Fogleman v. Cajun Bag & Supply Co.

638 So. 2d 706, 93 La.App. 3 Cir. 1177, 1994 La. App. LEXIS 1791, 1994 WL 261723
CourtLouisiana Court of Appeal
DecidedJune 15, 1994
Docket93-1177
StatusPublished
Cited by14 cases

This text of 638 So. 2d 706 (Fogleman v. Cajun Bag & Supply Co.) 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
Fogleman v. Cajun Bag & Supply Co., 638 So. 2d 706, 93 La.App. 3 Cir. 1177, 1994 La. App. LEXIS 1791, 1994 WL 261723 (La. Ct. App. 1994).

Opinion

638 So.2d 706 (1994)

Lyle O. FOGLEMAN, Sr., Plaintiff-Appellant,
v.
CAJUN BAG & SUPPLY COMPANY, Defendant-Appellee.

No. 93-1177.

Court of Appeal of Louisiana, Third Circuit.

June 15, 1994.

*707 Glennon P. Everett, Crowley, for Lyle O. Fogleman Sr.

Kenneth O'Neil Privat, Crowley, for Cajun Bag & Supply Co.

Before KNOLL, COOKS and WOODARD, JJ.

KNOLL, Judge.

In this suit, plaintiff, Lyle Fogleman, alleges that the defendant, Cajun Bag & Supply Co. (Cajun), failed to pay him $18,000 in commissions he earned from selling Cajun's products before leaving Cajun's employ. The trial court found that the commissions were not owing and dismissed the suit. Mr. Fogleman appeals, claiming the trial court erroneously failed to apply the doctrine of quantum meruit.

FACTS

Mr. Fogleman began working for Cajun in 1986. For the first 18 to 24 months, he was paid a salary plus his expenses. After this time period, Mr. Fogleman was paid on the basis of straight commissions (i.e., his only income was from commissions). To cover his expenses, Mr. Fogleman received a bi-monthly draw against his commissions.[1] In early 1992, Cajun conditioned Mr. Fogleman's continued employment on his signing an employment contract. Apparently, the contract contained a non-competition clause Mr. Fogleman found unacceptable. His employment with Cajun ended on January 17, 1992. At trial, the parties placed much emphasis on how and when commissions were earned. Mr. Jules Maraist, owner and manager of Cajun, testified that it was the policy of Cajun that commissions were earned only when the products were shipped and invoiced, not when the customer placed the order. This appeal concerns whether Mr. Fogleman may recover commissions for orders solicited by him before leaving Cajun on January 17, 1992, but not shipped and invoiced until after that date.

In finding Mr. Fogleman was not entitled to the commissions, the trial court concluded there was no contract governing the disposition of commissions in the event of a salesman's termination. While failing to frame its oral reasons within any explicit legal theory, the trial court noted two factors it believed weighed against Mr. Fogleman recovering. First, it found Mr. Fogleman, in the past, had received commissions for sales he did not solicit. Secondly, the trial court found Mr. Fogleman failed to perform certain duties required of salesmen employed by Cajun.

For reasons that follow, we reverse the judgment of the trial court and award Mr. Fogleman the $18,000 in commissions.

*708 THEORY OF RECOVERY

Fogleman asserts in his only assignment of error that "the trial court failed to apply the equitable principal [sic] of quantum meruit." Before we address the merits of plaintiff's claim, we think it appropriate to discuss the exact status of quantum meruit in Louisiana jurisprudence.

Quantum meruit has existed in our jurisprudence since the early part of the last century. See Quantum Meruit in Louisiana, 50 Tul.L.Rev. 631, citing Morgan v. Mitchell, 3 Mart. (n.s.) 576 (La.1825). However, this theory of common law origin has not been without its detractors. In Oil Purchasers, Inc. v. Kuehling, 334 So.2d 420 (La. 1976), the Supreme Court commented:

"Quantum meruit is a `striking example of an ill-considered importation from the common law ...' It supplied a need in early common law and has been expanded in our jurisprudence. However, its lack of underlying theoretical basis has `led inexorably to confusion and inconsistency'" Id. at 425 (Citations omitted).

Despite this criticism, the circuit courts continued to routinely apply quantum meruit to a large number of differing factual situations.

The Supreme Court most recently addressed the status of quantum meruit in Morphy, Makofsky & Masson v. Canal Place, 538 So.2d 569 (La.1989). Morphy involved a payment dispute between a sub-contractor and a "sub-sub-contractor". The trial court and the court of appeals found no contract existed, but made an award under "a theory of unjust enrichment or quantum meruit." The lower courts awarded the plaintiff only $45,000, finding the defendant was not enriched by the full $78,613 that the plaintiff was claiming as the fair value of its services. In overturning the lower courts' ruling, the Supreme Court found that a contract did exist, but a price had not been agreed upon. Since a contract did exist, the plaintiff should have been awarded the fair value of its services, $78,613, and not limited to the value by which the defendant was enriched, as a plaintiff would be if recovering under quantum meruit or unjust enrichment. The Court went on to distinguish two situations where Louisiana courts had applied quantum meruit. One situation is where a contract actually exists, and the court is simply supplying a price. The other is where no contract exists, and the court must supply a substantive basis for recovery.

"[T]he Civil Code articles on Obligations have long furnished the principles for interpreting contracts ambiguous only with regard to compensation or price for agreed upon services. Unfortunately for the purity of our civilian concepts, the cases in our jurisprudence which have applied these codal provisions have often referred to this reasonable value of services or equitable ascertainment of compensation or price as "quantum meruit" or an action in quantum meruit. Quantum meruit may well have been an ill-considered importation from the common law (see that criticism in Oil Purchasers v. Kuehling, 334 So.2d 420 (La. 1976)); however, no great harm follows from that importation if we understand that numerous cases in our jurisprudence have used "quantum meruit" as a descriptive term, descriptive of the equitable principles of contract interpretation enunciated in La.Civ.Code arts. 1903 and 1965 [now art. 2055], which were the substantive law bases for the decisions in these cases.
A problem has arisen in our jurisprudence only when the courts have moved from quantum meruit as simply a measure of compensation or price unstated in a contract, to quantum meruit, the common law substantive law claim geared to equity and unjust enrichment, something of a counterpart to the civilian actio de in rem verso." Id. at 574 (Citations and footnotes omitted).

In light of the above, we believe quantum meruit, as a substantive basis for recovery, is now viewed with disfavor by Louisiana law. This conclusion has also been reached by the United States Fifth Circuit. See SMP Sales Management, Inc. v. Fleet Credit Corp., 960 F.2d 557 (5th Cir.1992), wherein the court, citing Morphy, stated:

"Although both the district court and the parties relied on quantum meruit as a substantive basis of recovery, it is not recognized as such in Louisiana but is only used as a measure of compensation or *709 price in quasi-contract or when none is stated in a contract."

Therefore, where a plaintiff seeks to employ a quantum meruit theory as a substantive ground for recovery, we believe the analysis is more properly made under the doctrine of actio de in rem verso or unjust enrichment.[2] While the result reached under quantum meruit and unjust enrichment may often be the same, see Howell v. Rhoades, 547 So.2d 1087 (La.App.

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Bluebook (online)
638 So. 2d 706, 93 La.App. 3 Cir. 1177, 1994 La. App. LEXIS 1791, 1994 WL 261723, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fogleman-v-cajun-bag-supply-co-lactapp-1994.