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Conflict In The Courts Over Prompt Payment On Public Projects

La. R.S. 38:2191 mandates that “[a]ll public entities shall promptly pay all obligations arising under public contracts when the obligations become due and payable under the contract.” The statute also authorizes a mandamus action, a form of summary proceeding without the delays associated with an ordinary lawsuit, when a public entity fails to make payment due to a contractor.  However, Louisiana appellate court decisions conflict with respect to the interpretation and application of the statute as it pertains to the resolution of a public entity’s claim for offsets against a contractor.
 
In April 2018, the Louisiana Fourth Circuit Court of Appeal (based in New Orleans) rendered a decision which applied La. R.S. 38:2191 in a manner significantly benefiting general contractors by requiring a public entity to make final payment to a contractor despite the existence of claims against the contractor.  In Woodrow Wilson Construction. LLC v. Orleans Parish School Board, 2017-0936 (La. App. 4 Cir. 4/18/18), 245 So. 3d 1, a public entity withheld from payment the entirety of the retainage on a project, claiming that liquidated damages for delays, although contested by the contractor, exceeded the retainage due under the contract.  In doing so, the public entity relied upon a provision in the contract which permitted the collection of liquidated damages in any manner available, including the withholding of final payment.  However, citing to language within La. R.S. 38:2191 that “[t]he provisions of this Section shall not be subject to waiver by contract”, the Louisiana Fourth Circuit Court of Appeal concluded that the contractual provision relied upon by the public entity could not serve to waive the contractor’s right to final payment.  As such, the decision held that a public entity can be compelled to make final payment to a contractor by way of a summary mandamus action despite the existence of claims against the contractor, although that public entity may thereafter pursue it claims against the contractor by way of an ordinary lawsuit.  In October 2018, the Louisiana Supreme Court denied writs, meaning that the Court declined to address the case.
 
In March 2020, however, the Louisiana First Circuit Court of Appeal (based in Baton Rouge) rendered a decision with a differing interpretation of La. R.S. 38:2191.  The case of Law Industries, LLC v. Board of Supervisors of Louisiana State University, 2018-1756 (La. App. 1 Cir. 3/2/20), 300 So. 3d 21 also involved a contractor seeking final payment from a public entity by way of a summary mandamus action, which payment was withheld due to the assessment of liquidated damages as authorized by the parties’ contract.  In deciding the case, the Louisiana First Circuit Court of Appeal expressly stated that it “respectfully choose not to follow” the ruling of the Louisiana Fourth Circuit Court of Appeal in Woodrow Wilson.   Rather than holding that that the public entity was required to render payment to the contractor and that its liquidated damages claim must be resolved in a separate ordinary proceeding consistent with the ruling in Woodrow Wilson, the Court opined that “[i]f the plaintiff elects to use a mandamus proceeding, the trial court must determine in a summary proceeding what sum is owed under the parties' contract, including the amount of liquidated damages payable under the contract's provisions.” Dissenting to the decision, one of the appellate judges acknowledged that “[t]he majority's holding creates a split between the First and Fourth Circuit Courts of Appeal regarding the interpretation of La. R.S. 38:2191—a legal question—which needs to be resolved by the Louisiana Supreme Court.”  Nonetheless, in October 2020, the Louisiana Supreme Court declined to address the case.
 
In June 2020, the Louisiana First Circuit Court of Appeal again addressed a case involving the pursuit of final payment by a contractor by way of the summary mandamus action provided by La. R.S. 38:2191, which payment was withheld by a public entity due to the assessment of liquidated damages.  In Coast 2 Coast Construction, L.L.C. v. Parish of St. Tammany, 2019-1311 (La. App. 1 Cir. 6/16/20) 2020 WL 3249307, a different panel of judges than those which decided Law Industries concluded that the “identical issue” was recently addressed by the Court.  Accordingly, the Court adhered to the interpretation of La. R.S. 38:2191 as set forth in Law Industries.  In October 2020, the Louisiana Supreme Court also declined to address the Coast 2 Coast case.
 
Most recently, in July 2020, the Louisiana First Circuit Court of Appeal affirmed the dismissal of a contractor’s summary mandamus action brought under La. R.S. 38:2191 in Stevens Construction & Design, L.L.C. v. St. Tammany Fire Protection District No. 1, 2019-0955 (La. App. 1 Cir. 7/8/20), 2020 WL 3840899, concluding that the amounts sought were not due under the terms of the parties’ contract.  In November 2020, the Louisiana Supreme Court declined to address the case by denying writs. 
 
