Walter A. Glod, Jr., M.D. v. W. Gregory Baker

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

CA 08-355 consolidated with CA 08-356, CA 08-357, CA 08-358

WALTER A. GLOD, JR., M.D.

VERSUS

W. GREGORY BAKER, ET AL.

**********

APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT
PARISH OF LAFAYETTE, NO. 97-5864 C/W 98-0481 C/W 98-0482
C/W 98-0483
HONORABLE DURWOOD WAYNE CONQUE, DISTRICT JUDGE

**********

BILLY HOWARD EZELL
JUDGE

**********

Court composed of Sylvia R. Cooks, Michael G. Sullivan, and Billy Howard Ezell,
Judges.

AFFIRMED.

Steven Gerald Durio
Robert Louis Broussard
Jessica Farmer Watts
Durio, McGoffin, & Stagg
P. O. Box 51308
Lafayette, LA 70505-1305
(337) 233-0300
Counsel for Defendants/Appellees:
Donald J. Baker
Kirby Pecot
Andrew B. Jameson
Max Luttgeharm
M.L. Godley, M.D.

Joseph C. Giglio, Jr.
Liskow & Lewis
P. O. Box 52008
Lafayette, LA 70505-2008
(337) 232-7424
Counsel for Plaintiff/Appellee:
Walter A. Glod, Jr., M.D.

Robert A. Kutcher
Nicole Sophia Tygier
Chopin, Wagar, Cole, Richard, Reboul & Kutcher
3850 North Causeway Blvd., #900
Metairie, LA 70002
(504) 830-3824
Counsel for Defendant/Appellant:
Copeland’s of New Orleans, Inc.

William H. Parker, III
Allen & Gooch
P. O. Drawer 3768
Lafayette, LA 70502-3768
(337) 291-1270
Counsel for Defendants/Appellees:
Darnell, Sikes, Kolder, Frederick &Rainey
BCM, L.L.C.
Nawlins Kajun Food, L.L.C.
Ed Larry Sikes

Larry Lane Roy
Jennifer A. Wells
Dawn L. Morris
Preis & Roy
P. O. Drawer 94-C
Lafayette, LA 70509
(337) 237-6062
Counsel for Defendants/Appellees:
Coregis Insurance Company
Chris Verret

Louis Benedict Viviano
Attorney at Law
1310 South Union Street, Suite 8
Opelousas, LA 70570
(337) 948-3044
Counsel for Defendant/Appellee:
Louis B. Viviano

George Allen Walsh
Alice F. Estill
Attorneys at Law
601 Napoleon Street
Baton Rouge, LA 70802
(225) 381-9305
Counsel for Defendants/Appellees:
Vikki Lynn Baiers
W. Gregory Baker

EZELL, JUDGE.

This case, which has been before this court on numerous occasions, arises out

of the termination of the Copeland’s of New Orleans (CNO) franchises in Lafayette,

Louisiana, and Orlando, Florida. The issues of detrimental reliance and conversion

against CNO, Al Copeland, and William Copeland were tried to a jury on December

4, 2006 to December 12, 2006. At the time of trial, the only remaining plaintiffs in

the suit were BCM, LLC and Nawlins Kajun Foods, LLC. These entities were the

franchisees. The jury rejected their claims for detrimental reliance but found that

CNO had converted the property of both BCM and Nawlins. It made an award of

$123,189 to BCM and $119,830 to Nawlins on the conversion claims. The jury’s

decision on both issues is appealed by the parties.

FACTS

The underlying facts of this case were previously before this court in Glod v.

Baker, 02-988 (La.App. 3 Cir. 8/6/03), 851 So.2d 1255, writ denied, 03-2482 (La.

11/26/03), 860 So.2d 1135. The facts are undisputed by the parties and are restated

below:

In 1994, Alvin C. Copeland, William A. Copeland, and
Copeland’s of New Orleans, Inc. (the Copelands) entered into a written
franchise agreement with W. Gregory Baker (Baker), of Rapides Parish,
to open a Copeland’s restaurant in Lafayette. Baker initially assigned
the franchise to BCM, Inc., a corporation in which he and Vikki Lynn
Baiers (Baiers) were the sole stockholders. This assignment had written
CNO approval, a requirement under the franchise agreement. Baker and
Baiers then hired an accountant, Ed Larry Sikes, and an attorney, Chris
A. Verret, both of Lafayette Parish, to work with the franchise. In
November 1994, on the advice of their accountant and their attorney,
Baker and Baiers created a Louisiana limited liability company, BCM,
into which the franchise was transferred. This transfer also had the
written approval of CNO.

