EDWIN A. LOMBARD, Judge.
Plaintiff, Fleet Intermodal Services, L.L.C., appeals to this Court a judgment
The St. Bernard Port, Harbor and Terminal District (hereafter known as "the Port") is a public corporation and political subdivision of the State of Louisiana having "complete jurisdiction to regulate all domestic, coastwise, and intercoastal commerce and traffic within the territorial limits of St. Bernard Parish."
On October 4, 2005, the Board of Commissioners of the Port met and discussed the numerous issues and problems affecting the Port as a result of Hurricane Katrina. The Board discussed the rebuilding of its facilities, and how the approval of the Federal Emergency Management Agency (FEMA) would be required for all repair contracts and other Hurricane Katrina-related restoration projects for the foreseeable future. Shortly thereafter, representatives for the Port and Fleet Intermodal met to negotiate a contract in which Fleet Intermodal would provide 30 RV-class temporary housing units, also known as "trailers." An initial written proposal was created in which the Port would pay Fleet Intermodal $34,000.00 per unit for each trailer, with delivery and setup of each trailer included in the cost. The proposal also included an additional $330.00 per trailer unit for the cost and setup of access steps and railings. Thus, the resulting proposal value for the trailer unit was $34,330.00 per unit, with a total proposed contract value of $1,020,000.00. This written proposal also stated that 50% of the payment was a "deposit" that was "[d]ue at Contract Signing or first delivery," with the "[b]alance Due after Final Unit is Setup."
On October 7, 2005, a contract was executed by Fleet Intermodal and the Port for the purchase of the trailer units. The contract was signed by Darren Angelo, as owner of Fleet Intermodal, and by Robert J. Scafidel, Ed.D., the Port's Executive Director, and was properly witnessed by authentic act. The contract differed from the proposal in that only 28 trailer units were purchased. As a result, the contract stated a final price of $961,240.00 for 28 units at $34,000.00 per unit and $330.00 per unit for stairs and railings. The contract, drafted by the Port, stated that ". . . the proposal is made a part of hereof and hereby becomes a part of this contract." A project worksheet form completed by the Port, dated October 4, 2005, was sent to FEMA, requesting the $961,240.00 for 28 "portable temporary housing units."
Following execution of the contract, Fleet Intermodal delivered and set up the trailer units and stairs in late October 2005. At the time of final set-up, no payment had yet been made to Fleet Intermodal.
After sending letters to the Port through counsel requesting payment for alleged outstanding interest payments owed, on August 28, 2008, Fleet Intermodal filed this lawsuit, a "Petition on Open Account," in the 34th Judicial District Court. After ample pre-trial discovery, including the taking of depositions, a bench trial on the merits was held in this matter on March 29, 2010. Both parties submitted post-trial memoranda following the day-long trial. The trial court, in a judgment dated May 18, 2010, ruled in favor of the defendant-appellee, the St. Bernard Port, Harbor and Terminal District, and denied Fleet Intermodal's claims for interest owed on the contract as well as attorney's fees and costs. The trial court issued written reasons for judgment in favor of the Port. Fleet Intermodal now timely appeals the judgment of the trial court.
Fleet Intermodal argues that the trial court erred in holding the Port not liable to it for interest owed under its invoices sent following delivery and setup of the trailer units. Specifically, Fleet Intermodal argues that the Port accepted the terms of interest by submitting the interest request to FEMA along with the contract price, by marking the invoice "Approved RJS", and by failing to object to the accumulating interest. Plaintiff also argues that interest automatically began to accrue when the Port failed to tender payment at the time the trailer units were delivered. Appellant further argues that the trial court erred in not awarding it attorney's fees.
