In executing the terms of a construction contract, a builder and its subcontractors may not perform their duties as mandated under the terms of the contract. If a builder fails to perform its duties, then a property owner may file a claim for breach of contract and damages against the builder for defects in performance. However, the property owner’s ability to bring a claim against the builder is limited to a specific period of time prescribed by state law. The state legislature has the ability to pass laws that change the period of time in which a property owner can bring a claim against the builder for defects in performance; and in 2003, the Louisiana Legislature exercised this power to make changes in the law barring this type of claim, reducing the period from seven to five years.
When changes to the law have occurred, parties to a lawsuit may dispute which law is controlling in their claim. A recent example of litigation concerning changes in law occurred in Lafayette, Louisiana. In 2002, a property owner, Crescent City Property Partners, LLC (hereinafter “Crescent”), and a builder, Greystar Development and Construction, LP (hereinafter “Greystar”), entered into a contract for the construction of a mixed-use development in Lafayette, Louisiana. This development was completed in phases with construction of the multiple buildings being completed a year after the parties entered into the contract. Five years later, Crescent filed an arbitration claim under the terms of the construction contract, alleging defects in the builder’s performance, against Greystar and its insurer. In response, Greystar filed a third party demand against various subcontractors.
At the time the construction on the mixed-use development was completed there was a seven-year period of peremption for construction claims; however, only a month after completing the project, the legislature amended the law to provide for a five-year period of peremption. On July 11, 2011, shortly before the parties were scheduled to arbitrate the matter, the Supreme Court of Louisiana decided Ebinger v. Venus Construction Corp., discussing the retroactivity of the 2003 amendment.