USA Disaster Recovery, Inc. VS St. Tammany Parish Government and St. Tammany Parish Sheriff
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STATE OF LOUISiANA
COURT OF APPEAL
F1RST CIRCUIT
NO 2012 CA 0679
USA DISASTER RECOVERY INC
VERSUS
ST TAMMANY PAR GOVERNMENT AND
SH
ST TAMMANY PARISH SHERIFF
JudgmentRendered
EC 2 1 2012
Appealed from the
22nd Judicial District Caurt
In and for the Parish of St Tammany
State of Louisiana
Case No 2006
10170
The Honorable Richard A Swartz Judge Presiding
Kelly
M Rabalais
Ronald S
Counsel for Defendant
Appellant
Hagan
St Tammany Parish Government
Robert A Barnett
Lindsey D Manda
Covington Louisiana
Charles M Hughes Jr
Ryan
Counsel for Defendant
Appellee
Rodney Jack Strain en his
official capacity as Sheriff of
St Tammany Parish
G Davis
Mandeville Louisiana
William J
Jake A
Faustermann Jr
Counsel for Plaintiff
Appellee
USA Disaster Recovery Inc
Airey
S Michele Blanchard
Slidell Louisiana
r
Y
e Lt
f
CG
t
Bernard M
Plaia Jr
Counsel for Amicus Curiae
Enright Jr
LaShaunte Henry
Martin
Baton Rouge Louisiana
Thomas L
Louisiana Governor Oftice of
s
Homeland Security and
Emergency Preparedness
BEFORE CARTER C GUIDRY AND GAIDRY JJ
J
2
GAIDRY J
This is an appeal of a bench trial verdict rendered by the 22 Judicial
District Court in favor of the Appellee USA Disaster Recovery Inc
USA and against the Appellant St Tammany Parish Government the
Parish in the amount of 37 with interest For the following
00
500
reasons we reverse
FACTS AND PROCEDURAL HISTORY
This litigation originates with Hurricane Katrina making landfall over
St Tammany Parish on August 29 2005 At the time the Parish had certain
protocols in place for states of emergency outlined in the St Tammany
Parish Multi Emergency Operation Plan The plan called for the St
Hazard
Tammany Parish Sheriff Office the Sheriff to assume specific duties
s
one of which being search and rescue
To accomplish this task it was
necessary for the Sheriff to clear large amounts of debris from the roads so
that homes and other buildings where people might have been trapped were
accessible However the plan made it the duty of the Parish to clear the
roads
The Sheriff appointed Major ponald Shatp as incident commander for
eastern St Tammany and a command post was established near Oak Harbar
in southeastern St Tammany where most of the devastation to St Tammany
occurred While the Parish was tasked with clearing debris from the roads it
lacked the resources to perform its duties adequately The Parish therefore
contracted with private entities to assist in the clearing of debris from the
roads in accardance with guidelines set by the Federal Emergency
Management Agency FEMA
3
Meanwhile in order to accomplish search and rescue Maj Sharp
undertook the clearing of roads independently from the Parish as it was
necessary to reach any and all hurricane victims who needed to be extracted
from the affected areas as quickly as possible As this was being done Maj
Sharp was approached by Carl Hodge Jr and Sean Bentson who
volunteered their equipment and manpower in assisting the Sheriff to clear
debris from the roadways Mr Hodge and Mr Bentson had formed a joint
venture which they later formed into USA a Louisiana corporation
The
record indicates that the Sheriff advised Mr Hodge that they would be
unable to pay far the services he and Mr Bentson were providing but Mr
Hodge allegedly replied that he knew the parish president and was confident
the Parish would pay him for the services
Hodge and Bentson eventually submitted invoices to the Sheriff and
the Parish for the wark they performed Neither the Sheriff nor the Parish
paid these invoices
After USA was formed on or about September 13
2005 Hodge and Bentson assigned their claims against the Sheriff and the
Parish to USA USA then brought this suit for open account against the
Parish and the Sheriff seeking 77 which USA claimed was the
00
397
value of the services
they rendered
to
the Sheriff and the Parish
USA
claimed breach of contract and in the altemative USA claimed unjust
enrichment for the Sheriff and the Parish The Parish filed a cross
claim
against the Sheriff in the event the Parish was held liable for USA demand
s
The matter went to trial on two separate days the first being August
25 2011 and the second being September 22 2011
At trial it was
established by the Parish that FEMA requires contractors to contract with the
Parish to qualify for payment for debris removal The Parish established that
