Ilgen Construction, LLC v. Raw Materials, LLC and the Honorable Jason B. Harris, in his official capacity as the Clerk of Court for Livingston Parish ( 2021 )

NOT DESIGNATED FOR PUBLICATION
STATE OF LOUISIANA
COURT OF APPEAL
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FIRST CIRCUIT
2020 CA 0862
ILGEN CONSTRUCTION, LLC
VERSUS
RAW MATERIALS, LLC AND THE HONORABLE JASON B.
HARRIS, IN HIS OFFICIAL CAPACITY AS THE CLERK OF COURT
FOR LIVINGSTON PARISH
DATE OF JUDGMENT.- `` APR 16 2021
ON APPEAL FROM THE TWENTY-FIRST JUDICIAL DISTRICT COURT
NUMBER 165190, DIVISION F, PARISH OF LIVINGSTON
STATE OF LOUISIANA
HONORABLE ELIZABETH P. WOLFE, JUDGE
David J. Shelby, II Counsel for Plaintiff A
- ppellee
Leah C. Cook Ilgen Construction, LLC
T. Coulter McMahen
Kari A. Bergeron
Baton Rouge, Louisiana
Danial C. Vidrine Counsel for Defendant -Appellant
Baton Rouge, Louisiana Raw Materials, LLC
Eric L. Pittman Counsel for Defendant -Appellee
Denham Springs, Louisiana The Honorable Jason B. Harris, in
his official capacity as the Clerk of
Court for Livingston Parish
BEFORE: WHIPPLE, C. J., WELCH, AND CHUTZ, JJ.
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CRUTZ, J.
In this suit for a writ of mandamus and for damages, one of the defendants
appeals a trial court judgment ordering the cancellation of two liens and a notice of
lis pendens filed under the Private Works Act ( PWA) and awarding damages and
attorney fees to the plaintiff. For the following reasons, we affirm.
FACTS AND PROCEDURAL BACKGROUND
Ilgen Construction, LLC ( Ilgen) is the owner of two tracts of immovable
property located in Livingston Parish. Ilgen and Raw Materials, LLC (RML) entered
into an oral agreement' for RML to perforin clearing and dirt work preparatory to
the development of residential lots on the two properties. According to invoices
submitted by RML, the price for work on the property the parties referred to as the
Milton Road project was $ 72, 000.00, and the price for work on the property the
parties referred to as the Burgess Road project was $ 18, 500. 00. Ilgen maintained
the agreed price for the work on the Burgess Road project was $ 5, 500. 00.
RML is not a licensed contractor in Louisiana. Nevertheless, RML began
work on the two projects and received payments totaling $ 40, 000. 00. Ilgen was
dissatisfied with RML' s work, however, and on March 12, 2018, terminated RML' s
services. RML claimed there were only a few days remaining before it would have
completed the contracted work, and it demanded payment for the balance due under
the contract. After Ilgen made no further payments, RML filed a materialman' s lien
in the Livingston Parish mortgage records on April 10, 2018, in the amount of
50, 500. 00 on the two tracts of property owned by Ilgen. Pursuant to invoices
At the hearing on Ilgen' s writ of mandamus, counsel for RML alleged there were three different
contracts involved in this matter. However, Ilgen' s owner, Chris Ilgenfritz, indicated there was " a
verbal contract" setting different prices for the two separate projects. In its oral reasons for
judgment, the trial court referenced " a verbal agreement." We cannot say that this determination
was manifestly erroneous. See Gaines v. Lemoine, 19- 05 51 ( La. App. 1st Cir. 2/ 21/ 20), 297 So.3d
775, 778.
2 The terms " lien" and " privilege" are used interchangeably in this opinion, although technically,
lien" is a common law term and " privilege" is a civilian term. See Michael H. Rubin, Ruminations
on the Louisiana Private Works Act, 58 La. L. Rev. 569, 574 n.21 ( 1998).
2
attached to the lien, RML claimed Ilgen owed $ 18, 500. 00 for work RML performed
on the Burgess Road project and $32, 000. 00 for work RML performed on the Milton
Road project. RML did not link the amounts claimed to the specific tract ofproperty
on which the work was performed.
On May 25, 2018, Ilgen' s counsel sent a demand letter to RML requesting
RML have the lien canceled within ten days of receipt. RML declined to request
cancelation of the lien. On August 2, 2018, RML fled a damages suit against Ilgen
seeking a money judgment for the work it performed. Additionally, on September
10, 2018, RML filed a second materialman' s lien on the same two tracts of property
owned by Ilgen, as well as a notice of lis pendens. The second lien was duplicative
of the first lien, except that it correctly spelled Ilgen' s name, which had been
misspelled as " Ilgin" in the first lien. On October 15, 2018, Ilgen' s counsel sent
RML a demand letter requesting that RML have the second lien canceled within ten
days of receipt. RML did not comply with the request to have the lien cancelled.
