CHUTZ, J.
This multi-party litigation arises out of the Papanias' construction of a new home in the Maple Ridge Subdivision in Covington, Louisiana. On March 22, 2005, a subcontractor filed suit on an open account against the Papanias and Pyrenees, the general contractor on the project, averring entitlement to remuneration for work performed in conjunction with the construction. On August 16, 2006, along with their answer and a reconventional demand against the subcontractor, the Papanias asserted a third-party demand against Pyrenees, averring that as the general contractor, Pyrenees was liable to them for any amounts they were ordered to pay the subcontractor. Pyrenees answered the third-party demand, generally denying the Papanias' claims.
On March 30, 2009, the Papanias amended their third-party demand against Pyrenees to claim damages, alleging that various itemized works Pyrenees had undertaken were faulty, problematic, and defective. The Papanias also averred Pyrenees was responsible for the damages they suffered as a result of remedial actions they had undertaken as well as for collateral damages. Pyrenees answered the amended third-party demand on June 5, 2009, generally denying the Papanias' allegations.
On November 4, 2009, the Papanias again amended their third-party demand. This time, they asserted claims against LeBlanc, alleging that he was the owner and sole member of Pyrenees; a unity of interest and ownership existed between LeBlanc and Pyrenees insofar as the Papanias construction contract; Pyrenees was the alter ego of LeBlanc; and that, as such, Pyrenees was an instrumentality for LeBlanc's actions. The Papanias claimed that LeBlanc had misrepresented to them that Pyrenees held a valid contractor's license and that it carried insurance which "would cover the sorts of claims" filed in the third-party demand, thereby inducing them to enter into the construction contract. According to the amended third-party pleading, both Pyrenees and LeBlanc were liable to the Papanias for all the damages they had incurred. An answer generally denying the Papanias' allegations was filed by Pyrenees and LeBlanc on January 21, 2010.
With less than three weeks before the scheduled trial on the merits, on November 12, 2014, Pyrenees and LeBlanc filed a peremptory exception raising the objection of no cause of action, contending that the NHWA was the exclusive remedy available to the Papanias for the claims alleged in their third-party pleadings. Pyrenees and LeBlanc filed a second peremptory exception, objecting on the basis of peremption as to the claims levied against LeBlanc in his individual capacity, urging that by November 4, 2009, when the Papanias filed their third-party demand against LeBlanc,
After a hearing, the trial court sustained the exception of no cause of action and dismissed "all claims not cognizable under the [NHWA]"; sustained the exception of peremption and dismissed all claims against LeBlanc; and granted summary judgment, dismissing all the remaining NHWA claims against Pyrenees and LeBlanc. This appeal followed.
The NHWA was originally enacted in 1986 for the purpose stated in La. R.S. 9:3141:
The NHWA's "minimum required warranties" are set forth in La. R.S. 9:3144A, which states:
Under the NHWA and the facts of this case, the "warranty commencement date" is the date that the home was first occupied.
On appeal, the Papanias contend the trial court erred when it dismissed all of their claims "not cognizable under the [NHWA]." They maintain they have asserted claims against Pyrenees and LeBlanc for breach of contract, fraud, negligent misrepresentation, and negligence for a statutory violation in addition to those under the NHWA.
The function of an exception of no cause of action is to test the legal sufficiency of the petition by determining whether the law affords a remedy on the facts alleged in the pleading.
Generally, an exception of no cause of action should not be maintained in part, so as to prevent a multiplicity of appeals thereby forcing an appellate court to consider the merits of the action in a piecemeal fashion.
An appellate court conducts a de novo review of a trial court's ruling sustaining an exception of no cause of action, because the exception raises a question of law and the trial court's decision is based only on the sufficiency of the petition.
Initially, we note that in their first amended third-party demand, the Papanias clearly asserted defects existed in their new home as a result of Pyrenees' substandard workmanship, negligence, and negligent supervision. And in their second amended third-party demand, the Papanias alleged that with regard to the contract "any individuality and separateness" between LeBlanc and Pyrenees ceased. Thus, there is no error in the trial court's conclusion that the NHWA is applicable under the facts alleged in the Papanias' pleadings.
