Fluid Disposal Specialties, Inc. v. UniFirst Corporation

Judgment rendered September 25, 2019.
Application for rehearing may be filed
within the delay allowed by Art. 2166,
La. C.C.P.

No. 53,014-CA

COURT OF APPEAL
SECOND CIRCUIT
STATE OF LOUISIANA

*****

FLUID DISPOSAL Plaintiff-Appellee
SPECIALTIES, INC.

versus

UNIFIRST CORPORATION Defendant-Appellant

*****

Appealed from the
Second Judicial District Court for the
Parish of Claiborne, Louisiana
Trial Court No. 40393

Honorable Jimmy Cecil Teat, Judge

*****

LAW OFFICE OF DAVID TURANSKY, LLC Counsel for Appellant
By: David C. Turansky

COLVIN, SMITH & MCKAY Counsel for Appellee
By: James Henry Colvin, Jr.
Daniel N. Bays, Jr.

*****

Before WILLIAMS, STONE, and THOMPSON, JJ.

STONE, J.

INTRODUCTION

This dispute arises out of a supposed contract between UniFirst

Corporation (“UniFirst”) and Fluid Disposal Specialties (“FDS”), which

FDS shop foreman Kenny Bryce (“Bryce”) signed in his capacity as agent of

FDS. UniFirst pursues this appeal in its capacity as plaintiff-in-reconvention.

The appellees are FDS and Bryce, defendants-in-reconvention.

This case previously came to us as an appeal of the trial court’s

granting of a preliminary injunction against enforcement of the contract via

arbitration. We affirmed the preliminary injunction on the ground that Bryce

lacked authority. Subsequently, UniFirst filed a reconventional demand in

the trial court, asserting various causes of action, including open account and

unjust enrichment. FDS filed an exception of no cause of action and a

motion for summary judgment (“MSJ”) asserting prescription of the open

account action. The trial court granted the MSJ and dismissed the exception

of no cause of action as moot, and dismissed the entire case with prejudice.

UniFirst filed this appeal. For the reasons stated herein, we reverse the trial

court judgment and deny both the exception of no cause of action and the

MSJ.

FACTS AND PROCEDURAL HISTORY

UniFirst, the plaintiff, is in the business of leasing work uniforms to

employers. The defendants are FDS and Bryce, a shop foreman for FDS. On

April 3, 2014, Bryce, supposedly without authority to do so, signed a

contract purporting to bind FDS to a uniform supply contract with UniFirst.

A short time later, Bryce entered a second uniform supply contract with

UniFirst, again purporting to act as agent of FDS. Thereafter, UniFirst

delivered the uniforms; FDS accepted the uniforms and paid the rental

charges for approximately eight to ten months. However, FDS then stopped

making payments, and apparently returned the uniforms. FDS made the last

payment via check dated February 28, 2015. This check allegedly did not

clear the bank until March 30, 2015.

UniFirst filed arbitration proceedings against FDS pursuant to the

contract. On March 24, 2015, FDS obtained a preliminary injunction from

the trial court barring further arbitration proceedings. We affirmed that

preliminary injunction, reasoning that Bryce had no authority to bind FDS to

the contract, and thus, the arbitration provision thereof was unenforceable

against FDS. Fluid Disposal Specialties, Inc. v. UniFirst Corp., 50,356 (La.

App 2 Cir. 1/13/16), 186 So. 3d 210.

On March 6, 2018, UniFirst filed a reconventional demand in the trial

court seeking recovery on multiple grounds, including open account and

unjust enrichment. FDS filed an exception of no cause of action, and a MSJ

asserting that the open account action was prescribed. The trial court granted

the MSJ, and issued a final judgment dismissing any and all causes of action

asserted in the reconventional demand. The trial court also dismissed the

exception of no cause of action as moot.

