiff must allege both a breach of the agreement as well as an intent to harm or some other dishonest or morally questionable motive.  There was no allegation the underlying contractual breach stemmed from a dishonest or morally questionable motive.  The court held the subcontractor failed to state a claim for bad faith breach of contract.  The failure not only implicated the contractual requirements but jeopardized the validity of consequential damages.  The only difference between breach and breach in bad faith is the latter permits recovery of nonforeseeable damages.  The motion to dismiss was granted.

The subcontractor’s counterclaims against the general contractor were dismissed, except to the extent the subcontractor stated a claim for the unpaid balance of the subcontract.  Pace Construction Services, LLC v. Federal Insurance Co., 23-00197 (WD.La. 2026), 2026 WL 93829.

LIABILITY FOR INJURIES TO A WORKER

            Waste Connections contracted with WestRock to clean WestRock’s dumpsters.  WestRock hired H&M to clean the grounds at the site.  Fowler was employed by Waste Connections.  While attaching cables to a dumpster, Fowler stepped into mud and water, causing him to slip and fall, and, as a result, injured his knee and leg.  Fowler alleged H&M and WestRock negligently hired, trained and supervised its employees, negligently created unreasonably unsafe conditions and negligently monitored the premises.  H&M moved for dismissal.

The United States District Court for the Western District of Louisiana found Louisiana law recognized the tort of negligent hiring, training and supervising an employee by an employer.  Louisiana general-duty risk analysis governs the tort.  The court held Louisiana law recognized employers have a duty to exercise reasonable care in hiring, training and supervising employees, but the majority of the Louisiana appellate courts only apply the duty of reasonable care and hiring, training and supervision to an employer who hires an employee, who, in the performance of his duties, will have a unique opportunity to commit a tort against a third-party.  The court found Fowler could not show H&M’s work was of such a nature to present its employees with a unique opportunity to cause harm to him or others.  The court held Fowler could not prove all of the elements of his negligent hiring, training or supervision claims.  H&M’s motion was granted for that claim.

Fowler also alleged H&M caused his injury by negligently creating, allowing to be created and/or encouraging to be created the unreasonably unsafe condition which led to his injury and not remediating the condition.  The court held for Fowler to prove negligence of the Louisiana law, he must show that: 1) H&M’s conduct was the cause in fact of his harm, 2) H&M owed a duty of care to Fowler, 3) the duty was breached, and 4) the risk was in the scope of harm afforded by the duty.  The issue of whether a defendant owes a duty is a threshold question and one of law.  H&M argued since it did not employ, contract with, or supervise Fowler, it owed no duty to him.  Fowler was not employed by H&M and H&M did not supervise Fowler.  H&M and Waste Connections had no contractual relationship, and there was none between H&M and Fowler.  Since H&M did not employ, hire or contract or supervise Fowler, it had no duty to him.

To establish a premises liability obligation under Louisiana law, Fowler had to prove: 1) the property that caused his damage was in H&M’s custody; 2) the property had a vice or defect that presented an unreasonable risk of harm; 3) H&M had actual or constructive knowledge of the risk posed by the defect; and 4) the defect caused his damages.  A plaintiff must prove all of the factors.  The court found the first factor, custody, was relevant.  Distinct from ownership, custody refers to a person’s supervision and control (garde) over a thing posing an unreasonable risk of harm.  The test determining custody or control is whether the defendant had the right of direction or control over the thing and what, if any, benefit the defendant derived from the thing.  H&M argued it did not exercise control or direction over the dumpster area because before the accident, it had only performed infrequent clearing and disposal of debris at the site.  Fowler presented nothing to rebut evidence that, at the time Fowler was injured, H&M did not perform daily, frequent, routine work at the dumpster area which would result in it having control or direction over that site, nor did he provide any evidence suggesting H&M created the allegedly unsafe conditions.  Further, in his deposition, he stated WestRock once fixed the dumpster area which solidified the finding WestRock, not H&M, exercised control and, therefore, custody over the dumpster area.  The court concluded Fowler could not prove H&M exercised custody over the dumpster premises so Fowler’s premises liability claim also failed.  Fowler v. WestRock CP, LLC, 23-01525 (WD.La. 3/16/26), 2026 WL 735280.

FRAUD AND PERSONAL LIABILITY OF A MEMBER OF AN LLC FOR RESIDENTIAL CONSTRUCTION

The Lavarines contracted with MAC Construction, LLC to build a home in Jefferson Parish.  Stephen McCready was alleged to be the sole member and qualifying partner of MAC.  McCready/MAC hired unlicensed subcontractors to build the home.  The Lavarines contended hiring an unlicensed contractor was a criminal act and McCready was personally liabile in solido with MAC for the faulty workmanship of an unlicensed subcontractor.  The hiring of unlicensed contractor, according to the Lavarines, was fraud, and constituted a misappropriation of the Lavarine’s funds as a result of payment to the unlicensed contractor.  This was residential contractor fraud entitling the Lavarines to restitution for faulty work from McCready personally.

