United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS January 31, 2006
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
)))))))))))))))))))))))))) Clerk
No. 04-30598 c/w 05-30074
))))))))))))))))))))))))))
In The Matter Of: WHITAKER CONSTRUCTION COMPANY, INC.
Debtor
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FIDELITY & DEPOSIT COMPANY OF MARYLAND,
Appellee,
v.
FITZGERALD CONTRACTORS, INC.,
Appellant.
__________________________________________________
In The Matter Of: WHITAKER CONSTRUCTION COMPANY, INC.
Debtor
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FIDELITY & DEPOSIT COMPANY OF MARYLAND,
Appellant,
v.
FITZGERALD CONTRACTORS, INC.,
Appellee.
Appeals from the United States District Court
for the Western District of Louisiana
Before GARWOOD, PRADO and OWEN, Circuit Judges.
EDWARD C. PRADO, Circuit Judge:
This appeal is the consolidation of two actions, both of
which involve FitzGerald Contractors, Inc. (“FitzGerald”), a
subcontractor, seeking compensation under Louisiana’s Private
Works Act, LA. REV. STAT. ANN. §§ 9:4801-55 (West 1991 & Supp.
2005) (“PWA”), from Fidelity & Deposit Company of Maryland, Inc.
(“F&D”), a surety, for work performed on construction projects in
Louisiana. F&D seeks to avoid liability by asserting the defense
of peremption under subsection 9:4813(E) of the PWA. Two
questions are presented on appeal: (1) whether FitzGerald’s
filing of an involuntary bankruptcy petition against the general
contractor constituted an “assert[ion of] claims or rights” under
subsection 9:4813(E); and (2) whether the peremption period
defined in section 9:4822 is triggered when notice of the
construction contract is filed but notice of termination is not.
Answering both questions in the negative, the district court
found for F&D in the Biomedical Project matter and FitzGerald in
the Lifeshare Project matter. For the reasons below, we AFFIRM.
I. Background
Whitaker Construction Company, Inc. (“Whitaker”), as
contractor, entered into a standard-form construction contract
with the Biomedical Research Foundation of Northern Louisiana, as
owner, to build a biotechnology manufacturing facility in
2
Shreveport, Louisiana (“Biomedical Project”). The contract was
entered into the Caddo Parish, Louisiana mortgage books on April
28, 2000. It required Whitaker to furnish surety bonds
guaranteeing payment to subcontractors. F&D, as surety, issued
bonds with a penal sum of $9,755,904.00 on April 25, 2000.
Whitaker, as contractor, also entered into a contract with
Blood Center Properties, Inc., as owner, to build a facility for
Lifeshare Blood Centers in Shreveport, Louisiana (“Lifeshare
Project”). This contract was entered into the Caddo Parish
mortgage books on July 27, 2000. It also required Whitaker to
furnish a surety bond. F&D, again as surety, issued a bond in
the amount of $3,541,953.00 on July 26, 2000. For both the
Biomedical and Lifeshare projects, the contracts were recorded
and the bonds issued pursuant to the PWA.
Effective August 24, 2000, Whitaker and FitzGerald executed
two subcontracts, one relating to the Biomedical Project and one
to the Lifeshare Project, in each of which FitzGerald agreed to
perform work on the facility.
For the Biomedical Project, a Certificate of Substantial
Completion was recorded on September 17, 2001 in the mortgage
records for Caddo Parrish. For the Lifeshare Project, no
official filing was made regarding completion, though other
events occurred that suggest the project was completed: on June
29, 2001, the Estopinal Group, architect for the project,
compiled a punchlist; minutes of the Lifeshare Project progress
3
meetings indicate the facility was ready to be occupied between
July 23 and 26; and, on July 25, the City of Shreveport issued a
certificate of occupancy.
II. Procedural History
On August 9, 2002, FitzGerald and two other creditors filed
an involuntary bankruptcy petition against Whitaker in bankruptcy
court in the Western District of Louisiana. The standard Form B5
filing had the following information: (1) Whitaker’s identity as
debtor; (2) the nature of Whitaker’s business as general
contractor; (3) the amount FitzGerald was owed, $586,258.17,
including liened amounts of $418,596.58 and un-liened amounts of
$167,661.59; (4) that the petition was being filed under Chapter
7 of the Bankruptcy Code; and (5) an assertion of petitioners’
eligibility to file under 11 U.S.C. § 303(b). It did not invoke
the PWA nor mention specifically amounts owed under it.1
On August 19, 2002, F&D filed a notice of appearance in the
Whitaker bankruptcy proceeding. On September 6, Whitaker filed
an answer to the involuntary petition and a Motion to Convert
Case to Chapter 11 Proceeding with a corresponding memorandum in
support. On September 12, the bankruptcy court granted the Order
of Relief for the involuntary petition and converted the matter
to a voluntary Chapter 11 case. On January 9, 2003, FitzGerald
1
The parties do not dispute that the amounts in the filing
included the $82,473.89 owed for work on the Biomedical Project
and the $81,689.00 owed for work on the Lifeshare Project.
4
filed its proof of claim for all of its claims, liened and un-
liended, in the Chapter 11 bankruptcy proceeding.
