NOT DESIGNATED FOR PUBLICATION
STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
CA 09-620
R. D. SPELL, INC.
VERSUS
FERGUSON ENTERPRISES, INC. D/B/A LOUISIANA UTILITIES SUPPLY COMPANY
**********
APPEAL FROM THE FOURTEENTH JUDICIAL DISTRICT COURT PARISH OF CALCASIEU, NO. 2008-871 HONORABLE G. MICHAEL CANADAY, DISTRICT JUDGE
BILLY HOWARD EZELL JUDGE
Court composed of Ulysses Gene Thibodeaux, Chief Judge, Oswald A. Decuir, and Billy Howard Ezell, Judges.
REVERSED IN PART AND AFFIRMED IN PART.
Russell Joseph Stutes, Jr. Stutes & Lavergne, LLC 713 Kirby Street Lake Charles, LA 70601 (337) 433-0022 Counsel for Plaintiff/Appellee: R. D. Spell, Inc. Carroll Devillier, Jr. Breazeale, Sachse & Wilson, L.L.P. P. O. Box 3197 Baton Rouge, LA 70821-3197 (225) 387-4000 Counsel for Defendant/Appellant: Ferguson Enterprises, Inc. d/b/a Louisiana Utilities Supply Company EZELL, JUDGE.
Ferguson Enterprises Inc., d/b/a Louisiana Utilities Supply Company appeals
the granting of a default judgment in favor of R.D. Spell, Inc. Ferguson claims that
the judgment was granted on insufficient evidence and that Spell’s petition does not
comply with the Public Works Act.
FACTS
Spell is a general contractor who was working on a project for the City of Lake
Charles. About March 2005, Spell entered into an agreement with Ferguson in which
Ferguson would supply pipe to Spell in connection with the City project of Stage 1
South Regional Transport System, Contract 12, Trunk Segment No. 2, Plant “D”
Interceptor, City of Lake Charles, MA Project No. A9-96069-DD2. Pursuant to this
contract, Spell would provide pipe at a price of $106.50 per foot.
Subsequent to Hurricane Rita, Ferguson attempted to invoice Spell for the pipe
at an increased price of $111.85 per foot. On June 29, 2006, Ferguson and Spell
entered into a letter agreement. Pursuant to the agreement, Ferguson agreed that it
would not increase the price of the pipe unless the owner/engineer approved a change
order for the increased price. The change order was never approved.
In December 2007, Ferguson sent a letter to Fidelity & Deposit Company of
Maryland, Spell’s surety on the City contract, making a demand on it for payment of
materials supplied to Spell as the general contractor on the City project. In the letter,
Ferguson indicated that it recorded a materialman’s claim on May 31, 2007, in the
amount of $112,346.85.
On February 7, 2008, Spell filed a petition for declaratory judgment asking for
judgment that Ferguson had no claims against Spell arising from the City contract.
A preliminary default was entered on May 1, 2008. The judgment was confirmed on
1 May 6, 2008. Ferguson filed a motion for new trial which was denied by judgment
on November 21, 2008. Ferguson then filed the present appeal.
DEFAULT JUDGMENT
Ferguson claims that Spell failed to establish a prima facie case against
entitling it to a default judgment. The testimony of Shannon Spell, Spell’s vice-
president, was offered in support of Spell’s case at the hearing to confirm the default
judgment. Ferguson claims that this testimony was insufficient to establish a prima
facie case.
Confirmation of a default judgment is similar to a trial and requires, with admissible evidence, “proof of the demand sufficient to establish a prima facie case.” La. C.C.P. art. 1702(A); The elements of a prima facie case are established with competent evidence, as fully as though each of the allegations in the petition were denied by the defendant. In other words, the plaintiff must present competent evidence that convinces the court that it is probable that he would prevail at trial on the merits. A plaintiff seeking to confirm a default must prove both the existence and the validity of his claim. A default judgment cannot be different in kind from what is demanded in the petition and the amount of damages must be proven to be properly due. La. C.C.P. art. 1703.
....
There is a presumption that a default judgment is supported by sufficient evidence, but this presumption may be rebutted by the record upon which the judgment is rendered.
Arias v. Stolthaven New Orleans, L.L.C., 08-1111, pp. 7-8 (La. 5/5/09), 9 So.3d 815,
820 (case and treatise citations omitted).
In its petition for declaratory judgment, Spell stated that Ferguson had no
claims against it for additional funds arising from the City contract. Specifically,
Spell alleged that (1) The owner/engineer did not issue a change order approving the
increase in the cost of pipe as required by the letter agreement between the two
parties; (2) Ferguson did not reimburse or credit Spell for the warranty/repair work
which was required to render some of the pipe suitable for use; and (3) Spell incurred
2 increased expenses because of the improper delivery of pipe. Obviously, Spell is
seeking a setoff of the two debts.
