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John Begnaud Electric Motors, Inc. v. Alternative Well Intervention, LLC

Court of Appeals of Louisiana, Fourth Circuit

December 20, 2017

JOHN BEGNAUD ELECTRIC MOTORS, INC.
v.
ALTERNATIVE WELL INTERVENTION, LLC

         APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2015-06233, DIVISION "G-11" Honorable Robin M. Giarrusso, Judge

          Stephen D. Marx CHEHARDY, SHERMAN, WILLIAMS, MURRAY, RECILE, STAKELUM & HAYES, LLP COUNSEL FOR PLAINTIFF/APPELLEE, JOHN BEGNAUD ELECTRIC MOTORS, INC.

          Robert G. Harvey, Sr. COUNSEL FOR DEFENDANT/APPELLANT, ALTERNATIVE WELL INTERVENTION, LLC

          Court composed of Judge Terri F. Love, Judge Joy Cossich Lobrano, Judge Sandra Cabrina Jenkins

          Terri F. Love, Judge

          This appeal arises from a contract for the construction and sale of a rig that plaintiff was building for defendant. Defendant instructed plaintiff to cease work on the rig after the rig was over halfway completed. Plaintiff requested payment for work completed and presented an invoice signed by the president of defendant. The trial court awarded plaintiff $262, 500.00, plus interest from the date of judicial demand, as well as all costs. Defendant appealed contending that the trial court awarded a windfall amount considering the original contract price of the rig and electrical equipment that was never delivered to plaintiff.

         We find that the evidence demonstrates that the rig was over halfway completed. Additionally, plaintiff remains obligated to pay for the electrical equipment that had yet to be delivered. Further, the former president for defendant signed no less than two documents acknowledging the $262, 500.00 debt. As such, we find that the trial court did not commit manifest error by finding for plaintiff for $262, 500.00. The judgment of the trial court is affirmed.

         FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         Alternative Well Intervention, LLC ("AWI") provided "workover services to oil and gas companies in the Gulf of Mexico." John Begnaud Electric Motors, Inc. ("JBEM") previously constructed three rigs for AWI and was awaiting the final payment on rig 3 when AWI contracted with JBEM for the construction of rig 4 for $387, 029.00. Once JBEM received the final payment on rig 3 and received the initial payment of $96, 757.25 for rig 4, construction began. After the oil and gas market suffered a downturn, AWI ordered JBEM to halt construction on rig 4. AWI asked JBEM to submit an invoice for the amount of work completed on rig 4. The invoice reflected that AWI owed JBEM $262, 500.00 for rig 4.

          JBEM then needed cash and assigned the invoice to Crestmark Capital ("Crestmark"). John Stansbury, the former president of AWI, signed the invoice as an acknowledgment. Further, Mr. Stansbury accepted and agreed to the assignment by signing an "Invoice Acknowledgment Agreement" ("IAA") from Crestmark acknowledging the assignment and his ability to bind AWI. AWI never paid Crestmark on the invoice. JBEM repaid Crestmark for all of the monies Crestmark extended for the invoice. Crestmark then reassigned the invoice back to JBEM. AWI never paid JBEM.

         JBEM filed a petition seeking the $262, 500.00 payment from AWI. AWI filed Exceptions of No Right of Action and No Cause of Action. The Exception of No Right of Action was based on the premise that JBEM no longer possessed rights regarding the invoice. The trial court granted the Exception of No Right of Action with the right to amend. The Exception of No Cause of Action urged that JBEM was not entitled to attorney's fees. The trial court granted the Exception of No Cause of Action. JBEM then filed its First Supplemental and Amended Petition, which included the documentation concerning the assignment and reassignment of the invoice. The matter then proceeded to a bench trial.

         The trial court found for JBEM and awarded $262, 500.00, plus interest from the date of judicial demand, and all costs. AWI's Motion for Devolutive Appeal followed.

         AWI contends that the trial court erred when computing the amount owed to JBEM. Specifically, AWI maintains that it should not be required to pay for a transformer JBEM did not accept delivery on and should not be held responsible for almost the entire agreed upon contract price for a finished rig 4.

         STANDARD OF REVIEW

          "Louisiana courts of appeal apply the manifest error standard of review in civil cases." Detraz v. Lee, 05-1263, p. 7 (La. 1/17/07), 950 So.2d 557, 561. "[A] factual finding cannot be set aside unless the appellate court finds that the trier of fact's determination is manifestly erroneous or clearly wrong." Id. To reverse a fact finder's factual determinations, "an appellate court must review the record in its entirety and (1) find that a reasonable factual basis does not exist for the finding, and (2) further determine that the record establishes that the fact finder is clearly wrong or manifestly erroneous." Id. "Thus, the issue before the court of appeal is not whether the trier of fact was right or wrong, but whether the fact-finder's conclusion was a reasonable one." Snider v. Louisiana Med. Mut. Ins. Co., 14-1964, p. 5 (La. 5/5/15), 169 So.3d 319, 323. "The appellate court must not reweigh the evidence or substitute its own factual findings because it would have decided the case differently." Id. Furthermore, "[w]here the factfinder's determination is based on its decision to credit the testimony of one of two or more witnesses, that finding can virtually never be manifestly erroneous." Id.

         "Where one or more legal errors interdict the trial court's fact-finding process, however, the manifest error standard becomes inapplicable, and the appellate court must conduct its own de novo review of the record." Hamp's Const., L.L.C. v. Hous. Auth. of New Orleans, 10-0816, p. 3 (La.App. 4 Cir. 12/1/10), 52 So.3d 970, 973. "A legal error occurs when a trial court applies incorrect principles of law and such errors are prejudicial." Id. "Legal errors are prejudicial when they materially affect the outcome and deprive a party of substantial rights." Id.

         "ʻThe manifest error standard of review also applies to mixed questions of law and fact.'" State Farm Fire & Cas. Co. v. Hotel Mgmt. of New Orleans, L.L.C., 16-0822, p. 3 (La.App. 4 Cir. 5/3/17), 219 So.3d 435, 438, quoting A.S. v. D.S., 14-1098, p. 10 (La.App. 4 Cir. 4/8/15), 165 So.3d 247, 254. "Conversely, purely legal issues ʻare reviewed with the de novo standard of review.'" State Farm, 16-0822, p. 3, 219 So.3d at 438, quoting Gordon v. Gordon, 16-0008, p. 3 (La.App. 4 Cir. 6/8/16), 195 So.3d 687, 689.

         VALUATION OF COMPLETED WORK

         AWI asserts that the trial court committed manifest error by including the price of an undelivered ...


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