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Fourth Circuit Brings Clarity to Peremption Statute in Suit Against Design Professional

Published on: February 15, 2016

The question addressed in MR Pittman Group, LLC versus Plaquemines Parish Government, 2015-0396 (La.App. 4 Cir. 12/2/15) was whether the five-year peremptive period set by La. R.S. 9:5607 displaces Louisiana’s general one-year prescriptive period set by La. C.C. art. 3492, when applied to tort claims against design professionals. Finding a contractor’s claim against the project engineers prescribed, the MR Pittman court held that the one-year prescriptive period governs tort claims against design professionals.

La. R.S. 9:5607 explicitly provides a peremptive period that extinguishes all claims against architects, engineers and other design professionals five years after the project is completed, thus limiting design professional liability associated with the project. The MR Pittman plaintiff/contractor argued that the statute also eliminates the one-year prescriptive period and instead creates a special five-year prescriptive period, which allowed the contractor up to five years to bring its claim against the engineers to recover for delay and other extra costs allegedly resulting from deficiencies in the construction plans. This interpretation effectively expands tort liability by increasing the time period for bringing a tort claim from one to five years. In rejecting this argument, the MR Pittman court clarified that under the statute any claimant has no more than five years after project completion to bring suit against the design professional for any cause. However, a tort claimant still has only one year to file suit from the date he “knew or should have known” of damage caused by the alleged wrongful actions of the design professional.

A secondary question addressed in MR Pittman was the date of commencement of the one-year prescriptive period, which under La. C.C. 3492 commences to run from the day damage is sustained. The defendant/engineers argued that prescription commenced when the contractor first became aware of the alleged design deficiencies early in construction, as evidenced by the contractor’s notice to the owner of the deficiencies. The contractor argued that it could not fully appreciate its damages until the change orders were resolved later in the project. Citing Louisiana Supreme Court precedent holding that the quantum of damages need not be certain or fully incurred to trigger commencement of prescription, Harvey v. Dixie Graphics, Inc., 593 So.2d 351, 354 (La. 1992), the court agreed with the engineers’ position and dismissed the claims.

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Supreme Court Rules Against Broad Application of Indemnity Provision in Engineer’s Contract

The Supreme Court ruling in Couvillion Group, LLC v. Plaquemines Parish Government, 2020 -00074 (La. 4/27/20) is a reminder that an indemnity claim must be sufficiently related to the principal demand and that contract indemnity provisions are to be strictly construed.

In Couvillion, the general contractor sued the owner of a public works port project for contract delay damages resulting from a cease work order issued to allow redesign of a fuel tank platform. When the contractor submitted its delay claim, the owner requested that its project engineer review it and make recommendations. The engineer recommended payment of a little over $1 million dollars. When the owner refused to pay, the contractor sued. In response, the owner filed a third-party demand against the engineer alleging that its recommendation was erroneous and excessive and that, if it was bound by the engineer’s recommendation, then the engineer must indemnify the owner.

On behalf of the engineer, Keogh Cox attorneys argued that the engineer should not be required to reimburse the owner for any delay costs and asked for dismissal through an exception of no cause of action. Code of Procedure Article 1111 provides that a defendant in a principal action may bring in any person who may be liable to him for all or part of the principal demand. Here, that was not the situation. The engineer was not liable to the owner for any part of the contractor’s delay claim because the engineer did not cause the delay. The delay damages were incurred before the engineer made a recommendation for payment. The events giving rise to the two claims were separate and distinct: the main demand arose from the project delay and the third- party demand arose from the engineer’s recommendation of the claim amount. The Court commented that the principal claim against the owner for delay damages was too attenuated from the owner’s claim against the engineer, thus the third-party demand was improper.

The owner also relied on the indemnity provision in the engineer’s contract that required the engineer to indemnify the owner against any and all claims for personal injury or “damages to property” that may arise from its services. The Court held that the plain meaning of the term did not include the economic-only losses related to the subject delay claim. The Court further reasoned that indemnity agreements are to be strictly construed, rejecting the owner’s broader interpretation.

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Court Finds Signing of Waiver Form Does Not Extend Prescriptive Period

Until recently, tort claims in Louisiana were subject to a one-year prescriptive period.* In Carollo v. Tulane Univ., the plaintiff’s claim was subject to that one-year prescriptive period, but she filed her suit more than one year after she was injured. Thus, the plaintiff’s claim was dismissed as prescribed. In so holding, the court rejected the plaintiff’s claim that her execution of a waiver form prevented her from timely filing suit for her alleged injuries.

The plaintiff was a member of Tulane’s Swim and Dive Team. As a team member, she signed Tulane’s Concussion Education Form, which concluded with the following statement: “I understand that this release means that, among other things, I am giving up my right to sue the institution for any such losses, damages, injury, or costs that I may incur.” Plaintiff sustained a concussion during practice on January 9, 2021. In her Petition, she alleged she discovered the full extent of her injuries on August 5, 2021. However, she did not file suit until February 17, 2023, which was beyond the one-year prescription period.