In summary, while the Louisiana Fourth Circuit Court of Appeal has held that a contactor can obtain payment through the summary proceeding and that the owner’s claim for offsets must be resolved separately by way of an ordinary proceeding, the Louisiana First Circuit Court of Appeal has held that the contractor’s payment claim and the owner’s claim for offsets must be resolved concurrently if a summary mandamus action is invoked. Thus, for now, Louisiana appellate decisions remain in conflict regarding the interpretation and application of La. R.S. 38:2191, which should be resolved either by the Louisiana Supreme Court or legislatively. 
 

 

Conflict In The Courts Over Prompt Payment On Public Projects

La. R.S. 38:2191 mandates that “[a]ll public entities shall promptly pay all obligations arising under public contracts when the obligations become due and payable under the contract.” The statute also authorizes a mandamus action, a form of summary proceeding without the delays associated with an ordinary lawsuit, when a public entity fails to make payment due to a contractor.  However, Louisiana appellate court decisions conflict with respect to the interpretation and application of the statute as it pertains to the resolution of a public entity’s claim for offsets against a contractor.
 
In April 2018, the Louisiana Fourth Circuit Court of Appeal (based in New Orleans) rendered a decision which applied La. R.S. 38:2191 in a manner significantly benefiting general contractors by requiring a public entity to make final payment to a contractor despite the existence of claims against the contractor.  In Woodrow Wilson Construction. LLC v. Orleans Parish School Board, 2017-0936 (La. App. 4 Cir. 4/18/18), 245 So. 3d 1, a public entity withheld from payment the entirety of the retainage on a project, claiming that liquidated damages for delays, although contested by the contractor, exceeded the retainage due under the contract.  In doing so, the public entity relied upon a provision in the contract which permitted the collection of liquidated damages in any manner available, including the withholding of final payment.  However, citing to language within La. R.S. 38:2191 that “[t]he provisions of this Section shall not be subject to waiver by contract”, the Louisiana Fourth Circuit Court of Appeal concluded that the contractual provision relied upon by the public entity could not serve to waive the contractor’s right to final payment.  As such, the decision held that a public entity can be compelled to make final payment to a contractor by way of a summary mandamus action despite the existence of claims against the contractor, although that public entity may thereafter pursue it claims against the contractor by way of an ordinary lawsuit.  In October 2018, the Louisiana Supreme Court denied writs, meaning that the Court declined to address the case.
 
In March 2020, however, the Louisiana First Circuit Court of Appeal (based in Baton Rouge) rendered a decision with a differing interpretation of La. R.S. 38:2191.  The case of Law Industries, LLC v. Board of Supervisors of Louisiana State University, 2018-1756 (La. App. 1 Cir. 3/2/20), 300 So. 3d 21 also involved a contractor seeking final payment from a public entity by way of a summary mandamus action, which payment was withheld due to the assessment of liquidated damages as authorized by the parties’ contract.  In deciding the case, the Louisiana First Circuit Court of Appeal expressly stated that it “respectfully choose not to follow” the ruling of the Louisiana Fourth Circuit Court of Appeal in Woodrow Wilson.   Rather than holding that that the public entity was required to render payment to the contractor and that its liquidated damages claim must be resolved in a separate ordinary proceeding consistent with the ruling in Woodrow Wilson, the Court opined that “[i]f the plaintiff elects to use a mandamus proceeding, the trial court must determine in a summary proceeding what sum is owed under the parties' contract, including the amount of liquidated damages payable under the contract's provisions.” Dissenting to the decision, one of the appellate judges acknowledged that “[t]he majority's holding creates a split between the First and Fourth Circuit Courts of Appeal regarding the interpretation of La. R.S. 38:2191—a legal question—which needs to be resolved by the Louisiana Supreme Court.”  Nonetheless, in October 2020, the Louisiana Supreme Court declined to address the case.
 
