SBL Constr., LLC v. Michael M. Eymard & Tram Invs., Inc.

289 So.3d 1079

SBL CONSTRUCTION, LLC

v.Michael M. EYMARD and Tram Investments, Inc.

2018 CA 1691

Court of Appeal of Louisiana, First Circuit.

DATE OF JUDGMENT: NOVEMBER 12, 2019

Christopher H. Riviere, Todd M. Magee, Thibodaux, Louisiana, Counsel for Plaintiff - Appellee SBL Construction, LLC

Martin Stewart Bohman, Harry E. Morse, New Orleans, Louisiana, Victor R. Loraso, III, Baton Rouge, Louisiana, Counsel for Defendants - Appellants Michael M. Eymard and Tram Investments, Inc.

BEFORE: McDONALD, THERIOT, AND CHUTZ, JJ.

CHUTZ, J.

Appellants, Michael M. Eymard and Tram Investments, Inc. (Tram), appeal the trial court's judgment against them, awarding $30,000.00 for the balance owed on an open account in favor of appellee, SBL Construction, LLC (SBL), and denying relief on Tram's reconventional demand against SBL. For the reasons that follow, we reverse in part and affirm in part.

FACTUAL AND PROCEDURAL BACKGROUND

The evidence established that in September 2009, Eymard on behalf of Tram (a company that Eymard owns with his wife) and Frank Boura on behalf of SBL (a company that Boura owns) met at Eymard's office to discuss the construction of a bulkhead by SBL for Tram on Bayou Lafourche in Lafouche Parish. SBL utilized one of its invoices to provide an estimate to Tram.¹ The cost of the construction of the bulkhead was determined on a by-the-foot basis.

Boura provided two options for the bulkhead, with each option consisting of different materials, and Tram selected the option that utilized thicker vinyl sheets and bigger pilings. Although SBL was asked to provide a bid for a 280-foot bulkhead, Tram changed the design and requested additional footage. The parties created no written documents to support the change. At the end of construction, SBL submitted an invoice to Tram, dated August 3, 2010, requesting payment of $92,244.96, which reflected the construction of a bulkhead that was 336 feet.²

As of May 12, 2011, Tram had paid all but $30,000.00 of the amount SBL invoiced. When SBL demanded final payment, Boura was advised by Tram that the construction required remedial work because the bulkhead had bowed. Although Boura attributed the bowing to Tram's backfilling with sand, because he was advised by Tram that to collect the outstanding balance, he had to fix it and since he wanted to straighten it out before leaving the construction site, SBL undertook all the requests that Tram made. On August 16, 2011, and again on October 17, 2011, SBL sent written demands for $30,000.00 to Tram after having completed the remedial work, but the outstanding balance remained unpaid.

On March 22, 2012, SBL filed this lawsuit, naming Eymard and Tram as defendants and alleging entitlement to the balance of $30,000.00. SBL specifically averred the amount owed was due on an open account and sought reasonable attorney's fees. Tram answered the lawsuit and asserted a reconventional demand, contending that SBL breached the parties' agreement by failing to perform in a proper and workman-like manner and rendering a defective and substandard performance. Tram alleged that its damages consisted of the cost of repair of the bulkhead. Shortly thereafter, SBL voluntarily dismissed Eymard from the litigation without prejudice.

The matter proceeded to a trial on the merits at which testimonial and documentary evidence was adduced. On July 30, 2018, the trial court issued written reasons for judgment, concluding that the parties' agreement was an open account for which SBL was owed the balance due. The trial court also determined that Eymard and Tram failed to prove that SBL's construction of the bulkhead was defective and, therefore, were not entitled to relief. On July 31, 2018, the trial court signed a judgment that ordered Eymard and Tram to pay SBL the amount of $30,000.00 for the balance owed on the open account and denied Tram's claims for relief on the reconventional demand. This appeal followed.³

LIABILITY OF EYMARD

Although the trial court cast Eymard in judgment, SBL does not dispute that he had been dismissed from the lawsuit prior to the trial on the merits. Accordingly, because SBL concedes that the portion of the judgment ordering Eymard to pay $30,000.00 for the balance owed on the open account is erroneous, that portion of the judgment is reversed.