To get the Lafayette restaurant up and running, BCM needed
investors. Baker approached Louis Viviano, of St. Landry Parish, who
bought a 30% interest in BCM for $200,000. Viviano then transferred
that interest to a wholly owned corporation, LAF Foods, Inc. (LAF),

1

which he had created for the purpose of holding that franchise interest.
Baker also obtained from Dr. Walter A. Glod, M.D., of Lafayette Parish,
an investment of $100,000 in exchange for a 15% interest. At this point,
the ownership of the limited liability company, BCM, was 30% in LAF
Foods, Inc., 27.5% in Baker, 27.5% in Baiers, and 15% in Glod. The
Copeland’s restaurant in Lafayette was built and it opened for business
in September 1995.

On January 1, 1996, Baker transferred his interest in BCM into a
wholly owned new corporation, Greg Baker Enterprises (GBE), and
Baiers transferred her interest into her newly created corporation, VLB,
Inc. (VLB). In addition, Viviano transferred his interest held by LAF to
CBC International, Inc. (CBC), a sub-chapter S corporation wholly
owned by him. As a result of these transfers, the ownership of the
limited liability company that held the Lafayette franchise was: GBE,
27.5%; VLB, 27.5%; CBC, 30%; and Glod, 15%.

The Lafayette franchise was a success. Attention was then turned
to opening another restaurant, this one in Orlando. For this purpose
another limited liability company, Nawlins, had already been created.
On or about January 5, 1996, Viviano’s sub-chapter S corporation, CBC,
invested $75,000 and acquired a one-third interest in Nawlins. Baker
and Baiers were the members of Nawlins having the remaining
two-thirds interest. They each transferred their respective interests to
their corporations, GBE and VLB.

Baker and Baiers created NKF I-Drive Limited Partnership
(I-Drive), a Florida limited partnership, to be the operating entity for the
Orlando store. A Louisiana corporation, NKF, Inc. (NKF), owned in
equal shares by Viviano, Baker and Baiers, was created to be I-Drive’s
general partner. NKF owned 10% of I-Drive. There were two classes
of partners in I-Drive. Class B partners consisted of Nawlins and CPCI,
Incorporated (CPCI), another entity owned by Viviano. Class A
partners consisted of the individuals Donald Baker, Dr. Lloyd Godley,
Max Luttgenharm, Donald Jameson and Kirby Pecot: these individuals
were the limited partners, whose investments also contributed to the
efforts on behalf of the Orlando store.

Viviano’s entity, CBC, loaned $450,000 for the purchase of
furniture, fixtures, and equipment for the Orlando store. To secure this
loan, CBC got a mortgage on the purchases, and it also required, as
collateral, stock pledges from Baker and Baiers. Baker pledged his
stock in GBE, and Baiers pledged a thousand shares of her stock in
VLB.

Nawlins acquired a franchise from CNO and the Orlando
restaurant opened for business. This store was not a success. When it
needed money, Viviano, through his entities CBC and CPCI, eventually
infused $1,050,000 into the Orlando store. There were loans made by
CBC that were later subsumed by loans made by CPCI. As a part of the

2

complicated recapitalization and restructuring process that these loans
entailed, Baker sold to Viviano all of his stock in GBE for $225,000. It
was through GBE that Baker held his ownership in the LLCs. Baker
also acquired half of Baiers’ interest in VLB. Later, most of the shares
of VLB were purchased by CPCI at a judicial sale. The money changing
hands in this process went to I-Drive, but it was all for the benefit of
Nawlins.

All of these financial transactions and structuring resulted in
numerous conveyancing and encumbrancing of interests in the
franchises owned by the LLCs. Eventually, Viviano had the majority
ownership or control of both BCM and Nawlins, the two franchisee
LLCs. His ownership or control became 85% of BCM and 87.5% of
Nawlins.

We have named the corporations, partnerships, and LLCs
involved in these multiple and complicated transactions. The
individuals involved were Glod, Gregory Baker, Baiers, the two
Copelands, Viviano, the five limited partners (Donald Baker, Godley,
Luttgenharm, Jameson, and Pecot), Ed Larry Sikes, the accountant, and
Chris A. Verret, the attorney.

