Compass Engineering & consultants,l.L.C. v. Piconyx, Inc.

NOT DESIGNATED FOR PUBLICATION

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

21-645

COMPASS ENGINEERING & CONSULTANTS, L.L.C.

VERSUS

PICONYX, INC.

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APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT
PARISH OF LAFAYETTE, NO. 20205292
HONORABLE SCOTT J. PRIVAT, DISTRICT JUDGE

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CANDYCE G. PERRET
JUDGE

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Court composed of Billy Howard Ezell, Van H. Kyzar, and Candyce G. Perret,
Judges.

AFFIRMED.

Joshua G. McDiarmid
Juan J. Moreno
Butler Snow, LLP
445 North Blvd, Suite 300
Baton Rouge, LA 70802
(225) 325-8700
COUNSEL FOR DEFENDANT/APPELLANT:
PicOnyx, Inc.

William T. Babin
Law Office of William T. Babin
405 West Convent St.
Lafayette, LA 70501
(337) 232-7757
COUNSEL FOR PLAINTIFF/APPELLEE:
Compass Engineering & Consultants, L.L.C.

PERRET, Judge.

This appeal involves a petition on an open account. PicOnyx, Inc.,

(“PicOnyx”) appeals the trial court’s June 1, 2021 judgment granting Compass

Engineering & Consultants, L.L.C.’s (“Compass Engineering”) motion for summary

judgment and ordering PicOnyx to pay $189,144.00 in outstanding invoice balances

and attorney fees in the amount of $7,500.00. For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY:

The underlying facts of this case are not in dispute. Compass Engineering

sold merchandise and rendered services to PicOnyx from August through November

2019. Compass Engineering issued five invoices during that time, which amounted

to $189,144.00 for the work performed. The bills remained unpaid, and on August

10, 2020, Compass Engineering sent a written demand for payment to PicOnyx.

Thereafter, on October 27, 2020, Compass Engineering filed a petition on the

open account against PicOnyx seeking to recover payment for its services and an

award of attorney fees. Attached to the petition was an itemized statement of the

account that listed the invoice numbers, dates, and the amount due. On that same

date, Compass Engineering filed a request for admission of facts. PicOnyx answered

the petition on January 6, 2021, admitting that Compass Engineering rendered

services to it but denied each and every remaining allegation.

On March 4, 2021, Compass Engineering filed a motion for summary

judgment alleging that it is entitled to a summary judgment “on the grounds that the

pleadings and request for admissions on file, and the sworn affidavit, itemized

statement of account, invoices, certified demand letter and returned receipt annexed

hereto, show that there is no genuine issue as to material fact and that mover is

entitled to judgment[.]” In support of its motion for summary judgment, Compass

Engineering attached: (1) the affidavit of its lead engineer, Ronald Vining, stating

that PicOnyx owes it the full sum of $189,144.00, and (2) the itemized statement of

account and invoices for the account.

On May 18, 2021, PicOnyx filed an opposition to the motion for summary

judgment alleging that there is no dispute that Compass Engineering performed

services for it and that Compass Engineering invoiced it $189,440.00 but argued that

“the only evidence before this Court shows that the principals of PicOnyx and

Compass agreed to defer PicOnyx’s payment on the Purchase Orders until PicOnyx

completed its fundraising efforts.” PicOnyx alleges it had an oral agreement with

Compass Engineering that “created either a suspensive condition or an uncertain

term for payment, and PicOnyx’s obligation to pay Compass for the engineering

services was dependent on, and could not be enforced until, the happening of a

contemplated event: specifically, PicOnyx’s successful completion of its fundraising

efforts.” In support of its opposition, PicOnyx attached: (1) the affidavit of David

Bening, the president and chief executive officer of PicOnyx; (2) a couple of

purchase orders; and (3) email correspondence between Mr. Bening and Mr. Vining.

