Opinion
23-C-356
05-31-2024
COMMAND CONSTRUCTION, LLC v. PARISH OF JEFFERSON
COUNSEL FOR PLAINTIFF/RESPONDENT, COMMAND CONSTRUCTION, LLC Luke P. LaRocca Denise C. Puente Douglas F. Wynne, Jr. Peter S. Thriffiley, Jr. Kelly A. Gismondi COUNSEL FOR DEFENDANT/RELATOR, PARISH OF JEFFERSON Michael R.C. Riess Johanna E. Lambert Michael A. Levatino, Jr. AMICUS CURIAE, LOUISIANA ASSOCIATED GENERAL CONTRACTORS Harry J. Philips, Jr. John T. Andrishok
ON APPLICATION FOR SUPERVISORY REVIEW FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 831-689, DIVISION "C" HONORABLE JUNE B. DARENSBURG, JUDGE PRESIDING
COUNSEL FOR PLAINTIFF/RESPONDENT, COMMAND CONSTRUCTION, LLC Luke P. LaRocca Denise C. Puente Douglas F. Wynne, Jr. Peter S. Thriffiley, Jr. Kelly A. Gismondi
COUNSEL FOR DEFENDANT/RELATOR, PARISH OF JEFFERSON Michael R.C. Riess Johanna E. Lambert Michael A. Levatino, Jr.
AMICUS CURIAE, LOUISIANA ASSOCIATED GENERAL CONTRACTORS Harry J. Philips, Jr. John T. Andrishok
Panel composed of Judges Stephen J. Windhorst, Scott U.Schlegel, and Jason Verdigets, Pro Tempore
AFFIRMED
SJW
JMV
CONCURS WITH REASONS
SUS
STEPHEN J. WINDHORST JUDGE
Relator/defendant, Jefferson Parish ("the Parish"), seeks review of the trial court's June 14, 2023 judgment (1) granting respondent/plaintiff Command Construction, L.L.C's ("Command") motion for partial summary judgment; and (2) denying relator's motion for summary judgment. For the reasons that follow, we deny relator's writ application.
After a thorough review of the writ application, opposition, and attachments thereto, and careful consideration of the statutory law and jurisprudence, upon de novo review, we cannot find that the trial court erred in denying the Parish's motion for summary judgment and granting Command's motion for partial summary judgment for the reasons which follow.
Because this case concerns the legal effect of this court's ruling in Boh Bros. Construction Co., L.L.C. v. Parish of Jefferson, 20-472 (La.App. 5 Cir. 06/02/21), 325 So.3d 500, writ denied, 21-950 (La. 10/19/21), 326 So.3d 261, and writ denied, 21-951 (La. 10/19/21), 326 So.3d 259, the following factual background is necessary and relevant to the legal issues in this writ application.
PROCEDURAL HISTORY and FACTS
On June 10, 2020, the Parish issued an Advertisement for Bids for "West Esplanade Avenue U-Turn (Vicinity of Harvard Avenue)," Project No. 2017-031-RPB, Proposal No. 50-00130667 ("the project"). Command, Boh Bros., and other contractors submitted sealed bids for the project. The bids were opened and read aloud on July 28, 2020. Boh Bros. had the lowest monetary bid of $3,111,405.50 and Command had the second lowest bid of $3,288,248.00. Despite being the lowest monetary bidder, the Parish unilaterally rejected Boh Bros.' bid as non-responsive because it was not on the revised Public Bid Form and Unit Price Form.On August 11, 2020, Jefferson Parish sent a bid tabulation to all of the bidders, notifying Boh Bros. that its bid was rejected and Command was announced as the lowest bidder and was awarded the project.
Relator's writ application asserts that the date was June 5, 2020; however, a review of the exhibits from Boh Bros., supra, shows that the Advertisement for Bids was issued on June 10, 2020.
At the time of its bid submission, Command provided a bid bond in the amount of five percent of the value of the bid, or approximately $164,614.14.
The Parish's determination to reject Boh Bros.' bid as non-responsive was not prompted by a bid challenge from Command.
Addendum No. 2 required headers and footers on the Public Bid Form and Unit Price Form.
On August 13, 2020, Boh Bros. submitted a timely written protest to the Parish. On August 20, 2020, the Parish rejected the protest finding that Boh Bros. did not submit its bid on the revised Public Bid Form and Unit Price Form as required by Addendum No. 2, which required headers and footers on the bid form. No challenge was made to the responsiveness of Command's bid by either the Parish or Boh Bros.
On September 10, 2020, Boh Bros. filed a "Verified Petition for Temporary Restraining Order, Preliminary Injunction, Permanent Injunction and Mandamus, or in the alternative, for Damages," alleging it was the lowest responsive and responsible bidder for the project because its bid conformed with the bidding requirements under the Louisiana Public Bid Law, it was the lowest monetary bidder, and the Parish is prohibited from modifying the Louisiana Public Bid Form. Boh Bros. sought to enjoin the Parish from awarding the project to any other bidder and to compel the Parish to award the project to Boh Bros. The trial court granted Boh Bros. request for a temporary restraining order. Command filed a petition for intervention on September 21, 2020, alleging that it was the lowest responsive bidder for the project because it complied with the bid form and an award to any other contractor would be in violation of the Louisiana Public Bid Law. The Parish filed a response maintaining that Boh Bros.' bid was non-responsive because it did not comply with the bidding requirements.
