Louisiana Supreme Court Clarifies that Third Party Demands and Cross Claims for Indemnity are Not Premature Before a Decision on the Main Demand, by Margaret N. Davis
On Friday, the Louisiana Supreme Court issued a written opinion in Daniel Bennett v. Demco Entergy Services, LLC et. al., No. 2023-CC-01358 (5/10/24) finally settling an important conflict in Louisiana law. The Court found that cross claims for contractual indemnity and defense are not premature when they are asserted before liability is determined in the main demand. For several years, a circuit split emerged based on several Louisiana Supreme Court decisions that led courts in some circuits to find that cross claims for indemnity were premature before liability was determined. In the construction context, this frequently led to harsh consequences for general contractors, because while they waited for liability to be determined in the main demand, their indemnity cross claims against subcontractors were perempted (dead or unactionable) after five years under La. R.S. 9:2272. In short, cross claims could be premature during the five-year limit and perempted after the five-year limit.