In June 2020, the Louisiana First Circuit Court of Appeal again addressed a case involving the pursuit of final payment by a contractor by way of the summary mandamus action provided by La. R.S. 38:2191, which payment was withheld by a public entity due to the assessment of liquidated damages.  In Coast 2 Coast Construction, L.L.C. v. Parish of St. Tammany, 2019-1311 (La. App. 1 Cir. 6/16/20) 2020 WL 3249307, a different panel of judges than those which decided Law Industries concluded that the “identical issue” was recently addressed by the Court.  Accordingly, the Court adhered to the interpretation of La. R.S. 38:2191 as set forth in Law Industries.  In October 2020, the Louisiana Supreme Court also declined to address the Coast 2 Coast case.
 
Most recently, in July 2020, the Louisiana First Circuit Court of Appeal affirmed the dismissal of a contractor’s summary mandamus action brought under La. R.S. 38:2191 in Stevens Construction & Design, L.L.C. v. St. Tammany Fire Protection District No. 1, 2019-0955 (La. App. 1 Cir. 7/8/20), 2020 WL 3840899, concluding that the amounts sought were not due under the terms of the parties’ contract.  In November 2020, the Louisiana Supreme Court declined to address the case by denying writs. 
 
In summary, while the Louisiana Fourth Circuit Court of Appeal has held that a contactor can obtain payment through the summary proceeding and that the owner’s claim for offsets must be resolved separately by way of an ordinary proceeding, the Louisiana First Circuit Court of Appeal has held that the contractor’s payment claim and the owner’s claim for offsets must be resolved concurrently if a summary mandamus action is invoked. Thus, for now, Louisiana appellate decisions remain in conflict regarding the interpretation and application of La. R.S. 38:2191, which should be resolved either by the Louisiana Supreme Court or legislatively. 
 

 

Conflict In The Courts Over Prompt Payment On Public Projects

La. R.S. 38:2191 mandates that “[a]ll public entities shall promptly pay all obligations arising under public contracts when the obligations become due and payable under the contract.” The statute also authorizes a mandamus action, a form of summary proceeding without the delays associated with an ordinary lawsuit, when a public entity fails to make payment due to a contractor.  However, Louisiana appellate court decisions conflict with respect to the interpretation and application of the statute as it pertains to the resolution of a public entity’s claim for offsets against a contractor.
 
In April 2018, the Louisiana Fourth Circuit Court of Appeal (based in New Orleans) rendered a decision which applied La. R.S. 38:2191 in a manner significantly benefiting general contractors by requiring a public entity to make final payment to a contractor despite the existence of claims against the contractor.  In Woodrow Wilson Construction. LLC v. Orleans Parish School Board, 2017-0936 (La. App. 4 Cir. 4/18/18), 245 So. 3d 1, a public entity withheld from payment the entirety of the retainage on a project, claiming that liquidated damages for delays, although contested by the contractor, exceeded the retainage due under the contract.  In doing so, the public entity relied upon a provision in the contract which permitted the collection of liquidated damages in any manner available, including the withholding of final payment.  However, citing to language within La. R.S. 38:2191 that “[t]he provisions of this Section shall not be subject to waiver by contract”, the Louisiana Fourth Circuit Court of Appeal concluded that the contractual provision relied upon by the public entity could not serve to waive the contractor’s right to final payment.  As such, the decision held that a public entity can be compelled to make final payment to a contractor by way of a summary mandamus action despite the existence of claims against the contractor, although that public entity may thereafter pursue it claims against the contractor by way of an ordinary lawsuit.  In October 2018, the Louisiana Supreme Court denied writs, meaning that the Court declined to address the case.
 
In March 2020, however, the Louisiana First Circuit Court of Appeal (based in Baton Rouge) rendered a decision with a differing interpretation of La. R.S. 38:2191.  The case of Law Industries, LLC v. Board of Supervisors of Louisiana State University, 2018-1756 (La. App. 1 Cir. 3/2/20), 300 So. 3d 21 also involved a contractor seeking final payment from a public entity by way of a summary mandamus action, which payment was withheld due to the assessment of liquidated damages as authorized by the parties’ contract.  In deciding the case, the Louisiana First Circuit Court of Appeal expressly stated that it “respectfully choose not to follow” the ruling of the Louisiana Fourth Circuit Court of Appeal in Woodrow Wilson.   Rather than holding that that the public entity was required to render payment to the contractor and that its liquidated damages claim must be resolved in a separate ordinary proceeding consistent with the ruling in Woodrow Wilson, the Court opined that “[i]f the plaintiff elects to use a mandamus proceeding, the trial court must determine in a summary proceeding what sum is owed under the parties' contract, including the amount of liquidated damages payable under the contract's provisions.” Dissenting to the decision, one of the appellate judges acknowledged that “[t]he majority's holding creates a split between the First and Fourth Circuit Courts of Appeal regarding the interpretation of La. R.S. 38:2191—a legal question—which needs to be resolved by the Louisiana Supreme Court.”  Nonetheless, in October 2020, the Louisiana Supreme Court declined to address the case.
 
