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Payphone Connection Plus, Inc. v. Wagners Chef, LLC

Court of Appeals of Louisiana, Fourth Circuit

July 31, 2019


          APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2015-02580, DIVISION "E-16" Honorable Kern A. Reese, Judge.

          Christopher J. Davidson John A. E. Davidson DAVIDSON & DAVIDSON, APLC, COUNSEL FOR PLAINTIFF/APPELLEE.


          Court composed of Judge Daniel L. Dysart, Judge Rosemary Ledet, Judge Tiffany G. Chase.


         This appeal is taken from a trial court judgment confirming a default judgment in favor of plaintiff-appellee, Payphone Connection Plus, Inc. ("Payphone"), and against the defendants, Jadallah Saed and Shadia Hamideh. After reviewing the record and applicable law, we find that Payphone failed to sustain its burden of proof for confirmation of the default judgment. Accordingly, we vacate the trial court judgment and remand this matter for further proceedings.


         On March 20, 2015, Payphone filed a Petition against Wagners Chef, LLC ("Wagners") for an alleged breach of contract.[1] According to the Petition, Payphone entered into a fifteen-year contract, a "Placement Agreement," with Wagners on November 18, 2013, which gave Payphone the exclusive right to install and operate an automated teller machine ("ATM") on the property located at 4301 Louisa Street in New Orleans.[2] Payphone then installed an ATM at the site, although the installation date is not specified.

         The Petition alleges that Wagners breached the contract in June or July, 2014, by installing another ATM at the Louisa Street location. Wagners is alleged to have further breached the contract in October, 2014 by unplugging Payphone's ATM machine. Payphone sought the removal of the unauthorized ATM machine by letter to Wagners dated October 8, 2014; however, Wagners neither removed the ATM machine nor reconnected Payphone's ATM machine. As a result, Payphone allegedly lost revenues.[3]

         Service of the Petition was made on Wagners, though its registered agent, Jadallah Saed, on April 8, 2015.

         On May 19, 2015, Payphone filed a Motion for Preliminary Default which was granted the same day. Payphone then moved to set a trial to confirm the preliminary default on July 21, 2015; in response, the trial court set a trial for August 26, 2015. Before the trial occurred, however, Wagners appeared in the case and filed an Answer on August 4, 2015.

         Wagners then moved, on October 31, 2016, for leave of court to file a Reconventional Demand (against Payphone) and a Third Party Demand (against Nidal Jaber, who is alleged to be the owner of 33.33% of Wagners' units; and Suzanne Wimsatt, who is alleged to be Payphone's president and owner). While the trial court set a hearing on Wagners' motion for leave to file the reconventional demand and third party demand for January 20, 2017, the record does not reflect a ruling on that motion.

         Ten months later, on August 28, 2017, Payphone filed a First Supplemental and Amended Petition.[4] This amended petition added Jadallah Saed and Shadia Hamideh as defendants and amended the original petition by alleging that (1) an affidavit of dissolution was filed with the Louisiana Secretary of State, dissolving Wagners and because of this, Wagners is "no longer a juridical person or entity . . . [and] all the assets and liabilities of the company flow to its members individually"; and (2) Mr. Saed and Ms. Hamideh are married, and the assets of Payphone are community property.

         The record reflects attempts to serve the amended petition on Mr. Saed and Ms. Shadia over the course of five days in September; those efforts were unsuccessful. Thereafter, in response to a Motion to Appoint Private Process Server, Crescent City Legal Process was appointed "process server of the First Supplemental and Amended Petition" on September 26, 2017. On October 10, 2017, a person identified only as Tanya Craft filed an affidavit into the record stating that she personally served the First Supplemental and Amended Petition on Mr. Saed and Ms. Hamideh on October 1, 2017.[5]

         Payphone then moved for another preliminary default on October 30, 2017, which was granted on October 31, 2017. After a June 8, 2018 hearing to confirm the preliminary default, the trial court entered a "Final Judgment" on the same date against Mr. Saed and Ms. Hamideh in the amount of "Three Hundred Thousand One Hundred Four Hundred Eighty-Two and 50/100 dollars," along with attorney's fees of $8, 222.55, legal interest from the date of judicial demand and all costs of the proceedings.[6]

         On August 10, 2018, Mr. Saed and Ms. Hamideh filed a motion to annul the June 8, 2018 judgment on several bases.[7] The motion was set for a hearing which was continued twice and the current record does not reflect a ruling on the Motion. Mr. Saed and Ms. Hamideh filed the instant appeal of the June 8, 2018 judgment on August 13, 2018.[8]

         In their appeal, Mr. Saed and Ms. Hamideh have raised three assignments of error. Because we find merit to their second assignment of error which requires the reversal of the trial court's judgment, we address that issue, alone, and pretermit a discussion of the remaining issues.[9]

         Evidence/testimony at June 8, 2018 hearing

         At the hearing to confirm the default judgment, the only testimony was that adduced from Ms. Wimsatt, Payphone's owner/operator. Ms. Wimsatt identified the two Placement Agreements and indicated that, to her knowledge, they "are both signed . . . by persons authorized to sign these agreements." Ms. Wimsatt then testified that the agreements gave Payphone the right to exclusive use of ATMs at the location identified in the Agreements. According to Ms. Wimsatt, the Agreements allowed for damages for anticipated revenue in case of a breach and in this case, she prepared a calculation of anticipated revenue, offered into evidence, which amounted to $296, 039.05. She was not questioned about and gave no explanation as to how she arrived at this figure.

         Ms. Wimsatt then testified that the Payphone's ATM machine, which had been bolted to the floor of the store, was no longer on the premises and that she did not know what had become of it. She was never notified that Payphone was in breach of the Agreements. She indicated that the cost to replace the ATM machine, and its accessories, was $5, 543.

         Ms. Wimsatt was then questioned about Wagners' status as evidenced by the following colloquy:

Q Now, after the suit was filed, and we do have a copy of it, did Wagners Chef go into ...

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