United States Court of Appeals
                                                              Fifth Circuit
                                                           F I L E D
                    REVISED JANUARY 24, 2005
                                                          December 30, 2004
                 UNITED STATES COURT OF APPEALS
                      For the Fifth Circuit            Charles R. Fulbruge III
                                                               Clerk
                          No. 02-30183



                    SHAW CONSTRUCTORS, INC.,

                             Plaintiff-Appellant, Cross-Appellee,



                             VERSUS

               ICF KAISER ENGINEERS, INC., ET AL.,



                                                         Defendants,

                  PCS NITROGEN FERTILIZER, L.P.

                              Defendant-Appellee, Cross-Appellant




          Appeal from the United States District Court
              For the Middle District of Louisiana




Before HIGGINBOTHAM, GARZA and DENNIS, Circuit Judges.

DENNIS, Circuit Judge:

     This is an action based on the Louisiana Private Works Act

that requires the interpretation and application of the Louisiana

Civil Code articles in the chapters on Third Party Beneficiary and




                                1
Dissolution of Contracts.

     A subcontractor performed its part of the work in constructing

a $38 million Nitric Acid Facility for the owner of an industrial

plant.   In   the   subcontract   with   the    general    contractor,   the

subcontractor “agrees to and does waive” its right to file claims

or liens against the owner’s property. When the general contractor

materially breached its primary obligation to pay the subcontractor

the $5.3 million balance due for work on the owner’s facility, the

subcontractor filed claims and privileges or liens against the

owner’s property and brought suit against the owner under the

Louisiana Private Works Act (“LPWA”).1         The owner filed a counter-

claim, as third party beneficiary of the subcontract’s lien waiver

provision,    seeking   the   enforcement      of   that   provision,    the

cancellation of the claims and liens filed, and the award of

damages and attorneys’ fees.         Applying Louisiana law in this

diversity jurisdiction suit, we reverse the magistrate judge’s

holding that the subcontractor may not raise against the owner-

third party beneficiary’s demand the defenses it could have raised

against the general contractor. Instead, we enter summary judgment

sustaining the subcontractor’s right to regard the subcontract as

dissolved and the parties restored to their pre-contract positions

     1
      La. R.S. § 9:4801, et seq. The subcontractor also brought suit
against the general contractor, but these parties entered into a
“Compromise Agreement,” described more fully herein, reserving
the subcontractor’s rights against the owner.



                                    2
when it became evident that the general contractor would not

perform and had materially breached the subcontract.2          Because

dissolution and restoration operate retroactively to have effect as

of the day the subcontract was entered into, and because the

subcontractor did not explicitly waive its right to dissolution,

the dissolved lien waiver provision of the rescinded subcontract

could not be invoked to preempt or bar the exercise of the

subcontractor’s right to file claims and liens under the LPWA and

seek to enforce them against the owner and its property.

                                  I.

     On September 17, 1997, PCS Nitrogen Fertilizer, L.P. (“PCS”),

owner of an industrial plant near Geismar, Louisiana, entered into

a $38 million contract (“Prime Contract”) with general contractor

ICF Kaiser Engineering, Inc. (“Kaiser”) for design and construction

of a structure named the “1265 STPD NITRIC ACID FACILITY.”          The

facility was built at the PCS plant straddling the boundary line

between Iberville and Ascension Parishes.

     Under the Prime Contract, PCS authorized Kaiser to subcontract

portions of the work but specified that Kaiser would be responsible

for the   actions   of   subcontractors.   The   Prime   Contract   also

provided that Kaiser would pay and discharge any lien that may be

filed, and indemnify, defend, and hold PCS harmless from liens on



     2
      

2016, & 2018.

                                   3
its property.3       In addition, the Prime Contract provided that

Kaiser     would   reimburse   PCS   whatever   costs   PCS   incurred   in

discharging any liens. Although the LPWA authorized PCS to protect

itself against personal liability and privileges on its property

under the Act by filing a notice of the contract and having Kaiser

file a bond to protect subcontractors,4 PCS chose not to do so.

     In January 1998, Kaiser subcontracted a portion of its work to

Shaw Constructors, Inc. (“Shaw”).5          The subcontract states that

Shaw agrees to provide labor, equipment, materials, and other

construction services for the 1265 STPD NITRIC ACID FACILITY

project and “agrees to and does waive its right to file any

mechanic’s lien or claims of any sort or kind against [PCS’s]

premises or any part thereof.”6           In exchange, Kaiser obligated

     3
      The common law term “lien” and civil law term “privilege”
will be used interchangeably throughout this opinion because the
parties spoke of the terms as equivalent and as the differences
between the terms are not relevant to our analysis.
     4
         La. R.S. § 9:4802(C).
     5
      PCS was not a party to the subcontract, and there was no
privity between PCS and Shaw. However, the subcontract between
Kaiser and Shaw referred to the Prime Contract between PCS and
Kaiser, referred to PCS as “owner,” and stated that
“Subcontractor hereby agrees to and does waive its right to file
any mechanic’s lien or claims of any sort or kind against owner’s
premises or any part thereof.”
     6
         The full text of the lien waiver clause provides:

     Subcontractor hereby agrees to and does waive its right
     to file any mechanic’s lien or claims of any sort or
     kind against owner’s premises or any part thereof.
     Subcontractor further agrees to obtain a written waiver

                                      4
itself in the subcontract to make payments to Shaw, based on its

monthly progress, within 45 days after receiving each of Shaw’s

invoices.

     As Shaw’s work progressed, Kaiser failed to make timely

payments, and Shaw contemplated stopping work. Instead, on January

12, 1999, Shaw agreed to continue work in exchange for Kaiser

making specifically scheduled payments and obtaining a payment bond

for the remainder of the work on the project.

     Nevertheless, Kaiser still failed to perform its obligation

under the subcontract to pay for Shaw’s work.   Instead, on January

26, 1999, Kaiser notified Shaw that it could or would not make any

further payment under the subcontract. Shaw, which essentially had

completed its work, wound up its portion of the project on February

1, 1999.    At the time of Kaiser’s complete, material breach of the

subcontract, it had failed to pay Shaw over $5.2 million for Shaw’s

construction work on the PCS nitric acid facility.   On January 27,

1999, Shaw filed and recorded statements of claim and privilege

asserting its rights under the LPWA against PCS and its property



     of the right to file any mechanic’s liens or claims of
     any sort or kind against Owner’s premises or any part
     thereof from any and all subcontractors, suppliers and
     materialmen at the time any subcontracts or purchase
     orders are issued in connection with the work. In
     accordance with Article 25E of Exhibit “C”, General
     Conditions for Subcontract, a “Release and Waiver of
     Lien” in the form of Appendix 1-A shall be executed by
     Subcontractor prior to release of each payment
     hereunder.

                                  5
for Shaw’s uncompensated work on the PCS facility.

      On February 23, 1999, Shaw filed suit against PCS and Kaiser

in state court in Iberville Parish.                    PCS and Kaiser removed the

case to federal court.         On April 8, 1999, Shaw and Kaiser entered

into an agreement (“Compromise Agreement”) that: (1) Kaiser would

pay off $5,238,217.90 owed to Shaw for work on the PCS facility in

20 monthly installments; (2) a default judgment would be entered to

that effect; (3) Shaw’s liens on PCS’s property would not be

cancelled     unless    Kaiser    filed       a   bond    or    other     security    in

conformity    with     the   requirements         of    the   LPWA   or   furnished    a

$5,300,000 letter of credit; and (4) Shaw would not dismiss its

claims and lawsuit against PCS unless Kaiser furnished replacement

security or Kaiser’s monthly installment payment obligations to

Shaw were satisfied.         Pursuant to the Compromise Agreement, Kaiser

confessed to the allegations in Shaw’s petition in its Answer and

Confession     of    Judgment,      admitting           its    default     under     the

subcontract, its debt to Shaw, and the validity of Shaw’s claim and

privilege against PCS. PCS did not participate in the negotiations

and agreements between Shaw and Kaiser, and Shaw reserved all of

its rights against PCS.           After a default judgment was entered,

Kaiser made installment payments to Shaw totaling $3,201,133.21,

but   never   provided       replacement      security.         Thereafter,    Kaiser

defaulted on the remaining amount, leaving an unpaid principal

balance of $2,037,084.77 due Shaw.                On June 9, 2000, Kaiser filed



                                          6
a petition in bankruptcy.        On October 20, 2000 PCS demanded that,

within ten days thereof, Shaw cancel the claim, privilege or lien

and dismiss this lawsuit against PCS with prejudice, and on October

26, 2000 Shaw refused.

