LCG waited too long to take legal action against a local real estate appraiser and could have settled any questions about his appraisal long before it bought land for a controversial levee removal project in St. Martin Parish, a district judge ruled earlier this month.
LCG sued local appraiser Jake LaCour in May, claiming his “negligence” and “apparently erroneous” report caused LCG to overpay for the land, potentially in violation of state law. It’s unclear who will ultimately be held responsible for the excessive payment.
The Current first reported the Guillory administration’s overpayment in June of 2022, noting LCG paid triple the land’s worth, potentially violating statutes that prohibit “gratuitous donation” of public resources. LCG paid $84,000 to acquire two-thirds of land that LaCour had valued in total at $42,000. Under statutory law and the state constitution, a political subdivision cannot pay a price that exceeds the appraised value; doing so may amount to an illegal donation of public funds, according to an attorney general’s opinion.
In its lawsuit, LCG argued the window to sue LaCour began June 1 of 2022 when The Current first questioned local government about the overpayment, but 15th Judicial District Court Judge Valerie Gotch Garrett didn’t buy LCG’s argument. She ruled the clock on LCG’s right to sue started running in August 2021, when City-Parish Attorney Greg Logan emailed LaCour to clarify his appraisal. On that timeline, the one-year prescriptive period to sue ended in August 2022.
“[B]ecause this Court believes that LCG acquired knowledge on August 31, 2021, this matter has prescribed as it has been over 1 year since the date LCG knew or should have known of the alleged act, omission or neglect,” Garrett wrote.
Garrett opined that LaCour’s August 2021 email response clearly indicated the entire 41 acres were worth $42,000. LaCour also told LCG the total value may be even less, $31,500, because it wasn’t buying the entire tract, a common discount practice. “When reading the email, a simple math calculation in one’s mind should have raise[d] a red flag that the $31,500 (or $42,000 without the discount) was for the entirety of the 41-acre tract, not one third,” Garrett wrote.
Email correspondence obtained by The Current showed that LCG lawyers instead told two of the three sellers — one family was represented by District Judge David Blanchet and the other by attorney Jerry Guilliot — that the properties had been valued at $126,000, a figure that does not appear anywhere in LaCour’s appraisal or his email response to Logan in August 2021. A third landowner, Ed Francez, was left out of the deal and sued LCG for damages in February. Blanchet, Guilliot and Francez are cousins.
City-parish officials claim “erroneous” report led to major overpayment.
That conclusion was reached months ago and not shared with council members until this week.
LCG appealed Garrett’s ruling last week. LCG attorney Michael Adley, who also appeared on behalf of Josh Guillory in his lawsuit against challenger Monique Blanco Boulet on Oct. 4, did not respond to a request for comment. Guillory and Boulet face off on Nov. 18.
LaCour’s attorney, Fernand Laudumiey IV of Chaffe McCall in New Orleans, did not respond to a request for comment.
LCG’s lawsuit against LaCour and his company Icon Valuation Group was filed this spring just as Josh Guillory’s administration defended the St. Martin Parish project in response to a scathing audit issued by its own auditors, which found more than two dozen serious deficiencies that led to overpayment, bad bidding practices and poor internal control over LCG’s spending, potentially violating multiple state laws. Many of the auditors’ findings focused on various issues with the spoil banks’ project’s legality.
At the same time it was contemplating a lawsuit, LCG was also defending the overpayment, saying it accounted for the cost of an expropriation lawsuit should LCG be forced to seize the land. A lack of City Council authorization for the land acquisition, which would amount to a violation of LCG’s charter, also came under scrutiny in LCG’s annual financial audit, as did the overpayment.
The Louisiana legislative auditor confirmed in January that it is investigating the Guillory administration, a probe focused on drainage projects.
The land in question was purchased in St. Martin Parish to knock down a spoil bank levee along Bayou Vermilion in a secretive, overnight operation conducted without a permit from the U.S. Army Corps of Engineers. The Corps and EPA launched investigations.
Guillory has defended the project’s merits and said the City Council was aware of it, for example, when it signed off on an ordinance accepting $1.5 million from the state and agreeing to a $500,000 match.
Auditors also believe — as does one of LCG’s own attorneys — the awarding of the project violated the state’s public bid law. Rigid Constructors was paid $3.7 million for the overnight job by amending the work to a $390,000 as-needed excavation contract awarded in December 2021.
A success in LCG’s eyes, the overnight operation may also have violated federal laws and regulations and a St. Martin Parish ordinance — officials there say they were blindsided by the work and believed more studies were underway — and remains tied up in multiple lawsuits. The state has refused a $1.5 million payment to LCG because LCG did not follow the state’s requirements for the project, failing to turn over any of the necessary documentation, like final construction plans and proof of adherence to public bid laws.