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Citadel Builders, L.L.C. v. Dirt Worx of Louisiana, L.L.C.

Supreme Court of Louisiana

May 1, 2015

CITADEL BUILDERS, L.L.C.
v.
DIRT WORX OF LOUISIANA, L.L.C

IN RE: Dirt Work of Louisiana, L.L.C.; - Defendant; Applying For Writ of Certiorari and/or Review, Parish of Jefferson, 24th Judicial District Court Div. M, No. 725-313; to the Court of Appeal, Fifth Circuit, No. 14-CA-495.

ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FIFTH CIRCUIT, PARISH OF JEFFERSON.

John L. Weimer, Bernette J. Johnson, Greg G. Guidry, Marcus R. Clark, Jefferson D. Hughes, III. CRICHTON, J., additionally concurs and assigns reasons. Knoll, J. dissents.

OPINION

Page 909

[2014-2700 La. 1] PER CURIAM

This matter involves a default judgment for $1,256,205.39, plus legal interest, which was entered in favor of plaintiff and against defendant, Dirt Worx of Louisiana, L.L.C. We find the trial court's failure to conduct a contradictory hearing on plaintiff's motion to strike defendant's answer from the record was erroneous based on La. C.C.P. art. 964 and that the error was not harmless. Accordingly, we vacate and set aside the default judgment entered against defendant and remand for further proceedings.

BACKGROUND

Plaintiff filed suit against defendant for breach of a contract to provide demolition work, earthwork, and a storm drainage system on a construction project. After defendant was served with the citation and petition, plaintiff moved for and obtained a preliminary default. Thereafter, a letter from defendant was filed into the record. The letter, signed by defendant's registered agent, stated:

I'm writing in response to your petition for damages as outlined in case 725-313 Citadel Builders. Dirt Worx of Louisiana, LLC denies all claims mentioned. If you have any supporting documents to your claim, please forward them to our office for review.

The clerk of court for the trial court filed the letter as an " Answer to Original [2014-2700 La. 2] Petition" and charged a filing fee for the answer, which was paid by defendant.

A few months later, plaintiff sent a letter via private carrier and certified mail to defendant's registered agent stating that it intended to file a motion to confirm a default judgment against defendant. The letter explained that while plaintiff had not received the letter " purporting to be a response to the petition," plaintiff did not consider that letter to be an answer as it did not comply with the requirements of La. C.C.P. arts. 853, 854, and 1005. Further, plaintiff advised that, to the extent the letter could be considered a pleading, it was filed by a non-lawyer in violation of La. R.S. 37:213.

Thereafter, plaintiff filed two pleadings: a motion to strike answer and a motion for final default judgment. The same day, the

Page 910

court granted ex parte the motion to strike answer, ordered defendant's answer be stricken from the record, and rendered a default judgment against defendant.

Defendant filed a motion for new trial, which was denied. Defendant appealed, arguing that the trial court erred in striking its answer without a contradictory hearing and that plaintiff failed to give proper notice of its intent to confirm the default.

The court of appeal affirmed the trial court's confirmation of the default judgment. Citadel Builders, L.L.C. v. Dirt Worx of Louisiana, L.L.C., 14-495 (La.App. 5 Cir. 11/25/14), __ So.3d __. In so doing, the court determined that, despite its technical deficiencies, the letter filed by defendant sufficiently responded to the allegations in the petition so as to constitute an answer. In addition, the court determined that, while the trial court was required by the express terms of La. C.C.P. art. 964 to conduct a hearing prior to striking defendant's answer, the failure to hold such a hearing was harmless. Finally, the court determined that plaintiff complied with the notice requirement of La. C.C.P. art. 1702 prior to confirming the default. [2014-2700 La. 3] This application followed.

DISCUSSION

The sole issue presented concerns the trial court's failure to conduct a contradictory hearing on plaintiff's motion to strike. Relying on the plain wording of La. C.C.P. art. 964, the court of appeal correctly recognized that the trial court was required by the express language of the article to hold a hearing on plaintiff's motion prior to striking defendant's answer. However, the court went on to find that the trial court's failure to conduct the mandated hearing, while erroneous, was harmless. We respectfully disagree.

In clear and unambiguous language, La. C.C.P. art. 964 requires that a hearing be conducted prior to the issuance of an order to strike. See La. C.C.P. art. 964 (" The court on motion of a party or on its own motion may at any time and after a hearing order stricken from any pleading any insufficient demand or defense or any redundant, immaterial, impertinent, or scandalous matter." ). (Emphasis added.) The mandatory nature of this requirement, as it applies in this case, is underscored by La. C.C.P. art. 963, which provides, in pertinent part:

If the order applied for by written motion is one to which mover is clearly entitled without supporting proof, the court may grant the order ex parte and without hearing the adverse party.
If the order applied for by written motion is one to which the mover is not clearly entitled, or which requires supporting proof, the motion shall be served on and tried contradictorily with the adverse party. [Emphasis added.]

In this case, the court of appeal found that the trial court's failure to hold a contradictory hearing on plaintiff's motion to strike was harmless, i.e., it did not affect the merits of the case, because defendant's answer was filed by its registered agent and La. R.S. 37:213 prohibits a limited liability corporation from representing itself [2014-2700 La. 4] through its registered agent who is not licensed to practice law. Since the ruling striking defendant's answer was correct, the court of appeal reasoned, defendant was not prejudiced by the failure of the trial court to conduct a contradictory hearing.