UniFirst filed the instant appeal, urging the following six assignments

of error: (1) the trial court erred in applying the one-year prescriptive period

for delictual actions to an action which has nothing to do with any tort; (2)

the trial court erred in failing to find that UniFirst’s filing for arbitration

interrupted prescription, which interruption continued until UniFirst filed its

reconventional demand; (3) the trial court erred in failing to realize that its

own judgment rendered in March, 2015, was a preliminary injunction, not a
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permanent injunction and that arbitration proceedings were enjoined,

“pending further orders of this court to the contrary,” thus continuing to

interrupt prescription; (4) the trial court erred in failing to recognize that the

prescriptive period on an action on open account is three years from the date

of the last payment on the account; (5) the trial court failed to apply the 10-

year prescriptive period for a quasi-contractual action; and (6) the trial court

failed to overrule the exception of no cause of action.

DISCUSSION

In Robert L. Manard III PLC v. Falcon Law Firm PLC, 2012-0147

(La. App. 4 Cir. 11/16/12), 119 So. 3d 1, 7, on reh’g (La. App. 4 Cir.

4/10/13), the court stated:

Louisiana jurisprudence is well settled that the character of
an action as disclosed in the pleadings determines the
applicable prescriptive period. SS v. State ex rel. Dept. of
Social Services, 02–0831, p. 7 (La.12/4/02), 831 So.2d
926, 931; Starns v. Emmons, 538 So.2d 275, 277
(La.1989); Qayyum v. Morehouse General
Hospital, 38,530 (La.App. 2 Cir. 5/12/04), 874 So.2d 371,
374.

Thus, this court will address the exception of no cause of action prior to

addressing the issue of prescription.

However, before addressing the exception of no cause of action, we

must consider the effect of our prior ruling affirming the preliminary

injunction. Regarding an appellate court, the “law of the case doctrine” is

merely a discretionary policy. Day v. Campbell-Grosjean Roofing & Sheet

Metal Corp., 260 La. 325, 256 So. 2d 105 (La. 1971). Thereunder, “an

appellate court ordinarily will not, on subsequent appeal, reconsider its own

rulings of law [emphasis supplied] on a subsequent appeal in in the same

case.” Hanson v. River Cities Disposal, 51,700 (La. App. 2 Cir. 11/5/17),

3

245 So. 3d 213; Bank One, National Ass’n v. Velten, 2004-2001 (La. App. 4

Cir. 8/17/05), 917 So. 2d 454, 458, writ denied 2006-0040 (La. 4/28/06),

927 So.2d 283, cert. denied 549 U.S. 826, 127 S.Ct. 349 (2006). The

Supreme Court, in Babineaux v. Pernie-Bailey Drilling Co., 261 La. 1080,

262 So. 2d 328, 332 (1972), stated:

The law of the case rule cannot supplant the Code of Civil
Procedure…[and]…only applies when the same issue is
presented to the same court that has previously decided
that issue in the same case which has not become res
judicata (Emphasis in original; internal citations and
quotation marks omitted).

In Bank One, supra, the Fourth Circuit rejected the argument that

issuance of a preliminary injunction requires application of the law of the

case doctrine. In so doing, the court reasoned as follows:

A writ of preliminary injunction is essentially an
interlocutory order issued in a summary proceeding
incidental to the main demand for permanent injunctive
relief. It is designed to and serves the purpose of
preventing irreparable harm by preserving the status quo
between the parties pending a determination on the merits
of the controversy. The principal demand, as opposed to
the injunction, is determined on its merits only after a full
trial under ordinary process, even though the hearing on
the summary proceedings to obtain the injunction may
touch upon or decide issues regarding the merits. (Internal
citations omitted).

Bank One at 458.

For the reasons articulated in Bank One, supra, we decline to apply

the law of the case doctrine.

Exception of no cause of action

In Jackson v. City of New Orleans, 12-2742 (La. 1/28/14), 144 So. 3d

876, 895, the Louisiana Supreme Court explained:

The peremptory exception of no cause of action is
designed to test the legal sufficiency of a petition by
determining whether a party is afforded a remedy in law
4

based on the facts alleged in the pleading. All well-
pleaded allegations of fact are accepted as true and correct,
and all doubts are resolved in favor of sufficiency of the
petition so as to afford litigants their day in court. The
burden of demonstrating that a petition fails to state a
cause of action is upon the mover. The sufficiency of a
petition subject to an exception of no cause of action is a
question of law, and a de novo standard is applied to the
review of legal questions; this court renders a judgment
based on the record without deference to the legal
conclusions of the lower courts.

