Southern Environmental Management and Specialties, Inc. v. City of New Orleans and Honorable Latoya Cantrell, in Her Official Capacity as the Mayor of the City of New Orleans and Command Construction Industries, LLC and Arch Specialty Insurance, Inc.

SOUTHERN NO. 2022-CA-0018

ENVIRONMENTAL *

MANAGEMENT AND

SPECIALTIES, INC. * COURT OF APPEAL

VERSUS * FOURTH CIRCUIT

CITY OF NEW ORLEANS AND * STATE OF LOUISIANA

HONORABLE LATOYA

CANTRELL, IN HER *******

OFFICIAL CAPACITY AS THE

MAYOR OF THE CITY OF

NEW ORLEANS AND

COMMAND CONSTRUCTION

INDUSTRIES, LLC AND ARCH

SPECIALTY INSURANCE,

INC.

APPEAL FROM

CIVIL DISTRICT COURT, ORLEANS PARISH

NO. 2020-02242, DIVISION “E”

Honorable Omar Mason, Judge

******

Judge Rosemary Ledet

******

(Court composed of Chief Judge Terri F. Love, Judge Rosemary Ledet, Pro

Tempore Judge Madeline Jasmine)

Jonathan S. Forester

Christopher K. LeMieux

Evian Mugrabi

RIESS LeMIEUX, LLC

1100 Poydras Street, Ste. 1100

New Orleans, LA 70163

COUNSEL FOR PLAINTIFF/APPELLANT

Craig N. Mangum

Elliott Scharfenberg

Audrey E. Martin

KREBS FARLEY & DRY, PLLC

400 Poydras Street, Suite 2500

New Orleans, LA 70130

COUNSEL FOR DEFENDANT/APPELLEE

AFFIRMED

May 11, 2022

RML

This is a construction project, nonpayment dispute. The plaintiff—Southern

TFL

Environmental Management and Specialties, Inc. (“SEMS”)—was a subcontractor

MJ

on a Louisiana Public Works Act (“LPWA”) project—the Hagan-Lafitte Drainage

Upgrades and Green Infrastructure Project (the “Project”).1 SEMS sued, among

others, the Project’s statutory surety—Arch Insurance Company (“Arch”)—

asserting two claims: a payment claim under the bond (“Payment Claim”); and an

insurance bad faith penalties claim under La. R.S. 22:1892 and 22:1973 (“Penalties

Claim”). On Arch’s motion for partial summary judgment, the trial court dismissed

SEMS’s Penalties Claim.2 SEMS appeals.

The sole question presented is a legal one: whether a surety that issues a

statutory bond under the LPWA is immune from insurance bad faith penalties

1 The LPWA—La. R.S. 38:2241, et seq.—governs public work contracts and requires that

governing authorities entering into a construction contract for a public work furnish a statutory

bond. It is undisputed that the Project falls within the ambit of a public work regulated by the

LPWA.

2 As discussed elsewhere in this opinion, the trial court, in a separate judgment, granted SEMS’s

summary judgment motion on SEMS’s Payment Claim; the trial court’s ruling on the Payment

Claim is not before us on appeal.

1

under La. R.S. 22:1892 and 22:1973. Answering that question in the affirmative,

we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

This dispute originated from a public works project. The four parties

involved in this dispute are as follows: (i) the City of New Orleans, as Project

owner; (ii) Command Construction Industries, LLC (“Command”), as general

contractor; (iii) SEMS, as subcontractor; and (iv) Arch, as surety.3

In October 2018, the City entered into a bid contract for the Project with

Command—the lowest, responsible bidder. Command, in turn, subcontracted with

SEMS to perform a portion of the work on the Project. In connection with the

Project, Arch provided Command’s required statutory bond with Command as

principal, Arch as surety, and SEMS as obligee.4 During the Project, Command

asked SEMS to perform additional work on the Project.

