Wagoner Gravel, LLC v. C & J Dirt, Inc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

10-494

WAGONER GRAVEL[,] LLC

VERSUS

C. & J. DIRT, INC.[,] ET AL[.]

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APPEAL FROM THE
SEVENTH JUDICIAL DISTRICT COURT
PARISH OF CONCORDIA, NO. 44,918-B
HONORABLE LEO BOOTHE, DISTRICT JUDGE

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JAMES T. GENOVESE
JUDGE

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Court composed of John D. Saunders, Jimmie C. Peters, and James T. Genovese,
Judges.

REVERSED AND VACATED.

L. Lane Roy
M. Benjamin Alexander
Matthew S. Green
Preis & Roy (A Professional Law Corporation)
Post Office Drawer 94-C
102 Versailles Blvd., Suite 400
Lafayette, Louisiana 70509
(318) 237-6062
COUNSEL FOR DEFENDANT/APPELLANT:
Gilchrist Construction Company, LLC

Virgil Russell Purvis, Jr.
Post Office Box 298
Jonesville, Louisiana 71343
(318) 339-8526
COUNSEL FOR DEFENDANT/APPELLANT:
Gilchrist Construction Company, LLC

John Sturgeon
Sturgeon & Boyd
Post Office Drawer 1463
307 Texas Avenue
Ferriday, Louisiana 71334
(318) 757-4151
COUNSEL FOR PLAINTIFF/APPELLEE:
Wagoner Gravel, LLC

James L. Carroll
Mixon & Carroll, PLC
Post Office Box 1619
107 Riser Street
Columbia, Louisiana 71418
(318) 649-9284
COUNSEL FOR DEFENDANTS/APPELLEES:
Homeland Federal Savings Bank on behalf of
C & J Dirt, Inc.

GENOVESE, Judge.

In this garnishment proceeding, the garnishee, Gilchrist Construction

Company, LLC (Gilchrist), appeals the judgment of the trial court in favor of

garnishor, Wagoner Gravel, LLC (Wagoner), on Wagoner’s rule to traverse

garnishment interrogatories propounded to Gilchrist. For the following reasons, we

reverse and vacate the judgment.

FACTS

The Louisiana Department of Transportation and Development (DOTD) began

an extension project of Highway 131 in Concordia Parish, Louisiana. Gilchrist, the

general contractor in charge of the project, executed a purchase order with C & J Dirt,

Inc. (C & J), a subcontractor, to supply the necessary dirt and fill for the project.

C & J entered into an agreement with Wagoner, the operator of a dirt and gravel pit,

to supply the fill for the project and to transport it to the construction site. After

delivery of the fill to the construction site had begun, it was discovered that the fill

failed to meet DOTD specifications; thus, the construction project ceased.

Remediation efforts were made to cure the fill, and, ultimately, the fill met DOTD

specifications. Invoices between these entities allegedly went unpaid.

Wagoner filed suit against both C & J and Gilchrist, alleging it was owed

$52,332.58 for providing the labor, materials, and transportation in connection with

the construction project. In response, Gilchrist filed Exceptions of No Cause of

Action, Vagueness and Ambiguity, and No Right of Action, and Answer to Petition.

C & J failed to answer Wagoner’s petition, resulting in Wagoner obtaining a default

judgment against C & J in the amount of $52,332.58. Subsequently, Gilchrist filed

a Cross Claim1 against C & J, alleging that the fill provided by the subcontractor was

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On December 3, 2009, Gilchrist filed a Motion for Leave [of Court] to File Cross Claim on
Behalf of Gilchrist Construction Co., LLC, which was opposed by Wagoner. The trial court set a

redhibitorily defective, and, consequently, C & J was indebted to Gilchrist for

$70,605.09.2

In this same proceeding, Wagoner, as judgment creditor, filed a Petition for

Garnishment against Gilchrist, as garnishee, wherein Wagoner prayed for the

issuance of a writ of fieri facias for the seizure of “property and/or funds owed by the

defendant, [C & J,] in the possession and/or control of either [sic] garnishee.” The

trial court signed the order on October 23, 2009, stating in pertinent part, as follows:

IT IS FURTHER ORDERED that a writ of Writ of [sic] Fieri
Facias issue, commanding the Sheriff of Rapides Parish [to] seize the
property of the judgment debtor, [C & J,] in the possession of Gilchrist
Construction Company, LLC[,] sufficient to satisfy the Plaintiff’s
judgment, in the amount of $52,332.58 and legal interest from the date
of demand and costs.

In response to the Garnishment Interrogatories that were served along with the

Petition for Garnishment, Gilchrist denied that it controlled any money, rights,

credits, or property that belonged to C & J. To the contrary, Gilchrist responded that

the “judgment debtor, [C & J,] is indebted to Gilchrist in the amount of at least

$11,551.99. Therefore, it is [C & J] who has under its control money, rights,

credits[,] and/or other property belonging to Gilchrist.” And, in further response to

Wagoner’s Garnishment Interrogatories, Gilchrist stated that “[C & J] breached its

agreement with Gilchrist by providing materials that were redhibitorily defective,

causing Gilchrist to incur substantial expenses as a result, which renders [C & J]

hearing date of December 28, 2009. The motion was heard by the trial court along with Wagoner’s
Rule to Traverse Gilchrist’s Answers to Garnishment Interrogatories on December 14, 2009, at
which time Gilchrist was granted leave to file its Cross Claim.
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The record reflects that subsequent to the December 14, 2009 hearing, an Answer to Cross
Claim and Counter Claim was filed by Homeland Federal Savings Bank (HFSB) on behalf of C & J,
asserting therein that “[C & J] factored [an] invoice with [HFSB] for the full amount of
$19,346.10[,]” which it alleged was owed by Gilchrist to C & J. Further, HFSB alleged that
“Gilchrist unilaterally and without [C & J’s] or [HSFB’s] consent[,] paid $119,753.39 against an
amount owed of $188,806.49, leaving a balance still owed of $69,053.10.”

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liable unto Gilchrist.”

Wagoner filed a Rule to Traverse Gilchrist’s Answers to Garnishment

Interrogatories, asserting that even if a credit of $11,551.99 was taken from the

amount Gilchrist contended it was owed by C & J, there remained a balance of

$63,818.71 due to C & J, which was in the possession of Gilchrist and was more than

sufficient to satisfy Wagoner’s judgment. Gilchrist countered that Wagoner’s

computation was erroneous, explaining that the remediation costs it incurred to cure

the fill was actually $11,555.99 more than the amount of the purchase price C & J

contended it was owed by Gilchrist.

Wagoner’s rule to traverse was heard in the trial court on December 14, 2009.

After taking the matter under advisement, the trial court signed a judgment in favor

of Wagoner on February 25, 2010, ordering: (1) that Gilchrist’s Answers to

Garnishment Interrogatories be traversed, declaring them to be inaccurate, and

amending said answers to reflect a balance owed by Gilchrist to C & J of $75,362.57;

(2) that Gilchrist, as garnishee, comply with the Writ of Fieri Facias in satisfaction

of the October 23, 2009 judgment in favor of Wagoner and against C & J in the

amount of $52,332.58; and, (3) that Gilchrist pay Wagoner $2,500.00 in attorney fees.

Gilchrist appeals.

ASSIGNMENTS OF ERROR

Gilchrist presents the following assignments of error:

1. The trial court erred in determining that Gilchrist was “indebted”
to [C & J].

2. The trial court erred in authorizing garnishment on a debt that had
been extinguished due to compensation pursuant to [La.Civ. Code
art. 1893].
3. The trial court committed legal error in authorizing a garnishment
judgment against a party defendant.