In June 2020, the Louisiana First Circuit Court of Appeal again addressed a case involving the pursuit of final payment by a contractor by way of the summary mandamus action provided by La. R.S. 38:2191, which payment was withheld by a public entity due to the assessment of liquidated damages.  In Coast 2 Coast Construction, L.L.C. v. Parish of St. Tammany, 2019-1311 (La. App. 1 Cir. 6/16/20) 2020 WL 3249307, a different panel of judges than those which decided Law Industries concluded that the “identical issue” was recently addressed by the Court.  Accordingly, the Court adhered to the interpretation of La. R.S. 38:2191 as set forth in Law Industries.  In October 2020, the Louisiana Supreme Court also declined to address the Coast 2 Coast case.
 
Most recently, in July 2020, the Louisiana First Circuit Court of Appeal affirmed the dismissal of a contractor’s summary mandamus action brought under La. R.S. 38:2191 in Stevens Construction & Design, L.L.C. v. St. Tammany Fire Protection District No. 1, 2019-0955 (La. App. 1 Cir. 7/8/20), 2020 WL 3840899, concluding that the amounts sought were not due under the terms of the parties’ contract.  In November 2020, the Louisiana Supreme Court declined to address the case by denying writs. 
 
In summary, while the Louisiana Fourth Circuit Court of Appeal has held that a contactor can obtain payment through the summary proceeding and that the owner’s claim for offsets must be resolved separately by way of an ordinary proceeding, the Louisiana First Circuit Court of Appeal has held that the contractor’s payment claim and the owner’s claim for offsets must be resolved concurrently if a summary mandamus action is invoked. Thus, for now, Louisiana appellate decisions remain in conflict regarding the interpretation and application of La. R.S. 38:2191, which should be resolved either by the Louisiana Supreme Court or legislatively. 
 

 

Conflict In The Courts Over Prompt Payment On Public Projects

La. R.S. 38:2191 mandates that “[a]ll public entities shall promptly pay all obligations arising under public contracts when the obligations become due and payable under the contract.” The statute also authorizes a mandamus action, a form of summary proceeding without the delays associated with an ordinary lawsuit, when a public entity fails to make payment due to a contractor.  However, Louisiana appellate court decisions conflict with respect to the interpretation and application of the statute as it pertains to the resolution of a public entity’s claim for offsets against a contractor.
 
In April 2018, the Louisiana Fourth Circuit Court of Appeal (based in New Orleans) rendered a decision which applied La. R.S. 38:2191 in a manner significantly benefiting general contractors by requiring a public entity to make final payment to a contractor despite the existence of claims against the contractor.  In Woodrow Wilson Construction. LLC v. Orleans Parish School Board, 2017-0936 (La. App. 4 Cir. 4/18/18), 245 So. 3d 1, a public entity withheld from payment the entirety of the retainage on a project, claiming that liquidated damages for delays, although contested by the contractor, exceeded the retainage due under the contract.  In doing so, the public entity relied upon a provision in the contract which permitted the collection of liquidated damages in any manner available, including the withholding of final payment.  However, citing to language within La. R.S. 38:2191 that “[t]he provisions of this Section shall not be subject to waiver by contract”, the Louisiana Fourth Circuit Court of Appeal concluded that the contractual provision relied upon by the public entity could not serve to waive the contractor’s right to final payment.  As such, the decision held that a public entity can be compelled to make final payment to a contractor by way of a summary mandamus action despite the existence of claims against the contractor, although that public entity may thereafter pursue it claims against the contractor by way of an ordinary lawsuit.  In October 2018, the Louisiana Supreme Court denied writs, meaning that the Court declined to address the case.
 
