The Guide Company, LLC v. Madison Parish District d/b/a Madison Parish Hospital

Judgment rendered November 26, 2025.
Application for rehearing may be filed
within the delay allowed by Art. 2166,
La. C.C.P.

No. 56,469-CA

COURT OF APPEAL
SECOND CIRCUIT
STATE OF LOUISIANA

*****

THE GUIDE COMPANY, LLC Plaintiff-Appellee

versus

MADISON PARISH HOSPITAL Defendant-Appellant
SERVICE DISTRICT D/B/A
MADISON PARISH HOSPITAL

*****

Appealed from the
Sixth Judicial District Court for the
Parish of Madison, Louisiana
Trial Court No. 202,348

Honorable James Hugh Boddie, Jr., (Ad Hoc Judge)

*****

HUDSON, POTTS, & BERNSTEIN Counsel for Appellant
By: Gordon L. James

COTTON, BOLTON, HOYCHICK, Counsel for Appellee
& DOUGHTY, LLP
By: David P. Doughty

*****

Before STONE, ROBINSON, and HUNTER, JJ.

STONE, J.

This civil appeal arises from the Sixth Judicial District Court, the

Honorable James Boddie, Jr., presiding. The Guide Company, LLC

(“Guide”), appellee, sued the appellant, Madison Parish Hospital Service

District (“Madison”), for breach of contract. Madison reconvened,

demanding return of all money it paid to Guide pursuant to the contract

between them. On June 26, 2024, a bench trial on the merits was held and,

thereafter, the trial court took the matter under advisement. On December

17, 2024, the trial court signed a judgment ordering Madison to pay Guide

$28,000 for unpaid consulting fees but rejected Guide’s demand for attorney

fees. It also dismissed Madison’s reconventional demand with prejudice.

For the reasons stated herein, we reverse the judgment of the trial court both

as to the main demand and the reconventional demand.

FACTS AND PROCEDURAL HISTORY

The trial was held on June 26, 2024. Notably, the record is devoid of

any discovery motions, subpoenas, depositions, etc. The parties stipulated to

the admissibility of all of the exhibits entered into evidence; however,

Madison challenged the authenticity of Donald Frutiger’s signature on

Defendant’s Exhibit 2, p.3 (the purchase order form authorizing payment of

$6,000 per month to Guide in perpetuity). Guide called two witnesses, Dr.

Ted Topolewski (“Dr. Topolewski”) and Sonny Paxton (“Paxton”). Madison

called one witness, Dr. Donald Perry (“Dr. Perry”).

Dr. Topolewski’s testimony. In 2011, several people involved in the

hospital’s administration went to jail in connection with the embezzlement

of roughly $6 million from Madison. Dr. Topolewski served as the hospital

director for Madison from 2014 to October 14, 2022. He stated that he was

hired by the state as a “turnaround CEO” to help save Madison from

financial collapse. Six or eight months into his tenure, he requested that

Madison be placed under state fiscal administration to escape the pressure

from local government to provide patronage jobs. This request was granted

and Donald U. Frutiger (“Frutiger”) served as fiscal administrator at

Madison for about six years. According to Dr. Topolewski, Frutiger was Dr.

Topolewski’s “boss.” Elsewhere in his testimony, however, Dr. Topolewski

claimed that he had statutory authority to bind Madison to the contract with

Guide (and additionally obtained Frutiger’s approval). During Frutiger’s

term as fiscal administrator, Guide entered a consulting agreement with

Madison and four months thereafter, Frutiger requested that the state’s fiscal

administration of Madison be terminated for lack of need — and such

request was granted.

Dr. Topolewski claimed that he did not know Paxton at all prior to

inviting him to provide consulting services to Madison and further denied

any type of patronage motive. He explained how he arrived at his decision

to hire Paxton as follows:

Q. And, let me ask you this, why did you contact Mr. Paxton
about this [consulting work for Madison]?

A. A mutual friend of Sonny and I, in fact, he’s in the
audience, Don Woods, introduced me to him. I had spoken to Mr.
Woods saying that — and I know Mr. Woods from the Tallulah
Country Club. We were friends before, casual friends. I had said to
him that I would like to find someone to help me navigate the
bureaucracy of Baton Rouge, the Department of Health, the Medicaid
program. The hospital was having several issues of getting things
done with the bureaucracy. I was up against a brick wall, and I
said I would like to have someone that knows his or her way, people
down there, to help the hospital. I’ve done that at other
hospitals in other states, having people like — a lot of times
it’s a retired State Senator or former State Commissioner who knows
who to put the piece of paper to to get things done. So, at that
point, Mr. Woods says, “I got a guy.”
2

Dr. Topolewski explained his conversation with Paxton leading up to the

agreement as follows:

Q. In regards to that [conversation], what did you discuss
with Mr. Paxton?

A. Well, I discussed what the hospital would like someone
with this consulting agreement to do. Number one, there
were various reimbursement issues on the clinics and the
hospital, that were festering at the Department of Health.
They were, annually, hundreds of thousands of dollars. So,
I was anxious to get that done. I wanted someone also that
knows the capital programs here for grants to apply to, and
also, I said I’m interested in doing some behavioral health
here, and I’d like to be introduced to some firms that are in
that business to partner with. So I gave him a flavor of
what I would expect, and of course, there might be other
consequential items in there, but that was the main thrust
of what I said.

Q. Okay. And what did Mr. Paxton tell you with regards to
that?

A. He told me he has — he could help me on the
reimbursement problems. He mentioned some names, I
can’t recall them right now, that he said he could bring our
issues to that have been placed down there, and hopefully
get some results. With behavioral health, he says he knew
a gentleman that is in that business that would like to come
into this area here, and he will contact him on that. And he
said he would work on the grants. He knew some
legislators and all that would be favorable to our grant
requests. So, he said he could do what I want at that point.

Q. And is that — at that point, is that when the hospital
drew up this consulting agreement that I have in my hand?

A. Yeah, I wanted to make sure he knew what he was
doing and had some results, so at that point, we drew up
this contract

The Madison-Guide Consulting Services Agreement (the “agreement”

or “contract”), which is in evidence, was signed on April 19, 2019 by Paxton

for Guide and Dr. Topolewski for Madison. Dr. Topolewski also stated that

he obtained Frutiger’s approval for the contract. The contract states:

3

The specific scope of services for [Guide] are;

Monitoring and researching any governmental or public
relations issues which might affect the Hospital and its
planning....

Keeping the Hospital informed and advising the Hospital
relative to any such governmental or public relations
issues.

