AMERICAN TURBINE TECHNOLOGY, INC.
OMNI BANCSHARES, INC. D/B/A OMNI BANK, NICOLE NICHOLAS, CLINTON NICHOLAS, AND EDWARD SWAN
APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH
OF JEFFERSON, STATE OF LOUISIANA NO. 699-121, DIVISION
"A" HONORABLE RAYMOND S. STEIB, JR., JUDGE
COUNSEL FOR PLAINTIFF/APPELLANT, AMERICAN TURBINE TECHNOLOGY,
INC. Victoria L. Bartels.
COUNSEL FOR DEFENDANT/APPELLEE, OMNI BANCSHARES, INC. D/B/A
OMNI BANK Pauline F. Hardin Graham H. Ryan.
composed of Susan M. Chehardy, Jude G. Gravois, and Stephen
M. CHEHARDY CHIEF JUDGE.
appeal, plaintiff, American Turbine Technology, Inc., seeks
review of the district court's July 14, 2016 judgment
granting summary judgment in favor of defendant, Omni Bank,
and dismissing plaintiff's action with prejudice. For the
reasons that follow, we reverse this judgment and remand the
matter for proceedings consistent with this opinion.
AND PROCEDURAL HISTORY
Pawlicki is the sole shareholder and president of American
Turbine Technology, Inc. ("American"). Mr. Pawlicki
hired Nicole Nicholas in 1999 as office coordinator and fired
her in 2010 after discovering that she had converted company
funds to her personal use. As office coordinator, Ms.
Nicholas had a wide array of responsibilities, which
included, among many other things, receiving mail, answering
phones, bookkeeping, and managing all aspects of the
company's finances. Because Mr. Pawlicki travelled a lot
for business, Ms. Nicholas was also permitted, with the
requisite authorization, to conduct company business on
behalf of the company with a facsimile stamp of Mr.
April 12, 2000, American obtained a $150, 000 line of credit
from Omni Bank ("Omni"), evidenced by a promissory
note (the "master note") in that amount signed by
Mr. Pawlicki on behalf of American. This was secured with,
among other things, a collateral mortgage on Mr.
Pawlicki's personal property and a personal guaranty by
Mr. Pawlicki. Terry Hall was the Omni loan officer who
assisted Mr. Pawlicki in opening this line of credit and was
assigned to manage it. Mr. Hall was replaced by Brian Heiden
Pawlicki testified that when requesting a disbursement on
this line of credit, he did so orally over the phone with
Omni. He maintains that he only made three oral requests on
the credit line: $10, 000, $25, 000, and $10, 000.
Conversely, Ms. Nicholas testified that Mr. Pawlicki notified
her when he wanted to draw on the line of credit, and that
she submitted the requests to Omni via fax stamped with his
was also disagreement as to where the funds were deposited
after they were disbursed. Mr. Pawlicki explained it was his
understanding that the funds were wired directly into
American's primary operating account at Chase Bank
(formerly "Bank One"). On the other hand, both Mr.
Heiden and Ms. Nicholas explained that the disbursed funds
were initially deposited into American's account at Omni.
Though Mr. Pawlicki disputes that this account existed, Mr.
Heiden attested that Omni's records indicate a bank
account was opened at Omni in the name of American in
connection with the line of credit. Additional evidence in
the record reflects that a commercial checking account in the
name of American was opened at Omni on May 10, 2000; and the
signature card executed at the time this account was opened
expressly permitted the use of facsimile signatures in
connection with the account. Notwithstanding this evidence,
Mr. Pawlicki persistently repudiated any knowledge of this
account. But according to Ms. Nicholas and Mr. Heiden, it was
into this account that funds disbursed on the line of credit
were first deposited. Ms. Nicholas then issued checks from
this Omni account with the signature stamp and deposited them
into the Chase account, from where they were put to company
use, according to her.
alleges that Ms. Nicholas abused this process between May
2002 and December 2003 whereby she used the signature stamp
without Mr. Pawlicki's authorization to request
disbursements of funds from the line of credit, totaling
$140, 000. American contends that after the funds had
been transferred from the Omni account to the Chase account,
Ms. Nicholas converted the funds from the Chase account to
her personal use. Thus, American concedes in its brief that
"the advances transferred by [Ms. Nicholas] from Omni
Bank to Bank One/Chase cannot be linked directly to specific
acts of theft by [Ms. Nicholas] on specific dates."
Nicholas denies these allegations. She avows that each of
these disbursement requests was made at Mr. Pawlicki's
instruction and that the funds were ultimately put to company
use. As it turned out, Ms. Nicholas pled guilty in federal
court to forgery in 2013 and was ordered to pay restitution
to Mr. Pawlicki in the amount of $65, 295.73. The factual
basis offered by the government for this guilty plea was that
Ms. Nicholas issued unauthorized checks from American's
Chase account with Mr. Pawlicki's signature stamp
totaling $65, 295.73 for private school tuition, mortgage
payments, and other personal items.
also alleges that Ms. Nicholas took additional steps to
conceal and continue her crime. American contends that Ms.
