Vinet v. D and M Renovation LLC: Louisiana Fifth Circuit Finds Parties Bound by Verbal Change Orders in Construction Contract

The Louisiana Court of Appeal for the Fifth Circuit recently addressed whether parties to a construction contract may be bound by verbal change orders notwithstanding a provision in the original contract requiring all change orders to be in writing.  In Vinet v. D and M Renovation LLC, the plaintiffs, Mr. and Mrs. Vinet (the “Vinets”) contracted with the defendant, D and M Renovation, LLC (“D&M”) to reconstruct portions of their home due to damage from Hurricane Isaac.  The parties negotiated a written contract with a total price of $32,500.00.  The contract provided that any change orders were to be made in writing.

The principal of D&M, Mr. Ray, was onsite for most of the work at the plaintiffs’ residence, and he testified that the Vinets made numerous verbal changes and additions to the contract after the work began.  The additions included adding a second Jacuzzi tub, repainting rooms which had already been painted, changing the floors from laminate to ceramic tile, patching holes in the drywall of ceiling, installing a clothing dryer vent set and a hall furnace vent set, and repairing a ceiling crack in the garage.  Mr. Vinet testified at trial that he did in fact request additional work and upgrades but was told by Mr. Ray that these items would be “added” into the original contract, which he understood to mean Mr. Ray would include these items without any additional charge.  Mr. Ray testified that he told Mr. Vinet several times that the additional work would be billed as additional charges.  Both parties testified that the additional work had been completed, although Mr. Vinet claimed that the workmanship was defective in many ways.

At the completion of the work, Mr. Ray documented the additional work in an “Extra Work Order” which he presented to the Vinets for signature and payment.  After the Vinets refused to sign the Extra Work Order and pay D&M for the additional work, D&M placed a lien on the Vinets’ home for $9,547.51, the amount D&M claimed was owed for the work.  The Vinets responded by filing suit against D&M and Mr. Ray individually, claiming damages for substandard work and wrongfully placing a lien on their property.  D&M reconvened for the amount it claimed was due for the additional work.  At trial, the court ruled in favor of D&M, and denied the plaintiffs’ claims for defective workmanship and wrongful filing of the lien.  The Vinets appealed, arguing that the trial court erred by not enforcing the original contract provision requiring change orders to be in writing prior to performing any work contained therein; and thus, D&M breached the contract by performing the additional work and changes requested by the Vinets prior to executing a written change order. 

On appeal, the Fifth Circuit first noted that while a written contract is the law between the parties, it may be modified by oral contracts and the conduct of the parties, even when the written contract provides that change orders must be in writing.  Therefore, the court found it unnecessary to determine whether the Extra Work Order complied with the written change order provision because the parties modified the written contract, through their conduct, to allow D&M to complete the additional work and changes upon the Vinets’ verbal request.  The court observed that Mr. Vinet was present at the home throughout the renovation and never objected to D&M performing the additional work due to the absence of a written change order.  Thus, the court found that the parties had clearly modified the construction contract to allow for verbal change orders.

The Fifth Circuit’s decision comes as no surprise, as this case adds to a long line of Louisiana jurisprudence[1] allowing modification of written construction contracts through the conduct of the parties.  It is now well-settled in Louisiana that even where a written construction contract contains a provision requiring written change orders, parties can, whether verbally or through their conduct, modify a construction contract to allow for verbal change orders.  In such cases, it is important for the contractor to demonstrate (1) that the additional work was performed at the owner’s request or at the very least with the owner’s knowledge; and (2) that the owner did not insist on executing a change order for the additional work prior to the contractor performing the additional work.

[1] Aqua Pool Renovations, Inc. v. Paradise Manor Community Club, Inc., 880 So.2d 875 (La. App. 5th Cir. 2004); Malbrough v. State Farm Fire and Cas. Co., 1996 WL 533630 (E.D. La. 1996); Pelican Elec. Contractors v. Neumeyer, 419 So.2d 1 (La. App. 4th Cir. 1982); Nat Harrison Associates, Inc. v. Gulf States Utilities Co., 491 F.2d 578 (5th Cir. 1974).

 

Joseph Axiak