The franchise agreements contained language prohibiting the
conveyance or encumbrance of any interest in the agreement, the
restaurant, or the franchisee without the prior written consent of the
franchisor. In 1997, learning of these transfers and encumbrancing of
interests, and knowing that its consent was last obtained nearly three
years earlier in 1994, when the Lafayette franchise was conveyed to
BCM, the Copelands instituted arbitration proceedings seeking
termination of both franchise agreements. An arbitration award
terminated the franchise agreements on September 30, 1997.

In a published opinion in a writ application in one of these
consolidated cases, Glod v. Baker, 99-0872 (La.App. 3 Cir. 12/8/99),
755 So.2d 910, we agreed with the trial judge that the effect of the
arbitration award was to terminate the franchise agreements; it did not
affect the pending claims that had been judicially asserted by various
parties seeking the return of their investments and lost profits connected
to the Copeland’s restaurants in Lafayette and Orlando. Those pending
claims, described below, proceeded on through discovery toward trial.

Id. at 1259-60.

BCM and Nawlins filed suit claiming that they relied to their detriment on the

actions/inactions of CNO in investing significant amounts of money to open the two

restaurants, in addition to investing more funds to continue operating them. They

also claimed that CNO had used and taken property without their consent when it

3

continued to operate the restaurants after the franchises had been terminated. Trial

in the present matter proceeded before a jury on December 4, 2006 to December 12,

2006. By this time the only remaining parties were BCM and Nawlins as the

franchisees/plaintiffs and CNO, Al Copeland, and William Copeland as defendants.1

The jury heard evidence regarding the claims of detrimental reliance and conversion.

The jury found that CNO had converted the property of BCM and awarded it damages

in the amount of $123,189. The jury also found that CNO converted the property of

Nawlins and awarded it damages in the amount of $119,830. The jury determined

that BCM and Nawlins were not entitled to recover under a theory of detrimental

reliance. CNO, BCM, and Nawlins appealed the judgment.

JURY CHARGES

Both sides complain about charges made to the jury which they argue were

legally incorrect and, thus, misleading to the jury, which resulted in a defective

verdict. BCM and Nawlins complain about the jury charge regarding detrimental

reliance, and CNO complains about the jury charge regarding conversion.

The supreme court recently discussed the law and principles applicable in

instructing a jury on the law and the appellate’s court responsibility when reviewing

those instructions in Adams v. Rhodia, Inc., 07-2110, pp. 5-8 (La. 5/21/08), 983 So.2d

798, 804-05, as follows:

Louisiana Code of Civil Procedure article 1792(B) requires the
trial court to instruct jurors on the law applicable to the cause submitted
to them. The trial court is responsible for reducing the possibility of
confusing the jury and may exercise the right to decide what law is
applicable and what law the trial court deems inappropriate. Baxter v.
Sonat Offshore Drilling Inc., 98-1054, p. 6 (La.App. 1 Cir. 5/14/99),
734 So.2d 901, 906.

1
The remaining claims against Gregory Baker and Vikki Baiers were dismissed by the trial
judge on a directed verdict.

4

Adequate jury instructions are those which fairly and reasonably
point out the issues and which provide correct principles of law for the
jury to apply to those issues. The trial judge is under no obligation to
give any specific jury instructions that may be submitted by either party;
the judge must, however, correctly charge the jury. If the trial court
omits an applicable, essential legal principle, its instruction does not
adequately set forth the issues to be decided by the jury and may
constitute reversible error. Doyle v. Picadilly Cafeterias, 576 So.2d
1143, 1152 (La.App. 3 Cir.1991).

Correlative to the judge’s duty to charge the jury as to the law
applicable in a case is a responsibility to require that the jury receives
only the correct law. Melancon v. Sunshine Construction, Inc., 97-1167,
p. 6 (La.App. 1 Cir. 5/15/98), 712 So.2d 1011, 1016; Doyle, 576 So.2d
at 1152.

Louisiana jurisprudence is well established that an appellate court
must exercise great restraint before it reverses a jury verdict because of
erroneous jury instructions. Trial courts are given broad discretion in
formulating jury instructions and a trial court judgment should not be
reversed so long as the charge correctly states the substance of the law.
The rule of law requiring an appellate court to exercise great restraint
before upsetting a jury verdict is based, in part, on respect for the jury
determination rendered by citizens chosen from the community who
serve a valuable role in the judicial system. We assume a jury will not
disregard its sworn duty and be improperly motivated. We assume a
jury will render a decision based on the evidence and the totality of the
instructions provided by the judge.