Thereafter, Compass Engineering filed a reply memorandum alleging

PicOnyx waived this new claim (that the open account is not due and owing because

Compass Engineering allegedly agreed to defer payment on the account until

PicOnyx completed its fund-raising efforts) since it did not file this claim prior to its

answer or in its answer to Compass Engineering’s petition. Additionally, Compass

Engineering argues that PicOnyx has “produced no evidence (contract, letter, email,

etc.) to prove that [Compass Engineering] agreed to wait for payment until [PicOnyx]

could find the money to pay for the services.” Compass Engineering argues that

PicOnyx “admitted in its opposition memorandum . . . that ‘Aside from the purchase

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orders issued by PicOnyx, and the corresponding invoices issued by Compass, there

is no written contract or agreement, or applicable terms and condition, between

PicOnyx and Compass.’” Thus, Compass Engineering submits there is no genuine

issue of material fact and that it is entitled to judgment as a matter of law.

After a hearing, the trial court found in favor of Compass Engineering and

against PicOnyx in the amount of $189,144.00, plus interest, along with attorney

fees in the amount of $7,500.00. PicOnyx now appeals alleging the following sole

assignment of error: “The Trial Court erred in granting Compass’ Motion for

Summary Judgment, and entering judgment in favor of Compass and against

PicOnyx.”

STANDARD OF REVIEW:

An appellate court reviews a trial court’s granting of a motion for summary

judgment de novo. Duncan v. U.S.A.A. Ins. Co., 06-363 (La. 11/29/06), 950 So.2d

544. Under this standard of review, the appellate court uses the same criteria as the

trial court in determining if summary judgment is appropriate: whether there is a

genuine issue of material fact and whether the mover is entitled to judgment as a

matter of law. Id. “A fact is ‘material’ when its existence or nonexistence may be

essential to [a] plaintiff’s cause of action under the applicable theory of recovery.”

Smith v. Our Lady of the Lake Hosp., Inc., 93-2512, p. 27 (La. 7/5/94), 639 So.2d

730, 751. “‘[F]acts are material if they potentially insure or preclude recovery, affect

a litigant’s ultimate success, or determine the outcome of the legal dispute.’” Id.

(alternation in original) (quoting S. La. Bank v. Williams, 591 So.2d 375, 377

(La.App. 3 Cir. 1991), writs denied, 596 So.2d 211 (La.1992)).

The mover bears the burden of proving that he is entitled to summary

judgment. La.Code Civ.P. art. 966(D)(1). However, if the moving party will not

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bear the burden of proof on the issue at trial, he need only demonstrate an absence

of factual support for one or more elements essential to the non-moving party’s claim.

Id. Then, the non-moving party must produce factual support sufficient to establish

that he will be able to satisfy his evidentiary burden of proof at trial. Id. If the non-

moving party is unable to do so, there is no genuine issue of material fact and

summary judgment will be granted. La.Code Civ.P. art. 967(B).

DISCUSSION:

Louisiana Revised Statutes 9:2781(A) sets forth the procedures for suits on

open accounts and provides, in pertinent part:

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.

Louisiana Revised Statutes 9:2781(D) further defines an open account as “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.”

On appeal, PicOnyx alleges the evidence it submitted in opposition to

Compass Engineering’s motion for summary judgment created a genuine issue of

material fact. Specifically, PicOnyx relies upon the affidavit of Mr. Bening to show

“that the principals of PicOnyx and Compass agreed to defer PicOnyx’s payment on

the Purchase Orders until PicOnyx completed its fundraising efforts[,]” and that

PicOnyx relied upon “Mr. Vining’s representations that Compass would defer

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payment[s] were made with respect to both of the Purchase Orders, to induce

PicOnyx to continue the project, even though Compass and PicOnyx knew that funds

to pay for the work were not available at that time.”

