Opinion
NO. 2018 CA 1146
04-17-2019
ACTION OILFIELD SERVICES, INC. v. ENERGY MANAGEMENT COMPANY
Robert L. Cabes Lafayette, Louisiana Counsel for Defendant/Appellant Energy Management Company Marvin Gros Martin K. Maley, Sr. Stacey B. Stephens Donaldsonville, Louisiana Counsel for Plaintiff/Appellee Action Oilfield Services, Inc.
Appealed from the 18th Judicial District Court In and for the Parish of West Baton Rouge State of Louisiana
Case No. 1043095 The Honorable J. Kevin Kimball, Judge Presiding Robert L. Cabes
Lafayette, Louisiana Counsel for Defendant/Appellant
Energy Management Company Marvin Gros
Martin K. Maley, Sr.
Stacey B. Stephens
Donaldsonville, Louisiana Counsel for Plaintiff/Appellee
Action Oilfield Services, Inc. BEFORE: GUIDRY, THERIOT, AND PENZATO, JJ. THERIOT, J.
In some instances in the record, "43095" is used as the case number in district court.
In this suit on an open account, the defendant appeals a summary judgment in favor of the plaintiff. For the reasons set forth herein, we affirm.
FACTS AND PROCEDURAL HISTORY
Plaintiff, Action Oilfield Services, Inc. ("Action"), performed oilfield pipeline-related work for defendant, Energy Management Company of Texas ("Energy"). Upon completion of the work, Energy failed to pay the entire balance due, despite written demand by Action. As a result, Action filed a suit on open account on August 15, 2016, demanding payment of the balance due ($43,249.00), plus judicial interest, costs, and reasonable attorney fees pursuant to La. R.S. 9:2781. Energy answered the petition, asserting that its obligation to pay Action had been extinguished by compromise, novation, and/or accord and satisfaction; to wit:
The petition names "Energy Management Company," but after Energy filed an exception asserting that the citation should have been issued to "Energy Management Company of Texas," Action filed an amended petition to amend the caption and paragraphs to refer to Energy as "Energy Management Company of Texas," but it does not appear that an order was ever signed by the trial court.
On or about April 18, 2016, a check was issued to the plaintiff in the amount of $57,000, the memo line of which check contained the following handwritten note: "EMCO's $57,000 is full 100% payment for all services-materials from Action Services on #1 White Well through April 18, 2016," which check was accepted and negotiated by Plaintiff, so that Defendant affirmatively pleads the defense that the obligation was extinguished by one or more of the following: compromise, novation, and/or accord and satisfaction.
The matter was set for a bench trial; however, on April 2, 2018, the trial court issued an order, on its own motion and by agreement of the parties, continuing the bench trial without date and further ordering that:
[A]ny Motions for Summary Judgment shall be heard on April 30 , 2018 at 9 a.m. in Port Allen, Louisiana . All Motions for Summary Judgment shall be filed no later than April 17, 2018, and all moving parties shall exchange said motions, memoranda, and affidavits with opposing counsel on said date. Any memoranda in opposition shall be exchanged, filed, and submitted to the court no later than April 23, 2018. Any reply memoranda shall [be] exchanged, filed, and submitted to the court no later than April 26, 2018.Following the issuance of this order, Action filed a motion for summary judgment on April 16, 2018. Although it appears that Energy mailed a copy of its own motion for summary judgment to Action on April 17, 2018, nothing was filed by Energy in the trial court prior to the April 30, 2018 summary judgment hearing. At the conclusion of the April 30, 2018 hearing, the trial court granted summary judgment in favor of Action for the outstanding balance of $43,249.00, plus twenty-five percent attorney fees, interest, and costs from the date of judicial demand. Energy's motion for summary judgment was filed in the record on May 1, 2018, the day after the trial court granted Action's motion for summary judgment and signed the judgment in favor of Action. Energy's motion does not appear to have been set for hearing or acted upon, and on June 4, 2018, Energy filed this suspensive appeal from the trial court's April 30, 2018 summary judgment in favor of Action. Energy argues on appeal that the trial court erred in finding that Energy's tender and Action's subsequent deposit of the check did not result in a compromise under La. C.C. art. 3079 and in awarding twenty-five percent of the balance owed as reasonable attorney fees under the open account statute.
Although it appears from the transcript of the April 30, 2018 hearing that the trial court had reviewed a copy of Energy's motion for summary judgment, and although counsel for both parties believe that both motions for summary judgment were before the court at the April 30, 2018 hearing, Energy's motion and the attachments thereto were not properly before the court on that date.
DISCUSSION
Appellate courts review summary judgments de novo using the same criteria that governs the trial court's consideration of whether summary judgment is appropriate. Red Star Consultants, LLC v. Ferrara Fire Apparatus, Inc., 2017-0847, p. 4 (La.App. 1 Cir. 2/8/18), 242 So.3d 608, 611. That is, a motion for summary judgment shall be granted if, after an opportunity for discovery, the motion, memorandum, and supporting documents show there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(A)(3).