Residential contractor fraud is defined as the misappropriation or intentional taking of anything of value which belongs to another, either without the consent of the other to the misappropriation or taking, or by means of fraudulent conduct, practices or representations by a person contracted to perform any home improvement or residential construction.  L.R.S. 14:202.1(A).  Except as otherwise specifically set forth in L.R.S. 12:1320, no member, manager, employee or agent of a limited liability company is liable in such capacity for a debt, obligation or liability of the limited liability company.  McCready was alleged to be the sole member and qualifying partner of MAC.  MAC filed a motion for summary judgment to dismiss the claims.  The trial court denied the motion.  The Louisiana Fifth Circuit Court of Appeal held if there are sufficient allegations of fraud, the fraud exception could be triggered and the members of the LLC held liable.  With no record evidence of fraud, however, there is nothing to trigger the fraud exception under the statue.

The court of appeal held there was a question of material fact as to whether or not the payment of the unlicensed subcontractor constituted a misappropriation of the Lavarines funds.  There was also a question of whether McCready intentionally acted in such a way that piercing the corporate veil was an available remedy.  The court held a motion for summary judgment is not suitable for the disposition of cases requiring a judicial determination of subjective facts such as intent, knowledge, motive, malice, or good faith.  There was, additionally, a question of whether fraud was committed at all which would fall under the ultimate trier of fact’s purview.  In determining whether an issue is “genuine,” courts cannot consider the merits, make credibility determinations, evaluate testimony, or weigh evidence.  The decision of the trial court was affirmed.  Lavarine v. MAC Construction, LLC, 26-30 (La.App. 5 Cir. 2/9/26), 2026 WL 353067.

PEREMPTION RESERVED IN AN ARBITRATION AGREEMENT TO BE CONSIDERED BY THE ARBITRATOR

The Army Corps of Engineers contracted with PCCP for the design and construction of canal closures and pump stations in the New Orleans area.  PCCP subcontracted part of the work.  The Corps of Engineers asserted claims against PCCP regarding alleged problems and defects, some of which implicated the work performed by the subcontractors.  The subcontractors and PCCP entered into an arbitration agreement to resolve the respective responsibility of each of the parties for the claims of the Corps of Engineers.

PCCP filed an arbitration demand with JAMS Mediation, Arbitration, and Alternative Dispute Resolution Services, the arbitration body agreed upon by the parties.  It then requested JAMS stay the arbitration proceeding so it could pursue resolution of its disputes with the Corps of Engineers and allow the parties to the arbitration agreement to work toward resolution of their disputes regarding their respective liability.

An issue arose as to whether the arbitration agreement excluded perempted claims.  PCCP notified the subcontractors of its intention to lift the previously agreed-upon stay and re-initiate the arbitration proceeding related to the projects alleged defects as asserted by the Corps of Engineers.  The subcontractors filed a petition for declaratory judgment against PCCP in state court seeking a declaration perempted claims were not encompassed in the arbitration agreement, the arbitration agreement was null to the extent its scope included perempted claims, and peremption had extinguished the claims of PCCP against the subcontractors.  PCCP filed a dilatory exception raising the objection of prematurity asserting the subcontractors’ objection was premature because a valid arbitration agreement existed between the parties where the parties expressly agreed to arbitrate any disputes, including peremption.

The court found the arbitration agreement explicitly provided the parties would submit any disputes among them relating to the project to arbitration.  Furthermore, by entering into an arbitration agreement, the parties specifically agreed they did not admit or acknowledge anything related to any statute or limitations or similar defense concerning the timeliness of asserting a claim.  The perempted claims were clearly connected to the merits of any disputes related to the project which were reserved to arbitration.

The court also found the arbitration agreement expressly barred any party from commencing any legal proceeding against the other party in any forum other than arbitration relating in any manner to the project.  Peremption is an issue/dispute/defense that is distinctly related to and arising out of the merits of any claim associated with the project.  By attempting to have the defense of peremption decided by the trial court by means of a declaratory judgment rather than by participating in the arbitration process, the subcontractors were attempting to thwart the basic purpose of the arbitration agreement to which they explicitly agreed.  The court found the parties were bound by the agreement they made to arbitrate any dispute related to the project, including peremption.  The trial court did not err in sustaining the exception or prematurity and dismissing the subcontractors claims against PCCP. Stantec Consulting Services, Inc.  v. Kiewit Louisiana Co., 25-0536 (La.App. 1 Cir. 12/30/25), 427 So.3d 796, writ denied, 2026-c-00199 (La. 5/12/26), 430 So.3d 1087.