Court: Louisiana Court of Appeal; April 13, 2018; Louisiana; State Appellate Court
A legal dispute arose regarding Nottingham Construction Company's (Nottingham) contractual indemnity claim against its subcontractor, Professional Construction Services, Inc. (PCS), following damage to sheet piles used in a construction project. Nottingham entered a contract with the City of Hammond in May 2005 and subsequently subcontracted with PCS for specific work on the project. After the completion of the cofferdam, Nottingham denied any damage to the sheet piles, despite J.D. Fields Company, which rented the sheet piles, claiming otherwise and submitting an invoice for damages.
A series of legal actions followed, including Fields suing Nottingham and PCS in 2007, with Nottingham filing a third-party demand against PCS. This demand was dismissed without prejudice due to a prematurity objection raised by PCS. Fields' claim against PCS was also dismissed on summary judgment. In 2012, Fields filed a similar lawsuit in a different court, leading Nottingham to renew its third-party demand against PCS in 2016. PCS responded with a peremptory exception, arguing that Nottingham's claims were perempted under Louisiana law, which establishes a five-year period for such claims following the acceptance of work. The trial court granted PCS's exception and dismissed Nottingham's claims, prompting Nottingham's appeal, asserting that its indemnity claim is not perempted. The legal basis for Nottingham's claim rests on the principle of indemnity, which, while valid, is subject to prescriptive or peremptive limitations.
Nottingham is entitled to indemnification from PCS under their subcontract; however, they dispute the governing statute for the indemnification claim's time limits. Nottingham argues for a ten-year prescriptive period under La. Civ. Code art. 3499, claiming interruption of this period occurred when it first asserted the indemnity in a 19th JDC lawsuit. PCS argues that the five-year peremptive period under La. R.S. 9:2772 applies, which governs all contract-related actions in immovable property engagements, including third-party demands. The trial court agreed with PCS, ruling that Nottingham's claim had perempted under La. R.S. 9:2772.
The distinction between prescription and peremption is noted, with peremption terminating the cause of action itself and being unaffected by any external circumstances. Indemnity is recognized as a separate cause of action that relies on the outcome of the main demand. Since Nottingham's liability is contingent upon a judgment against it, the court emphasized that Nottingham's third-party demand is subject to the five-year peremptive period. Nottingham's claim, filed on August 10, 2016, is time-barred as it exceeds five years from the project's acceptance date of December 20, 2006.
The court affirmed the trial court's judgment dismissing Nottingham's claim against PCS with prejudice, stating that peremption is absolute and cannot be interrupted or suspended. Costs of the appeal are assigned to Nottingham Construction Company, L.L.C. Judge Holdridge concurred, highlighting that the third-party demand should be dismissed since the original demand against Nottingham is also perempted under La. R.S. 9:2772.
If Professional Construction Services, Inc. caused damage to the sheet piles during the cofferdam construction, then the outcomes of the cases (J.D. Fields Company, Inc. v. Nottingham Construction Company, LLC and Nottingham Construction Company, LLC v. Professional Construction Services, Inc.) hinge on whether both actions are perempted or not governed by Louisiana Revised Statute 9:2772. This statute stipulates that no legal action can be initiated against individuals involved in the design, planning, supervision, or construction of immovable or movable property more than five years after the project's acceptance is recorded in the mortgage office. The peremptive period applies to all claims, including those for property damage resulting from deficiencies in the construction, and extends to all demands, whether initiated by the owner or third parties, encompassing direct actions or claims for contribution or indemnity.
