Ballard's v. N. Amer. Land Development

677 So. 2d 648, 1996 WL 348114
CourtLouisiana Court of Appeal
DecidedJune 26, 1996
Docket28437-CA
StatusPublished
Cited by23 cases

This text of 677 So. 2d 648 (Ballard's v. N. Amer. Land Development) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ballard's v. N. Amer. Land Development, 677 So. 2d 648, 1996 WL 348114 (La. Ct. App. 1996).

Opinion

677 So.2d 648 (1996)

BALLARD'S INC., Plaintiff-Appellee,
v.
NORTH AMERICAN LAND DEVELOPMENT CORPORATION, et al., Defendants-Appellants.

No. 28437-CA.

Court of Appeal of Louisiana, Second Circuit.

June 26, 1996.

Joe D. Guerriero, Monroe, for Defendants-Appellants.

Francis C. Broussard, Monroe, for Third-Party Defendant.

Clifford L. Lawrence, Jr., Monroe, for Plaintiff-Appellee.

Before MARVIN, NORRIS and WILLIAMS, JJ.

*649 NORRIS, Judge.

The defendants, Nouri E. "Ed" Hakim and his company, North American Land Development Corp. ("NALD"), appeal a judgment in favor of the plaintiff, Ballard's Inc., for $18,164.20 due on an open account and $6,000.00 in attorney fees. Hakim and NALD also appeal the district court's judgment rejecting their reconventional demand against Ballard's and their third party demand against Edwards Air Conditioning, Mr. Hakim's mechanical contractor. Ballard's has answered the appeal, seeking additional attorney fees for the appeal. Finding no manifest error, we affirm the judgment insofar as it sustains the principal demand and rejects the incidental demands. We amend to increase Ballard's attorney fees for the appeal.

Factual and procedural background

The plaintiff, Ballard's, is an air conditioning distributor in Shreveport; it carries the York line of equipment. Ballard's president, Ed Roper, testified that he sold equipment primarily to authorized dealers, who in turn sold it to users, three-fourths of whom were homeowners.

The defendant, Ed Hakim, is a businessman in Monroe; he is a principal in NALD, as well as in Mini Togs Inc., which makes children's clothes. Hakim was using a mechanical contractor, Edwards Air, to repair and install air conditioning equipment at its plants and rental properties. Edwards Air had an account with Ballard's, but because of credit concerns it was for relatively small amounts.

In May 1990, Hakim expressed an interest in ordering some "big-ticket items" like chillers for his plants; he wanted to buy directly from a distributor. He got a quote from another company, Trane, but because Edwards Air's owner, William T. Edwards, preferred the York line, Mr. Hakim met with Ballard's salesman, Steve Menhennett, and Edwards. After negotiations, Ballard's agreed to sell directly to Mr. Hakim or his corporations. However, because of its usual policy of selling only to licensed dealers, and because it feared repercussions from competitors if it sold directly to a customer, Ballard's would invoice the equipment through Edwards Air; Mr. Menhennett assured Ballard's that Mr. Hakim as the ultimate purchaser, would be responsible.

In June 1990 NALD ordered a 75-ton dual compressor chiller from Ballard's; it was invoiced to Edwards Air, but delivered to NALD, which paid Ballard's directly the invoice price of $25,480.00. Mini Togs placed the next order, for 16 supply grilles, in December 1990. William Edwards actually signed the order, as he was authorized to do, and apparently Mini Togs paid Ballard's directly.

Beginning with the next order, for several indoor units in June 1991, Ballard's shipped the equipment to Mini Togs but invoiced it to Edwards Air. On this and two subsequent orders, Ballard's received payment from Edwards Air; William Edwards and Mr. Hakim both testified that Mini Togs or NALD would pay Edwards, and Edwards would then pay Ballard's.[1]

The transaction that gave rise to this suit was the October 1991 sale of a 27-ton liquid chiller for Mr. Hakim's personal residence on University Avenue. This was invoiced to Edwards Air and shipped to Mini Togs, but was subsequently placed on Mr. Hakim's premises. Mr. Hakim never paid Ballard's for it; he testified that he had already paid Edwards Air the invoice amount by advances and overpayments on other projects.[2]

Ballard's sent demand letters pursuant to La.R.S. 9:2781 to both Mr. Hakim and NALD on May 21, 1992. Mr. Hakim responded by presenting a copy of an Edwards Air service invoice, dated November 8, 1991, which showed that NALD paid Edwards $20,000 on that date, and a copy of the canceled check from NALD to Edwards Air for $20,000.00. The canceled check, however, *650 bears a notation that refers to an Edwards Air service invoice (No. 1757) which states that the $20,000 is for "Draw on Jonesboro Mfg.," another job that Edwards was performing for Mr. Hakim at the time.[3] When Ballard's did not receive payment within 15 days, it filed the instant suit on open account in June 1992. It claimed the amount due and reasonable attorney fees.

By answer Mr. Hakim and NALD denied they owed the account; they also filed a third party demand for indemnity against William Edwards, urging that he failed to pay Ballard's with proceeds of NALD's payment to Edwards Air.

Some months after suit was filed, Mr. Hakim requested from Ballard's copies of the invoices that constituted the open account. Examining Ballard's invoices, Mr. Hakim noticed these invoices to Edwards Air were approximately 10% lower than the invoices that Edwards Air had sent NALD for the same equipment. Mr. Hakim insisted that he had done business with Edwards Air only on the condition that Edwards Air sell him the equipment at its cost. Mr. Hakim and NALD therefore filed a reconventional demand against Ballard's, seeking damages for unfair trade practices and fraud.

Trial took place over two days in November 1993 and September 1994. As noted, the district court found that Ballard's had proved that there was an open account and that the 27-ton chiller was sold and delivered to NALD and Mr. Hakim. The court also rejected the defense of payment, finding it unbelievable that Mr. Hakim would overpay such a bill by nearly $2,000. The court therefore rendered judgment for the plaintiff on the principal demand. The court also found that the 10% markup on Edwards Air's invoices to NALD was equivalent to "bonuses, commissions or other incentives from the manufacturer" and was a "normal business practice" that did not amount to unfair trade. The court therefore rejected NALD and Mr. Hakim's incidental demands.

Applicable law

Title Nine of the Revised Statutes provides for collecting open accounts:

§ 2781. Open accounts; attorney fees; professional fees; open accounts owed to the state
A. When any person fails to pay an open account within fifteen days after receipt of written demand therefor correctly setting forth the amount owed, that person shall be liable to the claimant for reasonable attorney fees for the prosecution and collection of such claim when judgment on the claim is rendered in favor of the claimant. * * *
C. For the purposes of this Section and Code of Civil Procedure Articles 1702 and 4916, "open account" includes any account for which a part or all of the balance is past due, whether or not the account reflects one or more transactions and whether or not at the time of contracting the parties expected future transactions. * * *
D. As used in this Section, "person" means an individual, association, corporation, partnership, trust, or any other public or private legal entity.
(emphasis added)

An open account is analogous to a credit account. Jacobs v. Loeffelholz, 94-1123 (La.App. 4th Cir. 12/15/94), 647 So.2d 1282. The district court's findings that an open account exists, and that the statement thereof is correct, are subject to the manifest error rule. Chachere v. Bren Lynn Corp., 561 So.2d 140 (La.App. 3d Cir.1990).

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Bluebook (online)
677 So. 2d 648, 1996 WL 348114, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ballards-v-n-amer-land-development-lactapp-1996.