On September 30, 2020, after a trial on the merits, the trial court upheld the Parish's rejection of Boh Bros.' bid as non-responsive and denied the relief requested by Boh Bros. in its petition. The trial court further found Command to be the lowest responsive bidder for the project.
On October 30, 2020, Boh Bros. filed a motion for devolutive appeal, which was granted. On appeal, Boh Bros. alleged that the trial court erred in finding that it did not comply with the bidding requirements for the project. Boh Bros. also alleged that the trial court erred in failing to rule that the Parish's modifications to the Louisiana Uniform Public Work Bid Form did not violate the statutory requirements of the Louisiana Public Bid Law. Accordingly, Boh Bros. argued that as the lowest responsive bidder, it was entitled to mandamus and injunctive relief.
Pursuant to La. R.S. 38:2215, Boh Bros. was not entitled to file a suspensive appeal, only the Parish. La. R.S. 38:2215 A(2)(b) provides, in pertinent part:
(b) Public entity's right to suspensive appeal. Unless waived, only the public entity may take a suspensive appeal within fifteen calendar days of the rendition of the final judgment of the district court. [Emphasis in original.]
The Parish argued in opposition that the trial court did not err in upholding the Parish's rejection of Boh Bros.' bid and that the addition of headers and footers on the bid form did not violate the Public Bid Law. The Parish argued that the issue before this court was res nova, i.e., whether the requirement of headers and footers on the Uniform Bid Form and Unit Price Form was a violation of the Louisiana Public Bid Law. In its statement of facts and conclusion, the Parish mentioned that it awarded the contract to Command. However, the fact that the contract was already awarded to Command was not an assignment of error nor briefed as an argument before this court on appeal.
Command also filed an opposition holding that the trial court did not err in its judgment and the trial court properly held that Command was entitled to the award of the contract for the project.
On November 17, 2020, while Boh Bros.' appeal was pending, the Parish and Command entered into a contract for the project according to the mandates of La. R.S. 38:2215. As required by the contract, Command provided a payment and performance bond in the amount of $3,288,288.00. The Parish issued a notice to Command to proceed and Command commenced with the project. The Parish subsequently directed Command to perform additional work on the project, which necessitated the issuance of Change Order No. 1.
La. R.S. 38:2215, in pertinent part, provides:
A. (1) A public entity shall act not later than forty-five calendar days after the date of opening bids to award such public works contract to the lowest responsible and responsive bidder or to reject all bids. However, the public entity and the lowest responsible and responsive bidder, by mutually written consent, may agree to extend the deadline for award by one or more extensions of thirty calendar days.
(2)(a) Expeditious trial on the merits. If an interested party or bidder files for an injunction or writ of mandamus, they shall receive a trial on the requested relief in the district court within thirty calendar days of the filing of the suit. The district court shall render a final judgment not more than fifteen calendar days after the conclusion of the trial. A public entity shall award a public works contract in accordance with the judgment of a Louisiana court determining the lowest responsible and responsive bidder no later than forty-five days after such judgment, unless a timely suspensive appeal is filed.
(b) Public entity's right to suspensive appeal. Unless waived, only the public entity may take a suspensive appeal within fifteen calendar days of the rendition of the final judgment of the district court. The suspensive appeal of the public entity shall be returnable to the appropriate appellate court not more than fifteen calendar days from the rendition of the final judgment of the district court. The suspensive appeal of the public entity shall be expedited and heard no later than thirty calendar days from the return day of the appeal. The appellate court shall render its ruling on the merits within thirty calendar days of the return day of the appeal.
(c) Under no circumstance may an awarded bidder agree to relinquish or to compromise its award status in favor of another bidder. [Bold emphasis original; Italics added.]
B. If the lowest responsible and responsive bidder has timely provided all documents required by R.S. 38:2212, and no injunction or temporary restraining order is in effect, the lowest responsible and responsive bidder and the public entity shall execute the contract not later than sixty calendar days after the date of the public entity's award of the contract to the lowest responsible and responsive bidder. [Italic emphasis added.]
La. R.S. 38:2215 C provides:
C. The public entity shall issue to the contractor a notice to proceed with the project or work order not later than thirty calendar days following the date of execution of the contract by both parties, whichever execution date is later. However, the public entity and the contractor, upon mutual written consent of both parties, may agree to extend the deadline to issue the notice to proceed.