However, when a jury is erroneously instructed and the error
probably contributed to the verdict, an appellate court must set aside the
verdict. In the assessment of an alleged erroneous jury instruction, it is
the duty of the reviewing court to assess such impropriety in light of the
entire jury charge to determine if the charges adequately provide the
correct principles of law as applied to the issues framed in the pleadings
and the evidence and whether the charges adequately guided the jury in
its deliberation. Ultimately, the determinative question is whether the
jury instructions misled the jury to the extent that it was prevented from
dispensing justice. Nicholas v. Allstate Insurance Company, 99-2522,
p. 8 (La.8/31/00), 765 So.2d 1017, 1023; see also Brown v. White, 405
So.2d 555, 560 (La.App. 4 Cir.1981), rev’d on other grounds on reh’g,
430 So.2d 16 (La.1983) (the question is whether the jury was misled to
the extent that it was prevented from doing justice) and Jones v. Liberty
Mutual Insurance Company, 568 So.2d 1091, 1094 (La.App. 5
Cir.1990), writ denied, 572 So.2d 72 (1991) (reversible error occurs
when the jury is misled to such an extent as to prevent it from doing
justice).

Determining whether an erroneous jury instruction has been given
requires a comparison of the degree of error with the jury instructions as

5

a whole and the circumstances of the case. See Belle Pass Terminal,
Inc. v. Jolin, Inc., 634 So.2d 466 (La.App. 1 Cir.), writs denied, 638
So.2d 1094 (La.1994). Because the adequacy of jury instruction must
be determined in the light of jury instructions as a whole, when small
portions of the instructions are isolated from the context and are
erroneous, error is not necessarily prejudicial. Furthermore, the manifest
error standard for appellate review may not be ignored unless the jury
charges were so incorrect or so inadequate as to preclude the jury from
reaching a verdict based on the law and facts. Thus, on appellate review
of a jury trial the mere discovery of an error in the judge’s instructions
does not of itself justify the appellate court conducting the equivalent of
a trial de novo, without first measuring the gravity or degree of error and
considering the instructions as a whole and the circumstances of the
case. Brown, 405 So.2d at 558.

Jury Charge on Detrimental Reliance

During deliberations, the jury sent a note to the judge informing him that it was

having a small problem with the definition of detrimental reliance. After discussing

the matter with counsel, the judge read a supplemental instruction to the jury. BCM

and Nawlins argue that the jury was confused and the confusion was compounded by

the supplemental instruction which stated (emphasis supplied):

Under the detrimental reliance doctrine in Louisiana law, a party is
permitted to recover for economic harm whenever the defendant made
a representation by word or conduct upon which the plaintiff justifiably
relied and because of which the plaintiff changed his position to his
detriment. This is because the basis of the detrimental reliance doctrine
is designed to prevent injustice by barring or stopping a party from
taking a position contrary to his prior acts, admissions, representations,
or silence.

Okay. The law states that, when silence is asserted as a grounds
for detrimental reliance, a duty to speak must exist. For such duty to
speak to exist, there must be proof that: one, the defendant had the
opportunity to speak or act; two, the defendant had full knowledge of
the facts, circumstances, and understandings between the parties; three,
the defendant intended to mislead or at least had a willingness that the
plaintiff be deceived; four, the plaintiff must have been ignorant of and
without convenient or ready means of learning the true facts,
circumstances and understandings of the parties; and, five, the plaintiff
must have been misled into doing what he would not have done except
for the silence of the defendant.

6

BCM and Nawlins argue the bold-faced words created the jury confusion

regarding the law on detrimental reliance. They claim that the use of the word

“party” as opposed to simply “plaintiff” and “defendant” created the confusion

because “party” referred to the plaintiff in the first instance and to the defendant in

the second instance.

CNO argues that the confusing language in the supplemental instruction was

carried over directly from the charge previously submitted to the court by BCM and

Nawlins. This is the same instruction that BCM and Nawlins argue on appeal that the

trial judge erred in not using to charge the jury on detrimental reliance. In support of

this contention, CNO argues that BCM and Nawlins only objected to the second part

of the supplemental charge and not the portion that they claim on appeal is defective.

Counsel for BCM and Nawlins notes that he was not trial counsel, but in reviewing

the colloquy between trial counsel and the judge, he observes that there was an

objection made. He argues it is unclear what part of the detrimental reliance

instructions were objected to.