In March 2020, however, the Louisiana First Circuit Court of Appeal (based in Baton Rouge) rendered a decision with a differing interpretation of La. R.S. 38:2191.  The case of Law Industries, LLC v. Board of Supervisors of Louisiana State University, 2018-1756 (La. App. 1 Cir. 3/2/20), 300 So. 3d 21 also involved a contractor seeking final payment from a public entity by way of a summary mandamus action, which payment was withheld due to the assessment of liquidated damages as authorized by the parties’ contract.  In deciding the case, the Louisiana First Circuit Court of Appeal expressly stated that it “respectfully choose not to follow” the ruling of the Louisiana Fourth Circuit Court of Appeal in Woodrow Wilson.   Rather than holding that that the public entity was required to render payment to the contractor and that its liquidated damages claim must be resolved in a separate ordinary proceeding consistent with the ruling in Woodrow Wilson, the Court opined that “[i]f the plaintiff elects to use a mandamus proceeding, the trial court must determine in a summary proceeding what sum is owed under the parties' contract, including the amount of liquidated damages payable under the contract's provisions.” Dissenting to the decision, one of the appellate judges acknowledged that “[t]he majority's holding creates a split between the First and Fourth Circuit Courts of Appeal regarding the interpretation of La. R.S. 38:2191—a legal question—which needs to be resolved by the Louisiana Supreme Court.”  Nonetheless, in October 2020, the Louisiana Supreme Court declined to address the case.
 
In June 2020, the Louisiana First Circuit Court of Appeal again addressed a case involving the pursuit of final payment by a contractor by way of the summary mandamus action provided by La. R.S. 38:2191, which payment was withheld by a public entity due to the assessment of liquidated damages.  In Coast 2 Coast Construction, L.L.C. v. Parish of St. Tammany, 2019-1311 (La. App. 1 Cir. 6/16/20) 2020 WL 3249307, a different panel of judges than those which decided Law Industries concluded that the “identical issue” was recently addressed by the Court.  Accordingly, the Court adhered to the interpretation of La. R.S. 38:2191 as set forth in Law Industries.  In October 2020, the Louisiana Supreme Court also declined to address the Coast 2 Coast case.
 
Most recently, in July 2020, the Louisiana First Circuit Court of Appeal affirmed the dismissal of a contractor’s summary mandamus action brought under La. R.S. 38:2191 in Stevens Construction & Design, L.L.C. v. St. Tammany Fire Protection District No. 1, 2019-0955 (La. App. 1 Cir. 7/8/20), 2020 WL 3840899, concluding that the amounts sought were not due under the terms of the parties’ contract.  In November 2020, the Louisiana Supreme Court declined to address the case by denying writs. 
 
In summary, while the Louisiana Fourth Circuit Court of Appeal has held that a contactor can obtain payment through the summary proceeding and that the owner’s claim for offsets must be resolved separately by way of an ordinary proceeding, the Louisiana First Circuit Court of Appeal has held that the contractor’s payment claim and the owner’s claim for offsets must be resolved concurrently if a summary mandamus action is invoked. Thus, for now, Louisiana appellate decisions remain in conflict regarding the interpretation and application of La. R.S. 38:2191, which should be resolved either by the Louisiana Supreme Court or legislatively. 
 

 

Conflict In The Courts Over Prompt Payment On Public Projects

La. R.S. 38:2191 mandates that “[a]ll public entities shall promptly pay all obligations arising under public contracts when the obligations become due and payable under the contract.” The statute also authorizes a mandamus action, a form of summary proceeding without the delays associated with an ordinary lawsuit, when a public entity fails to make payment due to a contractor.  However, Louisiana appellate court decisions conflict with respect to the interpretation and application of the statute as it pertains to the resolution of a public entity’s claim for offsets against a contractor.
 
In April 2018, the Louisiana Fourth Circuit Court of Appeal (based in New Orleans) rendered a decision which applied La. R.S. 38:2191 in a manner significantly benefiting general contractors by requiring a public entity to make final payment to a contractor despite the existence of claims against the contractor.  In Woodrow Wilson Construction. LLC v. Orleans Parish School Board, 2017-0936 (La. App. 4 Cir. 4/18/18), 245 So. 3d 1, a public entity withheld from payment the entirety of the retainage on a project, claiming that liquidated damages for delays, although contested by the contractor, exceeded the retainage due under the contract.  In doing so, the public entity relied upon a provision in the contract which permitted the collection of liquidated damages in any manner available, including the withholding of final payment.  However, citing to language within La. R.S. 38:2191 that “[t]he provisions of this Section shall not be subject to waiver by contract”, the Louisiana Fourth Circuit Court of Appeal concluded that the contractual provision relied upon by the public entity could not serve to waive the contractor’s right to final payment.  As such, the decision held that a public entity can be compelled to make final payment to a contractor by way of a summary mandamus action despite the existence of claims against the contractor, although that public entity may thereafter pursue it claims against the contractor by way of an ordinary lawsuit.  In October 2018, the Louisiana Supreme Court denied writs, meaning that the Court declined to address the case.
 