     After the foregoing events, Shaw moved for partial summary

judgment on liability only to the effect that, under the LPWA, PCS

was personally liable and its nitric acid facility was subject to

a privilege for Shaw’s uncompensated work on the project.                 PCS

moved for partial summary judgment dismissing Shaw’s demands and

cancelling Shaw’s statements of claim and privilege filed on PCS’s

property.        The   parties   consented   to   adjudication   before    a

magistrate judge. On August 3, 2001, the magistrate judge ruled in

favor of PCS on both of the cross-motions for summary judgment,

dismissing Shaw’s claims and ordering Shaw’s lien removed from the

public records.        Thereafter, Shaw and PCS filed a second set of

motions    for   summary   judgment   concerning    attorneys’   fees   and

damages.    On December 21, 2001, the magistrate granted summary

judgment in favor of PCS and awarded it $61,614.68 in attorneys’

fees and damages under La. R.S. § 9:4833 of the LPWA. Both Shaw and

PCS appealed.

     Shaw argues that the magistrate judge erred by holding that

PCS was a third party beneficiary of the subcontract and therefore

able to demand specific enforcement of Shaw’s obligation to comply

with the lien waiver provision.       Alternatively, Shaw charges that,



                                      7
if PCS was a third party beneficiary, under Louisiana Civil Code

article 1982 Shaw had the right to raise against PCS, as third

party beneficiary, defenses based on the contract that it could

have raised against Kaiser, had Kaiser made the same demand against

Shaw.   Specifically, Shaw contends that, when Kaiser materially

breached the subcontract, Shaw had the right to refuse to perform

its file-no-lien obligation, to employ all rights and defenses

against PCS that it may have raised against Kaiser, and to enforce

its claim and privilege or lien against PCS and its property under

the LPWA.

     PCS argues that the magistrate judge correctly ruled that Shaw

could not raise against PCS the defenses it could have raised

against Kaiser, and that, in any event, Kaiser’s material breach of

the subcontract had no effect upon the lien waiver provision of the

subcontract. PCS contends that the magistrate judge correctly held

that it may as third party beneficiary enforce the lien waiver

provision against Shaw, that Shaw’s claim and privilege or lien

therefore were filed in violation of the lien waiver provision,

that Shaw’s claim and privilege or lien were improperly filed under

the LPWA for the same reason and others, that Shaw therefore cannot

hold PCS personally liable or enforce a lien or privilege against

PCS’s property under the LPWA, that Shaw did not have reasonable

cause to refuse to cancel its lien upon PCS’s demand, and that Shaw

should be taxed with attorney’s fees and damages pursuant to the



                                 8
LPWA.

     Both Shaw and PCS appealed.

     We review rulings on motions for summary judgment de novo,

applying the same standards prescribed for use by the district

court.7     Cross-motions must be considered separately, as each

movant bears the burden of establishing that no genuine issue of

material fact exists and that it is entitled to judgment as a

matter of law.8      If there is no genuine issue and one of the

parties is entitled to prevail as a matter of law, the court may

render summary judgment.9      Louisiana substantive law applies to



     7
         See Walker v. Thompson, 

, 624 (5th Cir. 2000).
     8
        10A CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL
PRACTICE AND PROCEDURE §2720 (3d ed. 1998)(“The court must rule on
each party’s motion [for summary judgment] on an individual and
separate basis, determining for each side, whether a judgment may
be entered in accordance with the Rule 56 standard.”)
     9
       10A CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL
PRACTICE AND PROCEDURE §2720 (3d ed. 1998)(“But if there is no
genuine issue and one or the other party is entitled to prevail
as a matter of law, the court will render judgment.”) Vela v.
City of Houston, 

, 671 (5th Cir. 2001)(In situations
involving cross-motions for summary judgment and upon finding no
genuine issues of material fact, this court regularly reverses
grants of summary judgment and enters judgment for the opposite
party.). See also Owsley v. San Antonio Independent School Dist.,

, 527 (5th Cir. 1999)(reversing and rendering
judgment for the adverse party on cross motions for summary
judgment.); Ehrlicher v. State Farm Ins. Co. 171 F.3d 212,(5th
Cir,. 1999)(reversing and rendering judgment for the adverse
party on cross motions for summary judgment.); Gilley v.
Protective Life Ins. Co. 

, (5th Cir. 1994)(reversing
and rendering judgment for the adverse party on cross motions for
summary judgment.)

                                    9
this diversity jurisdiction case.10

                                 II.

     The magistrate judge correctly interpreted the subcontract

between Kaiser and Shaw as stipulating a benefit for PCS as a third

party beneficiary, but it incorrectly concluded that Shaw could not

raise against PCS the defenses on the contract that it could have

raised against Kaiser.

     As the magistrate judge, in concluding that PCS was a third

party beneficiary of the Kaiser-Shaw subcontract’s lien waiver

provision, stated:

     Shaw expressly agreed to waive its right to file any
     liens or claims of any sort against the owner’s premises.
     The subcontract clearly identifies PCS as the owner....
          The preamble of the subcontract... stated that the
     subcontract was made pursuant to the contract between PCS
     and Kaiser....    Because of Kaiser’s agreement in the
     prime contract, the subcontract lien waiver provision
     benefitted both Kaiser and PCS. This arrangement does
     not render the benefit which Shaw unequivocally conferred
     upon PCS by agreeing to the condition any less apparent
     or direct.11

Nor do we see any error in the magistrate judge’s conclusion that

PCS adequately manifested its intention to avail itself of the

benefit before any attempt was made by Kaiser and Shaw to revoke




     10
          Erie R.R. Co. v. Tompkins, 

(1938).
     11
      Aug. 3, 2001 Magistrate Judge Opinion, at 13-15 (citing
Merco Mfg., Inc. v. J.P. Michael Const. Co., 

, 974
(W.D.La. 1974)(footnote omitted)).

                                  10
the stipulation.12

     The magistrate judge erred, however, in concluding that Shaw

could not raise against PCS the defenses based on the subcontract

that it had against Kaiser.      Louisiana Civil Code Article 1981

provides, in pertinent part, that “[t]he stipulation gives the

third party beneficiary the right to demand performance from the

promisor.”13    That right is qualified, however, by Louisiana Civil

Code Article 1982, which states that “[t]he promisor may raise

against the beneficiary such defenses based on the contract as he

may have raised against the stipulator.”14     Thus, in the present


     12
       See La. Civil Code arts. 1978-1979. PCS filed an
affidavit by its senior counsel that he had informed Kaiser as
early as February 26, 1999 and on numerous other occasions that
Kaiser should take no action which would waive or limit PCS’s
third party beneficiary rights. Shaw offered no evidence to
refute these expressions by PCS that implied its intention to
avail itself of the benefit. The events that Shaw contends
revoked the stipulation occurred after February 1999. “Once the
third party has manifested his intention to avail himself of the
benefit, the parties may not dissolve the contract by mutual
consent without the beneficiary’s agreement.” 

“Under this Article, the beneficiary’s intention to accept the
benefit may be made known in any manner, even implied.” 

rev. cmt. b. “The stipulation may be revoked only by the
stipulator and only before the third party has manifested his
intention of availing himself of the benefit.” 

     13
          

     14
        

Louisiana Civil Code Article 1982 is
similar to the prevailing rule in other jurisdictions. See
RESTATEMENT (SECOND) OF CONTRACTS § 309(2) (1981)(“If a contract
[creating the promisor’s duty to the intended beneficiary] ceases
to be binding in whole or in part because of... present or
prospective failure of performance, the right of any beneficiary
is to that extent discharged or modified.”); 

a

                                  11
case, Shaw, the promisor, had the right to raise against PCS, the

beneficiary, any defense based on the subcontract that Shaw could

have raised against Kaiser, the stipulator or promisee.15

     The magistrate judge concluded that interpreting Article 1982

to allow Shaw to raise against PCS any defense based on the

contract that Shaw could have raised against Kaiser, “would negate

the right of PCS under articles 1978 and 1981 to accept and demand




failure of the promisee to perform a return promise ordinarily
discharges the promisor’s duty to a beneficiary to the same
extent that it discharges his duty to the promisee.”); 13 RICHARD
A. LORD, WILLISTON ON CONTRACTS § 37:55 (4th ed. 2000) (collecting
authorities, e.g., Nauru Phosphate Royalties, Inc. v. Drago Daic
Interests, Inc.,138 F.3d 160, 166 (5th Cir. 1998)).
     15
        Article 1982 was adopted in 1984 to “express[] a
conclusion reached by the Louisiana jurisprudence.” La. Civ.
Code art. 1982 rev. cmt. (citing Union Bank of Louisiana v.
Bowman, 

(1845); Tiernan v. Martin, 2 Rob. 523
(1842)); see also J. Denson Smith, Third Party Beneficiaries in
Louisiana: The Stipulation Pour Autrui, 11 TUL. L. REV. 18, 57
(1936-37)(“[T]he promisor may oppose the suit of the beneficiary
any defenses arising from the contract which are available to him
as against the promisee such as that the contract was ineffective
because ... there was a failure of consideration, or of a
condition upon which performance of the promise was made to
depend.” (citing 

, Brandon v. Hughes, 

(1980); Janney v. Ober, 

(1876);
Tennent v. Caffrey, 

(1930))); 2 MARCEL PLANIOL, TREATISE
ON THE CIVIL LAW, No. 1264(5) (La. State L. Inst. Transl. 1959)
(“Failure by the Stipulator to Execute his Obligations. If the
stipulator has not carried out his own obligations to the
promisor, the latter is discharged from his obligation to the
third person.... [I]t is in conformity to the apparent will of
the parties to presume that the promisor is not obligated to the
third person except in consideration of the obligations towards
him.”).


