On Appeal from the 18th Judicial District Court, Parish of Iberville, State of Louisiana. Docket No. 614-11, Division " B" . Honorable J. Robin Free, Judge Presiding.
Richard J. Ward, Jr., District Attorney and Elizabeth A. Engolio, District Attorney, Plaquemine, LA, Attorneys for Plaintiff-Appellee State of Louisiana.
Frederick Kroenke, Louisiana Appellate Project, Baton Rouge, LA; Stephen Babcock, Baton Rouge, LA and Mark D. Plaisance, Thibodaux, LA, Attorneys for Defendant-Appellant Louis Allen.
BEFORE: McDONALD, CRAIN, AND HOLDRIDGE, JJ.
STATEMENT OF FACTS
Percy Butler, Jr. and his wife, Carla Butler, organized Magnolia Springs, L.L.C. (Magnolia Springs) in order to develop an affordable residential development in St. Gabriel, Louisiana. After receiving bids for the project in 2009, the Butlers ultimately elected to hire Northgate Land Development Corporation Northgate), a company which was represented by the defendant. The parties entered into a contractual agreement in June of 2009. Under the $968,370.00 contract, Northgate specifically agreed to develop two streets, and an infrastructure including sewerage, water, drainage, curbs and gutters, to complete the construction of the Magnolia Springs Subdivision. Magnolia Springs agreed to pay Northgate progressively upon certification of invoices individually submitted to request a " draw" or payment based on the work completed toward the project. Specifically, under the agreement once Magnolia Springs certified or approved an invoice, payment was made to Northgate to pay bills incurred in accordance with the invoice. Northgate began working on the project in July of 2009, and before April of 2010, $538,297.31 had been paid to Northgate for work completed toward the project.
On April 1, 2010, Northgate submitted an invoice with a net draw request of
approximately $100,910.58 and Magnolia Springs paid the draw. A portion of the draw was based on concrete pavement for a gross amount of $104,098.00 and a net amount (after the deduction of 7% for retainage) of $96,811.14. Thus, Mr. Butler expected that Northgate would use this draw to pay for all the labor and material for concrete pavement up to that point. In June of 2010, Magnolia Springs received notice of a privilege filed by Heck Industries, Inc. (Heck) for concrete materials and/or labor for $105,162.17 which included sums previously paid by Magnolia Springs to Northgate to pay Heck. Thus, Magnolia Springs became 3 aware of the fact that Northgate did not pay for some of the concrete expenses as requested in the April draw. Magnolia Springs ultimately canceled the contract and completed and/or corrected work as necessary to build houses in the subdivision. In 2011, Magnolia Springs paid Heck Industries (Heck) a total of 52,000.00 for expenses incurred after the April 1st services and draw, leaving a balance owed to Heck of approximately $53,000.00, an amount which Magnolia Springs had already paid to Northgate in the April draw in order to pay Heck.
ASSIGNMENT OF ERROR NUMBER ONE (ORIGINAL BRIEF) ASSIGNMENTS OF ERROR NUMBERS TWO AND THREE SUPPLEMENTAL BRIEF)
In assignment of error number one of his original brief, regarding count one, the defendant concedes the existence ofa contract to construct, erect, or repair and the receipt of money on the contract. However, the defendant denies any knowing failure to apply the money received as necessary to settle claims for material and labor due under the contract. Specifically, the defendant contends that the State did not provide any evidence as to the " special mental element" of this offense. Regarding count two, the defendant contends that the evidence in this case shows that Northgate was licensed. The defendant notes that the State may contend that the license held by Northgate in 2009 did not cover the classification of contracting that was needed for the project in question. The defendant argues that improper classification would not provide a basis for a conviction of engaging in the business of contracting without authority pursuant to La. R.S. 37:2160, but would instead be a violation of the classification requirement in La. R.S. 37:2159. The defendant further contends that performing work outside of one's classification in violation of La. R.S. 37:2159 does not have criminal consequences and is a matter to be resolved by the Board of Contractors in accordance with La. R.S. 37:2153. The defendant notes that the Board of Contractors conducted a hearing pursuant to La. R.S. 37:2153 on the issue, at which Northgate pled no contest, and imposed a one thousand dollar fine and a proper classification mandate.
In assignment of error number two of the supplemental brief, the defendant bolsters the sufficiency of his evidence argument. Regarding count one, the defendant specifically contends that the evidence irrefutably shows that he was not responsible for paying subcontractors and, alternatively, the State failed to prove that he knowingly misapplied contractor funds. The defendant further contends that the evidence proves that Northgate paid everything it received to the subcontractors and that unpaid invoices emanated from work done after Northgate was last paid. The defendant notes that Northgate was owned by his wife, Stephanie Allen, as opposed to the defendant who was merely an employee granted authority by his son, Louis Allen, Jr., to execute the contract with Magnolia Springs. The defendant further notes that his son had a contractor's license. The defendant contends that Magnolia Springs failed to pay Northgate for work and materials after April 1st, 2010. The defendant argues that there is no evidence that he knowingly misapplied the money Northgate did receive or paid for anything other than labor and material expenses, and that the State failed to exclude every hypothesis of innocence. Further, the defendant argues that the State did not overcome Mrs. Allen's testimony that she was responsible for paying Northgate's expenses or her explanation as to the work completed after April 1, 2010 ...