Thereafter, a dispute arose over the timing and propriety of the amount owed

by Command to SEMS for work on the Project. When SEMS invoiced Command

for the work, Command paid a portion of the invoiced amount but disputed the

remaining balance that SEMS claimed was due. Seeking to recover the remaining

balance, SEMS took three steps. First, in November 2019, SEMS notified Arch

that it was making a payment claim under the bond for the remaining balance

claimed due.5 Second, in March 2020, SEMS recorded a statement of claim (a lien)

3 Although all four of these parties are named in the underlying lawsuit, this appeal involves only

SEMS, as appellant, and Arch, as appellee.

4 The bond obligated Arch to pay all sums due and owed to subcontractors for the Project.

5 In November 2019, SEMS submitted a claim under the payment bond for its claims for

extra-contractual quantity and unit price increases to its scope of work.

2

with the Orleans Parish Recorder of Mortgages. Third, also in March 2020, SEMS

sued, among others, Arch asserting the Payment Claim and the Penalties Claim.

SEMS filed a motion for summary judgment, seeking a judgment against

Arch on both the Payment Claim and the Penalties Claim. Arch, in response,

opposed the motion, in general, and filed a cross motion for partial summary

judgment as to the Penalties Claim, in particular. Triggered by a consent agreement

between the parties, the trial court bifurcated the summary judgment hearing and

separately heard and decided the Payment Claim and the Penalties Claim.

In July 2021, the trial court held a hearing on the Payment Claim. At that

hearing, the trial court orally granted SEMS’s motion, ruling in SEMS’s favor and

against Arch as to the Payment Claim.6 The following month, in August 2021, the

trial court held a hearing on the parties’ cross summary judgment motions on the

Penalties Claim. Following the hearing, the trial court, in October 2021, rendered a

written judgment granting Arch’s motion and denying SEMS’s motion.

In its October 2021 judgment, the trial court stated that, pursuant to the

LPWA (La. R.S. 38:2241, et seq.), SEMS has no claims as a matter of law for

relief under the Insurance Code; thus, the trial court dismissed with prejudice

SEMS’s claims against Arch under La. R.S. 22:1982 and 22:1973—the Penalties

Claim.7 This appeal by SEMS followed.

6 As discussed elsewhere in this opinion, the trial court, on this court’s order, supplemented the

record on appeal with a signed, written judgment granting SEMS’s summary judgment on the

Payment Claim. In that judgment, the trial court ordered that “ARCH shall pay SEMS its

contract balance, including retainage, and payment for extra work under the contract between

[Command] and SEMS in the total amount of $219,730.45, as bifurcated and prayed for, for the

reasons provided in open court.”

7 The trial court also denied SEMS’s summary judgment motion as to its Penalties Claim. In so

doing, the trial court held that SEMS has no claim, as a matter of law, for relief under the

Insurance Code against Arch. Citing La. C.C.P. art. 966(A)(3), the trial court further held that

material disputed facts exist and SEMS’s summary judgment motion for bad faith claims under

3

DISCUSSION

Standard of Review

The same standard of review applies to an appellate court’s review of a trial

court’s ruling on a summary judgment motion and a trial court’s determination of a

legal issue—the de novo standard. See Elliott v. Cont’l Cas. Co., 06-1505, p. 10

(La. 2/22/07), 949 So.2d 1247, 1253 (observing that “appellate courts review

summary judgments de novo under the same criteria that govern the district court’s

consideration of whether summary judgment is appropriate”;8 Pierce Foundations,

Inc. v. Jaroy Const., Inc., 15-0785, p. 7 (La. 5/3/16), 190 So.3d 298, 303

(“Pierce”) (observing that “[b]ecause this matter involves the interpretation of

statutory provisions and only questions of law are presented, review by this court is

de novo”). Moreover, “because the case involves the [LPWA], it must be strictly

construed.” Id.

Jurisdictional Issue

An appellate court has a duty to decide, regardless if a party raises the issue,

whether it has jurisdiction to consider the merits of an appeal. See Urquhart v.