The burden of proof in an action for breach of contract is on the party claiming rights under the contract. Rebouche v. Harvey, 2000-2327, p. 3 (La.App. 4 Cir. 12/19/01), 805 So.2d 332, 334, citing Vignette Publications, Inc. v. Harborview Enterprises, Inc., 2000-1711, p. 3 (La.App. 4 Cir. 9/12/01), 799 So.2d 531, 534. The existence of the contract and its terms must be proved by a preponderance of the evidence. Id.
In interpreting contracts, we are guided by the general rules contained in La. Civ.Code arts. 2045-2057. French Quarter Realty v. Gambel, 2005-0933, pp. 6-7 (La.App. 4 Cir. 12/28/05), 921 So.2d 1025, 1029. La. Civ.Code art. 2045 states that the interpretation of a contract is the determination of the common intent of
The issue of whether or not the language of a contract is ambiguous is an issue of law subject to the de novo standard of review on appeal. French Quarter Realty, 05-0933 at p. 3, 921 So.2d at 1027. Contracts, subject to interpretation from the instrument's four corners without the necessity of extrinsic evidence, are to be interpreted as a matter of law, and the use of extrinsic evidence is proper only where a contract is ambiguous after examination of the four corners of the agreement. Richard A. Tonry, P.L.C. ex rel. Tonry v. Constitution State Service, L.L.C., 2002-0536, p. 3 (La.App. 4 Cir. 7/17/02), 822 So.2d 879, 881. However, "[i]n the interpretation of contracts, the trial court's interpretation of the contract is a finding of fact subject to the manifest error rule." French Quarter Realty, 05-0933 at p. 3, 921 So.2d at 1027-28, quoting Grabert v. Greco, 95-1781 (La.App. 4 Cir. 2/29/96), 670 So.2d 571, 573. This appellate standard of appellate review with regard to contractual interpretations has been recently clarified by this Court as follows:
New Orleans Jazz and Heritage Foundation, Inc. v. Kirksey, 2009-1433, p. 9 (La. App. 4 Cir. 5/26/10), 40 So.3d 394, 401, writ denied, 2010-1475 (La. 10/1/10), 45 So.3d 1100, quoting Clinkscales v. Columns Rehabilitation and Retirement Center, 2008-1312, p. 3 (La.App. 3 Cir. 4/1/09), 6 So.3d 1033, 1035-36.
As stated above, when interpreting contracts under Louisiana law, it is first necessary to review the four corners of a contract as a matter of law, and determine if the trial court was legally correct or incorrect. In the matter sub judice, the contract at issue was executed on October 7, 2005 between Fleet Intermodal, acting through Darren Angelo, its owner, and the Port, acting through Dr. Robert J. Scafidel. The contract recited a price of $961,240.00 and sufficiently described the 28 trailer units contracted for. The Port drafted the contract and incorporated the terms of the written proposal prepared by Fleet Intermodal. The proposal called for half-payment due at contract signing or first delivery, and a second half payment due after the final unit was set up. The trial court, in its reasons for judgment, stated that neither copy of the written proposal submitted by the parties contains any language regarding interest, nor did the final contract of October 7, 2005. Upon our de novo review of the contract and incorporated proposal, we
First, we must determine whether the payment of interest stated in the November 4, 2005 invoice was discussed between the parties in any manner prior to its imposition by Fleet Intermodal. During his trial testimony, Darren Angelo, the owner of Fleet Intermodal, was asked by defendant's counsel of the origins of the invoice calling for 24% APR interest:
There is ample additional trial testimony showing that the 24% interest was not agreed upon or even discussed by the parties. While it is clear that the parties did not agree upon imposing the 24% interest unilaterally placed by Fleet Intermodal into its November 4, 2005 invoice, further analysis must be made under Louisiana contract law:
Bains v. Young Men's Christian Ass'n of Greater New Orleans, 2006-1423, p. 5 (La. App. 4 Cir. 10/3/07), 969 So.2d 646, 649, writ denied, 2007-2146 (La.1/7/08), 973 So.2d 727. Therefore, this Court must further inquire as to whether the Port consented to Fleet Intermodal's imposition of interest on the contract for the sale and delivery of the trailer units.