Regarding the Biomedical Project, FitzGerald filed an
adversary complaint in the bankruptcy court on April 16, 2003,
naming F&D as defendant. In its complaint, FitzGerald alleged
that F&D was liable as surety for payment of $82,473.89 plus
interest for amounts Whitaker failed to pay FitzGerald for work
it completed on the Biomedical Project. On May 16, F&D answered
the complaint, denying FitzGerald’s allegations and asserting the
defense of peremption. On June 19, F&D moved for summary
judgment; FitzGerald made a cross-motion for summary judgment or,
alternatively, partial summary judgment. After hearing argument,
the bankruptcy court granted FitzGerald’s motion for summary
judgment in part, and denied F&D’s motion. It determined that
the involuntary bankruptcy petition was a timely assertion of
rights withing the meaning of § 9:4813(E) and that the bankruptcy
filing did not stay FitzGerald’s rights under the PWA. The
bankruptcy court entered judgment on September 2.
F&D appealed to the district court on September 3, 2003.
The district court determined that the involuntary bankruptcy
petition was not an assertion of rights for purposes of
subsection 9:4813(E). It reversed the bankruptcy court’s
judgment with respect to this issue and affirmed its judgment
with respect to finding that the bankruptcy filing did not stay
FitzGerald’s rights. The district court issued its final
5
judgment on May 26, 2004. FitzGerald appealed on June 17, 2004,
challenging the district court’s determination regarding the
involuntary bankruptcy petition in the Biomedical matter.
Regarding the Lifeshare Project, FitzGerald filed an
adversary complaint in the bankruptcy court on July 16, 2003,
naming F&D as defendant. In it, FitzGerald alleged that F&D was
liable as surety for payment of $81,689.00 plus interest for
amounts Whitaker failed to pay FitzGerald for work it completed
on the Lifeshare Project. On August 6, F&D answered the
complaint, denying FitzGerald’s allegations and asserting the
defense of peremption. On October 2, FitzGerald moved for
summary judgment or, alternatively, partial summary judgment. On
January 9, 2004, F&D filed a cross-motion for summary judgment.
After hearing argument, the bankruptcy court granted FitzGerald’s
motion for summary judgment in part, and denied F&D’s motion. As
in the Biomedical matter, it determined that the involuntary
bankruptcy petition was a timely assertion of rights within the
meaning of the PWA. The bankruptcy court also held that, because
no certificate of substantial completion was filed for the
Lifeshare Project, subsection 9:4822(C) applied, establishing a
peremption period of one year and sixty days. The bankruptcy
court entered judgment on March 26.
F&D appealed to the district court, the same court as in the
Biomedical matter, on March 29, 2003. The district court
affirmed the bankruptcy court’s result, but on different grounds.
6
Because notice of the contract had been filed for the Lifeshare
Project but notice of termination had not, the district court
held that subsection 9:4822(A) applied and that the peremption
period had not yet begun to run. It found that FitzGerald’s July
2003 filing of the adversary proceeding was a timely assertion of
its rights under the PWA. The district court issued its final
judgment on December 10. F&D appealed the Lifeshare matter on
December 27, 2004.
Both the Biomedical and the Lifeshare matters are
consolidated on appeal.
III. Standard of Review
We review the district court’s decisions by the same
standards it applied to the decisions of the bankruptcy court.
Kennard v. MBank Waco, N.A. (Matter of Kennard), 970 F.2d 1455,
1457 (5th Cir. 1992); In re Sinclair, 417 F.3d 527, 529 (5th Cir.
2005). For questions of law, the standard is de novo. Id. at
1458.
IV. Discussion
A. The Private Works Act
Both questions before us require interpretation of the
Private Works Act, which regulates the rights and
responsibilities of persons involved in the construction and
improvement of immovables. See LA. REV. STAT. ANN. §§ 94801-55,
Exposé des Motifs (West 1991). The PWA protects contractors,
7
laborers, suppliers of material and others who contribute to
construction projects by granting them a privilege on the
immovable to secure the price of their work and obligating owners
who use a general contractor to require that contractor to record
his contract and secure a surety bond guaranteeing payment to
contributors. Id. An owner who fails to comply may be
personally liable, even to those with whom he is not in
contractual privity; and a general contractor who fails to comply
may lose his privilege in the immovable. Id.
The rights created by the PWA extinguish after a period of
time, the length of which is defined by statute and depends on a
variety of factors. The present case involves the liability of
general contractor Whitaker’s surety, F&D, to a subcontractor,
FitzGerald. Subsection 9:4813(E) states that “[t]he surety’s
liability . . . is extinguished as to all persons who fail to
institute an action asserting their claims or rights against the
owner, the contractor, or the surety within one year after the
expiration of the time specified in R.S. 9:4822 for claimants to
file their statement of claim or privilege.” § 9:4813(E).
Timely institution of an action preserves the claim.
The first question is whether FitzGerald’s filing of the
involuntary petition for Whitaker’s bankruptcy constitutes an
action asserting its claim against F&D under subsection
9:4813(E). If it does constitute such an action, FitzGerald
8
timely instituted its action and both of its claims are
preserved.2 If it does not, FitzGerald’s claim in the Biomedical
matter is perempted. To decide whether the FitzGerald’s
Lifeshare claim is perempted as well, we must determine if the
time period specified in section 9:4822 expired, or for that
matter began to run. Under subsection 9:4813(E), if the period
specified in section 9:4822 never ended, the one year period
never ran and FitzGerald’s July 2003 adversary proceeding in the
Lifeshare matter was timely and its claim preserved.
