The opinion
STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT
13-1302
JENNIFER DIANE NUNEZ
VERSUS
PINNACLE HOMES, L.L.C. AND
SUA INSURANCE COMPANY
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ON REMAND FROM THE LOUISIANA SUPREME COURT
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APPEAL FROM THE
THIRTY-EIGHTH JUDICIAL DISTRICT COURT
PARISH OF CAMERON, NO. 10-18501
HONORABLE PENELOPE RICHARD, JUDGE
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J. DAVID PAINTER
JUDGE
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Court composed of John D. Saunders, Marc T. Amy, and J. David Painter, Judges.
AFFIRMED.
Amy, J., dissents and assigns reasons.
John C. Anderson
P. O. Box 82982
Baton Rouge, LA 70884
COUNSEL FOR DEFENDANTS-APPELLANTS:
Pinnacle Homes, L.L.C. and Allen Lenard
J. Bryan Jones, III
P. O. Box 4540
Lake Charles, LA 70606
COUNSEL FOR PLAINTIFF-APPELLEE:
Jennifer Diane Nunez
PAINTER, Judge.
This matter has been remanded to this court by the Louisiana Supreme Court
with instructions to consider its holdings in Ogea v. Merritt, 13-1085 (La.
12/10/13), 130 So.3d 888. After considering Ogea, we again affirm.
FACTS
In written reasons for judgment, the trial court correctly outlined the
underlying facts of the case as follows:
On January 8, 2008, JENNIFER DIANE NUNEZ and
PINNACLE HOMES, LLC entered into a Cost Plus Contract - Fixed
Fee contract for the construction of a new home located on 111
Boudreaux Lane, in the Grand Lake area, in Cameron Parish,
Louisiana. The fixed fee of the contract was $33,748.00, and the pre-
construction estimate of the construction costs was $277,772.00. (See
Plaintiff s Exhibit No. 4).
Pertinent provisions of the construction contract are located in
Section 4.2 and Section 4.4. Section 4.2 of the contract, provides that
“[a]ll work shall be completed in a workman like manner, and shall
comply with all applicable national, state and local building codes and
laws.” Section 4.4 provides that “[c]ontractor shall obtain all permits
necessary for the work to be completed.”
....
Accu-Line Surveying, Inc.[] prepared an updated elevation
certificate on or about September 18, 2007, which is dated March 12,
2006, which indicated that the Base Flood Elevation was 9.0 feet and
Advisory Base Flood Elevation was 10.0 feet for the Nunez home.
(See Plaintiff’s Exhibit. No. 1). The elevation certificate also included
the lowest adjacent grade at 4.61 feet and the highest adjacent grade at
5.48 feet.
According to the testimony of Ernestine Horn, Cameron Parish
Administrator, the base flood elevation is required by FEMA and the
advisory base flood elevation is required by the parish. After
Hurricane Rita, the State of Louisiana mandated all coastal parishes,
including Cameron Parish, to add one (1) foot to all of the elevations
contained in the flood elevation maps. (See Trial Transcript of
8/1/2012, p. 56).
The permit issued by the Cameron Parish Police Jury for the
construction of plaintiff’s home[] required that the base flood
elevation be 10 feet for the plaintiff’s home. (See Plaintiff’s Exhibit
No. 6).
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The post-construction elevation certificate prepared by Accu-
Line Surveying, Inc.[] indicates that the elevation of plaintiiff’s home
is 8.66 feet. It also indicates that the lowest elevation of machinery or
equipment servicing the building is 8.10 feet. (See Plaintiff’s Exhibit
No. 2).
....
The plaintiff’s home is below the required base flood elevation
of 9 feet as required by FEMA and below the advisory base flood
elevation of 10 feet as required by the permit issued by the Cameron
parish Police Jury
Nunez filed this suit for breach of warranties and contract naming Pinnacle
and SUA Insurance Co. (SUA) as defendants. She amended the petition to include
Lenard, the owner of Pinnacle, and American Safety Casualty Insurance Co.
(ASCI) as defendants. Nunez voluntarily dismissed the claims against SUA. The
claims against ASCI were dismissed pursuant to motion for summary judgment.
The trial court denied Lenard’s Exception of No Cause of Action and
Pinnacle’s motion for an order staying the proceedings and ordering arbitration.
The matter was tried, and the trial court rendered judgment in favor of Plaintiff and
awarded damages. Pinnacle and Lenard appealed the matter to this court. This
court affirmed finding no error in the judgment of the trial court. Pinnacle and
Lenard took writs to the Louisiana Supreme Court, and the supreme court
remanded the matter to this court.
