Service First, Inc. v. Timothy D. Plumley consolidated with Service First, Inc. v. Timothy D. Plumley

• Court: Louisiana Court of Appeal
• Decided: April 5, 2022
• Docket: 54,275-CA 54,276-CA
• Status: Published

Opinion

Judgment rendered April 5, 2022. Application for rehearing may be filed within the delay allowed by Art. 2166, La. C.C.P.

No. 54,275-CA No. 54,276-CA (Consolidated Cases)

COURT OF APPEAL SECOND CIRCUIT STATE OF LOUISIANA

*****

SERVICE FIRST, INC. Plaintiff-Appellant

versus

TIMOTHY D. PLUMLEY Defendant-Appellee

***** Appealed from the Fourth Judicial District Court for the Parish of Ouachita, Louisiana Trial Court Nos. 2019-2075 and 2019-2179

Honorable Daniel Joseph Ellender, Judge

ROUNTREE LAW OFFICES Counsel for Appellant By: James A. Rountree

LAW OFFICES OF J. DHU THOMPSON, APLC Counsel for Appellee By: J. Dhu Thompson Taylor Elaina Hipp

Before THOMPSON, ROBINSON, and O’CALLAGHAN (Pro Tempore), JJ. ROBINSON, J.

Service First, Inc. (“Service First”) appeals a judgment denying its

claim to recover money that it allegedly loaned to an employee, Timothy

Plumley (“Plumley”), who had been injured in a vehicular accident that was

non-work-related. We affirm the judgment.

FACTS

Timothy Plumley began working for Service First as a service

technician in 2011. Service First is located in West Monroe, Louisiana.

Plumley was an hourly employee whose areas of expertise were HVAC and

commercial refrigeration. Plumley’s job title later changed to service

manager, with his job duties including taking phone calls from Service First

technicians seeking advice. He became a salaried employee in 2015.

On May 31, 2016, Plumley was severely injured when an ambulance

transporting him from Rayville Hospital to St. Francis Medical Center in

Monroe was involved in an accident.

On June 3, 2016, Plumley signed an agreement with Service First,

which was managed by Harry Vowles (“Vowles”) at the time. The

agreement stated:

I, Timothy Plumley, hereby agree that out of the proceeds of settlement or judgment resulting from my accident of May 31, 2016, G. Scott Moore shall retain money owed to Service First, Inc. due to Service First, Inc. continuing to pay my wages as a loan until such time as I am released by my physician to return to work.

I further agree to sign any documentation necessary should Service First, Inc. be required to perfect a lien against said proceeds. Plumley was discharged from the hospital in June. He claimed that he

resumed his work duties after a couple of months as he began receiving

phone calls at home related to technical support. The extent of work

performed by Plumley over the next three years was disputed by Service

First.

Mike Bellissimo was the owner of Service First at the time. In

November of 2016, he returned to Louisiana from Tennessee to straighten

out Service First, which had fallen on hard financial times. He fired Vowles

at the beginning of 2017 and placed Jeffrey Alford (“Alford”) in charge of

finances. Plumley told Alford, who was unaware of the agreement, that he

would repay Service First when his lawsuit was settled.

Damon Kervin (“Kervin”) represented Plumley in his personal injury

lawsuit. On August 27, 2018, the legal assistant for Kervin emailed her

employer that Heath Hattaway (“Hattaway”), who represented Service First,

advised Kervin that he was no longer to speak with any employee of Service

First except for Plumley.

Shortly thereafter, Hattaway and Kervin began discussing the

agreement between Plumley and Service First. On September 19, 2018,

Hattaway emailed to Kervin, “It’s my understanding we ARE seeking this

reimbursement. I will confirm.”

On September 26, 2018, Kervin emailed Hattaway, “Good afternoon,

Heath. I am circling back on this.” The next day, Hattaway emailed Kervin,

“Yes. We want the reimbursement.” Kervin replied later that day asking

Hattaway to provide the amount. Hattaway responded that he had scheduled

a meeting with their CPA to determine that amount. There were other

2 emails that day concerning the release of depositions given by Mike

Bellissimo and Alford in Plumley’s lawsuit.