                                 12
performance of the stipulation pour autri.”16            We cannot agree.

Article 1982 only subjects the beneficiary’s demand for performance

from the promisor to the same contractual defenses which would

apply if the stipulator demanded performance under the contract.

Article 1982 would have no application to a case in which the

promisor   has   no   defense   based    on   the   contract   against   the

stipulator or promisee.     Thus, Article 1982 does not “negate” or

nullify the third party beneficiary’s right to avail himself of the

benefit and demand performance from the promisor under Articles

1978 and 1981.   In sum, when we interpret Article 1982 in reference

to the other code articles on the same subject,17 as we think the

Louisiana Supreme Court would, we conclude that the beneficiary’s

     16
      The magistrate judge’s reasoning seems to be based on the
incorrect assumption that the beneficiary’s right must be
considered as either an absolute right or a nullity. The court’s
full statement provides:

     Article 1981 grants both the stipulator and the third
     party beneficiary the right to demand performance.
     Under the second part of the article, if Kaiser
     demanded performance it would be doing so not for
     itself but for PCS. By exercising its equal right
     under article 1981 to claim the benefit of the
     stipulation, PCS cannot be exercising greater or better
     rights than Kaiser. Interpreting article 1982 as
     suggested by Shaw in the context of this case, would
     negate the right of PCS under articles 1978 and 1981 to
     accept and demand performance of the stipulation pour
     autri.

Aug. 3, 2001 Magistrate Judge Opinion, at 19 (footnote omitted).
     17
      See La. Civ. Code art. 13 (“Laws on the same subject
matter must be interpreted in reference to each other.”)


                                    13
right is not absolute or independent.          Inherently, it is a right

derived solely from the third party beneficiary contract between

the promisor and the stipulator or promisee. Unsurprisingly, then,

the Code provides in Article 1982 that the beneficiary’s right is

amenable to the same defenses based on that contract that the

promisor may use against the stipulator or promisee.

     In comparison, this contextual interpretation of Article 1982

is consistent with the prevailing general rule recognized by other

American jurisdictions.18 “As with any contract, the promisor’s and

promisee’s     substantive     purpose    in   entering   a   third   party

beneficiary contract is the performance of the mutual promises. If

the promisee fails to perform, the promisor has not received the

agreed consideration.    Under these circumstances, it is manifestly

unjust to allow a mere donee to enforce the promise.          Even creditor

beneficiaries are not entitled to any greater right than their

debtor possessed.”19 This reading of Article 1982 is also in accord

with Marcel Planiol’s treatise on the civil law, which states that

“[i]f the stipulator has not carried out his own obligations to the

promisor, the latter is discharged from his obligation to the third




     18
          See supra note 12.
     19
       13 LORD, WILLISTON ON CONTRACTS, supra note 12, § 37:56.
(internal footnotes omitted).


                                     14
person.”20   Planiol maintained this view, despite disagreement from

“[c]ertain authors” at the time, because “it is in conformity to

the apparent will of the parties to presume that the promisor is

not obligated to the third person except in consideration of the

obligations towards him.”21

     For these reasons, we conclude that the Louisiana high court

would follow the plain words of Article 1982 and allow Shaw to

raise against PCS such defenses based on the subcontract as it may

have raised against Kaiser. Accordingly, we turn to an examination

of the Civil Code rights and defenses that Shaw argues it could

have raised against Kaiser had Kaiser demanded that Shaw perform

its obligation arising from the subcontract’s waiver of right to

file liens provision.

                                      III.

     Shaw’s most relevant argument is that it was entitled, because

of Kaiser’s material breach of the commutative subcontract between

them, to rescind the contract and invoke a non-breaching party’s

right under La. C.C. art. 2022 to refuse to perform its own

obligations   under   the    contract.       Consequently,   Shaw    further


     20
       2 PLANIOL, TREATISE ON THE CIVIL LAW, supra note 13, No.
1264(5); see also Smith, supra note 13, at 57 (citing 

, Brandon v. Hughes, 

(1980);
Janney v. Ober, 

(1876); Tennent v. Caffrey, 

(1930)).
     21
      2 PLANIOL, TREATISE   ON THE   CIVIL LAW, supra note 13, No.
1264(5).

                                       15
contends, it was entitled to refuse to perform its obligation not

to file liens even as to PCS, the third party beneficiary, because

Civil Code article provides that “[t]he promisor [Shaw] may raise

against the beneficiary [PCS] such defenses based on the contract

as he may have raised against the stipulator [Kaiser].”        For the

reasons now assigned, we conclude that Shaw’s arguments have merit.

                               A.

     The subcontract between Kaiser and Shaw was a commutative

contract making “the performance of the obligation of each party

... correlative to the performance of the other,”22 as well as a

bilateral or synallagmatic contract in which “the parties obligate

themselves reciprocally, so that the obligation of each party is

correlative to the obligation of the other.”23


     

. Code art. 1911and rev. cmt.(b)&(c); see Morris v.
Homco International, Inc., 

, 342 (5th Cir. 1988);
SAÚL LITVINOFF, 5 CIV. L. TREATISE § 15.12 (2d ed. 2001); ALAIN A.
LEVASSEUR, PRECIS IN CONVENTIONAL OBLIGATIONS: A CIVIL CODE ANALYSIS 24
(Michie, 1980)(“A contract is commutative when a party considers
that what he gives or does is the equivalent of what it will
receive from the other party.”)
     

. Code art. 1908 and rev. cmt.(b)(citing 1 SAÚL
LITVINOFF, OBLIGATIONS 396-400 (1969) ; see 

;
cf.., Stockstill v. Byrd, 

, 407, 

, 447
(1913)(“The courts at the present day incline strongly against
the construction of promises as independent; and, in the absence
of clear language to the contrary, promises which form the
consideration for each other will be held to be concurrent or
dependent, and not independent, so that a failure of one party to
perform will discharge the other, [and] so that one cannot
maintain an action against the other without showing the
performance or tender of performance on his part.”); Accord: 15
LORD, WILLISTON ON CONTRACTS, supra note 14, § 44:5 (“The modern rule

                                    16
     “Either party to a commutative contract may refuse to perform

his obligation if the other has failed to perform or does not offer

to perform his own at the same time, if the performances are due

simultaneously.”24          Therefore, when Kaiser failed to perform its

obligation under the subcontract of making payments for work done

by Shaw, Shaw had the right to refuse to perform its obligation



adopts a presumption that mutual promises in a contract are
dependent and are to be so regarded, whenever possible.”); §44:11
(“Under the modern view, promises in a contract are generally
presumed to be dependent unless a contrary intent is
shown.”)(also quoting RESTATEMENT (Second) of Contracts § 232);
Foley Lumber Industries, Inc. v. Buckeye Cellulose Corp., 

, *700 (5th Cir. 1961)(“Although many nice distinctions
are to be found in the books upon the question, whether the
covenants or promises of the respective parties to the contract,
are to be considered independent or dependent; yet it is evident,
the inclination of courts has strongly favored the latter
construction, as being obviously the most just.” (quoting Bank of
Columbia v. Hagner, 1828, 

, 465, 

)).

     

. Code art. 2022 and rev. cmt.(b)(citing 2 SAÚL
LITVINOFF, OBLIGATIONS 426-434, 501-506 (1975)). The Second
Restatement of Contracts expresses a similar principle in the
introduction to Chapter 10 on Performance and Nonperformance:

          The most important and complex of the rules stated
     in this Chapter apply to the most significant type of
     contract, that in which the parties have exchanged
     promises in the expectation that there will be a
     subsequent exchange of performances....
          When a party fails to receive the performance that
     he expects,....[i]t is, therefore generally fairer to
     give the injured party, to the extent that it is
     possible, the right to suspend his own performance and
     ultimately to refuse it and, if the other party’s
     nonperformance is not justified, to claim damages for
     total breach of contract.

