98-134 La.App. 5 Cir. 5/27/98, Brackley & Voelkel Const., Inc. v. 3421 Causeway, Ltd.

• Decision Date: 27 May 1998
• Citation: 98-134 La.App. 5 Cir. 5/27/98, Brackley & Voelkel Const., Inc. v. 3421 Causeway, Ltd., 712 So.2d 716 (La. App. 1998)
• Parties: 98-134 La.App. 5 Cir
• Court: Court of Appeal of Louisiana

Page 716

712 So.2d 716

98-134 La.App. 5 Cir. 5/27/98

BRACKLEY & VOELKEL CONSTRUCTION, INC. d/b/a Brackley &amp Yarnick Construction, Inc. v. 3421 CAUSEWAY, LTD., A Louisiana Limited Partnership, James M. Gibbs, II and Harry P. Gamble, IV.

No. 98-CA-134.

Court of Appeal of Louisiana Fifth Circuit.

May 27, 1998.

Stephen R. Rue, Stephen R. Rue & Associates, Kenner, for Plaintiff/Appellant.

George L. Gibbs, Leefe, Gibbs & Koehler, Metairie, for Defendants/Appellees.

Before GAUDIN, WICKER and CANNELLA, JJ.

[98-134 La.App. 5 Cir. 1] WICKER, Judge.

Plaintiff appeals judgment in its favor in this suit for breach of contract and for enforcement of a contractor's lien, arguing the trial court erred in failing to find liability against the general partners of 3421 Causeway, Ltd., a limited liability partnership ("Causeway"). We affirm in part, reverse in part and render.

The lawsuit arises out of a claim for breach of contract by Brackley & Voelkel, Inc. d/b/a Brackley & Yarnick Construction, Inc. ("B & V") alleging that Causeway and its general partners, James M. Gibbs II and Harry P. Gamble IV, contracted with B & V to perform renovations and construction on the partnership's building at 3421 North Causeway Boulevard in Metairie, that the contract prices totaled $320,665.00, that defendants paid only a portion of the amounts due, and that defendants are liable to plaintiff for the remaining sum of $160,770.00 plus interest and attorney's fees.

Subsequent to filing of the suit, Causeway filed for Chapter 11 bankruptcy and the bankruptcy court issued an order accepting a plan of reorganization drafted by the major creditors. After receiving partial payment of its claim from the bankruptcy court, however, plaintiff continued to pursue its claims against both the partnership and the general partners. The partnership has not raised the Chapter 11 proceeding as a bar or defense to the claims made in this suit.

[98-134 La.App. 5 Cir. 2] Gibbs and Gamble filed a motion for summary judgment, contending that plaintiff's claims against them had been settled and compromised by plaintiff's acceptance of a promissory note for $176,354.00 which specifically relieved the partners of personal liability. Summary judgment was denied.

Following trial on the merits the district court rendered judgment in favor of plaintiff and against defendant Causeway, awarding plaintiff $66,912.55 plus legal interest from date of judicial demand, contractual interest at the rate of one-and-one-half percent per month, and costs. The judgment dismissed plaintiff's claims against Gibbs and Gamble with prejudice. As noted above, plaintiff has appealed.

FACTS

The chief witness for plaintiff was Patrick Brackley, president and sole stockholder of Brackley & Voelkel, Inc. He testified that B & V entered into two contracts with Causeway, one for the "Louisiana Federal project" and one for the "first floor lobby" project, both regarding renovations to be done to the building at 3421 N. Causeway Boulevard. The documents entered into evidence as proof of plaintiff's claims consisted variously of contracts, change orders, correspondence, invoices, copies of checks, etc. Brackley stated the total amount unpaid under the contracts was $160,770.00. He acknowledged that B & V had been notified that Causeway had filed for Chapter 11 Reorganization in bankruptcy court and he identified B & V's proof of claim in the amount of $160,770.00 filed in the bankruptcy proceeding. He acknowledged that B & V received $20,096.95 from the bankruptcy court as well as several payments of $9,917.30 after the filing of the petition in this case.

Brackley testified that several times Gibbs and Gamble presented him with written proposals to settle the debt with B & V, but he never agreed to any of the compromises. He also acknowledged that the documents his attorney submitted in evidence included a photocopy of a promissory note in the amount of $176,354.00 from Causeway, which contained a clause releasing the general partners from liability. He stated, however, that [98-134 La.App. 5 Cir. 3] he never signed the promissory note nor did he have the original of it. Further, he never signed any other document Causeway or the partners sent him to attempt to settle the claim.

On cross-examination Brackley acknowledged there were many change orders on the project, which he stated were mostly given to him verbally by Carlos Zervigon, whom he described as the project manager for Causeway. He admitted the change orders were not signed by anyone on behalf of Causeway. He stated, however, that there was never any contest or issue made over the changes. Questioned regarding the promissory note, he stated he did not have the original of the note; as far as he knew, the copy placed in evidence was a copy sent to his attorney by counsel for defendants. He reiterated that he never agreed to any of the attempts by Causeway (via Gibbs and Gamble) to settle B & V's claim for a reduced amount.

Plaintiff next called James Gibbs to testify. Gibbs stated he is a general partner of 3421 Causeway, Ltd. and identified Carlos Zervigon as a limited partner. He stated, however, that Zervigon had no authority to sign contracts. He acknowledged he had no recollection of ever objecting to any of the change orders, either orally or in writing. He admitted that all work done by plaintiff at the building was for the financial benefit of the partnership. He also admitted he was aware of the liens B & V filed against the property, but neither he nor the partnership took any action to have them removed. He admitted he was aware of the work that was done while it being performed and that he told Brackley he would be paid for the work that was completed.

Gibbs stated that the original of the promissory note was given to Brackley, together with a check for $70,500, following a meeting between Gibbs, Gamble and Brackley. Gibbs said they told Brackley that the promissory note would be paid out of the partnership's cash flow. Gibbs acknowledged, however, they never obtained Brackley's signature on any documents setting forth such an agreement. Gibbs said he believed at the time that they had an understanding as to settlement of the remainder of the debt.

[98-134 La.App. 5 Cir. 4] Plaintiff next called Harry Gamble to the stand. Gamble testified he is a general partner of 3421 Causeway, Ltd. He admitted he never made any written or oral objection to the work done at the location or to the invoices. He said that Jim Gibbs was more involved in management of the project than he was. He didn't feel they had any contract with Brackley so he didn't feel there was any modification necessary. He stated that Zervigon had executed contracts without his knowledge. He testified that Zervigon is a limited partner of Causeway, as well as an employee of Investprop, but he never had any authority to execute documents on behalf of Causeway.

Gamble testified that at the end of the project there were a number of people who did not get paid, including the architect, another contractor who worked on other parts of the building, and various other subcontractors and contractors who performed services to the partnership. They executed promissory notes to all these creditors, including with each note a large lump sum of cash. Those parties were paid on the notes until Causeway filed for bankruptcy. All the notes included waivers of personal liability as to Gamble and Gibbs.

The defense presented no witnesses.

After taking the matter under submission the trial court rendered judgment finding the partnership liable to plaintiff in the sum of $66,912.55, but dismissing plaintiff's claims against Gibbs and Gamble individually. The court did not issue reasons for judgment.

On appeal, plaintiff's only assignment of error is that the trial court erred...