STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
14-1035
MASONITE CORPORATION D/B/A LOUISIANA MILLWORK
VERSUS
SERVICE DOOR & MILLWORK, LLC, ET AL.
**********
APPEAL FROM THE FOURTEENTH JUDICIAL DISTRICT COURT PARISH OF CALCASIEU, NO. 2008-5435 HONORABLE G. MICHAEL CANADAY, DISTRICT JUDGE
JOHN D. SAUNDERS JUDGE
Court composed of Ulysses Gene Thibodeaux, Chief Judge, John D. Saunders, and Phyllis M. Keaty, Judges.
AFFIRMED.
Rick J. Norman, Jr. Norman Business Law Center 145 East Street Lake Charles, LA 70601 (337) 436-7787 COUNSEL FOR PLAINTIFF/APPELLEE: Masonite Corporation d/b/a/ Louisiana Millwork L. Richard Roy, III Fletcher & Roy, LLC 660 Government St. Baton Rouge, LA 70802 (225) 888-8000 COUNSEL FOR DEFENDANT/APPELLANT: Ralph L. Fletcher SAUNDERS, Judge.
This case is before us on appeal from a jury verdict rendered on suit on open
account in favor of Masonite Corporation d/b/a Louisiana Millwork (hereafter
“Appellee”) against Service Door & Millwork, L.L.C. (hereafter “Service Door”)
and Ralph L. Fletcher (hereafter “Appellant”), in solido, in the amount of
$215,026.95 plus $64,598.84 in attorney fees. For the following reasons, we
affirm and award additional attorney fees.
FACTS AND PROCEDURAL HISTORY
Service Door was a limited liability company established in Louisiana on
August 15, 2001. Thereafter, an application for credit was submitted to Louisiana
Millwork by Service Door on August 24, 2001. Louisiana Millwork began
providing manufacturing, loading, and delivery services and building materials to
Service Door. After performance of the services and delivery of the materials,
Service Door was periodically invoiced and made periodic payments. In 2003,
Masonite Corporation purchased Louisiana Millwork and refused to provide
further materials without the personal guaranties of the debts of Service Door by its
three members, Edgar S. Milton, IV, (hereafter “Milton”), Michael S. Marks
(hereafter “Marks”), and Appellant. Thereafter, on July 25, 2003, Louisiana
Millwork received a document entitled “Personal Guaranty,” purportedly bearing
the signature of Appellant. The document contained the following:
In order to induce Louisiana Millwork, LLC, a Louisiana limited liability company (“LMW”) to enter into an agreement to allow purchases on account (the “Agreement”) with _____________ (“Purchaser”), ______________ ([“]Guarantor”) hereby makes the following guaranty, indemnification and agreements with and in favor of LMW: The document was received by Appellee with the blanks designated for the names
of the purchaser and guarantor remaining empty. Louisiana Millwork was
subsequently merged into Masonite Corporation in 2005.
When Service Door failed to make payments, Appellee made demand by
certified mail on August 25, 2005, pursuant to La.R.S. 9:2781. No payment was
tendered. Thereafter, Appellee filed suit against Service Door and its three
partners, Milton, Marks, and Appellant, alleging all three members had provided
personal guaranties on behalf of Service Door in favor of Appellee.
Milton and Marks did not dispute that they had agreed to be personally
obligated, but were discharged in bankruptcy prior to trial. The personal guaranty
document on which Appellee relies bears only a stamp of Appellant’s signature;
expert testimony established that his name was not actually his written signature.
In his answer to Appellee’s petition on open account, Appellant denied that he
signed, affixed, or authorized his signature to be affixed on the personal guaranty.
Service Door and Appellant filed a reconventional demand and third-party claim
against Appellee and its general manager, Robert W. McBride (hereafter “Mr.
McBride”), alleging Appellee and McBride breached an oral contract to extend
credit. In response, Appellee and McBride filed a peremptory exception of no
cause of action, which was granted by the trial court.