The NHWA is not the exclusive remedy available to new homeowners in an
Recently, another panel of this court considered a new homeowners' assertion that because a builder terminated the construction contract before completion of the new home, the builder was liable to them under a theory of breach of contract.
In their March 30, 2009, amended third-party demand, the Papanias alleged that they entered into a construction contract with Pyrenees; Pyrenees failed to perform in accordance with the contract; and they subsequently terminated the contract with Pyrenees. They claimed Pyrenees was liable to them for damages for remediation work they had to undertake and for collateral damages. In the light most favorable to the Papanias with every doubt resolved in their favor, and allowing every reasonable interpretation in favor of maintaining their claims, based on the allegations of the third-party demand, particularly that the construction contract "was... terminated as a result of the [construction] issues," the Papanias have averred facts which, if proven, would result in damages for increased costs and unmet expectations, i.e., amounts they would have incurred in connection with securing completion of the construction after termination of the construction contract.
Fraud is one of the three vices of consent in a contractual relationship.
La. C.C. art. 1953 defines fraud as "a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other." In order to succeed on an action for fraud against a party to a contract, three elements must be proved: (1) a misrepresentation, suppression, or omission of true information; (2) the intent to obtain an unjust advantage or to cause damage or inconvenience to another; and (3) the error induced by a fraudulent act must relate to a circumstance substantially influencing the victim's consent to the contract.
Since the fraud claim arises out of a separate and distinct transaction or occurrence — i.e., formation of the contract — from that of performance of the contract that was the operative factual transaction for the breach of contract and NHWA claims, the trial court could properly dismiss a pleading that failed to state a cause of action in fraud.
At the outset, we must determine whether the Papanias actually stated a cause of action to support a claim of fraud. In the second amended, third-party demand, the Papanias averred that LeBlanc advised them that Pyrenees held a valid contractor's license for the construction of new homes and had in effect a valid insurance policy that would provide coverage for "the sorts of claims" for which the Papanias are presently suing. The Papanias also alleged that LeBlanc knew his misrepresentation that Pyrenees held a valid contractor's license was a principal cause for the contract. According to their November 4, 2009 pleading, the Papanias claimed that these two misrepresentations by LeBlanc induced them to execute and sign the construction contract with Pyrenees. In addition to iterating that the individuality and separateness between LeBlanc and Pyrenees ceased insofar as the construction contract, the Papanias claimed entitlement to reasonable damages for the fraudulent inducement of contract. Taking as true all of the Papanias' allegations of fact, we conclude they have stated
Pointing to La. R.S. 9:3150, Pyrenees and LeBlanc maintain that, as a matter of law, the Papanias may not assert an independent claim of fraud. The salient provisions of that statute state that the NHWA "provides the exclusive remedies, warranties, and peremptive periods as between builder and [new home] owner relative to home construction and no other provisions of law relative to warranties and redhibitory vices and defects shall apply." Because the facts as averred obviously do not allow the Papanias to be restored to the situation that existed before the contract was made, Pyrenees and LeBlanc apparently contend that an award of damages pursuant to La. C.C. art. 2033 would necessarily be a claim for restitution for construction defects. Thus, they assert the NHWA is the exclusive remedy available to the Papanias. We disagree.
First, La. R.S. 9:3150 expressly limits its exclusivity to "home construction," stating that "no other provisions relative to warranties and redhibitory defects and vices shall apply." (Emphasis added.) Therefore, by its own terms, the NHWA is the exclusive remedy applicable for home construction but only insofar as claims relative to warranties and redhibitory defects and vices.
La. C.C. art. 2520 provides for the warranty against redhibitory defects, explaining:
Thus, it is the existence of the redhibitory defect that gives right to relief. But as averred and broadly construed, the Papanias' pleading alleges that their consent upon entering into the contract was vitiated by a fraud perpetuated by LeBlanc.