On June 2, 2021, in reversing the trial court's judgment denying Boh Bros.' petition for injunctive relief and mandamus and upholding the Parish's rejection of Boh Bros.' bid, this court stated:
In the case at bar, the Parish required the header and footer on each page of the Uniform Bid Form and the Uniform Price Form, pursuant to Addendum No. 2. A public entity should not include any requirements in its advertisement for bids or bid form that it considers insignificant or are able to be waived. Hamp's Const. L.L.C. v. City of New Orleans, 05-489 (La. 2/22/06), 924 So.2d 104, 110, rehearing denied, (La. 4/17/06). "[W]hen a public entity elects to place certain requirements
in its advertisement for bids and on its bid forms, that entity is bound by those requirements and may not choose to waive them at a later date." Id., quoting Broadmoor, L.L.C., 867 So.2d at 657. Therefore, the requirement of the placement of the header and footer on each page of the bidding documents by the Parish cannot be considered as an insignificant or non-substantive labeling requirement. Consequently, once the Parish required the placement of the header and footer on each page of the bid form, it could not waive that requirement. The Parish was required to reject Boh Bros.' bid as non-responsive because the bid form did not comply with the requirements set forth in the bidding documents. Thus, the issue before this Court is whether the Parish's requirement that the header and footer be placed on each page of the bidding documents was in violation of the Louisiana Public Bid Law. [Emphasis added.]Boh Bros., 325 So.3d at 506-507.
After reviewing the facts of this case and Durr Heavy Construction, LLC v. City of New Orleans, 16-609 (La. 04/15/16), 189 So.3d 384, this court found that "the Parish violated the Louisiana Public Bid Law when it imposed the requirement in Addendum No. 2 that the Uniform Bid Form and the Uniform Price Form contain a header and footer on each page." Id. at 508. Accordingly, this court reversed the trial court's judgment upholding the Parish's rejection of Boh Bros.' bid for the project as non-responsive and denying Boh Bros.' petition for preliminary injunction, permanent injunction, and mandamus. Id. This court further enjoined the Parish from awarding Command the contract for the project and ordered that Boh Bros. be declared the lowest responsive and responsible bidder for the contract for the project. Id.
This court further stated:
The headers and footers were not treated as simple labeling indicators by the Parish, but rather, they were requirements that could disqualify a bidder if they were not included on the bidding documents. R.S. 38:2212 (B)(2) provides that only the specified information and documentation listed shall be required to be submitted by a bidder at the time designated in the advertisement for bid opening, and the headers and footers on the Uniform Bid Form and the Uniform Price Form required by the Parish are not specifically listed. Thus, we conclude that Boh Bros.' bid was improperly rejected by the Parish as a non-responsive bid because it did not include the header and footer on each page of its bidding documents. Accordingly, we find that the trial court was manifestly erroneous in denying Boh Bros.' request for injunctive relief. Id. at 508.
The Parish and Command each applied for writs with the Louisiana Supreme Court. On October 19, 2021, the Louisiana Supreme Court denied writs. Despite this court's ruling and denial of writs by the Louisiana Supreme Court, the Parish never ordered Command to stop working on the project and Command asserted that it was not in a position to refuse to continue work on the project because failing to do so would have placed its payment and performance bond at risk.
The Parish's agent and representative, the project engineer, determined that the project was substantially completed in December 2021. The Parish took possession of the project on December 30, 2021 and has been using it since that time.
On April 4, 2022, the Parish settled with Boh Bros. and the lawsuit on appeal in Boh Bros., supra, was dismissed. Command points out that after settling with Boh Bros., the Parish then hired the attorneys that represented Boh Bros. to represent the Parish in this lawsuit.
Pursuant to the contract, upon completion of its work, Command sought to have the Parish certify substantial completion of the project and execute Change Order No. 1 in order for it to invoice the Parish for the amount under the contract and for the extra work requested. Command sent this request to the Parish's agent, the project engineer. On April 18, 2022 the project engineer signed a recommendation that Change Order No. 1 be approved. On April 19, 2022, the project engineer also recommended final acceptance of the project to the Parish. The Parish refused to issue and execute the final acceptance of the project and refused to execute Change Order No. 1. Additionally, the Parish refused to make final payment to Command for the work performed. The Parish asserted for the first time that the contract with Command was an absolute nullity. Therefore, the Parish contended that Command was entitled to costs, but not overhead or profit under the contract. At no point during the project did the Parish direct Command to stop work on the project or indicate that it would not pay Command in full for the work performed on the project.
On August 17, 2022, Command filed a petition for damages against the Parish seeking full payment for the project, including overhead and costs. Command alleged several causes of action, including breach of contract, unjust enrichment, and detrimental reliance. The Parish filed an answer and affirmative defenses, including that the contract between the Parish and Command is an absolute nullity.
On March 3, 2023, Command filed a motion for partial summary judgment seeking to have the trial court declare that the Parish accepted the project pursuant to La. R.S. 38:2241.1 of the Public Works Act. The Parish opposed the motion arguing that La. R.S. 38:2241.1 does not apply to this dispute and Command cannot compel acceptance of the project because the terms of the statute require a written contract, which does not exist in this case. Specifically, the Parish asserted that the contract at issue is an absolute nullity and therefore, ceases to exist.