B. The Involuntary Bankruptcy Petition
First, this Court must decide whether FitzGerald’s
participation in the August 9, 2002 involuntary bankruptcy
petition against Whitaker preserved its claims against peremption
under subsection 9:4813(E). That provision extinguishes the
surety’s liability to those who fail to “institute an action
asserting their claims or rights” within a year after the period
determined by § 9:4822. § 9:4813(E). Although the appropriate
length of the peremption period for the Lifeshare project is
disputed, the parties agree that, if the period did in fact run,
the involuntary bankruptcy petition was timely in both matters.
2
Because no certificate of completion was filed for the
Lifeshare Project, there is controversy as to the appropriate
length, and for that matter the existence, of the peremption
period in the Lifeshare matter. This is discussed in Section C,
infra. However, because both parties agree that both claims
would be preserved if we answer the first question in the
affirmative, that is where we begin.
9
The question is whether the petition constituted an “action
asserting [its] rights and claims” under § 9:4813(E).3
The involuntary bankruptcy petition identified Whitaker as
debtor, its business and the amount it owed FitzGerald:
$586,258.17, including liened amounts of $418,596.58 and un-
liened amounts of $167,661.59. It did not mention the PWA or
specify claims made under the Act. In both the Biomedical and
Lifeshare matters, the bankruptcy court determined that this
constituted an assertion of FitzGerald’s claim or right. The
district court in the Biomedical matter disagreed, determining
that the involuntary bankruptcy petition did not provide notice
sufficient to preserve FitzGerald’s rights under the PWA.4 It
3
The parties do not dispute that a claim valid for PWA
purposes and made against general contractor Whitaker will also
count against surety F&D. Under subsection 9:4813(E), a person
must assert their claims or rights “against the owner, the
contractor, or the surety.” As the Louisiana Third Circuit Court
of Appeal held in Hershell Corp. v. Fireman’s Fund Insurance Co.,
743 So. 2d 698, 701(La. Ct. App. 1999), “suit against the
contractor, owner or surety preserves the claim. It is a matter
of preservation of the claim or privilege, not of interruption or
suspension of the time period for preserving the claim or
privilege” (emphasis in the original).
4
It also determined in dicta that, unlike prescription,
under Louisiana law peremption could not be renounced,
interrupted or suspended. Peremption and prescription are
separate concepts under Louisiana law. In Metropolitan Erection
Co., v. Landis Construction Co., 627 So. 2d 144 (La. 1993), the
Louisiana Supreme Court explained the distinction:
A peremptive period is a period of time fixed by
law for the existence of a right, and the right is
extinguished unless timely exercised within the period.
LA.CIV.CODE art. 3458. On the other hand, liberative
10
found that “general allegations regarding amounts due and
payable, as found in the involuntary petition relied upon by
FitzGerald, without any identifying language, do not provide
notice sufficient to preserve FitzGerald’s rights under the
LPWA.” Fid. & Deposit Co. v. FitzGerald Contractors, Inc., No.
03-1757 (W.D. La. May 26, 2004).5
1. The Petition did not Provide Sufficient Notice
Although prescription and peremption are distinct concepts,
at oral argument both parties agreed that the peremption period
at issue should be treated as a prescriptive period for purposes
of preserving the claim. Therefore, we treat it as such while
declining to adopt affirmatively their interpretation of
Louisiana law.
prescription is a mode of barring actions to enforce a
legal right as a result of inaction for a period of
time. LA.CIV.CODE art. 3447. The right is not
extinguished when the prescriptive period expires
without the filing of an action; enforcement of the
right is merely barred unless the obligee fails to
object or unless prescription was interrupted or
suspended. Peremption, by contrast, may not be
interrupted or suspended.
Id. at 147. The Metro Erection court continued on to describe
the time period in subsection § 9:4813(E) as peremptive: “a right
against a surety under LA.REV.STAT. 9:4813(E) involves a period of
peremption and becomes extinguished if not asserted within the
period of limitation, which cannot be suspended or interrupted.”
Id. at 148. For reasons explained below, in the present case we
treat peremption like prescription.
5
The Lifeshare court did not address the issue, choosing
instead to affirm the bankruptcy court on alternative grounds
discussed in Section C, infra.
11
Prescription is interrupted under Louisiana law “when the
obligee commences action against the obligor, in a court of
competent jurisdiction and venue.” LA. CIV. CODE ANN. art 3462;
see Hensgens v. Deere & Co., 869 F.2d 879, 881 (5th Cir. 1989).
Louisiana courts have interpreted the meaning of “commenc[ing]
action” for purposes of interrupting prescription. Determining
that a workmen’s compensation suit filed on behalf of a plaintiff
who died in an unrelated accident prior to filing interrupted
prescription, the Louisiana Supreme Court said that “the essence
of interruption of prescription by suit has been notice to the
defendant of the legal proceedings based on the claim involved.”
Nini v. Sanford Bros., Inc., 276 So. 2d 262, 264-65 (La. 1973).
As we have recognized, the Court in Nini adopted a broad view of
when prescription could be interrupted.
[T]he Court in Nini has, to all appearances, rejected
this narrower view. There National Surety was not
treated as a narrow exception carved out of the general
rule but as illustrative of the general rule itself.
