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Steve Owens Construction, Inc. v. Bordelon

Court of Appeals of Louisiana, First Circuit

February 27, 2018


         On Appeal from the 22nd Judicial District Court In and for the Parish of St. Tammany State of Louisiana Trial Court No. 2009-12762 Honorable William J. Knight, Judge Presiding

          Richard A. Richardson Covington, LA Attorney for Defendant-Appellee, Chad B. Bordelon, an Individual, and for Defendant-2nd Appellant, Causeway Place, LLC

          Michael F. Weiner Covington, LA Attorney for Plaintiff- I st Appellant and Appellee, Steve Owens Construction, Inc.


          HIGGINBOTHAM, J.

         This matter concerns an oral construction contract and a dispute over unpaid invoices on a commercial project. The owner of the project and the general contractor that worked on the project both appealed the trial court's judgment that ordered the payment of the invoices and recognized a lien against the property and its owner.


         Sometime in late 2007 to early 2008, Chad B. Bordelon, a general contractor, hired another general contractor, Steve Owens Construction, Inc. (Owens), to help him renovate immovable commercial property owned by Causeway Place, LLC, ("the Owner"), in Mandeville, Louisiana. The renovation involved transforming a former movie theater into a venue for events, named the Fleur de Lis Event Center ("the Project"). Bordelon informed Owens that the scope of the work to be performed by Owens was uncertain, because he intended to have some of his own employees and subcontractors do a portion of the work. Therefore, no firm estimate of the cost to complete the Project was ever offered by Owens. However, Bordelon and Owens ultimately came to an oral agreement for Owens to perform the work on the Project. Owens submitted weekly invoices to Bordelon for Owens' time and materials, plus 15% overhead and 10% profit.

         Between January 2008 and October 2008, Owens submitted 48 invoices to Bordelon, all of which were paid by the Owner without question. Each invoice clearly indicated that it was a time and materials (T&M) invoice, and the labor was charged using a different hourly rate for each employee that included direct and indirect costs associated with those employees, such as insurance, social security, tax withholdings, benefits, and administrative fees. Each invoice also outlined the materials used each week, the equipment rented, a supervision fee for Steve Owens, and bills for any subcontractor used by Owens on the Project. After paying invoices on a regular basis without incident for ten months, Bordelon presented a check to Owens on November 5, 2008, but he requested that Owens hold the check until the Owner could secure additional funding for the Project. Owens agreed to continue the work since the Project was nearing completion.

         Owens submitted three more invoices and completed the Project at the end of December 2008. Owens continued to request payment from Bordelon on the outstanding invoices, receiving only a partial payment on one, while Bordelon persistently indicated that payment would be made as soon as additional financing was secured. In early 2009, Bordelon informed Owens that the remaining invoices would not be paid for a different reason than financing issues, because Bordelon thought that the work on the Project should have been billed on a "cost-plus" basis, rather than a T&M basis, so that the labor costs were limited to the direct wages that Owens actually paid its employees. Accordingly, Bordelon and the Owner refused to pay the remaining invoices totaling $70, 042.89. Consequently, Owens filed a lien on the Project and filed a lawsuit against Bordelon individually, and the Owner of the Project. Bordelon and the Owner reconvened against Owens for an unspecified amount, claiming entitlement to a credit for the difference between the labor rate charged in all of Owens' invoices throughout the Project and the amount Owens actually paid its employees for the hours billed on the invoices.

         A bench trial was held on February 13, 2017, where the parties stipulated that the works reflected in the invoices were truly performed. The only issues for the trial court was to determine the type of oral contract the parties agreed to, what amount Owens was entitled to charge for labor on the Project, and whether to recognize the lien that had been filed against the property, the Owner, and Bordelon. The trial court ultimately determined, with written reasons for judgment, that the oral agreement constituted a T&M contract and that Owens was entitled to judgment against the Owner for all of the unpaid invoices plus legal interest. Additionally, the trial court dismissed Bordelon and the Owner's reconventional demand, while recognizing Owens' lien against the Owner and the property, but not Bordelon individually.

         Owens appealed the trial court's judgment, assigning error to the trial court's dismissal of Owens' claim against Bordelon individually, maintaining that Bordelon was liable in solido with the Owner because he had acted as an undisclosed agent of the Owner. The Owner also appealed the trial court's judgment, arguing that the trial court erred in finding that the parties had orally agreed to a T&M contract as opposed to a cost-plus contract and therefore, the trial court had erred in dismissing Bordelon and the Owner's reconventional demand.


         A trial court's determination of the existence or nonexistence of an oral contract is a finding of fact governed by the manifest error or clearly erroneous standard of review. SeeRead v. Willwoods Community, 2014-1475 (La. 3/17/15), 165 So.3d 883, 888. An appellate court cannot set aside a trial court's factual findings in the absence of manifest error or unless those findings are clearly wrong. Rosell v. ESCO,549 So.2d 840, 844 (La. 1989). If the factual findings are reasonable in light of the record reviewed in its entirety, an appellate court may not reverse, even if convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. ...

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