Spencer, 15-1354, p. 3 (La. App. 4 Cir. 12/1/16), 204 So.3d 1074, 1077 (quoting

Moon v. City of New Orleans, 15-1092, 15-1093, p. 5 (La. App. 4 Cir. 3/16/16),

190 So.3d 422, 425). The trial court’s October 2021 judgment, from which this

appeal arises, is an “issue” or a “claim” summary judgment under La. C.C.P. art

the Insurance Code is denied. Given our ruling affirming the trial court’s grant of Arch’s partial

summary judgment motion, we pretermit discussion of SEMS’s cross motion.

8 As this court has noted, the “procedural methodology and principles governing summary

judgment review are well-settled.” Lomax v. Transdev Servs., Inc., 20-0620, p. 6 (La. App. 4 Cir.

10/20/21), 331 So.3d 368, 373, writ denied, 21-01737 (La. 2/8/22), 332 So.3d 668. Given the

legal nature of the issue presented here, we find it unnecessary to repeat those principles here.

4

966(E).9 Such a judgment, albeit a partial final judgment, is not final unless the

certification requirements of La. C.C.P. art. 1915(B) are met.

Here, the trial court declared that this was a partial final judgment under La.

C.C.P. art. 1915 and that there was no just reason for delay of an appeal. In

support, the trial court declared that all remaining claims against Arch had been

dismissed with prejudice. In a footnote, the trial court stated that “SEMS’s claims

against Arch under the payment bond were granted in open court [in July 2021].

This [October 2021] Judgment does not modify the [July 2021] order from the

Court.”

Although the trial court certified the October 2021 partial summary

judgment as final pursuant to La. C.C.P. art. 1915(B), that designation is not

determinative of this court's jurisdiction. Instead, when an order designating a

judgment as final for appeal purposes is accompanied by explicit reasons, the

reviewing court must determine whether the trial court abused its discretion in

certifying the judgment. R.J. Messinger, Inc. v. Rosenblum, 04-1664, p. 13 (La.

3/2/05), 894 So.2d 1113, 1122.

Here, Arch contends in its appellee brief that the October 2021 judgment is

not final given the absence from the record of a signed, written judgment reflecting

the trial court’s July 2021 oral ruling on the Payment Claim. To resolve the

procedural problem created by the absence of a written judgment on the Payment

Claim, this court, sua sponte, ordered the trial court to supplement the record with

a signed, written judgment reflecting its July 2021 oral ruling. The trial court

9 La. C.C.P. art 966(E) provides that “[a] summary judgment may be rendered dispositive of a

particular issue, theory of recovery, cause of action, or defense, in favor of one or more parties,

even though the granting of the summary judgment does not dispose of the entire case as to that

party or parties.”

5

complied with the order. The trial court signed a judgment on the Payment Claim

in April 2022; and the record was supplemented with that signed, written

judgment.

Because all of SEMS’s claims against Arch—the Payment Claim and the

Penalties Claim—have been dismissed by written judgments, we find no abuse of

discretion in the trial court’s certification of the October 2021 judgment as a final,

appealable judgment pursuant to La. C.C.P. art. 1915(B). See Overmier v. Traylor,

475 So.2d 1094, 1094-95 (La. 1985) (observing that “once the final judgment has

been signed, any previously existing defect has been cured, and there is no useful

purpose in dismissing the otherwise valid appeal”).We, thus, turn to the substantive

issue presented here.

Substantive Issue

Again, this appeal presents the narrow, legal issue of whether a surety that

issues a statutory bond under the LPWA is immune from liability for insurance bad

faith penalties under the Louisiana Insurance Code—La. R.S. 22:1892 and 22:1973

(the “Insurance Penalties Provisions”). SEMS contends that the Insurance Penalties

Provisions apply to sureties under the LPWA given the general definitional

provisions of the Louisiana Insurance Code,10 coupled with the all-inclusive

language in the Insurance Penalties Provisions. SEMS stresses Arch’s counsel’s

admission that Arch is an insurer.