It is notice not of the plaintiff’s intention to assert
his demand, but of any demand stemming from the same
tortious occurrence or conduct, which interrupts
prescription as to subsequent demands on that “cause of
action,” at least to the extent that the first demand
sufficiently implies the second.
Louviere v. Shell Oil Co., 509 F.2d 278, 287 n.9 (5th Cir.
1975)(reversing dismissal and concluding that “suit by the
employer’s subrogated insurer to recover benefits paid an injured
employee under the Longshoremen’s and Harbor Workers’
12
Compensation Act will interrupt prescription to permit a
subsequent suit by the employee for his damages arising out of
the same occurrence”).
The Nini standard allows flawed or misdirected filings to
interrupt prescription. In Batson v. Cherokee Beach and
Campgrounds, Inc., 530 So. 2d 1128, 1130 (La. 1988), where
plaintiff had brought a second tort suit after the first one’s
dismissal for failure to state a cause of action, the court
determined that “prescription will be interrupted whether or not
the original pleading sets forth a cause of action.” In Parker
v. Southern American Insurance Co., 590 So. 2d 55 (La. 1991), the
plaintiff had filed a compensation suit for her husband’s death
against his employer and later filed a tort action against that
employer’s insurer. In that case, the former suit interrupted
the prescription period for the latter because a “pleading which
alleges a factual occurrence and liability of a named defendant
interrupts prescription despite failure to state a cause of
action by alleging negligence.” Id. at 56. As the Louisiana
Supreme Court explained,
The fundamental purpose of prescription statutes is
only to afford a defendant economic and psychological
security if no claim is made timely, and to protect him
from stale claims and from the loss of non-preservation
of relevant proof. They are designed to protect him
against lack of notification of a formal claim within
the prescriptive period, not against pleading mistakes
that his opponent makes in filing the formal claim
within the period.
13
Giroir v. S. La. Med. Ctr., Etc., 475 So.2d 1040, 1045 (La.
1985)(reversing judgment of court of appeals and determining that
amendments changing capacity of suing husband and adding children
as wrongful death plaintiffs successfully related back).
This Court has applied Nini to allow certain legal actions
which are not lawsuits to interrupt prescription. In McGee v.
O’Connor, 153 F.3d 258 (5th Cir. 1998), we held that filing of
proofs of claim in a bankruptcy interrupts prescription of
contract claims under Louisiana law. Drawing an analogy between
proofs of claim in bankruptcy proceedings and those in succession
proceedings–which under the relevant Louisiana statute suspend
prescription–we said that the “key to Parker is that the
defendant there received notice.”6 Id. at 262 (emphasis in the
original). As a result, worker’s compensation claims will
interrupt the running of prescription for tort claims against
third parties. See Drury v. U.S. Army Corps of Eng’rs., 359 F.3d
366, 368 (5th Cir. 2004).
Nini is, of course, not without its limits. Certain federal
administrative actions will not interrupt prescription of state
6
Prescription is interrupted when the prescriptive period
restarts; it is suspended when the period stops to run for an
applicable time. Rogers v. Corrosion Prods., Inc., 42 F.3d 292,
293 (5th Cir. 1995). The distinction between the two is
irrelevant for present purposes, as the question is whether the
involuntary bankruptcy petition preserved the claim. The quantum
of legal notice does not determine whether a prescriptive period
is suspended or interrupted.
14
law claims. In Drury, we determined that a suit under the
Federal Tort Claims Act did not interrupt prescription for a
state tort suit. Drury, 359 F.3d at 368-69. Likewise, in
Fitzgerald v. United States Department of Veterans Affairs, we
noted that no authority supported the proposition that filing an
administrative Title VII complaint would interrupt prescription
of state law discrimination claims. 121 F.3d 203, 210 (5th Cir.
1997). The lynchpin, again, is notice to the defendant.
FitzGerald argues that the involuntary bankruptcy petition
gave sufficient notice of its claim to Whitaker to preserve its
claim, and that this Court should extend Nini to the present
case. It emphasizes that the $586,258.17 amount claimed included
the $82,473.89 amount that was the subject of the Biomedical
proceedings and the $81.689.00 amount that was the subject of the
Lifeshare proceedings.
We disagree. The involuntary bankruptcy petition did not
provide sufficient notice to prevent peremption and preserve the
claim. The amounts owed under the PWA are indistinguishable in
the involuntary bankruptcy petition from Whitaker’s traditional
contractual obligations to FitzGerald.
While both the contractual and PWA obligations stem from the
same set of events, in cases reliant on Nini, more information
was available than is here. In O’Connor, the proofs of claim
were for the debtor’s obligation. 153 F.3d at 262. We
15
specifically distinguished that case from one in which a proof of
claim for the proceeds of an auction house’s bankruptcy did not
interrupt prescription in a tortious conversion suit against its
former employee. Id. at 262 n.5 (citing Hilbun v. Goldberg, 823
F.2d 881 (5th Cir. 1987)). Here, the petition is against
Whitaker, not its surety. More importantly, the legal and
factual bases for the debt are not identified. In Parker and
Nini, the factual and legal bases of liability were spelled-out.