In March 2020, however, the Louisiana First Circuit Court of Appeal (based in Baton Rouge) rendered a decision with a differing interpretation of La. R.S. 38:2191.  The case of Law Industries, LLC v. Board of Supervisors of Louisiana State University, 2018-1756 (La. App. 1 Cir. 3/2/20), 300 So. 3d 21 also involved a contractor seeking final payment from a public entity by way of a summary mandamus action, which payment was withheld due to the assessment of liquidated damages as authorized by the parties’ contract.  In deciding the case, the Louisiana First Circuit Court of Appeal expressly stated that it “respectfully choose not to follow” the ruling of the Louisiana Fourth Circuit Court of Appeal in Woodrow Wilson.   Rather than holding that that the public entity was required to render payment to the contractor and that its liquidated damages claim must be resolved in a separate ordinary proceeding consistent with the ruling in Woodrow Wilson, the Court opined that “[i]f the plaintiff elects to use a mandamus proceeding, the trial court must determine in a summary proceeding what sum is owed under the parties' contract, including the amount of liquidated damages payable under the contract's provisions.” Dissenting to the decision, one of the appellate judges acknowledged that “[t]he majority's holding creates a split between the First and Fourth Circuit Courts of Appeal regarding the interpretation of La. R.S. 38:2191—a legal question—which needs to be resolved by the Louisiana Supreme Court.”  Nonetheless, in October 2020, the Louisiana Supreme Court declined to address the case.
 
In June 2020, the Louisiana First Circuit Court of Appeal again addressed a case involving the pursuit of final payment by a contractor by way of the summary mandamus action provided by La. R.S. 38:2191, which payment was withheld by a public entity due to the assessment of liquidated damages.  In Coast 2 Coast Construction, L.L.C. v. Parish of St. Tammany, 2019-1311 (La. App. 1 Cir. 6/16/20) 2020 WL 3249307, a different panel of judges than those which decided Law Industries concluded that the “identical issue” was recently addressed by the Court.  Accordingly, the Court adhered to the interpretation of La. R.S. 38:2191 as set forth in Law Industries.  In October 2020, the Louisiana Supreme Court also declined to address the Coast 2 Coast case.
 
Most recently, in July 2020, the Louisiana First Circuit Court of Appeal affirmed the dismissal of a contractor’s summary mandamus action brought under La. R.S. 38:2191 in Stevens Construction & Design, L.L.C. v. St. Tammany Fire Protection District No. 1, 2019-0955 (La. App. 1 Cir. 7/8/20), 2020 WL 3840899, concluding that the amounts sought were not due under the terms of the parties’ contract.  In November 2020, the Louisiana Supreme Court declined to address the case by denying writs. 
 
In summary, while the Louisiana Fourth Circuit Court of Appeal has held that a contactor can obtain payment through the summary proceeding and that the owner’s claim for offsets must be resolved separately by way of an ordinary proceeding, the Louisiana First Circuit Court of Appeal has held that the contractor’s payment claim and the owner’s claim for offsets must be resolved concurrently if a summary mandamus action is invoked. Thus, for now, Louisiana appellate decisions remain in conflict regarding the interpretation and application of La. R.S. 38:2191, which should be resolved either by the Louisiana Supreme Court or legislatively. 
 

 

Conflict In The Courts Over Prompt Payment On Public Projects

La. R.S. 38:2191 mandates that “[a]ll public entities shall promptly pay all obligations arising under public contracts when the obligations become due and payable under the contract.” The statute also authorizes a mandamus action, a form of summary proceeding without the delays associated with an ordinary lawsuit, when a public entity fails to make payment due to a contractor.  However, Louisiana appellate court decisions conflict with respect to the interpretation and application of the statute as it pertains to the resolution of a public entity’s claim for offsets against a contractor.
 