On August 18, 2011, Appellant filed a motion for summary judgment,
asserting that there was no contract between Appellee and Service Door, that
Appellant did not sign or authenticate the personal guaranty in favor of Appellee,
which he alleged was incomplete and undated, and that Appellee committed fraud
in filing suit based upon a document submitted to it with blanks and later
completed by hand. On April 13, 2012, Appellant’s motion for summary judgment
was denied. 2 The case was submitted to a trial by jury on September 4, 2012. On
September 6, 2012, the jury returned a verdict in favor of Appellee in the amount
of $215,026.95, which included the principal balance of $136,092.95, plus
conventional interest at 1%. The jury also found that Appellant personally
guaranteed the open account obligation of Service Door to Appellee. On March 14,
2013, the trial court ordered that the verdict of the jury be made the judgment of
the court, and awarded attorney fees in the amount of $64,598.84 to Appellee. It is
from this judgment that the instant appeal arises. Appellee answered the appeal
and requested additional attorney fees for the defense of the appeal.
ASSIGNMENTS OF ERROR
In his appeal, Appellant asserts that the jury erred in finding that:
1. Appellant executed, authorized, or adopted the stamped signature on the
personal guaranty; and
2. the personal guaranty was enforceable when Appellant’s signature was
stamped on an incomplete personal guaranty form which did not contain
the name of the principal debtor when it was stamped with Appellant’s
signature.
STANDARD OF REVIEW
Findings of fact are subject to review for manifest error. Rosell v. ESCO,
549 So.2d 840 (La.1989). “In applying the manifest error-clearly wrong standard,
we must determine not whether the jury was right or wrong, but whether its
conclusion as factfinder was a reasonable one.” Billings v. State ex rel. Dep’t of
Transp. & Dev., 01-0131, p. 11 (La.App. 3 Cir. 6/13/01), 826 So.2d 1133, 1140
(citing Mart v. Hill, 505 So.2d 1120 (La.1987)). To warrant reversal of a jury’s
findings of fact, after reviewing the record in its entirety, an appellate court must
first find that a reasonable factual basis does not exist for the finding, and, second, 3 determine that the record establishes that the finding is clearly wrong or manifestly
erroneous. Stobart v. State through Dep’t of Transp. & Dev., 617 So.2d 880
(La.1993). “[W]here there is conflict in the testimony, reasonable evaluations of
credibility and reasonable inferences of fact should not be disturbed upon review,
even though the appellate court may feel that its own evaluations and inferences
are as reasonable.” Ortego v. Jurgelsky, 98-1622, p. 2 (La.App. 3 Cir. 3/31/99),
732 So.2d 683, 685.
ASSIGNMENT OF ERROR NUMBER ONE
In brief, Appellant asserts that the signature on the personal guaranty at issue
is a stamp of his signature; this fact is not in dispute. However, Appellant asserts
that he neither stamped nor authorized anyone to stamp his signature on the
personal guaranty at issue. After reviewing the record, we find ample evidence to
support the jury’s conclusion that Appellant personally guaranteed the debt of
Service Door.
In Rainey v. Entergy Gulf States, Inc., 09-572, pp. 15-16 (La. 3/16/10), 35
So.3d 215, 225-26, the Louisiana Supreme Court explained:
Written acts are of two kinds, authentic acts and acts under private signature. 5 SAUL LITVINOFF, LOUISIANA CIVIL LAW TREATISE—THE LAW OF OBLIGATIONS § 12.11 (2d ed.2001). . . . An act under private signature is one executed by the parties themselves without intervention of a public officer such as a notary public. LITVINOFF, § 12.26. “An act under private signature need not be written by the parties, but must be signed by them.” La. Civ.Code art. 1837. The signature of the parties is the only element the law requires to give evidentiary weight to an act privately executed by the parties. LITVINOFF, § 12.28. However, and of great significance to the matter before this Court, “where a private act, rather than an authentic one, is concerned, a party’s signature need not be handwritten, and a printed or electronically reproduced facsimile thereof may suffice, as is the case with contracts made in large numbers by one of the parties and executed in printed forms.” LITVINOFF, § 12.28.
Furthermore, where a statute requires a signature, a printed or typed “signature” is sufficient provided the signature was authorized 4 and intended to constitute the signature. Reno v. Travelers Home and Marine Ins. Co., 02-2637, p. 4 (La. Ct.App. 1 Cir. 11/7/03), 867 So.2d 751, 754 (citing Commerce Loan Co., Inc. v. Howard, 82 So.2d 487, 488 (La.App.Orl.1955), writ denied, (La.1955)); Fleming v. JE Merit Constructors, Inc., 07-926, p. 11 (La. Ct.App. 1 Cir. 3/29/08), 985 So.2d 141, 147. In the absence of a statute prescribing the method of affixing a signature, it may be written by hand, printed, stamped, typewritten, engraved, or by various other means. Reno, 02-2637 at p. 4, 867 So.2d at 754; Fleming, 07–926 at p. 11, 985 So.2d at 147.
