Court: Louisiana Court of Appeal; December 16, 2014; Louisiana; State Appellate Court
The Louisiana Supreme Court remanded this case for consideration of its ruling in Ogea v. Merritt. The trial court had previously found that Jennifer Diane Nunez and Pinnacle Homes, LLC entered a Cost Plus Fixed Fee Contract for her home construction on January 8, 2008, with a fixed fee of $33,748 and estimated construction costs of $277,772. Key provisions of the contract mandated work to be completed in a workmanlike manner and compliance with applicable building codes, with the contractor responsible for obtaining necessary permits. An elevation certificate indicated that the home’s base flood elevation should be 10 feet due to post-Hurricane Rita regulations, but the post-construction elevation showed the home at 8.66 feet, below the required levels.
Nunez filed suit for breach of warranties and contract against Pinnacle and SUA Insurance Co., later amending to include Lenard (Pinnacle's owner) and American Safety Casualty Insurance Co. (ASCI). SUA was dismissed voluntarily, and ASCI was dismissed via summary judgment. The trial court ruled in favor of Nunez, awarding damages, which Pinnacle and Lenard appealed. The appellate court affirmed the trial court's judgment. On remand, the focus is on whether Nunez established Lenard's personal liability for the elevation issues, as per the Supreme Court's guidance in Ogea, without revisiting the damages previously determined.
Allen Lenard has been found personally liable for professional negligence related to improper calculations and supervision concerning the elevation of a property. The trial court highlighted that Lenard failed to perform or ensure an elevation shot was completed after dirt work prior to the construction of the plaintiffs’ home. Initially, Lenard claimed he consulted Keith Daigle for the calculations but later contradicted himself, stating he left this task to the dirt contractor. His testimony indicated that it was typically the contractor's responsibility to obtain the elevation shot, which was contested by previous statements asserting that his company had the necessary equipment to perform this task. Ultimately, the trial court concluded that as the licensed contractor, Lenard bore the responsibility to ensure these tasks were executed correctly.
The court cited LSA R.S. 12:1320(D), which outlines the conditions under which members, managers, employees, or agents of a limited liability company can be held personally liable. This statute delineates that such individuals are generally not liable for the company’s debts unless there is fraud, a breach of professional duty, or other wrongful acts. The court determined that Lenard's negligence constituted a breach of professional duty, thereby allowing for personal liability despite the protections typically afforded to members of a limited liability company. The trial court referenced the Ogea case, which emphasized the legislative intent regarding breaches of professional duty without providing a specific definition for the term.
The term 'professional' is central to the quoted exception and must be understood within its legal context, as defined by La. R.S. 1:3. Historically, 'professional' held a specific legal meaning at the time the LLC statutes were enacted. Since 1964, Louisiana has allowed professional law corporations, and expanded this to include professional medical corporations in 1968, with statutes for various professions established thereafter, including medical, accounting, and engineering fields. In the case referenced, the Louisiana Supreme Court in Ogea did not determine whether a licensed contractor qualifies as a professional due to a lack of evidence regarding the specific contractor's license. However, evidence supports that Lenard was an individually licensed contractor, prompting examination of whether this status makes him professionally liable for damages. Although contractors are not explicitly listed among 'legislatively recognized professions,' definitions in legal sources, including Black’s Law Dictionary and La.R.S. 39:1484, are used to assess the professional status of contractors. The latter defines 'professional service' as work performed by independent contractors with specialized knowledge applied to practical affairs, citing a range of recognized professions. The distinction between professions and occupations is further illustrated in La.R.S. 3:3804, where specific titles are classified as professionals while others are designated as occupations.
Professional status can extend beyond the traditional definitions, particularly in the context of construction contracts. Lenard, who holds state licensure and demonstrated significant knowledge and expertise, was evaluated regarding his duties in a contract with Nunez. The trial court found that Lenard breached a professional duty by failing to elevate a house to the height required by a permit, which Lenard acknowledged was a defect due to his negligence. Despite being aware of FEMA's building requirements and possessing the necessary permit, Lenard mistakenly believed the elevation needed was nine feet instead of the ten feet mandated, and ultimately did not achieve even the height he thought was necessary. The court noted that his employees had the capability to measure the elevation, yet no checks were performed after site work was completed. Citing precedent cases, the court concluded that Lenard's negligence constituted a breach of professional duty, making him personally liable for the damages incurred. The trial court's judgment was affirmed, with costs assigned to the defendants, Pinnacle Homes, L.L.C. and Allen Lenard. A dissenting opinion was also noted.