On April 13, 2023, the Parish filed a motion for summary judgment moving the trial court to declare that (1) based on this court's ruling in Boh Bros., supra, the contract between the Parish and Command is an absolute nullity; and (2) because the contract is an absolute nullity, Command is only entitled to its costs without profit or overhead. Command filed an opposition contending that it was entitled to recover all of its costs, including profit and overhead for the project and the "clean hands" doctrine prevents the Parish from asserting nullity of the contract as a defense. Command averred that even if the contract is absolutely null, Command is not precluded from recovering overhead and profit under a quantum meruit theory or its detrimental reliance cause of action which was also asserted in its petition.
On June 14, 2023, after an evidentiary hearing, the trial court (1) granted Command's motion for partial summary judgment finding that the Parish had accepted the project; and (2) denied the Parish's motion for summary judgment. The trial court rendered written reasons for its judgment. The Parish filed the instant writ application seeking review of the trial court's judgment.
LAW and ANALYSIS
The Parish asserts the following issues and assignments of error: (1) whether a contract entered into in violation of the Louisiana Public Bid law is an absolute nullity; (2) whether this court's ruling in Boh Bros., supra, renders the contract between the Parish and Command an absolute nullity as a matter of law; (3) whether the clean hands doctrine applies to a contract that is absolutely null for violation of the Public Bid Law; (4) whether "recover[y] in the interest of justice" under La. C.C. art. 2033 applies to a contract that is absolutely null for violation of the Public Bid Law; (5) whether a contractor is entitled to overhead and profit under an absolutely null contract entered into in violation of the Public Bid Law; and (6) whether the Public Works Act, specifically, La. R.S. 38:2241.1 applies to a public contract that is absolutely null for violation of prohibitive law.
The Parish's motion for summary judgment
The Parish argues that this court in Boh Bros., supra, held that the actions of the Parish in requiring headers and footers on the bid forms, for the project in this case, were in violation of the Public Bid Law. Therefore, the Parish contends that the issue before the trial court on its motion for summary judgment was purely legal, i.e., whether the contract between the Parish and Command was an absolute nullity based on the ruling in Boh Bros., supra, and if so, whether Command is entitled to profit and overhead when a contract is absolutely null. Relying on La. R.S. 38:2220 and cited jurisprudence, the Parish contends that a violation of a prohibitory law, the Public Bid Law in this case, renders the contract between Command and the Parish an absolute nullity. Further, the Parish contends that under well-settled jurisprudence, because the contract is an absolute nullity, Command is only entitled to recover quantum meruit (i.e., its costs) without profit and overhead.
In support of its position that a violation of the Public Bid Law, as in the instant case, renders the contract absolutely null, the Parish also cited Boxwell v. Department of Highways, 14 So.2d 627 (La. 1943); Marquette v. Housing Authority of Opelousas, 137 So.2d 374 (La.App. 3 Cir. 1962); Coleman v. Bossier City, 305 So.2d 444 (La. 1974); State, Through Office of Governor v. L.W. Eaton Const. Co., Inc., 392 So.2d 477 (La.App. 1 Cir. 1980); Davis v. Franklin Parish School Bd., 412 So.2d 1131 (La.App. 2 Cir. 1982), writ denied, 415 So.2d 942 (La. 1982); Barriere Const. Co., LLC v. Terrebonne Parish Consolidated Government, 99-2271 (La.App. 1 Cir. 02/18/00), 754 So.2d 1123, writ denied, 00-801 (La. 05/05/00), 761 So.2d 546; State Machinery & Equipment Sales, Inc. v. Iberville Parish Council, 05-2240 (La.App. 1 Cir. 12/28/06), 952 So.2d 77; and Ryan Gootee General Contractors, LLC v. Plaquemines Parish School Board, 18-276 (La.App. 4 Cir. 11/07/18), 318 So.3d 1022.
In support of the argument that a contractor is entitled to only costs, not profit or overhead, the Parish cited Marquette, supra; Boxwell, supra; Smith v. Town of Vinton, 43 So.2d 18 (La. 1949); Coleman, supra, Jones v. City of Lake Charles, 295 So.2d 914 (La.App. 3 Cir. 1974); and Alonzo v Chifici, 526 So.2d 237 (La.App. 5 Cir. 1988).
The Parish asserts that Marquette v. Housing Authority of Opelousas, 137 So.2d 374 (La.App. 3 Cir. 1962) is directly on point with the facts of this case, however, the trial court did not even address the Marquette case. The Parish also argues that Maroulis v. Entergy Louisiana, LLC, 21-384 (La. 06/08/21), 317 So.3d 316, which deals with an unlicensed contractor, and the other cases cited by Command are not applicable to the facts in this case. The Parish contends that the trial court erroneously applied the "clean hands" doctrine in this case. Moreover, the Parish asserts the "clean hands" argument by Command is contrary to Command's position in Boh Bros., supra. The Parish contends that no one is at fault for the finding that the contract at issue is an absolute nullity. At all times leading up to the Louisiana Supreme Court denying writs, the Parish avers that it and Command argued and maintained that Command was the lowest responsive and responsible bidder, and that they were in good faith and performed/supervised the work in good faith.
It is well-settled that the trial court's oral or written reasons for judgment form no part of the judgment, and appellate courts review judgments, not reasons for judgment. Wooley v. Lucksinger, 09-571 (La. 04/01/11), 61 So.3d 507, 572. Judgments are often upheld on appeal for reasons different than those assigned by the trial court. Id. Written reasons for a judgment are merely an explanation of the trial court's determinations. Id.