Additionally, as the second circuit explained in Fleet Fuel, Inc. v. Mynex, Inc.,
38,696, pp. 9-10 (La.App. 2 Cir. 6/23/04), 877 So.2d 234, 240:
The Louisiana Civil Code provides that . . . a party against whom an act under private signature is asserted must acknowledge his signature or deny that it is his. La. C.C. art. 1838. When the signature is denied, the Civil Code further provides that any means of proof may be used to establish that the signature belongs to the denying party. Id. Our jurisprudence has established that these means include, but are not limited to, the testimony of witnesses who saw the party write the signature in controversy, or testimony by witnesses who know the signature of the party, or by comparison of signatures. In the last instance, when a signature has been denied, the court may examine and compare the denied signature with other admitted signatures of the denying party. Hardcastle v. Ravia, 14 So.2d 295 (La.App. 1 Cir.1943). See also, Saul Litvinoff, 5 La. Civ. L. Treatise: The Law of Obligations, (2d ed.2001) § 12.31.
Clearly, the personal guaranty at issue is not an authentic act, as it was not
executed in the presence of a notary. In light of the well-established law
concerning signatures affixed to acts under private signature, we find that the
stamped “signature” of Appellant is sufficient if it was authorized and intended to
constitute a signature. Therefore, we must turn to whether Appellant’s stamped
signature was authorized and intended to be his signature.
The record reveals that Appellant, who is an attorney, had a stamp of his
signature. In the course of his testimony, he conceded that the stamp had been
used to sign documents filed into court record. In fact, he conceded that it had
been used to sign documents filed into court record on July 23, 2003, a mere two
5 days prior to the date the guaranty was stamped. This evidence supports the
conclusion that Appellant intended that his stamped name constitute his signature.
Toni Stewart (hereafter “Ms. Stewart”), a certified public accountant, was
employed by Appellee as an accounting manager. She testified regarding the
agreement between Service Door and Appellant and the circumstances leading up
to the instant suit whereby Service Door became behind in paying the invoiced
amounts. She testified that she personally met with Appellant around July 2003 to
“discuss [the] credit problems” and suggested “[Appellee] close the account.” Ms.
Stewart further testified that it was Appellant who suggested that personal
guaranties be executed by Milton, Marks, and Appellant instead of closing the
account. Finally, Ms. Stewart testified that she received a faxed copy of the signed
guaranty, but she “was not happy with that. So, we were picking up the originals.
We sent [Mr.] McBride, who was the president of the company at the time, to go
by Appellant’s office and pick it up.” Thereafter, “[Mr. McBride] picked [the
stamped guaranty] up from [Appellant’s] office,” but she did not know who
stamped Appellant’s signature or filled in the incomplete portions.
Mr. McBride testified that when Service Door’s account became behind,
“[Appellee] had to have a personal guaranty.” He further testified that Appellant
had previously refused to sign a guaranty, but that, at a meeting with Appellant,
Milton, Marks, and Toni Stewart, “[Appellant] agreed to give us a personal
guaranty because we would not continue to sell him product.” Mr. McBride
testified that Appellant later told him to pick up the personal guaranty at
Appellant’s law office. While traveling to make sales, Mr. McBride stopped at
Appellant’s office late in the afternoon, where a woman at the office gave him the
stamped document. Thereafter, Mr. McBride spoke with Appellant “a number of
times” during which the personal guaranty was discussed. 6 Dennis Markwood, Appellee’s general manager, testified that he could not
specifically recall seeing the personal guaranty bearing Appellant’s stamped
signature, but that he could recall specifics of a meeting that occurred with
Appellant, Milton, and McBride because “there was a lot more at stake.” He
explained that, at the time, Service Door was “in deep trouble” and owed
approximately $300,000.00 to Appellee. Mr. Markwood testified that, when Mr.
McBride mentioned Appellant’s personal guaranty, “[Appellant’s] exact statement
was that the building and property were worth between $800,000[.00] and
$1,000,000[.00] and [Appellant] had more than enough equity in the building to
pay off all the debt he owed . . . . He said he had the equity in the building to cover
the debt that they had at Service Door.”