DISCUSSION
On appeal, Defendants disputed the trial court’s finding that Plaintiff
suffered damages because of the incorrect elevation of her house and that Lenard
was personally liable for the failure to correctly elevate the house. On remand, we
need not reconsider the issue of damages. We include by reference of finding with
regard to damages from our original opinion herein. Here, we consider whether
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Nunez proved personal liability on the part of Lenard, in light of the supreme
court’s holding in Ogea.
Personal Liability of Lenard
The trial court gave the following reasons for its determination of personal
liability:
The defendant, ALLEN LENARD, committed professional
negligence by not properly calculating and/or supervising the amount
of dirt that would be required to bring the property to proper
grade/elevation, and by failing to have an elevation shot performed
after the dirt work was completed and prior to beginning construction
on plaintiff’s home. Although Mr. Lenard initially testified in his
deposition and on the first day of trial that he consulted with Keith
Daigle on the calculation of the amount of dirt, he later contradicted
his testimony at the second day of trial and testified that he left that up
to the dirt contractor. Mr. Lenard also testified on February 21, 2013,
that it was usually the dirt contractor that would be responsible for
obtaining another elevation shot after the dirt work was completed.
His testimony was contradicted by his deposition testimony wherein
he testified that his company had the equipment to perform the
elevation shot, and that Cletis or Keith Daigle would have been the
one to do it. Obviously, it was not done by Keith Daigle the dirt
contractor, nor Cletis, an employee of PINNACLE HOME, LLC. He
later testified during the defense’s case that it would have been
Martine Nocilla, with his company, that would have been responsible
for shooting the elevation, because Cletis was not working with him at
the time of Mrs. Nunez’s foundation work. Nevertheless, ultimately,
as the licensed contractor on the job, it was Mr. Lenard’s
responsibility to ensure that both of these things were done and done
correctly. Therefore, the court finds that the defendant, ALLEN
LENARD, is liable to plaintiff personally pursuant to LSA R.S.
12:1320(D). See Regions Bank v. Ark-La-Tex Water Gardens, L.L.C.,
997 So.2d 734, (La. App. 2 Cir. 11/5/08), writ denied, 5 So.3d 119
(La. 3/13/2009).
The court in Ogea set out factors gleaned from La.R.S. 12:1320(D), to be
used in determining whether a member, manager, employee or agent of a limited
liability company may be held personally liable for damage causing acts or failures
to act. La.R.S. 12:1320(D) provides that:
A. The liability of members, managers, employees, or agents, as
such, of a limited liability company organized and existing under this
Chapter shall at all times be determined solely and exclusively by the
provisions of this Chapter.
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B. Except as otherwise specifically set forth in this Chapter, no
member, manager, employee, or agent of a limited liability company
is liable in such capacity for a debt, obligation, or liability of the
limited liability company.
C. A member, manager, employee, or agent of a limited liability
company is not a proper party to a proceeding by or against a limited
liability company, except when the object is to enforce such a
person’s rights against or liability to the limited liability company.
D. Nothing in this Chapter shall be construed as being in
derogation of any rights which any person may by law have against a
member, manager, employee, or agent of a limited liability company
because of any fraud practiced upon him, because of any breach of
professional duty or other negligent or wrongful act by such person, or
in derogation of any right which the limited liability company may
have against any such person because of any fraud practiced upon it
by him.
The trial court found personal involvement and inaction by Lenard which it
found constituted a “breach of professional duty or other negligent or wrongful
act.” Id. One of the exceptions to the protection granted a member, manager,
employee, or agent of a limited liability company arises from breach of a
professional duty. The court in Ogea noted that the statute does not define the
phrase “breach of a professional duty.” The court further noted that:
Again, in searching for the intended meaning of “any breach of
professional duty” in La. R.S. 12:1320(D), we recall that “this Court
must assume the Legislature was aware of existing laws on the same
subject.” Holliday, 09-0093 at 6, 27 So.3d at 817. Recognizing that
the word “professional” is the focus of the quoted exception, the
following principle must be observed as well: “Technical words and
phrases, and such others as may have acquired a peculiar and
appropriate meaning in the law, shall be construed and understood
according to such peculiar and appropriate meaning.” La. R.S. 1:3.
When the LLC statutes were enacted, “professional” had a
clearly defined technical meaning within the law of business entities.
See JAMES S. HOLLIDAY, JR., & H. BRUCE SHREVES,
LOUISIANA PRACTICE SERIES: LOUISIANA
CONSTRUCTION LAW § 1:9 pp. 10-11 (2013) (“Since 1964,
professional law corporations have been possible in Louisiana. In
1968, with recodification of Louisiana’s corporate laws, professional
medical corporations were also permitted. Since then, Louisiana has
enacted statutory provisions for professional corporations for the
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dental, accounting, chiropractic, nursing, architectural, optometry,
psychology, veterinary medicine and architectural-engineering.