Therefore, the Parish argues that Louisiana statutory and case law unambiguously provides that a contract in violation of prohibitory law is absolutely null, and a party seeking recovery under an absolutely null contract is only entitled to its costs without profit and overhead. Accordingly, the Parish requests that this court reverse the trial court's judgment granting Command's motion for partial summary judgment and denying its motion for summary judgment.
Citing La. C.C. art. 4, the Parish argues that there is no need to look to equity because the law provides exactly what happens to a contract and the contractor's recovery when the contract is entered into in violation of the Public Bid Law (i.e., contractor is only entitled to costs without profit and overhead when the contract is an absolute nullity). Specifically, the Parish contends that a party cannot rely on an equitable doctrine when there is an adequate remedy provided by law, such as in this case.
In opposition, Command contends that the trial court was correct in finding that a genuine issue of material fact exists as to whether the "clean hands" doctrine precluded the Parish from raising the issue of nullity, and whether the "exceptional circumstances" language contained in La. C.C. art. 2033 applies to the facts of this case such that Command may be entitled to recover its overhead and profit. Command contends that Maroulis, supra, which concerned a violation of a prohibitory law and the application of the "clean hands" doctrine, applies to the facts of this case and the Parish's actions and inactions. Command also avers that Marquette, supra, cited by the Parish is distinguishable based on the law in effect at that time versus the law currently in effect. Command further contends that the other cases cited by the Parish are also distinguishable from the facts of this case because in those cases, the Public Bid Law was not followed and the contractor's bid at issue was not responsive. Thus, in those cases, the deprivation of profit and overhead was serving the purpose of the Public Bid Law. Command asserts that in this case, there has been no challenge or assertion that its bid was not responsive. Command also asserts the Parish is at fault for entering into the contract with it and for its actions after this court's ruling in Boh Bros., supra, and the Supreme Court's denial of writs.
Command contends that under La. C.C. art. 2033, performance may be recovered in "exceptional situations when, in the discretion of the court . . . recovery would further the interest of justice." Command asserts that the trial court did not affirmatively award Command full recovery, the trial court merely found a genuine issue of material fact exists as to whether under the particular facts of this case, Command is entitled to its overhead and profit. Command argues that the Parish, as the party with the superior bargaining position, should not be permitted to hide behind the Public Bid Law to utilize Command's profit and overhead to pay for the damage it may have caused to Boh Bros. Command avers, as the innocent party, it should not suffer the loss because of the Parish's actions in improperly rejecting the bid of Boh Bros. Furthermore, Command asserts that genuine issues of fact exist as to whether it could recover all of its costs under the theory of detrimental reliance, which it also asserted in its petition.
A motion for summary judgment shall be granted if the motion, memorandum, and supporting documents 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. 966 A(3). The burden of proof rests with the mover. La. C.C.P. art. 966 D(1). Nevertheless, if the mover will not bear the burden of proof at trial on the issue that is before the court on the motion for summary judgment, the mover's burden on the motion does not require him to negate all essential elements of the adverse party's claim, action, or defense, but rather to point out to the court the absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. Id. The burden is on the adverse party to produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law. Id.
Appellate courts review a judgment granting or denying a motion for summary judgment de novo, therefore, appellate courts ask the same questions as the trial court in determining whether summary judgment is appropriate: whether there is any genuine issue of material fact, and whether the mover is entitled to judgment as a matter of law. Williams v. Nelson, 18-207 (La.App. 5 Cir. 12/19/18), 263 So.3d 466, 473, writ denied, 19-0092 (La. 3/18/19), 267 So.3d 92.
Under La. C.C. art. 2030, a contract is an absolute nullity "when it violates a rule of public order, as when the object of a contract is illicit or immoral." Moreover, an absolutely null contract may not be confirmed. Id.
A public entity may not take any action which is inconsistent with the Public Bid Law. Broadmoor, L.L.C. v. Ernest N. Morial New Orleans Exhibition Hall Authority, 04-211 (La. 03/18/04), 867 So.2d 651, 656; Leblanc Marine, L.L.C. v. Division of Administration, Office of Facility Planning and Control, 19-53 (La. 10/22/19), 286 So.3d 391, 394. The Public Bid Law, La. R.S. 38:2212, et seq., is a prohibitory law founded on public policy. Broadmoor, 867 So.2d at 656; Louisiana Associated General Contractors, Inc. v. Calcasieu Parish School Bd., 586 So.2d 1354, 1359 (La.1991); Haughton Elevator Division v. State, Through Division of Administration, 367 So.2d 1161, 1164 (La.1979). The legislature, pursuant to the Public Bid Law, has prescribed the conditions upon which it will authorize public work to be done on its behalf or on behalf of its political subdivisions. Broadmoor, 867 So.2d at 656. The Public Bid Law was enacted to protect the interest of taxpaying citizens against contracts of public officials entered into because of favoritism and involving exorbitant and extortionate prices. Id.; Haughton, 367 So.2d at 1164-1165.