neither Mr Hodge Mr Bentson nor USA ever contracted with the Parish
4
directly or followed any of the appiication guidelines put forth by the Parish
or FEMA to qualify for payment The Parish averred that at no time was it
even aware that USA or its representatives were present in St Tammany
clearing debris after the hurricane passed
The Sheriff established at trial
that it never promised USA or its representatives any payment and the
record establishes that the Sheriff did not give Hodge or Bentson the
assurance that the Parish would pay for the work they had done The court
found there was insufficient evidence to prove that an open account or a
contract existed between USA and the Parish or USA and the Sheriff
However the court did find that under the theory of unjust
enrichment USA was impoverished to the benefit of the Parish since the St
Tammany Multi Emergency Operation Plan made it the Parish
Hazard
s
obligation to clear the debris from the roads
While the Sheriff did clear
debris on its own it was not required to do so by the pian
The Parish
claimed that since USA impoverished itself at its own risk and had noY
contracted with the Parish directly the theory of unjust enrichment was
inapplicable The court cited for support of its ruling City ofNew Orleans v
Bellsouth Telecommunications Inc 2011 WL 2293134 E La 20ll
D
which states that impoverishment due to the plaintifPs own actions taken at
his own risk is not an exception to unjust enrichment
In determining the damages the court looked to La Civil Code Art
2298 which states the amount of compensation due for unjust enrichment is
the lesser of either
the
amount of enrichment or the
amount
of
impoverishment The court admitted that the evidence of damages provided
by USA was vague and did not sufficiently prove the assignment of rights to
the claim to USA and the relationship between Mr Hodge and USA was
Reversed and vacated by City of New Orleans v Bellsouth Telecommunications Inc
30607 A
llC La 7690 F 312
S
12
31
3d
5
never fully explained Mr Hodge testimony of the work he performed was
s
not specific and most of his records of the work were lost The work could
not be verified outside of Mr Hodge own testimony yet the court
s
acknowledged that Mr Hodge and his work team did perform some valuable
services for the Parish Thus the court awarded USA damages in the amount
of 37 against the Parish The Parish appealed the court judgment on
500
s
January 1 l 2012
ASSIGNMENTS OF ERROR
The assignments of error as given by the Parish are as follows
The trial court erred in the application of the law of unjust enrichment
when it declined to follow Louisiana law including compelling precedent of
the First Circuit case Charrier v Bell 496 So 601 La App 1 Cir 1986
2d
Instead the court was persuaded to follow the Ciry of New Orleans case an
unpublished slip opinion from the Eastern District of Louisiana and
concluded that USA was entitled to recover on a theory of unjust enrichment
despite finding that the actions of USA were undertaken at its own risk
The trial court erred in the application ofthe law of unjust enrichment
because the trial court identified no measure of damages and set an award
with no explanation analysis or evidence supporting its award The trial
court
failed
to
establish
a
rate of ineasurement
for
either
s
USA
impoverishment or the Parish enrichment or to compare the two and
s
choose the lesser Such failure does not comply with the requirements of La
C art 2298
The trial court erred in the application of the law of unjust enrichment
because it awarded damages despite USA claim on open account and the
s
agreement between USA and the Sheriff Art 2298 expressly provides that
unjust enrichment is not available when the law provides another remedy for
6
the impoverishment even if unsuccessful
USA sued the Sheriff and the
Parish under open account law yet the trial court allowed USA to recover
based
on
unjust enrichment
There was an offer and acceptance the
requisite elements of a contract between the Sheriff and USA
The trial court erred in the application of the law of unjust enrichment
because it concluded that the Parish was enriched by the actions of USA
despite finding that the Parish was unaware of USA or any work it may have
performed Although Mr Hodge testified that he had extensive experience
working with FEMA he failed to follow any of the Parish procedural
s
requirements induding verification of work imposed for the purpose of
complying with FEMA requirements Even if USA proof as to what work