On October 4, 2018, Kervin emailed Hattaway:

Thank you for speaking with me today, Heath. Please confirm in writing that Service First, Inc., is not pursuing any lien/payment per the attached document. Thank you, Damon.

Later that day, Hattaway replied in an email that was copied to Mike

Bellissimo:

Hi Damon:

I’ve spoken with my client, Mike Bellissimo, Present [sic] of Service First, Inc.

He has instructed me to relay to you at [sic] Service First, Inc. will not be pursuing any lien/payment from your client.

Please let me know if there is any additional information you need from me.

Best, HH

On October 15, 2018, Plumley settled his personal injury lawsuit.

Plumley sent an email to Alford and several other Service First employees

that he was resigning his position effective October 26, 2018. Nevertheless,

he continued working. He told Amanda Madden, Mike Bellissimo’s

secretary, about the settlement.

Plumley was terminated on June 7, 2019. From May 31, 2016, until

that date, Plumley was paid $159,107.60 in net pay after deductions for

taxes, Medicare, and Social Security.

Service First filed a petition for injunctive relief on June 28, 2019, to

prohibit Plumley from soliciting Service First’s employees or clients.

On July 10, 2019, Service First filed suit against Plumley to recover

the $208,544.88 in gross earnings that it had paid to Plumley since his 3 accident. Service First also claimed that Plumley failed to inform it that he

had settled his lawsuit, and, thus, he fraudulently continued to collect

money. In his answer, Plumley raised as an affirmative defense that the

relief sought against him was barred on the basis of the doctrines of

“equitable estoppel, judicial estoppel, waiver, laches, and/or unclean hands.”

On September 10, 2019, the trial court entered an order consolidating

the lawsuits.

Trial on the merits

A bench trial was held in this matter on March 10, 2021. Counsel for

Service First objected to examination concerning the email sent by Hattaway

to Kervin regarding the waiver on the grounds that it was an attempt to

expand the scope of the pleadings. Plumley’s counsel countered that waiver

had been raised as an affirmative defense. Counsel for Service First

responded that extinguishment of debt had not been specifically pled. Two

days prior to trial, Service First had filed a written objection to an expansion

of the pleadings on the grounds that the affirmative defense of

extinguishment of an obligation was not pled under La. C.C.P. art. 1005 and

was being raised for the first time in Plumley’s pretrial statement. The trial

court allowed the questions on the grounds that the general waiver language

in the answer was sufficient to give notice to Service First that waiver could

be an issue at trial.

Alford testified that he first became familiar with the agreement in

December of 2016 when Plumley brought it to his attention. Alford did not

think that Plumley did any work for at least a year, and he never fully came

back to work. According to Alford, Plumley came to the office and drank

coffee for a couple of hours a day, answered a few phone calls, and went to 4 job sites of his own volition. Plumley did this despite never providing a full

release to return to work. In evidence is a May 7, 2019, letter from

Plumley’s physician advising that he extended Plumley’s previous

limitations for another four weeks.

Alford testified that Heath Hattaway was Service First’s attorney from

2017 until January of 2019. Alford would meet with Hattaway to discuss

matters related to Service First. Hattaway also represented Service First in a

lawsuit brought against Vowles. Alford testified that he did not authorize

Hattaway to send the email to Kervin releasing the debt, and as far as he

knew, it had not been authorized by Mike Bellissimo.

Tammy Johnson became Service First’s office manager in 2018.

Prior to that, she had worked as its dispatcher. She thought Plumley was on

medical leave for two years and did not work, although he occasionally took

phone calls from technicians. She testified that Plumley told Amanda

Madden about his lawsuit being settled and showed his bank statement to

Madden.

Plumley testified that his job role converted to being a consultant a

few months after the accident. He claimed that he handled accounts

receivable, advised technicians over the phone, and occasionally went on

troubleshooting calls to job sites with technicians. Many of his tasks could

be performed from the office or from his home. He testified that he was

never told that he had to work a set number of hours to earn his salary.

Plumley was able to continue working despite not being released to return to

work by his physician.

Plumley testified that he told Madden about the settlement so she

could inform Mike Bellissimo about it. He also testified that he never 5 stopped working and actually earned his salary. He claimed that the emails

and photos documenting much of the work he performed were deleted from

his personal phone by Service First’s IT person.

Margaret Danna Bellissimo, the daughter of Mike Bellissimo, took

over Service First’s payroll and accounting in February of 2017. In her

opinion, Plumley did very little work for Service First following the

accident. She believed that Plumley owed the entirety of his salary that he

was paid from May of 2016 until he was terminated in June of 2019.

Mike Bellissimo (“Bellissimo”) testified that the first time he learned

of the agreement was when he gave a deposition in Plumley’s lawsuit.

Bellissimo recalled that he later received a phone call from Hattaway, who

was angry that Bellissimo and Alford had given a deposition without his

knowledge. He testified that during this conversation:

[Hattaway] told me that he could not tell me who he was talking to, that he could not tell me the particulars of what they had talked about, but he knew that there was a settlement on the table for Mr. Plumley and that the only thing standing in the way of it was a supposedly [sic] debt to Service First. And he asked me what I thought. I said, well, I did not make any agreement with Mr. Plumley, with Service First, and I cannot forgive something I didn’t do.

Bellissimo denied that he ever forgave any indebtedness owed by

Plumley under the terms of the agreement. He also denied that he

authorized Hattaway to email or to tell Kervin that Service First had

forgiven the debt. He explained that he would have emailed Alford if that

had been done because a decision of that magnitude was outside of his

involvement in Service First at that time and he was already back in

Tennessee. If there was a decision to be made, he would have consulted

with Alford.

6 Bellissimo agreed that Hattaway was his corporate lawyer who

handled the lawsuit against Vowles. He testified that he told Alford to

discharge Hattaway because he was not serving the purpose of Service First.

According to Bellissimo, Hattaway made a lot of decisions on his own

without Bellissimo’s knowledge and permission.

Kervin testified that Hattaway came into the picture when he

contacted Kervin’s office, identified himself as Service First’s corporate

attorney, and instructed Kervin not to have any further contact with Service

First. When the attorneys spoke next, Hattaway said that Service First

wanted the entire amount owed. He also asked Kervin for the depositions of

Alford, Bellissimo, and Plumley.

Kervin explained that the purpose of the phone conversation with

Hattaway was to determine whether Plumley owed money to Service First.

He recalled that Hattaway said he would look into it after reviewing the

depositions. Hattaway later called him and said Service First was not

seeking reimbursement. Kervin told Hattaway to confirm in writing that

they were waiving the lien, and Hattaway sent the email confirming that no

amount was owed.

Judgment

In its oral reasons for judgment, the trial court concluded that

Hattaway was the corporate counsel for Service First and had permission

from Service First to release the obligation. The court noted that Bellissimo

testified that he did not tell Hattaway that Service First was not pursuing the

amount allegedly owed to it. While the trial court found Bellissimo to be

generally credible, it did not find him to be credible on this point. The court

particularly noted that Bellissimo had been copied on the email from 7 Hattaway to Kervin. The court also considered that the release of the debt

was not inconsistent with the evidence that Plumley did perform some work

for the three years in question. In conclusion, the court ruled that Service

First had not carried its burden of proof and denied the claim.

On March 19, 2021, the court rendered judgment denying Service

First’s petition because it had failed to meet its burden of proof. The petition

for injunctive relief was dismissed as moot. Service First appealed.

DISCUSSION

In its sole assignment of error, Service First maintains that the trial

court erroneously concluded that Service First released Plumley from his

obligation to repay Service First as Hattaway lacked this authority. Service

First argues that Plumley never abided by his agreement to repay Service

First when his personal injury lawsuit was settled.

Service First contends that Hattaway’s October 4 email did not clearly

state it was a remission of debt. Service First adds that Kervin’s email on

that same date had an attached document, and without that document, one

cannot put Hattaway’s response in its proper context. Service First further

argues that Hattaway lacked authorization to release the debt, and the only

evidence of communication between Bellissimo and Hattaway was the

conversation in which Hattaway said he had information about a possible

settlement.

Service First maintains that Plumley did not bear his burden of

proving that he should not be required to repay Service First because he

earned the money. It notes that Plumley claimed that he had witnesses who

could corroborate his work, but did not subpoena them. Further, his claim

8 that emails and photos on his phone were swiped clean by Service First’s IT

person is fantastic.

Service First asserts that Plumley could have subpoenaed Hattaway in

support of his remission of debt defense, which triggers the uncalled witness

rule. Service First maintains that Hattaway had peculiar knowledge of

material facts, and the court should consider Plumley’s failure to call him as

an admission that Hattaway’s testimony would not have been favorable to

Plumley. Service First asserts that it had no reason to subpoena Hattaway

because the affirmative defense was not disclosed in pleadings and Plumley

had the burden of proof on the remission defense.

Service First also requests that this court take into consideration that

Mike Bellissimo returned to Louisiana in late 2016 because Service First

was near financial ruin, he did not become aware of the agreement until late

2018, and it is inconceivable that he would forgo more than $200,000 owed

by Plumley, who was going to settle his lawsuit for a significant sum of

money.

A compromise is a contract whereby the parties, through concessions

made by one or more of them, settle a dispute or an uncertainty concerning

an obligation or other legal relationship. La. C.C. art. 3071. A compromise

shall be made in writing or recited in open court. La. C.C. art. 3072.

Authority must be given expressly to make remission of a debt. La.

C.C. art. 2997. The requirement of a written document to perfect a

compromise is not satisfied by the signature of a party’s attorney alone,

unless authorization is expressly given. Chiasson v. Progressive Security

Ins. Co., 12-532 (La. App. 5 Cir. 2/21/13), 110 So. 3d 1147.

9 La. C.C. art. 3021 states, “One who causes a third person to believe

that another person is his mandatary is bound to the third person who in

good faith contracts with the putative mandatary.”

Apparent authority is an estoppel principle which operates in favor of

third persons seeking to bind a principal for unauthorized acts of an agent.

Independent Fire Ins. Co. v. Able Moving and Storage Co., Inc., 94-1982

(La. 2/20/95), 650 So. 2d 750. When the apparent scope of an agent’s

authority, the indicia of authority, is relied upon by innocent third parties to

their detriment, the principal is liable. Id.

This principle was discussed in depth by this court in Fluid Disposal

Specialties, Inc. v. Unifirst Corp., 50,356 (La. App. 2 Cir. 1/13/16), pp. 13-

15, 186 So. 3d 210, 218-219:

In the past, Louisiana courts jurisprudentially recognized the doctrine of apparent authority. Apparent authority is a doctrine by which an agent is empowered to bind his principal in a transaction with a third person when the principal has made a manifestation to the third person, or to the community of which the third person is a member, that the agent is authorized to engage in the particular transaction, although the principal has not actually delegated this authority to the agent. In 1997, the legislature enacted La. C.C. art. 3021 to specifically address the liability of a principal that arises out of his agent’s purporting to act on the principal’s behalf….

The courts have continued to apply the pre-La. C.C. art. 3021 jurisprudence on the doctrine of apparent authority. Apparent authority operates only when it is reasonable for the third person to believe the agent is authorized and the third person actually believes this. Louisiana courts have utilized the doctrine of apparent authority to protect third persons by treating a principal who has manifested an agent’s authority to third persons as if the principal had actually granted the authority to the agent. In the absence of contact between the putative principal and the third party, there is no manifestation and, a fortiori, no apparent authority.

An agency relationship is never presumed; it must be clearly established. The burden of proving apparent authority is on the party seeking to bind the principal. A third party may not 10 blindly rely on the assertions of an agent, but has a duty to determine, at his peril, whether the agency purportedly granted by the principal permits the proposed act by the agent. One must look from the viewpoint of the third party to determine whether an apparent agency has been created.

A trial court’s determination of an agency relationship is essentially a factual matter. Therefore, our review of the trial court's factual findings is governed by the manifest error standard of review. Under this standard, the reviewing court may reverse only if it finds that no reasonable factual bases exist for the findings of the trial court which are clearly wrong or manifestly erroneous.

Citations and article omitted.

The authority of an attorney to settle a lawsuit was at issue in Elder v.

Elder & Elder Enterprises, Ltd., 2006-0703 (La. App. 4 Cir. 1/11/07), 948

So. 2d 348, writ denied, 07-0560 (La. 5/4/07), 956 So. 2d 616. In that

matter, the defendants filed a motion to enforce a settlement after the

plaintiff’s counsel advised defendants that his client had accepted a

counteroffer. Discussing the authority required of attorneys when settling a

matter, the appellate court stated:

Requiring attorneys to secure the express and written consent of their clients as buyers and/or sellers in all settlements that include the transfer of immovable property is too onerous of a requirement in cases where the nature of the dispute itself does not involve immovable property. Such a requirement would only serve to impede settlements and thereby weaken our jurisprudential practice of encouraging judicial settlement of on-going litigation.

Id., 2006-0703 at p. 7, 948 So. 2d at 352.

The above language was cited with approval by the court in Chiasson

v. Progressive Security Ins. Co., supra. In that matter, Progressive’s

attorney sent a letter to the plaintiff’s attorney setting forth the settlement

terms. Progressive filed a motion to enforce a settlement after the plaintiff’s

attorney signed the letter above the notation, “On Behalf of and with the

11 Consent of Percy Chiasson.” Upholding the trial court’s judgment enforcing

the motion, the appellate court agreed with Progressive’s position that it

would place a great burden on the system if an opposing party could not rely

on the written assertions of counsel that he has the authority of his client to

enter into an agreement.

Hattaway was Service First’s corporate counsel in October of 2018.

He had earlier represented Service First in its lawsuit against another former

employee, Vowles. Hattaway initially communicated to Kervin that it was

his understanding that Service First was seeking reimbursement, which he

would confirm. A week later, he emailed Kervin that Service First wanted

the reimbursement.

When Hattaway told Kervin in a later phone conversation that

Service First was not seeking reimbursement, Kervin asked Hattaway to

confirm that in writing. Hattaway responded by email that Bellissimo,

Service First’s President, instructed him to notify Kervin that Service First,

Inc. would not be pursuing any lien/payment from Plumley. We note that

Bellissimo was copied on this email to his Service First email address.

Based on the record presented at trial, we conclude that Kervin

justifiably believed that Hattaway acted with corporate authority when

he informed Kervin that Service First would not seek payment from

Plumley. When attorneys deal with a corporate attorney in matters

pertaining to the corporation, they should not have to seek additional

affirmation of corporate authority when the corporate attorney holds

himself out as acting on the instructions of the corporation.

Plumley met his burden of proving his affirmative defense that

Service First had waived the debt he owed to Service First under the terms 12 of the agreement. Although the trial court found that Service First had not

carried its burden of proof, the court also found that Service First had

waived any amount that it had considered owed. This waiver is the basis of

the denial of Service First’s claim and was not clearly wrong.

We also reject Service First’s assertion that the uncalled witness rule

or adverse presumption was triggered when Plumley failed to call Hattaway

as a witness. This presumption applies when a party has the power to

produce witnesses who would elucidate the transaction or occurrence and

fails to call those witnesses. Bartley v. Fondren, 43,779 (La. App. 2 Cir.

12/3/08), 999 So. 2d 146; JPS Equipment, LLC v. Cooper, 50,506 (La. App.

2 Cir. 2/24/16), 188 So. 3d 1106. The presumption is rebuttable, particularly

when the witness is equally available to the opposing party. Easter v. Direct

Ins. Co., 42,178 (La. App. 2 Cir. 5/9/07), 957 So. 2d 323; JPS Equipment,

LLC, supra.

We note that Hattaway was equally available to his former client,

Service First. Plumley was obviously satisfied that he could establish

remission of the debt at trial without Hattaway’s testimony but through the

email evidence and testimony of Kervin, Bellissimo, and Alford.

Finally, Service First maintains that Plumley made a

misrepresentation within the meaning of La. C.C. art. 1953 each time

following his settlement that he told Service First employees that he would

repay the company. However, the evidence showed that Plumley notified

Bellissimo’s secretary of the settlement. This argument is without merit.

CONCLUSION

At Service First’s costs, the judgment is AFFIRMED.