RACM, LLC v. Glad Tidings Assembly of God Church of Lake Charles, 2024 WL 1607491 (W.D. La. Apr. 12, 2024)
Louisiana Federal Court Holds that Water Mitigation Work Does Not Require a Louisiana Contractor’s License.
Authors: Michael S. Blackwell and Trey Talley
In RACM, LLC v. Glad Tidings Assembly of God Church of Lake Charles, the US District Court for the Western District of Louisiana was faced with the question of whether water mitigation work in Louisiana, which can often include demolition services, requires the contractor performing the work to be a licensed contractor. Ultimately, the Court held that it does not.
This case arises out of water mitigation work performed by RACM, LLC (“ServPro”) for the Glad Tidings Assembly of God Church of Lake Charles (“Glad Tidings”) after damage Glad Tiding sustained. After ServPro performed the water mitigation work and contract amounts remained unpaid by Glad Tidings, ServePro filed suit against Glad Tidings for breach of contract, seeking to recover the amounts owed under the contract.
In the litigation, Glad Tidings argued that the contract was null and void because ServPro did not have a valid Louisiana contractor’s license. ServPro ultimately filed a motion for summary judgment in response, seeking to have the Court validate its contract with Glad Tidings.
In issuing its decision on the motion, the Court analyzed the specific language of ServPro’s contract. Although the contract used the word “reconstruction,” was clearly for water removal and dehumidification work. The Court further held that the Louisiana State Licensing Board of Contractors (“LSLBC”) website clearly states that “dewatering mitigation” work does not require a license to be issued from the LSLBC to lawfully contract for and perform the work. Thus, the Court found that no license is required for water mitigation work.
The Court ultimately held that since ServPro’s scope of work was limited to “dewatering mitigation,” which does not require a Louisiana contractor’s license, ServPro’s contract with Glad Tidings was valid. The Court also noted that every water mitigation service will inherently include some type of demolition, making it arguably broader than the water mitigation exception to the state’s licensing requirement. However, the Court made clear that water mitigation services do not require a contractor’s license from the LSLBC, even if demolition or removal services are included in the scope of work. Accordingly, the Court granted ServPro’s motion and upheld the validity of the contract.
Overall, this decision not only reinforces an exception that the LSLBC has already recognized, but it goes an additional step to broaden that exception to include work that would otherwise have to be licensed. Although this is a lone decision at this juncture, we will continue to monitor whether Louisiana courts, particularly federal courts like the one here, adopt this broadened approach.