Second, as we have already noted, the purpose of the NHWA is to, among other things, promote commerce and to provide additional protection to the public against defects in the construction of new homes. We cannot see how allowing fraud in the inducement of a construction contract would serve either of these express purposes of the NHWA.
Finally, despite the express terms of La. R.S. 9:3150, stating the NHWA provides the exclusive remedies as between a builder and a new homeowner relative to home construction, as we have already noted, the courts have allowed claims outside the NHWA for breach of contract when the builder abandons the construction project.
In general, the courts of this state have recognized that La. C.C. arts. 2315 and 2316, the codal articles defining tort law, encompass an action for negligent misrepresentation. Appellate courts have integrated the cause of action for negligent misrepresentation and misinformation into the duty-risk, negligence analysis.
The violation of a statute or regulation does not automatically, in and of itself, impose civil liability, as Louisiana has no negligence per se doctrine. Civil responsibility is imposed only if the act in violation of the statute is the legal cause of damage to another.
The negligent misrepresentations for which the Papanias alleged entitlement to damages outside the ambit of the NHWA were representations to them by LeBlanc that (1) Pyrenees held a valid contractor's license for new home construction; and (2) Pyrenees had a particular insurance coverage, which it did not. These misrepresentations, the Papanias aver, induced them to agree to the construction contract. On appeal, the Papanias assert the alleged statutory violations for which they are entitled to relief outside the ambit of the NHWA are those in conjunction with the required licensing provisions for a contractor under La. R.S. 37:2150-2173.
Based on the allegations of their third-party demand, the claims for negligent misrepresentation and statutory violations arise out of the operative facts of the same transaction or occurrence for which the Papanias allege fraudulently induced them to enter into the construction contract. Therefore, we conclude that it was error for the trial court to sustain the exception of no cause of action to dismiss the Papanias' claims for alleged negligent misrepresentation and statutory violation against LeBlanc and Pyrenees (through the cessation of the individuality and separateness between him and Pyrenees).
Because the Papanias have averred facts sufficient to support claims against Pyrenees
A motion for summary judgment shall be granted only if the pleadings, depositions, answers to interrogatories, and admissions, together with the affidavits, if any, admitted for purposes of the motion for summary judgment, show that there is no genuine issue as to material fact, and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966B(2).
The burden of proof is on the mover.
Summary judgment is appropriate when all the relevant facts are marshalled before the court, the marshalled facts are undisputed, and the only issue is the ultimate conclusion to be drawn from those facts.
Pyrenees and LeBlanc filed a motion for summary judgment contending that the Papanias failed to establish the requisite notice necessary to support a claim under the NHWA. The trial court agreed and, because it had concluded the only viable relief available was under the NHWA, dismissed all the Papanias' claims against Pyrenees and LeBlanc.
La. R.S. 9:3145A, which sets forth the notice that new homeowners complaining of defects in their property are required to give to the builder, provides:
The notice requirement imposed on the new homeowner is also referenced in La. R.S. 9:3144B, stating in pertinent part:
The legislature decided the builder should not be responsible for defects of which he was never made aware and never given the chance to remedy in accordance with the standards of the NHWA. Without notice of defects, the builder is deprived of the more economically sound and judicially efficient alternative, i.e., the opportunity to cure the defects, an alternative in accord with the legislative intent to promote commerce and stability.
Pyrenees and LeBlanc asserted that the Papanias were unable to produce evidence to support a finding by the trier of fact that they had provided the builders with the requisite notice. The builders produced Wayne Papania's deposition testimony in which he testified that on September 11, 2006, he sent a letter to LeBlanc advising him that he was no longer builder on the project. Mr. Papania also stated that he verbally apprised LeBlanc that the quality of the builder's work was "unacceptable and horrendous," however he was unable to pinpoint on what date he told that to LeBlanc or whether it was before or after he sent the September 11, 2006, termination letter. The termination letter, also introduced into evidence, was addressed to LeBlanc and advised him that he was no longer the contractor of record for the construction project. It expressly stated that LeBlanc was responsible for the workmanship at that home for a period of one year. A United States Post Office certified mail receipt with LeBlanc's address was also produced by the builders, but the date on it was illegible.
