Mary Anne Wolf will present Construction Insurance at the LSU and LSBA Construction Law CLE Program.

All claims against professional designers are perempted (extinguished) under La. R.S. 9:5607 five years after the project is completed with an exception for fraud. In cases of fraud, an otherwise untimely lawsuit can go forward. For this reason, plaintiffs often allege fraud when the claim may be perempted. This scenario was present in the recent First Circuit decision in Markiewicz v. Sun Constr., L.L.C, 2019-1590 (La. App. 1 Cir. 9/18/20), 2020 WL 5587265. The decision helps to explain when a designer’s alleged conduct falls outside of ordinary negligence based upon the standard of care and becomes fraudulent.

Broadly, fraud is designed as “a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other.” La. C.C. art. 1953. Fraudulent intent or intent to deceive is a necessary element of a fraudulent misrepresentation. Therefore, fraud cannot be predicated on a mere mistake or negligence, however gross.

In Markiewicz, the plaintiff homeowners filed a class action lawsuit in 2006 arising from flooding of their neighborhood. Ten years later, plaintiffs added as defendants the engineers involved in the design of the drainage system, including the engineers who prepared the surveys for the development. Absent fraud, the newly added claims would be untimely. Plaintiffs alleged that the engineers fraudulently provided incorrect or misleading survey certificates, despite their knowledge that the certificates were incorrect.

The engineers filed a motion for summary judgment on peremption because more than five years had passed from the completion of their services. The engineers argued that plaintiffs could not prove fraud under facts of the case such that the fraud exception would not apply.

The Markiewicz court ruled for defendants. Although there was a dispute as to whether the engineers’ measurements were erroneous, the court found that plaintiffs failed to prove that the services were fraudulent. The plaintiffs provided no evidence that the engineers were aware of any discrepancy in preparing the surveys or that they knowingly misrepresented the surveys. As such, the court found that the fraud exception did not apply, and plaintiffs’ claims against the engineers were perempted. Through its analysis, the Markiewicz court made clear that labelling allegedly negligent conduct as fraudulent is insufficient to defeat a supported motion. While fraud may be established by circumstantial evidence, including highly suspicious facts and circumstances, the court found the record devoid of such facts.

In Couvillion Group, LLC v. Plaquemine Parish Government, the Louisiana Court of Appeals for the Fourth Circuit addressed whether the general contractor could recover “pass-through claims” against the owner where those claims would be time-barred if brought directly by the subcontractors. “Pass-through claims” have been described as damage claims that subcontractors “pass through” to the contractor to prosecute an action against the project owner to recover those damages.

In Couvillion, the contractor sued the Parish for delay damages. The trial court awarded $2,782,724 in delay damages, $300,000 of which was for delays incurred by two of the subcontractors.

On appeal, the Parish argued that the contractor could not recover the pass-through claims because any claims for delay that the subcontractors had against the contractor were prescribed (time-barred). The subcontractors sent demand letters after substantial completion in 2013 but did not file suit against the contractor. Under Louisiana law, contract claims are subject to a 10-year prescriptive period. The Parish asserted that by the time trial occurred in 2024, the subcontractor claims had prescribed.

The Fourth Circuit recognized that subcontractors often pass their claims through the contractor to prosecute against the owner to recover those damages. The contractor included those claims in the lawsuit filed against the owner in 2015. When several parties share a cause of action, suit by one party interrupts prescription as to all parties. As such, the court held that prescription was interrupted, and the contractor could recover the pass-through claims against the owner.

This case highlights the importance of identifying and properly preserving pass-through claims early in litigation.

References:

Couvillion Grp., LLC v. Plaquemines Par. Gov't, 2025-0356 (La. App. 4 Cir. 1/7/26), 430 So. 3d 1175, writ denied, 2026-00217 (La. 5/12/26), 430 So. 3d 1090.

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Many in the construction industry favor arbitration and often include an arbitration clause in their contracts. Although best practice dictates that both parties sign the contract to eliminate doubt as to legal enforceability, in practice, one or both parties sometimes fail to sign. Instead, the parties show their mutual “meeting of the minds” that an agreement has been reached by performing and accepting the work. However, if a dispute arises, will an arbitration provision in an unsigned contract be enforced?

In Patriot Construction & Industrial, LLC v. Buquet& LeBlanc, Inc., when a dispute arose over the subcontractor’s work, the general contractor sought to invoke the arbitration clause in its standard subcontract. The subcontractor argued that the unsigned, red-lined subcontract its estimator had returned to the general contractor was not enforceable, and thus neither was the arbitration clause. The court found agreement on price and scope but found that no agreement was reached on the other terms because the estimator did not have authority to bind the subcontractor. Further, a provision in the contract required that changes be initialed by both parties, yet the subcontractor’s authorized agent had not initialed any of the changes.

