PAF, Inc. v. Regions Bank

150 So. 3d 477, 2014 WL 4723867
Louisiana Court of Appeal·Decided September 24, 2014·No. No. 14-CA-195·Published·Cited by 1 cases

Opinions

SUSAN M. CHEHARDY, Chief Judge.

^Plaintiff, PAF, Inc. (“PAF”), appeals a judgment of the 24th Judicial District Court finding a breach of contract by defendant, Regions Bank (“Regions”), and awarding PAF $13,297.44 in damages. In this appeal, PAF contends that it is entitled to further damages. For the reasons that follow, we reverse the judgment of the trial court.

FACTS AND PROCEDURAL HISTORY

On May 9, 1991, PAF entered into a purchase agreement with Gulf South Bank and Trust Co. (“Gulf South”) to purchase property located at 905-07 Westbank Expressway in Gretna, Louisiana. The purchase agreement contained the provision that PAF’s “corporations presently banking at Gulf South Bank will permanently be relieved of service charges on all accounts with Gulf South Bank as a condition of the sale.”

On September 23, 1996, Regions Bank acquired Gulf South Bank pursuant to a merger agreement. As Gulf South’s successor, Regions became responsible for all liabilities and obligations of Gulf South, including the provisions of the 1991 purchase agreement, which became binding upon Regions.

| sIn 2007, Regions changed computer systems, at which point PAF’s accounts began to incur charges which PAF claimed should have been excluded pursuant to the 1991 purchase agreement. PAF notified Jennifer Boudreaux, the branch manager at Regions’ Gretna branch, who reimbursed PAF for the charges. Then, in January of 2009, Ms. Boudreaux moved to the Marrero branch, and the new manager of the Gretna branch refused to reimburse PAF for the charges. Following a series of complaints from PAF, Regions conducted an analysis of PAF’s accounts in September 2009 and determined that several charges had been mistakenly reimbursed. Judy Wilson, a Treasury Management officer with Regions, testified that the reimbursements disbursed by Ms. Boudreaux in 2008 mistakenly included “miscellaneous charges.” She explained that there is a distinction between “service charges” and “miscellaneous charges” in the banking industry. On account of Ms. Boudreaux’s failure to distinguish between the two, Regions’ analysis concluded that PAF had been reimbursed in excess of the amount owed, but Regions forgave this debt and confirmed that PAF would not incur “service charges” pursuant to the 1991 purchase agreement.

Indeed, from September 2009 onward, PAF did not incur “service charges,” but did continue to incur “miscellaneous charges.” Dissatisfied with this result, on November 25, 2009, PAF filed a “Petition for Specific Performance and Damages,” seeking reimbursement for charges withdrawn from its account in violation of the 1991 purchase agreement, in the amount of $8,982.44. PAF also sought any other damages to which it was entitled and spe[479]*479cific performance. Then, in March 2010, PAF closed its six accounts with Regions and opened seven new accounts with Whitney Bank.

On April 4, 2012, PAF filed a motion for partial summary judgment, pursuant to which, on June 8, 2012, the parties entered into a consent judgment. |4This judgment held that the 1991 purchase agreement is binding upon Regions and that Regions is “liable for reimbursement for any and all service charges applied to its accounts by Regions, reserving to this court the determination of the amount of reimbursement due, and reserving to the plaintiff any claims for other damages, if any.”

The matter proceeded to a bench trial and on August 29, 2013, the trial court issued its judgment, finding:

Regions Bank breached its contractual obligations owed to PAF, Inc. Regions Bank failed to honor the terms of the agreement, which provided that PAF, Inc. was exempt from paying service charges on all accounts held with Gulf South Bank, Regions Bank’s predecessor. Regions Bank failed to honor the terms of the agreement by subsequently charging PAF, Inc. service fees on its bank accounts.

As a result, the court found Regions liable in the amount of $13,297.44 together with legal interest from the date of judicial demand and for all costs of the proceedings. On appeal, PAF raises three assignments of error: (1) the trial court erred by failing to award damages for service charges incurred at Whitney Bank; (2) the trial court erred by failing to award future damages; and (3) the trial court erred by failing to render judgment for specific performance. In Regions’ answer to PAF’s appeal, it argues that the trial court erred in finding a breach of contract and awarding damages and requests the judgment of the trial court be reversed.

DISCUSSION

The issue before us is one of contract interpretation, which is subject to de novo review on appeal. Subervielle v. State Farm, Mut. Auto. Ins. Co., 08-0491 (La.App. 4 Cir. 1/7/09), 32 So.3d 811, 812. In the interpretation of contracts, our starting point is the Louisiana Civil Code. See Prytania Park Hotel, Ltd. v. Gen. Star Indem. Co., 179 F.3d 169, 175 (5 Cir. 1999). La. C.C. art.2045 defines the interpretation of a contract as “the determination of the common intent of the|Bparties.” The official 1984 Revision Comment states that such intent is “objective in nature,” i.e., “what the parties must have intended, given the manner in which they expressed themselves in their contract.” Thus, “[wjhen the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties’ intent.” La. C.C. art. 2046. Indeed, “[t]he words of a contract must be given their generally prevailing meaning.” La. C.C. art. 2047. And, “[wjords of art and technical terms must be given their technical meaning when the contract involves a technical matter.” Id. Additionally, “when a dispute exists over the terms of a contract, the controversy must be resolved in light of the principle that informed and experienced parties do not ordinarily bind themselves to unreasonable obligations.” Spangenberg v. Yale Materials Handling-Louisiana, Inc., 407 So.2d 1270, 1274 (La.App. 4 Cir.1981), unit denied, 412 So.2d 1096 (La.1982).

With these precepts in mind, we turn to the pertinent provision of the 1991 purchase agreement between the parties, which stated that PAF’s “corporations presently banking at Gulf South Bank will permanently be relieved of service charges [480]*480on all accounts with Gulf South Bank as a condition of the sale.”

Philip Fasullo, Jr., the owner of PAF, testified that at the time of the purchase agreement, there was no discussion as to what constituted “service charges.” Conversely, Larry Pieno, the attorney representing Gulf South Bank in the 1991 transaction, testified that at the time of the transaction there were “documents that identified what service charges were,” but they had not been attached to the purchase agreement. However, he explained that his understanding of “service charges,” as referenced in the purchase agreement, denoted charges designated as such in Gulf South’s schedule of fees.

[ rJudy Wilson, a Treasury Management officer with Regions Bank, testified that in the banking industry, there is a distinction between “service charges” and “miscellaneous charges.” Regions’ schedule of fees confirms this distinction, delineating separately “Service Charges” and “Miscellaneous Charges.” According to this schedule, service charges include fees for monthly account maintenance, checks, debits, credits, deposits, electronic debits, and electronic credits.

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PAF, Inc. v. Regions Bank, 150 So. 3d 477, 2014 WL 4723867 (La. Ct. App. 2014).

150 So. 3d 477 (PAF, Inc. v. Regions Bank) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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