Brenda Taviani Wife of/and Floriano Taviani Versus Akrom, Inc. and Accident Insurance Company

• Court: Louisiana Court of Appeal
• Decided: April 26, 2023
• Docket: 22-CA-475
• Status: Unknown

Opinion

BRENDA TAVIANI WIFE OF/AND FLORIANO NO. 22-CA-475 TAVIANI FIFTH CIRCUIT VERSUS COURT OF APPEAL AKROM, INC. AND ACCIDENT INSURANCE COMPANY STATE OF LOUISIANA

ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 758-365, DIVISION "N" HONORABLE STEPHEN D. ENRIGHT, JR., JUDGE PRESIDING

April 26, 2023

JOHN J. MOLAISON, JR. JUDGE

Panel composed of Judges Susan M. Chehardy, Fredericka Homberg Wicker, and John J. Molaison, Jr.

AFFIRMED IN PART; REVERSED IN PART; REMANDED JJM SMC FHW COUNSEL FOR DEFENDANT/APPELLANT, AKROM, INC. AND ROBERT KOEHL Leonard L. Levenson Christian W. Helmke Donna R. Barrios Allison K. Nestor

COUNSEL FOR PLAINTIFF/APPELLEE, BRENDA TAVIANA AND FLORIANO TAVIANA Albert J. Nicaud Jeffrey M. Siemssen MOLAISON, J. In this matter pertaining to a breach of contract claim for residential

construction, appellants seek review of the trial court’s finding of their liability and

the determination of damages awarded to plaintiffs/appellees. For the reasons that

follow, the judgment of the trial court is affirmed in part, reversed in part, and we

remand for further proceedings.

FACTS AND PROCEDURAL HISTORY

On or about January 9, 2015, plaintiffs/appellees, Brenda and Floriano

Taviani (“the Tavianis”), entered into two contracts with Akram, Inc. (“Akram”) to

build an addition to their existing home on Edenborn Avenue in Metairie. The

total cost of the contracts, $200,000.00, was formally divided into a construction

contract for $150,000.00 and a “consulting contract” for $50,000.00. The major

areas of work identified in the construction contract consisted of an attached

solarium, an attached garage and bonus room, various cosmetic changes and the

addition of stucco to the front of the house, new air conditioning units, and new

plumbing from the solarium to the main sewer line. Akrom guaranteed that the

work would be completed in June of 2015.

On February 26, 2016, the Tavianis filed a petition in the Twenty-Fourth

Judicial District Court that alleged damages resulting from a breach of contract by

Akrom. The petition asserted that after Akrom had received $193,000, it

“abandoned the job and refused to return.” After that, Akrom allegedly refused to

return building materials which had already been purchased. Further, it was

alleged that Akrom’s abandonment of the construction led to various types of

structural damage to the Tavaini’s home. The petition indicated that the Tavianis

hired a new contractor to complete the construction for an additional cost of

$80,472.45. On September 26, 2016, Akrom filed an answer denying all of the

Tavianis’ claims, and also raised several exceptions.

22-CA-475 1 On January 3, 2019, the Tavianis filed a Supplemental and Amending

Petition which named as defendant Robert Koehl (“Koehl”), the sole shareholder

of Akrom, alleging that he was jointly and severally liable for the breaches of the

construction contracts. The petition specified that Koehl had failed to adequately

supervise Akrom’s subcontractors in the performance of their work; failed to

coordinate, consult, and confirm that the architectural and engineering plans were

consistent and adequate; and failed to provide the final agreed upon plans to the

subcontractors who performed the work, rendering much of the construction not in

accordance with the plans and specifications filed with Jefferson Parish. In

addition, the Tavianis alleged several acts of fraud on Koehl’s part, as well as a

spoliation of evidence claim.

On May 30, 2019, Koehl filed an answer to the amended petition and also

raised exceptions to the Tavianis’ alleged causes of action. On August 24, 2020,

Koehl filed a separate motion, which set forth the exceptions of prescription and no

cause of action. Both exceptions were denied by the trial court on November 4,

2020, following a hearing on October 20, 2020.