In order to sustain an action on open account, “the creditor must first prove

the account by showing that the record of the account was kept in the course of

business and by introducing evidence regarding its accuracy.” Metal Coatings,

L.L.C. v. Petroquip Energy Servs., L.P., 06-1118, p. 4 (La.App. 3 Cir. 11/21/07), 970

So.2d 695, 698. Once the creditor makes this prima facie showing, “the burden shifts

to the debtor to prove the inaccuracy of the account or to prove the debtor is entitled

to certain credits.” Id. The amount of an open account is a question of fact which

may not be disturbed on appeal absent manifest error. Credit Bureau Servs. v.

Lundberg, 08-1523 (La.App. 3 Cir. 5/6/09), 10 So.3d 883.

In this case, Compass Engineering established the existence of an open

account and the amount due by attaching the following to its motion for summary

judgment: (1) the sworn affidavit of Mr. Vining; (2) the itemized statement of

account, which showed a balance of $189,440.00; (3) invoices; and (4) the certified

demand letter. Because Compass Engineering established a prima facie case, the

burden then shifted to PicOnyx to prove the inaccuracy of the account or entitlement

to certain credits.

In opposition to the motion, PicOnyx relies on the affidavit of Mr. Bening, the

president of PicOnyx, to create a genuine issue of fact as to whether Compass

Engineering agreed to defer payment on its invoices until PicOnyx successfully

completed its fundraising efforts. Mr. Bening’s affidavit states, in pertinent part:

11. On or about June 18, 2019, PicOnyx issued a purchase order to
Compass to provide engineering services for the installation of a
production line to make PicOnyx’s M-Tone at the Facility (the

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“June 2019 Purchase Order”). A copy of the June 2019 Purchase
Order is attached as Exhibit A.

12. Work proceeded under the June 2019 Purchase Order. On
October 17, 2019, an additional purchase order was issued by
PicOnyx to Compass, for the purpose of continuing the services
for making the Facility ready for commercial production of M-
Tone (the “October 2019 Purchase Order”). A copy of the
October 2019 Purchase Order is attached as Exhibit B.

13. In about the third quarter of 2019, and prior to the issuance of the
October 2019 Purchase Order, I informed Ronald Vining (“Mr.
Vining”), Compass’ Chief Executive Officer and President, that
PicOnyx was running low on capital and was actively
fundraising to obtain additional capital.

14. Mr. Vining had represented to me that he was Compass’
President and Chief Executive Officer. I note that Compass’
website identifies Mr. Vining as Compass’ Chief Executive
Officer. An excerpt from Compass’ website is attached as
Exhibit C. Mr. Vining’s emails to me would at times use the
title President. At all times, Mr. Vining conducted himself as if
he had the authority to enter into agreements and bind Compass
to those agreements. At all times, I believed that Mr. Vining had
the authority to enter into agreements and bind Compass to those
agreements.

15. Prior to issuing the October 2019 Purchase Order, I contacted
Mr. Vining, and requested that Compass work with PicOnyx
regarding the providing of services and payment for those
services, because PicOnyx had insufficient funds at the time to
pay Compass. Specifically, I requested that Compass defer
PicOnyx’s payment for the services until after PicOnyx
successfully completed its fundraising efforts. Both PicOnyx
and Compass would benefit from this deferred payment
agreement. On the one hand, Compass was only to provide
services, not equipment, so its risk was limited to the time spent
by its employees. Further, upon the competition of this initial
project, PicOnyx had additional and larger projects for Compass.
Thus, a deferred payment agreement would help the
development of a long-term customer relation for Compass. On
the other hand, a deferred payment agreement would allow
PicOnyx to complete its M-Tone manufacturing facility in
tandem with its fundraising.

16. In these discussions, Mr. Vining agreed that PicOnyx would not
have to pay for the services thus far provided until PicOnyx
successfully completed its fundraising efforts. Mr. Vining,
knowing that PicOnyx at the time did not have sufficient funds

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to pay Compass, also agreed to continue to provide services to
PicOnyx, under this deferred payment agreement. Thus, Mr.
Vining requested, accepted and provided service under the
October 2019 Purchase Order, knowing that PicOnyx did not
have sufficient funds to pay Compass at that time.

