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Fluid Disposal Specialties, Inc. v. Unifirst Corp.

Court of Appeals of Louisiana, Second Circuit

November 13, 2019

FLUID DISPOSAL SPECIALTIES, INC. Plaintiff-Appellee
v.
UNIFIRST CORPORATION Defendant-Appellant

          Opinion Filed Date September 25, 2019.

          Appealed from the Second Judicial District Court for the Parish of Claiborne, Louisiana Trial Court No. 40393 Honorable Jimmy Cecil Teat, Judge

          LAW OFFICE OF DAVID TURANSKY, LLC By: David C. Turansky Counsel for Appellant

          COLVIN, SMITH & MCKAY By: James Henry Colvin, Jr. Daniel N. Bays, Jr. Counsel for Appellee

          Before WILLIAMS, STONE, and THOMPSON, JJ.

          STONE, J.

         INTRODUCTION

         This dispute arises out of a supposed contract between UniFirst Corporation ("UniFirst") and Fluid Disposal Specialties ("FDS"), which FDS shop foreman Kenny Bryce ("Bryce") signed in his capacity as agent of FDS. UniFirst pursues this appeal in its capacity as plaintiff-in-reconvention. The appellees are FDS and Bryce, defendants-in-reconvention.

         This case previously came to us as an appeal of the trial court's granting of a preliminary injunction against enforcement of the contract via arbitration. We affirmed the preliminary injunction on the ground that Bryce lacked authority. Subsequently, UniFirst filed a reconventional demand in the trial court, asserting various causes of action, including open account and unjust enrichment. FDS filed an exception of no cause of action and a motion for summary judgment ("MSJ") asserting prescription of the open account action. The trial court granted the MSJ and dismissed the exception of no cause of action as moot, and dismissed the entire case with prejudice. UniFirst filed this appeal. For the reasons stated herein, we reverse the trial court judgment and deny both the exception of no cause of action and the MSJ.

         FACTS AND PROCEDURAL HISTORY

         UniFirst, the plaintiff, is in the business of leasing work uniforms to employers. The defendants are FDS and Bryce, a shop foreman for FDS. On April 3, 2014, Bryce, supposedly without authority to do so, signed a contract purporting to bind FDS to a uniform supply contract with UniFirst. A short time later, Bryce entered a second uniform supply contract with UniFirst, again purporting to act as agent of FDS. Thereafter, UniFirst delivered the uniforms; FDS accepted the uniforms and paid the rental charges for approximately eight to ten months. However, FDS then stopped making payments, and apparently returned the uniforms. FDS made the last payment via check dated February 28, 2015. This check allegedly did not clear the bank until March 30, 2015.

         UniFirst filed arbitration proceedings against FDS pursuant to the contract. On March 24, 2015, FDS obtained a preliminary injunction from the trial court barring further arbitration proceedings. We affirmed that preliminary injunction, reasoning that Bryce had no authority to bind FDS to the contract, and thus, the arbitration provision thereof was unenforceable against FDS. Fluid Disposal Specialties, Inc. v. UniFirst Corp., 50, 356 (La. App 2 Cir. 1/13/16), 186 So.3d 210.

         On March 6, 2018, UniFirst filed a reconventional demand in the trial court seeking recovery on multiple grounds, including open account and unjust enrichment. FDS filed an exception of no cause of action, and a MSJ asserting that the open account action was prescribed. The trial court granted the MSJ, and issued a final judgment dismissing any and all causes of action asserted in the reconventional demand. The trial court also dismissed the exception of no cause of action as moot.

         UniFirst filed the instant appeal, urging the following six assignments of error: (1) the trial court erred in applying the one-year prescriptive period for delictual actions to an action which has nothing to do with any tort; (2) the trial court erred in failing to find that UniFirst's filing for arbitration interrupted prescription, which interruption continued until UniFirst filed its reconventional demand; (3) the trial court erred in failing to realize that its own judgment rendered in March, 2015, was a preliminary injunction, not a permanent injunction and that arbitration proceedings were enjoined, "pending further orders of this court to the contrary," thus continuing to interrupt prescription; (4) the trial court erred in failing to recognize that the prescriptive period on an action on open account is three years from the date of the last payment on the account; (5) the trial court failed to apply the 10-year prescriptive period for a quasi-contractual action; and (6) the trial court failed to overrule the exception of no cause of action.

