Opinion
23-CA-328
05-22-2024
FOUNDATION ELEVATION & REPAIR, LLC v. KENNETH MILLER AND DOREEN MILLER
COUNSEL FOR PLAINTIFF/APPELLEE, FOUNDATION ELEVATION &REPAIR, LLC AND DIRECT SOURCE HOME RENOVATION, LLC ANDREW T. LILLY COUNSEL FOR DEFENDANT/APPELLANT, KENNETH MILLER AND DOREEN MILLER TARRYN E. WALSH BRITTNEY L. ESIE
ON APPEAL FROM THE TWENTY-NINTH JUDICIAL DISTRICT COURT PARISH OF ST. CHARLES, STATE OF LOUISIANA NO. 76,295, DIVISION "C" HONORABLE CONNIE M. AUCOIN, JUDGE PRESIDING
COUNSEL FOR PLAINTIFF/APPELLEE, FOUNDATION ELEVATION &REPAIR, LLC AND DIRECT SOURCE HOME RENOVATION, LLC ANDREW T. LILLY
COUNSEL FOR DEFENDANT/APPELLANT, KENNETH MILLER AND DOREEN MILLER TARRYN E. WALSH BRITTNEY L. ESIE
Panel composed of Judges Fredericka Homberg Wicker, Stephen J. Windhorst, John J. Molaison, Jr., Scott U.Schlegel, and Timothy S. Marcel
SUSAN M. CHEHARDY CHIEF JUDGE FREDERICKA H. WICKER JUDE G. GRAVOIS MARC E. JOHNSON STEPHEN J. WINDHORST JOHN J. MOLAISON, JR. SCOTT U.SCHLEGEL TIMOTHY S. MARCEL JUDGES
TIMOTHY S. MARCEL JUDGE
In this suit originally arising from performance of a home elevation contract, defendants and petitioners-in-reconvention Kenneth and Doreen Miller appeal a judgment of the trial court denying their Motion to Set Aside Order of Dismissal for Abandonment. For the following reasons, we affirm in part and reverse in part the judgment of the trial court and render partial judgment in favor of appellants. BACKGROUND
The Millers entered into a contract with Foundation, Elevation &Repair, LLC ("FER") to elevate their home in August, 2010 as part of the Louisiana Office of Community Development Hazard Mitigation Grant Program. The home was damaged during the elevation process.
Prior to completion of the work, FER filed a Petition and Rule to Show Cause against the Millers for specific performance and for declaratory judgment. That petition claims FER was denied access to the property to complete the contract and receive payment. FER requested that the Millers be enjoined from preventing FER from completing the remaining item to be performed, specifically, installation of a back porch railing.
In response, the Millers filed dilatory exceptions of unauthorized use of summary proceedings and nonconformity with the requirements of La. C.C.P. art. 891. In their memorandum supporting the exceptions, the Millers claimed that FER had misrepresented and understated the damage caused by FER in its elevation of the home. The Millers also claimed they had been denied a certificate of occupancy and could not live in their home. On March 17, 2015, the parties entered into a consent judgment in which the Millers' dilatory exception of unauthorized use of summary proceedings was granted and FER's actions for injunctive and declaratory relief were dismissed with prejudice.
Thereafter, on February 19, 2016, the Millers filed exceptions, an answer, affirmative defenses, and a reconventional demand. In this petition in reconvention, they alleged that FER used incorrect and improper methods to elevate their home in April, 2011, that caused significant structural damage to the house. Also asserted are claims for breach of contract, negligence, unfair trade practices, negligence misrepresentation, and fraud. In this pleading, the Millers also asserted third-party demands against three new defendants: Direct Source Home Renovation, LLC ("DSHR"), Foundation Solutions of Louisiana, LLC a/k/a Ramjack Foundation Solutions of Louisiana, LLC ("FSL"), and Peter Waxman, LLC ("PW"). These defendants were alleged to be involved with the same damaging home elevation as FER.
After unsuccessful attempts by the Orleans Parish Sheriff to serve the defendant-in-reconvention and third-party defendants, the Millers moved for appointment of a special process server on May 25, 2016. Affidavits of service for FER, DSHR, and FSL were filed in the record on June 23, 2016.
As of March, 2019, almost three years later, neither the defendant-in-reconvention nor the third-party defendants had filed an answer or other pleading in response to the Millers' reconventional and third-party demands. The Millers filed for and obtained entry of a default against FER, DSHR, and FSL on March 13, 2019.
On October 16, 2019, counsel representing the Millers made a public records request on the St. Charles Parish Zoning and Planning Department to obtain documents relating to the denied certificate of occupancy for the Millers' home. These documents, which were allegedly requested as part of evidence to be presented at the hearing on confirming the default judgment, were provided by the Zoning and Planning Department to Millers' counsel a few days later.
On May 5, 2022, the Millers filed a Motion to Confirm Judgment by Default against FER, DSHR, and FSL seeking $184,728.63. This motion was denied on June 14, 2022 on grounds that the Millers had not notified enrolled counsel of record for the defendant-in-reconvention and the third-party defendants of their intent to obtain confirmation of the default judgment as required by La. C.C.P. art. 1702(A)(2).
Approximately three months later, the Millers transmitted notice dated September 23, 2022 of their intent to file an Amended Motion and Memorandum in Support to Confirm Judgment. In response, on September 30, 2022, third-party defendant DSHR, filed an answer to the Millers' petition in which they denied all of the Millers' allegations and prayed for further legal and/or equitable relief.
A few days later, on October 4, 2022, FER and DSHR jointly filed an ex parte motion to dismiss the Millers' action on grounds of abandonment pursuant to La. C.C.P. art. 561. FER and DSHR requested dismissal of the Millers' reconventional demand and third-party demands as abandoned, arguing the Millers had failed to take any step in the prosecution or defense of their case in the trial court for a period of more than three years (from March 12, 2019, one day after the Millers filed the motion for entry of judgment by default against FER, DSHR, and FSL, to May 4, 2022, one day before the Millers filed the motion to confirm the judgment by default.) The trial court granted this ex parte motion and dismissed the Millers' claims against FER and DSHR as abandoned by a judgment on October 11, 2022.
On December 29, 2022, the Millers filed a motion to set aside the order of dismissal for abandonment. After a contradictory hearing on April 4, 2023, the trial court denied the Millers' motion. This timely appeal followed.
DISCUSSION
An action is abandoned when the parties fail to take any step in its prosecution or defense in the trial court for a period of three years. La. C.C.P. art. 561. A "step" is defined as taking formal action before the court which is intended to hasten the suit toward judgment. Roubion Shoring Co., LLC v. Crescent Shoring, L.L.C., 21-237 (La.App. 5 Cir. 12/22/21), 335 So.3d 354, 360, writ denied, 22-00282 (La. 4/20/22), 336 So.3d 468.
Whether a step in the prosecution or defense of a case has been taken is a question of fact subject to manifest error analysis; by contrast, whether a particular act, if proven, interrupts abandonment is a question of law that is examined by ascertaining whether the trial court's conclusion is legally correct. Williams v. Montgomery, 20-01120 (La. 5/13/21), 320 So.3d 1036, 1042. Questions of law are subject to de novo review. Id. "Abandonment is not a punitive measure, but is designed to discourage frivolous lawsuits by preventing plaintiffs from allowing them to linger indefinitely." Gilbert v. Metropolitan Life Insurance Company, 20850 (La.App. 1 Cir. 2/22/21), 321 So.3d 1023, 1030, writ denied, 21-441 (La. 5/25/21), 316 So.3d. 444. Given that dismissal is the harshest of remedies, any reasonable doubt should be resolved against dismissal for abandonment. Clark v. State Farm Mut. Auto. Ins. Co., 00-3010 (La. 5/15/01), 785 So.2d 779, 786.
This Court has previously considered whether the defendant's filing of an answer after the abandonment period can serve as a waiver of his right to plead abandonment. In Bell v. Kreider, 04-594 (La.App. 5 Cir. 11/30/04), 890 So.2d 648, 651, we stated:
A defendant's post-abandonment actions can serve to waive his right to plead abandonment. It is the qualitative effect of the steps taken by the defendant which must be considered in a case-to-case approach to determine whether the defendant has waived abandonment. Steps which have facilitated judicial resolution of the dispute on the merits and which could be construed as an expression of the defendant's willingness or consent to achieve judicial resolution of the dispute are
legally operative to preclude him from raising a claim of abandonment.
(Citations omitted.)
The Louisiana Supreme Court and other circuits addressing this issue have likewise held that the filing of an answer after expiration of the period of inaction is inconsistent with the intent to treat claims as abandoned. See: Gilbert, supra; Production Specialties, Inc. v. Century Oil Tool Company, Inc., (La.App. 3 Cir. 1992), 602 So.3d 163; Geisenberger v. Cotton, (La. 1906), 40 So. 929. However, "the defendant which waives abandonment must be the same party which has taken the actions inconsistent to treat the action as abandoned." Greene v. Vermilion Par. Hosp. Serv. Dist. #2, 23-670 (La. 9/19/23), 370 So.3d 442, 444.
As a factual matter, it is undisputed that DSHR filed an answer to the Millers' petition on September 30, 2022. DSHR argues that when it filed the answer, it did not intend to waive its right to claim abandonment of the case against it. No documentary evidence or sworn testimony was introduced at the hearing to support counsel's argument of what DSHR intended.
The best evidence of DSHR's intent in filing the answer, and the only evidence properly in the record, is the text of the answer itself. In the answer, DSHR denied the allegations contained in the third-party demand filed by the Millers and prayed: 1) that the answer be deemed sufficient and good; and 2) for any further legal and/or equitable relief to which it may be entitled under the facts and circumstances of the case. Such statements, formally and directly responding to the plaintiffs' allegations and praying for relief from the court, are inconsistent with a defendant who intended to claim abandonment of the case. On its face, the answer is an expression of the defendant's willingness to achieve judicial resolution of the dispute.
Upon review of the record before us, we find that the trial court erred in denying the Millers' Motion to Set Aside Order of Dismissal for Abandonment. Defendant, DSHR waived its right to claim abandonment with the filing of the answer. However, with regard to defendant FER, which did not join in the answer, we find no waiver of abandonment. Accordingly, and for the foregoing reasons, the that part of the judgment of the trial court dismissing the Millers' claims against FER is affirmed, and that part of the judgment dismissing the claims against DSHR is reversed. We hereby grant in part the Millers' Motion to Set Aside Order of Dismissal for Abandonment as to their claims against DSHR. We remand this matter for further proceedings consistent with our decision herein.
AFFIRMED IN PART, REVERSED IN PART AND RENDERED; REMANDED
WINDHORST, J., DISSENTS IN PART WITH REASONS
I agree with the majority's opinion affirming the trial court's judgment which denied the Millers' motion to set aside the order that dismissed their claims against Foundation Elevation &Repair, LLC ("FER") due to abandonment.
I respectfully disagree with the majority's opinion finding that the trial court erred in denying the Millers' motion to set aside the order that dismissed their claims against Direct Source Home Renovation, LLC ("Direct Source"), and reversing that part of the judgment dismissing the claims against Direct Source. I would also affirm this part of the trial court's judgment.
The record shows that no steps were taken in the prosecution or defense of the Millers' claims for over three years (i.e., from March 13, 2019 to May 5, 2022). By operation of law, the Millers' claims against FER and Direct Source were abandoned. See Roubion Shoring Company, LLC v. Crescent Shoring, L.L.C., 21237 (La.App. 5 Cir. 12/22/21) 335 So.3d 354, 360, writ denied, 22-282 (La. 04/20/22), 336 So.3d 468. The moment the three year abandonment period lapsed, those claims were abandoned and unprosecutable.
On September 30, 2022, Direct Source filed an answer to the third-party demand, which was immediately followed by a motion to dismiss for abandonment on October 4, 2022. Counsel for Direct Source explained that the answer (i.e., general denial form answer) was filed to prevent a threatened default judgment, and that there was no intent to waive abandonment as shown by the motion to dismiss which was filed shortly thereafter.
Because dismissal is the harshest of remedies, the general rule is that "any reasonable doubt [about abandonment] should be resolved in favor of allowing the prosecution of the claim and against dismissal for abandonment." Clark v. State Farm Mut. Auto. Ins. Co., 00-3010 (La. 05/15/01), 785 So.2d 779, 787.
Only if a defendant takes action which clearly shows its preference and intent to proceed in order to obtain a judicial resolution on the merits, rather than to prevail simply by the procedural remedy of abandonment, they should be allowed, or if the evidence is sufficiently clear, be deemed to have waived. It would be preferable and more practical to adopt a requirement of an express renunciation of the right to plead abandonment by the party in whose favor abandonment would run.
Nevertheless, I do not see anything here that meets the Bell v. Krieder test (and Louisiana Supreme Court cases) for waiver of abandonment, i.e., that steps be taken by a defendant which (1) have facilitated judicial resolution of the dispute on the merits; and (2) could be construed as an expression of the defendant's willingness or consent to achieve judicial resolution of the dispute. Bell v. Krieder, 04-594 (La.App. 5 Cir. 11/30/04), 890 So.2d 648, 651.
I do not conclude that the mere filing of a general denial answer by a third party defendant (Direct Source) for the probable purpose of preventing the confirmation of a preliminary default judgment is sufficient evidence of that party's intent and consent to proceed to a judicial resolution on the merits, especially when followed promptly by a motion to dismiss for abandonment. Therefore, the dismissal of the Millers' claims against Direct Source due to abandonment should not be reversed.
Accordingly, for the reasons stated herein, I dissent in part and would affirm the trial court's denial of the Millers' motion to set aside the order which dismissed their third-party demand filed against Direct Source due to abandonment.
SCHLEGEL, J., DISSENTS IN PART AND CONCURS IN PART WITH REASONS
I respectfully dissent in part and concur in part with the majority opinion. It is undisputed that no party took a step in the prosecution or defense of this action from March 12, 2019 through May 4, 2022, a period of over three years. La. C.C.P. art. 561(A)(2) provides that abandonment "shall be operative without formal order." Thus, this matter was abandoned by virtue of law when the three years expired without a step made by any party.
Despite this undisputed fact, the majority has applied the judicially created "post-abandonment waiver" exception, which is understandable. This Court has done so in the past and will undoubtedly continue to do so given the jurisprudence on abandonment. But we are a civil law jurisdiction. And "'one of the fundamental rules of [the civil law tradition] is that a tribunal is never bound by the decisions which it formerly rendered: it can always change its mind,' 1 Marcel Planiol, Treatise on the Civil Law § 123, (La. State Law Inst. trans. 1959) (12th ed. 1939), prior holdings by this court are persuasive, not authoritative, expressions of the law." Bergeron v. Richardson, 20-1409 (La. 6/30/21), 320 So.3d 1109, 1115.
Furthermore, our primary sources of law are the constitution and legislation. Id. at 1116; Saloom v. Department of Transportation and Development, 22-596 (La. 12/9/22), 354 So.3d 1179, 1183; La. C.C. art. 1, Official Revision Comment (d). Legislation is a solemn expression of legislative will and prevails over custom, a secondary source of law resulting from a long practice generally accepted as having acquired the force of law. Saloom, 354 So.3d at 1183; see also La. C.C. arts. 2 and 3. If a legislative enactment solves a particular situation, then no jurisprudence, usage, equity or doctrine can prevail over the legislation. Saloom, supra; see also La. C.C. art. 3.
The principle of abandonment has a long legislative history and has been discussed by countless court decisions. The Supreme Court in Chevron Oil Co. v. Traigle, 436 So.2d 530, 533 (La. 1983), recognized that when the Legislature enacted La. C.C.P. art. 561 in 1960, it differed from the former abandonment law (La. C.C. art. 3519) in two respects: 1) it expressly declared that abandonment is self-operative; and 2) it provided that a step by any party interrupted the abandonment period. The prior law only allowed for a plaintiff's step in the prosecution to interrupt abandonment; a defendant's step in the defense was addressed indirectly through the jurisprudential waiver exception. See Clark v. State Farm Mut. Auto Ins. Co., 00-3010 (La. 5/15/01), 785 So.2d 779, 787.
La. C.C.P. art. 561 in its current form makes it crystal clear that abandonment "shall be operative without formal order," if no steps are taken by any party for a period of three years. The matter is either abandoned or it's not. "When a law is clear and unambiguous and its application does not lead to absurd consequences, the law shall be applied as written and no further interpretation may be made in search of the intent of the legislature." La. C.C. art. 9. Accordingly, the jurisprudentially created post-abandonment waiver exception should not continue to prevail over the will of the Legislature under the guise of equity.
Thus, I urge this Court and the Louisiana Supreme Court to "change their minds" and recognize that Article 561's silence concerning the jurisprudential exception of post-abandonment waiver should be construed as the Legislature's "conscious limitation of the right of abandonment to pre-abandonment actions." See Chevron, 436 So.2d at 534. Though I recognize that the Supreme Court changed its analysis in Chevron and Clark, supra, the Court had previously recognized in Melancon v. Continental Casualty Company, 307 So.2d 308, 311-12, fn. 2 (1975), that the post-abandonment waiver exception was "legislatively overruled by the adoption of article 561." The Melancon court observed that the Legislature incorporated this exception into the pre-abandonment period by amending the law to provide that a step by any party interrupted the abandonment period. Id. The Count further reasoned that "[c]learly, under the present version of article 561, formal action taken by the defendant after the expiration of five years' inactivity will not preclude a later plea of abandonment by him." Id. I urge a return to the plain language of Article 561 and the Supreme Court's prior analysis in Melancon in order to address the inconsistencies created by Louisiana abandonment jurisprudence.
In Chevron, supra, the Supreme Court considered the following options with respect to the Legislature's silence regarding the post-abandonment waiver exception when enacting Article 561 in 1960:
Article 561, therefore, explicitly addresses the question of pre-abandonment waiver; however its silence concerning post-abandonment waiver could either be construed as: (1) a conscious limitation of the right of abandonment to pre-abandonment actions, (2) legislative recognition of the jurisprudentially created doctrine of waiver in all of its forms, (3) codification of the pre-abandonment doctrine of waiver, with post-abandonment waiver left to the discretion of the courts; or (4) mere inadvertence in failing to recognize the potential for post-abandonment waiver.Id. at 534-35.
However, if the Supreme Court and the majority continue to believe that the Legislature intended to preserve the judicially created exception of postabandonment waiver, then I would urge them to consider and adopt the observations set forth in Slaughter v. Arco Chem. Co., 05-657 (La.App. 4 Cir. 4/26/06), 931 So.2d 387, 391-93, regarding the doctrine that should apply in determining whether a post-abandonment waiver occurred - that is renunciation rather than acknowledgment.
The Louisiana Supreme Court has recognized that abandonment is a form of liberative prescription. Clark, 785 So.2d at 787; see also Giovingo v. Dunn, 11781 (La.App. 5 Cir. 3/13/12), 90 So.3d 1098, 1101, writ denied, 12-831 (La. 5/25/12), 90 So.3d 418. Further, the Supreme Court explained in Lima v. Schmidt, 595 So.2d 624, 631- 632 (La. 1992), superseded by statute on other grounds, that once prescription has run, acknowledgment is no longer applicable; the applicable doctrine is then "renunciation":
Acknowledgment and renunciation differ in both substance and legal effect. Substantively, acknowledgment is the recognition of the creditor's right or obligation that halts the progress of prescription before it has run its course; renunciation is the technical term designating the abandonment of rights derived from prescription that has accrued. Official Comment (c) to LSA-C.C. Art. 3449; Comment, Interruption of Prescription by Acknowledgment in Louisiana, 14 Tul.L.Rev. 430 (1940). In legal effect, acknowledgment interrupts prescription and erases the time that has accrued, with prescription recommencing anew from the date of interruption; renunciation obliterates the effect of prescription that has run. Because of these differences, renunciation is subject to more stringent requirements than acknowledgment. Comment, Prescription and Peremption-The 1982 Revision of the Louisiana Civil Code, 58 Tul.L.Rev. 593, 611 (1983).