Nicholas used Mr. Pawlicki's signature stamp without his
authorization to renew the line of credit at Omni. The line
of credit was renewed annually on five occasions: April 25,
2001, April 29, 2002, September 26, 2003, September 24, 2004,
and February 23, 2006. Mr. Pawlicki admits that he authorized the
renewals in 2001 and 2002, but alleges that Ms. Nicholas
forged the latter three. Ms. Nicholas denies that she forged
any of these documents. Mr. Heiden testified that he could
not specifically recall witnessing Mr. Pawlicki signing the
renewals, but he explained that he often dropped off the
documents to Ms. Nicholas and received them back bearing Mr.
around June of 2006, the line of credit reflected an
outstanding balance of approximately $101, 000. This balance
evidently had not changed for some time, as Mr. Heiden
explained that the outstanding balance as of December 31,
2004 was $101, 111. This debt was reflected in American's
2004 corporate income tax return, in which the line for
"Mortgages, notes, bonds payable in less than 1
year" reflected an amount of $101, 111. Although Mr.
Pawlicki stated that he had not signed this return that was
filed with the IRS, he acknowledged that it bore his
signature stamp and was dated September 12, 2006. So, because
the line of credit was still stagnant in June of 2006, Omni
did not offer to renew the line of credit. Instead, it was
converted to an amortized term loan. American alleges that
the promissory note executed on June 16, 2006 converting the
line of credit to this term loan was also forged by Ms.
further claims that Ms. Nicholas changed American's
address on file with Omni without Mr. Pawlicki's
authorization in her efforts to conceal her crime. In March
of 2002, Omni received a request to change American's
address on file to a P.O. Box. Ms. Nicholas explained that
she submitted this request at Mr. Pawlicki's instruction
to facilitate the receipt of company mail. As a result, for a
time, all correspondence from Omni was sent to the P.O. Box,
of which Mr. Pawlicki maintains he was unaware.
Heiden attested that in connection with American's bank
account, Omni sent by U.S. mail monthly account statements to
the address on file, which was at various times
American's business address and the P.O. Box. In
connection with American's line of credit, Mr. Heiden
attested that Omni sent by U.S. mail statements and notices
regarding the loan and guaranty to the address on file, which
was at various times American's business addresses,
Pawlicki's personal addresses, and the P.O. Box.
Pawlicki maintains that he never received or reviewed any
statements from Omni. He also admitted that he never received
or reviewed any statements from American's Chase account.
Indeed, Ms. Nicholas stated that she never saw Mr. Pawlicki
look at any bank statements. Mr. Pawlicki even admitted that
had he timely reviewed American's bank statements, he
would have discovered the alleged misappropriations.
Pawlicki also admitted that he never reviewed or sought to
review documents from Omni to ensure that debt on the line of
credit was being paid off. He just "assumed" there
was no balance. Based on this assumption, and despite knowing
that annual renewals were required for the line of credit,
Mr. Pawlicki disregarded the lack of correspondence from Omni
and chose not to inquire further into the matter.
was in keeping with Mr. Pawlicki's hands-off management
style. He admitted that he never reviewed any of
American's files, books, records, or any other financial
documents, because, as he explained, "It wasn't my
style." He entrusted Ms. Nicholas to handle all of
American's accounting, banking, and finances with minimal
American's loan was placed into default. On December 24,
2007, Mr. Heiden sent by certified mail a letter to Mr.
Pawlicki's home address advising him that the loan was in
default. Mr. Pawlicki claimed that he never received this
Heiden followed this letter with another sent by certified
mail on March 11, 2008 to Mr. Pawlicki's home address. In
this letter, Omni advised Mr. Pawlicki that the collateral
property securing the loan had been sold at a tax sale due to
delinquent property taxes. The letter further explained:
"As a reminder, you have pledged a mortgage of this
property to secure the loan of American Turbine. The
delinquent taxes are a violation of the mortgage and place
your loan in default." This letter included a Certified
Mail Receipt that Mr. Pawlicki acknowledged bore his
signature. He explained that when he received this letter, he
called Ms. Nicholas and told her, "You need to fix
this." He had expected Ms. Nicholas to pay the property
taxes on his personal properties as part of her job
in 2009, Mr. Pawlicki began receiving collection calls. He
looked into the matter and learned that his bank statements
had been sent to the P.O. Box of which he claimed no
knowledge. This prompted him to further investigate his
company's finances. Based on his investigation, Mr.
Pawlicki determined that Ms. Nicholas had been
misappropriating company funds from American's Chase
account. Mr. Pawlicki closed the account and opened a new one
on November 17, 2009.
discovering Ms. Nicholas' activities in the Chase
account, Mr. Pawlicki began to investigate American's
accounts with Omni. In a meeting with Mr. Heiden on or about
March 14, 2010, Mr. Pawlicki claims he learned for the first
time that the line of credit had been converted to a term
loan and had an outstanding balance of $94, 876.72. Mr.
Pawlicki admitted that after learning this, in or around this
time, he made several payments on the loan totaling $90, 000.
March 9, 2011, American filed a "Petition for Nullity or
Rescission of Contract, for Breach of Contract and for
Damages for Conversion." In this petition, American
named as defendants Omni, Ms. Nicholas, Ms. Nicholas'
husband, and her father. American alleged that Ms. Nicholas
had converted $140, 000 of company funds that originated from
the Omni line of credit between May 2002 and December 2003
and that Mr. Pawlicki did not first learn of this until on or
about March 14, 2010. American sought to recover from Omni on
the bases that Omni had breached the master note by honoring
unauthorized advance requests by Ms. Nicholas and that the