Representing the Hospital in discussions with any
appropriate individual government official or officials as
well as any government entity or any public interest or
citizen group which might wish to discuss issues relative
to the Hospital and its planning. Specific examples of the
abovementioned are State Bond Commission, Capital
Grant Requests, Hospital State Legislator, Hospital State
Senator, State Department of Health, and State Fire
Marshall regarding licensure of new hospital.

Such other services as the Hospital’s CEO may determine
are necessary for the implementation of the hospital’s
objectives.

In return for Guide’s services, Madison promised to pay $6,000 per month

(later increased to $7,000 per month) and reimburse Guide for “out-of-

pocket expenses.” The exhibits in evidence include all of Guide’s monthly

invoices. Dr. Topolewski personally approved payment of each individual

invoice.

Dr. Topolewski testified that he had given his secretary a standing

order to send every hospital contract to the hospital’s attorney, Jack M.

Stolier (“Stolier”), for review. Dr. Topolewski assumed that, per his

standing order, his secretary sent a copy of the Madison-Guide contract to

Stolier for review, but he did not know whether his secretary actually sent it

or whether Stolier had approved it — despite his earlier testimony in an

affidavit asserting that Stolier had indeed approved the contract.

Regarding Guide’s performance, Dr. Topolewski stated:

Q. And did Mr. Paxton provide services on behalf of the
4

hospital in connection with what we’re talking about?

A. He provided all of the services requested, and then
some, in my opinion.

Q. If you would, describe what are some of what Mr.
Paxton did, that you had -- you contacted him about and
what he did for the hospital.

A. First, we had one of our rural health clinics that we had
purchased a while back, we had a reimbursement problem.
It was a physician-based practice. We wanted to change it
to hospital based. That alone is worth probably $200,000 a
year of reimbursement annually on that. We were having
no luck of getting the Department of Health and the
Medicaid program within the Department of Health of
okaying it on that. We tried various things. I even had a
state legislator go down and try to do it. We just couldn’t
get it done. Within, I’d say, a month of the signing of this
contract, it was done. Mr. Paxton went there and
contacted, I don’t even know who, but it was stamped and
we had that done, which amazed me. We were trying for
months to get that probably a half a year.

According to Dr. Topolewski, Paxton also:

• negotiated a lower price for land acquisitions and
leases than Dr. Topolewski felt he could have gotten as
a New Yorker representing Madison;
• introduced Dr. Topolewski to Jeff Richardson who was
“interested in partnering with the hospital” in
establishing a behavioral health services facility in the
parish; (this project allegedly was near the contract-
drafting phase when Dr. Topolewski was terminated as
Madison’s CEO);
• used his political connections to help speed up the loan
application process for a $38 million government loan
to build a new hospital; the loan was issued and the
new hospital was built.

Dr. Topolewski was fired as CEO/hospital director on October 14,

2022. On the day before his termination, Dr. Topolewski sent an email

instructing payment — of Guide’s November 2022 invoice — promptly on

November 1, 2022. Through its new CEO, Dr. Perry, Madison terminated

the contract with Guide shortly after Dr. Topolewski’s firing.

5

On cross-examination, Dr. Topolewski admitted that he is friends with

Paxton and that they have talked since termination from their respective

relations with Madison. Dr. Topolewski has a pending lawsuit against

Madison but said that his lawsuit is unrelated to the subject contract herein.

He acknowledged that the invoices by which Guide billed Madison showed

only “consulting” in the details of the charges — without further explanation

of the services that Paxton claimed to have actually provided. Dr.

Topolewski admitted that he did not require Paxton to provide such details

on the invoices, but instead, received them verbally. He initially implied

that his initials had been forged (as approval for payment) on the November

2022 invoice — which was received and approved in Dr. Topolewski’s name

on October 13, 2022. However, that same day at 9:02 AM, Dr. Topolewski’s

work email account sent a message to Kallie Blake requesting that the

premature invoice be paid on November 1, 2022.1 When presented with a

copy of the email, Dr. Topolewski first denied any recollection. The

following exchange thereafter ensued:

Q. Well, let me show you. Page 141, “I believe Sonny will be
away, so he wants to make sure we have the November invoice.
Please pay at the beginning of November.”

A. All right. You’re refreshing my memory on that one.

Q. So, that November invoice was paid. Were you ensuring that
your friend got paid when you knew there was going to be a change
in administration?

A. Absolutely not what you’re insinuating on this. Absolutely
not. I take objection to that question.

Q. Is that something you did routinely, say “go ahead and pay
next month’s invoice”

A. I take objection to that question.

1
R. 123-6; Pg. 140-141 of Exhibit D-2.
6

Q. Can I ask you again, sir? Is that something you routinely
did, said, “let’s go ahead and get ready to pay this next month’s
invoice?”

A. I believe I would have done that several times if someone said to
me, “I’m going to be away and here’s my invoice.” I would have done
that to other consulting companies.

Q. And is it fair to say that you’re bitter at this time over
the actions taken by the hospital board?

A. I’m not going to tell you if I’m bitter or not.

Q. Okay. You’ve got a lawsuit filed against them?

A. That is correct.

On redirect, Dr. Topolewski stated that he kept Frutiger abreast of

Paxton’s work and that Frutiger was pleased with that work (i.e., for the four

months in which the contract coincided with the state’s fiscal

administration).

Testimony of Sonny Paxton. Paxton stated that he was born in

Tallulah, Louisiana, and raised between Tallulah and Vicksburg, Mississippi.

He further stated that he served as Louisiana’s Deputy Secretary of Wildlife

and Fisheries in Baton Rouge in the 1980s (and made numerous contacts in

the healthcare field during that time); and that he moved to Georgia in 2001

where he continued to live until June 2021, when he moved back to Madison

Parish, Louisiana. Paxton admitted that his wife owns Guide, and through it,

she sold merchandise on the internet before and during his consulting work

for Madison.

Paxton testified that he did not know Dr. Topolewski before Dr.

Topolewski contacted him about working for Madison as a consultant. He

helped Madison with obtaining the lease of the land on which the new

7

hospital was built and he explained that he had known the landowners

“all…[his] life.”

Paxton alleged that he got U.S. Senator Bill Cassidy (“Sen. Cassidy”)

to help secure the $38 million U.S. Dept. of Agriculture (“USDA”) loan for

building the new hospital facility, and that Sen. Cassidy is “the reason it got

done.” He also stated that he used his contacts in Baton Rouge to get

Madison’s rural health practice reclassified from “physician-based to

hospital-based” (which, according to Dr. Topolewski, increased revenue by

$200,000 annually). Paxton also described his work on helping Madison

partner with a behavioral health operator, but Madison stopped pursuing it

after Dr. Topolewski was fired.