The court of appeal's ruling fails to account for the fact that plaintiff's motion to strike was based, in part, on the allegation that the answer filed on behalf of defendant was filed by an individual who is not licensed to practice law, an allegation that clearly requires supporting proof, yet a review of the record reveals no proof was

Page 911

offered or received. The motion was granted ex parte. Because there is no evidentiary basis in the record for the ruling striking defendant's answer, the trial court erred in granting plaintiff's motion to strike. That error was clearly prejudicial, and not harmless, because the default judgment should not have been rendered while defendant could, and should have been able to, claim the benefit of its answer.

Had the trial court conducted the mandated contradictory hearing in this matter, plaintiff would have had the opportunity to offer supporting proof for its motion and defendant would have had the opportunity to cure any deficiencies in its pleadings, either by controverting the plaintiff's proof or by engaging an attorney to appear on its behalf. See Seelig v. Kit World Super Store, Inc., 97-1592 (La.App. 4 Cir. 1/21/98), 705 So.2d 806, 808-09.[1] Neither of those alternatives having come to fruition in this case, the motion to strike was improvidently granted and the default judgment was improvidently entered.

[2014-2700 La. 5] Accordingly, the judgment of the court of appeal affirming the default judgment is reversed, the default judgment is vacated and set aside, and the case is remanded for further proceedings.

REVERSED AND REMANDED.

CONCUR

CRICHTON, J., additionally concurs and assigns reasons:

I concur with the per curiam in this matter. I write separately to note that a disregard of the provision in La. C.C.P. art. 964 which requires a contradictory hearing, and which results in a default judgment of this magnitude, would never, in my view, amount to harmless error.

DISSENT

[2014-2700 La. 1] Knoll, J. dissents.

I respectfully dissent and would grant the writ. This Court has not addressed what constitutes a sufficient answer. The issue is squarely before us in the present matter. We should grant and docket this writ and issue an opinion that fully fleshes out how to determine the sufficiency of an answer, giving guidance to the lower courts. Nevertheless, because the Court is issuing a per curiam, I also write to express my disagreement with this decision, as I find, based on what has been submitted in the parties' writ applications, that the District Court did not commit reversible error in this case.

Although the Clerk of Court filed the defendant's brief letter as an " answer," it appears to be nothing more than a dilatory strategy employed by the defendant to postpone facing nearly $1,300,000 in contractual damages. Importantly, the letter is written by the registered agent of Dirt Worx who at no point purports to be an attorney and thus has no authority to appear on behalf of a limited liability company. La. R.S. § 37:213. Furthermore, the letter is not captioned as an answer, does not [2014-2700 La. 2] appear to have been sent to the plaintiff at the time of filing, and was submitted more than a month after preliminary default had been entered.[1]

Page 912

Although pleadings must be construed reasonably so as to do substantial justice, the defendant's letter did not merely lack technical niceties. Rather, in light of defendant's failure to engage counsel and file a bona fide answer to a petition containing serious breach of contract allegations, even after having preliminary default entered, the defendant's letter can be reasonably viewed as a mere delay tactic rather than a valid pleading which would prevent entry of default judgment.

There is little Louisiana case law to guide us in considering what constitutes a sufficient answer. As the per curiam notes, the Fourth Circuit in Seelig v. Kit World Super Store, Inc., 705 So.2d 806, 1997-1592 (La.App. 4 Cir. 1/21/98) found a motion to strike, rather than confirmation of default, was appropriate in the case of an handwritten " answer" by a non-attorney corporation's president. However, Seelig is not applicable here, as the defendant in Seelig unquestionably intended the filing to constitute an answer, apparently utilizing the " answer" form provided to pro se litigants in good faith. Rather, the present matter is more analogous to past cases where a message on a citation or private letter sent to the clerk of court or judge were deemed to not constitute an answer. Foster v. Colonel Sanders Kentucky Fried Chicken, Inc., 526 So.2d 252, 259 (La. 2nd Ct. App.) writ denied, 531 So.2d 483 (La. 1988) (the Second Circuit held it had " no authority" to treat a response scrawled at the foot of a citation form as an answer); Fortier v. Gumelsky, 148 La. 768, 87 So. 741 (1921) (private letter sent to a trial [2014-2700 La. 3] judge did not to constitute an answer or general appearance); Taylor v. Shreveport Airport Auth., 564 So.2d 744, 747 (La. 2nd Ct. App. 1990) writ granted, decision rev'd on other grounds, 568 So.2d 1070 (La. 1990) (letter to the clerk of court requesting cancellation of preliminary default not considered an answer).

The District Court did not abuse its discretion by disregarding the defendant's letter, which fell woefully short of constituting a valid answer, and entering default judgment against the defendant under these circumstances. Alternatively, I find the District Court's grant of the Motion to Strike the Answer without a hearing to be harmless error under these circumstances. Dirt Worx's argument that it would have taken any additional action upon being notified of a hearing is speculative at best, as Dirt Worx already chose to ignore the plaintiff's notice of intent to file the Motion to Strike and to confirm default judgment.


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