“A party that properly pleads setoff as an affirmative defense has the burden
of proof of the claim. The defense of setoff requires mutual obligations whereby each
obligor owes an equally liquidated and demand able debt to the other.” Hebert v. Ins.
Ctr., Inc., 97-298, p. 8 (La.App. 3 Cir. 1/7/98), 706 So.2d 1007, 1012, writ denied,
98-353 (La. 3/27/98), 716 So.2d 888. “A debt is ‘liquidated when it is certain what
is due and how much is due. That which has been certain as to amount due by
agreement of parties or by operation of law.’ Black’s Law Dictionary 642 (6th ed.
abridged 1991).” Hutchinson v. Trussco, Inc., 06-582, p. 8 (La.App. 3 Cir. 11/2/06),
943 So.2d 585, 590.
The only evidence offered at the confirmation hearing was the testimony of
Shannon Spell. During his testimony, Mr. Spell recognized that Ferguson had filed
a lien in the amount of $112,346.85. Mr. Spell testified that Ferguson was attempting
to invoice Spell about $5.00 a foot over the original price quoted.
Mr. Spell also testified that some of the pipe supplied for the job cracked.
Ferguson indicated that it would do all warranty work that was required but failed to
do so. Spell was required to go to a third party to have the pipe repaired. Mr. Spell
testified that Ferguson never reimbursed Spell for these costs.
Mr. Spell also stated that Spell had instructed Ferguson to hold to a Saturday
delivery date to which both parties had agreed to. As the job progressed, there was
slippage in this agreement which caused some delays because they would have to stop
working to unload the pipe. These delays cost Spell money.
Mr. Spell testified that based on his calculations of the above expenses, the
total more than exceeded the $112,346.85 that Ferguson alleges it is due. Spell
3 claims that it established a prima facie case that it owed nothing to Ferguson.
In Galland v. National Union Fire Insurance Company of Pittsburg,
Pennsylvania, 452 So.2d 397 (La.App. 3 Cir. 1984), this court held that a plaintiff’s
testimony was sufficient to confirm a default judgment without corroborating
documentary evidence to prove the amount owed by defendant upon settlement of a
previous lawsuit. See also Carroll v. Coleman, 27,861 (La.App. 2 Cir. 1/24/96), 666
So.2d 1264.
Mr. Spell’s testimony established that there were several bases for offset. His
testimony further established that the amount it was owed was greater than the
amount that Ferguson claimed it was owed. The trial court obviously found Mr. Spell
Free access — add to your briefcase to read the full text and ask questions with AI
NOT DESIGNATED FOR PUBLICATION
STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
CA 09-620
R. D. SPELL, INC.
VERSUS
FERGUSON ENTERPRISES, INC. D/B/A LOUISIANA UTILITIES SUPPLY COMPANY
**********
APPEAL FROM THE FOURTEENTH JUDICIAL DISTRICT COURT PARISH OF CALCASIEU, NO. 2008-871 HONORABLE G. MICHAEL CANADAY, DISTRICT JUDGE
BILLY HOWARD EZELL JUDGE
Court composed of Ulysses Gene Thibodeaux, Chief Judge, Oswald A. Decuir, and Billy Howard Ezell, Judges.
REVERSED IN PART AND AFFIRMED IN PART.
Russell Joseph Stutes, Jr. Stutes & Lavergne, LLC 713 Kirby Street Lake Charles, LA 70601 (337) 433-0022 Counsel for Plaintiff/Appellee: R. D. Spell, Inc. Carroll Devillier, Jr. Breazeale, Sachse & Wilson, L.L.P. P. O. Box 3197 Baton Rouge, LA 70821-3197 (225) 387-4000 Counsel for Defendant/Appellant: Ferguson Enterprises, Inc. d/b/a Louisiana Utilities Supply Company EZELL, JUDGE.
Ferguson Enterprises Inc., d/b/a Louisiana Utilities Supply Company appeals
the granting of a default judgment in favor of R.D. Spell, Inc. Ferguson claims that
the judgment was granted on insufficient evidence and that Spell’s petition does not
comply with the Public Works Act.
FACTS
Spell is a general contractor who was working on a project for the City of Lake
Charles. About March 2005, Spell entered into an agreement with Ferguson in which
Ferguson would supply pipe to Spell in connection with the City project of Stage 1
South Regional Transport System, Contract 12, Trunk Segment No. 2, Plant “D”
Interceptor, City of Lake Charles, MA Project No. A9-96069-DD2. Pursuant to this
contract, Spell would provide pipe at a price of $106.50 per foot.
Subsequent to Hurricane Rita, Ferguson attempted to invoice Spell for the pipe
at an increased price of $111.85 per foot. On June 29, 2006, Ferguson and Spell
entered into a letter agreement. Pursuant to the agreement, Ferguson agreed that it
would not increase the price of the pipe unless the owner/engineer approved a change
order for the increased price. The change order was never approved.