Finally, Paxton discussed his billing practices and termination of the

contract. He stated that nobody from Madison ever asked him for written

details of the services provided in connection with the invoices he submitted.

Paxton submitted the invoices at the beginning of the billing period — the

beginning of the month. Paxton initially did not know whether his invoice

from November 24, 2022, had been paid; later, he said that was for the

services he would render in December of 2022.2

Paxton admittedly received a letter from the interim CEO/hospital

director who replaced Dr. Topolewski, Dr. Perry, which was dated January

24, 2023. It notified him of the termination of the contract and the hospital’s

position that it was never a valid contract in the first place.3 However, the

letter also invited Paxton to prove that Guide had a valid contract with

2
Exh. P-2.
3
Exh. P-4.
8

Madison and that he “legally performed” those contractual obligations, and

Madison would reconsider. Paxton offered no information whatsoever,

explaining that, as far as he was concerned, he already “had a valid contract

to start with.” Instead of providing the requested information, Guide/Paxton

hired an attorney who sent a letter threatening a lawsuit if Madison did not

pay $28,000 to Guide within seven days of the date the letter.

Parenthetically, this demand letter offered nothing responsive to Dr. Perry’s

invitation to Paxton to provide documentation showing that he had actually

rendered services pursuant to the agreement.

Thus, Guide’s invoices from December 2022 through March 2023

went unpaid despite Paxton allegedly continuing to work at least through

January of 2023. On direct examination, Paxton stated that he was working

on the prospective behavioral health partnership at the time “these

terminations occurred,” i.e., Dr. Topolewski’s termination on October 14,

2022, and the contract termination on January 24, 2023. Paxton specifically

claimed that he was “absolutely” working on the behavioral health project at

the time he submitted the November 24, 2022 invoice (for consulting

services to be rendered in December 2022). Paxton further claimed that he

kept working on the behavioral health project even after the hospital quit

paying his invoices. On cross-examination, Paxton admitted he had not

communicated with the new administration at all while he was allegedly

doing this work:

Q. Is it your testimony that you continued working for the
hospital after Dr. Topolewski left?

A. I would say yes, simply because that mental health
clinic was in motion. That’s not something you can just
stop.

9

Q. When you were doing that work, who were you
consulting…with [at] the hospital, to tell them what you
were doing?

A. I wasn’t consulting with anybody. I didn’t know who
to contact.

As Paxton acknowledged, however, he had already been contacted by the

new CEO before performing any alleged work he did in February and/or

March of 2023.

Paxton also stated that he lost his records of his work performed as a

consultant for Madison in the move back to Louisiana from Georgia in June

2021. In the next breath, however, he seemingly stated that he did not make

such records in the first place.4 Paxton conclusively admitted that he could

not provide a monthly breakdown of the services he had performed.

Invoices in evidence. The evidence includes every monthly invoice

Guide submitted to Madison, along with Topolewski’s emails instructing

payment of each invoice and bank receipts showing that the payments were

made. From the commencement of the contract in April 2019 until June

2021, Guide’s invoices typically showed that Paxton drove from Suwanee,

Georgia, to Tallulah and other locations in Louisiana as part of his work for

Madison; the stated purpose of these trips was to attend meetings. Most

such meetings were just with Dr. Topolewski. For these months, Guide

billed Madison an additional $500 to $1500 for “out-of-pocket expenses,”

including mileage, meals, and lodging. The invoices concerning October

2020 and February 2021 assert that Paxton drove from Suwanee, Georgia, to

Tallulah to meet with Dr. Topolewski for lunch and then drove back to

Suwanee the same day. Some meetings that Guide claimed included

4
R. 137-138.
10

Madison Parish landowners, Jeff Richardson (“Richardson”), a state senator,

and/or representatives of insurance companies. However, in April 20215

(i.e., shortly before Paxton’s move back to Louisiana in June 2021), the

monthly consulting fee increased from $6,000 per month to $7,000 per

month; from June 2021 until the termination of the contract in January 2023,

Guide claimed no out-of-pocket expenses and provided no details regarding

any “consulting” services performed.

Below, we detail the invoices which bear specific information of what

Paxton did:

• Invoice dated April 4, 2019, shows that Paxton made three trips from
Georgia to Tallulah, first, to meet with Dr. Topolewski, Jeff
Richardson, Alan Barksdale, etc.; second, to “discuss consulting
contract” with Dr. Topolewski, and, last, another trip to sign the
contract

• Invoice dated April 30, 2019, shows that, in April 2019, Paxton made
a trip from Georgia to Tallulah: “purpose of trip was to meet with Dr.
Topolewski, Robert Laurents, Jeff Richardson, Mark Fontenot
(LARIS Insurance Agency) and the Perret Group, LLC, represented
by Leonard Franques and Hunter Perret”

• Invoice dated August 1, 2019, shows a trip from Georgia to Tallulah
that included “follow up with Warren S. Patrick, Jr. to discuss land
lease on 19th of July”

• Invoice dated September 1, 2019, shows a trip from Georgia to
Tallulah that included “follow up with Warren Patrick, Jr. to discuss
land lease on 19th of July”

• Invoice dated October 2, 2019, shows two trips from Georgia to
Tallulah in September 2019, first, to meet with “Pat Patrick and
Rhonda Cobb concerning lease with the Madison Parish Hospital”
and, ten days later, another such trip to meet with Pat Patrick to
“discuss revised lease agreement”

• Invoice dated January 1, 2020, asserts that in December 2019, Paxton
made a trip to Tallulah to meet with Irene W. Jackson of Delta
Recovery, Outpatient Detox

5
Exhibit D-2, p. 84.
11

• Invoice dated February 1, 2020, asserts that made Paxton made a trip
from Georgia to Delhi, Louisiana, to meet with Senator Francis
Thompson

• Invoice dated April 1, 2021, asserts a trip in March 2021 from Georgia
to Baton Rouge, Louisiana: “purpose of trip was final deposition of
$2,000,000 bond with La. Bond Commission. Additional purpose of
meeting was the discussion of possible direction and additional
services for new hospital, when completed

Testimony of Dr. Perry. Dr. Perry stated that he was a staff physician

at the hospital before serving as interim CEO there. He admitted that Dr.

