Daniel Lund III | Phelps Dunbar
The Louisiana legislature enacted several years ago a mandamus statute geared at promoting payment to contractors engaged in public works projects in the state.
Louisiana Revised Statute 38:2191 provides for mandamus – a summary procedure – for an aggrieved contractor to pursue payment plus attorney’s fees and interest when payments are delayed beyond the 45 days specified in the statute.
As regards progress payments on public works construction projects, the statute specifically provides that the statutory penalties are allowed only if the public entity “lacked reasonable cause for late payment” – a condition which would appear to be a pretty low hurdle for a reticent payor public entity.
In a case involving a street paving project, an appeal was taken to the Louisiana Fourth Circuit Court of Appeal of a trial court ruling wherein claims under the statute on seven separate invoices (corresponding to a claim of $201,000 on interest alone, and an indeterminate amount of attorney’s fees) netted the contractor statutory penalties on only one invoice.
The Court of Appeal – noting that the factual findings of the trial court could only be reviewed under an “abuse of discretion” / “manifest error” standard – nonetheless reversed the trial court on all six remaining invoices. For its part, the Court of Appeal engaged in an independent, veritably microscopic review of the circumstances surrounding payment on all of the invoices, scouring the documentary evidence and testimony concerning each alleged delay in payment.
Ruling in favor of the contractor, the Court of Appeal held: “The trial court’s finding to the contrary was unreasonable in light of the record.”
Wallace C. Drennan, Inc. v. Cantrell, 2023-0193 (La. App. 4 Cir. 10/25/23); 2023 La. App. LEXIS 1753
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