In December 2007, Ferguson sent a letter to Fidelity & Deposit Company of
Maryland, Spell’s surety on the City contract, making a demand on it for payment of
materials supplied to Spell as the general contractor on the City project. In the letter,
Ferguson indicated that it recorded a materialman’s claim on May 31, 2007, in the
amount of $112,346.85.
On February 7, 2008, Spell filed a petition for declaratory judgment asking for
judgment that Ferguson had no claims against Spell arising from the City contract.
A preliminary default was entered on May 1, 2008. The judgment was confirmed on
1 May 6, 2008. Ferguson filed a motion for new trial which was denied by judgment
on November 21, 2008. Ferguson then filed the present appeal.
DEFAULT JUDGMENT
Ferguson claims that Spell failed to establish a prima facie case against
entitling it to a default judgment. The testimony of Shannon Spell, Spell’s vice-
president, was offered in support of Spell’s case at the hearing to confirm the default
judgment. Ferguson claims that this testimony was insufficient to establish a prima
facie case.
Confirmation of a default judgment is similar to a trial and requires, with admissible evidence, “proof of the demand sufficient to establish a prima facie case.” La. C.C.P. art. 1702(A); The elements of a prima facie case are established with competent evidence, as fully as though each of the allegations in the petition were denied by the defendant. In other words, the plaintiff must present competent evidence that convinces the court that it is probable that he would prevail at trial on the merits. A plaintiff seeking to confirm a default must prove both the existence and the validity of his claim. A default judgment cannot be different in kind from what is demanded in the petition and the amount of damages must be proven to be properly due. La. C.C.P. art. 1703.
....
There is a presumption that a default judgment is supported by sufficient evidence, but this presumption may be rebutted by the record upon which the judgment is rendered.
Arias v. Stolthaven New Orleans, L.L.C., 08-1111, pp. 7-8 (La. 5/5/09), 9 So.3d 815,
820 (case and treatise citations omitted).
In its petition for declaratory judgment, Spell stated that Ferguson had no
claims against it for additional funds arising from the City contract. Specifically,
Spell alleged that (1) The owner/engineer did not issue a change order approving the
increase in the cost of pipe as required by the letter agreement between the two
parties; (2) Ferguson did not reimburse or credit Spell for the warranty/repair work
which was required to render some of the pipe suitable for use; and (3) Spell incurred
2 increased expenses because of the improper delivery of pipe. Obviously, Spell is
seeking a setoff of the two debts.
“A party that properly pleads setoff as an affirmative defense has the burden
of proof of the claim. The defense of setoff requires mutual obligations whereby each
obligor owes an equally liquidated and demand able debt to the other.” Hebert v. Ins.
Ctr., Inc., 97-298, p. 8 (La.App. 3 Cir. 1/7/98), 706 So.2d 1007, 1012, writ denied,
98-353 (La. 3/27/98), 716 So.2d 888. “A debt is ‘liquidated when it is certain what
is due and how much is due. That which has been certain as to amount due by
agreement of parties or by operation of law.’ Black’s Law Dictionary 642 (6th ed.
abridged 1991).” Hutchinson v. Trussco, Inc., 06-582, p. 8 (La.App. 3 Cir. 11/2/06),
943 So.2d 585, 590.
The only evidence offered at the confirmation hearing was the testimony of
Shannon Spell. During his testimony, Mr. Spell recognized that Ferguson had filed
a lien in the amount of $112,346.85. Mr. Spell testified that Ferguson was attempting
to invoice Spell about $5.00 a foot over the original price quoted.
Mr. Spell also testified that some of the pipe supplied for the job cracked.
Ferguson indicated that it would do all warranty work that was required but failed to
do so. Spell was required to go to a third party to have the pipe repaired. Mr. Spell
testified that Ferguson never reimbursed Spell for these costs.
Mr. Spell also stated that Spell had instructed Ferguson to hold to a Saturday
delivery date to which both parties had agreed to. As the job progressed, there was
slippage in this agreement which caused some delays because they would have to stop
working to unload the pipe. These delays cost Spell money.
Mr. Spell testified that based on his calculations of the above expenses, the
total more than exceeded the $112,346.85 that Ferguson alleges it is due. Spell
3 claims that it established a prima facie case that it owed nothing to Ferguson.
In Galland v. National Union Fire Insurance Company of Pittsburg,
Pennsylvania, 452 So.2d 397 (La.App. 3 Cir. 1984), this court held that a plaintiff’s
testimony was sufficient to confirm a default judgment without corroborating
documentary evidence to prove the amount owed by defendant upon settlement of a
previous lawsuit. See also Carroll v. Coleman, 27,861 (La.App. 2 Cir. 1/24/96), 666
So.2d 1264.