Topolewski had fired him “years ago.” When asked why he terminated the

contract, aside from legal advice to do so, he indicated that it was because

there was no documentation whatsoever of what consulting services, if any,

Paxton had actually rendered. He stated that listening to the other witnesses’

testimony was the first time he ever heard any allegation of what services

Paxton allegedly performed for Madison.

Attorney fees. Both Paxton and Dr. Topolewski admitted they did not

discuss legal expenses in negotiating the contract — it was not mentioned as

an “out-of-pocket” expense.

Action of the trial court. The trial court awarded $28,000 in damages

in favor of Guide and against Madison, denied Guide’s claim for attorney

fees, and denied Madison’s reconventional demand. The trial court issued

written reasons for judgment. Therein, the trial court stated that, after trial, it

took the matter under advisement and “[o]ut of necessity…engaged in

additional independent research, review, study, analysis, and deliberation.”

The trial court then admonished this court to follow the manifest

error/clearly wrong standard of review and specifically held that the

12

testimony of Paxton was “credible and reliable.”6 It further credited the

testimony of Dr. Topolewski, which it found corroborated Paxton’s

testimony. The trial court also held that the contract’s provision — that

Madison would reimburse Guide’s “out-of-pocket expenses” — did not

create an obligation to pay Guide’s attorney fees. The trial court rejected

Madison’s argument that the contract was “gratuitous” and, therefore,

unenforceable. Finally, the trial court rejected Madison’s reconventional

demand without comment.

ASSIGNMENTS OF ERROR

Madison asserts that the trial court erred in: (1) considering evidence

outside the record; (2) holding that the contract was enforceable; (3) not

holding that the contract was absolutely null because Guide failed to register

as a lobbyist as required by law; and (4) rejecting Madison’s demand for

$300,620 in reimbursement for fees paid.

DISCUSSION

Overview

The basic facts surrounding the formation of the agreement are largely

undisputed.7 However, Madison argues that because Paxton did not do

anything for Madison, the contract is “gratuitous,” and a “prohibited

donation,” i.e., a patronage job, a simulation. Madison alternatively argues

6
Paxton’s wife owns Guide. R. 128.
7
Madison’s counsel did cast doubt on the authenticity of Frutiger’s signature on
the purchase order authorizing payment to Guide.

13

that the agreement is an absolutely null contract for lobbying services by an

unregistered lobbyist.8

Madison’s allegation that the trial judge considered evidence that had

not been admitted (and which was not otherwise in the record) seems

plausible given the trial court’s statement in its written reasons for judgment,

i.e., that while the case was under advisement, “[o]ut of necessity…[the trial

court] engaged in additional independent research, review, study, analysis,

and deliberation.” After that “independent additional research,” the trial

court decided the case exclusively on credibility findings — without one

legal citation in its written reasons other than admonishing this court of the

manifest error standard of review. This could be seen as indicating that the

“additional independent research” was evidentiary rather than research of

applicable law. However, we need not decide this issue because, regardless,

we find that the trial court committed manifest error in crediting the

testimony of Paxton or Dr. Topolewski.

Accordingly, Guide failed to carry its burden of proving that the

agreement was a valid, enforceable contract. Furthermore, Guide had the

burden, under La. C.C. art. 2022 and Harter v. Harter, 50,942 (La. App. 2

Cir. 11/10/16), 208 So. 3d 971, 980, writ denied, 17-0225 (La. 3/24/17), 217

So. 3d 353, of proving that it performed its contractual obligation in the

months for which it sued to force Madison to pay the $7,000 monthly fee,

and Guide failed there, too.

As to Madison’s reconventional demand, it had the burden of proving

the contract was null or non-existent; however, as explained below, a

8
Finally, Madison implies that Dr. Topolewski lacked authority to bind Madison
to this contract.
14

presumption of simulation applies when the surrounding facts and

circumstances create a “highly reasonable suspicion” that there was no arms’

length bargain between the parties. Hogan v. McKeithen, 527 So. 2d 982

(La. App. 2 Cir. 1988). We hold that the presumption applies here and that

Guide has failed to rebut it.

Madison’s argument regarding unlicensed lobbying is without merit

because there is no evidence that Paxton’s and/or Guide’s conduct came

within any statutory definition of lobbying.

Standard of review

“The determination of the existence of a contract is a finding of fact,

not to be disturbed unless clearly wrong,” i.e., manifestly erroneous. Crowe

v. Homesplus Manufactured Hous., Inc., 38,382 (La. App. 2 Cir. 6/21/04),

877 So. 2d 156. The Louisiana Supreme Court “has stated a two-part test

for the reversal of a factfinder’s determinations: 1) the appellate court must

find from the record that a reasonable factual basis does not exist for the

finding of the trial court, and 2) the appellate court must further determine

that the record establishes that the finding is clearly wrong or manifestly

erroneous.” Read v. Willwoods Cmty., 14-1475 (La. 3/17/15), 165 So. 3d

883, 888. Manifest error review requires great deference to the factfinder’s

decisions regarding witness credibility. However, if documents or objective

evidence so contradict the witness’s story, or the story itself is so internally

inconsistent or implausible on its face, that a reasonable factfinder would not

credit the witness’s story, the court of appeal may find manifest error

regarding a finding purportedly based on a credibility determination. Lam

ex rel. Lam v. State Farm Mut. Auto Ins. Co., 05-1139 (La. 11/29/06), 946

15

So. 2d 133; New South Communications v. Wright, 35,442 (La. App. 2 Cir.

12/28/01), 803 So. 2d 1103.

Review of the evidence

Paxton’s testimony is not credible. As a self-styled “government

consultant,” he testified that he could not figure out how to communicate

with the Madison administration after Dr. Topolewski was fired on October

14, 2022, (but he continued submitting invoices for $7,000 each month until

February of 2023). Paxton claimed that, notwithstanding this inability to

communicate with his client, he continued to do “government consulting”

work on behalf of Madison in somehow facilitating Madison’s alleged

prospective partnership with a behavioral health operator — a partnership

that never happened. On January 24, 2023, Guide received a letter from new

Madison director, Dr. Donald Perry. This letter informed Guide that

Madison would be repudiating the agreement effective immediately, but

would reconsider if Guide provided the requested information, including the

services Guide performed for Madison. However, Guide did not offer Dr.

Perry any information regarding the services it allegedly performed for

Madison. Instead, Guide, through counsel, sent a demand letter (dated

February 21, 2023), threatening to take “legal action” if Madison did not pay

Guide $28,000 within seven days of the date of the letter (which, again,

offered no description of what Paxton was allegedly doing on behalf of

Madison).