A review of the entire colloquy between the trial judge and counsel about the

jury’s confusion reveals that the judge first reviewed the requested jury charges from

both sides on detrimental reliance. Then they discussed the charges. The transcript

reveals that trial counsel for BCM and Nawlins specifically had no objection to the

specific part of the supplemental jury charge now complained of on appeal and the

wording to be used:

MR. CHEATWOOD: We wouldn’t have any problem with
stopping after the first sentence you read: Designed to prevent injustice
by barring a party from taking a position contrary to his prior - -

THE COURT: But you have the same exact sentence in yours:
This is because the basis of the detrimental reliance doctrine is designed
to prevent injustice by barring a party from taking a position contrary to
his prior acts, admissions, or representations, or silence.

7

MR. CHEATWOOD: And I’m saying, I don’t have a problem
with that sentence at all, in Mr. Kutcher’s or in mine. It’s the next part
that bothers me.

MR. KUTCHER: What, a condition precedent?

MR. CHEATWOOD: Right. Talking about promises when we’re
talking about silence and inaction.

We have reviewed the entire exchange between counsel and the court, and we

agree with CNO that BCM and Nawlins failed to object to the part of the jury charge

now complained of and cannot now complain about it on appeal. See La.Code Civ.P.

art. 1793(C).

Jury Charge on Conversion

CNO claims that the jury charge on conversion submitted to the jury denied it

the affirmative defense that implicit or explicit consent or ratification vitiates

conversion regardless of the way it is committed. The trial judge charged the jury as

follows on conversion:

Louisiana law provides a remedy called conversion for unlawful
interference with the ownership or possession of property. Among the
ways that conversion can be committed are: One, possession of property
acquired in an unauthorized way; two, the property is removed from one
place to another with the intent to exercise control over the property;
three, possession of the property is transferred without authority or
consent; four, possession is withheld from the true owner or possessor;
or, five, property is altered or destroyed.

CNO argues that this jury instruction allowed the jury to believe that BCM’s and

Nawlins’ implied consent was not a defense when considering whether a conversion

had been committed.

The law is clear that:

A conversion is committed when any of the following occurs: 1)
possession is acquired in an unauthorized manner; 2) the chattel is
removed from one place to another with the intent to exercise control
over it; 3) possession of the chattel is transferred without authority; 4)
possession is withheld from the owner or possessor; 5) the chattel is
altered or destroyed; 6) the chattel is used improperly; or 7) ownership

8

is asserted over the chattel.

Dual Drilling Co. v. Mills Equip. Invs., Inc., 98-343, pp. 4- 5 (La. 12/1/98), 721 So.2d

853, 857 (citing FRANK L. MARAIST & THOMAS C. GALLIGAN, LOUISIANA

TORT LAW § 1-2, at 3 (1996 & Supp.1998)).

While the jury charge does not specifically mention implied consent, it does

state that “possession of the property is transferred without authority or consent.”

The instruction when read as a whole indicates that conversion occurs when a party

does not have permission to use the property of another. We find that the trial judge’s

instruction on conversion correctly stated the law.

JUROR MISCONDUCT

BCM and Nawlins contend that one of the jurors expressed prejudicial

comments about Mr. Louis Viviano during deliberations which in effect “poisoned”

the jury. In support of this argument, they offered the affidavit of the jury foreperson.

The trial court denied their motion for new trial on this issue.

The law is clear that affidavits and other testimony of jurors cannot be used to

impeach the jury’s verdict. Uriegas v. Gainsco, 94-1400 (La.App. 3 Cir. 9/13/95)

663 So.2d 162, writ denied, 95-2485 (La. 12/15/95), 664 So.2d 458; Theriot v.

Theriot, 622 So.2d 257 (La.App. 1 Cir.), writ denied, 629 So.2d 1138 (La.1993);

Williams v. Super Trucks, Inc., 36,993, 36,994 (La.App. 2 Cir. 4/9/03), 842 So.2d

1210, writ denied, 03-1303 (La. 9/5/03), 852 So.2d 1042; Coleman v. Brooks, 583

So.2d 133 (La.App. 4 Cir. 1991). “[I]nvasive scrutiny of a juror’s individual

deliberation or investigation of a jury’s collective reasoning for reaching a verdict are

disfavored in the law as a matter of public policy.” Uriegas, 663 So.2d at 170-71.

