Rebel Electric, L.L.C VS Jacobs Builders, Inc., Randall G. Wilkins and Julie Rae Wilkins
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NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT NUMBER 2009 CA 1821 REBEL ELECTRIC L C VERSUS JACOBS BUILDERS INC RANDALL G WILKINS AND JULIE RAE WILKINS Judgment Rendered y APR 1 4 2010 Appealed from the 7 Nineteenth Judicial District Court In and for the Parish of East Baton Rouge Louisiana Trial Court Number 571 083 Honorable Doug Moreau Judge Presiding Phil E Miley Baton Rouge LA Counsel for PlaintiffAppellee Larry M Roedel Counsel for Defendant Appellant Jacobs Builders Inc Carlton Jones III Rebel Electric L C Baton Rouge LA Steven B Loeb Counsel for DefendantsAppellees Yvonne R Olinde Randall G Wilkins and Julie Wilkins Baton Rouge LA BEFORE WHIPPLE HUGHES AND WELCH JJ HUGHES J This is an appeal from a default judgment based on the contention that the judgment was insufficiently supported by the pleadings and the evidence For the reasons that follow we vacate in part and affirm in part FACTS AND PROCEDURAL HISTORY In March of 2006 Jacobs Builders Inc Jacobs agreed to construct a commercial building on property owned by Randall Wilkins and Julie Wilkins collectively Wilkins Electric L Rebel C for the price of 465 00 000 Rebel was hired by Jacobs as a subcontractor for the project Jacobs received 405 from Wilkins but abandoned the job 00 290 without completing the building or paying all of the subcontractors Suit was filed on September 26 2008 by Rebel against Jacobs and Wilkins seeking to recover the amount of 25 representing the 00 705 unpaid balance of labor and materials fumished by Rebel on the building project Wilkins filed an answer on March 10 2009 which asserted a cross claim against Jacobs for indemnity in accordance with LSA R 9 S 4802 F Wilkins further alleged that the failure of Jacobs to perform the work under the contract resulted in property damages delay damages increased fees and expenses and costs to complete and remediate the work Wilkins also sought civil penalties against Jacobs including attorney fees and litigation costs under LSAR 9 S 4814 On April 16 2009 a default judgment was rendered on the main demand in favor of Rebel and against Jacobs in the amount of 25 00 705 This judgment was not appealed 1 Louisiana Revised Statute 9provides in pertinent part A contractor shall indemnify F 4802 the owner for claims against the owner arising from the work to be performed under the contract 2 On May 18 2009 a default judgment was rendered on the cross claim in favor of Wilkins and against Jacobs granting the indemnity claim as well as awarding 25 in penalties pursuant to LSAR 9 plus 00 705 S 4814 C 98 436 12 as reasonable attorney fees along with court costs and interest On July 1 2009 Jacobs filed answers to Rebel main demand and to s the cross claim of Wilkins On July 17 2009 Jacobs filed a devolutive appeal of the May 18 2009 judgment On appeal Jacobs asserts the following assignments of error The trial court improperly rendered judgment in favor of the Wilkins awarding penalties and attorney fees under 1 LSAR 9 since the Wilkins are not within the class S 4814 es of persons entitled to bring such a claim and absent any evidence to support any elements of such a claim 2 The trial court improperly rendered judgment ordering Jacobs Builders to indemnify the Wilkins for any es other persons or entities who assert claims arising from the es Wilkins project without any evidence regarding such claims or whether the claims fall within the scope of LSAR S F 4802 9 LAW AND ANALYSIS Penalties and Attorney Fees In the first assignment of error Jacobs contends that the award of penalties and attorney fees to the owner Wilkins on the basis of LSAR S 4814 9 exceeded the authority granted in that statute which provides A No contractor subcontractor or agent of a contractor or subcontractor who has received money on account of a contract for the construction erection or repair of a building structure or other improvement including contracts and mortgages for interim financing shall knowingly fail to apply the money received as necessary to settle claims to sellers of movables or laborers due for the construction or under the contract Any seller of movables or laborer whose claims have not been settled may file an action for the amount due s The default judgment further stated that ajll other claims are preserved which presumably encompassed the claim of Wilkins for property damages that was not addressed by the default judgment 3 includinx reasonable attorney fees and court costs and for civil penalties as provided in this Section B When the amount misapplied is one thousand dollars or less the civil penalties shall be not less than two hundred fifty dollars nor more than seven hundred fifty dollars C When the amount misapplied is greater than one thousand dollars the civil penalties shall be not less than five hundred dollars nor more than one thousand dollars for each one thousand dollars in misapplied funds D A contractor subcontractor or agent of a contractor or subcontractor who is found by the court to have knowingly failed to apply construction contract payments as required in Subsection A shall be ordered by the court to pay to plaintiff the penalties provided in Subsection B or C as may be applicable and the amount due to settle the claim including reasonable attorney fees and court costs Emphasis added Jacobs asserts that the plain language of this statute authorizes