The burden of proof on a motion for summary judgment rests with the mover. La. C.C.P. art. 966(D)(1). If the mover will bear the burden of proof at trial on the issue before the court in the motion, the burden of showing there is no genuine issue of material fact remains with the mover. After the mover makes a prima facie showing that the motion should be granted, the burden shifts to the non-moving party to present evidence demonstrating a material factual issue remains. However, if the mover will not bear the burden of proof at trial, the mover need not negate all essential elements of the adverse party's claim, but must point out the absence of factual support for one or more elements essential to the claim. Thereafter, the burden shifts to the non-moving party to produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law. See La. Code Civ. Pro. art. 966(D)(1); Red Star Consultants, 2017-0847 at p. 4, 242 So.3d at 611. Because the applicable substantive law determines materiality, whether a particular fact in dispute is material must be viewed in light of the substantive law applicable to the case. Bryant v. Premium Food Concepts, Inc., 2016-0770, p. 3 (La.App. 1 Cir. 4/26/17), 220 So.3d 79, 82, writ denied, 2017-0873 (La. 9/29/17), 227 So.3d 288.
Louisiana Revised Statutes 9:2781, which sets forth the procedures for suits on open accounts, provides, in pertinent part:
[w]hen any person fails to pay an open account within thirty days after the claimant sends written demand therefor correctly setting forth the amount owed, that person shall be liable to the claimant for reasonable attorney fees for the prosecution and collection of such claim when judgment on the claim is rendered in favor of the claimant. Citation and service of a petition shall be deemed written demand for the purpose of this Section.
In an action on an open account, a plaintiff bears the burden of proving his demand by a preponderance of the evidence. Ochsner Clinic Foundation v. Arguello, 2011-326, p. 5 (La.App. 5 Cir. 11/29/11), 80 So.3d 622, 625. The plaintiff must first prove the account by showing that it was kept in the course of business and by introducing supporting testimony as to its accuracy. Id. Once the plaintiff has established a prima facie case, the burden shifts to the debtor to prove the inaccuracy of the account or to prove that the debtor is entitled to certain credits. Id.
In support of its motion for summary judgment, Action filed the affidavit of its president, Michael Medine, Jr., in which he attested that he had personal knowledge of the validity of the amount claimed by Action on open account, and that the amount of $43,249.00 was, to his personal knowledge, the unpaid balance due and owing for labor, shipping costs, and materials furnished under an open account with Energy, on which a "systematic record" had been kept. Medine also attested that he was never put on notice of any dispute concerning the unpaid balance, never spoke with Energy's owner, Joe Vaughan, regarding any dispute, and never agreed to any compromise of a dispute with Vaughan or any representative from Energy. Action also filed the affidavit of David Bacque, a former employee of Energy, regarding his personal knowledge of the $43,249.00 balance owed by Energy to Action. Bacque attested that he was responsible for signing and approving all invoices on behalf of Energy and that "there was never a dispute over the work performed or the amount of the invoices on the open accounts with Action." Bacque further attested that he was personally familiar with Energy's business practice of writing "paid in full 100%" on checks "as a practice to elevate itself of due and owing obligations and debts."
Action set forth a prima facie case through the affidavits of Medine and Bacque as to the accuracy of the amount claimed and that the account records were kept by Action in the course of its business. At this point, the burden shifted to Energy to prove the inaccuracy of the records or its entitlement to certain credits. However, Energy filed no opposition to Action's motion for summary judgment, failed to file its own motion for summary judgment timely, and failed to either file its supporting documents into the record prior to the hearing or introduce them at the hearing. Although Energy attached an affidavit from Vaughan to its own motion for summary judgment, in which Vaughan attested that he had discussed a compromise of the claim with someone at Action prior to sending the $57,000.00 check as full payment, this affidavit was not before the court at the summary judgment hearing. See Johnson v. Slidell Memorial Hospital, 552 So.2d 1022, 1023 (La.App. 1 Cir. 1989), writ denied, 558 So.2d 571 (La. 1990) (On a motion for summary judgment, the trial judge must consider the pleadings, depositions, admissions, and affidavits that have been filed into the record or admitted into evidence. Where affidavits were submitted as attachments to a memorandum that was not properly filed into the record prior to the hearing on the motion for summary judgment, they must be introduced into evidence at the hearing in order to be considered by the trial court.); see also Banks v. Parish of Jefferson, 2012-215, pp. 17-18 (La.App. 5 Cir. 1/30/13), 108 So.3d 1208, 1219-20 (Affidavits need not be formally introduced into evidence at the hearing on the motion for summary judgment if they are already "on file" or physically placed into the record prior to the hearing on the motion.).