Louisiana has a “fact pleading” system, as opposed to the federal “notice

pleading” system. La. C.C.P. art. 854, cmt. (a). To state a cause of action in

a Louisiana court, a petition must allege the material facts constituting the

cause of action. Id.

Actual authority

The trial court granted a preliminary injunction against enforcement

of the arbitration clause in the purported contract. In affirming the

preliminary injunction, this court found that Bryce lacked actual or apparent

authority to bind FDS to the contract.

Nonetheless, UniFirst makes allegations which, if proven, would

establish a cause of action for enforcing the contract based on actual

authority. Specifically, UniFirst alleges:

Prior to signing the agreement…Bryce left his office and
UniFirst’s representative therein and went to another
office. When Bryce returned to his office, he indicated that
he had been authorized to sign the Master Agreement on
FLUID DISPOSAL’S behalf.

It bears repeating that the law of the case doctrine does not preclude UniFirst

from pursuing enforcement of the contract on the ground of actual authority.

La. C.C. art. 3019; ratification

UniFirst alleges that, after Bryce signed the supposed contracts with

UniFirst, FDS took delivery of the uniforms and its employees used them for
5

a time, and that FDS paid UniFirst according to the purported contract.

UniFirst has also alleged that this court determined that Bryce lacked the

authority to bind FDS to these contracts.

Based on the foregoing allegations, UniFirst has stated a cause of

action against FDS for enforcement of the contract via tacit ratification, and

an alternative cause of action against Bryce.

La. C.C. art. 3019 states: “A mandatary who exceeds his authority is

personally bound to the third person with whom he contracts, unless that

person knew at the time the contract was made that the mandatary had

exceeded his authority or unless the principal ratifies the contract.”

(Emphasis supplied).

La. C.C. art. 1843 provides for tacit ratification of contracts as

follows:

Ratification is a declaration whereby a person gives his
consent to an obligation incurred on his behalf by another
without authority.
…

Tacit ratification results when a person, with knowledge of
an obligation incurred on his behalf by another, accepts
the benefit of that obligation.

Ratification is an affirmative defense which must be specifically pled.1 La.

C.C.P. art. 1005; Little v. Little, 391 So. 2d 1213 (La. App. 1 Cir. 1980).

As previously stated, UniFirst’s allegations in its reconventional

demand, if proven, would establish that FDS ratified the contract.

Specifically, UniFirst alleges that it delivered the uniforms pursuant to the

agreement, FDS accepted the uniforms, and that, for a time, FDS made

1
UniFirst did not file an answer prior to the granting of the preliminary injunction
enjoining arbitration.
6

payments for the uniforms pursuant to the agreement. This suffices to state a

contractual cause of action based on ratification.2

Additionally, we point out that this court did not address the issue of

ratification in affirming the preliminary injunction; therefore, the law of the

case doctrine – even if we applied it – would not bar UniFirst from pursuing

ratification.

Open account

In relevant part, La. R.S. 9:2781, known as the “open account statute,”

states:

D. For the purposes of this Section …“open account”
includes any account for which a part or all of the
balance is past due, whether or not the account reflects
one or more transactions and whether or not at the time
of contracting the parties expected future transactions.
(Emphasis added).