A violation of the Public Bid Law renders the contract null and void. La. R.S. 38:2220 A and B provide:
A. Any purchase of materials or supplies, or any contract entered into for the construction of public works, contrary to the provisions of this Part shall be null and void.
B. The district attorney in whose district a violation of this Part occurs, the attorney general, or any interested party may bring suit in the district court through summary proceeding to enjoin the award of a contract or to seek other appropriate injunctive relief to prevent the award of a contract which would be in violation of this Part, or through ordinary proceeding to seek appropriate remedy to nullify a contract entered into in violation of this Part.
Additionally, La. C.C. art. 2033 provides:
An absolutely null contract, or a relatively null contract that has been declared null by the court, is deemed never to have existed. The parties must be restored to the situation that existed before the contract was made. If it is impossible or impracticable to make restoration in kind, it may be made through an award of damages.
Nevertheless, a performance rendered under a contract that is absolutely null because its object or its cause is illicit or immoral may not be recovered by a party who knew or should have known of the defect that makes the contract null. The performance may be recovered, however, when that party invokes the nullity to withdraw from the contract before its purpose is achieved and also in exceptional situations when, in the discretion of the court, that recovery would further the interest of justice.
Absolute nullity may be raised as a defense even by a party who, at the time the contract was made, knew or should have known of the defect that makes the contract null. [Emphasis added.]
Official revision comments do not constitute law and are not authoritative. They may, however, be persuasive. See Dye v. LLOG Exploration Company, LLC, 20-441 (La.App. 5 Cir. 11/03/21), 330 So.3d 1222, 1224. Relevant to this case, the 1984 Revision Comment (c) to La. C.C. art. 2033 states the following reasoning:
(c) Under this Article, a party who knew or should have known at the time of contracting of a defect that made the contract absolutely null may not avail himself of the nullity when the purpose of the illegal contract has been accomplished. See Boatner v. Yarborough, 12 La. Ann. 249 (1857); Gravier's Curator v. Carraby's Executor, 17 La. 118 (1841); Mulhollan v. Voorhies, 3 Mart. (N.S.) 46 (1824). This conclusion flows naturally from the principle expressed in the traditional Roman maxim, nemo propriam turpitudinem allegare potest (no one may invoke his own turpitude), sometimes called the "clean hands" doctrine. If a performance has been rendered under such a contract by a party with knowledge of the cause of nullity, the other party may keep that performance, in accordance with the complementary Roman maxim, In pari causa turpitudinem potior est conditio possidentis (in case of equal wrongdoing the one in possession is in a better position). See 2 Litvinoff, Obligations 163-169 (1975). The philosophy underlying those principles is not to reward the recipient of the performance, who by hypothesis is as guilty as the renderer, but to protect the court from mediating disputes between dealers in iniquity. See Gravier's Curator v. Carraby's Executor, 17 La. 118 (1841). See also Tzarano, Etude sur la regie: "Nemo auditur propriam turpitudinem allegans" 103-115 (1926); Le Tourneau, La regle: "Nemo auditur ..." 178-179 (1970).
In Boxwell v. Department of Highways, 14 So.2d 627 (La. 1943), Smith v. Town of Vinton, 43 So.2d 18 (La. 1949), and Coleman v. Bossier City, 305 So.2d 444 (La. 1974), the Supreme Court held that the vender/contractor under an absolutely null contract, based on a violation of a prohibitory law, was entitled to costs under the contract, without profit or overhead on the theory of unjust enrichment. In Marquette, supra, the contract, in violation of a prohibitory law, was found to be absolutely null in a prior proceeding, and the appellate court found that the contractor was entitled to quantum meruit (i.e., costs) but not profit and overhead.
In Coleman, the Supreme Court in dictum also alluded to circumstances wherein a party may be entitled to additional amounts under the theory of detrimental reliance. Coleman, 305 So.2d at 447. Here, Command has argued its petition also stated a cause of action for detrimental reliance, and that it may be entitled to recovery its full costs under this theory.
These cases involved a violation of the public bid law in effect at that time.
In Jones v. City of Lake Charles, 295 So.2d 914, 917-918 (La.App. 3 Cir. 1974), the appellate court held that a contract between the parties would not have been prohibited by law but found that the parties did not enter into a contract for the repair of a boat. The court held that where no contract of any kind exists, but where the party rendering the service was in good faith and the public body accepted the work which was performed and it derived a benefit from the work performed, the party that rendered performance was entitled to recover under quantum meruit, its costs and labor, which benefited the public body. Id. at 917.
In Alonzo v Chifici, 526 So.2d 237, 243 (La.App. 5 Cir. 1988), writ denied, 527 So.2d 307 (La. 1988), this court held that a prohibitory law, the licensing law, La. R.S. 37:2150, et seq., cannot be avoided by private agreement. Citing Boxwell, supra, this court found that the construction contract between the unlicensed plaintiff and defendant was in contravention of prohibitory law, and therefore, the contract was null and void. Id. This court further found that it would be unjust to allow defendant to escape liability for payment of the actual cost of materials, services and labor while benefiting from the renovations performed, and thus, awarded plaintiff for his expenses. Id. at 243-245. However, this court held that plaintiff was not entitled to profit and overhead. Id. at 243. In these cases, the "clean hands" doctrine codified in La. C.C. art. 2033 was not at issue, and the courts awarded the vendor/contractor its costs, without profit and overhead based on the theory of unjust enrichment.