Mr. Spell’s testimony established that there were several bases for offset. His
testimony further established that the amount it was owed was greater than the
amount that Ferguson claimed it was owed. The trial court obviously found Mr. Spell
to be a credible witness, a finding we do not disturb, as we find no manifest error in
the ruling. Rosell v. ESCO, 549 So.2d 840 (La.1989). Therefore, based upon Mr.
Spell’s testimony, we find that Spell adequately established a prima facie case for
confirmation of default against Ferguson.
PUBLIC WORKS ACT
Ferguson argues that the procedures set forth in the Public Works Act should
have been followed since it had filed a materialman’s lien. Ferguson argues that the
procedure employed by Spell in pursuing the declaratory judgment was procedurally
improper pursuant to the Public Works Act. Specifically, Ferguson claims that a
concursus should have been invoked and the surety named as a party pursuant to
La.R.S. 38:2243. Spell recognizes that a lien-release bond was filed on May 2, 2008,
but it claims that the lien was effective on February 7, 2008, when the suit for
declaratory judgment was filed.
We recognize that the Public Works Act provides the exclusive remedy for
claims made in connection with the construction of public works. Board of
4 Supervisors of Louisiana State Univ. v. Louisiana Agric. Fin. Auth., 07-107 (La.App.
1 Cir. 2/8/08), 984 So.2d 72. However, “[A] defendant against whom a default
judgment is confirmed may not assert an affirmative defense on appeal.” Arias, 9
So.3d at 820. “[A] party who seeks to have a default judgment rendered against him
set aside must allege and prove facts which would excuse his failure to plead any
defense that he may have had.” Davis v. Coregis Ins. Co., 00-475, p. 17 (La.App. 3
Cir. 12/27/00), 789 So.2d 7, 19, writ denied, 01-292 (La. 3/30/01), 788 So.2d 1192
(citing DeFrances v. Gauthier, 220 La. 145, 55 So.2d 896 (1951)).
Ferguson admitted it received service of process and had no excuse for not
timely answering or making an appearance at the hearing to confirm the default.
Therefore, we find that Ferguson has no right to complain that the procedure utilized
at the default proceedings was improper.
SCOPE OF JUDGMENT
Ferguson claims that the judgment is well beyond the scope of the testimony
rendered. It argues that the judgment effectively rules not only on Spell’s claims to
offset but also on any possible claim Ferguson may have against Spell.
Pursuant to La.Code Civ.P. art. 1703, “[a] judgment by default shall not be
different in kind from that demanded in the petition.” The comments to Article 1703
state that “[t]his article is essential to prevent the judgment by default from going
beyond the scope of the prayer.”
In its petition, Spell made the following request for judgment:
For the reasons set forth above, Spell desires that this Court render a Judgment in favor of Spell declaring that Defendant, or any person or entity acting by, through or for Defendant, has no claims against Spell arising from any theory of law, whether in tort, contract, or otherwise connected to the City Contract.
The judgment provided:
5 IT IS ORDERED, ADJUDGED AND DECREED that Judgment is rendered in favor of Plaintiff, R.D. SPELL, INC., declaring that defendant, FERGUSON ENTERPRISES, INC. D/B/A LOUISIANA UTILITIES SUPPLY COMPANY, or any person or entity acting by, through or for Defendant, has no claims against R.D. SPELL, INC. arising from any theory of law, whether in tort, contract, or otherwise.
There is no doubt that the judgment conforms to the prayer for relief in the
petition. Ferguson did receive the petition and knew what relief Spell was requesting.
However, we do find that the judgment goes beyond the prima facie evidence Spell
presented at the hearing to confirm the default. See Spear v. Tran, 96-1490 (La.App.
4 Cir. 9/18/96), 682 So.2d 267, writ denied, 96-3024 (La. 2/7/97), 688 So.2d 500, in
which the fourth circuit found the trial court erred in awarding penalties in a default
judgment when there was no proof of damages as a result of the insurer’s beach of
duty at the confirmation hearing.
We find that the only issue at the hearing to confirm the default was whether
Spell was entitled to an offset against the lien claim of Ferguson. Therefore, we find
that the judgment should not have included relief for any claim beyond the offset
claim.
For these reasons, we reverse the portions of the judgment that forecloses
Ferguson, or any person or entity acting by, through or for Defendant, for any claim
arising from any theory of law. The judgment is affirmed insofar as it denies
Ferguson, or any person or entity acting by, through or for Defendant, for its claim
for $112,346.85 since Spell established it is entitled to a setoff. Costs of this appeal
are to be split between R.D. Spell, Inc. and Ferguson Enterprises, Inc. d/b/a Louisiana
Utilities Supply Company.
This opinion is NOT DESIGNATED FOR PUBLICATION. Uniform Rules- Court of Appeal. Rule 2-16.3.