The Court held that the arbitration clause was not binding. The Court emphasized that Louisiana law favors arbitration; however, it held “arbitration is a matter of contract, and a party cannot be required to submit to arbitration any dispute to which he has not so agreed.” The question of who is bound by an arbitration agreement is determined from the intent of the parties as expressed in the terms of the contract. If the contract is deemed void because it was not properly confected, any arbitration clause contained therein may likewise be void. This may be true even where neither party objected to the arbitration clause per se.

Although the Patriot Court stated that generally, to be subject to arbitration, a party must be a signatory to the contract containing the arbitration clause, a signature is not a statutory requirement to enforce an arbitration clause. Louisiana’s arbitration statute, La. R.S.9:4201, requires only that the arbitration agreement be in writing. It does not require a signed contract. The jurisprudence is clear that the law does not require a signed agreement to arbitrate.  See Hurley v. Fox, holding that the defendant-architect’s motion to confirm the arbitration award could not be denied merely on the ground that the plaintiff-homeowner never signed the contract. See also Rainey v. Entergy Gulf States, Inc., in which the Louisiana Supreme Court held that a party who drafts a contract and presents it to another for signature cannot claim the contract is unenforceable because that party never signed the contract. Even where the parties contemplate that both parties will sign the contract to signify acceptance, a contract may nevertheless be valid without both signatures where the non-signing party has availed itself of the agreement or taken action evidencing its acceptance of it.*

However, the result hinges on the parties’ intent – as determined by the written agreement. For example, where the written contract expressly conditions validity on both signatures, a missing signature is likely fatal to the enforcement of any arbitration clause contained in the contract.  See Huckaba v. Ref-Chem, LP, in which the U.S. Fifth Circuit invalidated an arbitration provision in an employment contract where the employee signed it but the employer – who sought to enforce the arbitration clause – did not.

Also noteworthy, an arbitration clause in a contract signed by both parties may nonetheless be invalid where the court finds that fraud, duress, or other vice was involved in the formation of the contract such that one party did not truly consent to the contract terms. In the recent case Mapp, LLC v. Floor and Decor Outlets of America, Inc., the U.S. Fifth Circuit held that a contract was unenforceable because it was found to be adhesionary – it gave the owner, which had superior bargaining power, sole discretion to invoke arbitration.

In Carver Theater, LLC v. Melancon, another noteworthy case, an arbitration clause in a written contract signed by both parties was enforced by the Court and resulted in an arbitration award. However, it was later determined invalid – and the award was also invalidated –where the party that initially sought to enforce arbitration later changed its position and argued that the contract was invalid.  The Court invalidated the arbitration award under the Louisiana arbitration statute, finding that the award was procured using “undue means.” In seeking to compel arbitration, the party argued that the contract was valid and required arbitration. Once in arbitration, that same party argued that the contract was invalid. This misrepresentation to the Court satisfied the statute’s narrow grounds for invalidating an arbitration award.**

As a final consideration, non-signatories such as subcontractors or sureties may be compelled to arbitrate where their subcontract or bond incorporates by reference the contract containing the arbitration clause and where the language in that arbitration clause is sufficiently broad, for example – any controversy or claim arising out of or related to the contract. See The Jewish Federation of Greater New Orleans, et al. v. Fidelity & Deposit Company of Maryland, holding that the surety was bound by the arbitration clause in the construction contract because its bond incorporated it by reference, even on its counterclaim for declaratory relief based on a defense that the performance bond had lapsed.

* See Harp v. Succession of Bryan, 2019-0062 (La.App. 1 Cir. 9/3/20), 313 So.3d 284; La. Civil Code art. 1927.

** La. R.S.9:4210(A).

References:

PatriotConstruction & Industrial, LLC v. Buquet & LeBlanc, Inc., 2023-557 (La. App. 3 Cir. 4/24/24), 387So.3d 784.

Hurley v. Fox, 520 So.2d 467 (La. App. 4 Cir. 1988).

Rainey v. Entergy Gulf States, Inc., 2009-572 (La.3/16/10), 35 So.3d 215.

Huckaba v. Ref-Chem, LP, 892 F.3d 686 (5th Cir.2018).

Mapp, LLC v. Floor and Decor Outlets of America, Inc., 2026WL 2265969, 25-30536 (5th Cir. 2026).

Carver Theater, LLC v. Melancon, 2024-0468 (La. App.4 Cir. 5/5/25), 417 So.3d 676. The court determined that the FederalArbitration Act and its severability doctrine did not apply in this case. Theresults may have been different under the FAA.

The Jewish Federation of Greater New Orleans, etal.  v. Fidelity & Deposit Company of Maryland, 273 F.3d 1094,2001 WL 1085096 (5th Cir. 2001) (unpublished).