Thus, according to Paxton, for at least 3 months (October 14, 2022

through January 2023), he worked as a consultant on behalf of Madison by

assisting it with establishment of a partnership with a behavioral health

operator without Madison even knowing about it. Dr. Topolewski claimed
16

that Paxton had this alleged prospective partnership almost to the contract-

drafting phase. If that were true, it is challenging to imagine why

Guide/Paxton responded to Madison’s information request with a demand

letter threatening a lawsuit. Likewise, at trial, Guide/Paxton did not attempt

to introduce any documentary evidence to support the claim to have been

working the alleged prospective partnership almost to the contract-drafting

phase. Paxton offered neither any explanation as to why he failed to do so,

nor why Guide failed to call Richardson, the counterparty to the alleged

prospective partnership, as a witness. No reasonable factfinder could

believe Paxton’s testimony regarding his alleged work after Dr. Topolewski

was fired.

Paxton’s testimony on other points is likewise unbelievable. He

claimed to have accomplished several great works on behalf of Madison —

including obtaining a $38 million loan from the USDA; obtaining a

reclassification and higher Medicaid revenue for Madison’s rural health

clinics; and negotiating with landowners in Madison’s land lease for the

construction of a new hospital. However, Paxton admitted he had no

documentary evidence whatsoever to support his alleged works because it

was all lost during his move back to Louisiana in June 2021.9 This

explanation is impossible as to the approximate $126,000 in consulting fees

Guide/Paxton received after the move. Measured temporally, almost half of

the duration of the contract came after that move. Documentation for work

done after the move could not possibly have been lost in the move.

9
That is, other than the brief notations on nine of the invoices.
17

Additionally, Paxton, by this testimony, implied that he negotiated

with the Madison Parish landowners, Sen. Cassidy, the USDA, and the

Louisiana Dept. of Heath, and others without a single text message, email, or

phone call sent or received—in the 2020s. Indeed, emails, text messages,

call histories, credit card statements, calendar app data, etc. — at least some

of which such activities would have generated — are not corporeal. They

are electronic and are stored digitally and/or electronically, often online; if

so, they cannot be lost by moving from one place of residence to another.

Paxton did not claim that his email server crashed, nor that he lost his phone,

nor that his phone was not backed up; nor did he otherwise explain his

absolute inability to produce a single electronic document.

Dr. Topolewski’s testimony is also untrustworthy. He contradicted

and reversed his own testimony multiple times and refused to answer

questions to which there was no objection and for which he claimed no

privilege. Concerning his instructions — which he gave on October 13,

2022 — to pay Guide’s November 2022 invoice, Dr. Topolewski himself

“objected” to questions regarding why the invoice was submitted so early

and why he approved it so early. Given the context, Dr. Topolewski did this

apparently because answering truthfully would make him look bad.

Furthermore, Dr. Topolewski initially insinuated that his initials had

been forged on Guide’s November 2022 invoice (as approval for payment).

However, once opposing counsel showed Dr. Topolewski his own October

13, 2022 email instructing prompt payment of the invoice on November 1,

2022, Dr. Topolewski completely reversed course. He admitted that he

approved the payment prematurely and tried to justify it as a virtuous

18

accommodation to Paxton because the latter was to be “out of town.”10 In

simple words, Dr. Topolewski shifted from the equivalent of “I did not do it;

my initials were forged,” to, once cornered, “Yes, I did it and it was a good

thing.” Dr. Topolewski was fired the very next day, and circumstances

indicate he knew that his termination was imminent (i.e., he prematurely

approved payment of the Guide invoice knowing he would be terminated

before the invoice matured).

Furthermore, when asked if he was bitter toward Madison because he

was fired, Dr. Topolewski simply refused to answer the question —

presumably because he knew answering truthfully would detract from his

credibility.

Finally, Dr. Topolewski swore in an affidavit that Madison’s legal

counsel, Stolier, “reviewed and approved” the contract; however, at trial, he

testified that he did not know whether Stolier had even reviewed it.

SUBSTANTIVE LAW

“A contract is an agreement by two or more parties whereby

obligations are created, modified, or extinguished.” La. C.C. art. 1906. “A

contract is formed by the consent of the parties established through offer and

acceptance.” La. C.C. art. 1927. The irreducible minimum for an

enforceable contract consists of the following four elements: (1) at the time

of formation of the contract, the parties must possess the capacity to

contract; (2) the parties must freely give mutual consent to the contract,

which is established through offer and acceptance; (3) the contract must

10
From the inception of the agreement in April 2019 until June 2021, Paxton
lived in Georgia: he was domiciled “out of town.” That did not impede Guide from
getting paid for those months. Dr. Topolewski did not offer any explanation as to why
Paxton being out of town in November 2022 would impede Guide’s receipt of payment.

19

have an object that is lawful, possible, and determinable; and (4) the contract

must have a lawful cause.11 La. C.C. arts. 1918, 1927, 1966, 1971; Granger

v. Christus Health Cent. Louisiana, 12-1892 (La. 6/28/13), 144 So. 3d 736,

760-61. Additionally, a contract confected by an agent on behalf of a

principal must be supported by authority to so act on behalf of the

principal.12 Our discussion below focuses on the elements of “authority,”

“object,” and “cause.”

Authority

Statutory authority in general. “A person may represent another

person in legal relations as provided by law.” La. C.C. art. 2985. The

representative is called the “agent” and the represented party is called the

“principal.” Comment (b) to La. C.C. art. 2985. For purposes of the subject

agreement, Madison is the principal and Dr. Topolewski is the agent.

La. R.S. 46:1057 provides a non-exhaustive list of duties and powers

of a hospital director such as Dr. Topolewski; these include:

(2) With the consent of the commissioners, and subject to
such budgetary limitations and any civil service laws in
effect, the director shall have power to establish positions
and to make appointments thereto; to establish rates of
pay; to abolish positions; to transfer duties among
positions; to assign duties to, direct and control the work
of, and transfer, promote, demote, remove and otherwise
change the status of employees of the district.
…
(6) To prepare an annual budget for approval by the
commission and the police jury.
…
(9) To control and direct all business affairs of the district.
By way of extension and not of limitation, these duties

11
“An obligation may be valid even though its cause is not expressed.” La. C.C.
art. 1969.
12
Furthermore, for certain types of contracts, the law imposes form requirements.
“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.” La. C.C. art. 1927.
20

shall include the keeping of the accounts of the district,
making necessary purchase of equipment, supplies and
materials, making major and minor repairs to physical
facilities.
…

(11) To perform any other duties and functions which he or
the commission consider necessary or desirable to carry
out the purposes of this Chapter.

