The recent decision by the Louisiana Court of Appeals in City of Ruston v. Womack & Sons Construction Group, Inc., 374 So. 3d 311 (La. App. 2 Cir. 2023) underscores the critical need for architects to meticulously draft and review contracts, contract conditions, and change orders in construction projects.
The City of Ruston (the “City”) undertook the construction of the Ruston Sports Complex to host the 2019 Dixie World Series, contracting with Womack & Sons Construction Group, Inc. (“Womack”) as general contractor for the $35 million project (the “Project”). The City hired Yeager, Watson & Associates, LLC (“YWA”) as architects for the Project. Timely completion of the Project was of utmost importance to the City, who stood to benefit economically from hosting the World Series.
The contract was based on AIA Documents A101-2007 & A201-2007, but included Supplementary Conditions prepared by YWA. Womack discovered a leak in the geomembrane liner of five fields during construction. Despite knowledge, Womack delayed notifying YWA until January 2019. YWA then notified the City and suggested remedies, including an alternative GeoBase system at Womack’s expense. Concerned with meeting the World Series deadline, the City approved Change Order No. 2 (“the Change Order”), increasing the contract sum by $1,779,682.33 and authorizing Womack to continue with construction and complete the project on time.
After completion, the City sued Womack for breach of contract, seeking reimbursement for the Change Order expense. Womack filed a Motion for Summary Judgment, citing the unambiguous language of the Supplementary Conditions and the City’s execution of the Change Order, which modified the contract and authorization of the work. The trial court ruled in favor of Womack, a decision upheld by the Court of Appeals, which emphasized the City’s failure to pursue alternative available remedies under the clear contractual terms or otherwise available under Louisiana law.
The Court chastised the City for neglecting legal remedies at the time of discovery and criticized its attempt to rescind the Change Order post-facto. Moreover, it rejected claims of error, fraud, or duress, highlighting the City’s awareness of the issues, active participation in decision-making prior to executing the Change Order, and its status as being a sophisticated party to the Contract with ready access to legal counsel.
The Ruston ruling underscores the critical importance of careful contract drafting and legal diligence throughout the lifecycle of construction projects. Parties involved in such disputes should prioritize thorough review and understanding of contractual terms, especially regarding change orders or modifications. Seeking legal counsel early in the process can also help mitigate risks and ensure the protection of rights and interests until completion.