Opinion
No. 2004-CA-0578.
December 1, 2004.
Appeal from the Civil District Court, Orleans Parish, No. 2002-18020, Division D, Lloyd J. Medley, J.
Warren Horn, Heller, Draper, Hayden, Patrick Horn, LLC, New Orleans, LA, and Jon P. Bohn, Pro Hac Vice, Bohn Ducloux, Houston, TX, for Third Party Plaintiff/Appellant.
Charles C. Foti, Attorney General, James J. Bolner, Jr., Special Assistant Attorney General, Berrigan, Litchfield, Schonekas, Mann, Traina Thompson, L.L.C., New Orleans, LA, for Division of Administration, Sharon Reed and Roger Magendie.
(Court composed of Judge TERRI F. LOVE, Judge EDWIN A. LOMBARD, Judge ROLAND L. BELSOME).
RELEVANT FACTS AND PROCEDURAL HISTORY
This suit arises out of a lease contract between the State of Louisiana through the Department of Social Services (DSS) and Baha Towers Limited Partnership (BTLP). In May 1998, DSS entered into a lease with BTLP, the owners of the "Plaza Tower" office building located at 1001 Howard Avenue. The term of the lease was from November 1998 until November 2003. On November 16, 2001, Director of Facility Planning and Control, Roger Magendie, gave notice of cancellation to lessor of Plaza Tower. DSS vacated the premises in February 2002.
DSS, with the approval of the Division of Administration (DOA), terminated their lease because the building owners were in violation of the fire code, asbestos regulations and also because chronic water leaks in the building permitted mold to grow in leased office space.
On November 20, 2002, DSS instituted suit against BTLP for the return of rent payments made after DSS vacated the building in response to an eviction notice and for damages caused by water leaks in the building. Defendants reconvened against the State and filed a third-party complaint against the DOA and two DOA employees. The third-party demand, filed on February 28, 2003, is the subject of this appeal.
On July 29, 2003, the DOA, and state employees, Sharon Reed and Roger Magendie, filed a Dilatory Exception of Prematurity to these claims asserting that the defendant's administrative appeal, filed on April 8, 2003, had not concluded, therefore the action was premature. The trial court granted the state's exception.
On August 8, 2003, Commissioner of Administration Mark C. Drennan, acting on administrative appeal, found that cancellation of the lease was reasonable. He found that the "emergency" procurement, securing alternative space, was reasonable; and, the procedures followed by Sharon Reed and Roger Magendie complied with the statutory guidelines. He also found that the negotiations between the Office of Facilities Corporation and owners of alternative office space did not circumvent the procurement code.
On October 6, 2003, NOOB I, LP filed suit against DSS in the 19th Judicial District Court for the Parish of East Baton Rouge pursuant to 1691(C) of the Procurement Code alleging a cause of action based upon efforts to "circumvent the Louisiana Procurement Code" and seeking a "loss of rental payments due under the lease, past, present and future."
LAW AND DISCUSSION
Appellate review of questions of law is simply a review of whether the trial court was legally correct or legally incorrect. O'Niell v. Louisiana Power Light Company, 558 So.2d 1235, 1238 (La.App. 1 Cir. 1990).
The exception raising the objection of prematurity may be utilized in cases where the applicable law or contract has provided a procedure for a claimant to seek administrative relief before resorting to judicial action. See Jones v. Crow, 633 So.2d 247, 249 (La.App. 1 Cir. 1993). Generally, the person aggrieved by an action must exhaust all such administrative remedies before being entitled to judicial review. Id.
Appellant argues that the trial court erred in sustaining third-party defendant's exception of prematurity based on La. R.S. 39:1673, which provides in part:
This Section applies to controversies between the State and a contractor and which arise under or by virtue of a contract between them. This includes without limitation controversies based upon breach of contract, mistake, misrepresentation, or other cause for contract modification or rescission. Any contractor who seeks a remedy with regard to such controversy shall file a complaint with the chief procurement officer.