         DISCUSSION

         In Robert L. Manard III PLC v. Falcon Law Firm PLC, 2012-0147 (La.App. 4 Cir. 11/16/12), 119 So.3d 1, 7, on reh'g (La.App. 4 Cir. 4/10/13), the court stated:

Louisiana jurisprudence is well settled that the character of an action as disclosed in the pleadings determines the applicable prescriptive period. SS v. State ex rel. Dept. of Social Services, 02-0831, p. 7 (La.12/4/02), 831 So.2d 926, 931; Starns v. Emmons, 538 So.2d 275, 277 (La.1989); Qayyum v. Morehouse General Hospital, 38, 530 (La.App. 2 Cir. 5/12/04), 874 So.2d 371, 374.

         Thus, this court will address the exception of no cause of action prior to addressing the issue of prescription.

         However, before addressing the exception of no cause of action, we must consider the effect of our prior ruling affirming the preliminary injunction. Regarding an appellate court, the "law of the case doctrine" is merely a discretionary policy. Day v. Campbell-Grosjean Roofing & Sheet Metal Corp., 260 La. 325, 256 So.2d 105 (La. 1971). Thereunder, "an appellate court ordinarily will not, on subsequent appeal, reconsider its own rulings of law [emphasis supplied] on a subsequent appeal in in the same case." Hanson v. River Cities Disposal, 51, 700 (La.App. 2 Cir. 11/5/17), 245 So.3d 213; Bank One, National Ass'n v. Velten, 2004-2001 (La.App. 4 Cir. 8/17/05), 917 So.2d 454, 458, writ denied 2006-0040 (La. 4/28/06), 927 So.2d 283, cert. denied 549 U.S. 826, 127 S.Ct. 349 (2006). The Supreme Court, in Babineaux v. Pernie-Bailey Drilling Co., 261 La. 1080, 262 So.2d 328, 332 (1972), stated:

The law of the case rule cannot supplant the Code of Civil Procedure…[and]…only applies when the same issue is presented to the same court that has previously decided that issue in the same case which has not become res judicata (Emphasis in original; internal citations and quotation marks omitted).

         In Bank One, supra, the Fourth Circuit rejected the argument that issuance of a preliminary injunction requires application of the law of the case doctrine. In so doing, the court reasoned as follows:

A writ of preliminary injunction is essentially an interlocutory order issued in a summary proceeding incidental to the main demand for permanent injunctive relief. It is designed to and serves the purpose of preventing irreparable harm by preserving the status quo between the parties pending a determination on the merits of the controversy. The principal demand, as opposed to the injunction, is determined on its merits only after a full trial under ordinary process, even though the hearing on the summary proceedings to obtain the injunction may touch upon or decide issues regarding the merits. (Internal citations omitted).

         Bank One at 458.

         For the reasons articulated in Bank One, supra, we decline to apply the law of the case doctrine.

         Exception of no cause of action

         In Jackson v. City of New Orleans, 12-2742 (La. 1/28/14), 144 So.3d 876, 895, the Louisiana Supreme Court explained:

The peremptory exception of no cause of action is designed to test the legal sufficiency of a petition by determining whether a party is afforded a remedy in law based on the facts alleged in the pleading. All well-pleaded allegations of fact are accepted as true and correct, and all doubts are resolved in favor of sufficiency of the petition so as to afford litigants their day in court. The burden of demonstrating that a petition fails to state a cause of action is upon the mover. The sufficiency of a petition subject to an exception of no cause of action is a question of law, and a de novo standard is applied to the review of legal questions; this court renders a judgment based on the record without deference to the legal conclusions of the lower courts.

         Louisiana has a "fact pleading" system, as opposed to the federal "notice pleading" system. La. C.C.P. art. 854, cmt. (a). To state a cause of action in a Louisiana court, a petition must allege the material facts constituting the cause of action. Id.

         Actual authority

         The trial court granted a preliminary injunction against enforcement of the arbitration clause in the purported contract. In affirming the preliminary injunction, this court found that Bryce ...


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