A.B.S. Services, Inc. v. James Construction Group, L.L.C. 2020-0841 (La. App. 1 Cir 7/22/21), 2021 WL 3087879
Authors: Michael S. Blackwell and Mary Claire Kramer
Attorney Fees Not a Free-for-All under Louisiana Prompt Pay Statute
In A.B.S. Services, Inc. v. James Construction Group, L.L.C.¸ the Louisiana First Circuit limited the recovery of attorney fees under the Louisiana Prompt Pay Statute to only those fees incurred in recovering the unpaid amounts. Specifically, the First Circuit found that a subcontractor could not recover attorney fees for work done in the entire litigation on the breach of contract claim against the contractor. InA.B.S. Services, the trial court awarded the subcontractor damages for unpaid invoices under Louisiana’s Prompt Pay Statute, La. R.S. 9:2784, which requires that a contractor pay a subcontractor for their work on the project within 14 days of receipt of the owner’s payment for the subcontractor’s work. Id. This statute also permits a successful subcontractor to recover penalties and attorney’s fees after proving that the contractor failed to pay promptly without reasonable cause.
The court’s final judgment on December 1, 2015, ordered the contractor to pay the subcontractor damages under La. R.S. 9:2784 and additional damages for breaching the contract. The contractor appealed. While the First Circuit affirmed much of the judgment, it did not reach a majority consensus on the amount of attorney’s fees the subcontractor could recover. On June 25, 2019, the subcontractor filed a motion to fix attorney’s fees and costs, seeking to recover The contractor countered this motion, arguing that attorney’s fees were only available for recovering the unpaid invoice according to La. R.S. 9:2784. The subcontractor responded, urging the court to find that the amount of the judgment was final and had res judicata effect. The court disagreed, ultimately determining that since the court did not reach a consensus on the attorney’s fees awarded, res judicata did not apply. Moreover, the court found that, under well-settled law, only a contract or statute may provide for the award of attorney’s fees. Here, the contract did not provide for attorney’s fees. Therefore, the subcontractor could only recover the fees incurred when litigating under Louisiana’s Prompt Pay Statute and successfully recovering the subcontractor’s one unpaid invoice of $39,000. Based on the court’s decision and the contingency fee contract between the subcontractor and their attorneys, the court awarded 40% of the $39,000 in attorney’s fees to the subcontractor.