Appeal Court Sheds “Nu-Lite” on the Public Works Act 45-Day Notice Issues and the Time to File a Sworn Statement of Claim

In April 2018, a Louisiana appeal court issued a holding to clarify, and substantially limit, a prior appeal court opinion dealing with the Louisiana Public Works Act sworn statement of claim notice and filing requirements within La. Rev. Stat. 38:2242(B).  In Nu-Lite Electrical Wholesalers, LLC v. Axis Construction Group, LLC, 2018 WL 1703964, 2017-1204 (La. App. 1 Cir. 4/9/18), the First Circuit Court of Appeal held that a supplier’s sworn statement of claim filed BEFORE the filing of the Project’s notice of acceptance was not detrimental to the supplier’s Public Works Act claim against the general contractor and its surety.

The First Circuit’s decision addressed and distinguished the Fourth Circuit Court of Appeal’s holding in Gootee Construction, Inc. v. Atkins, 2015-0376 (La. App. 4 Cir. 12/21/16); 207 So. 3d 485.  In Gootee, the Fourth Circuit held that a Public Works Act sworn statement of claim filed BEFORE the filing of a Project’s notice of acceptance was invalid.  The Gootee Court dismissed the Public Works Act claim, cancelled it from the mortgage records, and held that a claimant cannot file a sworn statement until AFTER notice of acceptance (but within 45 days).  The Nu-Lite Court, however, held that the Gootee is really about prematurity.  According to the First Circuit in Nu-Lite, if a Public Works Act claimant files its sworn statement of claim before notice of acceptance, but gives actual notice of its claim before the 45-day period expires, then the claimant cannot lose its Public Works Act rights to assert a claim against the general contractor and surety.  Essentially, according to the First Circuit, the Gootee holding does not remove a claimant’s Public Works Act rights even if the claim is asserted too early — prematurity does not equal no right of action under the Public Works Act.

According to the First Circuit in Nu-Lite, the supplier gave appropriate notice of its claim and filed suit on its claim before notice of acceptance.  Thus, the general contractor and surety had actual notice of the supplier’s claim before the expiration of the 45-day period to assert such a claim, meaning “no harm, no foul.”  The First Circuit determined that the general contractor and surety essentially waived their right to argue that the claim was premature because they waited five years to raise that issue.  Perhaps the First Circuit’s holding was based, in part, on the fact that the supplier could not go back in time to refile its sworn statement to correct the alleged mistake?