Louisiana Supreme Court Grants Writ of Certiorari In Favor of Local Hotel Owner, Enforcing Terms of Contract and Finding General Contractor Responsible for Jobsite Safety.
The Louisiana Supreme Court recently ruled in favor of the firm’s client, the owner of a New Orleans-area hotel, reinstating the favorable judgment of the district court. The Supreme Court’s decision enforcing the terms of the parties’ contract is not only an important win for the firm’s client, but the decision importantly advances the interest of public safety by clarifying that a contractor cannot contractually assume sole responsibility for the safety of its workers and subcontractors but then shirk that responsibility if an injury occurs on its jobsite by using its own legal violation to its advantage.
In Ioannis Maroulis v. Entergy Louisiana, LLC, et. al., Case No. 2021-00384, the plaintiff, a scaffolding subcontractor, sued a local hotel owner for injuries sustained while working on a construction project involving the renovation of a hotel. The hotel owner then filed a third-party demand against the project’s general contractor, which remained solely responsible for jobsite safety during the construction project pursuant to the parties’ contract.
Although it completed work under the contract and accepted payment from the owner, the contractor filed a motion for summary judgment invoking Louisiana’s contractors licensing law, Revised Statute 37:2160. The statute generally provides that a construction contract involving an unlicensed Louisiana contractor is an absolute nullity, and its terms cannot be enforced. Because it was not licensed in the State of Louisiana, the contractor argued that the hotel owner could not assert a breach of contract claim for the failure to ensure jobsite safety.
The 24th Judicial District Court denied the contractor’s motion, ruling in favor of the owner. The general contractor then sought supervisory review before the Louisiana Court of Appeal for the Fifth Circuit, which reversed the judgment of the district court and entered summary judgment in favor of the contractor.
The hotel owner, represented by Pipes | Miles | Beckman, filed an application for writ of certiorari with the Louisiana Supreme Court seeking reversal of the Fifth Circuit’s judgment and reinstatement of the district court’s ruling. The Supreme Court ruled in favor of the hotel owner, holding that, as the owner argued, the contractor could not invoke its own failure to obtain a Louisiana contractor’s license to absolve itself of its contractual obligation to ensure jobsite safety:
We find La. C.C. art. 2033 applicable, providing in pertinent part: "An absolutely null contract, or a relatively null contract that has been declared null by the court, is deemed never to have existed. . . . Nevertheless, a performance rendered under a contract that is absolutely null because its object or its cause is illicit or immoral may not be recovered by a party who knew or should have known of the defect that makes the contract null. . . ." Further, 1984 Revision Comment (c) to La. C.C. art. 2033 states: "[A] party who knew or should have known at the time of contracting of a defect that made the contract absolutely null may not avail himself of the nullity when the purpose of the illegal contract has been accomplished This conclusion flows naturally from the principle expressed in the traditional Roman maxim, nemo propriam turpitudinem allegare potest (no one may invoke his own turpitude), sometimes called the 'clean hands' doctrine (Emphasis added.)