As with all contracts, “[a]n open account necessarily involves an underlying

agreement between the parties on which the debt is based.” Sork v. Sork,

2017-0300 (La. App. 1 Cir. 2/9/18), 242 So. 3d 640. Thus, an “open

account” is a type of contract.3 In Sandair Corp. v. Davis Indus., 470 So.2d

2
La. C.C. art. 3019 imposes on an agent who exceeds his authority liability to the
third party contractant; thus, if it is established that he lacked authority to bind FDS to the
contract with UniFirst, Bryce could be liable to UniFirst on the contract, unless it is
established that FDS ratified the contract (or that UniFirst knew he lacked authority at the
time the contract was made). Accordingly, Bryce and FDS could have adverse interests.
However, they are represented by the same attorney in this appeal – James Colvin, Jr.
(“Mr. Colvin”). In oral arguments, this court inquired about the potential conflict of
interest, and counsel stated that Bryce and FDS do not have adverse interests in this
matter. Based upon that assertion, it appears to the court that FDS and Bryce have
reached some type of indemnification agreement. We decline to speculate as to the
specific terms of this apparent agreement, and do not pass on its validity or whether it
alleviates the concerns under RPC Rule 1.7.
3
La. R.S. 9:2781(D), supra, was enacted in 2001. Acts 2001, No. 1075, Section 1.
As shown below, Shreveport Elec. Co. v. Oasis Pool Serv., Inc., 38,776 (La. App. 2 Cir.
9/29/04), 889 So. 2d 274, 279, writ denied, 2005-0340 (La. 4/1/05), 897 So. 2d 613, in
stating that an open account is not a contract, relies on jurisprudence which predates the
enactment of La. R.S. 9:2781(D):
A contract is significantly different from an open account. Louisiana
Civil Code Article 1906 defines contract as an agreement by two or
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279 (La. App. 5 Cir. 1985), a contract for rental of an air compressor for

which payments were overdue was considered an open account.

UniFirst’s allegations in the reconventional demand, if proven, are

sufficient to establish a contract between FDS and UniFirst for the rental and

laundering of the uniforms (see discussion of actual authority, ratification,

supra), and that there are overdue balances owed by FDS. Thus, the

allegations are sufficient to state a cause of action for an open account under

La. R.S. 9:2781.

Quasi-contracts

UniFirst asserts several claims that are quasi-contractual in nature: (1)

unjust enrichment; (2) quantum meruit; and (3) detrimental reliance.

Unjust enrichment/quantum meruit. La. C.C. art. 2298 articulates the

law of unjust enrichment as follows:

A person who has been enriched without cause at the
expense of another person is bound to compensate that
person. The term “without cause” is used in this context to
exclude cases in which the enrichment results from a valid
juridical act or the law. The remedy declared here is
subsidiary and shall not be available if the law provides
another remedy for the impoverishment or declares a
contrary rule.

Thus, there are five elements essential to an unjust enrichment claim:

(1) there must be an enrichment, (2) there must be an
impoverishment, (3) there must be a connection between
the enrichment and resulting impoverishment, (4) there
must be an absence of “justification” or “cause” for the

more parties whereby obligations are created, modified, or
extinguished. An open account is an account in which a line of
credit is running and is open to future modification because of
expectations of prospective business dealings. Services are
recurrently granted over a period of time. A contract, however, is an
agreement between two or more parties in which an offer is made by
one of the parties and acceptance is made by the other party, thereby
establishing a concurrence in understanding the terms. Tyler v.
Haynes, 99-1921 (La. App. 3d Cir.05/03/00), 760 So.2d 559.

8

enrichment and impoverishment, and (5) there must be no
other remedy at law available to plaintiff

Baker v. Maclay Properties Co., 94-1529 (La. 1/17/95), 648 So. 2d 888,

897. 4

UniFirst’s reconventional demand makes allegations which, if proven,

are sufficient to establish the first four requirements. UniFirst alleges its

costs in providing the uniforms, FDS’s employees’ use of the uniforms, and

this court’s (interlocutory) ruling that there was no enforceable contract

between FDS and UniFirst.

Understandably, UniFirst does not allege that it has “no other remedy

at law” available to it. However, this should not prevent UniFirst from

pursuing unjust enrichment at this point. The matter currently before the

court is merely an exception of no cause of action; thus, this court cannot

determine whether UniFirst actually has “no other remedy at law.” Instead,

this court can determine merely whether UniFirst has stated a cause of

action for an “other remedy at law,” i.e., enforcement of the contract.

Because UniFirst has, in fact, stated a cause of action for enforcing the

contract (via ratification or actual authority), the exception of no cause of

action regarding unjust enrichment is referred to the merits.

Detrimental reliance is a cause of action distinct from unjust

enrichment. La. C.C. art. 1967, in relevant part, states: “a party may be

obligated by a promise when he knew or should have known that the

promise would induce the other party to rely on it to his detriment and the

4
“Quantum meruit,” in this context, is merely a different name for unjust
enrichment. Whitbeck v. Kay, 2005-774 (La. App. 3 Cir. 2/1/06), 921 So. 2d 1178
(“[q]uantum meruit is an equitable remedy founded upon the principle that no one who
benefits from the labor or materials of another should be unjustly enriched at the other’s
expense. The doctrine operates in the absence of a specific contract…”)
9

other party was reasonable in so relying.” Thus there are three elements: (1)

promise by the defendant; (2) the defendant knew or should have known that

the plaintiff would rely on it to the plaintiff’s detriment; and (3) the plaintiff

reasonably relied on the promise to his or her detriment. Unlike unjust

enrichment, a promise by the defendant is an essential element of

detrimental reliance under La. C.C. art. 1967.