Boxwell, supra, Smith, supra, Coleman, supra, and Jones, supra, were decided before the enactment of La. C.C. art. 2033 in 1984, No. 331, §1, eff. Jan. 1, 1985.
Recently, however, in Maroulis, supra, the contractor raised the affirmative defense of nullity of the contract in response to a third-party demand by Hotel Investors, wherein Hotel Investors alleged a breach of contract and was seeking insurance coverage under the contractor's insurance policy. Maroulis v. Entergy Louisiana, LLC, 20-226 (La.App. 5 Cir. 02/10/21), 314 So.3d 1002, 1004, rev'd, 21-384 (La. 06/08/21), 317 So.3d 316. The contractor alleged the contract was absolutely null because it was in violation of a prohibitory law, the licensing law, and subsequently filed a motion for summary judgment alleging that the contract was an absolute nullity. Id. at 1004-1005. The trial court denied the contractor's motion for summary judgment. Id. at 1005. On appeal, this court held that the contract was in violation of a prohibitory law and thus, the contract was an absolute nullity. Id. at 1005-1008. Hotel Investors argued that even assuming the contract is null, the contractor cannot invoke nullity to avoid the obligations it knowingly undertook and was paid for, because it knew it was an unlicensed contractor at the time it signed the contract. Id. at 1008. This court further found Hotel Investors' reliance on the "clean hands" doctrine was misplaced, reversed the trial court's judgment, and granted the contractor's motion for summary judgment, dismissing Hotel Investors' claims against the contractor. Id. at 1009. In a per curiam reversing this court and reinstating the trial court's judgment, the Louisiana Supreme Court found that the "clean hands" doctrine set forth in La. C.C. art. 2033 was applicable to the facts of the case and concluded that the trial court "could not be said to have erred in denying" the contractor's motion for summary judgment. Maroulis, 317 So.3d at 316.
This court in Boh Bros., supra, found that the Parish violated the Public Bid Law. The Public Bid Law is a prohibitory law. Before the ruling, however, the Parish had already entered into a contract with Command. Pursuant to La. C.C. art. 2030, R.S. 38:2220, and well-settled jurisprudence, a contract in violation of a prohibitory law is an absolute nullity. Based on this court's ruling in Boh Bros., the Parish raised the affirmative defense of absolute nullity of the contract, asserting that because the contract is an absolute nullity, Command is only entitled to costs. However, Command asserts that under the affirmative defense of the "clean hands" doctrine, codified in La. C.C. art. 2033, the Parish's nullity defense is precluded in this case. Command contends that the Parish's actions (1) in failing to order Command to stop work on the project after this court's ruling in Boh Bros. and/or after the Supreme Court denied writs; (2) in requesting additional work to be performed on the project; (3) in utilizing the project after completion without acceptance; and (4) alleging nullity of the contract, seeking to pay Command only its costs after settling with Boh Bros., and hiring the attorneys that previously represented Boh Bros., all constitute actions/inactions that preclude the Parish from asserting nullity of the contract under the "clean hands" doctrine.
The trial court denied the Parish's motion for summary judgment, finding that based on the actions/inactions of the Parish after this court's ruling in Boh Bros. and the denial of writs by the Supreme Court, genuine issues of material fact existed as to whether the contract is an absolute nullity and if so, whether Command is entitled to recover the full amount of its costs, including profit and overhead.
La. C.C. art. 2033 limits recovery to costs under a contract that is absolutely null due to an illicit or immoral cause, and further provides that profit and overhead may not be recovered by a party who knew or should have known of the defect that makes the contract null. Based on a thorough review of statutory law and jurisprudence, and the facts of this case, upon de novo review, we find genuine issues of material fact exist as to the parties' knowledge, intent, and good faith regarding the defect that made the contract absolutely null (i.e., application of La. C.C. art. 2033 to the Parish's contract with Command).
There is scant jurisprudence dealing with the "clean hands" doctrine as codified in La. C.C. art. 2033 and there is no jurisprudence dealing with the specific facts of this case.
We further conclude, as did the trial judge, that even if the contract is a nullity, genuine issues of material fact exist as to whether Command is limited to recovery of costs. As an exception to the general rule that only costs may be recovered for a contract which is a nullity due to violation of a prohibitory law, La. C.C. art. 2033 permits that profit and overhead may also be recovered in exceptional situations when, in the discretion of the court, that recovery would further the interest of justice. In the instant case, the Parish evidently allowed Command to continue work on the project after this court's ruling in Boh Bros. and after the Supreme Court denied writs; requested additional work on the project; and put the project into use after completion, then contended that the contract is a nullity. These and other related allegations of fact may well constitute "exceptional situations." Further, the question of whether, in the discretion of the trial court, such exceptional circumstances as these are in the interest of justice, so as to justify recovery of more than only costs, is also material and remains, at the least, genuinely at issue.
