Under Louisiana law, a party may recover attorney’s fees from an opposing party only in two specific circumstances: (1) where there is a contract between the disputing parties that explicitly requires the payment of the attorney’s fees incurred by the opposing party, or (2) where a specific Louisiana statute requires the payment of the opposing party’s attorney’s fees.
Because an award of attorney’s fees can resemble a penalty to the losing side, courts can be hesitant to make such an award and generally take a hard look at the contract or statute under which the fees are sought. A construction entity can only help its chances by including a fee recovery clause drafted by an attorney in its form contracts and, on a more practical level, by insisting that all such contracts are signed by all parties before any activity commences on the project.
However, even if the applicable contract is silent (or if there is no contract at all), there are a few specific Louisiana statutes which can provide for the recovery of attorney’s fees in the construction context.
Private Works Act: Louisiana’s Private Works Act is the state statute governing lien rights and lawsuits on private construction projects. Importantly, the Private Works Act does not specifically provide for the attorney’s fees incurred in the filing of a lien and/or the pursuit of a lien-based lawsuit. However, the Act does provide for the recovery of attorney’s fees in a few certain situations, specifically where the fees are incurred for:
- the removal of an expired lien from the parish mortgage records; La. R.S. 9:4833.
- a subcontractor or supplier to recover amounts due from a contractor who has knowingly failed to apply money received from an owner to settle claims of the subcontractor or supplier; La. R.S. 9:4814.
- where an Owner fails to provide notice of the termination of a project to a lien claimant who has timely requested such notice; – La. R.S. 9:4822.L(2).
Public Works Act: The Public Works Act is the state statute governing lien rights and lawsuits on public and/or governmental construction projects. Unlike the Private Works Act, here the claimant is entitled to ten percent (10%) attorneys’ fees upon the recovery of the full amount of a timely and properly recorded claim, La. R.S. 38:2246(A).The Act also provides for attorney’s fees for removal of expired or improperly filed liens, La. R.S. 38:2242.1(B)
Open Account Statute: The “open account” statute, La. R.S. 9:2781, allows for an award of attorney’s fees where “any person fails to pay an open account within thirty days after the claimant sends written demand therefor correctly setting forth the amount owed.” A recent decision from Louisiana’s First Circuit Court of Appeal—which has jurisdiction over the Greater Baton Rouge area and all parishes along the I-12 corridor—reminds us that the “open account” statute can allow for the recovery of attorney’s fees in a construction dispute. R. L. Drywall, Inc. v. B & C Elec., Inc., 2013-1592 (La. App. 1 Cir. 5/2/14) (La. Ct. App. May 2, 2014). In this case, the court clarified that the “open account” statute can apply to a construction contract—here, a contract to provide and install drywall. The “open account” statute requires that the party owed funds send a written demand for payment that accurately states the amount owed, and in the context of collection matters, offers construction entities another way in which to collect attorney’s fees.