RESTATEMENT (SECOND)   OF   CONTRACTS ch. 10 intro. note, at 193-94.

                                        17
under the subcontract.25

     More important, when it became evident that Kaiser would not

perform its subcontract obligation, Shaw had the right to consider

the subcontract and all of its provisions dissolved26 and the


     25
        Article 2022 gives “general formulation to the exceptio
non adimpleti contractus (defense of nonperformance).” La. Civ.
Code art. 2022 rev. cmt. b. As Planiol explained, the “exception
non adimpleti contractus...is interposed when one of the parties
is claiming of the other the performance of his engagement,
without himself offering what he owes; such party is nonsuited by
the filing of the above mentioned exception.” 2 PLANIOL, TREATISE ON
THE CIVIL LAW, supra note 13, No. 949(2). “[W]hen two persons
obligate themselves the one to the other, each one of them gives
only but conditional consent to the act; one obligates himself
because the other also obligates himself towards him. The
reciprocity of the obligations necessarily implies performance
and this concept leads, on the one hand, to a ‘give and take’
system of performance or to the exceptio non adempleti
contractus..., and on the other hand, to the right to demand the
resolution when it was too late to oppose the said exception
because the obligation was already performed.” 

. Code art. 2016 (“[W]hen it is evident that the
obligor will not perform, the obligee may regard the contract as
dissolved without any notice to the obligor.”); 

(“Louisiana courts have established that a putting in default is
not necessary when the obligor has communicated an intention not
to perform, or in a situation where time is of the essence
(citing Allen v. Steers, 

(1887); Abels v. Glover, 15
La. Ann.247(1860); Kinsell & Locke, Inc. V. Kohlman, 

(La. App. Orl. 1930))); 

(“When the obligor fails to
perform, the obligee has a right to the judicial dissolution of
the contract or, according to the circumstances, to regard the
contract as dissolved.”).
     Planiol explained some of the principles underlying the
right of resolution or dissolution as follows:

     Art. 1184 in establishing the action of resolution,
     indicates in the following terms the circumstances
     which gives rise to it: “in case one of the contracting
     parties does not comply with his engagements.” The law
     is not precise as to the nature of the cause which

                                 18
parties   restored    to   the   situation    that   existed   before   the

subcontract     was   made.27     Thus,      the   “dissolution   operates


     prevents him from complying.... The text makes no
     distinction, and the jurisprudence therefore concludes,
     as do the majority of the authors, that there is an
     action in resolution, whatever is the cause for which
     the adverse party fails to comply with his
     engagements.”

2 PLANIOL, TREATISE ON THE CIVIL LAW, supra note 13, No. 1313
(citations omitted).

     The action in resolution established by Art. 1184 is
     given only to the party who is ready to perform his
     engagement or who has already performed it. The other
     party has no right to the resolutions of the
     contract.... It is natural, therefore, that the party
     at fault should suffer the resolution by the will of
     the other, without being able to demand it himself.

(citations omitted).

     The party entitled to the action of resolution is not
     limited to this means only; he has the choice of
     resolving the contract or of demanding its performance
     if he prefers it, provided that the fault of the debtor
     has not rendered such performance impossible.

     The resolution of the contract is not sufficient in
     itself to completely satisfy the plaintiff. His
     recovering or keeping the object of his obligation
     often does not give him the contemplated profits he
     would have obtained upon the effective performance of
     the contract. To compensate him for the damage
     suffered by this loss of profits, he is entitled to
     damages to be fixed by the judge.

. Code art. 2018 (“Upon dissolution of a contract,
the parties shall be restored to the situation that existed
before the contract was made.”); see Sliman v. McBee, 

retroactively,”28 “has a retrospective effect to the day that the

engagement was contracted,”29 and “the parties are restored to the

situation in which they would be if the contract had not been

entered into.”30

     Moreover, under the Louisiana Supreme Court’s decisions, in

order for a party to waive his right to dissolve a commutative

contract upon the other party’s material breach, the non-breaching

party must express therein his intent to relinquish that right in

words that make specific reference to the action to dissolve.           In

the leading case of Sliman v. McBee,31 Mrs. Sliman sold immovable



248, 252 (La. 1975)(“The effect [of dissolution] is to place all
parties in the same position they occupied prior to the sale.”);
Louis Werner Saw Mill Co. v. White, 

, 268 (La.
1944)(“The effect of the dissolution is to place matters in the
same state as though the obligation had not existed.”); U.S. v.
Maniscalco, 

, 1342(E.D.La. 1981)(“The effect of
the resolutory condition is codified in Article 2130 which states
that obligations are "extinguished" by the effect of the
dissolving condition.”).
     28
      2 A.N. YIANNOPOULOS, LA. CIVIL LAW TREATISE: PROPERTY § 233, at
469 (4th ed. 2001).
     29
      Liquidators of Prudential Sav. & Homestead Soc. v.
Langermann, 

, 61 (La. 1924); McKenzie v. Bacon, 

(La. 1889).
     30
      Hood v. Southern Prod. Co., 

, 341 (La.
1944)(dictum); Sliman v. McBee, 

, 252 (La.
1975)(“[T]he seller may sue for dissolution of the sale and
return of the property. The effect is to place all parties in
the same position they occupied prior to the sale.” (citations
omitted)).
     31
          

(1975).

                                   20
property to the McBees, her daughter and son-in-law.32   In the act

of sale, Mrs. Sliman waived her vendor’s privilege stating that “no

lien shall exist on the lots here sold securing payment” of the

notes given by the McBees as part of the purchase price.33      The

McBees defaulted and Mrs. Sliman brought suit for dissolution of

the sale for nonpayment.34    The trial and appeals courts both

decided against Mrs. Sliman, the latter holding that she had waived

not only her vendor’s lien but also her right to dissolution of the

sale for nonpayment.35     The Louisiana Supreme Court reversed,

holding that (1) a “dissolving, or resolutory, condition is implied

in all commutative contracts and takes effect upon the failure of

either party to comply with his engagement and the demand for

dissolution by the aggrieved party;”36 (2) the right of dissolution

is an independent, substantive remedy in no way dependent upon the

existence of a security device such as a mortgage or a privilege;37


     32
          

     33
          

     34
          

     35
          

     36
      

(citing and quoting La. Civ. Code art. 2045
(1870): “The dissolving condition is that which, when
accomplished, operates the revocation of the obligation, placing
matters in the same state as though the obligation had not
existed.”)
     37
      

to dissolution arises from the contract
itself. La. Civ. Code art. 2013 comment (b).

                                21
(3) in order to waive the separate and independent right of

dissolution the non-breaching party must “express her intent to

relinquish that right in words that make specific reference to the

action to dissolve as distinguished from the action to enforce the

contract;”38 (4) the language in the act of sale does not constitute

a waiver by Mrs. Sliman of her right to rescind the sale upon the

McBees’ default in payment of the purchase price.39   “The fact that

the vendor has lost, or not preserved, his vendor’s lien, or

mortgage, presents no sort of obstacle to the exercise of this

right of resolution.”40

     The already strong right to dissolution was preserved and

strengthened by the 1984 revision of Title III of Book III of the

Louisiana Civil Code of 1879, “Of Obligations.”         Article 2013

“reproduces the substance of C.C. Arts. 2046 and 2047 (1870)and

also provides that, according to the circumstances, the obligee has

a right to regard the contract as dissolved, a right recognized by

the Louisiana jurisprudence in numerous decisions.”41    Further,

     38
          

at 253.
     40
      

n.8 (quoting Stevenson v. Brown, 

, 463 (1880)).
     

. Code art. 2013 rev. cmt. a (citations omitted).
Article 2013 (1984) provides:
        When the obligor fails to perform, the obligee has a
     right to the judicial dissolution or the contract or,
     according to the circumstances, to regard the contract
     as dissolved. In either case, the obligee may recover

                                 22
     Under this Article, either party to a contract may seek
     dissolution upon the other’s failure to perform. [T]his
     remedy is [no longer] predicated upon a resolutory
     condition implied in every commutative contract. This
     Article abandons both that rationale and that limitation,
     in accordance with modern doctrine. Nevertheless, under
     this Article a party’s right to dissolution because of
     the other party’s failure to perform arises from the
     contract itself, and to that extent it can be said to be
     implied in it, although not in the form of a resolutory
     condition.42

     Louisiana Civil Code Article 2018, in part, provides that:

“Upon dissolution of a contract, the parties shall be restored to

the situation that existed before the contract was made.”43 “It

expresses a principle that is implied in C.C. Arts. 1901, 1903,

2045, and 2046 (1870).”44

     Thus, we conclude, as we think the Louisiana Supreme Court

would, that the subcontract provision by which Shaw “agrees to and

does waive its right to file any mechanic’s lien or claims” against

PCS’s property, does not constitute a waiver by Shaw of its

dissolution rights because it does not express Shaw’s intent to

relinquish the right to dissolution “in words that make specific




     damages.
        In an action involving judicial dissolution, the
     obligor who failed to perform may be granted, according
     to the circumstances, an additional time to perform.

