In a recent appellate decision obtained by Shields | Mott LLP, the Louisiana Fourth Circuit Court of Appeal made clear that “La. R.S. 9:4802(G)(3) requires that the seller of movables provide notice of nonpayment to the owner and general contractor in order to preserve the right to a lien.”
In AP Interiors, L.L.C. v. Coryell County Tradesmen, L.L.C., 2017-0230 (La. App. 4 Cir. 3/21/18), — So. 3d —, 2018 WL 1419131, the attorneys of Shields | Mott LLP represented a general contractor on a construction project. An unpaid material supplier to one of the subcontractors on the project filed a lien that the contractor obtained a surety bond to remove. The supplier filed suit against the contractor and the lien bond surety, as well as the subcontractor. The supplier ultimately filed a motion for summary judgment, contending that there was no genuine issue of material fact that the lien was valid. The contractor opposed the motion, contending that there was no evidence the supplier complied with La. R.S. 9:4802(G), which required the supplier to provide prior written notice of nonpayment to the contractor in order to secure its ability to file a lien. The contractor argued that because the supplier presented no evidence of this notice, there was a genuine issue of material fact that precluded summary judgment. The trial court granted summary judgment in favor of the supplier, finding the lien was valid, and the contractor appealed.
On appeal, the Louisiana Fourth Circuit reversed the trial court’s ruling, and remanded the case for further proceedings. Specifically, the Fourth Circuit found that the notice requirements outlined in La. R.S. 9:4802(G)(3) were a prerequisite that the supplier had to meet to preserve any right it has to file a lien under the Louisiana Private Works Act. In light of a lack of evidence of such notice, and in the face of the contractor’s evidence showing that no evidence had been provided, the Fourth Circuit found that genuine issues of material fact about the supplier’s compliance with La. R.S. 9:4802(G) existed, and that summary judgment was inappropriate.
In light of the AP Interiors decision, it is clear that material suppliers need to be aware of La. R.S. 9:4802(G) before payment issues arise, and to provide the appropriate notice when nonpayment begins, not after it has been ongoing. The time periods found in La. R.S. 9:4802(G), in both residential and commercial contexts, create a trap for the unwary material supplier that could bar the filing of a lien even in the face of actual nonpayment.