The supreme court in Ogea, however, did not reach the question of whether a
licensed contractor is a professional for purposes of the exception. In that case, the
court found that it did not need to reach the question because there was no
evidence of record that Merritt was a licensed contractor. In this case, the evidence
clearly supports the conclusion that Lenard held a contractor’s license individually.
Therefore, we must consider the question of whether a licensed contractor is a
professional so that a breach of professional duty would render him personally
liable for the damage incurred by Nunez.
Although a building contractor is not one of the “legislatively recognized
professions” set out in Ogea, we will look to other sources to determine whether,
under the facts of this case, a licensed contractor should be recognized as a
professional.
BLACK’S LAW DICTIONARY 1210 (6th ed. 1990) defines “professional” as:
“One engaged in one of the learned professions or in an occupation or in an
occupation requiring a high level of training and proficiency.” We further note that
the legislature has, in La.R.S. 39:1484, where it defines terms used in the chapter
on public finance, defined “professional service” as follows:
[W]ork rendered by an independent contractor who has a professed
knowledge of some department of learning or science used by its
practical application to the affairs of others or in the practice of an art
founded on it, which independent contractor shall include but not be
limited to lawyers, doctors, dentists, psychologists, certified advanced
practice nurses, veterinarians, architects, engineers, land surveyors,
landscape architects, accountants, actuaries, and claims adjusters. A
profession is a vocation founded upon prolonged and specialized
intellectual training which enables a particular service to be rendered.
The word “professional” implies professed attainments in special
knowledge as distinguished from mere skill. For contracts with a total
amount of compensation of fifty thousand dollars or more, the
definition of “professional service” shall be limited to lawyers,
doctors, dentists, psychologists, certified advanced practice nurses,
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veterinarians, architects, engineers, land surveyors, landscape
architects, accountants, actuaries, claims adjusters, and any other
profession that may be added by regulations adopted by the office of
contractual review of the division of administration.
Further, in La.R.S. 3:3804, the legislature distinguishes between
professions and occupations regulated by the Horticulture Commission, noting that
arborists, retail florists, wholesale florist, landscape horticulturist, landscape
architect, utility arborists, and landscape irrigation contractors are professionals
while nursery stock dealers and cut flower dealers considered to be practicing
occupations. We therefore conclude that professional status may extend beyond the
narrow scope of the professions enumerated in the citation from Ogea hereinabove.
Our analysis of the record and the statutes regarding licensing and regulation
of contractors convinces us that, with regard to the construction contract with
Nunez, Lenard was acting as a professional with attainments in special knowledge,
particularly as evidenced by his having attained licensure from the state, as
distinguished from mere skill. We note that he tested for environmental
remediation, commercial contracting, and residential contracting and, according to
his testimony, received “pretty much the highest scores you can get.” Therefore,
we must determine whether the trial court was in error in finding that Lenard
breached a professional duty owed to Nunez.
There can be no question but that the failure to elevate the house as required
by the permit issued by Cameron Parish is a defect. Lenard’s own testimony
indicates that it was his negligence which resulted in this defect. He testified in his
deposition that he was aware of the FEMA requirements for home building in
Cameron Parish. He states in trial testimony that he was in possession of the
building permit but thought that the house needed to be elevated to nine feet, rather
than the ten indicated by the permit. The house was not even elevated to the nine
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feet he believed to be required. As noted by the trial court, Pinnacle had the
equipment to shoot the elevation and that a Pinnacle employee, who as the trial
court noted, would have been under his direct supervision as contractor, would
have been responsible to do so. Lenard indicated in deposition testimony that
neither he nor anyone in his employ checked for a proper elevation after dirt work
to raise the site elevation was finished. As in Matherne v. Barnum, 11-0827
(La.App. 1 Cir. 3/19/12), 94 So.3d 782 and Regions Bank v. Ark-La-Tex Water
Gardens, L.L.C., 43,604 (La.App. 2 Cir. 11/5/08), 997 So.2d 734, writ denied, 09-
0016 (La. 3/13/09), 5 So.3d 119, the negligence of the contractor resulted in a
breach of a professional duty such that he is personally liable for the resulting
damages.
CONCLUSION
Having found no error in the judgment of the trial court, we affirm. Costs of
this appeal are assessed to Defendants-Appellants, Pinnacle Homes, L.L.C. and
Allen Lenard.