The matter proceeded to a judge trial on March 21, 22, and 23, 2022. After

considering the post-trial memoranda of the parties, the trial court issued a written

judgment on May 12, 2022, which incorporated the following relevant rulings.

First, judgment was rendered in favor of the Tavianis on their breach of contract

claims against Akrom and Koehl in the amount of $178,208.08. The court

specified that Koehl was personally and solidarily liable with Akrom for the entire

amount. The Tavianis were also awarded $20,000 in attorneys’ fees.

Koehl and Akrom filed a motion for devolutive appeal, which was granted

on July 6, 2022.

ASSIGNMENTS OF ERROR

On appeal, Koehl and Akrom allege the following assignments of error:

22-CA-475 2 (A) The trial court erred as a matter of law when it denied the peremptory exception of prescription filed on behalf of Robert Koehl;

(B) The trial court erred as a matter of law in awarding attorney's fees; alternatively the trial court abused its discretion in awarding the amount of attorney's fees without the requisite proof; and

(C) The trial court abused its discretion in awarding damages for costs not attributable to poor workmanship and/or for which the defendant/appellants are not responsible.

FIRST ASSIGNMENT OF ERROR

The exception of prescription

An exception of prescription is a peremptory exception, which a defendant

may raise at any time, including on appeal or after the close of evidence, but prior

to the submission of the case after trial. La. C.C.P. arts. 927 and 928(B).

“[P]rescriptive statutes are strictly construed against prescription and in favor of

the obligation sought to be extinguished; thus, of two possible constructions, that

which favors maintaining, as opposed to barring, an action should be adopted.”

Carter v. Haygood, 04-646 (La. 1/19/05), 892 So.2d 1261, 1268. Ordinarily, the

exceptor bears the burden of proof at the trial of the peremptory exception,

including prescription. However, if prescription is evident on the face of the

pleadings, the burden shifts to the plaintiff to show that the action has not

prescribed. When a cause of action is prescribed on its face, the burden is upon

the plaintiff to show that the running of prescription was suspended or interrupted

in some manner. Woods v. Cousins, 12-100 (La. App. 5 Cir. 10/16/12), 102 So.3d

977, 979, writ denied, 12-2452 (La. 1/11/13), 107 So.3d 617. In the absence of

evidence, the exception of prescription must be decided on the facts alleged in the

petition, which are accepted as true. Waguespack v. Judge, 04-137 (La. App. 5

Cir. 6/29/04), 877 So.2d 1090.

22-CA-475 3 The original and amending petition

In this case, it is not contested that the Tavianis timely filed a petition for

damages against Akrom. The claims in the original petition included breach of

contract, failure to complete work, performing substandard work, and the use of

lesser quality materials by Akrom. The first amended petition was filed three

years later, after discovery had been conducted. In the supplemental and

amending petition, plaintiffs alleged four acts of fraud against Koehl:

A. Failing to provide the solarium, stone veneers, flooring, walls, ceilings and stucco which had not been purchased by him and installed on the premises despite the fact that he had been paid by the Tavianis for these materials; B. Hiring unlicensed electrical, framing, HVAC and other subcontractors who did not hold a valid license with the State of Louisiana; C. Intentionally utilizing substandard materials than those called out in the specifications in order to earn extra profits and gain an advantage over the Tavianis to their detriment; and D. Performing residential construction despite the fact that he did not possess a residential construction license issued by the Louisiana State Licensing Board for Contractors.

It is unclear from the record when Koehl’s alleged acts of fraud were discovered

by the Tavianis, which resulted in the filing of the amended petition. However, as

discussed below, this finding is not necessary to our analysis of the prescription

issue in this case. Koehl introduced no evidence in support of his exception of

prescription, resulting in the exception being decided on the facts alleged in the

petition, which are accepted as true. Waguespack v. Judge, supra.

In his exception of prescription, Koehl first argued Akrom’s legal status as a

distinct juridical person, and that he had not bound himself individually for

Akrom’s debt. Next, he asserted that that the Tavianis’ claims of conversion and

fraudulent misrepresentation are subject to a one-year prescriptive period that

began to toll when they first became aware of the alleged acts in 2016.