Subsequently, Ilgen filed a petition for a writ of mandamus naming the
Honorable Jason B. Harris, the Clerk of Court for Livingston Parish ( Clerk of Court),
and RML as defendants and seeking an order directing the Clerk of Court to cancel
the first and second liens, as well as the notice of lis pendens. Ilgen also requested
an award for damages resulting from the filing ofthe improper liens and for attorney
fees.
Following a hearing, the trial court ruled in favor of Ilgen. On February 7,
2020, the trial court signed a judgment ordering that the first and second lien and the
notice of lis pendens filed by RML be extinguished and directing the Clerk of Court
to cancel them from the mortgage records. Additionally, Ilgen was awarded
4,294. 13 in damages, as well as costs and attorney fees, in an amount to be
3
determined at a separate hearing and set forth in a separate judgment.3 RML took
an appeal from the February 7, 2020 judgment.'
Subsequently, a hearing was held to set attorney fees and costs. The trial court
signed a judgment on April 20, 2020, awarding Ilgen $ 29, 506. 03 in attorney fees
and costs, plus an additional $ 1, 500. 00 for attorney fees and costs associated with
Ilgen' s motion to tax attorney fees and costs. RML did not appeal the April 20, 2020
judgment.
DISCUSSION
The trial court' s written reasons for judgment indicate it concluded RML' s
failure to file a notice of contract in the mortgage records was " fatal" to RML' s claim
for a privilege under the PWA. The trial court further concluded the liens were
extinguished under La. R.S. 9: 4823( A)(2) 5 by RML' s failure to file a suit to enforce
the liens within one year of their filing.
In order for a general contractor to enjoy a privilege under the PWA, La. R.S.
9: 4811( D) required the filing (in the mortgage records of the parish where the work
was to be performed) of written notice of the contract between the general contractor
and the owner if the price of the contract exceeded $ 25, 000. 00. See also La. R.S.
9: 4811( A) & La. R.S. 9: 4831( A). RML contends this provision was not applicable
in this case because it only applies to general contractors, and RML was a
subcontractor. In arguing it was not a general contractor on the Milton Road and
Burgess Road projects, RML emphasizes that it only contracted with Ilgen to
perform " dirt work," and not to perform all or substantially all of the work necessary
for the construction of the houses to be built on the lots.
3 The judgment also ordered the Clerk of Court to return the $ 63, 125. 00 in security that Ilgen
previously provided to bond off the second lien and lis pendens pursuant to La. R.S. 9:4835.
4 The Clerk of Court did not join in the appeal.
I All statutory references in this opinion are made to those statutes as they existed at the time of
the relevant events herein, which was prior to the revision of the PWA by 2019 La. Acts, Act No.
325, of. 1/ 1/ 20.
4
Regardless, our review of this matter indicates it is unnecessary to determine
whether RMI, was a general contractor or subcontractor or whether the liens were
extinguished by a failure to file a timely suit to enforce the liens. Even if the trial
court erred in making those determinations, the liens were nevertheless fatally
defective due to the fact that RML was not a licensed contractor in Louisiana.
In Louisiana, the licensing provisions for contractors were enacted to protect
the interests of public order. Leija v. Gathright, 51, 049 (La. App. 2d Cir. 12/ 21/ 16),
211 So. 3d 592, 596, writ denied, 17- 0144 ( La. 3/ 13/ 17), 216 So. 3d 806; see also La.
R.S. 37: 2150. Louisiana Civil Code article 2030 provides that a contract in violation
of a rule of public order is an absolute nullity. Moreover, an absolutely null contract
may not be confirmed. La. C.C. art. 2030; see also La. C. C. art. 7. Thus, individuals
may not by private agreement set aside the licensing provisions enacted by the
legislature. Maroulis v. Entergy Louisiana, LLC, 20- 226 ( La. App. 5th Cir.
2/ 10/ 21), So. 3d , 2021 WL 484332, at * 2.
Under La. R.S. 37: 2160( A)( 1), it is unlawful in Louisiana for a person to
engage in the business of contracting or to act as a contractor' without an active
contractor' s license. Quaternary Resource Investigations, LLC v. Phillips, 18-
1543 ( La. App. 1st Cir. 11/ 19/ 20), So. 3d , 2020 WL 6797271, at * 11, writ
denied, 20- 01450 ( La. 3/ 2/ 21), So. 3d , 2021 WL 791249. Further, it is
well established that a construction contract made with an unlicensed contractor is
an absolute nullity. Quaternary Resource Investigations, LLC, So. 3d at ,
2020 WL 6797271, at * 9; Maroulis, So. 3d at , 2021 WL 484332, at * 2;
see also Leija, 211 So. 3d at 597.