Our courts have consistently held that renunciation must be 'clear, direct, and absolute and manifested by words or actions of the party in whose favor prescription has run.' (citations omitted.)
Thus, the Slaughter court reasoned that if our courts treat abandonment as a form of prescription, "then we must consider 'renunciation' to be the truly correlative analogous concept. Renunciation requires a much higher standard than that of mere acknowledgement. A renunciation of prescription is an abandonment of the right derived from prescription that has accrued and is subject to stringent proof requirements." Slaughter, 931 So.2d at 393.
Considering this more stringent standard, the trial court's decision to deny the plaintiffs' Motion to Set Aside Order of Dismissal For Abandonment should be affirmed. There were no steps taken in the prosecution or defense of this case in the trial court for a period of more than three years - March 12, 2019 to May 4, 2022. On May 5, 2022, plaintiffs filed a Motion to Confirm Judgment by Default, which was denied on May 27, 2022, on grounds that plaintiffs failed to notify enrolled counsel of record as required by La. C.C.P. art. 1702(A)(2). Months later, on September 23, 2022, the Millers cured this defect by transmitting notice of their intent to file an Amended Motion To Confirm Judgment By Default to counsel. In response, third-party defendant DSHR filed a one-page answer containing only a general denial of the Millers' allegations on September 30, 2022. A few days later, on October 4, 2022, FER and DSHR filed an ex parte motion to dismiss the Millers' action on the grounds of abandonment.
Abandonment is a balancing concept; it "balances two equally sound, competing policy considerations: on the one hand, the desire to see every litigant have his day in court, and not to lose same by some technical carelessness or unavoidable delay; on the other hand, the legislative purpose that suits, once filed, should not indefinitely linger, preserving stale claims from the normal extinguishing operation of prescription." Felo v. Ochsner Med. Ctr.-Westbank, LLC, 15-459 (La.App. 5 Cir. 12/23/15), 182 So.3d 417, 420, writ denied, 16-232 (La. 4/8/16), 191 So.3d 584. Further, just as courts are instructed not to dismiss actions as abandoned based on technicalities, the same rule must apply when considering whether a defendant waived abandonment. See Roubion Shoring Co., LLC v. Crescent Shoring, L.L.C., 21-237 (La.App. 5 Cir. 12/22/21), 335 So.3d 354, 361, writ denied, 22-282 (La. 4/20/22), 336 So.3d 468.
A defendant should not be placed in jeopardy of waiving an abandonment that has already accrued, by requiring him to forego at his peril the filing of responsive pleadings or taking other appropriate defensive actions. See Slaughter, 931 So.2d at 398. A general denial answer filed after receiving notice of a motion to confirm a default judgment, that is then followed by a motion to dismiss based upon abandonment only days later, cannot possibly be construed as an express or tacit renouncement under La. C.C. art. 3450. Who can fault a defendant who files an answer after receiving a judgment of default? "[T]he jurisprudence has carved out so many exceptions that a party has no way to be sure of the court's application of [the three-year] rule to the facts of a particular case. Because the question of abandonment is fraught with so much uncertainty, a party cannot reasonably ignore actions taken by the opposing party that could have material consequences should the court decide against abandonment." Slaughter, 931 So.2d at 399-400. Therefore, I dissent to the majority's application of the defense post-abandonment waiver exception.
I recognize that in Slaughter, supra, the defendant filed a motion to dismiss for abandonment before filing an answer. However, considering the unique circumstances of the present matter involving the notice the Millers were required to send to counsel to confirm the default, the "general denial" answer hastily filed in response, and the motion to dismiss for abandonment filed just days later, DSHR engaged in reasonable defensive actions and not actions indicating an intent to waive abandonment.
Finally, I concur with the majority's decision to the extent it affirms the judgment dismissing the Millers' claims against FER as abandoned.