TRAM'S LIABILITY FOR AN OPEN ACCOUNT

On appeal, without challenging the amount of liability imposed, Tram asserts that the trial court erred in characterizing the parties' agreement as an open account rather than a conventional obligation, noting that historically the courts have not construed construction contracts as open accounts. Describing the contract to construct the bulkhead as "a single transaction," Tram suggests that the parties' agreement was for a specific price without the running of a line of credit or expectations of future dealings between the parties. Thus, Tram avers the agreement was not an open account and that the trial court's conclusion to the contrary was erroneous.

An open account "includes any account for which a part or all of the balance is past due, whether or not the account reflects one or more transactions and whether or not at the time of contracting the parties expected future transactions." La. R.S. 9:2781(D).

In R. L. Drywall, Inc. v. B & C Elec., Inc. , 2013-1592 (La. App. 1st Cir. 5/2/14), 2014 WL 3559390, this court addressed whether an agreement to provide drywall services in a warehouse building constituted an open account. The builder had provided a bid to the owners of the building for services and materials using an invoice which estimated a total amount of $11,012.00. However, the project was later expanded to include an additional ceiling and another room. In response to the expansion, the builder provided a total bid of $12,337.00 for the modified project. After completion of the job, the warehouse owners tendered a $5,000.00 check to the builder as "a good-faith down payment" until the parties could sit down and figure out the basis of the builder's charges. The builder did not cash the check, but instead filed suit. R. L. Drywall, Inc. , 2014 WL 3559390, at * 1.

On appeal, the warehouse owners contended that the trial court had erred in its conclusion that the agreement fell within the parameters of an open account under La. R.S. 9:2781 because the contract between the parties clearly contemplated a single construction job rather than any on-going relationship and, due to the failure of the builder to provide a reasonable explanation, the amount owed was unclear. In addressing the owners' contentions, this court stated:

In Frey Plumbing Company, Inc. v. Foster , 2007-1091 (La. 2/26/08), 996 So.2d 969 (per curiam), a homeowner hired a plumbing company to fix an underground pipe at her residence. The plumbing company issued an invoice to the homeowner after the work was performed. The bill remained unpaid for over six months. During that time, the plumbing company sent written demands for payment to the homeowner to no avail. The plumbing company filed suit to recover payment and also sought an award of attorney's fees under the open account statute. The homeowner filed a motion for partial summary judgment, arguing that the claim did not constitute a claim on open account where the services were for a first and only transaction between the parties, there was no line of credit, only one invoice was submitted for a single-time payment, and no additional jobs were anticipated. Frey Plumbing Company, Inc. v. Foster , 996 So.2d at 970. The trial court granted the [motion for partial summary judgment], finding the claim did not constitute a claim on an open account. The court of appeal denied the plumbing company's writ application, finding no error in the trial court's judgment. On review, the Supreme Court determined that the trial court erred in finding that a contract for open account could not exist between the parties merely because there was only a single transaction between them and no future transactions were contemplated. The Court noted that any account which fits the definition of an open account, including but not limited to an account for professional services, fits within the ambit of the statute, reasoning that: " La. R.S. 9:2781(D) must be applied as written. Under a plain reading of the statute, there is no requirement that there must be one or more transactions between the parties, nor is there any requirement that the parties must anticipate future transactions. To the extent the prior case law has imposed any requirements which are inconsistent with the clear language of La. R.S. 9:2781(D), those cases are overruled." Frey Plumbing Company, Inc. v. Foster , 996 So.2d at 972.

Under Frey, which directs us to apply the language of [La.] R.S. 9:2781(D) as written (i.e., that an "open account" includes any account for which a part or all of the balance is past due, whether or not the account reflects one or more transactions and whether or not at the time of contracting the parties expected future transactions), we find the account herein fits the definition of an open account as pled by plaintiff in his petition. The clear language of the statute states that an open account "includes any account[,]" and nowhere in the statute are construction accounts or contracts specifically excluded.

R. L. Drywall, Inc. , 2014 WL 3559390, at *5-6.

In the case before us, the undisputed evidence showed that although the parties clearly agreed to a by-the-foot price, the length of the bulkhead was not determined prior to the time SBL undertook construction. Boura's testimony suggested that at some point during construction, Eymard indicated that Tram wanted to extend the length of the bulkhead. Eymard stated that it was during their initial discussions in September 2009, when SBL provided its bid, that he voiced an interest in changing the design to include additional footage. According to Eymard, Boura advised him that whatever additional...