     42
          

b (citations omitted)(emphasis added).
     43
          

. Code art. 2018 rev. cmt. a.

                                   23
reference to the action to dissolve.”45                      Further, that waiver

provision     is    simply   too    vague,       indefinite,       and    uncertain    to

indicate that the parties’ intended for it to supersede all of

Shaw’s     rights   against    Kaiser       regardless       of   Kaiser’s      material

failure of     performance.          For    these      reasons,     Shaw’s     right    of

dissolution upon Kaiser’s material breach was not affected by

Shaw’s agreement to waive the right to file liens and claims

against PCS.

     Accordingly,       when       Kaiser        materially       defaulted      on    its

obligation     of   performance,      Shaw       had   the    right      to   regard   the

subcontract as having been dissolved. Upon its dissolution,                            the

parties were restored to the situation that existed before the

contract was made.46         Therefore, when PCS filed its counterclaim

seeking, as third party beneficiary standing in Kaiser’s shoes, to

enforce the erstwhile lien waiver provision, it was not entitled to

do so. That provision had been dissolved as part of the dissolved

subcontract; and Shaw was free of any obligation created by the

parties’ agreement to the waiver provision because Shaw had been

restored to the situation that existed before the subcontract.

Consequently, after the dissolution and restoration Shaw had a

right under the LPWA to file a claim and a privilege against PCS’s

property and to seek recovery from PCS personally for uncompensated

     45
          Sliman v. 

.
     

. Code art. 2018 (1984).

                                            24
work on PCS’s nitric acid facility; when Shaw took these actions

the subcontract and Shaw’s obligations under it had been dissolved

ab initio.   Therefore, the dissolved lien waiver provision and any

obligation created by it could not have any effect upon Shaw’s

ability to exercise its rights under the LPWA against PCS and its

property.

     In other words, PCS, whose right as a third party beneficiary

can rise no higher than the right of Kaiser, its stipulator-

promisee, is not entitled to enforce the lien waiver provision as

if that obligation were separate and independent from the other

obligations arising from the subcontract.      PCS is amenable to

Shaw’s defense and right of dissolution just as Kaiser would have

been if it had sought to enforce the lien waiver provision.



                                 B.

     PCS argues that, despite Kaiser’s material breach giving rise

to Shaw’s rights and defenses, the magistrate judge’s ruling was

correct and the lien waiver provision may still be enforced by PCS

against Shaw because “‘[A] mechanic’s lien can be obtained only if

there is a breach of contract and if ... a breach of contract

nullifies a written waiver of lien, then there would be no way to

effectively waive the right to a mechanic’s lien.’”47   PCS relies



     47
      PCS Original Brief, at 28 (citing and quoting Jankoviak v.
Butcher, 

, 378 (Ill. App. 2d Dist. 1959)).

                                 25
principally upon this rationale, which it quotes from the Illinois

Court of Appeal’s opinion in Jankoviak v. Butcher,48 a 1959 decision

applying the Illinois mechanics’ lien statute to uphold a home

builder’s lien waiver in its contract after an owner refused to pay

the home builder.

     PCS’s argument is not relevant, however, because it is based

on Illinois rather than Louisiana law.                   In    this       diversity

jurisdiction case, we must apply Louisiana law, and in resolving

any issues of interpretation or application, we must decide as we

think the Supreme Court of Louisiana would.                     For several reasons,

we believe that the Louisiana high court would refuse to borrow and

apply      the     Illinois       court’s     interpretation         of   the   Illinois

mechanics’ lien statute here as urged by PCS.

     To borrow the rule of decision from an Illinois case would

require a drastic departure from the civil law methodology followed

by the Louisiana Supreme Court.                    In Louisiana, “[t]he sources of

law are legislation and custom.”49                  These authoritative or primary

sources of law are to be “contrasted with persuasive or secondary

sources       of    law,     such    as     [Louisiana    and    other      civil   law]

jurisprudence, doctrine, conventional usages, and equity, that may

guide     the      court    in    reaching     a    decision    in    the   absence   of



     48
          

.
     

. Code art. 1.

                                              26
legislation and custom.”50        “It is axiomatic that in Louisiana,

courts must begin every legal analysis by examining primary sources

of law: the State’s Constitution, codes, and statutes.”51           “[O]ur

ultimate ‘Erie guess’ requires that we employ the appropriate

Louisiana methodology to decide this issue the way that we believe

the Supreme Court of Louisiana would decide it.”52 We are convinced

that the Louisiana high court would not depart from its usual civil

law   methods    of   examining   first   the   primary   sources   of   law

applicable to the present case, the Louisiana Civil Code and the

LPWA.      Therefore, we do not believe that the Louisiana high court

would, in a case under the Civil Code or the LPWA, borrow and apply

a rule of decision from an Illinois court’s interpretation of the

Illinois mechanics’ lien law.       In addition, it is likely that no

state supreme court would consider applying case law based on any


      50
       

b. (citing A.N. YIANNOPOULOS, LOUISIANA CIVIL LAW
SYSTEM §§ 31, 32 (1977).
      51
        Prytania Park Hotel, Ltd. v. General Star Indem. Co., 

, 174 (5th Cir. 1999); see also Smith v. Southern
Holding, Inc., 

(La. 2003); Cole-Miers Post 3619
V.F.W. of DeRidder v. State, Dept. Of Rev. & Taxation, Office of
Alcoholic Beverage Control, 

(La. 2000); Albert
Tate, Jr., Techniques of Judicial Interpretation in Louisiana, 22
LA. L. REV. 727, 727-728 (1962)(“[T]he primary basis of law for a
civilian is legislation, and not (as in the common law) a great
body of tradition in the form of prior decisions of the
courts.... The Louisiana judge must, as stated, find primarily in
legislative enactments the legal principles to be applied in
deciding the case before him.”).
      52
      Lake Charles Diesel, Inc. v. General Motors Corp., 

, 197 (5th Cir. 2003).

                                     27
other     jurisdiction’s   mechanics’    lien   statute   because   of   the

notorious diversity of such laws among the states.53

     In fact, the Illinois mechanic’s lien statute is crucially

different from the LPWA. The 1959 Jankoviak decision is inapposite

Illinois jurisprudence because it was based on two features of the

Illinois mechanics’ lien statute that differ crucially from the

LPWA.     First, the Illinois court noted that the Illinois statute



     53
       See, e.g., UNIFORM CONSTRUCTION LIEN ACT prefatory note, 7
U.L.A. 2 (2002)(“All states presently have mechanics’ lien laws.
Those laws present an extraordinarily varied approach, in
substance, and in language, to the issues involved in mechanics’
lien legislation. In fact, variation among the states may be
greater in this area than in any other statutory area.”); 53 AM.
JUR. 2D Mechanics’ Liens § 7(“The mechanic's lien laws of the
various states are notorious for the extent to which they vary
from each other in their application and operation. The
diversity in the mechanic's lien laws of the various states
diminishes, and may often nullify, the value of a decision from
one state as a precedent in another, and courts often reject the
asserted authority of a decision from another jurisdiction, or
regard it as being of little or no value”(footnotes omitted));
Ethan Glass, Old Statutes Never Die ... Nor Do They Fade Away: A
Proposal for Modernizing Mechanics’ Lien Law By Federal Action,
27 OHIO N.U. L. REV. 67 (2000)(“State statutes create many
different rules regarding what property can be impaired by a
mechanics' lien, who is entitled to claim a mechanics' lien, how
a mechanics' lien may be created, and what the result is of the
creation of a mechanics' lien. The ongoing theme to remember is
that there are fifty-two jurisdictions with fifty-two different
laws.”).
      The variety in state lien laws is particularly evident with
respect to the effect of lien waiver clauses on lien rights. See
8 LORD, WILLISTON ON CONTRACTS, supra note 12, § 19:58 (“There is a
conflict in the cases as to the effect of a contractor’s waiver
in a building contract of his right, or that of subcontractors or
materialman, to file mechanics’ liens, with perhaps a majority of
states refusing to permit such waivers, except upon or following
payment.”(footnote omitted)).

                                    28
provided that “[i]f the legal effect of any contract between the

owner and contractor is that no lien or claim may be filed or

maintained by anyone, such provision shall be binding.”54                   Second,

that court’s decision was also based on the Illinois statutory

requirement that a mechanic’s lien could be obtained only if there

was first a breach of contract.55

     The LPWA does not make the breach of a contract indispensable

to obtaining a lien, as the Illinois mechanics’ lien law does.