AFFIRMED.
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NUMBER 13-1302
COURT OF APPEAL, THIRD CIRCUIT
STATE OF LOUISIANA
JENNIFER DIANE NUNEZ
VERSUS
PINNACLE HOMES, LLC, ET AL.
AMY, J., dissenting.
After reconsideration of this matter in light of the supreme court’s
instruction on remand, I continue to conclude that the trial court erred in finding
Mr. Lenard personally liable. As I expressed in my original dissent, I do not find
that a determination of personal liability was appropriate pursuant to La.R.S.
12:1320 or the analysis provided in Ogea v. Merritt, 13-1085 (La. 12/10/13), 130
So.3d 888.
Certainly, the initial inquiry is whether Mr. Lenard, as a contractor, may be
considered a “professional” so as to fall outside of La.R.S. 12:1320(B)’s broad
pronouncement that unless “otherwise specifically set forth . . ., no member,
manager, employee, or agent of a limited liability company is liable in such
capacity for a debt, obligation, or liability of the limited liability company.”
However, per La.R.S. 12:1320(D), an LLC member/manager may be assessed with
liability for “any breach of professional duty or other negligent or wrongful act by
such person[.]”
On remand, I again conclude that the breach of professional duty exception
invokes those professions whose members owe separate, non-contractual duties to
their clients. To apply the exception otherwise would, in my view, open any
member or manager of an LLC to personal liability upon a finding of professional
liability. Such potential exposure to liability is at odds with the broad limitation of
liability contained in La.R.S. 12:1320(B).
Although Ogea, 130 So.3d 888, does not resolve the issue of whether a
general contracting license confers a “professional” persona to an individual for
purposes of the exception of La.R.S. 12:1320(B), the opinion otherwise notes
various instances in which legislation sets apart a “profession” from other defined
entities. Id. Importantly, contracting is not included among professional
corporations listed in the Louisiana Revised Statutes, Title 12. Id. Further, and
returning to what I find to be an important component of “professional” status,
there is no indication that contractors owe a separate, non-contractual duty to their
customers as many of the members of the professional corporations listed in Title
12 may. Thus, I maintain my position that the plaintiff did not demonstrate that the
“breach of professional duty” exception applied to Mr. Lenard in his personal
capacity.
Neither do I find that the plaintiff proved the availability of La.R.S.
12:1320(D)’s alternative cause of action against an LLC member for “other
negligent or wrongful act by such person[.]” Ogea described four factors for
consideration of that exception as follows: 1) whether a member’s conduct can be
fairly characterized as a traditionally recognized tort; 2) whether a member’s
conduct can be fairly characterized as a crime, for which a natural person, not a
juridical person, could be held culpable; 3) whether the subject conduct was
required by, or was in furtherance of, a contract between the claimant and the LLC;
and 4) whether the conduct was performed outside the member’s capacity as a
member. Ogea, 130 So.3d 888. The latter two elements are particularly
instructive in my opinion.
First, it seems apparent to me the conduct now at issue, i.e., the supervision
of employees in this aspect of construction, was required by or in furtherance of
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the contract between the plaintiff and the LLC. Thus, “it follows that if the reason
a member is engaged in the conduct at issue is to satisfy a contractual obligation of
the LLC, then the member should be more likely to qualify for the protections of
the general rule of limited liability in La.R.S. 12:1320(B).” Ogea, 130 So.3d at
904. Simply, the contract in this case was entered into between the plaintiff and
the LLC and the elevation/foundation work was to be performed by that company.
Thus, I again find that Mr. Lenard’s role in the supervision of his own employees
and/or subcontractors was in furtherance of that contract.
Similarly, and with regard to element Number 4, it is evident that Mr.
Lenard’s alleged conduct was within the context of his membership in the LLC and
not undertaken in a personal capacity. To the extent that the plaintiff’s claim is
one alleging poor workmanship, Ogea, 130 So.3d at 905-06, explains that “a
showing of poor workmanship arising out of a contract entered into by the LLC, in
and of itself, does not establish a ‘negligent or wrongful act’ under La.R.S.
12:1320(D). To hold that poor workmanship alone sufficed to establish personal
liability would allow the exception in La.R.S. 12:1320(D) to negate the general
rule of limited liability in La.R.S. 12:1320(B).” In my opinion, the trial court’s
findings, under the facts now present, do, in fact, impermissibly allow the
exception of Paragraph D to negate the general rule advanced by Paragraph B.
Finding La.R.S. 12:1320(D) inapplicable, I respectfully dissent from the
majority opinion. I re-urge my view that the trial court’s finding of personal
liability should be reversed.
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