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Build A Better Building Defect Petition:
Know When To State A Cause Of Action For Breach Of Contract And When To State A Cause Of Action In Tort

By Teresa L. Fiore Hatfield, Esq.
It is a basic premise of law that a party needs privity of contract to have a claim for breach of contract.[1] So why then should a party who never had a contract with a contractor be able to sue that contractor because that party does not agree with the work the contractor performs? Imagine this common scenario: a plaintiff wants to sue for damages caused by defective work performed under a construction contract, but more than a year has run from the time he knew or should have known about the damage.[2] He has waited too long to state a claim in tort. Can he sue for breach of contract instead? Now imagine this scenario, a property owner buys a defectively constructed structure from another person, such that there is no privity of contract with the builder. For whatever reason, the property owner cannot or does not want to sue the person with whom he has privity. Can that property owner file a suit against the builder in tort since he does not have a cause of action for breach of contract? While often attorneys try, and believe that they can, use causes of action in breach of contract and in tort interchangeably when a contractor does not perform in a workmanlike manner, the two causes of action are not interchangeable. While the caselaw pertaining to these issues is often overlooked, there is a body of caselaw that answers these questions. The law is simple, a cause of action for breach of contract applies to claims brought as to the defectively performed work itself, while a tort action should be brought for damages caused by the defective work.

While there are cases that have failed to follow this rule,[3] and cases that have distinguished this rule,[4] there is ample jurisprudence in Louisiana which holds that claims as to work performed lie in contract only, and therefore may only be brought by those with privity of contract. In Lumber Products, Inc. v. Hiriart, [5] the Fourth Circuit Court of Appeals held that, with construction claims, if the damage sued for is defectively performed work itself, the action lies strictly in contract; only damages caused by or arising out of defective work may be properly recovered in a tort action, and even then the plaintiff must prove the necessary elements in tort. In Lumber Products, Inc. v. Hiriart,[6] the owner attempted to sue a subcontractor, with whom she had no privity, for defectively performed work. While the subcontractor did file an exception of no cause of action, the homeowner recovered against the subcontractor at the trial court level. The subcontractor appealed. On appeal, the Fourth Circuit performed an extensive study of the cases in which a person was allowed to recover in tort when no privity of contract existed. The Court ultimately concluded:

A careful examination of this case and other cases allowing recovery against a contractor in tort by one not privy to a contract with him reveals a significant and basic distinction from those cases denying recovery because of the absence of privity of contract. Where the damage sued for is the defectively performed work itself, the action is strictly a contractual one and only those who are in privity with the contractor have an action against him. However, where the damage sued for its [sic] not the defective work but is instead damage caused by the defective work, a tort action against the contractor is proper when the elements of delictual recovery are present. [7]

The Court then held that because the owner's claim was to have the work performed properly, and not for collection of damages caused by the defective workmanship, the owner could not recover.

State of Louisiana v. Simoni, Heck and Associates,[8] is a First Circuit decision which followed Lumber Products shortly after the Fourth Circuit rendered its decision. The owners, the State of Louisiana and Louisiana Office Building Corporation, brought suit, inter alia, against the subcontractor, Pittman Construction Company, Inc., and its supplier, York Corporation, for installation of the wrong materials. In finding that the only damage claimed was that the wrong material was supplied and installed, the court upheld exceptions of no cause of action granted in favor of Pittman and York. The Court stated:

Plaintiff's pleadings herein allege only that exceptors negligently and willfully supplied the rubber-in-shear isolators. They do not claim any damages were caused by exceptors furnishing of said isolators; instead, they merely seek the difference in purchase price between the isolators supplied by exceptors and a type isolator which they should have been provided. The pleadings in this matter sound wholly in contract and allege none of the elements upon which a delictual claim can be based.[9]