“The reason for this rule is to promote the jury’s discovery of the truth by preventing

litigants from invading the privacy of the jury room.” Id.

9

It would be improper for the trial court to consider this affidavit to overturn a

jury verdict. Furthermore, the jury process is such that the jury should be allowed to

deliberate and express opinions without worry that its opinions would be subject to

scrutiny. There were twelve people on this jury, and many probably had varying

opinions about the parties involved in the litigation. The trial judge did not err in his

ruling.

CONVERSION

CNO contends that the jury’s finding that conversion occurred was manifestly

erroneous, as there was no evidence presented to support such a finding. It argues

that CNO operated the restaurants with the consent of Mr. Viviano for just over a

two-week period following the dissolution of the temporary restraining order. They

claim that, at the very least, no steps were taken to prevent CNO from continuing to

operate the restaurants while negotiations to keep the restaurants open were ongoing.

In response to this argument, BCM and Nawlins contend that there was sufficient

testimony in the record to allow the jury to conclude that products and equipment

were removed without their consent.

A trial court’s factual determination is subject to the manifest error standard of

review. Bellard v. Am. Cent. Ins. Co., 07-1335, 07-1399 (La. 4/18/08), 980 So.2d

654. The issue to be resolved by the reviewing court is whether the fact finder’s

conclusion was a reasonable one. Id.

Conversion consists of an act in derogation of plaintiff’s possessory rights.

Angelo and Son, Inc. v. Rapides Bank & Trust Co., 95-992 (La.App. 3 Cir. 4/10/96),

671 So.2d 1283, writs denied, 96-1173, 96-1204 (La. 6/21/96), 675 So.2d 1083. Any

wrongful exercise or assumption of authority over another’s goods, depriving him of

possession, permanently or for an indefinite period of time, is conversion. Id.

10

Mr. Viviano testified that the restaurants were kept open after the dissolution

of the temporary restraining order because he thought the parties could work things

out. However, CNO never asked if they could use anything. After the restaurants

were closed on November 2, 1997, the electrical and water utilities were still on, but

the coolers had been turned off and fresh food had been left to spoil. All dry goods

and proprietary goods had been removed. The payroll records were also gone.

Chris Rodrique, who had been an area supervisor and director of operations for

CNO, also testified. He stated that he was instructed to send a team over to the

restaurants to get the payroll records, so they could pay people when CNO ceased

operating the restaurants. He also testified that there was some inventory that had

been purchased, mostly food and liquor, that also needed to be removed. Scott

Johnson went to Orlando and Pat Lynch went to Lafayette to carry out these duties.

Pat Lynch became the area supervisor of the Lafayette and Orlando restaurants

for CNO. When CNO took over the restaurants about a month before closure, he was

responsible for ensuring that they continued to operate in a Copeland’s fashion. He

testified that he got a call the night the restaurants closed. Some food was taken out

of the restaurant and put on a truck. Alcohol was also removed. These items were

taken to other Copeland’s restaurants.

Scott Johnson was the area supervisor responsible for closing the Lafayette

restaurant. A refrigerated truck was waiting to remove items from the store. The

managers loaded the regular closing period inventory on the truck. He made a copy

of the Excel spreadsheet showing the inventory onto a disk. Employee files and

payroll records were also removed. Inventorying and loading of the truck took

several hours.

11

Mr. Bryant Angelle, II, a computer consultant, also testified. He went with Mr.

Viviano to the Lafayette restaurant about four to five months after the restaurant was

closed. There were three computers: two were networked and one was a standalone.

One of the networked computers was not running, and a couple of files were missing

on the other one. He was able to ascertain that the touch-screen program for placing

orders had last been accessed on November 7. Payroll and tip schedule files were last

accessed on November 8 but were no longer on the server.

Richard Talluto was a chief financial officer for Al Copeland Investments. He

testified that the agreement for CNO to keep the restaurants open called for the rents,

utilities, equipment notes, etc., to be paid. However, since BCM and Nawlins owed

CNO money, it decided to offset the debt as a way of collecting the money.

From the evidence as a whole, we find it reasonable for the jury to conclude

that while BCM and Nawlins consented to CNO continuing to operate the Lafayette

and Orlando restaurants, there was no agreement that it could use the property in the

restaurants without paying for it. This includes food, liquor, and computer programs

and records. One can assume from the suspicious removal of the property in the

middle of the night that CNO was trying to get the property and records before it

could be stopped.