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4. The trial court erred as a matter of law in finding that Wagoner
met its burden of proof to traverse Gilchrist’s [A]nswers to
[G]arnishment [I]nterrogatories.

LAW AND DISCUSSION

Because it is dispositive of the matter before us, we will address the issue of

whether legal error was committed by the trial court in authorizing a garnishment

judgment against Gilchrist.

Louisiana Code of Civil Procedure Article 2411(A) (emphasis added) provides

as follows:

The judgment creditor, by petition and after the issuance of a writ
of fieri facias, may cause a third person to be cited as a garnishee to
declare under oath what property he has in his possession or under his
control belonging to the judgment debtor and in what amount he is
indebted to him, even though the debt may not be due. He may require
the third person to answer categorically and under oath the
interrogatories annexed to the petition within the delay provided by
Article 2412.

In the instant matter, Wagoner filed suit, seeking payment of $52,332.58 and

naming both Gilchrist and C & J as defendants. Once Wagoner obtained a default

judgment against C & J, it then sought to collect the amount owed under that

judgment from Gilchrist via garnishment proceedings. However, Gilchrist, a co-

defendant in the case, is not a “third person” as required by the express terms of

La.Code Civ.P. art. 2411. Consequently, Plaintiff/Wagoner, proceeding in its

capacity as judgment creditor of Defendant/C & J, cannot pursue Defendant/Gilchrist,

as garnishee, in satisfaction of the default judgment obtained against a co-defendant.

Long-standing jurisprudence states that a garnishment proceeding may not be

pursued against a party defendant. In Swift & Co. v. Centerville Co. Inc, 108 So. 408,

408 (La.1926), our supreme court held that “[o]nly third persons, not defendants in

the suit or in execution of a judgment, can be garnisheed under the provisions of

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articles 242 and 642 of the Code of Practice[,]” which articles were the precursor to

La.Code Civ.P. art 2411. Applying the literal language of the articles, the court

opined that defendants in a suit were not “third persons” and, thus, were “not subject

to the garnishment process, because they are the defendants, and this process is not

authorized against the defendant in a suit.” Id. at 409. Therefore, our supreme court

held that “only third persons who have property in their possession or under their

control, or who may be indebted to the judgment debtor, can be garnisheed.” Id. See

also Richardson v. Lacey, 27 La.Ann. 62 (La.1875) and Bailey v. Lacey, 27 La.Ann.

39 (La.1875).

Undisputedly, in the instant case, Wagoner named C & J and Gilchrist as co-

defendants. Although Wagoner obtained a judgment against C & J, it cannot seek

satisfaction of that judgment against Gilchrist. Allowing a plaintiff/judgment creditor

to execute a judgment obtained against one defendant by proceeding with a

garnishment action against a co-defendant/garnishee is tantamount to converting a

rule to traverse into a trial on the merits as the claims relate to this co-defendant.

Moreover, the procedure employed by the trial court in this matter is legally

impermissible. Wagoner’s claim against Defendant/Gilchrist for money due must

proceed by trial on the merits via ordinary process and not pursuant to a garnishment

proceeding, which is a summary proceeding. See Reading & Bates Constr. Co. v.

Baker Energy Res. Corp., 94-450 (La.App. 3 Cir. 11/2/94), 649 So.2d 581. As such,

we find that Gilchrist is not a “third person” subject to garnishment under La.Code

Civ.P. art. 2411, and, therefore, it was legal error for the trial court to cast Gilchrist

in judgment relative to Wagoner’s Petition for Garnishment. Having found that the

trial court erred in authorizing a garnishment judgment against a party defendant, we

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need not address Gilchrist’s remaining assignments of error.

DECREE

For the foregoing reasons, the judgment of the trial court in favor of Wagoner

Gravel, LLC, and against Gilchrist Construction Company, LLC, is reversed and

vacated in its entirety. Costs of this appeal are assessed to Wagoner Gravel, LLC.

REVERSED AND VACATED.

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