JAMES C. GULOTTA, Judge Pro Tem.
In this construction contract dispute involving the New Orleans land-based casino, Imagine Construction, Inc. ("Imagine"), a subcontractor, claims entitlement to payment by the general contractor for materials furnished and work performed on the casino. Suit was directed against the general contractor, Centex Landis Construction Company, Inc. ("Centex"), and several defendant insurance companies
The sole and only issue in this case is whether, pursuant to the provisions of the subcontract, Imagine's (subcontractor's) claim for payment against Centex (general contractor) is premature because of the owner's non-payment to the general contractor.
In concise written Reasons for Judgment, the trial judge stated:
Citing this Court's opinion in Pyburn v. Walle Corp., 454 So.2d 1128 (La.App. 4 Cir. 1984), the trial judge concluded that because the general contractor, Centex, "has not been paid by the owner," no payments are due Imagine.
Imagine appealing relies primarily on the Louisiana Supreme Court's holding in Southern States Masonry, Inc. v. Landis Construction Company, Inc., 507 So.2d 198 (La. 1987), consolidated with Strahan v. Landis Construction Co., Inc., 507 So.2d 198 (La. 1987), cases strikingly similar to the instant one.
Southern States involves claims by subcontractors against the general contractors for payment in connection with the Louisiana World's Fair construction. In Southern States, the subcontractors demanded payment from the contractors for the work that had been completed. Relying on the language in the contract, the general contractor, as in the instant case, filed an Exception of Prematurity. The Supreme Court in Southern States set aside the trial court judgment maintaining the exception of prematurity.
The pertinent language in the subcontract agreement between the contending parties in Southern States reads as follows:
The operative language in the other consolidated case, Strahan v. Landis Construction Co., Inc., reads as follows:
In analyzing these provisions, the Supreme Court concluded the language in the cited cases "did not suspensively condition the contractors' obligation to make payment until the contractors were in fact paid by the owner." Southern States, 507 So.2d at 203. According to the Supreme Court, the relevant provisions constituted a term of payment dictating when the contractor's payment should occur.
The Supreme Court reasoned that pursuant to the payment provisions, it was reasonable to assume that the subcontractor, in the normal course of events, would be paid by
According to the Supreme Court, it was not reasonable to infer from the language in the contracts that the parties either agreed or contemplated that should the owner not pay the general contractor, the subcontractors would not be paid by the general contractor. The relevant question in Southern States, according to the Supreme Court, was not "if" the subcontractors will be paid but "when" they will be paid.
Turning now to the provisions of the subcontract in the instant case, the pertinent provisions of the agreements state:
The contract in the instant case further provides:
And the final pertinent language of the contract reads:
The question posed is whether the language in the instant subcontract is distinguishable from the contract provisions in the Southern States case, as contended by Centex; or, whether the language in our case is simply a distinction without a difference, as claimed by Imagine.
It appears that the pertinent language in the instant case more specifically and explicitly sets forth language which particularizes that payment is to be made to the subcontractor only if actual payment is made to the contractor by the owner. The most significant language in this respect in our case is the provision which states that the subcontractor agrees that full payment from the owner shall be a condition precedent to the bringing of any action by a subcontractor against the defendants.
This language specifically recognizes and acknowledges the possibility that there may be an utter and complete failure of either progress payments or full payments. Thus, in our case the failure to make payment by the owner was, in our view, reasonably foreseen and certainly intended to be addressed by the language of the payment provision. Until actual receipt of payment, any action against the contractor, Centex, would be premature.
Based on the holding of the Supreme Court in Southern States, when considered with the language of the contract in the instant case, we are in agreement with the trial court that plaintiff's action is premature. It seems clear from the language in the instant case that the intent of the parties was that payment would not be made to the subcontractor if payment had not been received by the general contractor from the owner.
Argument has been raised in our case by plaintiff that were we to conclude that the
This issue is not before us at this time. We are concerned here only with the question of whether plaintiff's suit was prematurely filed. The question of a defense of peremption at a later date, if raised by the surety or sureties, is for another day at another time. We do not consider that issue here.
Having so concluded, we affirm the judgment of the trial court.