Wright & Moreno, LLC v. Dr. Richard Clement and Emily Clement

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

NO. 04-1097

WRIGHT & MORENO, L.L.C.

VERSUS

DR. RICHARD CLEMENT AND EMILY CLEMENT

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APPEAL FROM THE
FOURTEENTH JUDICIAL DISTRICT COURT,
PARISH OF CALCASIEU, NO. 2003-3144,
HONORABLE ALCIDE GRAY, DISTRICT JUDGE

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JIMMIE C. PETERS
JUDGE

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Court composed of Oswald A. Decuir, Jimmie C. Peters, and Glenn B. Gremillion,
Judges.

AFFIRMED IN PART AND REVERSED IN PART.

K. Michael Wright
Richard Moreno
Ike A. Hobaugh
Wright & Moreno, L.L.C.
203 West Clarence
Lake Charles, LA 70601
(337) 439-6930
COUNSEL FOR PLAINTIFFS/APPELLEES:
Wright & Moreno, L.L.C.

Steven W. Hale
Steven W. Hale & Associates, Inc.
1735 Ryan Street
Lake Charles, LA 70601-6049
(337) 433-0612
COUNSEL FOR DEFENDANTS/APPELLANTS:

Dr. Richard Clement and Emily Clement

PETERS, J.

Dr. Richard Clement and his wife, Emily (the Clements), appeal a portion of

a default judgment entered against them by the trial court in favor of Wright &

Moreno, L.L.C. (Wright & Moreno). For the following reasons, we affirm the award

of attorney fees and reverse the award of penalties.

DISCUSSION OF THE RECORD

Wright & Moreno is a professional limited liability company performing legal

services for clients. Between May 1, 2002, and February 28, 2003, it performed legal

services for the Clements and billed them $5,834.92 for the services rendered. When

the Clements failed to pay for the services rendered, Wright & Moreno instituted this

collection suit, seeking the amount owed together with penalties and attorney fees.

The Clements failed to respond to the suit, and, on July 2, 2003, Wright &

Moreno requested and obtained a judgment of default. Thereafter, on July 9, 2003,

Wright & Moreno presented evidence to the trial court in support of its demands.

After considering the evidence presented, the trial court entered judgment in favor of

Wright & Moreno and against the Clements, awarding Wright & Moreno $5,834.92

on the open account obligation, $1,200.00 in attorney fees, and $3,964.60 in

penalties. The Clements appeal only the attorney fee and penalty awards.

OPINION

At the July 9, 2003 trial, Wright & Moreno offered as evidence in support of

their demands the testimony of Rena Baldwin, the firm’s accountant, as well as the

following exhibits:1

1. Wright & Moreno statements for professional services rendered.

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Wright & Moreno actually offered the entire record into evidence, and these exhibits were
attached to the original petition.

2. A copy of a $3,964.60 check made payable to Michael Wright,
drawn on the Clements’ Whitney National Bank checking
account, signed by Emily Clement, dated February 7, 2003, and
bearing the notation “For Legal services.” The check also bears
the stamped notation on its face “RETURNED UNPAID NSF.”

3. A statement from Bank One, dated February 13, 2003, and
addressed to Wright & Moreno, stating that the $3,964.60 check
had been returned because the account upon which it was drawn
did not contain sufficient funds to cover it.

4. A copy of a letter from Wright & Moreno dated May 8, 2003, and
addressed to the Clements, informing them of Bank One’s failure
to honor the check dated February 7, 2003, and making demand
for payment of the dishonored check and a service charge.

Ms. Baldwin testified that she deposited the $3,964.60 check on behalf of Wright &

Moreno and that the check was returned, accompanied by the Bank One February 13,

2003 statement.

Attorney Fee Issue

Attorney fees may be awarded on a suit on open account provided that the

plaintiff complies with the requirements of La.R.S. 9:2781. That statute provides:

A. When any person fails to pay an open account within thirty
days after the claimant sends written demand therefor correctly setting
forth the amount owed, that person shall be liable to the claimant for
reasonable attorney fees for the prosecution and collection of such claim
when judgment on the claim is rendered in favor of the claimant.
Citation and service of a petition shall be deemed written demand for the
purpose of this Section. If the claimant and his attorney have expressly
agreed that the debtor shall be liable for the claimant’s attorney fees in
a fixed or determinable amount, the claimant is entitled to that amount
when judgment on the claim is rendered in favor of the claimant.
Receipt of written demand by the person is not required.
B. If the demand is forwarded to the person by first class mail to
his last known address, a copy of the demand shall be introduced as
evidence of written demand on the debtor.
C. If the demand is made by citation and service of a petition, the
person shall be entitled to pay the account without attorney fees by
delivering payment to the claimant or the claimant’s attorney within ten
days after service of the petition in city courts and fifteen days after
service of the petition in all other courts.