22-CA-475 4 Allegations of fraud and the liability of a shareholder

Juridical persons, such as corporations and limited liability companies, are

distinct from their members. La. C.C. art. 24. Consequently, a corporation’s

shareholders are not liable for its debts. Bergman v. Nicholson Mgmt. &

Consultants, Inc., 594 So.2d 491, 499 (La. Ct. App.), writ denied, 600 So.2d 646

(La. 1992). However, third parties can bring claims against a member for “any

fraud practiced upon him, because of any breach of professional duty or other

negligent or wrongful act by such person, or in derogation of any right which the

limited liability company may have against any such person because of any fraud

practiced upon it by him.” La. R.S. 12:1320(D). Thus, under certain

circumstances, a court can pierce the corporate veil in order to reach the “alter ego”

of the corporate member and hold the corporate member liable for the debts of the

corporation. 1 Peyton Place, Condominium Associates, Inc., v. Guastella, 08-365

(La. App. 5 Cir. 5/29/09), 18 So.3d 132, 149.

Joint and several liability

The Tavianis’ amended petition alleges joint and several liability between

Koehl and Akrom. Joint tortfeasors are solidarily liable for the damage they cause

when they conspire to commit an intentional or willful act. La. C.C. art. 2324(A).

Fraud exists if it can be shown that material misrepresentations have been made by

one party designed to deceive another to obtain some unjust advantage or to cause

loss or inconvenience to the other. La. C.C. art. 1953. Fraud was specifically pled

in the amending petition. Where fraud or deceit has been practiced on a third

party by the shareholder acting through the corporation, the courts have

disregarded the corporate entity and imposed personal liability for those debts upon

the shareholder. Dutton & Vaughn, Inc. v. Spurney, 496 So.2d 1126, 1129-30 (La.

App. 4th Cir.1986), writ denied, 501 So.2d 208 (La.1987).

22-CA-475 5 Interruption of prescription as to defendant Koehl

The interruption of prescription against one solidary obligor is effective

against all solidary obligors and their heirs. La. C.C. art. 1799. When a

plaintiff’s basis for claiming an interruption of prescription is that the defendant is

a joint tortfeasor with a defendant who was timely sued, the plaintiff bears the

burden of proving joint tortfeasor status and of establishing that prescription has

been timely interrupted against a joint tortfeasor. McKenzie v. Imperial Fire and

Casualty Insurance Co., 12-1648 (La. App. 1 Cir. 7/30/13), 122 So.3d 42, 47, writ

denied, 13-2066 (La. 12/6/13), 129 So.3d 534. As discussed above, the allegations

of fraud on the face of the amended petition were a sufficient basis upon which the

trial court could consider joint and several liability between Koehl and Akrom,

raising the possibility that Akrom was, in fact, Koehl’s alter ego. Thus, we find no

error in the trial court’s apparent conclusion that the timely institution of the

Tavianis’ lawsuit against Akrom notified Koehl of the litigation and interrupted

prescription against him individually. Withers v. Timber Products, Inc., 574 So.2d

1291, 1295 (La. App. 3d Cir.1991), writ denied, 580 So.2d 378 (La.1991).

.SECOND ASSIGNMENT OF ERROR

In the first part of this assignment, appellants argue that the trial court erred

in awarding attorneys’ fees as part of its judgment.

Once fraud is established, the party responsible for the fraudulent activity is

liable for damages and attorneys’ fees under La. C.C. art. 1958. Landreneau v.

National Affiliated Investors Life Ins. Co., 96-1071 (La. App. 3 Cir. 2/26/97), 692

So.2d 464, writ denied, 97-0813 (La. 5/9/97), 693 So.2d 762. Accordingly, in this

case, where the trial court found that the appellants perpetuated fraud upon the

Tavianis, we find that an award of attorneys’ fees is supported.

22-CA-475 6 Appellants also argue under this assignment that the trial court abused

its discretion in awarding an amount for attorneys’ fees without considering

evidence of how the fees were justified. We agree.