Fleet Intermodal first argues that the Port accepted the terms of interest set in its invoice dated November 4, 2005 by submitting the contract invoice and subsequent interest invoices to FEMA. In support of this argument, appellant insists that trial testimony from Dr. Scafidel, the Port's Executive Director, in which he testifies to submitting the interest invoices to FEMA, renders him liable for these submitted interest payments. Specifically, appellant argues that the very act of submitting the interest payment request to FEMA shows that the Port viewed the interest payments as valid. The trial court did not accept this assertion, and neither does this Court. The trial court noted: "That was a reasonable thing to do. If he wanted interest, submit to FEMA, see if they felt it was appropriate. It's not fraudulent. That's the way things happened down here after the storm." According to testimony from Dr. Scafidel, the Port never agreed to pay the interest
Next, Fleet Intermodal argues that the Port accepted the terms of interest by stamping "Approved RJS" on the invoice. A party who demands performance of an obligation must prove the existence of the obligation. La. Civ.Code art. 1831. A contract is formed by the consent of the parties established through offer and acceptance. La. Civ.Code art. 1927. Unless the law prescribes a certain formality for the intended contract, offer and acceptance may be made orally, in writing, or by action or inaction that under the circumstances is clearly indicative of consent. Id. "In cases where the law does not expressly create a legal presumption of consent from certain facts, it is left to the discretion of the judge to determine if consent is to be implied from the particular circumstances of the case." Illinois Central Gulf Railway Co. v. International Harvester Co., 368 So.2d 1009, 1012 (La. 1979). "[E]xcept in those instances in which the statutory law creates a legal presumption, the mere silence of an offeree should not, in principle, be considered as involving acceptance on his part." Id. "His consent can result from silence, however, when combined with other facts or acts so as to imply or indicate his consent unequivocally." Id.
At some time before the Port issued payment for the trailer unit contract price on April 5, 2006, an employee of the Port marked the November 4, 2005 invoice "Approved RJS." Fleet Intermodal argues that this act resulted in consent to the 24% interest rate written on the invoice. At trial, Dr. Scafidel acknowledged the existence of the "Approved RJS" stamp on this invoice:
However, Dr. Scafidel denied that it was an approval to pay interest. He stated that it was his understanding that it was an approval to pay the agreed-upon contract price listed on the invoice: $961,240.00:
Despite this testimony, Fleet Intermodal argues that its invoice with the 24% interest constituted an offer, and that the Port's stamp constituted an acceptance. Appellant cites New Orleans Medical Sales and
(Emphasis added).
Upon our review of the trial testimony, we agree with the trial court in this matter that "under the circumstances, there is no clear indication of the Port's consent to be bound to pay interest." Dr. Scafidel's testimony clearly showed that the stamp was merely an authorization to pay the invoice amount; the contracted-for $961,240.00. There were no interest calculations made at any time by the Port. The testimony of the Port's employees indicates that no one from the Port agreed in any way to accept Fleet Intermodal's unilaterally imposed terms of interest. This is also evidenced by the fact that none of the interest-only invoices sent to the Port between January and April 2006 were approved or acted upon. And as stated above, the Port's mere submission of the interest invoices to FEMA cannot be considered to be an acquiescence to pay the 24% interest. It cannot be said that the Port agreed to the terms of interest. Nor it can it be said that, given the testimony of the Port's employees, that the Port approved the interest by silence. Therefore, we find no error in the trial court's determination that there was no consent to payment of interest.