The statutes provide that any person not satisfied with the decision shall seek further redress with the commissioner of administration in accordance with La. R.S. 39:1685. The decision rendered by the commissioner of administration shall be final and binding between the state and the contractor unless the contractor timely institutes a petition for review in the only venue available to the statute, the 19th Judicial District Court. La. R.S. 39:1691(c).
We find that Appellant's claims against the State of Louisiana through the Division of Administration, Sharon Reed, and Roger Magendie arise by virtue of the contract between the State and Appellant. At the time the suit was filed, the administrative process remained unfinished. Initiation of any litigation prior to conclusion of the administrative process was premature.
Accordingly, the trial court's ruling is affirmed.
AFFIRMED.
LOVE, J., concurs with reasons.
I respectfully concur with the majority in the present case. I write separately to address the assertions raised by the third-party plaintiff, NOOB I, LP. ("NOOB") that La. R.S. 39:1673 applies only to contracts and that NOOB's petition in the case sub judice asserts a claim in tort for fraud and conspiracy. The trial court, in its Reasons for Judgment, provides an excellent recitation of the facts, which I repeat:
Third party plaintiff NOOB I, LP. (hereafter, NOOB), filed a third party demand on February 28, 2003 against the Division of Administration (hereafter, DOA); Roger Magendie, the former director of the Office of Facility Planning and Control, a department of the Division of Administration (hereafter, Magendie); and Sharon Reed, the director of the office of Real Estate Leasing, a department of the Office of Facility Planning and Control (hereafter, Reed).
In its third party petition, NOOB alleges that it is the assignee of lease number 10-0290 between BAHA Towers and the Department of Social Services (hereafter, DSS), and lease number 09-40056 between BAHA Towers and the Department of Health and Hospitals (Hereafter, DHH).
NOOB alleges that on February 1, 2002, DSS breached its lease. In paragraph 18 of the petition, NOOB alleges that ". . . as early as May 4, 2001, before the expiration of either the DHH or DSS lease, and well before any complaints of mold or asbestos, well before `any emergency', with plenty of time to issue public bid invitations DSS, OFP, Magendie and Reed were devising a scheme to get DSS and DHH our of Plaza Tower circumventing the procurement code." The petition lists the third party plaintiff's cause of action as tortuous interference, conspiracy to violate the procurement code, fraud and fraud in the inducement.
In response to this action, third party defendants filed an Exception of Prematurity on July 28, 2003, asserting that the procurement code provides administrative remedies which must be exhausted by the protestant before seeking judicial review.
The Legislature's intent in enacting the Louisiana Procurement Code, La. R.S. 39:1551, et seq., was to increase the public's confidence in those procedures implemented in public procurements and to ensure the all persons who are involved with the procurement of this state are treated fair and equitable. Louisiana Associated General Contractors, Inc. v. Calcasieu Parish School Bd., 586 So.2d 1354 (La. 1991). NOOB asserts that the claims pending before this court are "tort claims" against DOA, Magendie, and Reed, and that therefore, NOOB is not required to comply with the provisions of La. R.S. 39:1551 prior to seeking a judicial remedy. Although grounded in tort, the NOOB's claims against DOA, Magendie, and Reed are based on leases with DSS and DHH. The trial court's finding that the procurement code does not exclude tort claims from the application of La. R.S. 39:1673, is overbroad. The procurement code does not exclude tort claims which arise under contractual obligations from the application of La. R.S. 39:1673.
The final error asserted by NOOB is that the trial court erred in sustaining the Exception of Prematurity brought by Reed and Magendie because the tort claims were not brought against them in their individual capacities and were therefore not subject to administrative review. The trial court was correct in finding that the claims against Magendie and Reed were subject to administrative review, in that the alleged acts are asserted against Magendie, in his capacity as the former Director of Facility Planning and Control and Reed, in her capacity as the Director of Real Estate Leasing, thus dictating administrative review.