SEMS acknowledges, however, that this court resolved the same legal issue

in a surety’s favor in Metro Builders Hardware, Inc. v. Burko Const., Inc., 93-1970

10 See La. R.S. 22:46(10) (defining an insurer as “every person engaged in the business of

making contracts of insurance, other than a fraternal benefit society”); La. R.S. 22:47(18)

(classifying surety as insurance).

6

(La. App. 4 Cir. 2/25/94), 633 So.2d 838 (“Metro”). Nonetheless, SEMS contends

that the Louisiana Supreme Court, in its subsequent decision in Pierce, implicitly

overruled Metro.

Arch counters that Metro has not been overruled and is dispositive. Arch

emphasizes that the Legislature has not revised the statutory provision this court

cited in Metro—La. R.S. 38:2241(C)—that provides for immunity to a surety (the

“Immunity Provision”). Arch further emphasizes, as this court also noted in Metro,

that the LPWA has its own penal provision—La. R.S. 38:2246, which provides for

attorney’s fees.

To resolve the impact, if any, of Pierce on our precedent in Metro, we begin

by summarizing the Metro and Pierce cases and then addressing the impact of

Pierce on Metro. At the outset, we note that both Metro and Pierce arose out of

public works projects governed by the LPWA. In both cases, the issue addressed

was a purely legal one.

Metro

The legal issue this court addressed in Metro was whether the Insurance

Penalty Provisions—there, former La. R.S. 22:122011—applied to a surety bond

issued under the LPWA. The plaintiff, a material supplier, sued the general

contractor and the statutory surety asserting a claim for the following three items:

(i) the principal amount due for the materials; (ii) attorney’s fees under the LPWA,

La. R.S. 38:2246; and (iii) insurance bad faith penalties under the Louisiana

Insurance Code, La. R.S. 22:1220. The trial court found the surety liable for the

first two items, but denied the third one—the insurance bad faith penalties.

11 After Metro was decided, the Louisiana Legislature renumbered the Insurance Penalty

Provisions. The substance of the penalty provisions has not been changed.

7

On appeal, the material supplier made the same argument SEMS makes

here—that the Insurance Penalties Provisions applied because a surety bond is an

insurance contract and, thus, the surety’s failure to pay under that contract resulted

in insurance bad faith penalties. Rejecting that argument, this court reasoned that a

surety under the LPWA could not be held liable for any claim not provided for in

the LPWA. In so holding, this court cited the following five factors:

• The LPWA is sui generis; it is the exclusive remedy to parties in public

construction work; and it must be strictly construed;

• The LPWA requires a bond be furnished by a public entity that contracts for

the construction of public work in excess of a certain sum; that required

bond is a statutory bond. La. R.S. 38:2241(A);

• The LPWA provides certain immunities to sureties—the Immunity

Provision. La. R.S. 38:2241(C) (providing “[s]ureties and contractors

executing payment bonds for public works contracts under this Part shall be

immune from liability for or payment of any claims not required by this

Part”)’;

• Although the LPWA contains an attorney’s fees provision, it contains no

penalty provision. See La. R.S. 38:224 (providing that attorney’s fees are

recoverable when payment is not made within thirty days after amicable

demand on the principal or surety and the claimant recovers the full amount

of the claim); and

• Louisiana courts have refused to allow recovery on a statutory bond beyond

the LPWA’s provisions.

Summarizing, this court observed that “[b]ecause the public contract and bond in

this case are governed by the [LPWA], [the statutory surety] is not liable for any

claim not provided for in the statute.” Metro, 633 So.2d at 840.