Attorneys’ fees are subject to review and control by the courts.

Abadie v. Markey, 97-684 (La. App. 5 Cir. 3/11/98), 710 So.2d 327, 333.

Regardless of the language of the statutory authorization for an award of

attorneys’ fees or the method employed by a trial court in making an award

of attorneys’ fees, courts may inquire as to the reasonableness of attorneys’

fees as part of their prevailing, inherent authority to regulate the practice of

law. Richardson v. Parish of Jefferson, 98-625 (La. App. 5 Cir. 2/10/99),

727 So.2d 705, 708, writ denied, 99-864 (La. 5/7/99), 740 So.2d 1289. The

factors to be considered in determining the reasonableness of attorney's fees

are: 1) the ultimate result obtained; 2) the responsibility incurred; 3) the

importance of the litigation; 4) the amount of money involved; 5) the extent

and character of the work performed; 6) the legal knowledge, attainment,

and skill of the attorneys; 7) the number of appearances involved; 8) the

intricacies of the facts involved; 9) the diligence and skill of counsel; and

10) the court's own knowledge. In re Tutorship of the Property of Alicia St.

John Huddleston, 95-97 (La. App. 5 Cir. 4/25/95), 655 So.2d 416, 419.

Our review of the record reflects that no evidence was introduced at trial

concerning any of the above-listed factors in awarding attorneys’ fees in this case.

Nor did the trial court articulate any reasons supporting its award. Accordingly,

we vacate that portion of the trial court's judgment awarding attorneys’ fees and

remand this matter to the trial court for an evidentiary hearing to determine a

reasonable amount of attorneys’ fees in accordance with the factors listed above,

and other applicable law. Williams v. Sec. Plan Fire Ins. Co., 16-714 (La. App. 5

Cir. 5/31/17), 222 So.3d 200, 205

22-CA-475 7 THIRD ASSIGNMENT OF ERROR

In their last assignment, appellants claim that the trial court abused its

discretion in awarding damages for costs to the Tavianis that were not attributable

to poor workmanship and/or for which the defendant/appellants are not

responsible.

If an undertaker fails to do the work he has contracted to do, or if he does

not execute it in the manner and at the time he has agreed to do it, he shall be liable

in damages for the losses that may ensue from his non-compliance with his

contract. La. C.C. art. 2769. In the instant case, the Tavianis established damages

from the breach of contract through the unrefuted testimony of their experts, as

well as a report that identified, in precise descriptions, appellants’ incomplete

and/or defective work.

The Tavianis called Michael Gurtler as a witness and offered him as an

expert in construction defects and building codes. On direct examination, he was

asked in detail about the findings in his original and supplemental report on the

Tavianis’ incomplete home renovation by Akrom. In connection with his

testimony, the Tavianis introduced Exhibits P-40 and P-41, which were Gurtler

Brothers’ reports and accompanying invoices dated August 21, 2015 and July 11,

2016.

The plaintiffs’ construction expert, C.J. Minor, a licensed Louisiana

contractor who does residential and commercial construction, testified on March

22, 2022, and was accepted without objection as an expert in construction

estimating and contracting. Mr. Minor stated that he had been hired by the

Tavianis to complete an inspection estimate for their home on Edenborn Avenue,

which included an analysis of the deficiencies in Akrom’s uncompleted work and a

price to complete the project. On direct examination, Mr. Minor was asked about

every charge to the Tavianis to complete the home addition, at a cost of

22-CA-475 8 $180,184.23. During Mr. Minor’s cross examination, the Tavianis stipulated that

there were two charges for the same item, a set of doors, and that any award should

be reduced by $4,376.15. Plaintiffs’ Exhibit 42 was the estimate from C & G

Construction, which formed the basis of Minor’s testimony.

Conversely, neither Akrom nor Koehl provided their own calculation of the

value to repair the defective work and complete the work under the contract, nor

did they introduce expert testimony to refute Mr. Gurtler or Mr. Minor’s testimony.