penalties and attorney fees only in favor of a seller of movables or a laborer who has a claim due for the construction or under the contract The owner Wilkins in whose favor judgment was rendered is neither a seller of movables nor a laborer Jacobs cites to this court jurisprudence holding that when a statute authorizes the imposition of a penalty it is to be strictly construed Guillory v Lee 2009 0075 p 37 La 6 16 So 1104 09 26 3d 1130 Cosman v Cabrera 2009 0265 p 10 n La App 1 Cir 10 7 09 23 3d So 7 n and Spine Diagnostics Center of Baton Rouge Inc v Louisiana State Board of Nursing ex rel Louisiana Department of Health and Hospitals 2008 0813 pp 19 20 La App 1 Cir 12 08 23 4 So 854 869 writs denied 20090144 2009 0188 La 4 5 3d 09 13 3d So 163 Jacobs further cites Spine Diagnostics as holding that the doctrine of strict construction requires that these penal statutes and their provisions be given a genuine construction according to the fair import of their words taken in their usual sense in connection with the context and with reference to the purpose of the provision 4 See Spine Diagnostics Center of Baton Rouge Inc v Louisiana State Board of Nursing ex rel Louisiana Department of Health and Hospitals 2008 0813 at pp 1920 4 So at 869 We agree 3d After reviewing LSA R 9 we conclude that plainly read S 4814 Paragraph A provides a right of action only to a seller of movables or a laborer Thus only a seller of movables or a laborer would be a plaintiff who would be entitled to recover the penalties and attorney fees authorized in Paragraph D Inasmuch as a strict construction of the statutory remedy is proper we must consider the remedy enumerated in the statute to be the only remedy authorized by the legislature that remedy then is exclusive See Wright v DeFatta 244 La 251 26061 152 So 10 2d 14 1963 Accordingly the trial court award of penalties and attorney s fees in this case was erroneous and is hereby vacated Indemnity for Claims of Other PersonsEntities In its second assignment of error Jacobs contends the trial court erred in rendering a default judgment that ordered indemnity for claims asserted by any other persons or entities to the extent such claims were not made by Rebel as such indemnity would exceed the scope of the pleadings Further Jacobs asserted that no evidence had been presented to show that Wilkins has been subjected to a claim by anyone other than Rebel Louisiana Code of Civil Procedure Article 1703 provides A judgment by default shall not be different in kind from that demanded in the petition The amount of damages awarded shall be the amount proven to be properly due as a remedy This article is essential to prevent the judgment by default from going beyond the scope of the prayer A defendant may 3 We note that the contract between Jacobs and Wilkins filed into evidence at the default confirmation hearing contains no provision authorizing the award of attorney fees upon default by a party thereto S decide not to defend as to a particular prayer for relief whereas he would defend if relief beyond the prayer were available If a judgment by default should exceed the amount demanded in the petition it would be null to the extent of the excess LSA C art 1703 Comment See also Howard v P A M Construction Company 93 1013 p 10 La App 1 Cir 4 94 29 637 So 575 580 Mooring Financial Corp 401 Profit Sharing Plan 2d K v Mitchell 2008 1250 pp 4 5 La App 4 Cir 6 15 So 311 09 10 3d 315 16 In this case Wilkins cross claim against Jacobs for indemnity alleged that in the event it is determined that Rebel has any valid claim and did suffer any damages to which the law allows a remedy Jacobs is solely liable for the payment of any and all such amounts which may be determined to be owed to Rebel Wilkins prayer for judgment contained in the cross claim likewise sought indemnity only for any and all amounts assessed against Wilkins arising from the claims of Rebel Thus Wilkins cross claim only sought indemnity as to the claims asserted by Rebel and did not assert a claim for indemnity as to any claims by any other persons or entities Nevertheless with respect to the claim for indemnity the default judgment provided as follows IT IS HEREBY ORDERED ADJUDGED AND DECREED that Jacobs shall pursuant to LSAR 9 fully S 4802 F indemnify Wilkins for any and all amounts which may be assessed against Wilkins arising from the claims of Rebel andlor any other persons or entities who assert claims arising from the construction proiect subiect of these proceedings sic and Jacobs shall be solely liable for the payment of any and all such amounts which may be determined to be owed to Rebel in this case Emphasis added In awarding indemnity to Wilkins for the claims of any other persons or entities who assert claims arising from the construction project subject of E these proceedings the trial court default judgment exceeded the amount s demanded in the cross claim therefore this portion of the default judgment is null and is hereby vacated in part to the extent indemnity is granted as to any claims other than those asserted by Rebel against Wilkins In all other respects the judgment is affirmed CONCLUSION For the reasons assigned we vacate in part and affirm in part as indicated herein the May 18 2009 default judgment rendered by the trial court in favor of Randall G Wilkins and Julie Rae Wilkins and against Jacobs Builders Inc The parties shall bear their own costs VACATED IN PART AFFIRMED IN PART
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