Pierce

In Pierce, the Supreme Court granted a subcontractor’s writ application to

interpret two LPWA provisions—La. R.S. 38:2247 and 38:2242(B). At the outset

of its opinion, the Supreme Court observed that it “granted the writ application to

8

determine whether, under La. R.S. 38:2247, the notice and recordation

requirements of La. R.S. 38:2242(B) are necessary conditions for a claimant's right

of action against a bond furnished pursuant to La. R.S. 38:2241.” Pierce, 15-0785,

p. 1, 190 So.3d at 299.12

In addressing the issue, the Supreme Court summarized the LPWA’s history

and observed that under the LPWA, a claimant on a public works project has two

avenues of relief: (i) an action against the general contractor and surety on the

project’s statutory bond (“Bond Action”); and (ii) in lieu of a lien, a privilege

against funds in the hands of the public authority with whom the original contract

was entered into (“Privilege Claim”). The Supreme Court held that the

subcontractor’s failure to comply with the notice and recordation requirements of

12 In Pierce, a general contractor entered into a contract with the Jefferson Parish Council

(“Parish”) to construct a gym. In compliance with La. R.S. 38:2241 A(2), the general contractor

obtained a bond with a surety, Ohio Casualty Insurance Company (“Ohio Casualty”). The

general contractor then entered into a subcontract with Pierce Foundation, Inc. (“Pierce”) for the

installation of pilings. After completing its work in November 2008, and upon the general

contractor’s failure to pay for the work, Pierce sued the general contractor in July 2009. A year

later, Pierce added Ohio Casualty as a defendant. The general contractor then filed for

bankruptcy; thereafter, the matter proceeded solely against Ohio Casualty. Almost a year later,

Parish filed a notice of acceptance of the work in the mortgage records. Pierce failed to file a

sworn statement of claim in the mortgage records.

Ohio Casualty filed a summary judgment motion contending that Pierce failed to preserve

its rights to proceed against it, citing La. R.S. 38:2247. The trial court granted in part and dened

in part Ohio Casualty’s summary judgment motion; the trial court granted it solely to the extent

that there was no privilege in Pierce’s favor. The appellate court denied Ohio Casualty’s writ

application on the showing made, stating that “we decline to exercise our supervisory

jurisdiction” and citing K Construction, Inc. v. Burko Construction, Inc., 629 So.2d 1370 (La.

App. 4th Cir. 1993)(“Burko”), and Wilkin v. Dev Con Builders Inc., 561 So.2d 66 (La. 1990).

Pierce Founds., Inc. v. The Ohio Casualty Ins. Co., 12-0859 (La. App. 5 Cir. 11/09/12)

(unpublished). Following a bench trial, a judgment was rendered against Ohio Casualty.

On appeal, the appellate court, changing its position, reversed. Construing La. R.S.

38:2247, the appellate court held that “only those claimants who have complied with the notice

and recordation requirements of La. R.S. 38:2242(B) shall not be deprived of a right of action on

the bond.” Pierce Founds., Inc. v. JaRoy Constr., Inc., 14-669, p. 7 (La. App. 5 Cir. 3/25/15),

169 So.3d 580, 584. The appellate court held that the notice and recordation requirements set

forth in La. R.S. 38:2242(B) are prerequisites for a right of action on the bond. The appellate

court found that the subcontractor’s (Pierce’s) failure to comply with these prerequisites deprived

it of a right of action on the bond. In so holding, the appellate court rejected the reasoning of the

Burko case. The Supreme Court granted Ohio Casualty’s writ to address this legal issue.

9

the LPWA deprived it of the Privilege Claim, but not the Bond Action. Pierce, 15-

0785, p. 8, 190 So.3d at 304. In support of its holding, the Supreme Court cited

two factors—the ambiguity of the statutory language in question and the purpose

of the LPWA.

As to the ambiguity, the Supreme Court observed that the plain language of

La. R.S. 38:2242(B)—which included the permissive language that a claimant

“may”13 file a sworn statement of claim—and the language of La. R.S. 38:2247—

which included a reference to the recordation “requirements” of section 2242(B)—

were in conflict. To resolve this ambiguity, the Supreme Court looked to the

purpose of the statutory provision as a whole.