The allegations of the petition would appear to perhaps support a

cause of action for detrimental reliance against Bryce. The allegations

against Bryce are summarized as follows. Bryce executed an agreement with

UniFirst wherein he purported to act as FDS’s agent with authority to bind

FDS to the agreement. Bryce claimed he had authority to do so and even

negotiated terms in confecting the purported agreement. Bryce entered a

second agreement, again purporting to have authority as agent of FDS. In

reliance on these promises, which are evidenced by Bryce’s signatures on

the contracts, FDS made outlays of approximately $488,000 pursuant to the

supposed contract.

Motion for summary judgment

La. C.C.P. art. 966, in relevant part, provides:

A. (1) A party may move for a summary judgment for all
or part of the relief for which he has prayed…
…
(3) After an opportunity for adequate discovery, a
motion for summary judgment shall be granted if
the motion, memorandum, and supporting
documents show that there is no genuine issue as to
material fact and that the mover is entitled to
judgment as a matter of law.
(4) The only documents that may be filed in support of
or in opposition to the motion are pleadings,
memoranda, affidavits, depositions, answers to
interrogatories, certified medical records, written
stipulations, and admissions…
…
10

D. (1) The burden of proof rests with the
mover. Nevertheless, if the mover will not bear the
burden of proof at trial on the issue that is before the
court on the motion for summary judgment, the
mover’s burden on the motion does not require him
to negate all essential elements of the adverse
party’s claim, action, or defense, but rather to point
out to the court the absence of factual support for
one or more elements essential to the adverse
party’s claim, action, or defense. The burden is on
the adverse party to produce factual support
sufficient to establish the existence of a genuine
issue of material fact or that the mover is not
entitled to judgment as a matter of law.
(2) The court may consider only those documents filed
in support of or in opposition to the motion for
summary judgment and shall consider any
documents to which no objection is made. Any
objection to a document shall be raised in a timely
filed opposition or reply memorandum. The court
shall consider all objections prior to rendering
judgment. The court shall specifically state on the
record or in writing which documents, if any, it held
to be inadmissible or declined to consider.
E. A summary judgment may be rendered dispositive of a
particular issue, theory of recovery, cause of action, or
defense, in favor of one or more parties, even though
the granting of the summary judgment does not dispose
of the entire case as to that party or parties.
F. A summary judgment may be rendered or affirmed only
as to those issues set forth in the motion under
consideration by the court at that time.

Prescription

Breach of contract claims are subject to ten-year prescription under

La. C.C. art. 3499. Hotard’s Plumbing, Electrical Heating & Air, Inc. v.

Monarch Homes, LLC, 15-180 (La. App. 5 Cir. 3/16/16), 188 So. 3d 391.

Actions that sound in quasi-contract and subject to a 10-year

prescriptive period. Kilpatrick v. Kilpatrick, 27, 241 (La. App. 2 Cir.

8/23/95), 660 So. 2d 182, writ denied 644 So. 2d 444, 1995-2579 (La.

12/15/95). Thus, unjust enrichment actions are subject to the 10 year

prescriptive period of La. C.C. art. 3499. Trust for Melba Margaret

11

Schwegmann v. Schwegmann Family Trust, 09-968 (La. App. 5 Cir.

9/14/10), 51 So. 3d 737; Bazile v. Arnaud Coffee Co., 465 So.2d 111 (La.

App. 4 Cir. 1985), writ denied, 468 So. 2d 1212; Slocum v. Daigre, 424 So.

2d 1074 (La. App 3 Cir. 1982), writ denied, 429 So.2d 128; Acme

Refrigeration of Baton Rouge, Inc v. Caljoan, Inc., 346 So. 2d 743 (La. App.

