South Texas Pioneer Millwork v. Favalora Constructors, Inc.

90 So. 3d 1092, 11 La.App. 5 Cir. 722, 2012 WL 833315, 2012 La. App. LEXIS 313
CourtLouisiana Court of Appeal
DecidedMarch 13, 2012
DocketNo. 11-CA-722
StatusPublished
Cited by4 cases

This text of 90 So. 3d 1092 (South Texas Pioneer Millwork v. Favalora Constructors, Inc.) 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
South Texas Pioneer Millwork v. Favalora Constructors, Inc., 90 So. 3d 1092, 11 La.App. 5 Cir. 722, 2012 WL 833315, 2012 La. App. LEXIS 313 (La. Ct. App. 2012).

Opinion

WALTER J. ROTHSCHILD, Judge.

12This is an appeal from a judgment rendered by the trial court in this suit for payment for materials. For the reasons stated herein, we affirm the trial court’s judgment. We also award attorney’s fees for this appeal.

South Texas Pioneer Millwork, d/b/a Pioneer Architectural Millwork, (hereinafter “Pioneer”) filed the instant suit against Favalora Constructors, Inc. (“Favalora”) for breach of contract and damages for unpaid amounts due for materials sold and supplied to it. Pioneer also claimed civil penalties for the alleged non-payment pursuant to La. R.S. 9:4814 and La. R.S. 9:2784, as well as attorney’s fees and court costs. Prior to trial, the parties stipulated to certain facts and referenced exhibits, and these stipulations were considered by the trial court in a bench trial. Following trial, the court rendered judgment in favor of Pioneer for amounts due under the contract, for penalties pursuant to La. R.S. 9:4814 and La. R.S. 9:2784, and for attorney’s fees and costs. Favalora sought a new trial, which was denied by the trial court. Favalora now files this suspensive appeal from the | judgment, on the basis that the award of penalties and attorney’s fees was unwarranted and excessive. Pioneer filed in this Court a Motion to Award Attorney’s Fees for time and costs incurred on appeal.

Facts and Procedural History

The Trial Stipulations contained in the record indicate that Favalora, a Jefferson Parish general contractor, was hired by the RC Corporation to renovate a building on Magazine Street in New Orleans for use as the dentist office of Dr. Elizabeth Riggs. Favalora contracted with Pioneer, a millworker located in Texas, to fabricate and furnish cabinets, countertops, shelving and a reception desk at a cost of $24,245.00 to be installed by Favalora in the Magazine Street property. Favalora accepted delivery of the materials on October 4, 2007, and was invoiced by Pioneer the following day. On October 9, 2007, Favalora submitted to the RC Corporation an application for payment of the amount due to Pioneer for materials and supplies, and on October 30, 2007, Favalora received payment for these amounts. However, Favalora failed to settle the account of Pioneer, and in June of 2008, Pioneer filed a lien on the Magazine Street property where the materials had been installed. On November 8, 2008, in consideration of payment by the building owners of the sum of $19,905.00, Pioneer agreed to release the lien on the property, reserving all rights against Favalora. The amount Favalora still owed to Pioneer under the contract was $4,340.00. The parties also [1095]*1095stipulated that Pioneer was not the only subcontractor and supplier of materials to whom Favalora failed to apply funds received from the building owner to settle accounts.

In addition to these Trial Stipulations, both parties filed pre-trial memoranda. At the trial, the parties submitted the stipulations and the exhibits, and submitted argument on the matter without any testimony. In written reasons, the trial court found that Favalora, in violation of La. R.S. 9:4814, knowingly ^misapplied funds of $24,245.00 that it received from the building owner, entitling Pioneer to the full amount still due, as well as attorney’s fees, costs and statutory penalties. The trial court further found that Favalora, in violation of La. R.S. 9:2784, failed to make payment to Pioneer within fourteen days of receiving payments from the building owner, entitling Pioneer to a penalty therefor, along with attorney’s fees and costs. The trial court rendered judgment against Favalora and in favor of Pioneer as follows:

1. Payment of the amount still due of $4,340.00.
2. Payment of a penalty pursuant to La. R.S. 9:4814 of $500 per $1,000 that were knowingly misapplied, for a total of $12,000.
3. Payment of a penalty pursuant to La. R.S. 9:2784 for failure to timely pay Pioneer, which is capped at 15% for a total of $3,000.00.
4. Payment of attorney’s fees of $29,201.50.
5. Payment of costs of $1,387.58.

Discussion

By this appeal, Favalora contends the trial court failed to properly consider evidence that shows that Pioneer acted in bad faith and is therefore not entitled to penalties. Favalora also contends that Pioneer failed to mitigate its damages by settling with the building owner for less than the total amount due. In support of this argument, Favalora points out that Pioneer removed the lien it placed on the subject property for less than the total amount due, or $19,905.14. Favalora contends that some portion of the debt was reserved solely for the reason of securing statutory penalties and attorney’s fees. In support of its bad faith argument, Favalora also relies on email correspondence between Robert Crane, a principal of Pioneer, and Elizabeth Riggs, the building owner, in which the two discuss the non-payment of the amount due from Favalora. Favalora contends that |sthe two were working together in bad faith to ensure that Favalora would not have sufficient funds to pay Pioneer.

A review of evidence in the record fails to support appellant’s argument. The record shows that the parties in this case stipulated that on October 9, 2007, Favalo-ra submitted a pay request to the building owner which included the amounts due to Pioneer and was paid by cashier’s check dated October 30, 2007. The parties also stipulated that Favalora failed to apply any of the amounts received this date to settle the account and claim of Pioneer in the amount of $24,245.00. Copies of the pay request and the cashier’s check were submitted into evidence.

The record also indicates that in February of 2008, Robert Crane, the principal of Pioneer, began corresponding by email with Laurence Favalora regarding the non-payment of his account. On June 5, 2008, Crane received an email from Fava-lora indicating that “the client would not fund any payments for which he [Favalora] had already been paid,” but that Favalora was attempting to pay Pioneer from funds received from another job. No payment was made, but Crane clearly stated on numerous occasions his intentions to seek [1096]*1096statutory penalties and attorney’s fees as a result of Favalora’s failure to pay his account.

Subsequently, Pioneer filed a Labor and Materials Lien on the subject property. The parties stipulated that on November 8, 2008, Pioneer agreed to release the lien on the property, in consideration of payment by the property owners of the sum of $19,905.00. In the release, Pioneer reserved all rights against Favalora.

The record in this case contains no factual or legal support for appellant’s argument that Pioneer failed to mitigate its damages by settling with the building owners for less than the amount owed to Pioneer. Further, the record is completely | (¡devoid of any evidence that Pioneer was in bad faith in corresponding with Elizabeth Riggs regarding the non-payment by Favalora and Pioneer’s claim of entitlement to statutory penalties as a result thereof. Rather, the record clearly supports the trial court’s factual determination that Favalora misapplied funds received from the building owner in October of 2007 by failing to pay the amounts due to Pioneer which were included in those funds. The correspondence between Crane and Riggs did not occur until May of 2008, several months after the misapplication of funds had occurred.

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Bluebook (online)
90 So. 3d 1092, 11 La.App. 5 Cir. 722, 2012 WL 833315, 2012 La. App. LEXIS 313, Counsel Stack Legal Research, https://law.counselstack.com/opinion/south-texas-pioneer-millwork-v-favalora-constructors-inc-lactapp-2012.