590 So.2d at 56; 276 So.2d at 266. The involuntary bankruptcy
petition includes no references to the PWA, nor to the Biomedical
Project, the Lifeshare Project or any other private work. It
indicates merely the creditor and the amount owed.
O’Connor does not identify precisely the quantum of
description that constitutes proper notice; but we believe the
line falls beyond the reach of this involuntary bankruptcy
petition. In Abramson v. Boedeker, we noted that an involuntary
bankruptcy petition “serves as even less notice than the
generalized complaint. . . .The ‘right’ of a creditor to hang on
to his self-help priority may not, therefore, be equated with
concepts of fair notice from pleadings.” 379 F.2d 741, 745 n.7
(5th Cir. 1967)(evaluating such a petition in the context of
determining whether it or an amended complaint established the
date of bankruptcy). More substantial notice is required to
preserve a PWA claim.
16
This conclusion is bolstered by the instruction of the
Louisiana Supreme Court in Metro Erection, that PWA rights were
“in derogation of common rights and must be strictly construed
against those to whom the right is accorded.” Metro Erection,
627 So. 2d at 148.
2. The Petition was not an Informal Proof of Claim
Alternatively, FitzGerald argues that the involuntary
bankruptcy petition qualifies as an informal proof of claim, and
that O’Connor requires the claim be preserved. F&D responds that
the doctrine of informal proof of claim does not apply, both
because the doctrine is an equitable one and because FitzGerald
timely filed. In In re Nikoloutsos, 199 F.3d 233 (5th Cir.
2000), we adopted a five-part test for qualifying something as an
informal proof of claim:
(1) [T]he claim must be in writing; (2) the writing must
contain a demand by the creditor on the debtor’s estate; (3)
the writing must evidence an intent to hold the debtor
liable for such debt; (4) the writing must be filed with the
bankruptcy court; and (5) based upon the facts of the case,
allowance of the claim must be equitable under the
circumstances.
Id. at 236. The parties do not dispute that the first four
conditions have been met in the present case.
In Nikoloutsos, the claimant, a woman seeking to enforce a
judgment against her husband for maliciously assaulting her,
filed her complaint late. Orally, the bankruptcy court seemed
willing to accept the complaint as a proof of claim; but later,
17
without explanation, it did not recognize it as such. This Court
noted that “the rules of equity require being flexible with
regard to form when justice requires.” Id. at 237 (punctuation
omitted). Our other applications of the informal proof of claim
doctrine have rectified similar injustices but not mere mistakes
in advocacy. See, e.g., Greyhound Lines, Inc. v. Rogers, 62 F.3d
730 (5th Cir. 1995) (regarding an informal proof of claim where
claimant failed to file because of concomitant court-ordered
alternative dispute resolution program); cf. DeCell &. Assocs.
v. FDIC, 36 F.3d 464 (5th Cir. 1994) (holding there was no
informal proof of claim where assignee of letter of credit sued
FDIC in its corporate capacity but not in its receivership
capacity and failed to make a deposit insurance claim).
FitzGerald was represented by counsel and had the opportunity to
raise its claim under the PWA. It chose to file only the
petition for involuntary bankruptcy within the peremption period.
Equity does not support application of the doctrine in this
instance. Even if this Court were to consider the present
involuntary bankruptcy petition an informal claim, for O’Connor
to apply, FitzGerald would still have had to provide sufficient
notice. It did not, so the district court’s judgment is
affirmed.
3. Resolution of the Biomedical Matter
A certificate of substantial completion was filed for the
18
Biomedical project on September 17, 2001. The section 9:4822
period elapsed thirty days later, and the section 9:4813 period
one year after that. Thus, FitzGerald had until October 17, 2002
to institute an action asserting its claim. The only action it
undertook before that deadline was joining the involuntary
bankruptcy petition against Whitaker on August 9, 2002. Because
that action did not constitute an “action asserting [its] rights
and claims” under § 9:4813(E), FitzGerald’s claim in the
Biomedical matter is perempted.
C. Triggering of the Peremptive Period
Because we hold that the involuntary bankruptcy petition
could not preserve FitzGerald’s claim, this Court must decide a
second question regarding the Lifeshare matter: whether, when
notice of a contract has been filed but notice of termination has
not, the one-year extinguishment period in subsection 9:4813(E)
is triggered; and, if so, when. Section 9:4822 provides, in
pertinent part:
A. If a notice of a contract is properly and timely
filed in the manner provided by R.S. 9:4811, the persons to
whom a claim or privilege is granted by R.S. 9:4802 shall
within thirty days after the filing of a notice of
termination of the work:
(1) File a statement of their claims or privilege.
(2) Deliver to the owner a copy of the statement of
claim or privilege.
. . .
C. Those persons granted a claim and privilege by R.S.
9:4802 for work arising out of a general contract, notice of
which is not filed, and other persons granted a privilege
19
under R.S. 9:4801 or a claim and privilege under R.S. 9:4802
shall file a statement of their respective claims and
privileged within sixty days after:
(1) The filing of a notice of termination of the work;
or
(2) The substantial completion or abandonment of the
work; if a notice of termination is not filed.
LA. REV. STAT. ANN. § 9:4822(A), (C).7 In the Lifeshare matter,
while the construction contract was properly and timely recorded
on July 25, 2000, no notice of termination was ever filed.