Proof by a preponderance of the evidence is defined as taking the evidence

as a whole, the fact to be proved is more probably than not. Fuller v. Wal-Mart

Stores, Inc., 519 So.2d 366, (La. App. 2nd Cir.1988). Uncontroverted evidence

should be taken as true to establish a fact for which it is offered absent any

circumstances in the record casting suspicion as to the reliability of this evidence

and sound reasons for its rejection. Earls v. McDowell, 07-17 (La. App. 5 Cir.

5/15/07), 960 So.2d 242, 248. The appellate court may not set aside a trial court's

factual findings in the absence of manifest error or unless such findings are clearly

wrong. Stobart v. State, through DOTD, 617 So.2d 880 (La. 1993). In awarding

damages to the Tavianis, the trial court also apparently found their expert witnesses

to be credible. When factual findings are based on determinations regarding the

credibility of witnesses, the manifest error-clearly wrong standard of review

demands great deference to the trier of fact's findings. In re L. D. B., 18-205 (La.

App. 5 Cir. 10/17/18), 258 So. 3d 963, 973, writ denied sub nom. In re L.D.B., 18-

1864 (La. 2/11/19), 263 So.3d 1151.

Given the unrefuted evidence and testimony at trial, we cannot say that the

trial court’s award of damages to the Tavianis was manifestly erroneous.

DECREE

For the reasons assigned, the portion of the judgment awarding damages for

the breach of contract is affirmed. We affirm the trial court’s denial of the

22-CA-475 9 defendants’ exception of prescription. The portion of the judgment awarding

attorneys’ fees is reversed, and we remand the matter for further proceedings

consistent with this opinion.

AFFIRMED IN PART; REVERSED IN PART; REMANDED

22-CA-475 10 SUSAN M. CHEHARDY CURTIS B. PURSELL

CHIEF JUDGE CLERK OF COURT

SUSAN S. BUCHHOLZ FREDERICKA H. WICKER CHIEF DEPUTY CLERK JUDE G. GRAVOIS MARC E. JOHNSON ROBERT A. CHAISSON LINDA M. WISEMAN STEPHEN J. WINDHORST FIRST DEPUTY CLERK JOHN J. MOLAISON, JR. CORNELIUS E. REGAN, PRO TEM FIFTH CIRCUIT MELISSA C. LEDET JUDGES 101 DERBIGNY STREET (70053) DIRECTOR OF CENTRAL STAFF POST OFFICE BOX 489 GRETNA, LOUISIANA 70054 (504) 376-1400

(504) 376-1498 FAX www.fifthcircuit.org

NOTICE OF JUDGMENT AND CERTIFICATE OF DELIVERY I CERTIFY THAT A COPY OF THE OPINION IN THE BELOW-NUMBERED MATTER HAS BEEN DELIVERED IN ACCORDANCE WITH UNIFORM RULES - COURT OF APPEAL, RULE 2-16.4 AND 2-16.5 THIS DAY APRIL 26, 2023 TO THE TRIAL JUDGE, CLERK OF COURT, COUNSEL OF RECORD AND ALL PARTIES NOT REPRESENTED BY COUNSEL, AS LISTED BELOW:

22-CA-475 E-NOTIFIED 24TH JUDICIAL DISTRICT COURT (CLERK) HONORABLE STEPHEN D. ENRIGHT, JR. (DISTRICT JUDGE) ALLISON K. NESTOR (APPELLANT) CHRISTIAN W. HELMKE (APPELLANT) LEONARD L. LEVENSON (APPELLANT) ALBERT J. NICAUD (APPELLEE) JEFFREY M. SIEMSSEN (APPELLEE)

MAILED BRET D. GUEPET, JR. (APPELLEE) COLLEEN B. GANNON (APPELLANT) WILL C. GRIFFIN (APPELLEE) ATTORNEY AT LAW DONNA R. BARRIOS (APPELLANT) ATTORNEY AT LAW 3000 18TH STREET ATTORNEYS AT LAW GRIFFIN & BIVALACQUA LLC METAIRIE, LA 70002 650 POYDRAS STREET 650 POYDRAS STREET SUITE 2750 SUITE 2615 NEW ORLEANS, LA 70130 NEW ORLEANS, LA 70130