Fiscal administration. At the time the agreement was confected,

Madison was under fiscal administration by the state.13 The fiscal

administrator’s duties and powers are limited to investigation, monitoring,

and proposing a comprehensive budget to the governing authority of the

political subdivision. La. R.S. 39:1352. However, if the governing authority

refuses to adopt the budget, upon motion by the attorney general, the court:

shall order the adoption and implementation of the budget
proposed by the fiscal administrator as revised by the
governing authority of the political subdivision, except for
those revisions which the court finds will make it
reasonably certain that the political subdivision will fail to
make timely debt service payments or reasonably certain
to fail to have sufficient revenue to pay current
expenditures.

La. R.S. 39:1353(B). Thus, it does not follow from the statutory law that a

fiscal administrator is the “boss” of a hospital director of a service district

hospital under fiscal administration. Instead, the fiscal administrator

investigates the finances of the public entity concerned, proposes a budget,

and monitors budget compliance.

Object

“Parties are free to contract for any object that is lawful, possible, and

determined or determinable.” La. C.C. art. 1971. “The object of a contract

13
For a fiscal administrator to be appointed, the attorney general must initiate a
summary proceeding in the district court and prove by preponderance that the political
subdivision lacks financial stability. La. R.S. 39:1351.
21

must be determined at least as to its kind. The quantity of a contractual

object may be undetermined, provided it is determinable.” La. C.C. art.

1973.

La. C.C. art. 1815 distinguishes divisible and indivisible obligations:

An obligation is divisible when the object of the
performance is susceptible of division.
An obligation is indivisible when the object of the
performance, because of its nature or because of the intent
of the parties, is not susceptible of division.

“A contract is commutative when the performance of the obligation of

each party is correlative to the performance of the other.” La. C.C. art. 1911.

“Either party to a commutative contract may refuse to perform his obligation

if the other has failed to perform.” La. C.C. art. 2022. This article points to

the “self-help” right of a party in a commutative contract to refuse to

perform if the other party fails to perform his own obligation. If the latter

party sues, he has the burden of proving that he did perform his own

obligation. Harter, supra.

Madison’s promise to make a monthly, uniform payment of $6,000 or

$7,000 per month in consulting fees to Guide indicates that, if the contract

was not a simulation (see infra), Guide/Paxton would be obligated to —

each month — provide services to Madison sufficient to earn those

consulting fees. Each month, Dr. Topolewski made a discretionary

determination that Paxton had in fact performed, and thus authorized

payment of the monthly fee. That determination, however, was based on

oral conversation between Topolewski and Paxton. The grounds for Dr.

Topolewski’s affirmative findings that Paxton had performed were never

reduced to writing as such. This “off the books” arrangement made the

matter more difficult for Madison commissioners to observe.
22

The fact that the contract remained in effect perpetually, subject to a

termination clause, made the overall amount of consulting fees

indeterminate at the time the agreement was confected; only the monthly

amount is determined. A monthly expense of $6,000 to 7,000 is plausibly

less likely to incite inquiry (observation) than, for example, larger amounts

paid out as Paxton’s alleged projects were completed.

Cause

A contract has an onerous cause when the reason that each of the

parties enters the agreement is to obtain an advantage in exchange for his

obligation. La. C.C. arts. 1909 and 1967. In other words, an onerous

contract is one in which the parties are bargaining at arms’ length.

Article VII, Section 14(A) of the Louisiana Constitution prohibits the

“donation” of government assets. For purposes of government contracts, the

policy underlying this constitutional prohibition on donations parallels the

policy of the Public Bid Law; the Louisiana Supreme Court has explained

that policy as follows:

[I]nsofar as…[ Public Bid Law] requires advertising and
the obtaining of competitive bids, is a prohibitory law
founded on public policy. It was enacted in the interest of
the taxpaying citizen and has for its purpose their
protection against contracts of public officials entered into
because of favoritism and possibly involving exorbitant
and extortionate prices. (Emphasis added.)

Haughton Elevator Div. v. State, Through Div. of Admin., 367 So. 2d 1161,

1164 (La. 1979). Similarly, the Fourth Circuit has stated that the purpose of

this constitutional prohibition on such donations “is to protect the electorate

from the possibility that a politically powerful individual or interest could

importune the legislature or other governmental entity into making a

donation of assets of the State.” In re Members of Class of Descendants of
23

Former Owners of Cheniere Ronquillo, 01-1548 (La. App. 4 Cir. 4/24/02),

817 So. 2d 324, 327, writ denied, 02-1448 (La. 9/20/02), 825 So. 2d 1170,

and writ denied, 02-1454 (La. 9/20/02), 825 So. 2d 1171.

Ronquillo, supra, explains the policy underlying this constitutional

prohibition with reference only to the donee. Here, using this case as an

example, we add explanation of this constitutional policy with reference to

the “donor.” In contrast to a private actor acting in his own individual

capacity, Madison — a government entity funded with tax dollars —

obligated itself to pay Guide $6,000 to $7,000 per month in perpetuity

without requiring from Guide any written documentation of the work Guide

allegedly did. In fact, Dr. Topolewski indicated that, by his design, Paxton

only kept him abreast of Paxton’s alleged work by the spoken word—i.e.,

never in writing.

The widely discussed “agency problem,” i.e., “the ability of

[corporate] directors and officers to shirk their duties and extract private

benefits from corporations with dispersed ownership” must be

acknowledged here. Asaf Eckstein, Gideon Parchomovsky, The Agent’s

Problem, 70 Duke L.J. 1509, 1511 (2021). Robert H. Sitkoff, The Economic

Structure of Fiduciary Law, 91 B.U. L. Rev. 1039, 1040 (2011), explains it

this way:

The law tends to impose a fiduciary obligation in
circumstances that present what economists call a
principal-agent or agency problem…[A]n agency problem
arises whenever one person, the principal, engages another
person, the agent, to undertake imperfectly observable
discretionary actions that affect the wealth of the
principal. The concern is that in exercising this
unobservable discretionary authority, the agent will favor
the agent’s interests when the agent’s interests diverge
from those of the principal. (Emphasis added.)

24

It would appear that it is far easier to be loose ― or even wasteful ― with

other people’s money than one’s own, and the problem seems to be

magnified in cases like the one before us.