The LPWA’s purpose, the Supreme Court noted, is “to ‘protect those

performing labor and furnishing materials for public works’ rather than protecting

the sureties on the bond.” Pierce, 15-0785, p. 10, 190 So.3d at 305 (quoting Wilkin,

561 So.2d at 70). To achieve the purpose, the LPWA “creates an additional

remedy to persons contributing to the construction, alteration, or repair of public

works”—the Privilege Claim. Pierce, 15-0785, p. 10, 190 So.3d at 305 (emphasis

in original). The LPWA, however, “is not intended to—and does not—affect rights

between parties proceeding directly in contract”—the Bond Action. Pierce, 15-

0785, pp. 10-11, 190 So.3d at 305.14 Accordingly, the Supreme Court concluded

13 The Supreme Court cited La. R.S. 1:3, which provides that “‘[t]he word ‘shall’ is mandatory

and the word ‘may’ is permissive.” Pierce, 15-0785, p. 8, 190 So.3d at 304.

14 Continuing, the Supreme Court observed that “La. R.S. 38:2247 is first and foremost a

prescription provision, providing an additional year to parties filing suit after the acceptance of

work or default notice is filed.” Pierce, 15-0785, p. 10, 190 So.3d at 305. Emphasizing the

unique circumstances presented in Pierce, the Supreme Court noted that the subcontractor had

filed suit over a year before the acceptance was filed, the parties litigated the claims through

discovery and motions, and the surety obviously was on notice of the suit. Based on the unique

circumstances, the Supreme Court commented that “[r]equiring additional notice under these

unique circumstances . . . would be futile and merely duplicative.” Id.

10

that “[b]ecause the statutory language at issue is ambiguous, and because the

purpose of the Act is to assist laborers in recovery—not to immunize sureties

where parties may proceed in contract—the purpose of the Act is effectuated by

this decision.” Pierce, 15-0785, p. 13, 190 So.3d at 307.15

Issue Presented in This Case

The issue here is whether a surety that issues a statutory bond under the

LPWA is immune from insurance bad faith penalties under La. R.S. 22:1892 and

22:1973. Citing La. R.S. 38:2241(C), the Immunity Provision, this court in Metro

answered that question in the affirmative. As noted elsewhere in this opinion,

SEMS argues that the Supreme Court in Pierce effectively overruled this court’s

decision in Metro. In support, SEMS cites the following three statements by the

Supreme Court in Pierce:

• The LPWA “creates an additional remedy to persons contributing to the

construction, alteration, or repair of public works”—the Privilege Claim.

Pierce, 15-0785, p. 10, 190 So.3d at 304 (emphasis in original).

• “[T]he purpose of the Act is to assist laborers in recovery—not to immunize

sureties where parties may proceed in contract.” Pierce, 15-0785, p. 13, 190

So.3d at 307.

• “[A]ny other interpretation of La. R.S. 38:2242 and 38:2247 would

undermine the stated purpose of the Act: to protect those contributing to the

construction, alteration, or repair of public works, not to foreclose

preexisting contractual rights between parties.” Pierce, 15-0785, p. 12, 190

So.3d at 306-07.

15 Buttressing it reasoning, the Supreme Court cited with approval this court’s decision in Burko,

authored by former Chief Justice John Dixon sitting pro tempore. The Supreme Court noted that

Burko considered and rejected the same arguments made by the surety in Pierce. Agreeing with

Burko, the Supreme Court observed that “any other interpretation of La. R.S. 38:2242 and

38:2247 would undermine the stated purpose of the Act: to protect those contributing to the

construction, alteration, or repair of public works, not to foreclose preexisting contractual rights

between parties.” Pierce, 15-0785, p. 12, 190 So.3d at 306-07.

11

According to SEMS, Pierce stands for the proposition that the LPWA can be

harmonized with other laws—including other statutory schemes, such as the

Louisiana Insurance Code—and that it is not a subcontractor’s exclusive remedy.