Recently, the Second Circuit has applied and followed the ruling in Lumber Products in Long v. Jeb Breithaupt Design Build, Inc. [10] In Long, the plaintiff homeowner("Plaintiff"), Raymond Long, hired Jeff Breithaupt Design Build, Inc. ("design builder") to remodel the Plaintiff's home. The design builder subcontracted out the roof removal and replacement to Ron Carroll Builder, Inc. ("subcontractor"). When disagreements arose between the parties, the Plaintiff not only filed suit against the design builder under various legal theories, but Plaintiff also filed suit against the subcontractor with allegations of negligence generally. Subcontractor filed an exceptions of no cause of action. Because there was no privity of contract between the Plaintiff and the subcontractor, the trial court granted the subcontractor's exception on the grounds that the allegations of negligence set forth in the petition were conclusory and that there was no privity of contract between the plaintiff and the subcontractor. Plaintiff appealed. The Second Circuit upheld the trial court's granting of the subcontractor's exception of no cause of action. In so holding, the Second Circuit cited Lumber Products, Inc. v. Hiriart,[11] and carefully examined the alleged "failures" of the roofing as pled by the plaintiff. Based upon the allegations of roofing "failures" set forth by plaintiff's petition, the Second Circuit found: "All of these alleged failures are related to workmanship or defects in the roofing work itself."[12]

The First Circuit's 2008 decision in Walton Construction Company, L.L.C. v. G.M. Horne & Company, Inc.,[13] also cites the Lumber Products rule in dicta.

For good reason, it is clear a party not in privity cannot claim "tort" to recover for work which is simply not in conformity with a contract, while, on the other hand, a party who claims damages arising out of defectively performed work cannot state their claim as a breach of contract claim. Attorneys drafting a petition for poor construction and/or the damages arising therefrom should be cognizant of the differences to avoid dismissal of their client's claims.
[1] Block v. Fitts, 274 So.2d 811 (La.App. 3 Cir. 1973); Ragusa v. Burns, 462 So.2d 658 (La.App. 1 Cir. 1984); Soileau v. Yates Drilling Company, 183 So.2d 62 (La.App. 3 Cir. 1966).

[2] A cause of action in tort would have a prescriptive period of a year, while a cause of action in breach of contract has a ten year prescriptive period.

[3] Gurtler, Hebert and Company, Inc. v. Weyland Machine Shop, Inc., 405 So.2d 660 (La.App. 4 Cir. 1981). In Gurtler, the Court summarized a number of cases, including Lumber Products, and concluded that the rule of law was “absent privity of contract a cause of action cannot be asserted based on breach of contract; however, this does not preclude asserting a claim for damages based on the wrongdoer's tort.” It is notable that, in the Gurtler case, both Judges Samuel and Garrison dissented on the grounds that the actions on which the plaintiff was seeking to base liability were contractual and not tortious.

[4] See Young v. City of Plaquemine, 2001-CA-0063 (La.App. 1 Cir. 5/10/02), 818 So.2d 892, wherein plaintiffs Young and Sanchez were exposed to lead based paint during their duties as employees of a subcontractor on a public project. While the Court in Young recognized the rule as stated in Lumber Products, the plaintiffs were clearly not stating a cause of action for defective work, but for tortious activity giving rise to personal injuries.

[5] Lumber Products, Inc. v. Hiriart, 255 So.2d 783 (La.App. 4 Cir. 1971).

[6] Lumber Products, Inc. v. Hiriart, 255 So.2d 783 (La.App. 4 Cir. 1971).

[7] Emphasis added. Lumber Products, Inc. v. Hiriart, 255 So.2d 783, 787 (La.App. 4 Cir. 1971), citing and distinguishing, Marine Insurance Company v. Strecker, 234 La. 522, 100 So.2d 493 (1958), and Pennington v. Campanella, 180 So.2d 882 (La.App. 1 Cir. 1965).

[8] 297 So.2d 918 (La.App. 1 Cir. 1974).

[9] State of Louisiana v. Simoni, Heck and Associates, 297 So.2d 918, 924 (La.App. 1 Cir. 1974).

[10] 44,002-CA (La.App. 2 Cir. 2/25/09), 4 So.3d 930.

[11] 255 So.2d 783 (La.App. 4 Cir. 1971).

[12] Long v. Jeb Breithaupt Design Build Inc., 44,002-CA p. 9 (La.App. 2 Cir. 2/25/09), 4 So.3d 930, 942.

[13] 2008 CA 0145 (La.App. 1 Cir. 2/20/08), 984 So.2d 827.