* * * * * * * (Court composed of Chief Judge Joan Bernard Armstrong, Judge Charles R. Jones, Judge Edwin A. Lombard)

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1 CYPRESS COVE MARINA, INC. VERSUS MICHAEL A. FRENETTE ALSO KNOWN AS MIKE FRENETTE * * * * * * * * * * * NO CA-0513 COURT OF APPEAL FOURTH CIRCUIT STATE OF LOUISIANA APPEAL FROM 25TH JDC, PARISH OF PLAQUEMINES NO , DIVISION B Honorable William A. Roe, Judge * * * * * * Charles R. Jones Judge * * * * * * (Court composed of Chief Judge Joan Bernard Armstrong, Judge Charles R. Jones, Judge Edwin A. Lombard) ARMSTRONG, C.J., DISSENTS IN PART AND CONCURS IN PART W. Eric Lundin III 103 Yorke Street Belle Chasse, LA COUNSEL FOR PLAINTIFF/APPELLEE W. Chad Stelly Blake G. Arata, Jr. C. Perrin Rome, III ROME, ARATA & BAXLEY, L.L.C. 650 Poydras Street Suite 2017 New Orleans, LA 70130

2 COUNSEL FOR DEFENDANT/APPELLANT AFFIRMED The present matter arises out of a suit on an open account. The Appellant, Michael Frenette, appeals the judgment of the district court in favor of the Appellee, the Cypress Cove Marina. We affirm. FACTS AND PROCEDURAL HISTORY Mr. Frenette, a charter boat captain and former television show host, had operated his business out of the Venice Marina in Venice, Louisiana, for some time prior to In 1995, Mr. Julius Sonny Eirich approached Mr. Frenette and propositioned him with the possibility of joining him in his plan to develop the Cypress Cove Marina. Mr. Eirich also contacted other boat captains who were working out of the Venice Marina and asked whether they would be interested in relocating to the Cypress Cove Marina.

3 As part of the development deal, Mr. Frenette was offered incentives for relocating his business to the Cypress Cove Marina. These incentives included: free boat slip rental for Mr. Frenette s houseboat and fishing boats in the Cypress Cove Marina, as well as a ten percent (10%) discount on any supplies purchased from the ship store. On or about August 30, 1995, Mr. Frenette tendered $5, of his own money as a part of the development deal. Specifically, Mr. Frenette was told that the funds would be used to develop a clubhouse barge located at the Cypress Cove Marina; however, he was never allowed to move his clubhouse barge onto the site for which he had paid. For a number of years during his occupancy of the boat slip at the Cypress Cove Marina, Mr. Frenette was allowed to make supply purchases from the ship store on account. In December 1999, when his account reached a zero ($0) balance, Mr. Frenette s on account purchasing privileges at the ship store were terminated. On October 31, 2001, the Cypress Cove Marina sought to collect on both account purchases and slip rental fees assessed to Mr. Frenette for the period from October 1995 through October 31, Mr. Frenette objected to demands for payment and requested documents proving the amounts due, but to no avail. In

4 November, 2002, Mr. Frenette left the Cypress Cove Marina and resumed charter boat operations at the Venice Marina. On April 29, 2003, the Cypress Cove Marina, Inc., filed suit on open account against Mr. Frenette seeking $5, for purchases of fuel, supplies, and ship store purchases, in addition to slip rental and utility charges. On May 22, 2003, Mr. Frenette filed a general denial. On March 1, 2004, Mr. Frenette amended his answer and reconvened, alleging that he had paid the Cypress Cove Marina $5, for the development of an area in the marina for him to dock his houseboat barge. However, this new development was never completed. On March 8, 2004, the Cypress Cove Marina answered and essentially asserted that Mr. Frenette s claim in the reconventional demand should be brought against the Louisiana Fruit Company. After a bench trial commenced on March 15, 2004, a judgment was rendered in favor of the Cypress Cove Marina on August 3, 2004, in the amount of $5,915.65, together with twenty five per cent (25%) attorney s fees, costs and judicial interest. The district court dismissed Mr. Frenette s reconventional demand, with prejudice. No reasons for judgment were given. Mr. Frenette filed a suspensive appeal that was later converted to a

5 devolutive appeal due to Mr. Frenette s failure to post adequate bond. In the instant appeal, Mr. Frenette argues the district court erred in admitting inadmissible hearsay and dismissing his reconventional demand in favor of the Cypress Cove Marina. DISCUSSION This Court, in Updegraff v State ex rel. Dept. of Transp. and Development, (La. App. 4 Cir. 10/2/02), 828 So.2d 693, 698 discussed the standard of review for appellate courts which determined that a court of appeal may not set aside a trial court's or a jury's finding of fact in the absence of manifest error or unless it is clearly wrong. Rosell v. ESCO, 549 So.2d 840, 844 (La.1989); Stobart v. State, Through Department.of Development and Transportation, 617 So.2d 880, 883 (La. 1993). In Mart v. Hill, 505 So.2d. 1120, 1127 (La. 1987), the Louisiana Supreme Court reiterated the two-part test posited in Arceneaux v. Dominguue, 365 So.2d 1330, 1333 (La. 1979) for a reversal of a fact finder's determinations: 1. The appellate court must find from the record that a reasonable factual basis does not exist for the finding of the trial court, and

6 2. The appellate court must further determine that the record establishes that the finding is clearly wrong or manifestly erroneous. Thus, this test means that a reviewing court must do more than simply review a record for some evidence which supports the district court s finding; it must determine that the record, as a whole, establishes the district court was justified in its conclusions. The record indicates that at trial, Michael Ballay, the Harbor Master at the marina for ten years, testified as to the charges made to Mr. Frenette s account. He indicated that the charges began around October 25, 1999, and included various items purchased in the store, as well as gasoline, utility bills, and slip rental fees. He said that at some point Mr. Frenette was allowed to purchase only C.O.D., but gasoline, ice, and other products were put on his charge account usually because Mr. Frenette made purchases in the morning with the promise that he would return later with his credit card. During cross examination, Mr. Ballay testified that he had no receipts and further verified that Mr. Frenette had a zero ($0) balance in December of 1999 when he was placed on the C.O.D. basis. However, Mr. Ballay could not confirm that he actually handled the purchases Mr. Frenette made. Julius Sonny Eirich, who is Mr. Ballay s boss, testified that he was

7 one of the principals of the marina. He also indicated that in his role as the operating officer, he was involved in the day-to-day operations of the marina. Additionally, he testified that he was familiar with the computer print out of Mr. Frenette s account. He said that when Mr. Frenette first came to the marina, the parties signed an Agreement whereby Mr. Frenette would not be charged a slip rental fee since, [Mr. Frenette] had some television shows and was doing promotions of the marina. However, as time went on, Mr. Frenette no longer had those opportunities and therefore I wrote him a letter suggesting that we have no alternative but to charge him slip rentals, since he was no longer promoting the marina, nor was he paying his bills on time. With that in mind, we wrote him a letter, and therefore started to charge him slip rental. The Agreement was signed May 30, 1997, and reads: This rental agreement shall commence the 30 th day of May, 1997 for a period of until and a rate of none. Mr. Eirich also testified that he had signed the affidavit which verified that the account balance reflected on Mr. Frenette s account was indeed correct. However, Mr. Frenette objected to the admission of the computer printout of the account on the basis that it was inadmissible hearsay. The district court ruled the evidence admissible under the business records exception to the hearsay rule and stated that the accuracy of the statement

8 was for the court to decide. At trial, Mr. Frenette introduced a letter which he received from Mr. Eirich, dated March 8, 2002, which read: Reference: Balance. Dear Mike: You usually pay your bills at the counter via a credit card, which we really appreciate. However, you haven t paid any of the bills, including your utilities for over a year now. As respects your dockage, we reduced your rate dramatically and we will have no alternative but to now charge you slip rental. Mike, I know you wanted to try and come see me about something, however, you told me that you couldn t make it but I am now requesting that you please forward me a check for $4, as soon as possible so that we can get you caught up. My bank is now forcing me to take steps against my outstanding receivables, and therefore, I have no choice in this matter. Best regards, CYPRESS COVE MARINA, INC. J.F. Sonny Eirich, Jr. Mr. Frenette also introduced self-drafted letter he sent to Mr. Eirich, dated February 3, 2004, in which he challenged the account charges, asked for a meeting, and inquired about the development of an area in the marina.

9 Mr. Frenette testified that he had paid $5, for the marina development, but Mr. Eirich indicated that the money was never paid to the Cypress Cove Marina, but that the check had been made to the Louisiana Fruit Company. Mr. Eirich acknowledged that there had been discussions between the parties to build an area for a large barge, but that those discussions had been ten years prior, and he could remember little about them. He reiterated that the Cypress Cove Marina had never received any money from Mr. Frenette for the marina development. Mr. Eirich then read his letter to Mr. Frenette, which was dated September 16, 2002, into the court record. The letter read: Dear Mike: I received your letter of September 8 th and I do not think it is necessary for you and I to meet. As respects the one thousand dollar payment, we do not have a record of it and all we are asking is that you please give us a copy of your receipt where you made the payment. With regard to the fifty five hundred that you keep referring to was a check that was made payable to Louisiana Fruit Company, not to Cypress Cove. Rene does not recall receiving that kind of money from Louisiana Fruit on your project; however, it was specifically meant for an area where you were going to bring a very large barge to our facility. As we all know, that never did materialize. As respects your Virtual Reality fishing machine, I have told you on numerous occasions that this machine is in the marina store on top of

10 the freezer in boxes. I also told you it never worked properly, but it did work on occasions and I have been waiting for you to pick it up. Mike, the charges that we have charged your account stand as is, especially the electricity that you have not paid for in quite sometime and if we don t have payment for electricity, we will have to disconnect your barge from the electricity, which we are paying for. It is best that you move your barge out of the marina as soon as possible for it is obvious that none of us are happy with the arrangement that we have. Best regards, CYPRESS COVE MARINA, INC. During re-direct, Mr. Eirich identified the Louisiana Fruit Company as the landlord of the Cypress Cove Marina. Mr. Frenette testified that he brought his account balance down to zero ($0) in November or December of 1999 and was subsequently put on a C.O.D. basis. After receiving several demand letters, he told Mr. Ballay that he wanted to discuss the discrepancies in the bill. To dispute the accuracy of the account charges, Mr. Frenette alleged that he paid $1, on the account on October 31, 2001, and $2, on the account March 15, At the time of the trial, the account balance was $5, Additionally, Mr. Frenette introduced copies of his and his wife s American Express billing statements. Mr. Frenette indicated

11 that a large payment was made to the Cypress Cove Marina in October He also pointed to a charge at the Empress of China Restaurant made on July 7, 2001, and a charge the same day for fuel, ice, and lube oil in the amount of $ at the marina. Mr. Frenette testified that although the store charges indicate that he went on a fishing trip that day, he in fact could not have gone on a fishing trip if he were having lunch at the Empress of China. He also pointed to three separate credit card charges made at the marina on May 19, He indicated that the May 19, 2001, charges show that he paid his bill for his purchases on his credit card every time he went into the marina, rather than pay for the charges later. As to the letters he drafted to the Appellee, Mr. Frenette indicated that the dates on the letters do not indicate the dates they were actually drafted. He testified that a check for $2, was attached to the letter, and he produced a copy the same, which was dated March 15, In reference to the Agreement, he testified that it was his understanding that he was not to be charged slip rental fees. Mr. Eirich had told him that he desired to have high profile charter captains dock at the marina to build the marina s reputation. He consulted with Mr. Eirich, Nat Philips of the Louisiana Fruit Company, and Rene Cross. They all agreed on the location of the marina as it was being developed. Mr. Frenette indicated that his boat was one of the

12 first boats docked at the marina. He had no incentive to move his boat there because he was currently receiving a free slip rental elsewhere, but he moved the boat on the promise that he would receive a ten percent (10%) discount on fuel and other needs. He paid $5, for the development of a clubhouse at the marina. Mr. Frenette explained that he attended a casual meeting on an unspecified date with Mr. Eirich, Mr. Cross, and Mr. Philips. He indicated that his attorney was also in attendance. The men discussed the development of the Cypress Cove Marina with the Louisiana Fruit Company as the majority partner in charge of the slips and dockage and Mr. Eirich as the principal owner of a restaurant and the shop store. The men expressed interest in Mr. Frenette docking his boat there, but informed him there would be costs incurred to develop a spot for him. Mr. Frenette was asked to pay the costs and he later drafted a check to the Louisiana Fruit Company. The improvements were subsequently made. The appellant asked Mr. Eirich when he could move his boat to his slip but Mr. Eirich told him that a road needed to be built for some future condominiums. As a result, Mr. Frenette was forced to dock at a less attractive area of the marina, whereas he indicated that his original purpose for moving the boat to the marina was to have the spot where the

13 improvements were made. However, some time later, Mr. Frenette noticed a concrete barge docked in the slip. Mr. Ballay explained to him that the barge would only be there for a short time, but two or three months later the barge remained. Mr. Frenette was never allowed to move his boat, and the spot was subsequently rented out to others. Mr. Frenette left the Cypress Cove Marina in November 2002 and relocated his boat to Venice Marina. Mr. Frenette introduced a cancelled check he wrote for the initial investment. The Appellees objected on the basis that the Louisiana Fruit Company was not a party to the litigation, however, the district court allowed the item to be admitted into evidence. During cross examination, Mr. Frenette disputed the charges and also testified that the lease for the slip was not on a year-to-year basis. He admitted that the signature on the return receipt which was attached to the November 4, 2002, letter from the Cypress Cove Marina belonged to his wife. The Cypress Cove Marina admitted into evidence: the rental Agreement, an addendum to the Agreement between the Cypress Cove Marina and Michael Frenette, and a Declaration of Separate Ownership between Frenette, the Louisiana Fruit Company and the Cypress Cove Marina, each of which had been recorded in the conveyance office records in Plaquemines Parish.

14 The Cypress Cove Marina called Mr. Eirich in rebuttal and questioned him about the addendum to the Agreement. Mr. Eirich read the following section: Lessor agrees that should Lessee be in default in connection with his loan to Hancock Bank and if said bank or a successor holder of said note file proceedings to seize said Teaser Clubhouse or if for whatever reason Lessee is no longer involved with the ownership or operation of Teaser Clubhouse, then Lessor shall permit Lender to keep Teaser Clubhouse at Cypress Cove Marine [sic] for up to one hundred eighty (180) days after such filing of judicial papers and/or termination of Lessee s involvement with Teaser Clubhouse, provided Lender pays a rental charge of $5.00 per linear foot of Teaser Clubhouse or $ per month, maintains liability insurance on Teaser Clubhouse during the period of time and complies with all terms and conditions of the boat slip agreement, as modified by this addendum during the period of such tenancy. Mr. Eirich explained that Mr. Frenette had paid money to the Louisiana Fruit Company for partial construction of a facility to bring a large barge into the marina. He never bought the barge, and he never got the loan from Hancock Bank. The marina therefore rented that slip out to someone else with the intention all along that he should pay slip rental in the future if he did not promote the marina as he agreed to initially in The rental Agreement

15 specified an eighty-five foot clubhouse which Mr. Frenette never produced, even though he did have a much smaller clubhouse on the premises. In his first assignment of error, Mr. Frenette alleges the district court erred in admitting inadmissible hearsay, namely the computer printout of his account, to prove the charges allegedly owed. Specifically, he argues that that the Cypress Cove Marina failed to show the existence of a contract obligating him to pay for the amounts due. Mr. Frenette also indicated that he was placed on a C.O.D. basis after a certain point, but his account statement reflected that he, in fact, continued to make charges at the store. Despite Mr. Frenette s argument that he could not have been at the store on certain days, the district court found that the charges were valid. Mr. Frenette also argues that he should not have been charged slip fees because the rental Agreement provided that a boat slip would be provided at no cost to him. However, the letter of March 8, 2002 clearly sets out that Mr. Frenette would be charged slip rental fees after this date. The Cypress Cove Marina sued on open account. In proving an open account, the creditor first must show that the record of account was kept in the course of business. Once the creditor establishes a prima facie case, the burden of proof shifts to the debtor to disprove the existence or correctness of the account. Farlee Drug Center, Inc. v. Belle Meade Pharmacy, Inc., 464

16 So.2d 802, 806 (La. App. 5 Cir.1985). Prima facie evidence is evidence sufficient to establish a given fact, which, if not rebutted or contradicted, will remain sufficient. Dupre v. Joe's Riverside Seafood, Inc., 578 So.2d 158, 163 (La. App. 1 Cir.1991). Hearsay is a statement, other than one made by the declarant while testifying at the present trial or hearing, offered in evidence to prove the truth of the matter asserted. Articles Art. 801 (C) and 801 (D) of the Louisiana Coed of Evidence further lists statements not considered hearsay. Article 803 of the Louisiana Code of Evidence sets forth several exceptions to the hearsay rule, including an exception for records of regularly conducted business activity. This Court stated in Williams v. Augustus, 506 So.2d 630, 633 (La. App. 4 Cir. 1987): The business records exception to the hearsay rule is predicated upon considerations of reliability and necessity. Herlitz Construction Co. v. Clegg Concrete, Inc., 378 So.2d 1002 (La.App. 1st Cir.1979). Business records are admissible as proof of their assertions if: 1) Persons concerned with recording the information are unavailable for testimony; 2) The first collected record available to or usable by the court is introduced; 3) The records are identified at the trial by one familiar with the record keeping procedure; and 4) The evidence seems reliable after considering such factors as contemporaneousness of the entry with the occurrence of fact recorded; first-hand knowledge of the entrant; existence of a business or professional duty to record or report the facts in

17 the regular course of business; completeness and honest appearance of the books; absence of fraud in making the entries or in destroying the supporting memoranda and perhaps, whether the books belonged to a third party. Comment, 21 La. L. Rev. 449 (1961) and cases cited therein. Mr. Ballay testified that he was Harbor Master at the marina. His testimony revealed that he was well familiar with the operations of the store and charges incurred there. He testified that he routinely read the utility meters at the marina. In particular, he indicated that he was aware of Mr. Frenette s account. He further testified that the printout reflected Mr. Frenette s account. Additionally, Mr. Eirich also signed an affidavit which attested to the validity of the printout of the account. Therefore, the district court determined that the evidence was admissible under the business record exception to the hearsay rule. The appellate court may not modify factual findings of the trial court absent a finding of manifest error. Arceneaux v. Domingue, supra; Rosell v. Esco, supra. In the instant matter, the record does not indicate that the district court erred in its findings. Thus, we find that this assignment of error does not have merit. In his second assignment of error, Mr. Frenette argues the district court erred in dismissing his reconventional demand. At trial Mr. Frenette

18 testified that on or about August 30, 1995, he issued a check made payable to the Louisiana Fruit Company in the amount of $5, for the development of a specified area in the marina for his clubhouse barge. However, since he was never allowed to move his clubhouse barge to the developed location, and was later asked to leave to leave the marina, he argues that he received no benefit from his investment. However, the record indicates that the $5, was paid to the Louisiana Fruit Company and not to the Cypress Cove Marina. Thus, Mr. Frenette has failed to show that the district court erred in dismissing his reconventional demand, thereby ruling in the Cypress Cove Marina s favor. As, this court has indicated above, an appellate court may not modify factual findings of the trial court absent a finding of manifest error. Arceneaux v. Domingue, supra; Rosell v. Esco, supra. Again, the record does not indicate that the district court s judgment was manifestly erroneous or clearly wrong. Thus, we find that this assignment of error is also without merit. DECREE Accordingly, and for the reasons stated herein, we affirm the district court

19 judgment. AFFIRMED