17. In issuing the October 2019 Purchase Order, and in accepting
services pursuant to that purchase order, I relied upon Mr.
Vining’s agreement to defer payment for those services and the
prior services.

18. In these October 2019 discussions, I on behalf of PicOnyx and
Mr. Vining on behalf of Compass, entered into an agreement,
that PicOnyx’s payments for the services provided by Compass
under the June 2019 Purchase Order and the October 2019
Purchase Order would not be due until after PicOnyx had
successfully concluded its fundraising efforts.

19. PicOnyx’s fundraising efforts were ongoing but unsuccessful for
the remainder of 2019 and the start of 2020. PicOnyx’s
fundraising efforts were then greatly complicated and hurt by the
pandemic. Additionally, Carbo’s filing for bankruptcy in April
2020 further complicated and hurt PicOnyx’[s] ability to raise
funds, because Carbo was PicOnyx’s manufacturing partner.

20. Because Compass had agreed to defer PicOnyx’s payment until
the successful completion of PicOnyx’s fund raising efforts, I
would from time to time let Mr. Vining know about the status of
PicOnyx’s ongoing fundraising efforts. See, e.g., the
communications exchanged between Mr. Vining and I attached
as Exhibits D and E.

21. To date, PicOnyx has not successfully completed its fund-raising
efforts. Thus, pursuant to the deferred payment agreement that
PicOnyx entered into with Compass, PicOnyx does not currently
owe Compass any payment for the funds invoiced to PicOnyx.
A “Client Invoice Aging” is attached as Exhibit F.

PicOnyx does not dispute that Compass Engineering rendered engineering

services for the price and sum of $189,440.00 but asserts that Mr. Bening’s affidavit

creates a genuine issue of fact as to whether the parties agreed to defer payment on

the account until PicOnyx successfully completed fundraising efforts. However,

upon review of the record, we find that neither Mr. Bening’s affidaivit nor the

attachments to the affidavit support PicOnyx’s argument that Compass Engineering

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agreed to defer payment on the invoices until PicOnyx could find the money to pay

for the services. The trial judge also questioned PicOnyx’s counsel at the hearing as

to whether there was any other evidence besides Mr. Bening’s self-serving affidavit

that Compass Engineering agreed to defer payment. Counsel for PicOnyx testified,

as follows:

THE COURT: Is that in writing?

MR. MCDIARMID: No, it’s not in writing.

THE COURT: So it’s just – it’s just in an affidavit that your client
signed?

MR. MCDIARMID: That’s correct.

THE COURT: That’s it?

MR. MCDIARMID: That’s it.

THE COURT: So there’s no other evidence other than what your
client says, correct?

MR. MCDIARMID: Not that we’ve seen so far.

THE COURT: Okay.

Like the trial court, we, too, find PicOnyx failed to present evidence sufficient

to create factual issues precluding summary judgment on this open account suit. It

is worth reiterating that PicOnyx admitted in its opposition memorandum that

“Aside from the purchase orders issued by [it], and the corresponding invoices

issued by Compass, there is no written contract or agreement, or applicable terms

and condition, between PicOnyx and Compass.’” For these reasons, we affirm the

decision of the trial court granting Compass Engineering’s motion for summary

judgment.

DECREE:

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In conclusion, we find PicOnyx failed to carry its burden of proving the

inaccuracy of the account or that an agreement was made to defer payments on the

open account. Therefore, the trial court correctly rendered judgment in favor of

Compass Engineering. We hereby affirm the trial court’s judgment that granted

summary judgment in favor of Compass Engineering in the amount of $189,144.00

with interest and the award of attorney fees in the amount of $7,500.00. All costs of

this appeal are assessed to PicOnyx, Inc.

AFFIRMED.

This opinion is NOT DESIGNATED FOR PUBLICATION.
Uniform Rules—Courts of Appeal, Rule 2-16.3.

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