Under     the   LPWA,   as   soon     as   the   work   has   been    substantially

completed       or   abandoned   or    the      owner   has   filed   a   notice   of

termination, a subcontractor may file and obtain a lien, regardless

of whether there has been a breach of contract.56                 Thus, under the



     54
          

.
     55
        

statute may have been anomalous and
contrary to a basic principle of contract law. “[I]t is essential
to waiver that the right allegedly waived exist at the time of
the waiver; a party may not waive any right it does not yet have.
After a contract has been made, on the other hand, the right to
performance under the contract may generally be waived either
before or after the time when performance is due.” 13 LORD,
WILLISTON ON CONTRACTS, supra note 12, § 39.10 (footnotes omitted);
see also 31 C.J.S. Estoppel § 75 (“[A] waiver implies and
requires the existence of the right in question at the time of
the alleged waiver; there can be no waiver of a right before it
exists, before a person is in a position to assert it, or after
it has been lost.”); 28 AM. JUR. 2D Estoppel § 201 (“To constitute
a waiver, the right or privilege claimed to have been waived must
generally have been in existence at the time of the purported
waiver. So, a person cannot waive a right before he or she is in
a position to assert it.”).
     56
          La. R.S. § 9:4822(C).

                                           29
LPWA, the subcontractor is not forced by law to wait until the

general contractor actually defaults before filing a claim or

privilege, as he would have to do under the Illinois statute.

Moreover, unlike the Illinois statute, the LPWA does not declare

that a contract between the owner and the contractor prohibiting

the future filing of liens or claims by anyone “shall be binding.”

In sum, the LPWA is more favorable to a subcontractor than the

Illinois mechanics’ lien statute, because the LPWA does not limit

his access to Civil Code and LPWA rights and remedies in case the

general contractor breaches the contract, and the LPWA does not

make breach of contract a sine qua non to the subcontractor’s right

to file a claim or lien against the owner’s property.

     For these reasons, we are not persuaded by PCS’s argument

based on the Illinois case and statute.

                                C.

     PCS does not advance any other argument or authority for the

proposition that it, as a third-party beneficiary, may require that

the Kaiser-Shaw subcontract’s lien waiver provision be enforced

despite Shaw’s rights of dissolution and restoration evoked by

Kaiser’s material breach of that contract.57 Our own research leads


     57
       PCS cites a number of Louisiana cases cursorily mentioning
or using waiver without defining it or discussing its nature,
conditions or scope. Hero & Co. v. Farnsworth & Chambers Co., 

(La. 1958); Wardlaw Bros. Garage, Inc. v. Thomas, 

(La. App. 2d Cir. 1932); Babineaux v. Grisaffi, 

888 (La. App. 3d Cir. 1965); Bank of Jena v. Rowlen, 

only to additional reasons to doubt that the Louisiana Supreme

Court would affirm that litigation position.

     The Kaiser-Shaw subcontract, after stating that Shaw “agrees

to and does waive” its right to file claims and liens against PCS’s

property, does not expressly state what legal effects the parties

intended for the provision to have.        The term “waiver” does not

appear to have any fixed meaning or connotation in Louisiana law to

which it can be assumed that the parties must have referred.           The

Louisiana   Civil   Code,   which   regulates   nominate   contracts   and

juridical acts in detail, does not provide definition or regulation

for a contract or act of waiver.58        The LPWA does not define or


2d 146 (La. App. 3d Cir. 1979); Executive Office Centers, Inc. v.
Cournoyer, 

(La. App. 4th Cir. 1983).   See also
Union Texas Petroleum v. PLT Eng’g, 

, 1053 n.16 (5th
Cir. 1990); Toomer v. Price, 

, 856-58 (La. 1929).
However, these cases do not address or support PCS’s position
that, as third party beneficiary, it may assert greater or better
rights against Shaw than Kaiser, its stipulator-promisee, after
Kaiser’s material breach of the subcontract of which the third
party stipulation was a part. And, while these cases may support
a conclusion that Louisiana courts will enforce “lien waivers”
executed in exchange for contemporaneous payment or alternate
security, they are not support for enforcement of a waiver where
there has been a failure of cause or consideration or material
breach of a commutative contract. As Shaw correctly points out,
they are distinguishable factually, contractually, and on other
grounds. Shaw’s 2d brief, pp. 11-13.
     58
       The Civil Code in several articles provides for the
“renunciation” of certain accrued or existing rights. See La.
Civ. Code art. 626 (usufruct); 

& 771-772 (predial
servitudes); 

(successions); 

(obligations with a term); 

(solidary obligations);

regimes); 

(sequestration);

(mandate); 

(prescription). The

                                    31
regulate waiver either.59

     We have found but three cases in which the Louisiana Supreme

Court comprehensively defined “waiver.”        In two insurance coverage

cases,    involving   whether   an   insurer   had    waived   a   coverage

exclusion, and whether an insurer had waived a condition precedent

of sound health, the state high court stated that “[w]aiver occurs

when there is an existing right, a knowledge of its existence and

an actual intention to relinquish it or conduct so inconsistent

with the intent to enforce the right as to induce a reasonable

belief that it has been relinquished.”60             In a third case the

Louisiana Supreme Court, in deciding whether homeowners had waived

their rights to sue the builder for noncompliance with building

plans and specifications, defined waiver in similar but more




Code does not, however, provide a general definition of
“renunciation” applicable to other rights.
     59
          La. R.S. § 9:4801, et seq.
     60
      Steptore v. Masco Constr. Co., Inc., 

, 1216
(La. 1994) (emphasis added)(citing Tate v. Charles Aguillard Ins.
& Real Estate, Inc., 

(La.1987); Ledoux v. Old
Republic Life Ins. Co., 

(La.App. 3d Cir. 1970);
Peavey Co. v. M/V ANPA, 

(5th Cir.1992)). In Tate
v. Charles Aguillard Insurance & Real Estate, Inc., the court
stated: “Of course, reliable proof of such a knowing and
voluntary waiver is necessary and the burden of producing it, as
in the proof of obligations generally, falls on the party who
demands 

(citing La. Civ. Code
art. 1831; 

(1870)); see also BLACK’S LAW DICTIONARY
1574 (7th ed. 1999)(“The party alleged to have waived a right
must have had both knowledge of the existing right and the
intention of forgoing it.”).

                                     32
comprehensive terms: “Though there are various definitions of the

term ‘waiver’, it can be comprehensively defined as a voluntary and

intentional relinquishment or abandonment of a known existing legal

right, advantage, benefit, claim, or privilege, which except for

such waiver the party would have enjoyed.”61                  If these waiver

definitions apply here, Shaw would not have been able, when the

Kaiser-Shaw subcontract was formed, to waive a right to file claims

and liens against PCS’s property.                 Shaw had no known existing

legal right to file a claim or lien against PCS at the inception of

the subcontract under which it had not yet performed any work.                We

are not called upon to make an Erie guess as to whether the

Louisiana Supreme Court would apply those definitions of waiver

here.     But   their   existence    in     the    court’s   jurisprudence    is

consistent with our undiminished Erie duty to follow and apply the

Louisiana Supreme Court’s rule against finding that a party has

waived    the   right     of   dissolution    of    a   contract,   unless   she

“express[es] her intent to relinquish that right in words that make

specific reference to the action to dissolve[.]”62

     In sum, we have not discovered any basis in Louisiana law for

concluding that a third party beneficiary, such as PCS, has a right

to demand performance from the promisor, like Shaw, even though the


     61
      Breaux v. Laird, 

, 38 (La. 1956)(emphasis
added).
     62
          Supra, n. 34.

                                       33
contracting party through which the beneficiary claims,                   Kaiser,

the   stipulator-promisee          here,        has   materially   breached      the

underlying contract and caused its dissolution.                PCS’s reliance on

inapposite Illinois authority indicates that it also was unable to

find Louisiana law to support its position.                Consequently, in the

absence of clear language in the subcontract to the contrary, we

conclude that Shaw did not relinquish, but may enforce, its right

to dissolution, and restoration. Consequently, PCS may not enforce

the dissolved lien waiver provision against Shaw.                   Accordingly,

unless we      find   merit   in   PCS’s        alternative   argument,   Shaw    is

entitled to enforce its claim and lien, holding PCS liable under

the LPWA.

                                       IV.

                                       A.

      Alternatively, PCS urges us to affirm the summary judgment in

its favor on a ground that the magistrate judge did not reach,

viz., that the statement of claim and privilege filed by Shaw did

not reasonably identify the immovable with respect to which its

work was performed.

