Louisiana appeals court sides with construction company in dispute with Orleans Parish School Board

By Glenn Minnis | May 3, 2018

NEW ORLEANS — The Louisiana Fourth District Court of Appeal has reversed a trial court’s decision and ruled in favor of a construction company in a dispute with the Orleans Parish School Board over payment for services.

The appeal was heard by Chief Judge James F. McKay III and Judges Regina Bartholomew Woods and Terri F. Love, who issued the decision on April 18.

The owners of Woodrow Wilson Construction LLC recently filed suit against the Orleans Parish School Board, alleging that it owed them $22,476 related to the construction of a new school. According to the plaintiffs, after completing a vast amount of work on the project, the company submitted its application for final retainage payment.

The suit further alleged that the payment was categorically denied because school board officials insisted that the board was entitled to withhold payment under terms of the contract as a way of collecting liquidated damages of $5,000 per day for a 517-day delay in the project's completion that it alleged was the construction company's fault. 

Woodrow Wilson Construction filed a petition, asking the trial court to order final retainage payment, but its petition was refused on the grounds that it created unanswered questions about the terms of the original contract.

In rendering its verdict to reverse the lower court’s decision, Love said in the decision that the plaintiffs were entitled to final payment, irregardless of the defendant’s outstanding liquidated damages claim.

As part of the appellate court's decision, Love cited the state’s prompt payment provisions, which stipulates that “all progressive stage payments and final payments shall be paid when they respectively become due and payable under the contract.”

"Giving practical effect to all parts of the contract, we find OPSB's contractual interpretation does not comport with the law," Love said in the decision. "Asserting a separate claim for damages as a means to circumvent a mandamus action would render La. R.S. 38:2191 meaningless. OPSB's separate damages claim must be tried in an ordinary proceeding. Liability for the delay in this case is a heavily contested issue and the resolution of which would delay determination of whether to issue a writ of mandamus."

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Louisiana Fourth Circuit Court of Appeal Orleans Parish School Board

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