Government corporations, like Madison, are funded by tax dollars

from the electorate (as opposed to shareholders who participate voluntarily),

and which earn monies ostensibly to serve the electorate. In our

constitutional republic, the electorate have no direct say in the awarding of

government contracts, nor any broad, individual right of action against

government agents who indulge this problematic incentive. Aside from a

few narrow exceptions, perhaps the electorate’s only remedy is to vote for

politicians who vow to root out such conduct — while being mindful that

everyone has the same incentive and ability to put their own interests over

the interests of those whom they serve. See Stonecipher v. Caddo Par.,

51,148 (La. App. 2 Cir. 4/7/17), 219 So. 3d 1187, 1196, writ denied, 17-0972

(La. 10/9/17), 227 So. 3d 830.

In light of these underlying policy considerations, we define the term

“donation,” as used in Article VII, Section 14(A) of the Louisiana

Constitution, as any transfer of valuable assets not supported by

consideration sufficient to maintain an onerous contract; such consideration

must demonstrate that the agreement is the product of an arms’ length

bargain. Additionally, the government must enforce its obligor’s duties in

good faith.

Louisiana law disregards inaccurate labels that the parties affix to

their agreements. “A contract is a simulation when, by mutual agreement, it

does not express the true intent of the parties.” La. C.C. art. 2025. A

simulation is either relative or absolute. “A simulation is relative when the
25

parties intend that their contract shall produce effects between them though

different from those recited in their contract. A relative simulation produces

between the parties the effects they intended if all requirements for those

effects have been met.” La. C.C. art. 2027. This article presupposes that the

contract has a lawful object and a lawful cause and that all other essential

elements are established.

Throughout the centuries, our courts have treated donations

disguised as onerous contracts as donations. For example, in Austin v.

Palmer, 7 Mart.(n.s.) 20, 21 (La. 1828), 1828 WL 1474, the Louisiana

Supreme Court regarded the lender/father’s issuance to his debtor/son a

receipt for a fictitious loan payment as a donation. In Seikmann v. Kern, 132

La. 100, 61 So. 128, 130 (1913), the Louisiana Supreme Court affirmed the

trial court’s holding that the conveyance in question was a simulation; the

higher court noted the clandestinity of the parties’ dealings, the conspicuous

failure of ostensibly favorable witnesses to testify, and the uncorroborated,

self-serving testimony of the parties benefiting from the transaction.

Where an act states consideration which the payor never received, the

payment is a simulation, a donation in disguise subject to annulment. In re

Buller’s Ests., 192 La. 644, 188 So. 728 (La. 1939). However, a “transaction

will not be set aside as a simulation if any consideration supports the

transaction, because the reality of the conveyance is thus established.”

Russell v. Culpepper, 344 So. 2d 1372, 1376 (La. 1977).

La. C.C. art. 1831 generally allocates the burden of proof

regarding contracts in litigation as follows:

A party who demands performance of an obligation must
prove the existence of the obligation.

26

A party who asserts that an obligation is null, or that it has
been modified or extinguished, must prove the facts or
acts giving rise to the nullity, modification, or extinction.14
However, a rebuttable presumption of simulation may arise:

The burden is initially upon the one alleging…simulation
to prove this claim…[However], a jurisprudential
presumption of simulation arises when the evidence
establishes the existence of facts and circumstances which
create a highly reasonable doubt as to the reality of the
putative sale. The burden then shifts to the one claiming
rights under the putative sale to establish the reality of the
sale. This is done by proving a good faith transaction
resulting in a true alienation of ownership for
consideration. (Internal citations omitted.)

Hogan, supra. Holding in favor of the party challenging the transaction’s

validity, Hogan found that “the testimony, which fails to show any payment

of consideration, creates a ‘highly reasonable doubt’ as to the reality of the

sale. The…[parties supporting the transaction] therefore had the burden of

establishing a valid sale or donation inter vivos.” Id.

Relevant to the inquiry regarding whether there is a “highly

reasonable suspicion” of simulation is the adverse presumption rule:

An adverse presumption exists when a party having
control of a favorable witness fails to call him or her to
testify, even though the presumption is rebuttable and is
tempered by the fact that a party need only put on enough
evidence to prove the case. Whether to apply such an
inference is fully within the discretion of the trial court.15
(Internal citations omitted.)

14
In 2012, the legislature enacted La. C.C. art. 1849, which in relevant part,
states: “In all cases, testimonial or other evidence may be admitted to prove the existence
or a presumption of a simulation or to rebut such a presumption.
15
Glasscock further stated: “Louisiana courts have held that the trial judge’s
decision not to apply the negative inference is not an abuse of discretion under any one of
these circumstances: where the witness’s testimony would be cumulative; where the party
seeking to avail itself of the negative inference has the burden of proof on the issue that
would be addressed by the witness’s testimony; and where the witness is equally
available to the opposing party.”
27

Glasscock v. Bd. of Sup’rs of La. State Univ., 49,855 (La. App. 2 Cir.

8/19/15), 174 So. 3d 757, 760-61, writ denied, 15-1628 (La. 10/30/15), 179

So. 3d 618. Application of this principle is illustrated by Seikmann, supra,

wherein the court cited the conspicuous failure of ostensibly favorable

witnesses to testify as a fact supporting the finding of simulation.

Furthermore, we hold that, under the circumstances of this case, the

same presumption also applies to the failure to create, subpoena, or

introduce ostensibly favorable documentary evidence.

ANALYSIS
Guide’s breach of contract claim

Because the testimony of Paxton and Dr. Topolewski is without

credibility, Guide failed to prove the existence of a valid, enforceable

contract. For this reason alone, the portion of the judgment awarding Guide

$28,000 must be reversed. However, even assuming for the sake of argument

that there was an enforceable contract between the parties, the trial court

nonetheless committed manifest error in awarding $28,000 to Guide; that is

because Guide failed to carry its burden of proof under Harter, supra, i.e.,

the burden of proving that Guide performed “government consulting” work

for Madison during (any) of the last four months of the contract. The trial

court was clearly wrong in concluding that the testimony of Paxton and/or

Dr. Topolewski was sufficient to establish prima facie evidence of such

performance. Alternatively, the trial court may have committed a legal error

in failing to apply Harter, supra.

28

Madison’s reconventional demand

The trial court’s holding in favor of Guide on the main demand

necessarily precluded Madison’s reconventional demand; thus, the trial court

dismissed the reconvention with prejudice without further consideration.

Our reversal of that holding revives the reconventional demand. Because

the record is complete, remand is unnecessary; we conduct de novo

determination of the reconventional demand in light of our reversal of the

trial court’s credibility determinations.

