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Ernest N. Morial New Orleans Exhibition Hall Authority and New Orleans Public Facility Management, Inc. v. New Limits New Limits, LLC

Court of Appeals of Louisiana, Fourth Circuit

April 5, 2017

ERNEST N. MORIAL NEW ORLEANS EXHIBITION HALL AUTHORITY AND NEW ORLEANS PUBLIC FACILITY MANAGEMENT, INC.
v.
NEW LIMITS NEW LIMITS, LLC AND FIRST STANDARD ASURETY, LLLP

         APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2015-09402, DIVISION "C" Honorable Sidney H. Cates, Judge

          Robin J. Magee Cearley W. Fontenot OATS & MARINO COUNSEL FOR PLAINTIFF/APPELLEE

          Mark D. Plaisance ATTORNEY AT LAW COUNSEL FOR DEFENDANT/APPELLANT

          (Court composed of Chief Judge James F. McKay, III, Judge Terri F. Love, Judge Sandra Cabrina Jenkins)

          Terri F. Love Judge

         This is an appeal of a default judgment rendered in a claim against a contractor and surety for breach of contract. Defendant First Standard Asurety, LLLP ("First Standard") appeals a default judgment rendered after it failed to answer a lawsuit filed against it and New Limits Enterprise, LLC ("New Limits"), for whom First Standard wrote a surety bond for a construction project. First Standard asserts that the plaintiff Ernest N. Morial New Orleans Exhibition Hall Authority ("Authority") failed to comply procedurally and substantively with the statutory default provisions. A motion for default judgment must be accompanied by a certificate pursuant to La. C.C.P. art. 1702.1. The Authority failed to comply with the certification mandate. Therefore, we find the trial court committed manifest error when it granted the Authority's motion for confirmation of default judgment. Accordingly, the default judgment is reversed and vacated.

         PROCEDURAL HISTORY AND FACTUAL BACKGROUND

         The Authority and New Orleans Public Facility Management, Inc. entered into a $335, 000 contract with New Limits for the construction of chair storage. The contract, which was formally executed in January 2014, called for a completion date of March 31, 2014. In conformity with the contract, New Limits provided a performance bond and payment bond from First Standard.

         The Authority filed a petition for breach of contract in September 2015 against New Limits. The petition alleged that New Limits did not meet the initial completion date as well as the extended completion date of November 30, 2014. Despite repeated demands, the Authority claimed that New Limits "failed and/or refused to complete the project for the agreed upon price" and had "abandoned the jobsite, effectively terminating the construction contract." As of the date of abandonment, the Authority averred that it paid New Limits $259, 958. On January 12, 2015, the Authority notified First Standard of New Limits' default and sought enforcement of the surety bonds.

         First Standard was served with the Authority's lawsuit through its registered agent on October 21, 2015. First Standard did not file an answer to the petition.

         Thereafter, the Authority filed a motion for default judgment, which the trial court signed on December 8, 2015. In February 2016, the Authority moved for confirmation of the default judgment. The motion included the following attachments: (1) affidavit of Robert L. Johnson, Executive Vice President of the Authority; (2) notice of bid award; (3) performance bond; (4) payment bond; (5) owner-contractor agreement; and (6) letter from counsel for the Authority to David Harris of First Standard. The trial court denied the motion as presented.[1]

         In March 2016, without a hearing, the trial court rendered judgment of default in the Authority's favor and against New Limits and First Standard for $259, 958. The trial court also assessed New Limits with attorney's fees and costs in the amount of $2, 500. First Standard timely appeals the March 2016 judgment of default.

         STANDARD OF REVIEW

         Appellate courts review confirmation of default judgments under the manifest error/clearly wrong standard of review. Nat'l Collegiate Student Loan Trust 2007-2 v. Kuzma, 15-0504, p. 2 (La.App. 4 Cir. 2/17/16), 187 So.3d 91, 92; See also Arias v. Stolthhaven New Orleans, LLC, 08-1111, p. 5 (La. 5/5/09), 9 So.3d 815, 818 ("[T]he appellate court is restricted to determining the sufficiency of the evidence offered in support of ...


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