Commercial Union Ins. Co. v. Melikyan

430 So. 2d 1217, 1983 La. App. LEXIS 8346
CourtLouisiana Court of Appeal
DecidedApril 5, 1983
Docket82 CA 0624
StatusPublished
Cited by24 cases

This text of 430 So. 2d 1217 (Commercial Union Ins. Co. v. Melikyan) 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
Commercial Union Ins. Co. v. Melikyan, 430 So. 2d 1217, 1983 La. App. LEXIS 8346 (La. Ct. App. 1983).

Opinion

430 So.2d 1217 (1983)

COMMERCIAL UNION INSURANCE COMPANY
v.
Armand V. MELIKYAN, et al.

No. 82 CA 0624.

Court of Appeal of Louisiana, First Circuit.

April 5, 1983.
Rehearing Denied May 20, 1983.

*1218 David S. Bell, Baton Rouge, for plaintiffappellee, Commercial Union Ins. Co.

Jerry McKernan, Baton Rouge, for defendant-appellee, Arman V. Melikyan.

Lawrence A. Durant, Baton Rouge, for defendant-appellee, John A. Melton.

Craig Kaster, Baton Rouge, for defendant-appellee, Don R. Estellee.

Stephen K. Peters, Baton Rouge, for defendant-appellant, Arman V. Melikyan.

Before LOTTINGER, COLE and CARTER, JJ.

CARTER, Judge.

This appeal by Arman V. Melikyan arises out of a series of transactions which are as follows.

In 1973, plaintiff, Commercial Union Insurance Company (Commercial), entered into a General Application and Indemnity Agreement with Lent, Inc., as principal, and with Lent, Inc., Arman V. Melikyan, John A. Melton, and Don (Donathan) R. Estelle, as indemnitors, providing for indemnification to Commercial for any sums that Commercial may be required to pay on bonds issued for Lent, Inc. for performance of certain construction contracts.

Relying upon this indemnification agreement, Commercial subsequently issued performance bonds on three separate jobs undertaken by Lent, Inc.[1] Lent, Inc. defaulted on payments to certain subcontractors *1219 and Commercial made various payments to discharge its bond obligations.[2]

After making payments to discharge its bond obligations, Commercial filed this proceeding naming as defendants, Melikyan, Melton, and Estelle, and seeking a judgment in solido against the defendants in the sum of $40,313.76, with interest, attorney's fees, and costs.

After the original petition was filed, Commercial filed a motion to dismiss its action against John A. Melton, reserving all rights and causes of action against all other defendants, namely, Melikyan and Estelle. On February 3, 1980, judgment was signed pursuant to the motion, and this judgment is now final and not a part of this appeal.

It appears from the record that in April of 1976, in consideration of the transfer of all of Estelle's stock in Lent, Inc., that Lent, Inc., Melikyan, and Melton entered into a Hold Harmless Agreement with Estelle agreeing to hold him harmless and indemnify him (Estelle) from all claims, damages, *1220 actions, etc., including attorney's fees, resulting from any obligation Estelle may incur as an indemnifier of Lent, Inc. On January 23,1980, Estelle filed an answer to the petition of Commercial, denying the various allegations and asserting affirmative defenses, and additionally filed a thirdparty demand against Melikyan and Melton. In Estelle's third-party demand, he asked for judgment (based on the Hold Harmless Agreement) against Melton and Melikyan for all amounts that he may be condemned to pay to Commercial, plus costs and attorney's fees.

Therefore, at this stage, we find Commercial filing suit against Melikyan, Estelle, and Melton, as three of its four indemnifiers, and Estelle filing a third-party petition against Melton and Melikyan as two of three of his indemnifiers. Melton was released from the suit by Commercial, as to Commercial's claim, but remains in the proceeding as one of three indemnifiers of Estelle under the 1976 Hold Harmless and Indemnification Agreement between Estelle and Melton, Melikyan, and Lent, Inc.

On February 26, 1980, Melikyan filed an answer to the petition of Commercial, an answer to the third-party demand of Estelle, and additionally filed a third-party demand against Melton alleging that Melton, as a co-debtor in solido, was liable for contribution to Melikyan for one-half of the debts and liabilities owed both to Commercial and Estelle.

Melton filed an answer to the third-party petition of Melikyan and additionally filed a reconventional demand against Melikyan alleging that in the event that he is found to be a co-debtor in solido with Melikyan (to Estelle) as a result of Estelle's third-party action, then Melikyan is indebted to Melton for one-half of any sums for which he may be held liable to Estelle.

The trial court determined that the actual amount owed to Commercial was $37,300.04, plus attorney's fees of $11,978.59, for a total of $49,278.63. Since there were four indemnifiers on the General Application and Indemnity Agreement (Lent, Inc., Melikyan, Melton, and Estelle), and one of these indemnifiers (Melton) had been released by Commercial, the total amount was then reduced by one-fourth to reflect Melton's release, and judgment was rendered in favor of Commercial and against Melikyan and Estelle, in solido, in the amount of $36,958.77.[3]

The trial court further rendered judgment in favor of third-party plaintiff Estelle and against third-party defendants, Melikyan and Melton, in solido, for any sums that Estelle actually pays to Commercial, plus in any event, the sum of $1,397.25 as attorney's fees and additionally all costs.

The third-party demand of Melikyan against Melton seeking contribution for "one-half of the total amount of debts and liabilities allegedly owed to both Commercial and Estelle" was rejected.

The reconventional demand of Melton against Melikyan seeking contribution by Melton from Melikyan in the event that Estelle was successful in effecting recovery against Melton on the Estelle claim was also rejected.

Melikyan, alone, has appealed with the following assignments of error:

1. The trial court erred in holding that Commercial Union sustained its burden of proof by a mere showing of "good faith payment," although it failed to prove the claims it paid were owed by Lent, Inc., as principal, or were bonded claims for which the appellant would be liable as indemnitor.
2. The trial court erred in awarding attorney's fees to Commercial Union and Don R. Estelle against appellant.
3. The trial court erred in reducing the debt by one-fourth rather than onethird.
4. The trial court failed to recognize the legitimacy of appellant's claim for *1221 contribution of one-half from John A. Melton with respect to the obligation of appellant to Commercial Union and Don R. Estelle.

ASSIGNMENT OF ERROR NO. 1

Appellant contends that although Commercial proved that it paid these claims, it failed to prove that Lent, Inc. actually owed the claims, and that even if Lent's liability had been established, the indemnitors would not be liable unless it was proven that liability was within the scope of the bond obligation undertaken by Commercial.

As we appreciate appellant's argument, he is saying that because La.Civ.Code art. 3037[4] requires that the surety obligation not exceed what may be due by the debtor nor be contracted under more onerous conditions, Commercial was bound to satisfactorily prove at trial the amounts of the claims against Lent, Inc. and whether the claims were within the scope of the bond obligation. Appellant fails to recognize, however, that this is a suit on a contract of indemnity, not on suretyship. The contract of indemnity forms the law between the parties and must be interpreted according to its own terms and conditions. See Grady v. Alfonso, 315 So.2d 832 (La. App. 4th Cir.1975).

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Bluebook (online)
430 So. 2d 1217, 1983 La. App. LEXIS 8346, Counsel Stack Legal Research, https://law.counselstack.com/opinion/commercial-union-ins-co-v-melikyan-lactapp-1983.