We draw an adverse inference from Guide’s failure to subpoena or

attempt to introduce any ostensibly favorable third-party witnesses (e.g.,

Frutiger, the fiscal administrator; Sen. Cassidy; Richardson, the alleged

prospective partner/behavioral health operator; the local Madison Parish

landowners; or agents of the Louisiana Dept. of Health involved in the

alleged Medicaid reclassification), and failure to explain why no such

witnesses were called. We draw further adverse inference from Guide’s

failure to subpoena or introduce any documentary corroboration of Paxton’s

alleged accomplishments on behalf of Madison, and failure to explain why

no such efforts of proof were made. Finally, we draw additional adverse

inference based on: (1) Paxton’s unbelievable trial testimony, concerning (a)

his impossible explanation for his total lack of documentary evidence of

what he did for Madison, and (b) his actions after Dr. Topolewski was fired;

and (2) Dr. Topolewski’s (a) refusal to answer a valid question and his

multiple personal “objections” he baselessly raised on cross-examination, (b)

his abrupt pivot from insinuating forgery of his initials on the October 13,

2022 invoice, to, once confronted with his own email, saying the equivalent

of “Okay, yeah, I did it and it was a good thing,” and (c) reversing his initial
29

testimony that Madison’s attorney, Stolier, approved the subject contract and

admitting he did not know whether Stolier had even reviewed it.

Furthermore, given the circumstances, the spreading of the payments to

Guide over a perpetual monthly billing cycle, combined with Dr.

Topolewski’s “off the books” method of determining whether Guide had

performed for a given month is consistent with an intention to avoid scrutiny.

For these reasons, the totality of the evidence creates a “highly reasonable

suspicion” that this was not an arm’s length bargain as to Madison’s

interest.16

Below, we detail the grounds for our adverse inferences regarding

each alleged work Paxton did for Madison.

Medicaid reclassification. Other than agreeing in their testimony,

Paxton and Dr. Topolewski did not offer any corroboration of their claims

that Paxton expedited a Medicaid reclassification for Madison’s rural health

clinics—nor even that such reclassification occurred, despite the presumable

paperwork involved. It would have been contrary to Madison’s interest to

introduce such records; conversely, it would have supported Guide’s claim to

introduce records of the reclassification. As previously stated, Guide made

no attempt to subpoena or introduce such documents or the testimony of the

decision-makers at the Louisiana Dept. of Health. Furthermore, Dr.

Topolewski testified that he did not know any details of what Paxton did in

16
Madison urges us to use analogically La. C.C. art. 1526, which provides a
mathematical test for determining whether a purported “donation” is actually an arms’
length bargain. The operation of this article is to validate certain formally invalid private
“donations” which, in substance, are not donations at all, but instead, are onerous
contracts. That is, La. C.C. art. 1526 is a shield in the hand of a purported donee, not a
sword in the hand of a party to an ostensibly arms’ length contractual bargain. We reject
Madison’s invocation of this article as supplying it a cause of action to recover monies it
paid Guide.

30

allegedly expediting the reclassification for Madison, except that he “went

there” and contacted someone.

USDA loan. Likewise, Paxton and Dr. Topolewski did not offer any

corroboration of their claim that Paxton obtained Sen. Cassidy’s help to get

Madison a $38 million loan from the USDA. It would have supported

Guide’s claim to introduce records of the loan process or communications

with Sen. Cassidy. Guide made no attempt to subpoena or introduce such

documents or the testimony of Sen. Cassidy.

Negotiation with landowners. Furthermore, Guide did nothing to

corroborate the claim that Paxton negotiated with local landowners for the

lease of land for the new hospital facility (except for notations on the

invoices for August, September, and October of 2019, which Paxton wrote).

It would have been contrary to Madison’s interest to introduce such records;

conversely, it would have supported Guide’s claim to introduce records of

the leases of the subject land and/or records of Paxton’s communications

with local landowners. Guide made no attempt to introduce such documents

or the testimony of the landowners.

Prospective partnership with behavioral health operator. Finally,

Guide offered no documentation whatsoever demonstrating that Paxton had

in fact “worked on” Madison’s prospective partnership with Richardson, a

behavioral health operator — nor that such partnership ever was an actual

prospect.17 How such a process could develop all the way to the contract-

drafting stage (as Dr. Topolewski alleged) without generating any written

language to be included in the contract, written negotiations, other

17
That is, aside from brief notations on a few of the invoices.
31

paperwork, documents, emails, text messages, etc., is difficult — if not

impossible — to imagine. Nor did Guide subpoena or introduce the

testimony of Richardson, the alleged prospective partner/behavioral health

operator.

The evidence in this case, including Paxton and Dr. Topolewski’s

unbelievable testimony and the adverse inferences arising from what was not

introduced, as outlined herein, creates a “highly reasonable suspicion” that

Dr. Topolewski was not dealing at arm’s length when he caused Madison to

pay $300,620 to Guide for Paxton’s alleged services. Hogan, supra. Thus,

the presumption of simulation applies. For the reasons detailed herein,

Guide has failed to rebut that presumption. As a result, the contract has a

predominantly unlawful cause and is an absolute nullity. La. C.C. art. 2030;

La. C.C. arts. 1966 and 1967; La. Const. art. VII section 14(A).

La. C.C. art. 2033 provides the remedies available when a contract is

declared null; in pertinent part, it states:

An absolutely null contract…is deemed never to have
existed. The parties must be restored to the situation that
existed before the contract was made. If it is impossible or
impracticable to make restoration in kind, it may be made
through an award of damages.

Nevertheless, a performance rendered under a contract that
is absolutely null because its object or its cause is illicit or
immoral may not be recovered by a party who knew or
should have known of the defect that makes the contract
null. [However,] …[such] performance may be
recovered…in exceptional situations when, in the
discretion of the court, that recovery would further the
interest of justice.

La. C. C. art. 2033. We hold that Guide did prove that it performed services

under the contract in connection with its invoices submitted on April 4,

2019, ($7,582); April 30, 2019, ($6,667); August 1, 2019, ($6,677);

32

September 1, 2019, ($6,618); October 2, 2019, ($7,226); January 1, 2020,

($7,521); February 1, 2020, ($7,488); and April 1, 2021, ($8,563) and is

entitled to offset the sum of those amounts against the $300,620 it would

otherwise owe Madison.

CONCLUSION

The judgment of the trial court is REVERSED. Guide’s claims

against Madison are dismissed with prejudice. Madison’s reconventional

demand is granted. JUDGMENT in the amount of $242,278 is hereby

awarded in favor of the Madison Parish Hospital Services District and

against The Guide Company, LLC. All costs of this appeal are taxed to The

Guide Company, LLC.

REVERSED; RENDERED.

33