STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
14-47
2 S SIGN COMPANY, INC.
VERSUS
KEVIN KELLER AND SUNSET SOLUTIONS, LLC
**********
APPEAL FROM THE CITY COURT OF PINEVILLE NO. 9-0587 HONORABLE J. PHILLIP TERRELL, JUDGE
J. DAVID PAINTER JUDGE
Court composed of Sylvia R. Cooks, Marc T. Amy, and J. David Painter, Judges.
REVERSED AND RENDERED.
Howell D. Jones, IV P.O. Box 14558 Alexandria, LA 71315 COUNSEL FOR PLAINTIFF-APPELLEE: 2 S Sign Company, Inc.
B. Gene Taylor P.O. Box 6118 Alexandria, LA 71307 COUNSEL FOR DEFENDANT-APPELLANT: Kevin Keller PAINTER, Judge.
Defendant, Kevin Keller (Keller), appeals the judgment rendered against
him on the petition for open account filed by Plaintiff, 2 S Sign Company, Inc. (2 S
Sign). Finding that Keller has no personal liability for any debt of Sunset
Solutions, LLC (Sunset), that might be owed to Plaintiff, we reverse the trial
court’s judgment against Keller and render judgment dismissing Plaintiff’s suit
against Keller in its entirety and with prejudice.
FACTS AND PROCEDURAL HISTORY
2 S Sign filed a petition on open account against Keller and Sunset seeking
to recover $19,900.52 allegedly owed to it for custom advertising signs constructed
by it. Sunset is a limited liability company owned by Johnathan S. Grimmett.
Keller was employed by Sunset, and he was neither a member of nor an officer of
the LLC. There was no written contract for the construction of the signs.
Negotiations were handled by Keller on behalf of Sunset. It is undisputed that
Keller had authority and consent to act on behalf of Sunset for the construction of
these signs and that Keller had authority to write checks on Sunset’s account to pay
Sunset’s bills.
Following a trial on the merits, the trial court rendered judgment in favor of
2 S Sign against Keller, individually, and Sunset in the full amount claimed by 2 S
Sign with interest from the date of demand. Keller and Sunset were also cast with
all costs of the proceedings. Sunset did not participate in the trial, and Grimmett
appeared in proper person.
Keller now appeals that judgment alleging that the trial court erred in
holding him personally liable for Sunset’s debt because there was no written or
oral agreement by Keller to act as Sunset’s guarantor and because he neither
exceeded his authority nor defrauded Sunset in connection with his dealings with 2 S Sign. Keller also asserts that the trial court erred in allowing 2 S Sign to proceed
on a theory of fraud when such allegations were never pled with particularity.
Finally, Keller argues that the trial court erred in awarding the full amount sued
upon when 2 S Sign judicially confessed and even asked for an offset for funds
received in settlement in the amount of $7,086.34. Sunset did not appeal the
judgment, and 2 S Sign has not filed a brief in this court.
DISCUSSION
Neither the trial court’s written reasons for ruling nor its judgment
discloses the theory upon which it found Keller personally responsible for the debt
of Sunset to 2 S Sign.
The applicable standard of review in this case is the manifest error standard.
In Brewer v. J.B. Hunt Transp., Inc., 09-1428, pp. 12-13 (La. 3/16/10), 35 So.3d
230, 239-40, the Louisiana Supreme Court stated:
To reverse a factfinder’s determination under this standard of review, an appellate court must undertake a two-part inquiry: (1) the court must find from the record that a reasonable factual basis does not exist for the finding of the trier of fact; and (2) the court must further determine the record establishes the finding is clearly wrong. Stobart v. State, Department of Transportation and Development, 617 So.2d 880, 882 (La.1993). Ultimately, the issue to be resolved by the reviewing court is not whether the trier of fact was right or wrong, but whether the factfinder’s conclusion was a reasonable one. Id. If the factual findings are reasonable in light of the record reviewed in its entirety, a reviewing court may not reverse even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Id. at 882-883.
Where there are two permissible views of the evidence, the factfinder’s choice between them cannot be manifestly erroneous. Id. at 883. However, where documents or objective evidence so contradict a witness’s story, or the story itself is so internally inconsistent or implausible on its face that a reasonable factfinder would not credit the witness’s story, a reviewing court may well find manifest error. Rosell v. ESCO, 549 So.2d 840, 844-845 (La.1989). Where such factors are not present, however, and a 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 or clearly wrong. Id. This is not to say, however, that 2 factual determinations cannot ever, or hardly ever, be upset. Ambrose v. New Orleans Police Department Ambulance Service, 93-3099, p. 8 (La.7/5/94), 639 So.2d 216, 221. Although deference to the factfinder should be accorded, because appellate courts have a constitutional duty to review both law and facts, they have the right and the obligation to determine whether a trial court verdict is clearly wrong based on the evidence, or clearly without evidentiary support. Id.
In this case, based on the evidence and the testimony of the witnesses, we
find that the trial court’s finding personal liability by Keller was clearly without
evidentiary support. First, La.Civ.Code art. 3038 provides that “[s]uretyship must
be express and in writing.” It is undisputed that there is no written contract for the
construction of the signs and that there is no other writing wherein Keller purports
to express an intent to be bound personally for the obligations of Sunset.