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D. For the purposes of this Section and Code of Civil Procedure
Articles 1702 and 4916, “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. “Open account”
shall include debts incurred for professional services, including but not
limited to legal and medical services. For the purposes of this Section
only, attorney fees shall be paid on open accounts owed to the state.
E. As used in this Section, “person” means natural and juridical
persons.

Wright & Moreno filed suit on June 10, 2003, and it is undisputed that the

Clements were served with citation and suit on June 12, 2003. The trial court

rendered judgment on July 9, 2003. Thus, less than thirty days had lapsed between

service on the Clements and confirmation of the judgment. The Clements argue that

La.R.S. 9:2781 allows them thirty days in which to pay the open account and that,

because Wright & Moreno did not wait thirty days before obtaining judgment against

them, it is not entitled to an award of attorney fees.

The May 8, 2003 demand letter addressed only the failure of Whitney National

Bank to honor the Clements’ $3,964.60 check and cannot be used as written demand

of the total amount due, $5,834.92. Thus, the issue to be resolved in this appeal is

whether citation and service of the open account petition is subject to the thirty-day

requirement of La.R.S. 9:2781(A) or the fifteen-day requirement of La.R.S.

9:2781(C). We conclude that the latter period applies.

If read in a vacuum, La.R.S. 9:2781(A) would require that a plaintiff relying

on citation and service of the petition as written demand wait thirty days after citation

and service before being entitled to an attorney fee award. However, we cannot read

that section in a vacuum but must construe it in pari materia with La.R.S. 9:2781(C).

Our conclusion that the fifteen days is the appropriate period is supported by the

legislature’s amendment of the statute in 2001.

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Prior to 2001, La.R.S. 9:2781(A) provided only a fifteen-day requirement for

the written notice and did not provide for the use of citation and service of the

petition as adequate written notice. In that year, 2001 La. Acts No. 1075, § 1,

amended La.R.S. 9:2781(A) to change the fifteen-day requirement to thirty days and

added the sentence allowing use of citation and service of the petition as a form of

written demand. The same Act added what is now La.R.S. 9:2781(C).

While poorly drafted, it is clear that the amendment intended to accomplish

two objectives: (1) increase the time in which a person could avoid payment of

attorney fees after written demand from fifteen to thirty days and (2) provide that

citation and service of the petition would also serve as written demand, but subject

to only a fifteen-day avoidance window.2 This fifteen-day window corresponds to the

time limit in which a defendant must answer a petition. See La.Code Civ.P. art. 1001.

Because the Clements had fifteen days after service to avoid payment of

attorney fees by paying the account in full and because they failed to do so, we find

no error in the trial court’s award of attorney fees. Thus, we find the Clements’

assignment of error in this regard to be without merit.

Penalty Issue

The trial court awarded penalties pursuant to La.R.S. 9:2782.2. The pertinent

language is found in La.R.S. 9:2782.2(A), which states that “[w]henever any drawer

of a check stops payment on the check . . . the drawer shall be liable . . . for damages

of twice the amount so owing, but in no case less than one hundred dollars, plus

attorney fees and court costs, if the drawer fails to pay the obligation created by the

check within thirty days after receipt of written demand for payment thereof

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The avoidance window is ten days if the open account action is pursued in city court.

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substantially in the form provided for in [La.R.S. 9:2782.2(C)] . . . .” (Emphasis

added). Because La.R.S. 9:2782.2 is a penalty statute, it must be strictly construed.

Ancona’s Stop & Save, Inc. v. Cleo Fields & Assocs., L.L.C., 00-0760 (La.App. 1 Cir.

6/22/01), 809 So.2d 170.

In the matter before us, there exists no evidence that the Clements stopped

payment on the $3,964.60 check. Whitney National Bank refused to honor the check

because the Clements’ account did not contain sufficient funds to pay the check.

Applying the required strict construction to La.R.S. 9:2782.2, we find that the trial

court erred in awarding Wright & Moreno penalties.

DISPOSITION

We affirm the attorney fee award and reverse the penalty award. We assess all

costs equally between Wright & Moreno, L.L.C. and Dr. and Mrs. Richard Clement.

AFFIRMED IN PART AND REVERSED IN PART.

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