When a claim is prescribed on the face of the petition, the burden shifts to the plaintiff to prove her claim is not prescribed. Carollo first argued (1) the Concussion Education Form was a contract, (2) her claim arose from that contract, and (3) personal claims under contracts should be subject to a ten-year prescriptive period under La. C.C. art. 3499. The court rejected this argument because the concussion form did not meet the requirements for a valid contract under Louisiana law.

The plaintiff then argued that the doctrine of contra non valentem should apply. This doctrine provides “prescription does not run against one who is ignorant of the facts upon which their cause of action is based and applies an exception to the statutory prescriptive period where in fact and for good cause a plaintiff is unable to exercise his cause of action when it accrues.”

Contra non valentem can apply when there is some condition coupled with a contract that prevented the plaintiff from filing suit. The court rejected the plaintiff’s arguments asserting this theory. Even if Carollo could establish a contract with Tulane under the concussion form, she could not point to any physical, mental, or procedural condition that prevented her from investigating her tort claims and filing suit against it.

Contra non valentem can also apply when the defendant does some act effectually to prevent the plaintiff from availing herself from her cause of action. The plaintiff argued that she was forced to sign the concussion form as a member of the Swim and Dive Team and that the form prevented her from filing suit within the prescriptive period. The court also rejected this argument, holding the plaintiff “knew about her concussion related injuries but did not perform her due diligence within the prescriptive period to determine whether she could file suit.”

Accordingly, the plaintiff’s execution of a waiver form stating she agreed not to sue the defendant for injuries could not interrupt prescription for the plaintiff’s claim.

*La. C.C. art. 3493.1, which went into effect on July 1, 2024, now provides delictual actions/tort claims are subject to a liberative prescription of two years.

References:

Carollo v. Tulane Univ., 2024-0038 (La. App. 4 Cir. 1/9/25), --- So.3d ---, 2025 WL 52557.

Insight

Court Finds Legal Malpractice Claim Perempted Because the Client Knew It Received “Bad Advice” More than One Year Before Suit Was Filed

Legal malpractice claims in Louisiana are governed by a peremption period that cannot be interrupted or suspended. La. R.S. 9:5605(A) provides that a legal malpractice claim must be brought one year from the date of the alleged malpractice, or within one year from the date the alleged malpractice should have been discovered. However, even when a claim is filed within one year of discovery, it must be filed within three years of the date of the alleged malpractice. If a party fails to assert a legal malpractice claim before the peremption period expires, the right to bring the claim is lost.

The Louisiana Supreme Court holds that “peremption commences to run in a legal malpractice case when a claimant knew or should have known of the existence of facts that would have enabled him to state a cause of action for legal malpractice.” In Crosby v. Waits, Emmett, Popp & Teich, LLC, the court recently examined the types of circumstances that should inform a plaintiff that an act of alleged malpractice occurred, which would trigger the peremptive period in which the plaintiff’s claim must be filed.

The plaintiff in Crosby owned 75% of a company and was in the process of buying out the minority stakeholder. The company was involved in litigation at the time. Initially, the minority stakeholder maintained all of the recovery and risk related to the suit. In April 2016, an attorney advised the plaintiff to accept an offer to split the recovery and risk in the suit 50/50 as part of the sale. The plaintiff then accepted the 50/50 offer. The litigation concluded after the sale, in February 2018, and resulted in an adverse judgment for which the plaintiff was responsible pursuant to the 50/50 agreement.

The plaintiff filed suit on February 12, 2019, within one year of the verdict in the underlying litigation, and claimed that its attorney committed malpractice when he advised that plaintiff accept the offer to split the recovery and risk in the suit. Specifically, it was alleged the attorney failed to examine the nature of the litigation or discover that the seller’s employees were aware the suit bore serious risk. The plaintiff’s representative testified that he did not keep track of the litigation and therefore could not have known the attorney engaged in the alleged malpractice until the jury rendered its verdict in the underlying suit.

However, the minority stakeholder testified that he knew the 50/50 offer was a bad deal for the plaintiff. Another employee testified he thought the risk of loss in the underlying suit was apparent to everyone involved. The court agreed. Based upon the evidence presented, “it should have been obvious to all concerned that the 50/50 option was favorable” to the minority stakeholder, who was adverse to the plaintiff’s interest.

The court held that the plaintiff should have known its attorney may have committed an act of malpractice when he advised it to accept the 50/50 split before the underlying litigation concluded. Accordingly, suit was not filed within one year of when the plaintiff should have known the alleged act of malpractice occurred. The plaintiff’s claims that it lacked such knowledge could not stand up to conflicting evidence. Thus, the claim was peremepted, and the plaintiff’s suit was dismissed.

Case References:

Crosby v. Waits, Emmett, Popp & Teich, LLC, 2022-0395 (La. App. 4 Cir. 11/21/22), 352 So. 3d 145.

Jenkins v. Starns, 2011-1170, p. 15 (La. 1/24/12), 85 So.3d 612, 621.