Moreover, Michelle Stacy, the owner and operator of 2 S Sign, testified that she
handles the day to day operations of 2 S Sign and that she was well aware that the
contract at issue was with Sunset and that Keller never provided anything in
writing to her or made any verbal representation that he guaranteed payment on
behalf of Sunset. Her testimony further acknowledged that any checks she
received from Keller were checks drawn on Sunset’s account not Keller’s personal
account. In fact, her testimony was that she merely inferred that Keller would pay
if Sunset did not. The trial court clearly ignored the law that “suretyship must be
express and in writing” and the jurisprudence that “[s]uretyship cannot be
established by inference.” Jimco, Inc. v. Gentilly Terrace Apartments, Inc., 230
So.2d 281, 284 (La.App. 4 Cir. 1970).
We further find that if the trial court found Keller personally liable on a
theory that Keller exceeded his authority as Sunset’s agent in his dealings with 2 S
Sign, this was also manifestly erroneous. Louisiana Civil Code Article 3016
provides that “[a] mandatory who contracts in the name of the principal within the
limits of his authority does not bind himself personally for the performance of the 3 contract.” Again, 2 S Sign was fully aware that the contract at issue was with
Sunset. Although Grimmett executed an affidavit stating that Keller began “to
usurp” his authority and contract for jobs without his knowledge and consent, his
testimony at trial clearly contradicted this.
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STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
14-47
2 S SIGN COMPANY, INC.
VERSUS
KEVIN KELLER AND SUNSET SOLUTIONS, LLC
**********
APPEAL FROM THE CITY COURT OF PINEVILLE NO. 9-0587 HONORABLE J. PHILLIP TERRELL, JUDGE
J. DAVID PAINTER JUDGE
Court composed of Sylvia R. Cooks, Marc T. Amy, and J. David Painter, Judges.
REVERSED AND RENDERED.
Howell D. Jones, IV P.O. Box 14558 Alexandria, LA 71315 COUNSEL FOR PLAINTIFF-APPELLEE: 2 S Sign Company, Inc.
B. Gene Taylor P.O. Box 6118 Alexandria, LA 71307 COUNSEL FOR DEFENDANT-APPELLANT: Kevin Keller PAINTER, Judge.
Defendant, Kevin Keller (Keller), appeals the judgment rendered against
him on the petition for open account filed by Plaintiff, 2 S Sign Company, Inc. (2 S
Sign). Finding that Keller has no personal liability for any debt of Sunset
Solutions, LLC (Sunset), that might be owed to Plaintiff, we reverse the trial
court’s judgment against Keller and render judgment dismissing Plaintiff’s suit
against Keller in its entirety and with prejudice.
FACTS AND PROCEDURAL HISTORY
2 S Sign filed a petition on open account against Keller and Sunset seeking
to recover $19,900.52 allegedly owed to it for custom advertising signs constructed
by it. Sunset is a limited liability company owned by Johnathan S. Grimmett.
Keller was employed by Sunset, and he was neither a member of nor an officer of
the LLC. There was no written contract for the construction of the signs.
Negotiations were handled by Keller on behalf of Sunset. It is undisputed that
Keller had authority and consent to act on behalf of Sunset for the construction of
these signs and that Keller had authority to write checks on Sunset’s account to pay
Sunset’s bills.
Following a trial on the merits, the trial court rendered judgment in favor of
2 S Sign against Keller, individually, and Sunset in the full amount claimed by 2 S
Sign with interest from the date of demand. Keller and Sunset were also cast with
all costs of the proceedings. Sunset did not participate in the trial, and Grimmett
appeared in proper person.
Keller now appeals that judgment alleging that the trial court erred in
holding him personally liable for Sunset’s debt because there was no written or
oral agreement by Keller to act as Sunset’s guarantor and because he neither
exceeded his authority nor defrauded Sunset in connection with his dealings with 2 S Sign. Keller also asserts that the trial court erred in allowing 2 S Sign to proceed
on a theory of fraud when such allegations were never pled with particularity.
Finally, Keller argues that the trial court erred in awarding the full amount sued
upon when 2 S Sign judicially confessed and even asked for an offset for funds
received in settlement in the amount of $7,086.34. Sunset did not appeal the
judgment, and 2 S Sign has not filed a brief in this court.
DISCUSSION
Neither the trial court’s written reasons for ruling nor its judgment
discloses the theory upon which it found Keller personally responsible for the debt
of Sunset to 2 S Sign.
The applicable standard of review in this case is the manifest error standard.