Arch counters that Pierce, in addressing the legal issue before it, never left

the confines of the LPWA itself and, thus, is consistent with Metro. According to

Arch, Pierce never harmonized the LPWA and other statutory schemes; rather,

Pierce stands for the limited proposition that a subcontractor may pursue the Bond

Action—a contract claim—against the general contractor and its statutory surety

despite the lack of timely filing and recordation. Arch also emphasizes that the

majority opinion in Pierce does not mention Metro. We agree.

Nothing in Pierce changes our holding in Metro. The Supreme Court in

Pierce addressed an entirely different issue of statutory construction than the issue

presented in Metro. The key statutory provision cited in Metro was La.

R.S. 38:2241(C)—the Immunity Provision. Although the surety in Pierce raised

the Immunity Provision as a defense to the subcontractor’s claim against it, the

majority in Pierce declined to address the Immunity Provision. As one of the

dissenting justices in Pierce, former Justice Knoll, observed:

Nowhere does the majority opinion address this key provision in the

[L]PWA—the immunity granted the surety under La. R.S. 38:2241(C)—,

which renders the majority’s analysis clearly erroneous. A proper statutory

analysis would address the immunity provision, which the surety . . . is

urging in this case. The immunity provision clearly grants [the surety]

immunity because [the subcontractor] did not follow the notice and

recordation requirements before (or even after) it filed suit against [the

surety].”

Pierce, 15-0785, p. 6, 190 So.3d at 310 (Knoll, J., dissenting). In an apparent

response to the dissent, the majority in Pierce inserted a footnote in its opinion,

stating that the Immunity Provision was not intended to supplant contractual

12

remedies a LPWA claimant otherwise possesses. Pierce, 15-0785, p. 11, n. 6, 190

So.3d at 306.16

Given the failure of the majority opinion in Pierce to construe the Immunity

Provision coupled with its focus on two entirely different LPWA statutory

provisions, we find SEMS’s contention that Pierce effectively overruled Metro

unpersuasive. 17 As Arch emphasizes, the Legislature has not amended the

Immunity Provision since Metro was decided. Again, the Immunity Provision

expressly provides that “[s]ureties . . . executing payment bonds for public works

contracts under this Part shall be immune from liability for or payment of any

claims not required by this Part.” La. R.S. 38:2241(C).18 The Immunity Provision

cabins a surety’s liability to the parameters of the LPWA. Given the Insurance

Penalties Provisions are located outside the LPWA—in the Louisiana Insurance

Code—the Insurance Penalties Provisions, as we held in Metro, are not applicable

to the statutory surety, Arch. Accordingly, we find no error in the trial court’s grant

of Arch’s motion for partial summary judgment on the Penalties Claim.

DECREE

16 The footnote reads as follows:

We note further that R.S. 38:2241(C) contains language that purports to

‘immunize’ sureties from liability for or payment of claims ‘not required by this Part.’

La. R.S. 38:2241(C) . . . It has been suggested that the aim of this provision is to ‘clearly

state[ ] that a bond given pursuant to the Public Works Act is a statutory bond which is

strictly construed and that only claimants who are specifically named in the statutes have

a right to sue under the bond.’ LA. PRAC. SERIES: LA. CONSTR. LAW, § 13:10. Though this

language is less than clear, there is no indication that it was intended to supplant

contractual remedies that persons who qualify as ‘claimants’ under the Act otherwise

possess.

Pierce, 15-0785, p. 11, n. 6, 190 So.3d at 306.

17 Our holding that Pierce did not effectively overrule Metro is buttressed by the fact that Burko,

which the majority in Pierce adopts as supporting its holding, was decided by this court in 1993,

a year before Metro was decided.

18 See La. R.S. 1:3 (providing that “[t]he word ‘shall’ is mandatory”).

13

For the foregoing reasons, the judgment of the trial court is affirmed.

AFFIRMED

14