1 Cir. 1977).

Assignment No. 1 – one-year prescription

One-year prescription does not apply. This is not a tort action.

Assignment Nos. 2 & 3 – interruption via arbitration filing;
continuation of that interruption resulting from preliminary injunction

UniFirst argues that its filing for arbitration – pursuant to the

arbitration provision of the contract – interrupted prescription. UniFirst

further argues that the trial court’s preliminary injunction against the

arbitration proceedings causes this interruption to continue indefinitely, i.e.,

until the injunction is dissolved or made permanent.

In rebuttal, FDS argues that UniFirst’s filing did not constitute a

“submission” within the meaning of La. C.C. art. 3099 because FDS and

UniFirst had no contract (covenant) to arbitrate. Therefore, FDS argues,

UniFirst’s filing for arbitration did not interrupt prescription, as that

interruption is based on “submission” to arbitration.

“A submission is a covenant by which persons who have a lawsuit or

difference with one another, name arbitrators to decide the matter and bind

themselves reciprocally to perform what shall be arbitrated.” La. C.C. art.

3099. (Emphasis in original). A “submission” to arbitration interrupts

prescription as provided in La. C.C. art. 3105:

B. Prescription is interrupted as to any matter submitted to

12

arbitration from the date of the submission and shall
continue until the submission and power given to the
arbitrators are put at an end by one of the causes in
Article 3132, unless suit has been filed, in which case
the provisions of Articles 3462 and 3463 shall apply.

La. C.C. art. 3132 provides for the termination of the submission and power

given to the arbitrators upon the occurrence of any of the following:

1. By the expiration of the time limited, either by the
submission or by law, though the award should not be
yet rendered.
2. By the death of one of the parties or arbitrators.
3. By the final award rendered by the arbitrators.
4. When the parties happen to compromise touching the
thing in dispute, or when this thing ceases to exist.

A submission is a covenant, i.e., a contract. Our decision of the prior

appeal in this matter merely affirmed the preliminary injunction, and

therefore, constituted only an interlocutory ruling. Thus, it does not preclude

the existence of an enforceable contract. Thus, the premise of FDS’

argument, i.e., that it has been conclusively established that there was no

contract, is erroneous. Only once the enforceability of the contract has been

determined with finality can it be determined whether or not the arbitration

filing interrupted prescription.

Assignment No. 4: Three-year prescription for open account action

La. C.C. art. 3494(4) provides a three-year prescriptive period for

open account actions. The trial judge granted the MSJ, holding that

UniFirst’s purported open account action is barred by prescription. We

pretermit this issue. Even if the last payment occurred more than three years

before UniFirst filed a reconventional demand, that does not necessarily

render the open account action prescribed. If it is determined that the

contract is enforceable via actual authority or ratification, then the arbitration

filing interrupted prescription continuously. In that eventuality, the open
13

account action would not be prescribed despite the passage of more than

three years between the last payment and the filing of suit.

SUMMARY AND CONCLUSION

In its reconventional demand, UniFirst has a stated the following

causes of action against FDS: (1) enforcement of contract via actual

authority; (2) enforcement of contract via ratification; (3) open account; or,

alternatively, (4) unjust enrichment. If UniFirst prevails on the merits

regarding actual authority or ratification, then the arbitration clause is

enforceable, and the arbitration filing (which was made before March 24,

2015), interrupted prescription.

UniFirst has also stated causes of action against Bryce for (4)

exceeding authority under La. C.C. art. 3019, and (5) detrimental reliance.

The trial court, in granting the MSJ based on prescription and

dismissing the case in its entirety, ignored all of the aforementioned causes

of action – except for open account. Because the reconventional demand was

filed within the 10-year prescriptive period applicable to these contractual

and quasi-contractual claims, this was error. Furthermore, if UniFirst

establishes actual authority/ratification on the merits, then the interruption of

prescription via arbitration filing interrupted the running of prescription as to

the open account claim as well. Therefore the MSJ regarding the open

account is denied.

DECREE

Based on the foregoing, we REVERSE the trial court judgment. The

exception of no cause of action and the motion for summary judgment are

DENIED. The defendants are cast with all costs of this appeal.

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This case is REMANDED for further proceedings consistent with this

opinion.

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