In Brewer v. J.B. Hunt Transp., Inc., 09-1428, pp. 12-13 (La. 3/16/10), 35 So.3d
230, 239-40, the Louisiana Supreme Court stated:
To reverse a factfinder’s determination under this standard of review, an appellate court must undertake a two-part inquiry: (1) the court must find from the record that a reasonable factual basis does not exist for the finding of the trier of fact; and (2) the court must further determine the record establishes the finding is clearly wrong. Stobart v. State, Department of Transportation and Development, 617 So.2d 880, 882 (La.1993). Ultimately, the issue to be resolved by the reviewing court is not whether the trier of fact was right or wrong, but whether the factfinder’s conclusion was a reasonable one. Id. If the factual findings are reasonable in light of the record reviewed in its entirety, a reviewing court may not reverse even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Id. at 882-883.
Where there are two permissible views of the evidence, the factfinder’s choice between them cannot be manifestly erroneous. Id. at 883. However, where documents or objective evidence so contradict a witness’s story, or the story itself is so internally inconsistent or implausible on its face that a reasonable factfinder would not credit the witness’s story, a reviewing court may well find manifest error. Rosell v. ESCO, 549 So.2d 840, 844-845 (La.1989). Where such factors are not present, however, and a 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 or clearly wrong. Id. This is not to say, however, that 2 factual determinations cannot ever, or hardly ever, be upset. Ambrose v. New Orleans Police Department Ambulance Service, 93-3099, p. 8 (La.7/5/94), 639 So.2d 216, 221. Although deference to the factfinder should be accorded, because appellate courts have a constitutional duty to review both law and facts, they have the right and the obligation to determine whether a trial court verdict is clearly wrong based on the evidence, or clearly without evidentiary support. Id.
In this case, based on the evidence and the testimony of the witnesses, we
find that the trial court’s finding personal liability by Keller was clearly without
evidentiary support. First, La.Civ.Code art. 3038 provides that “[s]uretyship must
be express and in writing.” It is undisputed that there is no written contract for the
construction of the signs and that there is no other writing wherein Keller purports
to express an intent to be bound personally for the obligations of Sunset.
Moreover, Michelle Stacy, the owner and operator of 2 S Sign, testified that she
handles the day to day operations of 2 S Sign and that she was well aware that the
contract at issue was with Sunset and that Keller never provided anything in
writing to her or made any verbal representation that he guaranteed payment on
behalf of Sunset. Her testimony further acknowledged that any checks she
received from Keller were checks drawn on Sunset’s account not Keller’s personal
account. In fact, her testimony was that she merely inferred that Keller would pay
if Sunset did not. The trial court clearly ignored the law that “suretyship must be
express and in writing” and the jurisprudence that “[s]uretyship cannot be
established by inference.” Jimco, Inc. v. Gentilly Terrace Apartments, Inc., 230
So.2d 281, 284 (La.App. 4 Cir. 1970).
We further find that if the trial court found Keller personally liable on a
theory that Keller exceeded his authority as Sunset’s agent in his dealings with 2 S
Sign, this was also manifestly erroneous. Louisiana Civil Code Article 3016
provides that “[a] mandatory who contracts in the name of the principal within the
limits of his authority does not bind himself personally for the performance of the 3 contract.” Again, 2 S Sign was fully aware that the contract at issue was with
Sunset. Although Grimmett executed an affidavit stating that Keller began “to
usurp” his authority and contract for jobs without his knowledge and consent, his
testimony at trial clearly contradicted this. In fact, Grimmett’s trial testimony
established that he gave Keller permission to enter into a contract with 2 S Sign
and that Keller had authority to write checks to pay Sunset’s bills. Grimmett
clearly testified that he did not recall executing the affidavit and that Keller “had
the authority and control.”
2 S Sign never specifically pled fraud, but advanced an argument at trial that
Keller defrauded Sunset. However, there was no evidence or testimony presented
to prove fraud. Quite to the contrary, Grimmett’s testimony clearly established
that as far as he knew, Keller acted properly in contracting with 2 S Sign on behalf
of Sunset. His testimony clearly established that Keller had the authority and
consent of Sunset to contract with 2 S Sign. Therefore, if the trial court’s judgment
was premised on a finding of fraud, this was clear error.
2 S Sign also advanced the theory that piercing the corporate veil was proper
in this instance to find Keller personally liable for the debt at issue. However,
““piercing the corporate veil applies to shareholder, directors, and officer, not
employees.”” Winn Fuel Service, Inc. v. Booth, 45, 207, p. 7 (La.App. 2 Cir.
4/14/10), 34 So.3d 515, 519. There is no dispute that Keller was merely an
employee of Sunset. Thus, if the trial court’s judgment finding Keller personally
liable under the theory of piercing the corporate veil, it is clearly wrong.
Because we have found no basis for imposing personal liability for Sunset’s
debt on Keller, we need not consider Keller’s arguments that the trial court erred in
allowing 2 S Sign to proceed on the theory of fraud at trial and that the trial court
4 erred in failing to offset the judgment by the amount of settlement funds received
by 2 S Sign.
DECREE
Finding absolutely no factual or evidentiary support for the trial court’s
finding of personal liability on the part of Keller, we reverse the trial court’s
judgment against Keller and render judgment dismissing Plaintiff’s suit against
Keller in its entirety and with prejudice. All costs of this appeal are assessed to
Plaintiff-Appellee, 2 S Sign Company, Inc .