Fleet Intermodal next argues that the trial court erred in not finding that it is owed interest automatically under La. Civ. Code arts. 1989, 2550, and 2553
More importantly, the trial testimony shows that appellant was certainly aware of the requirement that FEMA would be reimbursing the Port, and that payment could not be made until FEMA approved the project and provided the money. At trial, Dr. Scafidel testified as such:
David McClain, the Port's Director of Operations at the time, testified that he first received an interest-only invoice from Fleet Intermodal in January 2006, and that he had numerous conversations with Mr. Angelo with the mutual understanding that Mr. Angelo would be paid only after FEMA approved the contract and reimbursed the Port:
In this matter, the Port, as obligor, was not at any point placed in default. As the trial court correctly noted, "[t]he Port failed to pay on the schedule laid out in the contract and proposal, yet nowhere in either document did the parties define the consequences of default." In fact, we find that, based on the trial testimony, all parties were aware that payment would not be made to Fleet Intermodal until FEMA approved the contract. La. Civ. Code art. 1927.
Trial testimony further indicates that Mr. Angelo had attended meetings where it was discussed that payment would be forthcoming from FEMA, as was the case in countless other personal and commercial payments following Hurricane Katrina. Mr. Angelo had testified that he was aware that some payment or approval process was coming from FEMA. Appellant was also aware of the project worksheet which stated the contract price of $961,240.00 and was approved by FEMA on October 4, 2005. As soon as this payment was made by FEMA, appellant received payment in full on the contract price. Therefore, this Court finds that no damages are owed to appellant for "default" under La. Civ.Code art. 1989.
For these reasons, and because the October 7, 2005 contract between the parties did not stipulate any penalties or consequences of non-payment, we find no valid
Appellant's final argument on appeal is that it is owed attorney's fees for having to pursue its claim on an alleged open account under La.Rev.Stat. 9:2781. Appellant correctly points out that in Frey Plumbing Company, Inc. v. Foster, 2007-1091, p. 5 (La.2/26/08), 996 So.2d 969, 972, the Louisiana Supreme Court rejected prior multi-factor tests in determining what constitutes an "open account" for the purpose of obtaining attorney's fees under the statute, and held that an "open account" is clearly defined by the statute itself.
Nevertheless, upon our plain reading of La.Rev.Stat. 9:2781, we cannot conclude that appellant is owed attorney's fees for bringing suit on an open account. For the reasons already provided above in this opinion, the contract between Fleet Intermodal and the Port was fulfilled as a result of the Port's payment of $961,240.00 on April 5, 2006, immediately after receiving funds from FEMA. It is undisputed that the Port paid the full contractual amount well within thirty days, and so attorney's fees are not owed on the contract amount under La.Rev.Stat. 9:2781. Since this Court also concludes that there was no consent to terms of interest unilaterally imposed by Fleet Intermodal, there are no attorney's fees owed to appellant for pursuing its interest claim, either. See Newman v. George, 2007-0620, pp. 7-8 (La. App. 4 Cir. 9/26/07), 968 So.2d 220, 225-226. In essence, because plaintiff's primary claim for interest fails, its underlying claim for attorney's fees under La. Rev. Stat. 9:2781 also fails.
Upon de novo review of the October 7, 2005 contract between Fleet Intermodal and the St. Bernard Port, Harbor and Terminal District, we find that the contract itself and the proposal therein made no mention of interest to be owed in the event of default or non-payment. Our review of the trial testimony reveals that the Port did not consent to any terms of interest. Nor do we find that the Port's submission
Although the contract proposal called for payment upon final set-up of the units, it was well established at trial that all parties knew payment would not be made until FEMA approved the project and issued payment on the contract amount. Once payment was made, the Port immediately issued payment on the contractual amount of $961,240.00 to Fleet Intermodal. Therefore, no legal interest is owed to appellant under La. Civ.Code arts. 1989, 2550, and 2553. Because plaintiff's interest claim fails, so does its claim for attorney's fees under La. Rev. Stat. 9:2781.
We find no error in the trial court's judgment denying Fleet Intermodal's claim for conventional interest, attorney's fees, and costs. The judgment of the trial court is affirmed.
La. Civ.Code art. 2553 provides:
