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Golden Nugget Lake Charles, L.L.C. v. W. G. Yates & Sons Construction Co.

United States Court of Appeals, Fifth Circuit

March 6, 2017

GOLDEN NUGGET LAKE CHARLES, L.L.C., formerly known as Ameristar Casino Lake Charles, L.L.C., formerly know as Creative Casinos of Louisiana, L.L.C., Plaintiff-Appellee,

         Appeal from the United States District Court for the Western District of Louisiana

          Before JOLLY, SMITH, and PRADO, Circuit Judges.

          EDWARD C. PRADO, Circuit Judge:

         This case arises out of a construction contract between Plaintiff- Appellee Golden Nugget Lake Charles, LLC ("Golden Nugget") and Defendant-Appellant W.G. Yates & Sons Construction Company ("Yates"). Yates appeals the district court's order dismissing its claim for a statutory lien under the Louisiana Private Works Act (the "LPWA"). The LPWA grants general contractors a privilege-i.e., a lien-to secure payment for their work, but a contractor must preserve the lien by filing a statement of claim or privilege in a timely manner.[1] The district court dismissed Yates's claim to have its lien recognized because Yates did not file a lien statement within the time required by statute. However, we find that because Golden Nugget never filed a notice of substantial completion, Yates's lien statement was timely filed. Accordingly, we REVERSE and REMAND the district court's judgment dismissing with prejudice Yates's claim for a statutory lien and find that Yates has a valid lien against Golden Nugget.

         I. BACKGROUND

         Golden Nugget is the owner of the Golden Nugget Lake Charles Hotel & Casino located in Lake Charles, Louisiana (the "Project"). In 2011, Yates entered into a contract with the original owner to construct the Project, which was to be a casino, hotel, and spa. In July 2012, the parties recorded a written notice of contract as well as payment and performance bonds in the property records of Calcasieu Parish, Louisiana. Golden Nugget purchased the ownership interest in the Project in 2013. On December 1, 2014, Yates and Golden Nugget signed a certificate of substantial completion, which meant that the Project was fit for occupancy. The Project has been in use ever since. According to Golden Nugget, "Golden Nugget has paid nearly all amounts owed under the Contract, but [it] is withholding approximately $18.7 million to protect itself against estimated damages caused by Yates'[s] contractual and other breaches."

         On November 25, 2015, Golden Nugget filed a complaint in federal district court seeking damages and declaratory relief for breach of contract, breach of warranty, and negligence in connection with the Project. Yates filed a counterclaim on December 21, 2015, alleging that Golden Nugget is wrongfully refusing and delaying payment on the Project. In its counterclaim, Yates indicated that it would be "filing a statement of lien and privilege pursuant to [Louisiana Statutes §] 9:4801 et. seq. to secure payment for the price of its work" and that it sought "recognition of that lien and privilege" by the district court. Two days later, Yates filed a lien statement in the mortgage records for Calcasieu Parish. Golden Nugget filed a motion to partially dismiss the counterclaim on January 15, 2016. Specifically, Golden Nugget argued that Yates had not filed the statement in time to preserve its lien under the LPWA. Under the district court's interpretation of § 9:4822, the statement was untimely; therefore, the court "dismiss[ed] with prejudice Yates' claim for a statutory lien." At Golden Nugget's request, Yates had the lien statement removed from the parish property records to prevent the lien from acting as a cloud on Golden Nugget's title to the property.[2] Yates filed a notice of appeal on April 29, 2016.

          II. DISCUSSION

         The district court had jurisdiction under 28 U.S.C. § 1332. This Court has appellate jurisdiction over the district court's decision pursuant to 28 U.S.C. § 1291. We review a district court's grant of a motion to dismiss de novo. Whitley v. BP, PLC, 838 F.3d 523, 526 (5th Cir. 2016).

         The question in this case is one of statutory interpretation: whether the phrase "substantial completion of the work" in § 9:4822(B) refers to an event or a document. The LPWA "protects contractors, laborers, suppliers of material and others who contribute to construction projects by granting them a privilege on the immovable to secure the price of their work." In re Whitaker Constr. Co., 439 F.3d 212, 216 (5th Cir. 2006). "The rights created by the [LPWA] extinguish after a period of time, the length of which is defined by statute and depends on a variety of factors." Id. A contractor must assert its lien by filing a statement of claim or privilege-a lien statement-within a certain time frame. See La. Stat. Ann. § 9:4822. The time frame varies based on whether a notice of contract was filed by the parties and based on the type of lien claimant. See id. Because a notice of contract was filed in this case and because Yates is a general contractor, the parties agree that § 9:4822(B) governs. That provision states:

A general contractor to whom a privilege is granted by R.S. 9:4801 of this Part, and whose privilege has been preserved in the manner provided by R.S. 9:4811, shall file a statement of his privilege within sixty days after the filing of the notice of termination or substantial completion of the work.

§ 9:4822(B) (emphasis added).

         The parties dispute the meaning of "within sixty days after the filing of the notice of termination or substantial completion of the work." The basic arguments are straightforward. Yates contends that this phrase requires an owner-here, Golden Nugget-to take affirmative action by filing either a notice of termination or a notice of substantial completion of the work in the local property records. Because Golden Nugget never filed such a document, Yates argues, "the time period for Yates to file its [lien statement] never started to run." Consequently, the lien statement Yates filed on December 23, 2015, was timely.

         Golden Nugget, by contrast, asserts that "substantial completion of the work" under subsection (B) refers to an event-"a state of a construction project and not . . . a document to be recorded." Under Golden Nugget's interpretation, ยง 9:4822(B) "sets forth . . . two alternative triggers applicable to general contractors": when the owner files a notice of termination or when the work is substantially completed. Golden Nugget argues that because work on the project was substantially completed when the Project became occupied ...

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