In response, the Papanias produced LeBlanc's deposition testimony in which he acknowledged the Papanias advised subcontractors of complaints related to painting, plumbing, stucco application, flooring, and electrical work. LeBlanc testified that he overheard those complaints and intervened. He admitted that he did not finish the construction project. When shown an itemized list of complaints, LeBlanc stated he could not recall whether he had received it, but acknowledged that prior to termination, all the complaints on the list had been made known to him. LeBlanc likewise could not recall having seen the September 11, 2006, termination letter. He testified that he was in the process of "trying to get the final inspection" when he was terminated, indicating that he was unsure whether he had yet asked for it. The Papanias also relied on Mr. Papania's deposition testimony, which established that although LeBlanc was removed from the project, he continued to return to the construction site. Mr. Papania testified when LeBlanc returned, he was provided more information about issues related to uncompleted items but failed to address them.
Pyrenees and LeBlanc maintain that the Papanias failed to unequivocally establish they gave the builders "written notice, by registered or certified mail, within one year after knowledge of the defect, advising... of all defects" as required under the NHWA. They, therefore, contend the summary judgment evidence demonstrated an absence of factual support of statutory notice, which is an essential element of the Papanias' NHWA claim and, thus, the trial court correctly granted summary judgment.
The Papanias rely on decisions from other circuit courts of appeal, which have held that a new homeowner's failure to comply with the technical requirements of La. R.S. 9:3145 is not necessarily fatal to a NHWA claim when actual notice of specific defects was provided within the time limits to the builder. In particular, they cite
In
Unlike the new homeowners in
Given this showing and the jurisprudence permitting a new homeowner who has provided a builder with actual written or repeated verbal notice and allowed the builder a reasonable opportunity to repair/remedy the alleged defects to pursue a NHWA claim, we conclude that out-standing material issues of fact preclude summary judgment on the issues of whether the Papanias provided the builders with notice as required by the NHWA and whether the builders were afforded a reasonable opportunity to repair. Accordingly, the trial court incorrectly granted summary judgment.
Any action to enforce any warranty under the NHWA shall be subject to a peremptive period of thirty days after the expiration of the appropriate time period provided in R.S. 9:3144. La. R.S. 9:3146.
Peremption is a period of time fixed by law for the existence of a right. Unless timely exercised, the right is extinguished upon the expiration of the peremptive period. La. C.C. art. 3458. Peremption may not be renounced, interrupted, or suspended. La. C.C. art. 3461. Public policy requires that rights to which peremption periods attach are to be extinguished after passage of a specified period.
Because the trial court concluded the Papanias were limited to recovery only within the ambit of the NHWA, it sustained an objection of peremption to dismiss their claims against LeBlanc for one-year and two-year warranty relief under La. R.S. 9:3144A(1) and (2). The Papanias challenge the propriety of this determination.
According to Mr. Papania's deposition testimony, the Papanias moved into their new home around April or May of 2007. Therefore, under an application of La. R.S. 9:3146, the peremptive period lapsed no later than thirty days after May 31, 2008 — or July 2, 2008 — for the warranty for any defect under La. R.S. 9:3144A(1) and thirty days after May 31, 2009 — or July 2, 2009 — for the warranty for the various systems defects under La. R.S. 9:3144A(2). Because the Papanias did not amend their petition until November 4, 2009 to add LeBlanc as a third-party defendant and allege that "any individuality and separateness" between LeBlanc and Pyrenees ceased, their claims against LeBlanc under La. R.S. 9:3144A(1) and (2) of the NHWA had already perempted.
For these reasons, we maintain the appeal. The trial court's judgment is reversed insofar as it dismissed all of the Papanias' claims "not cognizable under the [NHWA]" and granted summary judgment to dismiss all the Papanias' claims under the NHWA. The trial court's judgment is affirmed insofar as it sustained the exception of peremption and dismissed the Papanias' NHWA claims against LeBlanc under the one and two year warranties set forth in La. R.S. 9:3144A.
