Thursday, January 31, 2019

Is The Notice Valid?

            A general contractor was hired to build public schools in Louisiana. The GC subcontracted a portion of the project to a subcontractor, who in turn, further subcontracted with 84 Lumber Company.
            Presumably 84 Lumber Company furnished building materials, but I see from their website that they are capable of furnishing much more including custom manufacturing.
            84 Lumber Company was not paid, so 84 Lumber filed sworn Statements of Claim. Louisiana law requires that subcontractors must send written notice of its claim by certified or registered US mail to the GC’s Louisiana office.
            Instead of using US mail, 84 Lumber sent the notice by email.
            Instead of sending the notice to the GC’s Louisiana office, 84 Lumber sent the notice to the GC’s attorney.
            84 Lumber sued the GC. The district court held that 84 Lumber’s notice did not comply with Louisiana laws.
84 Lumber appealed.
            The Appellate Court reviewed the State laws requiring notice, to determine if it was clear and unambiguous. The Court found that the laws on this subject were intended to protect those performing labor and furnishing materials. And that those same laws, if unambiguous, must not be expanded in their scope, but rather must be read literally.
            Louisiana laws provide that a subcontractor must furnish written notice to the GC within 45 days after recordation of the notice of acceptance by the property owner or notice of the owner regarding a default. The notice sent by the subcontractor must be “. . . served by mailing the same by registered or certified mail, postage prepaid, in an envelope addressed to the contractor at any place he maintains an office in the state of Louisiana.”
            It is undisputed that 84 Lumber did not send notice of its claim by registered or certified mail to the GC’s Louisiana office. 84 Lumber did neither. However, 84 Lumber gave evidence at trial that its lawyer’s secretary sent claim statements by email to the GC’s counsel. And accordingly, 84 Lumber contends that receipt by the GC of such sworn statements satisfies the statutory requirements.
            Because regardless of the manner of delivery, the message was in fact timely delivered and no one is contending otherwise. And so, the argument goes, we should look at the intent of the law not its exact wording. The purpose of the law is to provide notice. Notice was provided. Just not in exact conformance with Louisiana laws.
            Unconvinced, the Appellate Court determined that words have meanings and meanings should not be expanded if the ordinary meaning is clear. If the law requires notice to be sent by certified or registered mail to a Louisiana location, then that precludes notice sent by any other manner such as emails, texts, instant messaging, and phone calls.
No Louisiana court has held that an email to the GC’s counsel satisfies the requirements of Louisiana law. Consequently, 84 Lumber’s email notice to GC’s attorney fails.
            The GC wins; 84 Lumber loses.
See 84 Lumber Company v. Continental Casualty Company et al; US Court of Appeals, 5th Circuit, Case No. 18-30170; January 24, 2019:
            Lessons Learned / Questions Asked:
1.      This issue comes up constantly. People want to know that their email message is sufficient under law. Sometimes it is; often it is not.
2.      There are times where laws require delivery of a formal notice or demand in a specific manner. Eviction notices come to mind, as do demands for treble or punitive damages. I have not yet seen non-litigation laws that allow severe correspondence to be sent in any manner other than old fashioned paper, with proof of delivery.
3.      Conversely, leases, vendor agreements, service agreements, construction contracts and contracts of purchase and sale now commonly offer, as a convenience, to allow formal notices to be furnished by email or posted on a web portal. Be careful. There is a substantial risk that the intended recipient never sees the message as it might be trapped in a spam filter or ignored. For important notices like default, term renewal, and building repairs, only use paper notices by personal delivery, registered or certified mail, or courier delivery. The point is to have evidence of exactly when the notice was delivered, and to whom. You may need that evidence if the matter is contested.
                                                                                                Stuart A. Lautin, Esq.*

* Board Certified, Commercial (1989) and Residential (1988) Real Estate Law,
Texas Board of Legal Specialization
Licensed in the States of Texas and New York

Reprinted with the permission of North Texas Commercial Association of REALTORS®, Inc.



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