Still, other evidence suggests the project was completed: on June
29, 2001, the Estopinal Group, architect for the Lifeshare
Project, compiled a punchlist; minutes of the project’s progress
meetings indicate it was ready to be occupied between July 23 and
26; and, on July 25, the City of Shreveport issued a certificate
of occupancy.
The courts below, as well as the parties, differ on the
application of section 9:4822 to these facts. Ruling from the
bench, the bankruptcy court determined that the specified period
began to run sixty days after the issuance of the certificate of
occupancy.8 Whitaker Constr. Co. v. FitzGerald Contractors, Inc.
(In re Whitaker Constr. Co.), No. 02-12642 (Bankr. W.D. La. Mar.
7
LA. REV. STAT. ANN. § 9:4802(A)(1) grants subcontractors
like FitzGerald claims for the price of their work.
8
Because it determined that FitzGerald’s filing of the
involuntary bankruptcy petition was a timely assertion of rights,
the bankruptcy court determined that the claims were preserved.
20
26, 2004). The district court disagreed, holding that “because a
notice of contract was filed but a notice of termination or
certificate of substantial completion was not filed, the 30-day
tolling period never began to run.” Fid. & Deposit Co. of
Maryland v. FitzGerald Contractors, Inc., No. 03-1757 c/w No. 04-
0913 (W.D. La. Dec. 10, 2004). F&D argues that subsection
9:4822(C) applies when no notice of termination is filed, and
that the peremptive period began to run sixty days after issuance
of the certificate of occupancy.9 FitzGerald contends that
subsection 9:4822(A) governs all situations in which notice of
the contract has been filed, and that its thirty day period does
not begin to run until filing of a notice of termination. If the
peremption period never began to run, FitzGerald’s July 17, 2003
adversary complaint was timely. If it did run, the only timely
filing was the involuntary bankruptcy petition, which does not
suffice to preserve the claim for the reasons discussed in
Section B, supra.
1. The Text of the Statute
9
F&D identifies the issuance of the certificate of
occupancy as the point of substantial completion in accordance
with § 9:4822(H), which reads: “A work is substantially complete
when: (1) The last work is performed on, or materials are
delivered to the site of the immovable or to that portion or area
with respect to which a notice of termination is filed; or (2)
The owner accepts the improvement, possesses or occupies the
immovable, or that portion or area of the immovable with respect
to which a notice of partial termination is filed, although minor
or inconsequential matters remain to be finished or minor defects
or errors in the work are to be remedied.”
21
In interpreting a Louisiana statute, this Court must be
mindful of the state’s hybrid civil/common law tradition. In the
civil law tradition, the Civil Code is the “solemn expression of
legislative will” to which our Erie obligation applies.
Songbyrd, Inc. v. Bearsville Records, Inc., 104 F.3d 773, 776
(5th Cir. 1997) (quoting Shelp v. National Surety Corp., 333 F.2d
431, 439 (5th Cir. 1964)); see also Erie Railroad Co. v.
Tompkins, 304 U.S. 64 (1938). We look to the statute as the
primary source of law. In re Orso, 283 F.3d 686, 695 (5th Cir.
2002). If the statute is unambiguous, our inquiry ends, and we
need go no further. Id. at 693. If it is ambiguous, we consult
other sources of authority.
FitzGerald and the district court contend that the language
of section 9:4822 supports the reading that subsection (A)
applies to situations in which notice of a contract has been
filed and subsection (C) to situations in which it has not.
Subsection 9:4822(A) begins “[i]f a notice of a contract is
properly and timely filed in the manner provided by R.S. 9:4811,
. . . .” The use of the word “if” before a comma implies a
sufficient condition for whatever follows the comma. Here, the
condition is proper and timely filing of the notice of contract.
On this reading of section 9:4822, when this condition is
fulfilled, i.e., when notice of the contract is filed, subsection
(A) applies.
22
Taken together, the prefatory clauses of the two subsections
also support this reading. While (A) begins with a properly
filed notice of contract, subsection (C) begins “[t]hose persons
granted a claim and privilege by R.S. 9:4802 for work arising out
of a general contract, notice of which is not filed . . .” §
9:4822(C). The language here does not imply a sufficient
condition. Like the one immediately preceding it,10 subsection
(C) begins by defining the group of people to whom it applies.
Since subsection (C) applies to those granted a claim for work
arising out of a contract that is not filed, it applies when the
contract is not filed. If each subsection is understood to apply
exclusively to when a notice of contract has been filed and when
it has not, subsection (A) should govern the present situation
and the peremptive period in subsection 9:4813(E) is not
triggered.
The bankruptcy court and F&D read section 9:4822
differently, limiting subsection (A) to those situations where
both a notice of a contract and a notice of termination have been
filed. Under their reading, subsection (C) operates as a catch-
all category for all other situations. They offer two arguments
to support this reading. First, the wording of subsection (A)
does not provide explicitly for a situation in which notice of
the contract has been filed but notice of termination has not.
10
LA. REV. STAT. ANN. § 9:4822(B) begins “[a] general
contractor to whom a privilege is granted by R.S. 9:4801.”
23
It provides that when a contract has been filed, the person
granted rights must file and deliver a statement within thirty
days of filing of the notice of termination. As the argument
goes, because the subsection assumes the filing of the notice of
termination, it cannot apply when that notice is not filed.