      The LPWA provides that a statement of a claim or privilege

must reasonably identify the immovable with respect to which the

work was performed and its owner.63 “The purpose of a statement of

claim or privilege is to give notice to the owner (and contractor)


      63
           La. R.S. 9:4822.G.(3)

                                           34
of the existence of the claim and to give notice to persons who may

deal with the owner that a privilege is claimed on the property.”64

“Technical defects in the notice should not defeat the claim as

long as the notice is adequate to serve the purposes intended,”65

The filing of a statement of a claim or privilege is accomplished

when it is filed for registry with the recorder of mortgages of the

parish in which the work is to be performed.66    Each filing made

with the recorder of mortgages which contains a reference to

immovable property shall contain a description of the property

sufficient to clearly and permanently identify the property.      A

description which includes the lot and/or square and/or subdivision

or township and range meets the requirement of the Act.67   Naming

the street or mailing address without more is not sufficient.68

     On February 17, 1999 Shaw filed with the recorder of mortgages

in Ascension and Iberville Parishes an amended and supplemental

statement of claim and privilege in the amount of $5,350,000

(modifying its original statement of claim and privilege for


     64
      

Mercantile Nat. Bank of Dallas v. J.
Thos. Driscoll, Inc., 

(La. 1940); See Hibernia
National Bank v. Belleville Historic Development, L.L.C., 

,*306 (La. App. 4th Cir. 2002).
     65
          

R.S. 9:4831.A.
     67
          La. R.S. 9:4831.C.
     68
          

   filed    January   27,   1999)69   for    labor,       equipment,

materials and other engineering and construction services supplied

to Kaiser to improve the immovable property of PCS.                    To describe

PCS’s tract of land upon which its plant is located, it appears

that Shaw used the surveyor’s legal property description contained

in the deed by which PCS acquired title to the tract.                    The tract

evidently borders on the Mississippi River at the boundary line

between    Ascension    and   Iberville    Parishes,      so    that    the   tract

includes land contiguously located in each parish. In other words,

the   line   between    the   parishes    runs   through       PCS’s    tract   and

intersects its river-front boundary at some point not precisely

disclosed in this record. The surveyor’s legal description does not

attempt to specify which part of the tract lies in each parish but

simply begins by stating that the land is located east of the

Mississippi     River    in    Ascension     and    Iberville          Parishes.70


      69
      Shaw’s original statement of claim and privilege filed
January 27, 1999 in both parishes was essentially the same as the
amended and supplemental statement, except for lesser amount of
$1,389,707.04. The same surveyor’s legal property description was
attached as in Exhibit A of the amended and supplemental
statement. Both statements were filed timely and are essentially
the same in other respects. Therefore, we will discuss in detail
only the amended and supplemental statement of February 17, 1999.
      70
       The property description begins:
                          Legal Description
                             South Tract
      A TRACT OF LAND LOCATED IN SECTIONS 74, 75, &T95-R/E
      SECTIONS 38, 39, & 40, T95-R2E, SOUTHEASTERN DISTRICT,
      EAST OF MISSISSIPPI RIVER, ASCENSION & IBERVILLE
      PARISH, LOUISIANA

                                     36
Apparently, the same deed of acquisition using the same surveyor’s

legal description            was    recorded       by   PCS   in   both    Ascension    and

Iberville Parishes. In any event, it is undisputed that Shaw’s

statement of claim and privilege uses the only legal description

pertaining to PCS’s property that is recorded in Ascension and

Iberville Parishes.           Also, it is undisputed that PCS has not made

available       to    Shaw    any     other    legal      property        description    to

substitute for the legal property description recorded in the two

parishes.

       It is evident from the property description that the PCS tract

upon        which    the   construction        was      performed     is     bounded    by

identifiable railroad, electric utility, state highway rights of

way, and by identifiable tracts owned by a number of other named

industries, as well as the Mississippi River.71                       It is undisputed


       71
       More specifically, Shaw’s amended and supplemental
statement of claim provides, in pertinent part, as follows:

       ICF Kaiser Engineers, Inc...entered into a contract with the
       Owners of certain property believed to be PCS Nitrogen
       Fertilizer,L.P....whose address is Louisiana Highway 3115
       and 30, Post Office Box307, Geismar, La 70734 to provide
       labor, equipment, materials and other construction services
       for the construction of a project called “1265 STPD NITRIC
       ACID FACILITY.”

       ...Pursuant to [the Kaiser-Shaw] subcontract, SHAW supplied
       labor, equipment, materials and other
       engineering/construction services to...Kaiser...to improve
       the immovable property described...below.

       The subject immovable property, upon which the work was
       performed, is owned by...PCS Nitrogen Fertilizer,
       L.P....which immovable property is further described on

                                              37
that the 1265 STPD Nitric Acid Facility was erected at the PCS

plant     located   within    the   described   PCS   tract   near   Geismar,

Louisiana;72 that the prime PCS-Kaiser contract provides that PCS

will pay Kaiser $38,890,000 for the construction of the 1265 Nitric

Acid Facility;73 and that Shaw was not paid $5,350,000 for the

labor, equipment, materials and other engineering/construction

services that it alone had contributed to the project.

     The Louisiana courts have not added any legal gloss to the

LPWA’s requirement that a statement of a claim or privilege shall

“reasonably identify” the property with respect to which the work

was performed, for the purpose of notifying the owner, contractor,

and persons dealing with the owner that a privilege is claimed on

the property, and should be upheld despite technical defects if the

notice is adequate to serve the purposes intended.74 They have


     Exhibit A attached hereto and made a part hereof.

     Exhibit A consists of a surveyor’s lengthy metes and bounds

property description, entitled and commencing as follows:

                        Legal Description
                           South Tract
     A TRACT OF LAND LOCATED IN SECTIONS 74, 75, &T95-R/E
     SECTIONS 38, 39, & 40, T95-R2E, SOUTHEASTERN DISTRICT,
     EAST OF MISSISSIPPI RIVER, ASCENSION & IBERVILLE
     PARISH, LOUISIANA
     72
          See PCS Br. at 9.
     

.
     74
      See, e.g., Hibernia Nat. Bank v. Belleville Historic
Development, L.L.C., 

, 305-306 (La.App. 4th Cir.

                                       38
simply applied the unvarnished statutory standards and terms to

each varying factual situation to determine whether the worksite

was reasonably identified so as to provide adequate notice of the

claim and privilege to the owner, contractor and persons dealing

with the owner.75

     Applying the pertinent LPWA provisions, as we think the

Louisiana Supreme Court would, we conclude that reasonable minds

must find that Shaw preserved its claim and privilege by, inter

alia, “reasonably identify[ing] the immovable with respect to which

the work was performed...and the owner thereof.”76                     The legal

description      identifies PCS’s industrial tract on the Mississippi

River     with   certainty   according       to   surveys   by   a    registered

professional land surveyor with references including state plane

coordinates,      certain    section        corners,   metes,        bounds   and

identifiable landmarks.       PCS does not dispute the fact that the

1265 Nitric Acid Facility was constructed at PCS’s plant located



2002)(“[S]trict construction cannot be so interpreted as to
permit purely technical objections to defeat the real intent of
the statute, which is to protect materialmen, laborers and
subcontractors who engage in construction projects.”)(citing
Bernard Lumber Company, Inc. V. Lake Forest Construction Co. Inc.

(La. App. 1 Cir. 1990); Authement's Ornamental Iron
Works v. Reisfeld, 

(La. App. 4th Cir.1979); Morgan
v. Audubon Const. Corp., 

(La. App. 5 Cir. 1986))
Norris Rader, Inc. v. Swilley, 

(La. App. 3 Cir.
1993).
     75
          

R.S.9:4822.G.(3).

                                       39
within PSC’s industrial river-front tract. It is also evident from

the   foregoing           that   the   1265   STPD    Nitric    Acid    Facility     is   a

substantial construction or edifice with a distinctive name located

in PCS’s plant on the clearly and certainly described river-front

industrial tract. Consequently, we conclude that by furnishing the

surveyor’s legal property description---which                          described PCS’s

industrial tract on the Mississippi River, wherein PCS’s plant was

located, in which the distinctly named, substantial 1265 STP Nitric

Acid Facility was built—–Shaw reasonably identified the property

with respect to which the work was performed and the owner thereof.

Thus, Shaw’s statement of claim and privilege fulfills its purpose

of “giv[ing] notice to the owner (and contractor) of the existence

of the claim and [gives] persons who may deal with the owner that

a privilege is claimed on the property.”77 Because the “notice is

adequate to serve the purposes intended” any “[t]echnical defects
                                                               78
in the notice should not defeat the claim.”