In support of his argument that the jury manifestly erred in finding him
personally liable for the debt of Service Door, Appellant directs this court to his
own testimony that he had never personally guaranteed the debts of Service Door
to any other vendors, that he did not authorize anyone to stamp his signature on
any financial documents, like the document at issue in this case, and that he was
unaware that the personal guaranty had been stamped with his signature prior to
receiving the demand letter sent by Appellee. Although Appellant may have
refused to guaranty the debts of Service Door to any other vendors, this does not
refute the conclusion that he guranteed the debt of Service Door to the vendor in
the instant matter. Moreover, his testimony that he did not authorize anyone to
stamp his signature on the guaranty conflicts with the testimonies of Ms. Stewart
and Mr. McBride that Appellant agreed to personally guaranty the debts of Service
Door to Appellee. Additionally, Appellant’s testimony that he was unaware of the
guaranty until he received the demand letter from Appellee conflicts with the
testimony of Mr. McBride that he and Appellant discussed the guaranty on “a 7 number of times” after Mr. McBride had picked it up from Appellant’s office. It
also conflicts with the testimony of Mr. Markwood, who testified that when the
personal guaranty was discussed, Appellant mentioned he was financially able to
pay the entire debt of Service Door.
The record reveals no manifest error in the jury verdict in favor of Appellee.
Multiple witnesses testified that Appellant agreed to personally guaranty the open
account debt of Service Door and that they recalled discussing the personal
guaranty with Appellant after it had been received by Appellee. The jury weighed
the credibility of the witnesses, balanced the conflicting testimony, and made its
conclusions as fact finder, as it was entitled to do. The record reveals that
Appellant did, in fact, have a stamp of his signature, and that it was used regularly
to sign pleadings. Further, a review of the record reveals ample testimony upon
which a fact finder could have found that Appellant authorized his signature to be
stamped on the personal guaranty at issue. Thus, the record reveals a reasonable
basis for the verdict. Having found no manifest error, we affirm the jury’s verdict.
ASSIGNMENT OF ERROR NUMBER TWO
In brief, Appellant asserts that, in the alternative, if the stamped signature
was authorized, the jury erred in finding him bound by the personal guaranty
because it did not identify the principal debtor when initially received by Appellee.
Appellant relies on the testimony of Ms. Stewart that she initially received the
personal guaranty by fax and from Mr. McBride bearing only the signature of
Appellant. After reviewing the record, we find this assignment of error is without
merit.
In Stanfield v. White, 535 So.2d 753, 756 (La.App. 2 Cir.), writ denied, 536
So.2d 1199 (La.1988), the second circuit explained: “The filling in of a blank in a
written instrument presents a question of authority and not one of alteration.” “In 8 particular, the mere fact that a contract contains blanks when signed does not make
it invalid, as blanks may be filled in pursuant to parol authority or implied
authority, so long as there is a meeting of the minds relative to the agreement
itself.” 3B C.J.S. Alteration of Instruments § 99 (footnotes omitted). One who
receives a signed contract containing blanks has implied authority to fill in blanks
according to the intent of the parties. See Ken Edwards Real Estate, Inc. v.
Molero’s Marina, Inc., 355 So.2d 1067 (La.App. 4 Cir. 1978); see also J.H.
Landworks, LLC v. T. Lariviere Equip. & Excavation, Inc., No. 2:11-CV-00488-
MHW, 2012 WL 4758079 (D. Idaho Oct. 5, 2012). “Whoever signs or executes an
instrument bearing blanks and later contests the correctness of the completion of
the blanks, bears the burden of proving by a preponderance of the evidence that the
document was completed in a manner not agreed to between the parties.” Trinity
Universal Ins. Co. v. Lambert, 176 So.2d 651, 657 (La.App. 1 Cir.), writ refused,
248 La. 413, 179 So.2d 15 (1965).
Ms. Stewart testified that she initially received a copy of the personal
guaranty by fax bearing only the signature of Appellant; the blank lines where the
names of the debtor and guarantor were to be inserted remained blank. This fact is
not in dispute. Ms. Stewart could not ascertain whether the document came from
Appellant’s fax or Service Door’s fax because the document bore the fax time
stamp of both. Ms. Stewart further testified that, later, when Mr. McBride picked
up the original from Appellant’s office, it still bore only Appellant’s signature and
the blanks designated to insert the name of the purchaser and the guarantor
remained blank. Ms. Stewart also testified that she later received the same
guaranty by fax from Service Door bearing the signature of Appellant, with the
blanks completed; thus, it identified the purchaser as Service Door and the
guarantor as Appellant. She testified that her office did not complete the blanks. 9 Ms. Stewart testified that she also received by fax from Service Door the personal
guaranties bearing the signatures of Milton and Marks with the blanks reserved for
insertion of the names of the purchaser and guarantor completed. Again, she
testified that her office did not complete the blanks.