Second, other language in subsection (C) can be read as
applying where notice of the contract has been filed but notice
of termination has not. After identifying § 9:4802 claimants who
work on contracts the notice of which is not filed, subsection
(C) continues “and other persons granted a privilege under R.S.
9:4801 or a claim and privilege under R.S. 9:4802 . . .” §
9:4822(C) (emphasis added).11 The use of the conjunctive “and”
11
Section 9:4802 reads, in pertinent part:
A. The following persons have a claim against the
owner and a claim against the contractor to secure
payment of the following obligations arising out of the
performance of work under the contract:
(1) Subcontractors, for the price of their work.
(2) Laborers or employees of the contractor or a
subcontractor, for the price of work performed at the
site of the immovable.
(3) Sellers, for the price of movables sold to the
contractor, or a subcontractor that become component
parts of the immovable, or are consumed at the site of
the immovable, or are consumed in machinery or
equipment used at the site of the immovable.
(4) Lessors, for the rent of movables used at the
site of the immovable and leased to the contractor or a
subcontractor by written contract.
(5) Prime consultant registered or certified
surveyors or engineers, or licensed architects, or
their professional subconsultants, employed by the
contractor or a subcontractor, for the price of
professional services rendered in connection with a
work that is undertaken by the contractor or
subcontractor. . . .
24
and the words “other persons” suggests a different group than
that identified in the initial clause of the subsection, in other
words a group of people granted a claim or privilege on a
contract notice of which is filed. The “notice of which is not
filed” clause lies immediately after the first clause, suggesting
it does not apply to the “other persons” mentioned later.
F&D argues that the words “other persons” in subsection (C)
include those in FitzGerald’s position. Certainly, “other
persons” refers to those granted privileges under section 9:4801
other than general contractors, since subsection § 9:4822(B)
provides a separate rule for general contractors. But “other
persons” also includes a group of people with a claim and
privilege under section 9:4802. F&D argues that this latter
group includes all section 9:4802 claimants other than those in
the situation to which, it claims, subsection 9:4822(A) applies
exclusively--where notice of the contract and notice of
termination have both been filed.
FitzGerald asserts that the “other persons” under section
9:4802 can be understood in contrast to the earlier mention of
section 9:4802 claimants in the subsection. The earlier mention
reads “persons granted a claim and privilege by R.S. 9:4802 for
work arising out of a general contract,” whereas the “other
persons” includes those with “a claim and privilege under R.S.
LA. REV. STAT. ANN. § 9:4802.
25
9:4802.” § 9:4822(C). The difference between the two is the
“work” in which the former group participates. Section 9:4802
lists categories of construction participants and the sources of
their claims. Subcontractors have a claim “for the price of
their work,” and laborers or employees “for the price of work
performed.” § 9:4802(A)(1), (2). Sellers’, lessors’ and
professionals’ claims are grounded not on work but on the price
or rent of the goods and services they provide. § 9:4802(A)(3)-
(5). FitzGerald argues that, since these last three categories
have claims that are not “for work arising out of a general
contract,” they are the “other persons” contemplated by
subsection (C).
We are not persuaded by FitzGerald’s artful textual
construction of “other persons.” Subsection 9:4802(A)’s preface
to all five categories reads as follows: “[t]he following persons
have a claim . . . to secure payment of the following obligations
arising out of the performance of work under the contract.” The
prefatory clause in subsection 9:4822(C) maps this language
closely, suggesting that all five categories are contemplated.
Ultimately, ambiguity remains as to the identity of section
9:4822(C)’s “other persons.”
Ambiguity exists in the statute, so we must look to
authority beyond the text.
2. Caselaw and Commentary
26
To resolve textual ambiguity, we consult the interpretations
given to the statute by Louisiana courts. Jesco Const. Corp. v.
NationsBank Corp., 278 F.3d 444, 447 (5th Cir. 2001). In looking
at caselaw, we “steer clear of the common law principle of stare
decisis and . . . apply instead the distinctly Civilian doctrine
of jurisprudence constante.”12 Songbyrd, 104 F.3d at 776. The
decisions of Louisiana courts do not so much establish a rule we
are bound to follow as interpretations invaluable to our
understanding. Id. at 777; Orso, 283 F.3d at 695. Because the
Louisiana Supreme Court has not addressed whether the peremption
period begins to run when notice of the contract has been filed
but notice of termination has not, we make an “Erie guess” as to
what its answer would be. Rogers, 42 F.3d at 295.13 In examining
12
Black's Law Dictionary defines jurisprudence constante as
"[t]he doctrine that a court should give great weight to a rule
of law that is accepted and applied in a long line of cases, and
should not overrule or modify its own decisions unless clear
error is show and injustice will arise from continuation of a
particular rule of law." Black's Law Dictionary 872 (8th ed.
2004). This principle is distinct from stare decisis in that it
"does not command strict adherence to a legal principle applied
on one occasion in the past." Id.
13
The bankruptcy stay alleged to stop the running of
prescription in Rogers came about through the filing of an
involuntary bankruptcy petition, and this Court examined whether
the stay suspended prescription under Louisiana law. Rogers, 42
F.3d at 293, 295 (affirming district court determination that
bankruptcy stay did not stop running of prescriptive period for
delictual actions). However, that case is inapplicable here. In
Rogers, we asked whether the equitable doctrine of contra non
valentem agere non currit praescripto, a judicial creation that
suspends prescription for a limited category of plaintiffs unable
27
the opinions of lower courts, we are mindful that “‘an
intermediate appellate state court . . . is datum for
ascertaining state law which is not to be disregarded by a
federal court unless it is convinced by other persuasive data
that the highest court of the state would decide otherwise.” Id.