       PCS argues that Shaw did not reasonably identify the property

where the work was done because the property description of PCS’s

river-front industrial tract was “too broad” to pin-point the site

of    the     1265    STPD       Nitric   Acid     Facility.    But    the   surveyor’s

description          of    PCS’s    unsubdivided      industrial       tract   was    the


       77
            

       78
            

not the ending, point.       Additionally, because of the

magnitude of the construction, the fact that the structure or

building was called by its specific, distinctive name, and the

undisputed fact that it was designed and built as an improvement to

PCS’s plant within the certainly described tract, there was a

reasonable identification of the place where the work was done so

as to give notice of the claim to persons who may deal with the

owner that a privilege is claimed on the property.   Because it was

adequate to serve this purpose, its technical defects, if any, do

not defeat the claim.

     The cases upon which PCS relies are inapposite.   In re Lurgi-

Knost, Inc., was a federal court decision predating the 1981 LPWA

revision holding that a lien affidavit, stating that materials

“were actually used in the construction of additions at the plant

site [of] Enjay Chemical Co., Baton Rouge, Louisiana[,]” was too

general to be effective because there was no legal description of

the plant site, and “there is nothing in the affidavit to even

vaguely indicate which building or structure and which lot or

parcel of ground may be involved.”79 Shaw’s affidavit, in contrast,

specifies far more than the owner’s plant in or near a certain

city; it also provides a surveyor’s detailed legal description of

the parcel containing the owner’s plant, and, in particular, names


     79
          

, 403 (M.D.La. 1974).

                                  41
specifically the $38 million 1265 STPD Nitric Acid Facility edifice

built at the plant with Shaw’s labor, materials and services.

Among other reasons, the lien in Samedan Oil Corp. V. Ultra

Fabricators, Inc., was invalid because the “steel structures”

fabricated        were not identified and there was “no block number or

specific legal description” of the owner’s property.80       As we have

explained, Shaw’s claim and privilege does name the particular

structure upon which the work was done and describes its location

with reference to a specific legal description that includes

specific sections, townships and ranges, among other identifiers.

Finally, Boes Iron Works v. Spartan Building Corp., is the most

inapposite because it held a lien to be invalid on account of its

identification of the property only by its municipal address.81

Shaw, of course, did not place its reliance on a municipal address

but used the multiple factors already described.



                                     B.

     Applying Section 4833 of the LPWA,82 the magistrate judge ruled

that Shaw, without reasonable cause, failed to cancel its claims

and privileges in response to PCS’s written request and assessed


     80
          

, (La. App. 3d Cir. 1999).
     81
          

(La. App.4th Cir. 1994).
     82
          La. R.S. 9:4833.

                                     42
damages and attorneys fees against Shaw. After reviewing the

record, however, we conclude that Shaw acted with reasonable cause

and should not be taxed damages and attorneys fees.

      The LPWA provides that, if a statement of claim or privilege is

improperly filed, an owner may require the filing party to give

written authorization for the recorder of mortgages to cancel the

statement of claim or privilege from the records.83             If the person

who filed the statement of claim or privilege fails, without

reasonable cause, to comply with the request within ten days, he

shall be liable for damages suffered by the owner as a consequence

and    for       reasonable      attorney’s   fees   incurred   in   obtaining

cancellation.84

       Shaw filed its claim and privilege on January 27, 1999 in

Ascension and Iberville Parishes and its amended and supplemental

claim and privilege in both parishes on February 27, 1999. On

October 20, 2000 PCS’s attorney sent Shaw’s attorneys a letter

demanding that Shaw cancel its claims and liens in both Ascension

and Iberville parishes and dismiss this action with prejudice

within 10 days. Shaw’s attorney responded on October 26, 2000 that

Shaw would not cancel its filings or dismiss this suit under the

LPWA because, inter alia, Kaiser had materially breached the


       83
            La. R.S. 9:4833.A.
       84
            La. R.S. 9:4833.B.

                                         43
subcontract giving Shaw the right under Civil Code article 1982 to

raise against PCS all defenses it could raise against Kaiser.

     In parts II & III of this opinion we conclude that, because

Kaiser materially breached the Kaiser-Shaw subcontract, Shaw had a

right under Civil Code articles 2013 et seq. to consider the

subcontract dissolved and to be restored to its position before

entering the subcontract; and Shaw had a right under Civil Code

article 1982 to use these rights in defense against PCS.                        Thus,

because Shaw was no longer obliged by the dissolved subcontract to

refrain from filing liens or claims against PCS’s property, Shaw

had the right to file the statements of claim and privilege against

PCS’s property upon which Shaw’s work was performed. Consequently,

Shaw’s   claim   and   privilege      were   properly      filed,    and       it   had

reasonable   cause     to   refuse    to   cancel   them    from    the    mortgage

records.

     The magistrate judge also decided, however, that Shaw should

be   assessed    damages     and     attorney’s     fees    because       it    acted

unreasonably in failing to cancel its claim and lien in Iberville

Parish because it knew that none of its work had been performed on

PCS’s property in the parish.              But there is no support in the

record or basis in law for the magistrate judge’s decision in this

respect either.      Because the Ascension-Iberville line runs through

PCS’s industrial tract and plant, Shaw did not know whether its



                                        44
work had been performed in one or both of these parishes.85                Thus,

when PCS filed a written request that Shaw cancel its claims and

privileges in both parishes and dismiss its lawsuit on October 20,

2000, Shaw had reasonable cause to refuse to comply.

     PCS   did   not    send    Shaw    any    other   written   request    for

cancellation of a claim or privilege.              Therefore, Shaw was not

called upon to consider making any response to a written request

for cancellation       other   than    PCS’s   October   20,   2000   in   globo

request.   Consequently, Shaw was never without reasonable cause to

refrain from cancelling any of its claims or privileges.

     PCS’s January 4, 2001 amendment of its counterclaim to allege

that Shaw had refused to cancel its liens in both parishes and to



     85
       The magistrate judge apparently concluded that PCS owned
property on both sides of the river and that the nitric acid
facility’s location with respect to the river would have made
clear to Shaw in which parish the work was done. R. at 0683.
However, the legal description of the property establishes that
the whole of the property in question is east of the river. The
surveyor’s description included in Shaw’s statement of claim and
privilege begins
                         Legal Description
                            South Tract
     A TRACT OF LAND LOCATED IN SECTIONS 74, 75, &T95-R/E
     SECTIONS 38, 39, & 40, T95-R2E, SOUTHEASTERN DISTRICT,
     EAST OF MISSISSIPPI RIVER, ASCENSION & IBERVILLE
     PARISH, LOUISIANA
 (emphasis added) and the description of the north tract begins
 similarly. The parish line runs essentially perpendicular to the
 river, therefore the position of the nitric acid facility
 relative to the river would not, in and of itself, make clear in
 which parish the work was done.



                                        45
pray for damages and attorney’s fees cannot be considered as such

a request because it related only to Shaw’s rightful refusal to

comply with PCS’s October 20, 2000 request.              Nor can we so consider

PCS’s subsequent filing of an affidavit by Robert D. Brinker, its

Lead Process Supervisor, dated February 15, 2001 that “[t]he 1265

STPD Nitric Acid Facility is located [o]n a tract of land 160 feet

x   180 feet,      located   exclusively       in   Ascension       Parish.”      That

instrument did not request Shaw to do anything.                       Moreover, Mr.

Brinker’s affidavit did not furnish Shaw with satisfactory proof

that   none   of    its   work   had   taken    place    in   Iberville        Parish.

According     to   his    affidavit    Mr.     Brinker   is     a    “Lead     Process

Supervisor,” not an attorney or a surveyor, and does not show that

he is qualified to determine the position of the parish line with

respect to PCS’s plant or the 1265 STPD Nitric Acid Facility.

Furthermore, the affidavit does not give any factual basis for such

a determination by Mr. Brinker, does not show that Mr. Brinker’s

opinion as to the location of the parish line with respect to

Shaw’s work has a reliable basis, and does not contain a suitable

legal description by which anyone could determine the location of

the 160 feet x 180 feet tract conclusorily referred to by Mr.

Brinker.

                                   Conclusion

       For the reasons assigned, we reverse the judgment of the



                                        46
magistrate judge and instead render judgment in favor of Shaw and

against PCS, on the issue of liability only, for the recognition of

the validity of Shaw’s claim and privilege under the LPWA against

PCS personally, and against its property upon which Shaw’s work was

performed, for the amounts to be determined in further proceedings

consistent with this opinion, and for the assessment of all costs

of these proceedings against PCS.

 Magistrate Judge’s Judgments REVERSED; Judgment RENDERED, on the

issue of liability, recognizing Shaw’s right to enforce its claim

and privilege against PCS personally and against PCS’s property

upon which Shaw’s work was performed, for amounts to be determined

in further proceedings, and the assessment of all costs of these

proceedings   against   PCS.    REMANDED   for   further   proceedings

consistent with this opinion.




                                  47