Energy argues on appeal that the trial court erred in failing to recognize the compromise of Action's claim under La. C.C. art. 3079 resulting from Energy's tender of $57,000.00 as payment in full and Action's negotiation of the check. Article 3079 provides that a disputed or unliquidated claim can be compromised when the claimant accepts a payment that the other party tenders with the clearly expressed written condition that acceptance of the payment will extinguish the obligation. For there to be a valid compromise of a debt or claim under Article 3079, there must be: (1) a disputed claim; (2) a tender of a check for less than the amount of the claim by the debtor; and (3) an acceptance of the tender by the creditor. Complete Medical Systems, L.L.C. v. Health Net Federal Services, L.L.C., 2013- 0367, p. 5 (La.App. 1 Cir. 11/1/13), 136 So.3d 807, 810-11. The existence of a bona fide dispute prior to the tender and negotiation is an indispensable prerequisite to the compromise of the claim and subsequent estoppel of the claimant's right to pursue the claim. This is because the creditor's acceptance in negotiating the check for a lesser sum than claimed must be an informed consent. Thus, where the creditor is not aware of a dispute as to the amount, a check for less than the entire balance due, submitted in the ordinary course of business with the notation "In Full Payment," cannot operate to discharge the debt if the creditor deposits it without noticing the restrictive condition on its face. See Charles X. Miller, Inc. v. Oak Builders, Inc., 306 So.2d 449, 451-52 (La.App. 4 Cir. 1975). Thus, in order to defeat summary judgment, Energy was required to show the existence of an issue of fact as to Action's awareness of a dispute as to the amount claimed. Energy failed to do so, and as a result, the trial court did not err in granting summary judgment in favor of Action.
Although Action attached correspondence between counsel for the parties to its motion for summary judgment, in which counsel discussed communications between Vaughan and an Action employee or Medine regarding a dispute as to the amount owed and possible compromise, these letters were not verified or authenticated, and therefore could not be considered by the court on a motion for summary judgment. See Banks, 2012-215 at p. 17-18, 108 So.3d at 1219-20. --------
Energy next argues that the trial court erred in awarding twenty-five percent of the amount awarded as attorney fees. The open account statute, La. R.S. 9:2781, provides that reasonable attorney fees are to be awarded. A trial judge has great discretion in arriving at an award of attorney fees, and the exercise of this discretion will not be reversed on appeal without a showing of clear abuse of this discretion. Burford v. Burford, 1995-2318, p. 5 (La.App. 1 Cir. 6/28/96), 677 So.2d 722, 725. Factors which should be considered in making a fee award include: the ultimate result obtained; responsibility incurred; importance of the litigation; amount involved; extent and character of the work performed; legal knowledge; attainment and skill of the attorney; number of appearances made; intricacies of facts and law involved; diligence and skill of counsel; court's own knowledge; and ability of party liable to pay. Law Offices of Fred L. Herman, APLC v. Helmer, 2013-235, p. 6 (La.App. 5 Cir. 10/9/13), 128 So.3d 310, 313.
Energy argues on appeal that there was no evidence submitted to support the attorney fee award, and that the amount awarded was unreasonable under the circumstances of this case. Initially, we note that there is no requirement that the trial court hear evidence concerning the time spent or the hourly rates charged, since the record will reflect much of the services rendered. The trial court is also allowed to call upon its own experience and expertise in the valuation of legal services rendered by an attorney. Naquin v. Louisiana Power & Light Co., 2005-2104, p. 6 (La.App. 1 Cir. 11/17/06), 951 So.2d 228, 232, writ denied, 2006-2979 (La. 3/9/07), 949 So.2d 441. In this case, Action's counsel began attempting to collect the unpaid balance from Energy in May 2016. Counsel for Action filed a lien and attempted to resolve the matter with Energy's counsel for several months before filing suit. After filing suit, Action's counsel pursued the claim for almost two years before obtaining summary judgment in Action's favor, including: opposing Energy's declinatory exceptions; filing a supplemental and amended petition; conducting discovery; obtaining witnesses' affidavits; preparing a pre-trial memorandum; and filing and supporting a motion for summary judgment. We find the attorney fee award does not constitute an abuse of discretion on the facts of this case, and therefore we affirm the amount of attorney fee awarded. See Industrial Screw & Supply Co., Inc. v. WPS, Inc., 2005-1188, pp. 6-7 (La.App. 3 Cir. 4/5/06), 926 So.2d 134, 138, writ denied, 2006-1063 (La. 6/23/06), 930 So.2d 986 (Attorney fee award of twenty-five percent of the principal amount was reasonable in suit on open account, where plaintiff's counsel issued demand letter, filed suit, filed motion for summary judgment, and supported that motion with memoranda and associated documentation.); Cardinal Wholesale Supply, Inc. v. Rainbow Floor Covering, Inc., 432 So.2d 419, 422 (La.App. 1 Cir. 1983) (attorney fee award of twenty-five percent of principal and interest was reasonable in suit on open account).
CONCLUSION
The April 30, 2018 summary judgment in favor of Action Oilfield Services, Inc. is affirmed. Costs of this appeal are assessed to the appellant, Energy Management Company of Texas.
AFFIRMED. NUMBER 2018 CA 1146 GUIDRY, J., dissents and assigns reasons. GUIDRY, J., dissenting.
I respectfully disagree with the opinion reached by the majority. I believe that the check presented by EMCo and attached to Action's Motion for Summary Judgment, which has notated in its memo line "Emco's $57,000 is full 100% payment for all services-materials from Action Services on # 1 White Well through April 18, 2016", creates a genuine issue of material fact as to the existence of a dispute and therefore, summary judgment was inappropriate.