(quoting Comm’r. v. Estate of Borsch, 387 U.S. 456, 465 (1967).
In the situation at hand, lower Louisiana courts reach the
conclusion that the peremption period does not trigger. In
Bernard Lumber Co., Inc. v. Lake Forest Constr. Co., the
Louisiana First Circuit Court of Appeal examined section 9:4822
and held:
The terms of the statute clearly establish that La.R.S.
9:4822(A) governs those situations in which a notice of
contract has been filed, and La.R.S. 9:4822(C) governs
those situations in which no notice of contract has
been filed. Therefore, where an owner has neglected to
file a notice of termination, the 30-day period
provided for in La.R.S. 9:4822(A) never begins to run.
572 So. 2d 178, 181 (La. Ct. App. 1990). Bernard Lumber involved
a subcontractor who sued the general contractor and the owner to
recover for services and material supplied for the renovation of
a restaurant. The court considered the legislative intent behind
the Private Works Act, protecting materialmen, laborers and
subcontractors, and determined that the legislature intended to
to bring suit, applied to the plaintiff. Id. at 294. The issue
there was whether a stay resulting from an involuntary bankruptcy
petition excused plaintiff’s failure to file. Here the question
is whether the petition itself is a filing at all.
28
place the onus for filing on the owner. “Where the owner fails or
neglects to take such affirmative action,” the court wrote, “he
should be made to bear the consequences of his failure to file a
notice of termination, not the claimant.” Id. Likewise,
although it reviewed an earlier version of section 9:4822, the
Rowley Co. v. Southbend Contractors, Inc. court determined that
the thirty-day period would not run without proper filing on the
part of the owner. 517 So. 2d 1260 (La. Ct. App. 1987). In
Rowley, a subcontractor sued the general contractor and its
surety to recover labor costs. The Louisiana Fourth Circuit
Court of Appeal determined that the notice of termination’s pithy
description–of the address of the project–was insufficient. Id.
at 1261. While the court was primarily concerned with a
different issue, its conclusion is consistent with the court in
Bernard Lumber: the thirty-day period will not begin to run until
the owner acts.
F&D argues that both Bernard Lumber and Rowley are
inapplicable. It points to the fact that Bernard Lumber did not
involve a suit against a surety; but this distinction is
irrelevant as applied to section 9:4813. That provision, which
creates the surety’s liability, explicitly refers to section
9:4822, which the First Circuit interpreted in Bernard Lumber.
Moreover, subsection (E) says that claims must be asserted
against “the owner, the contractor, or the surety” §
29
9:4813(E)(emphasis added). Whether the defendant is the owner or
the surety is irrelevant for purposes of the claim itself, and a
case determining the time limit for a suit against an owner
applies as well to a suit against a surety. F&D attempts to
distinguish Rowley because that case dealt with the requirements
for a valid notice of termination. But, again, the primary
holding of Rowley is not relevant; the result reached by the
court is: that the time period would not begin to run without a
proper notice of termination. Rowley supports the proposition
that the time period will not commence without affirmative action
on the part of the owner.
The reading given section 9:4822 by Louisiana courts is
bolstered by language in the official comments to section 9:4822.
This language suggests that subsection (A), not subsection (C),
applies to the present situation. “If a notice of contract is
filed,” the commentary reads, “a notice of termination is always
required to commence the 30 day time for filing. Where no notice
of contract is filed the owner may still file a notice of
termination.” § 9:4822 cmt. (a). If a notice of contract is
filed but the notice of termination is not, the comments suggest
that the thirty day period simply does not commence.
Finally, F&D argues that construing subsection 9:822(A) to
mean the time period never triggered would create an “open-ended
lien period” inconsistent with the general structure and policy
30
underlying the PWA. First, it contends the Act is a “unified
scheme,” and that all situations should fit snugly into the
thirty-sixty day structure articulated in section 9:4822.
According to this account, the broad language in subsection
9:4822(C) includes all situations other than that one explicitly
outlined in subsection 9:4822(A), when notice of the contract and
notice of termination have both been filed. This interpretation
does not follow directly from the statutory language, and it is
inconsistent with all of the aforementioned sources. F&D also
asserts that the PWA seeks to balance new rights created in
laborers, contractors and the like with the liability concerns of
sureties. It points to strong peremption language in §
9:4813(E). This may well be true; but it is not our prerogative
to dictate to the Louisiana legislature where to strike the
balance between the rights of sureties and construction
creditors.
A plain reading of subsection 9:4822(A), extant caselaw and
official commentary all bolster our understanding of section
9:4822, that when notice of a contract has been filed but notice
of termination is not, the time period for making claims is not
triggered. Accordingly, we affirm the district court’s
determination that the peremptive period was not triggered.
Because the period was not triggered, FitzGerald’s adversary
action in July 2003 was timely under the PWA; and its claim in
the Lifeshare matter is not perempted.
31
V. Conclusion
For the reasons above, we affirm the judgment of the
district court.
AFFIRMED.
32