In this case, it is undisputed that RML did not possess a Louisiana contractor
license. Accordingly, the contract between RML and Ilgen was an absolute nullity.
6 For purposes of the contractor licensing provisions, the term " contractor" includes both general
contractors and subcontractors. See La. R.S. 37: 2150. 1( 4)( b).
5
See Quaternary Resource Investigations, LLC, So. 3d at , 2020 WL
6797271, at * 9; Maroulis, So. 3d at , 2021 WL 484332, at * 2. Under La.
C. C. art. 2033, an absolutely null contract is deemed never to have existed.
Given the special nature of the rights provided by the PWA, its provisions
must be strictly construed. Landco Construction, LLC v Precision Construction
Maintenance, LLC, 19- 0403 ( La. App. 1st Cir. 11/ 15/ 19), 290 So. 3d 1185, 1191,
writ denied, 19- 01977 ( La. 2/ 10/ 20), 292 So. 3d 67. The PWA grants contractors
and subcontractors a lien on immovable property for the price of the work performed
on the immovable. La. R.S. 9: 4801( 1) and La. R.S. 9: 4802( A)( 1) & ( B). Since the
PWA defines a contractor as " one who contracts with an owner to perform all or part
of a work,"
the lien granted to contractors by La. R.S. 9: 4801( 1) plainly
presupposes a direct contractual relationship between the [ lien] holder and the
owner." La. R.S. 9: 4801, Comment ( a) ( 1981); La. R.S. 9: 4807( A). Additionally,
a subcontractor is defined as one who by contract directly with or emanating from a
contractor through a series of contracts is bound to perform all or a part of a work
contracted for by the contractor. La. R.S. 9: 4807( C). Louisiana Revised Statutes
9: 4802( A)( 1) & ( B) grants a lien to subcontractors to secure " obligations arising out
of the performance of work under the contract." These provisions demonstrate that
the liens granted to contractors and subcontractors under the PWA are to secure debts
or principal obligations arising from contracts. Leija, 211 So. 3d at 597. Therefore,
in the absence of a valid and enforceable contract, a contractor or subcontractor
cannot assert a valid lien under the PWA.1 Leija, 211 So. 3d at 597; see also La. R.S.
9: 4801( 1) & Comment (a) ( 1981); La. R.S. 9: 4802( A)( 1) & ( B); and La. R.S. 9: 4807.
7 Even though an unlicensed contractor is not entitled to recovery under contract, under certain
circumstances, it may be entitled under the theory of unjust enrichment to recover the actual cost
of its materials, labor, and services, without recovery of any profit or overhead expenses. See
Quaternary Resource Investigations, LLC, So. 3d at , 2020 WL 6797271, at * 11- 16.
6
Moreover, the two liens filed by RML were also defective because they
merely claimed a privilege on two separate tracts of immovable property in the lump
sum of $50, 500. 00.
RML failed to specify what amount of the total claimed was
due for work performed on the first tract of property and what amount of the total
claimed was due for work performed on the second tract of property.' Under the
PWA, a claimant is only entitled to a lien for the work actually performed on the
immovable property. A claimant cannot properly place a lien on immovable
property for work that was not perfonned on that particular piece of property.
Specifically, La. R.S. 9: 4801 grants contractors a lien on " an immovable" for the
obligation " arising out of a work on the immovable." ( Emphasis added.) Similarly,
La. R.S. 9: 4802( B) provides that a subcontractor' s claims against an owner " shall
be secured by a privilege on the immovable on which the work is performed."
Emphasis added.) RML' s liens were improper in that they imposed a lien in the
full amount claimed for the work performed on both tracts of immovable property,
without limiting the lien on each tract of property to the amount due for the work
performed on that particular property.'
CONCLUSION
For the reasons stated, the February 7, 2020 judgment of the trial court is
affirmed. All costs of this appeal are assessed to defendant, Raw Materials, LLC.
AFFIRMED.
8 Since La. R.S. 9:4801 provides that a privilege is granted on " an immovable" and La. R.S.
9: 4802( B) provides for a privilege on " the immovable," we question whether it is proper to place
a single lien on two separate tracts of immovable property. However, having resolved this matter
on a different basis, we need not reach this issue.
In brief, RML argues the trial court erred in awarding excessive attorney fees. However, the
judgment on appeal merely held that Ilgen was entitled to attorney fees in an amount to be
determined later in a separate judgment. RML did not appeal the April 20, 2020 judgment that set
the actual amount of attorney fees owed. Accordingly, the issue of whether the trial court awarded
excessive attorney fees is not before us in this appeal.
7