s
it did was reliable the Parish could not successfully request reimbursement
because USA did not comply with the Parish requirements
s
The trial court erred in the application of the law of unjust enrichment
when it ignored the benefit the Sheriff received and concluded that the
Sheriff was not enriched The trial court findings of fact and conclusions
s
of law are inconsistent in that it found there was no underlying agreement
between the Sheriff and USA despite finding that the Sheriff undertook the
clearing of roads to conduct search and rescue USA volunteered to assist
the Sheriff the Sheriff said it could not pay USA and USA accepted the
Sheriffls offer The Sheriff testified that in the past it had cleared roads for
a specific cause such as search and rescue Such testimony contravenes the
trial court conclusion that the Sheriff received no benefit
s
The trial court findings of fact and conclusions of law are internally
s
inconsistent in that it concluded that Mr Bentson who did not testify at trial
assigned his rights to USA notwithstanding the failure to produce such an
assignment and of Mr Bentson to testify
7
The trial court erred in dismissing the Sheriff from this action and
from any liability to USA
DISCUSSION
We must first decide if the trial court correctly applied the theory of
unjust enrichment as it is defined by La 2298 and the prevailing
C
jurisprudence
The Parish is correct that the City of New Orleans case upon which
the trial court based its decision is an unpublished slip opinion by the
Federal Eastern District of Louisiana
What the Parish did not know and
could not have lrnown at the time it wrote its brief is that the Eastern District
had its ruling overturned by the Federal Fifth Circuit Court of Appeal where
it was stated that the theory of unjust enrichment in a case originating in
I
Louisiana
must
be
applied according
to Louisiana
law
See
Ciry of New
Orleans v Bellsouth Telecommunications Inc 11 11 C
30607 31058 A
S
La 7690 F 312 329
12
31
3d
The Parish cites Charrier as the guiding case for this court on the
issue of whether the Parish enrichment at the expense of USA was unjust
s
There are five criteria to this claim
There
1 must be an enrichment
There
2 must be an impoverishment
3 There must be a connection
between the enrichment and the
impoverishment
There
4 must be an absence of justification ar cause for the enrichment
and impoverishment
There
5 must be no other remedy at law available to the plaintiff
CharrieN at 606
8
While there is dispute as to who exactly was enriched there is no
doubt Yhat enrichment occurred
While USA benefitted the Sheriff by
assisting in the clearing of roads to facilitate search and rescue operations
USA also benefitted the Parish by assisting it in its obligation to have the
roads cleared
More importantly is the issue of the second criterion of
impoverishment and whether USA impoverished itself at its own risk
Although USA may have done wark at its own expense the impoverishment
element is met only when the factual circumstances show that it was not a
result of the plaintiff own fault or negligence or was not undertaken at his
s
own risk Id
The record shows that USA did engage in some risky behavior
Hodges and Bentson were unsolicited when they approached the Sheriff and
offered to assist in the clearing of the roads While it seems the Sheriff
accepted their offer the acceptance was conditioned with the inability or
unwillingness to compensate them for their services That condition alone
should cause a reasonable business person to wonder whether it is prudent to
perform services Instead USA persisted by stating to the Sheriff that the
Parish would pay for the wark even though USA or its representatives had
no previous communication or authorization from the Parish in this regard
In other words USA truly did not have any reason to believe that the Parish
would pay for the wark it performed and USA should have known that its
work may in fact go without compensation Nevertheless USA decided to
perform work without guarantee of payment USA was acting possibly out
of its own negligence but more probably knowingly and at its own risk
especially since USA claims to be familiar with the contract guidelines
created by FEMA Id at 607 Obviously the intent of unjust enrichment is
9
to avoid awarding one who has helped another through his own negligence
ar fault or through action taken at his own risk Id
There is no question that there is a connection between the enrichment