The record contains a letter, bearing the signature of Appellant, on Service
Door letterhead dated June 27, 2003, just a few weeks before Appellee received the
personal guaranty bearing the stamped signature of Appellant. Above the Service
Door letterhead, the fax time stamp, also dated June 27, 2003, indicates the
document was faxed from Appellant’s law office at 13:50. Thereafter, on July 1,
2003 at 13:57, Service Door faxed the letter to Appellee, as indicated by a second
fax time stamp. The document bearing the title “FAX COVER SHEET” was
addressed to “Toni” from “Ralph Fletcher.” Although this evidence does not
indicate who actually signed or stamped the signature of Appellant on the letter, it
does indicate that Appellant had a relationship with Service Door in which he
would fax documents to Service Door, which would then forward the documents to
Appellee by fax.
The record establishes that Appellee did receive a personal guaranty bearing
the stamped signature of Appellant, with all of the blanks completed and clearly
identifying the principal debtor and the guarantor, after Appellee received one
executed in blank. Having already determined that the jury could have reasonably
concluded that Appellant authorized his signature to be stamped on the guaranty
and considering that it is not in dispute that the guaranty was initially received by
Appellee in blank, we must now decide whether the evidence is such that the jury
could have reasonably concluded that Appellant had granted the authority to
complete the document.
10 The fax time stamps on the completed personal guaranty indicate that the
document was faxed, first, from Appellant’s law office to Service Door and, then,
from Service Door to Appellee. Ms. Stewart testified that her office received the
executed and completed personal guaranty by fax from Service Door after she had
initially received it in blank and that her office did not insert the names of the
purchaser and guarantor into any of the personal guaranties. The jury was entitled
to rely on this evidence, and it supports the conclusion that the blanks were
completed by someone at Service Door prior to being faxed to Appellee. Further,
the evidence indicates it was not unusual for Appellant to fax documents to Service
Door for forwarding to Appellee. In light of Appellee’s later receipt of the
executed and completed personal guaranty from Service Door, Appellant’s history
of faxing documents to Service Door for further forwarding to Appellee, and
Appellant’s part ownership of Service Door, the jury reasonably could have
concluded that Appellant had granted the authority to complete the document by
inserting of the names of the principal debtor and guarantor into the blanks. Thus,
we find this assignment of error to lack merit.
ATTORNEY FEES
In its answer to the appeal, Appellee has requested additional attorney fees
for work on appeal. “An increase in attorney’s fees is awarded on appeal when the
defendant appeals, obtains no relief, and the appeal has necessitated more work on
the part of the plaintiff’s attorney, provided that the plaintiff requests such an
increase.” McKelvey v. City of DeQuincy, 07–604, pp. 11–12 (La.App. 3 Cir.
11/14/07), 970 So.2d 682, 690. We have affirmed the judgment of the trial court.
We find that an additional award of $5,000.00 is appropriate to compensate for the
work performed on this appeal. Thus, we award an additional $5,000.00 in
attorney fees for the defense of the appeal. 11 CONCLUSION
The record reveals no manifest error in the jury verdict in favor of Appellee.
The jury weighed the credibility of the witnesses, balanced the conflicting
testimony, and made its conclusions as fact finder, as it was entitled to do. A
review of the record reveals ample testimony upon which a fact finder could have
found that Appellant authorized his signature to be stamped on the personal
guaranty at issue. Additionally, the record reveals evidence on which the jury
could have reasonably relied to conclude that the executed document was
completed with authority by someone at Service Door. Thus, the record reveals a
reasonable basis for the verdict. Having found no manifest error, we affirm the
jury’s verdict. We award an additional $5,000.00 in attorney fees to Appellee,
Masonite Corporation d/b/a Louisiana Millwork Louisiana. Costs of this appeal
are assessed to Appellant, Ralph L. Fletcher.