CNO additionally argues that the sums awarded for conversion was erroneous.

The jury’s awards relative to conversion were based on expert testimony. CNO

complains that BCM’s and Nawlin’s experts methodology and determinations were

defective.

A fact finder’s evaluation of expert testimony and resolution of conflicts is also

subject to the manifest error standard of review. Bellard, 980 So.2d 654.

12

Philip Garrett, an expert in business and financial accounting, testified on

behalf of BCM and Nawlins. The occupancy and operating costs were based on an

average of the previous thirteen periods. The inventory amounts came from the

October 5, 1997 balance sheet and general ledgers of the restaurants. The software

cost was from a depreciation schedule. His calculations for Lafayette included

$24,880 in occupancy costs, $50,147 in operating costs, $16,678 in inventory, and

$32,484 for the deleted software. His calculations for Orlando included $23,063 in

occupancy costs, $48,603 in operating costs, $16,943 in inventory, and $31,221 for

the deleted software. Other than the inventory, CNO claims that the other

calculations are factually unsupported.

CNO argues that the operating costs are wrong because Mr. Garrett admitted

he used an average of costs versus looking at an actual bill to determine the amount.

It also complains that Mr. Garrett admitted the figure included a 2.25% advertising

fee payable to CNO, which BCM and Nawlins were not responsible for since the

franchises were terminated. CNO further questions the amount because Mr. Viviano

listed occupancy and operating costs on bankruptcy schedules at a lower amount.

Further, it claims that Mr. Garrett used replacement cost for the software when he

should have used a depreciated value.

The jury was allowed to hear CNO’s questioning of Mr. Garrett and how he

determined the conversion costs. Mr. Garrett explained that he used replacement cost

for the software because you assume the software would be replaced. Mr. Garrett

agreed that the advertising fee should not be included if BCM and Nawlins did not

have to pay the fee. However, Mr. Garrett was never asked to recalculate without the

advertising fee, so the jury had no evidence of what this number would be.

Furthermore, there was no evidence that Mr. Garrett helped Mr. Viviano prepare the

13

amounts included in bankruptcy schedules.

Obviously, the jury determined that Mr. Garrett’s calculations were the best

supported evidence of the amount of conversion damages. He thoroughly explained

his basis and was cross-examined on every item. We cannot say that the jury’s

awards were manifestly erroneous.

OFFSET

Lastly, CNO argues that the trial court erred in failing to offset any sums owed

by BCM and Nawlins under the prior judgment. CNO argues that this court should

follow the Louisiana Supreme Court’s decision in Levy v. Roos, 32 La.Ann. 1029

(La.1880), which relied on former La.Civ.Code art. 2210 and held that judgments

may be set-off against each other, whether the claims upon which they were

recovered could have been or not.

Present La.Civ.Code art. 1894 provides, in pertinent part:

Compensation does not take place, however, if one of the obligations is
to return a thing of which the owner has been unjustly dispossessed, or
is to return a thing given in deposit or loan for use, or if the object of one
of the obligations is exempt from seizure.

Comment (b) to this article explains, the “wrongdoers or parties who have acted in

bad faith are not allowed to set up the plea of compensation.”

In Levy, 32 La.Ann. 1029, the plaintiff filed suit against a surety to recover

damages based on a judgment against the surety in a previous case for the wrongful

issuance of attachment. The surety answered claiming compensation because the

judgment he was being sued on was extinguished by a judgment rendered in the same

case against the plaintiff by the party the surety was responsible for. The supreme

court held that the original causes or considerations on which the previous two

judgments were based were merged in the judgments themselves. Thus, the wrongful

action was no longer an existing cause of action at the time of the suit.

14

In the present case, the cause of action for conversion had not been reduced to

judgment at the time CNO pleaded offset. The law is clear that set-off is not allowed

in a suit for wrongful conversion. Aldredge v. Moses, 595 So.2d 379 (La.App. 3 Cir.

1992); Hebert v. First Guar. Bank, 493 So.2d 150 (La.App. 1 Cir. 1986); Neff v. Ford

Motor Credit Co., 347 So.2d 1228 (La.App. 1 Cir. 1977). We find that the trial court

did not err in failing to offset the prior judgment against this award for conversion

damages.

For the reasons set forth in this opinion, we affirm the judgment of the trial

court. All costs of this appeal are to be split half to the Copeland parties and half to

BCM and Nawlins.

AFFIRMED.

15