and the resulting impoverishment although again the extent of the
impoverishment is in question Whether USA did only a little or a large
amount of work to clear the roads of St Tammany the work directly
benefitted both the Sheriff and the Parish
As to whether USA had cause or justification to impoverish itself
USA contends it had an aral agreement with Maj Sharp that it would clear
the roads however Maj Sharp told Mr Hodge he could not pay for the
work While Mr Hodge stated he was confident that the Parish would pay
him he had no such verification from the Parish Cause is the reason why a
party obligates himself La art 1967 Comment c of art 1967 states
C
that cause is not synonymous with consideration but the reason why a
party binds itself From the record it is apparent that USA cause or reason
s
to obligate itself was payment Mr Hodge had a discussion with Maj Sharp
about payment and USA subsequently invoiced both the Sheriff and the
Parish for an amount that was never agreed upon by anyone Since USA
s
cause was never agreed upon there was no meeting of the minds and no
obligation ever existed
Even if USA had a gratuitous contract with the
Sheriff or the Parish circumstances which would otherwise give rise to a
contractual
quasi obligation like unjust enrichment to pay for the services
rendered give rise merely to an imperfect obligation incapable of
enforcement in a court of law Webb v Webb 2001 p 7 App 1
1577
La
Cir 11 835 So 713 719
02
8
2d
Finally the Parish argued that since USA sued primarily for open
account breach of contract and alternatively for unjust enrichment relief
lo
under unjust enrichment is unavailable since another legal remedy exists
The law must provide the plaintiff with another remedy in order to defeat a
cause of action in unjust enrichment
See Walters v Medsouth Record
Management LLC 2010 La 6 38 So 245 247 A remedy
0353
10
4 3d
at law or an applicable rule of law vitiates the utilization of an action based
on unjust enrichment Webb at 718 It is not the success or failure of other
causes of action but rather the existence of other causes of action that
determines whether unjust enrichment can be applied Garber v Badon
RanieY 2007 p La App 3 Cir 4 981 So 92 100 writ
1497 10
11
OS
2
2d
denied 2008 La 9 992 So 943 USA sued on open account
1154
08
19
2d
and presented as prima facie proof an affidavit of correctness to the court
pursuant to La art 1702 B Although USA subsequently failed to
P
C
3
prove the indebtedness by making a prima facie case it availed itself of the
legal remedy of open account Therefore unjust enrichment could not have
been pled in the alterna
ive
CONCLUSION
Unjust enrichment is not available to USA for the second fourth and
fifth criteria listed in Charrier Specifically USA impoverished itself at its
own risk had no cause to obligate itself and had another remedy at law
available to it before unjust enrichment The trial court was incorrect to
award damages to USA under unjust enrichment but was correct to deny
damages under
open
account
The result is that USA cannot recover
damages under these legal theories and the Parish assignments of error
s
regarding damages need not be discussed
prejudice
11
s
USA suit is dismissed with
DECREE
The judgment ofthe trial court is reversed and vacated The award of
damages to the Appellee USA Disaster Recovery Inc in the amount of
00
500
37 is also vacated The instant lawsuit is dismissed with prejudice
and all costs of this appeal are assessed to the Appellee USA Disaster
Recovery Inc
REVERSED
12
USA DISASTER
DISCOVERY INC
STATE OF LOUISIANA
COURT OF APPEAL
VERSUS
FIRST CIRCUIT
ST TAMMANY PARISH GOVERNMENT
AND ST TAMMANY PARISH SHERIFF
NO 2012CA0679
C rter C Concurs in the result
J
I agree that the judgment of the trial court must be reversed but I am not in
agreement with certain language in the majority opinion USA sued primarily on
open account and clearly failed to prove its case As concerns the alternative claim
for unjust enrichment it is also clear that this remedy was not available to USA
because of the claimed existence
by USA of another remedy
viz open account
As the majority set forth it is not the success or failure of the other cause of action
but rather the claimed existence of the other cause of action that precludes the
application of the action for unjust enrichment Therefore for the above reasons I
concur in the result reached by the majority
I
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