In April 2018, the Louisiana Fourth Circuit Court of Appeal (based in New Orleans) rendered a decision which applied La. R.S. 38:2191 in a manner significantly benefiting general contractors by requiring a public entity to make final payment to a contractor despite the existence of claims against the contractor.  In Woodrow Wilson Construction. LLC v. Orleans Parish School Board, 2017-0936 (La. App. 4 Cir. 4/18/18), 245 So. 3d 1, a public entity withheld from payment the entirety of the retainage on a project, claiming that liquidated damages for delays, although contested by the contractor, exceeded the retainage due under the contract.  In doing so, the public entity relied upon a provision in the contract which permitted the collection of liquidated damages in any manner available, including the withholding of final payment.  However, citing to language within La. R.S. 38:2191 that “[t]he provisions of this Section shall not be subject to waiver by contract”, the Louisiana Fourth Circuit Court of Appeal concluded that the contractual provision relied upon by the public entity could not serve to waive the contractor’s right to final payment.  As such, the decision held that a public entity can be compelled to make final payment to a contractor by way of a summary mandamus action despite the existence of claims against the contractor, although that public entity may thereafter pursue it claims against the contractor by way of an ordinary lawsuit.  In October 2018, the Louisiana Supreme Court denied writs, meaning that the Court declined to address the case.
 
In March 2020, however, the Louisiana First Circuit Court of Appeal (based in Baton Rouge) rendered a decision with a differing interpretation of La. R.S. 38:2191.  The case of Law Industries, LLC v. Board of Supervisors of Louisiana State University, 2018-1756 (La. App. 1 Cir. 3/2/20), 300 So. 3d 21 also involved a contractor seeking final payment from a public entity by way of a summary mandamus action, which payment was withheld due to the assessment of liquidated damages as authorized by the parties’ contract.  In deciding the case, the Louisiana First Circuit Court of Appeal expressly stated that it “respectfully choose not to follow” the ruling of the Louisiana Fourth Circuit Court of Appeal in Woodrow Wilson.   Rather than holding that that the public entity was required to render payment to the contractor and that its liquidated damages claim must be resolved in a separate ordinary proceeding consistent with the ruling in Woodrow Wilson, the Court opined that “[i]f the plaintiff elects to use a mandamus proceeding, the trial court must determine in a summary proceeding what sum is owed under the parties' contract, including the amount of liquidated damages payable under the contract's provisions.” Dissenting to the decision, one of the appellate judges acknowledged that “[t]he majority's holding creates a split between the First and Fourth Circuit Courts of Appeal regarding the interpretation of La. R.S. 38:2191—a legal question—which needs to be resolved by the Louisiana Supreme Court.”  Nonetheless, in October 2020, the Louisiana Supreme Court declined to address the case.
 
In June 2020, the Louisiana First Circuit Court of Appeal again addressed a case involving the pursuit of final payment by a contractor by way of the summary mandamus action provided by La. R.S. 38:2191, which payment was withheld by a public entity due to the assessment of liquidated damages.  In Coast 2 Coast Construction, L.L.C. v. Parish of St. Tammany, 2019-1311 (La. App. 1 Cir. 6/16/20) 2020 WL 3249307, a different panel of judges than those which decided Law Industries concluded that the “identical issue” was recently addressed by the Court.  Accordingly, the Court adhered to the interpretation of La. R.S. 38:2191 as set forth in Law Industries.  In October 2020, the Louisiana Supreme Court also declined to address the Coast 2 Coast case.
 
Most recently, in July 2020, the Louisiana First Circuit Court of Appeal affirmed the dismissal of a contractor’s summary mandamus action brought under La. R.S. 38:2191 in Stevens Construction & Design, L.L.C. v. St. Tammany Fire Protection District No. 1, 2019-0955 (La. App. 1 Cir. 7/8/20), 2020 WL 3840899, concluding that the amounts sought were not due under the terms of the parties’ contract.  In November 2020, the Louisiana Supreme Court declined to address the case by denying writs. 
 
In summary, while the Louisiana Fourth Circuit Court of Appeal has held that a contactor can obtain payment through the summary proceeding and that the owner’s claim for offsets must be resolved separately by way of an ordinary proceeding, the Louisiana First Circuit Court of Appeal has held that the contractor’s payment claim and the owner’s claim for offsets must be resolved concurrently if a summary mandamus action is invoked. Thus, for now, Louisiana appellate decisions remain in conflict regarding the interpretation and application of La. R.S. 38:2191, which should be resolved either by the Louisiana Supreme Court or legislatively. 
 

 
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