The trial court made several specific "findings of fact." Those "findings of fact" tend to support Command's contentions. Regardless, for the purpose of considering the Parish's motion for summary judgment, we need go no further than determining that genuine issues of material fact exist.
We therefore further conclude that the Parish is not entitled to judgment as a matter of law limiting Command's recovery only to costs, without profit and overhead, on the basis that the contract is an absolute nullity. Accordingly, we find no error in the trial court's denial of the Parish's motion for summary judgment.
Command's motion for partial summary judgment
The Parish further contends that the trial court erred in granting Command's motion for partial summary judgment because the ruling is based on enforcement of provisions of the Public Works Act ("PWA") that cannot apply to an absolutely null contract. Specifically, the Parish avers that under the PWA, a written contract is required and here, as an absolute nullity, the contract ceased to exist. The Parish argues that the trial court's judgment impermissibly attempts to revive an absolutely null contract and allow Command to recover amounts not owed (i.e., the judgment will impermissibly allow Command to seek damage remedies provided under the PWA, for instance under La. R.S. 38:2191, which provides for mandamus and penalties in the event payment is withheld without just cause).
Command argues that the trial court did not err by granting its motion for partial summary judgment upon finding that pursuant to La. R.S. 38:2241.1, the Parish had accepted the project when it took possession of the same in December 2021. Command contends that it is undisputed that the parties entered into a written contract and therefore, the subsequent status of the contract should have no bearing on the need for the public body to be required to file an acceptance as required by law. As the Parish noted, the statutory lien period does not begin to run until such time as the acceptance is filed. Command asserts that if no acceptance is filed by the Parish, the statutory lien period under the Public Works Act cannot commence and as a result, Command is unable to provide a clear lien and privilege certificate which is a prerequisite to final payment on the project. Command further argues that how it intends to utilize the trial court's ruling is not before this court. The Parish speculates that Command intends to use the ruling to seek additional damages; however, Command has not done so and thus, that assertion by the Parish should not be considered by this court. La. R.S. 38:2241.1 provides:
A. When any public entity enters into a written contract for the construction, alteration, or repair of any public works, in accordance with the provisions of R.S. 38:2241, the official representative of the public entity shall have recorded in the office of the recorder of mortgages, in the parish where the work has been done, an acceptance of such work or of any specified area of such work, not later than thirty calendar days after the date of completion or substantial completion of such work.
The Parish's argument presupposes that the contract with Command is an absolute nullity, but for the reasons expressed throughout this opinion, the contract has not been declared to be an absolute nullity. The trial court found to be without genuine issue that despite this court's ruling in Boh Bros. and the Supreme Court's denial of writs, the Parish did not request Command to stop work on the project and allowed Command to proceed with completion of the project. The Parish's agent and representative then indicated the project was substantially completed and recommended final acceptance by the Parish. The trial court also found the Parish did not issue a final acceptance, but it has been utilizing the project since its completion. The trial court also found that the Parish accepted the project when it started utilizing the project and therefore, granted Command's motion for partial summary judgment. Thus, for the purpose of this motion, and because the contract has not been declared an absolute nullity, the parties had a written contract subject to R.S. 38:2241.1.
Upon de novo review, considering the facts of this case, we find no reason to disturb the trial court's ruling at this time.
DECREE
Accordingly, for the reasons stated herein, the Parish's writ application is denied. The trial court's denial of the Parish's motion for summary judgment, and the trial court's granting of the Command's motion for summary judgment, are maintained.
AFFIRMED
SCHLEGEL, J., CONCURS WITH REASONS
I concur with the majority's decision to deny the motion for summary judgment filed by Jefferson Parish.
I write separately, however, to point out that I do not believe that there are genuine issues of material fact related to the question of whether or not the contract between the Parish and Command Construction, LLC violated the Public Bid Law. We declared so in our original opinion in 2021. See Boh Bros. Constr. Co. v. Par. of Jefferson, 20-472 (La.App. 5 Cir. 6/2/21), 325 So.3d 500, 508, writ denied, 21-951 (La. 10/19/21), 326 So.3d 259, and writ denied, 21-950 (La. 10/19/21), 326 So.3d 261 ("After review of the facts of this matter, in conjunction with the Durr decision, we find that the Parish violated the Louisiana Public Bid Law when it imposed the requirement in Addendum No. 2 that the Uniform Bid Form and the Uniform Price Form contain a header and footer on each page.")
And typically, this finding would be sufficient for the trial court to declare the contract an absolute nullity in accordance with La. R.S. 38:2220(A), which provides that "[a]ny purchase of materials or supplies, or any contract entered into for the construction of public works, contrary to the provisions of this Part shall be null and void." But in this case, the trial court correctly found that there are genuine issues of material fact related to Command's affirmative defenses, including the clean hands doctrine as codified in La. C.C. art. 2033, and whether Command is limited to recovery of costs, or if this is an exceptional situation in which the trial court would permit the recovery of profit and overhead in the interest of justice.